A time for drive in global trade and development

A time for drive in global trade and development

W. Lewis Amselem, Jakarta

As Trade Ministers from around the world gather in Hong Kong
for the Sixth World Trade Organization Ministerial, it is
important to remember what is at stake in these negotiations --
nothing less than a once-in-a-generation opportunity to
dramatically reduce trade barriers that impede global growth,
economic opportunity and poverty alleviation.

To maximize the development dividends of these and other
investments, trade ministers from (host country) and more than
145 other WTO members around the world must seize the opportunity
of this week's meeting in Hong Kong to advance negotiations and
lay a solid foundation for ambitious outcomes across agriculture,
goods and services by the end of 2006.

According to the World Bank, successful negotiations have the
potential to lift tens of millions out of poverty. But the
benefits will be limited without the kind of deep cuts in tariffs
that can open markets and provide meaningful new commercial
opportunities. High ambition and a comprehensive approach to
progress in all three core areas are critical to realizing the
promise of the Doha Round for the world's poor.

Each WTO member has a responsibility to make the Doha
negotiations a success for global trade liberalization. Given the
difference between formal tariff obligations under the WTO and
those currently applied on trade in goods, tariff cuts must be
deep to affect the global economy and improve lives. Given the
differences in our economies, the deal must be comprehensive if
we are to find enough common ground to reach agreement.

The United States has made ambitious proposals in each of the
core areas of the negotiations -- offering to eliminate
agriculture tariffs, export subsidies and trade distorting
domestic support; to cut high tariffs on industrial goods; and to
remove barriers to growing trade in services. We are committed to
breaking the deadlock in multilateral talks on agriculture. We
stand ready to make meaningful changes in our economic policies.
We have challenged others to match our ambition with bold
proposals of their own.

Improving market access by cutting tariffs in agriculture will
be particularly critical for developing countries. For example,
agriculture is the largest employer in African countries,
accounting for about 60 percent of the labor force and producing
roughly 20% of merchandise exports. But the products of African
farmers are subject to an average world tariff of 62 percent --
more than five times the average U.S. agricultural tariff of 12
percent. The World Bank has calculated that nearly two-thirds of
the gains from full trade liberalization would come from
agriculture, and 93 percent of those gains would come from
reducing tariffs.

Developing countries have a role to play in delivering on the
promise of Doha, and have much to gain from making meaningful
contributions to a successful conclusion of an ambitious and
comprehensive Round. They stand to gain new access to markets in
the developed and developing world. Developing countries conduct
45 percent of their trade with other developing countries, but
that trade accounts for 70 percent of the tariffs they pay around
the world.

The United States is deeply committed to promoting greater
economic growth and to reducing global poverty through the
powerful combination of aid and trade. The United States is the
world's single largest provider of trade-related assistance,
donating $1.34 billion in 2005 -- an increase of nearly 50
percent since 2004 and more than 100 percent since 2001.

Those who fear liberalization should remember that the
previous WTO Rounds did not require the immediate elimination of
protections. Nor will the Doha Round. The Framework for
negotiations provides for exempting some products from full
tariff reductions, though it will be important to limit these so
that the world sees the strongest possible benefit. The Doha
mandate also explicitly states that special and differential
treatment -- ways in which developing countries are provided
unique treatment such as less deep reductions and longer phase-in
periods that facilitate their participation in global trade --
will be an integral part of the Doha negotiations.

On the margins of the G7 ministerial in London, Brazil and
India indicated they are prepared to move on market access in
manufactured goods and services, as a responsible gesture from
advanced developing countries to reinvigorate the negotiations.
Such leadership should help to break the logjam in the global
trade talks and make the Hong Kong Ministerial and subsequent
gatherings more fruitful.

The breakthrough can only occur if the EU shows similar
commitment. The EU needs to immediately respond with equally bold
steps in its agriculture proposal to reinforce the goodwill of
India and Brazil. Brussels hinting that an EU revised agriculture
proposal will be forthcoming in early 2006 is simply not enough.
What is needed is a real and realistic offer.

With high ambition, comprehensive vision and sustained
investment, but most of all with committed leadership on all
sides, the members of the WTO can take advantage of the
once-in-a-generation opportunity the Doha Round represents.
Nations large and small, rich and poor, from Mexico to
Bangladesh, from Senegal to Thailand -- will share in the
benefits.

The writer is Chargi d'Affaires of U.S. Embassy Jakarta.