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Opening Statement, Press conference on Doha Development Agenda and the Sixth WTO Ministerial in Hong Kong - Remarks by Thomas J. Donohue

Wednesday, December 7, 2005 - 7:00pm

Thomas J. Donohue
President and CEO, U.S. Chamber of Commerce

CPA Library, U.S. Chamber of Commerce

December 8, 2005

Good morning. Thank you all for coming.

Next week I will travel to Hong Kong for the Sixth WTO Ministerial.

This meeting serves as an important milestone on the road to a deal in the global trade negotiations known as the Doha Development Agenda.

We are carrying a very simple message.

First, these negotiations are too important to fail.

Second, the United States has more to gain from the Doha Round than just about anyone.

And third, the United States is DOING more than just about anyone to make the Round a success — with the business community helping to lead the charge.

Now, I was in Seattle and Cancun. It's important to go into these ministerials with a reality check. Here's one now.

China, India, and other emerging markets are opening their economies, embracing free markets, encouraging entrepreneurs, building critical infrastructure, competing for energy and natural resources, challenging us in third country markets, and developing and educating their workforce…

In other words, they are doing all of the things that we have encouraged them to do for the past fifty years. The fact that they're actually doing it — and doing it well — makes us all a little uncomfortable.

Why uncomfortable? Because our market is already pretty much wide open to competition from the 96% of the human race that lives outside the United States.

This is a good thing, especially for American consumers. It's a big part of why we have the highest living standards in the world.

But it's also unfair. American businesses and farmers need to have better access to global markets if we are going to be able to compete effectively — and the way we are going to tap those global markets is through the Doha Round.

People who write about international trade for a living probably get tired of hearing about how important it is to get "a level playing field" — but fairness is always going to be the first priority of American business.

What is the Chamber looking for in the Doha Round? The first ingredient for success is ambition.

An ambitious result from the Doha Round could mean a big shot in the arm for the U.S. economy.

The University of Michigan has estimated that a one-third cut to global trade barriers could raise the income of the average American family by $2,500 a year.

And looking overseas, the Center for Global Development estimates that a successful conclusion to the Doha negotiations could lift more than 500 million people out of poverty.

Trade makes a difference. I was in Mexico last week, and it's amazing to see what NAFTA has meant for that country.

Half of all the jobs created in Mexico over the past decade arose because of NAFTA … and those jobs pay a premium of 40%.

For the United States, NAFTA has been just as successful. Since NAFTA, more than 21 million new jobs have been created in the United States…and income gains and tax cuts from NAFTA are putting an extra $900 into the pockets of the average American family of four every year.

We need more of this kind of growth in the United States and around the world.

The second priority for success in the Doha Round is ensuring that the final deal is comprehensive.

We are on the right track. The Doha Round covers more kinds of economic activity than any previous round since the Second World War.

For the first time it includes reform of agriculture policies and more comprehensive liberalization in trade in services, in addition to reducing barriers to trade in industrial and consumer products.

That means that the Doha Round has even greater potential than previous rounds to:

  • generate increased income and higher savings for producers and consumers alike;
  • drive innovation and advances in productivity; and
  • reach all corners of the globe, creating new markets for U.S. products and services.

No one ever said Hong Kong was the end of the road. It's an important milestone in the negotiations.

The target date for conclusion of the Doha Round is the end of 2006. It's critical that we meet this target date so the United States can vote on a final agreement before Trade Promotion Authority expires in June 2007.

Now, I want to emphasize that the United States will be leading the charge in Hong Kong.

U.S. Trade Representative Rob Portman and our negotiators are doing a great job. The U.S. offer is a sweeping one, from agriculture to manufactured goods to services.

American business is stepping up as well. The Chamber is a founder and a leader of the American Business Coalition for Doha.

This coalition brings together so many diverse interests to fight for the strongest possible result in the negotiations. We'll be working closely with our coalition partners in Hong Kong.

No one should be surprised that the U.S. administration and the U.S. business community are the engine driving these negotiations.

In recent years, a number of interest groups, including Oxfam, have painted the United States as an increasingly protectionist country.

It's that protectionist voices have gotten louder, including in the Congress. But in practice, the United States is holding fast to its longstanding free trade principles

For example, U.S. agricultural subsidies have been greatly exaggerated. Oxfam regularly claims that the United States spends $75 billion annually on agricultural subsidies.

This is a wild exaggeration. Even the WTO agrees that U.S. domestic support for agriculture less than a third of that sum.

Second, while the United States is often accused of using anti-dumping laws to protect our market, the number of anti-dumping cases filed in the United States has been falling for years.

We're likely to see a total of no more than 13 anti-dumping cases filed this year — that would be down from 77 in 2001.

This year, for the first time, U.S. firms will probably face more anti-dumping suits abroad than they file at home.

Finally, the fact remains that the United States is the world's largest importer. The United States purchased nearly a fifth of all the world's merchandise exports in 2004.

If the U.S. market is so protected, why is our trade deficit — which is set to reach about $700 billion this year — nearly as large as the GDP of Brazil, India, or Korea?

My point is — we are not just talking the talk — we are walking the walk.

A few more comments on our game plan … Hong Kong is a great chance for those of us in the business community to push and prod our governments toward a deal.

In addition to my own meetings with trade ministers from leading countries, I will be meeting with leading business groups from around the world to plot strategy.

One point I'll be making is that we can't let the slow pace of the agriculture talks hold back the negotiations on services or consumer and industrial goods.

On the contrary, seeing forward movement in those parts of the negotiations will help to generate broader interest — and that can only help the agricultural talks to advance.

One final point. The Doha Round was called the "development" round from the beginning. Lately the Europeans have been claiming that their reluctance to cut their own tariffs and quotas on agricultural imports stems from their concern for developing countries.

I won't walk through the tortured arguments behind this, because my point is quite different — that is, market access means development.

The United States has made a bold offer to open our markets further as part of a global deal.

If the Europeans do the same for agriculture, a sector where their market is still very much closed, that will do more for development in the world's poorer countries than anything else.

The way to pull millions of people from poverty is to tear down these barriers — not, as the EU is proposing, to create complex, new preference programs.

Again, no one ever said Hong Kong was the end of the road. It's an important milestone in the negotiations.

As we approach this milestone, the Chamber and the American business community know that we have an important responsibility here.

In the end, it's business that engages in international trade — not government.

We are the ones who will be able to raise incomes, create new jobs, and lift people out of poverty with a successful deal.

Our commitment is unshakeable.

Thank you again for coming. I'd be happy to take your questions.