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Transcript of press conference: Geneva, Switzerland: 20 July 2008: Cairns Group Press Conference.



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The Hon Simon Crean MP AUSTRALIAN MINISTER FOR TRADE

20 July 2008, Geneva

Cairns Group Press Conference SIMON CREAN, CHAIR OF CAIRNS GROUP: We had a meeting of the Cairns Group this morning. I am Simon Crean. I am the chair of the Cairns Group as the Trade Minister from Australia. I will invite, from the end of the table, the respective countries to introduce themselves. I’ll make some opening statements. You’ve got a copy of the communiqué and then we will open it to questions.

z Ambassador Valles from Uruguay

z Mercedes Araoz, Minister of Foreign Trade and Tourism of Peru

z Marco Ruiz, Minister of Foreign Trade from Costa Rica.

z Philip Goff, Minister of Trade and Defence from New Zealand

z Reinaldo Ruiz, Vice Minister of Agriculture from Chile

z Nestor Stancanelli, Deputy Secretary for International Economic Negotiations of

Argentina

CREAN: All right, well as you know the Ministerial meeting has been convened this week to try and bring another step in the conclusion of the Doha Round. As part of that exercise, the Cairns Group met this morning, it’s a coalition of 19 agricultural exporting countries, that account for over 25 per cent of the world’s agricultural trade. Our members comprise both developed and developing economies and they share the commitment to securing reforms to the most heavily distorted sector of the global economy.

We are firmly of the view that there can’t be a conclusion to the Doha Round unless there is an ambitious outcome on agriculture in the Round and on that we are united. It’s also interesting to note that the Cairns Group - apart from it being a very consolidated and strongly supportive group, as the communiqué indicates - has also been instrumental over the years in driving a reform agenda that’s been picked up in many instances within the text that the negotiations over the coming week will be debating.

It’s the Cairns Group that advocated the elimination of the Special Safeguards. It’s the Cairns Group that has advocated the prevention of tariff quota creation. It’s the Cairns Group that has argued that there should be zero tariffs on in-quota tariff rates. All of those have been picked up in the brackets around which we will be debating this week. We also proposed an initiative on tropical products that’s been incorporated into the text and our proposals on food aid and export credit disciplines and on monitoring and surveillance have

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also been picked up.

On sensitive products, the Cairns Group proposal is in the text, and even the alternate proposal within the text is based on domestic consumption criteria that the Cairns Group drove. And I make those points because not only have we been able to find common ground, we’ve been able to influence the debate. We’ve been able to have the intellectual input and so its more than just a position of solidarity that we are anxious to see driven home to our advantage over the course of the coming week.

Today we had a detailed discussion, essentially to review our priorities. The outlook for the week ahead, we’re all committed to staying the distance, to driving home the advantage and to putting in whatever effort is needed to bring this Round to a conclusion.

From the discussions today, the shared objectives reflected in the communiqué - that are important to remind you of - is our commitment to an effective tariff cap; to the highest possible level of tariff quota expansion; to zero in-quota duties; to no creation of new tariff quotas; to the elimination of the Special Safeguards measure; the fullest liberalisation of tropical products; deep cuts in the domestic support of the major subsidizers, essentially the blue and amber boxes, as well as strong green box disciplines; and finally strong export competition. We’re committed to advocate those in the larger group, the TNC, within the green room. We will be having regular meetings during the week. We will be doing what we can to advance our interests. So we’ve reaffirmed our key positions across the three pillars: market access, domestic support, and export competition. And I reiterate the point I made at the outset. There can be no successful outcome to the Round without a substantial package of reforms on agriculture.

As for the prospects this week, we remain positive about it. That’s not to pretend there aren’t difficulties in the week ahead. It’s not just the issue of resolving outstanding matters in the agricultural text. It’s also understanding that issues involving industrial products and services still have to be talked through and the parallel mechanisms that this week will see emerge. They’re going to be an interesting test as to how we can try and find that appropriate balance. The final point I would make is that the eyes of the world are on us as trade ministers this week. There’s been many times in which people have been brought to Geneva to try and resolve this. This is more than just another one of those. This, in our judgment, is the best opportunity ever - in the whole seven years of this Round - for concluding a deal. The reasons for that are the uncertainty in the global world economy and the fact that we, as trade ministers, can bring some certainty if we can move towards closing the Round.

World trade has historically grown much faster than world output. In fact over the past fifty years world trade has grown three times faster than world output. So the challenge is

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obvious. If countries want to sustain their economic future they’ve got to engage with trade and importantly they’ve got to liberalise trade because each Round that’s occurred, whether its through the GATT or the WTO, has given a new impetus, has lifted that multiple of trade

to output. Interestingly enough over the past 5 years, despite some of the strongest economic growth continuously that the world has seen, the rate of growth in world trade has not kept up with its historic proportionate average to world output. It’s only been about twice as much as world output.

So the imperative of a new impetus, a new impetus to help bring about economic certainty, that’s the challenge to us. It’s also the case that for us as agricultural producers, looking for improved market access and reductions in subsidies, the best time to be able to do that in circumstances in which producers are receiving record high prices. So not only is there an imperative from the perspective of the food price issue to deal with a successful conclusion to Doha, there indeed is a real opportunity, an opportunity that in the past has produced much greater difficulty.

All that being said, many difficulties still remain. We’re going to have a hard week of negotiations. But the resolve of the Cairns Group is undaunted. We remain convinced of the merit of our case. We understand it is part of a coordinated and a much broader set of negotiations, but we are united in our resolve to try and do what we can to bring a conclusion to the Round. So it’s open to you for questions.

Isabel Saco, Spanish News Agency - I would like to ask the Minister of Costa Rica, how do you think the bananas affair can affect this week’s negotiation?

MARCO RUIZ, COSTA RICA: Well we have been very creative in finding the right solution. I think it is about time that the European Union solved a 14 year old problem. It is one of the black, let’s say, is one of the old disputes in this WTO.

I think we are close, we have been working with a couple of producers, with officers of the General Director of the WTO. There are one or two possible solutions. We want to work very hard this week to try to solve them. I think we feel positive, as long as other issues in the Round, like, for us, most important, besides tropical products, full access to the market, is that we find ways, in agriculture, most of the countries of the developed world share a great opportunity to eliminate or at least to phase-out subsidies, that’s most important for the Round right now.

REPORTER: You Minister met with US Trade Representative Susan Schwab yesterday I understand, one of the big issues outstanding in Agriculture is Domestic Support, in particular the cap the United States is prepared to accept. Do you have an indication from the US side whether they are going to go below the current range set out in the Chairman’s

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text and what sort of figure can the Cairns Group live with as a final figure from the US on this and for the EU are you satisfied that you have an agreement with them on the range that’s acceptable?

CREAN: Well on the first part of the question, we have not had an indication from the United States as to what they will be proposing insofar as the Overall Trade Distorting Support (OTDS).

You know the Chairman’s text and the Cairns Group is unanimous that we believe that the offer should be, or the solution should be, at the lowest end of that scale but that remains for negotiations. Similarly with the Europeans we have made some important progress in part because of some initiatives that the Cairns Group took in advancing a way through to resolving some of the issues for developing countries and the Cairns Group in particular with Sensitive Products and the like with Europe.

There is still a way to go. We have made significant progress in narrowing the differences. The numbers of brackets in Crawford’s text has come down significantly and I think that there is a desire to really try to complete this but in the end the question of how much further we can go to a large extent is gong to be dependent upon the balance question in the rest of the package. So no one’s given us any insights, you can try with Susan Schwab and find out what she has to say to you but I am sure that over the next couple of days these positions will become somewhat clearer.

REPORTER: There is a general perception among many developing countries that the Cairns Group adopt some kind of double standards on some vital agriculture issues, for example they say that you treat the developing country flexibilities with a hammer, you come with kid gloves when it comes to the US Domestic Support Payments. Why is it that the Cairns Group cannot take some kind of more balanced positions in terms of what it demands in Market Access in relation to what it actually wants the Domestic Support Pillar to be addressed in terms of effective cuts. We don’t see the words “effective cuts” at all in your statement today, I mean can you sort of suggest that there are no double standards in Cairns Group general approach to agriculture issues when it comes to the developing countries?

CREAN: Well, I mean, we are saying that our position today was that they should be the deepest cuts in the tier. I think it poses an interesting question with the argument if we start going outside the text. I know that there are some that argue that it is not ambitious enough and that we should do that, that’s not a view that I share but we will see how those deliberations, how that argument develops over the course of the week.

We have to try and get an outcome and therefore we have to work - and I think this is the

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view of most of us - we have to work within the parameters. Can I also say that we have been very strong in arguing that the US and the EC have to on the one hand improve market access and on the other to lower their level of domestic support. We have been the strongest of advocates in pursuing that course of action. We hope we can succeed in that regard this week.

REPORTER: Okay, just a follow up question, namely what is the Cairns Group’s stand at this point of time on say Special Safeguard Mechanism. I mean because this is what can be a deal breaker at this point of time with some of the key emerging developing countries taking a very hard line position that they cannot accept and if there are no clear number of tariff lines that can go to Uruguay round.

CREAN: So far as the SSM is concerned there are different views in relation to that, these have to be resolved during the course of the week. But you know what’s surprising about that. The Cairns Group is a group of, as I say, of nineteen countries, we’re not going to agree on everything. If you look at the list on what we have agreed on it is substantial. And the fact that we’ve had that agreement over a consistent period of time has influenced the direction of the debate.

The issues of SSM and Special Products still remain to be resolved and I think there is a realization - whatever the differences are that, itself that the resolution of those is going to have an impact on the overall level of ambition. So let’s see how the negotiations proceed. Yes, we have some differences but we have a lot in common. And what we have got to do is drive home to best advantage that which we have in common and use the integrity of the

group and the honesty and the frankness with which it’s been prepared to face up to these issues. Because we had good discussions about it today. So I would expect that to continue in the course of the week. Ok any more questions?

REPORTER: Mr Stancanelli, I would just like to ask you a question. Mr Stancanelli, Argentina has been very vocal on the need for balance between Agriculture and the NAMA negotiations, given what you have seen in the text now, what sort of number are you ready to agree to in the NAMA negotiations, let me see, the coefficient at the lower end being a possibility or will you keep insisting on something in the upper 20’s or higher?

NESTOR STANCANELLI, ARGENTINA: I will say precisely what is our position. As Minister Simon Crean said that the job to do is still in agriculture in order to have a clear picture of what would be the outcome in this area. And thanks to the Cairns Group, agriculture is within the general rules and disciplines in WTO and in GATT.

You know the work of the Cairns Group during the Uruguay Round, there is strong support for the Cairns Group and its work and also we are members for the G20. Regarding the

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question, you are right, we don’t see a balance in the negotiations if you compare the two drafts. I would say agriculture we still need to do a lot in order to have a meaningful result and in NAMA that it is totally unbalanced. We reject it, the NAMA text, and our position remains the same. We have to get in the NAMA text 25 points more in the coefficients than developed members. In this case we’ll be having the most balanced condition for NAMA and would be possible to reach a deal.

This is our position vis-a-vis the two areas, but in agriculture, I repeat, we agree with what Minister Simon Crean said, that the Cairns Group is in a strong position seeking liberalisation in Agriculture and that we are trying to reach the right balance in regarding the certain things where the group has not coordinated, or I would say the same position as it is on SSM and Special Products.

CREAN: Okay, thank you, we look forward to seeing you during the week.

ENDS

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