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Parliament House, Canberra: [transcript]: media briefing, informal meeting of Trade Ministers, Sydney 14-15 November.



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Tuesday, 12 November 2002, Parliament House Canberra

Minister for Trade, Mark Vaile

Media briefing, Informal Meeting Of Trade Ministers, Sydney 14-15 November

MARK VAILE: Thanks, everybody, for coming down to this briefing in advance of the ministerial meeting we're holding in Sydney, Thursday night and Friday. If I can just quickly give you a background and then I'll go to the agenda of the meeting so you've got a bit of an idea.

If we cast our minds back to the lead-up to and the failure of the meeting in Seattle at the end of 1999, it highlighted two things to the members of the WTO. The first one was the significant role that developing countries now play in this organisation that has 145 member countries, the overwhelming majority of which are developing countries. Their issues, their concerns hadn't satisfactorily been addressed they didn't feel at Seattle so that's resulted in the outcome that we got.

The other thing that was highlighted was there was a lack of preparation or enough attention to preparation in advance of the meeting. You put together an organisation of 145 member countries and the decision making process is one of consensus, so nothing's agreed until everything's agreed and nothing's agreed until everybody agrees is a difficult process.

Post-Seattle and in the lead-up to Doha last year, there were two crucial informal mini-ministerial meetings held: one in Mexico City and one in Singapore. They played a significant role in preparing the momentum and the environment and the atmospherics for the successful launch of a round in Doha in Qatar. Following that, with a very clear mandate to conclude the round by 1 January 2005, our missions in Geneva have been actively working on the agenda that we set and the mandate that we gave them.

That has been moving forward. From the beginning of this year I've taken a very strong position internationally that we - and we being the members of the WTO - would need to continue that process of informal meetings to keep it going, to maintain the momentum that we're going to need to hold onto to conclude these negotiations by the end of 2004. In the margins of the OECD ministerial meeting in Paris this year and again at APEC and other fora that I've been involved, I've continued to push the case that we needed to have, in the last quarter of this year, another informal mini-ministerial meeting along the lines of what we did in Mexico and Singapore last year and there's been broad agreement to that. I proposed that we hold that in Australia. There's been broad agreement to that.

So on Thursday night and Friday we're going to have a meeting of 25 ministers, or ministers from 25 member countries, in Sydney to discuss a range of issues. We will have Dr Supachai, the director general who has just taken up his position as of the beginning of September in attendance in Sydney as well. It comes at a crucial stage in negotiations. This year has been spent locking in the agenda and the schedule that we've got to meet if we're to achieve the outcomes firstly in time for the fifth ministerial meeting of the WTO in Cancun, Mexico next year, and then a bit over 12 months later by concluding the round at the end of 2004.

And so the meeting this week is about injecting the political momentum to keep the process moving forward, addressing and looking for areas of flexibility that haven't been found in Geneva so that we can continue the process moving forward so that next year in 2003 we can achieve the deadlines or the schedule dates for starting substantive negotiations in all the key

areas. So in terms of the time frames, by December of this year the organisation needs to deal with the issue of TRIPS and public health: access to medicines for HIV/AIDS, malaria and TB and the like by developing countries. There's got to be a mechanism found to allow that to happen in an affordable and equitable way under the TRIPS agreement so that intellectual property protection can remain in place but we can ensure that those countries in the world that currently can't get access to those medicines can in the future. That's December of this year.

In terms of agriculture, we need to see that all countries, all member countries have put down a clear position in terms of responding to the mandate out of Doha in the three key areas of market access, of the removal of domestic subsidies and the move towards the eventual elimination of export subsidies so that those negotiations can take place next year. There's a critical time in December of this year when the chair of that committee needs to develop an overview paper on how that's going to move forward.

We need to meet the deadlines at the end of March in terms of offers coming back on services, services requests. So requests for improvement in access for services have closed. The deadline for offers to come back on those requests is the end of March next year, and then of course the deadline on industrial market access is the end of May next year.

And so in terms of the agenda for the meeting this week in Sydney, we're focusing on some of those key developing country issues. The first item on the agenda is TRIPS and public health and looking at how we create an environment that allows access to those medicines so that the intellectual property that is predominantly controlled or held by developed countries is not compromised, yet we can see a circumstance eventuate that allows the manufacture of those drugs and the export and import of those drugs to those much needing developing countries.

The second item on the agenda in terms of the developing countries that we're going to be dealing with is a package of development issues, the implementation issues where we spent a significant amount of time last year in the lead-up to Doha addressing concerns of developing countries who believed that a lot of their concerns hadn't been adequately addressed out of the Uruguay round, and that is work in progress but a lot of confidence building has taken place in that area.

The issue of special and differential treatment for developing countries in all agreements within the WTO, an example being in the Australia and the Cairns Group position that we've put down on agriculture, we've asked for the significant reduction of domestic subsidies and opening up of market access, that there be a differential time frame applied. For example, if we're asking for a five-year implementation period for developed countries, we put in a 10-year implementation period for developing countries, taking into account the different economic circumstances of developing countries. But we need to have a discussion in terms of what are the aspirations of developing countries with regard to special and differential treatment in the different areas of negotiation in the WTO.

We want the developing countries to clearly outline and clearly identify their aspirations in terms of what they want to see and not just hear from developed countries what we believe they should get as far as special and differential clauses are concerned in agreements.

And then of course the other important issue of trade related technical assistance or capacity building measures for developing countries. The rules based system is a legalistic and very complex system. Even countries like Australia expend significant resources exercising our rights under the WTO rules.

A classic example was the lamb case where the United States slapped on a 201 safeguard action on the export of lamb to America, put a tariff on that. And we are one of the original members of the GATT. We've been in this system since it started. We've got a significantly deep level and broad level of expertise in Australia. But it still took us two years to get a result on lamb. So that was a much longer period to get a result than it should take in any system, but it also takes a lot of expertise and a lot of resourcing. We need to ensure that all the members of the WTO have the technical ability to be able to exercise their rights and participate fully in this organisation.

Another critical issue that has been raised in the last two years by developing country members, we've embarked on a number of projects and programs to help our near neighbours in the Asia Pacific region in terms of developing and expanding their skills base, and also in the African continent in terms of helping those member countries. But again it's a very, very important issue for the entire organisation because if we expect everybody to shoulder their responsibilities as far as their membership of the rules based system is concerned, they should also have the capacity to be able to exercise their rights. A lot of countries at this stage still don't have that capacity and we need to be cognisant of that.

The third agenda item that we're going to be covering is market access and of course that runs across those three critical areas of agriculture, of industrials and of services, and I've outlined the deadlines that we want to meet on those and of course these discussions really need to focus on extracting a commitment that everybody is going to meet those scheduled deadlines for getting positions down so we can start negotiations. And so that is an important element of the discussion.

Of course, on Friday the opportunity will also present itself to discuss a range of what we've called other issues or the Singapore issues which include investment, [and] competition, [then there is] environment, the rules which is anti-dumping, and a whole range of issues that were not in the built in agenda that came out of the Uruguay round but have been put onto the agenda, that were negotiated and mandated out of - some of them were mandated out of Doha, and so we need to discuss those and of course I go back to the issue of how the system works, how the rules based system works, different countries' ability to be able to exercise their rights in that system and how long it takes.

We're not satisfied that it took Australia two years to get a result on lamb. The first six months of that timeframe was spent arguing and negotiating who should sit on the panel. And so we've got to improve this system if our constituencies, if our domestic constituencies in the developed world and the developing world, are going to have faith in this system and faith that it can deliver the outcomes that we're looking for and of course the concluding item on the agenda is the road to Cancun.

Cancun will be the fifth ministerial of the WTO. It will be held in Cancun, Mexico in September of next year. It will be at the mid point in the round. So, we need to be in a position by the time we go to Cancun that we can start seeing a balance developing in terms of the negotiations and we need to be in a position to see and understand that there is a level of comfort right across the organisation of all the members of different economic levels within the WTO, that their issues are being acceptably addressed.

And we need to be also comfortable at that point that we're going to achieve the deadline at the end of the following year for the conclusion of the round. It is a very ambitious deadline that we've set to conclude by 1 January 2005. We believed in Doha we needed to do that if we

weren't going to have a similar exercise as we had in Uruguay where it went on for several years and it didn't continue to apply pressure and discipline to the member countries to focus on the critical issues.

If I can conclude my comments by saying that our view is that at this stage in the proceedings there are two critical issues that need to be addressed if we're to unlock the door to open up the pathway to the next stage of this process. The first one is dealing in an acceptable way with developing countries with terms of access to medicines under the TRIPS agreement. This is crucial to be able to confidently carry forward the interests of the developing countries, the developing member countries of the WTO. We must deal with this issue to maintain the confidence from the developing world that they are being included, involved and their issues are being dealt with by this organisation.

The second critical issue is that we must have a significant level of genuine intent expressed by all the major players in terms of agriculture. We've got the deadline for modalities of the end of March next year that Stuart Harbinson, as I indicated, has got to develop an overview paper by December of this year which really encapsulates all the positions and tries to get them into perspective so that there can be an agreement on the modalities of the negotiations and where we're going to have to go to look for common ground.

At this stage, in response to the mandate issued in the Doha declaration last year, Australia and the Cairns Group, the United States, China and a number of other individual countries have put down clear positions responding to the mandate from Doha. That is a crucial point in this. It is no good reaching back to the outcomes of the Uruguay round or the built in agenda out of the Uruguay round or referring to article 20 out of the Uruguay round. The positions that are put down have got to respond to the challenges in the mandate that came out of Doha. Now, we need those other key countries like the EU and Japan and Korea to do that so that this process can go forward.

This is not just an issue that's crucial to Australia and the Cairns Group; this is a crucial issue for the developing world. Those countries that cannot get access for their agricultural products into richer markets across the world can't hope to see significant improvements in their economic circumstances in the foreseeable future and will continue to rely on aid from the developed world for their sustenance and development in their economies. That is not the way forward. The way forward is to see better access into richer markets across the world. That is the second of the two critical issues that we see that need to be addressed now for the whole process to move forward.

If I could just close in making one comment, and we need to be clear on this. This is - and there is a reason why it is called an informal mini-ministerial meeting. It is not held under the auspices of the WTO, it is held and being convened by Australia in discussions with the chair of the next full ministerial, the Minister from Mexico, Luis Derbez. It cannot make clear, binding decisions, there won't be a clear undertaking coming out of this meeting, it is about generating more momentum politically so that our officials and our missions in Geneva can break through where they are at the moment and move ahead. It was successful - this mechanism was successful in Mexico and in Singapore in the lead-up to Doha last year. I have a firm belief that using this mechanism through the entire round between full ministerial meetings will ensure a successful outcome.

So out of this week what we want is a meeting of minds, I suppose, of representatives of all the different key groupings within the WTO to address the issues that have currently slowed the

process down, find compromise positions, find flexibility, so that our missions in Geneva can move the agenda ahead. Okay.

QUESTION: You've got the EU and the US at this meeting. They're the two main countries concerned in terms of TRIPS but there would be drug manufacturers - - -

MARK VAILE: And Switzerland.

QUESTION: And Switzerland. Say you get some sort of agreement from them at this meeting, what is then the mechanism by which that would be implemented to meet the December deadline?

MARK VAILE: The General Council in Geneva of our ambassadors, all the ambassadors of the WTO. Twenty-five member countries can't make a binding commitment on behalf of everybody, so for flexibility, and there's agreement on the sorts of environment that can be created to allow this to take place, where countries on all sides of this issue are comfortable, that's then taken back to Geneva by the Director General, instructions are given to ambassadors, there's a meeting before the end of the year of the full General Council to make a decision on it, and that decision then is binding.

QUESTION: So this meeting could be the one that sees the - - -

MARK VAILE: The breakthrough on that, yes. It could be the catalyst to that.

QUESTION: Yes.

MARK VAILE: Right? And, yes, I am hopeful.

QUESTION: What are the specific mechanisms, Minister, that you and Australia will be pushing in terms of relaxing the TRIPS agreement….

MARK VAILE: Well, you know, there have been a range of proposals put forward that will be discussed and there needs to be an identification of, you know, what diseases are we talking about, there needs to be an identification of what countries should have access, so what countries should be identified as to be the importing countries, what countries should be identified that can manufacture at an affordable rate, how do we deal with diversion? I mean, you know, there is an intellectual property right that needs to be protected and we've got to recognise that in this. There is a need in the developing world that needs to be supplied.

QUESTION: Sorry, Minister. By diversion you mean leakage?

MARK VAILE: So that if there's agreement that a drug that might be manufactured in Europe, if there's agreement that a third country that can manufacture that drug cheaper and then export it to - or a second country can manufacture it cheaper and export it to a third country in need, that either out of the second manufacturing country there's not a diversion into other unendorsed markets or there's diversion out of the target country or the developing country or the LDC that needs the drug. And, you know, we all know what can happen in some of those countries, so that somehow there's got to be those mechanisms agreed to and put in place that gives certainty in terms of the intellectual property holders that, you know, a very good cause is being met but their commercial interests are not being significantly compromised in the richer markets of the world.

And it is a complex matrix of an understanding and how we go about, you know, agreeing on, you know, whether it's a waiver or what the legal mechanisms are that you put in place that are acceptable to all parties. But at this stage there seems to be a genuine intent across the organisation to deal with this issue. And I think that if we do and if we can and if Sydney becomes - if all Sydney achieves is that it is the catalyst and we precipitate an acceptable outcome on this issue, then it will have been an outstanding success.

QUESTION: So if Pfizer, say, could license an Indian manufacturer to produce its drugs or set up its own plant - - -

MARK VAILE: Yes, but I'm not going to nominate companies or countries, but for manufacture for specific target markets that can't get access at the moment.

QUESTION: Minister, what do you say to those people who are going to protest? What do you say to them in terms of why, and say, “Don't come and protest”, what do you say to those people who are upset about the WTO, who are going to stand up there and yell you down and Bob Zoellick and everybody else?

MARK VAILE: What are you on about? You don't understand what the real issues are. You don't understand that this is not an organisation that is made up of the heads of - or CEOs of all the major multinational corporations across the world, this is an organisation of elected ministers and elected representatives of the 145 countries that belong to this organisation that are focusing on building an open and inclusive trading environment across the world but are focused on improving a rules based system that delivers benefit to not just the rich countries of the world but the developing countries of the world and the LDCs across the world. An organisation where those 145 member countries have an equal vote. Lesotho's vote is exactly the same as what the United States of America's vote is worth.

And so don't lecture us about globalisation, don't lecture us about what multinationals are doing, this is about sovereign countries doing what they believe is in the best interests of their domestic constituencies as well as building a much better structured rules based system across the world. And this specific meeting from the outset is targeting dealing with an absolute and unambiguous developing country issue.

QUESTION: Minister, they might have one vote but as you mentioned yourself, they have difficulty accessing and utilising a rules based system. I mean, it's unlikely that Lesotho could have run a lamb case. Are you saying that maybe, you mentioned that problem, should the developed countries be giving aid, whether it be in money or expertise, to help those poorer countries run cases like that?

MARK VAILE: Yes, we should and yes, we are. And Australia in particular in our region, I mean, we announced in Los Cabos in Mexico another $3 million program on top of about $16.5 million that we spend through our aid budget within our region, the Asia Pacific region, helping in that technical capacity building means throughout the region. We've done a significant amount with sub Saharan African countries in terms of helping train their officials to be able to fully engage in those mechanisms and prosecute cases. The WTO itself has developed a specific fund so that they can assist countries, and Australia is a contributor to this fund and there's another pledging round coming up shortly, for this fund is established so that member countries that cannot afford to have a mission in Geneva have the ability and the assistance to be able to go forward and take cases through the process in Geneva.

So there is a lot to be - like, that is being done in that area and again, we put an agenda together that focuses on discussions on, you know, and Dr Supachai will report to us on that particular fund in the WTO and how that's working, and if we need more I know that he's going to seek commitment to a further pledging round. Because we are getting to a stage, and that's why I identified those two outcomes out of Seattle, and one of them is certainly - and I've noticed in the three and a half years that I've been in this portfolio, there's been a significantly increased recognition of the role that developing countries play in the global trade agenda and certainly in the WTO, and the organisation is certainly far more inclusive now than what it was three and a half years ago.

QUESTION: On agriculture, is there going to be pretty heavy pressure applied to the EU, Japan and so forth on getting something on the table?

MARK VAILE: Hopefully, yes.

QUESTION: Yes. How are you going to approach that?

MARK VAILE: Well, the thing is, the way these meetings operate is that we have a general discussion on, and we've have lead facilitators in all those areas, but I've identified these agenda items and I've also nominated lead facilitators in those different areas in terms of leading the discussion. And they are mostly people that are involved in those aspects of developing the mandate out of Doha and saying, “Okay, this is the state of play, this is where we think countries have got to start now showing flexibility”. And the facilitator on that will obviously call on those countries to say, “Well”, you know, “Why haven't you put on the table your position? I mean, you agreed to the mandate out of Doha, you need now to get on with the next stage otherwise it's going to, be a blockage in the system”, and then other countries will also participate in the discussion, including Australia.

QUESTION: Is this meeting, though, almost a make or break thing on the issue of agriculture as well, or is it another gathering needed…

MARK VAILE: Well, I wouldn't say it's make or break, and there's been a broad recognition that this mechanism will be used again during the course of next year, but there's nothing locked in, there's - nobody's offered to hold another one of these meetings next year, but my personal view is that there will be and we will need to use these meetings as a mechanism to continue to inject that political momentum to keep things moving forward. And I think that quite possibly prior to that March 30 deadline we may need to, you know, revisit this issue. I would hope that out of Sydney we don't, but we just don't know.

QUESTION: Does that mean Japan, Korea and EU have yet to respond to the Doha issues on agriculture? Have the US got its response on the table and if they have how does that fit with the Farm bill?

MARK VAILE: The US position is not as ambitious as Australia or the Cairns Group, nor would you expect it to be. But by comparison to the Farm bill and the reaction that the US received across the world to the Farm bill, is quite a significant and positive step forward in that it proposes to create some relativities across economies in terms of the legal or allowable levels of domestic support. And it's simplistic if you look at the three largest domestic supporting or subsidising countries, the US, Japan and the EU, at the moment, what the US has mandated to spend in the Farm bill is legal under the agreement out of the Uruguay round. I mean, they can spend $19 billion a year subsidising or providing domestic support for agriculture and that's

legal, nobody can challenge that. Japan has around about $30 billion worth, the EU about $60 billion worth.

What the US proposal says is that we will reduce ours if others also agree to reduce it to a level where there is a common comparison of domestic support at the level of five per cent of domestic production. So there's some relativity across the area. Now, of course, if you apply that to Australia we'd increase ours from where it is at the moment. But at least they're seeking to get some - at the moment there's no relativity. By comparison they're using some baseline. They're also proposing a modest increase in market access in terms of tariff quota regimes. They talk about - I don't know whether it's 20 or 25 per cent but it actually ends up about - in real terms I think it's one per cent increase in TRIPs access. And so that at least it's a positive position. As I say, ours is much more ambitious than that and, of course, others that haven't put down a position yet have criticised ours as being unrealistic. But unless we are, how are we going to drag these players on to the field initially and then try and get them into a position where they're at least addressing the challenges that are laid down in Doha?

QUESTION: Minister, have the Europeans actually already blown the raspberry at 2005? The EU Summit seemed to focus totally on expansion, 2004, 2005 was all about expanding Europe. The one - you know, the subsidies weren't going to increase by one per cent a year, the Europeans are already talking informally about not addressing agriculture until the second half of the decade. So have they already started to put out markers well beyond January 2005?

MARK VAILE: There is a level of concern at the position that's been taken internally in the European Union with regard to reforming the common agriculture policy. It's one of the areas that obviously will receive some attention and discussion at the meeting in Sydney this week. Can I just make this point? As far as this round is concerned, unless there is an acceptable outcome as far as agriculture is concerned, then Australia, the Cairns Group, any number of developing countries that are very focused on improvement in agricultural trade, are not going to be comfortable. The United States is not going to be comfortable. I mean, they expressed to the Cairns Group meeting in Bolivia only a couple of weeks ago that without agriculture there's not a lot in this round for the United States either.

So we need to be aware from the outset that, unless it is addressed in an acceptable way and that we're not prepared to have a similar outcome that we received in the Uruguay round, then the prospects of the round being concluded are going to come into question. You cannot continue to hold out against the overwhelming majority of the members of this organisation who believe that it is unsustainable to think that agriculture should be treated differently to industrial goods and services in terms of the global trading regime.

And so we are going to get to a point at some stage during this time frame where we're going to have to confront that issue. Now, we understand that there may be a possibility of Japan putting down their position on agriculture before the end of the year. I am hopeful that that is correct and we certainly would like to see a similar indication from others. But going to your question, it remains to be seen and certainly the message that's coming out domestically from the EU in terms of the round is not a positive one but I would hope that in the spirit of what's going on and in the spirit of what we're trying to achieve, that there is a positive and substantive move forward by the EU.

QUESTION: ….. through that agreement if implemented and you get a 1 percent increase in EU spending on domestic supports ad infinitum, is it possible to get an acceptable outcome on agriculture?

MARK VAILE: It's not possible to get an acceptable outcome on agriculture unless the three pillars that were identified to be dealt with in the mandated agenda for this round out of Doha, that is on market access, on domestic support and export subsidies are addressed, then the answer is no. And any number of countries have indicated over the last four years as we've moved towards this negotiation that reform of agriculture was bought and paid for in the Uruguay and not received and not delivered. It's not going to be bought and paid for again and not be delivered. And so there are other issues that others are looking for that won't be delivered on if we don't get a balance in agriculture. And the balance in this agreement is not to be pursued within the ag agenda, it's across the overall agenda, and it's a very important issue.

QUESTION: Have you talked to Pascal Lamy since - - -

MARK VAILE: No, I haven't. The meeting this week will be the first opportunity of having that discussion since those discussions have been made public. But I mean, we shouldn't discount the possibility of the European Union going back to Brussels and being prepared to shoulder its responsibility as a major player in the WTO either.

QUESTION: Minister, can I get your reaction to US farm groups appearing to have done a u-turn on the free trade agreement and Bob Zoellick's to get a letter from them today supporting negotiations in - - -

MARK VAILE: Well, I'm not aware of the letter and I obviously haven't seen it, but if the Farm Bureau has softened their position in terms of the bilateral relationship between Australia and the United States that would obviously be very welcome. In this context, in the multilateral context, obviously working very closely with the Bush administration in the pursuit of a common direction. I don't say that our agenda and our goals are exactly the same as the Bush administration, but certainly we have a common direction in terms of being pro-reform in agricultural trade liberalisation. I know the Farm Bureau do support the position that the United States has put down on that and so - I mean, I'd be interested to hear more about a letter from the Farm Bureau to the USTR. But I would see that as being positive.

QUESTION: Well, it is more than just the Farm Bureau. Are you saying you're not aware that a letter will be sent or you just haven't - you're not aware of the content of the letter?

MARK VAILE: Not aware of the contents. There's been nothing official conveyed to us about the letter and certainly I haven't seen a copy of it either.

QUESTION: Are you having one on one talks with Bob Zoellick on Friday?

MARK VAILE: No, I'm having one on one talks with Bob Zoellick on Thursday morning.

QUESTION: Thursday morning, okay. And that will be discussed?

MARK VAILE: Bob Zoellick I think is arriving in Australia sometime Wednesday, maybe Wednesday evening and I'm having a bilateral with him on Thursday morning.

QUESTION: Here?

MARK VAILE: In Canberra, yes.

QUESTION: Mr. Vaile, what's the terms of the make-up of the 25 nations represented?

MARK VAILE: A range of issues. Obviously we've focused specifically on a majority of developing countries because of the agenda that we wanted to set and the key issues that we want to address in this discussion. And from the outset I said I wanted to have, because it's in our part of the world, it's in East Asia, we wanted to ensure that we have a good cross-section of developing countries from our region but we also want a good representation of developing countries from Africa. Of course you need have the Quads involved: the US, the EU, Canada and Japan. Other North Asian economies, we wanted to have China here because of it being one of the newest members of the WTO but also the most populated country in the world. We wanted to have India here because of the critical role in a number of those developing country issues. And so we've tried to balance all the different interested groupings within the WTO and get representation there so as much as possible those different interest groupings within the WTO are comfortable that their interests and their issues will be addressed and discussed at this particular meeting.

We accept that you cannot please everybody and we understand that, but still that was the case in Singapore and Mexico last year. The meetings were around about this size and still delivered a successful outcome. And I've had discussions with a number of countries who are not going to be present at the meeting and they certainly understand the rationale behind that and of course there are countries that are present at this meeting that weren't present in Singapore or Mexico last year and who probably won't be present at meetings if they're held next year. There may be a case when Australia might not be present. We've got to accept that. That's just the way this process is developing. But while it continues to deliver successful outcomes in terms of maintaining momentum then we should accept the informal nature of these meetings moving forward.

QUESTION: If you can get a deal on TRIPS on defined country, defined disease, defined medicines, who is going to run that? Are you going to hand that over to the WTO - sorry, to the World Health Organisation? I mean, who's going to have carriage of this…

MARK VAILE: Well, that's something that's obviously a crucial part of the discussion as well, as to how - you're saying well, who's going to be the watchdog, who's going to be the policeman, and that is also a subject of the discussions. Initially it will go back to that particular committee, the TRIPS Committee in Geneva, and the Mexican Ambassador is the chair of that committee, I understand, and I would imagine that he will also be in Sydney with his minister. But then, who's going to be the watchdog and the policeman on this, well, that's something that's obviously a subject of discussion and will be a key element of any outcome in terms of delivering comfort to both sides.

QUESTION: Who would you nominate ?

MARK VAILE: I think that we're committed to the rules based system, we're committed to the WTO. I would think that somewhere within the rules based system and structure that we should be able to deal with that because we're dealing with it within the membership.

QUESTION: What's your attitude to Labor's criticism of the secrecy around the services negotiations and are you happy with their move or their plan to seek a Senate inquiry on the services negotiations?

MARK VAILE: Well, I mean, the Senate has the ability to do whatever it likes doing. We've made no secret of the fact in terms of our requests that we put in on time I think were on - I'll get

the figures mixed up here - on 34 countries across 17 different sectors. The requests have gone in. We negotiated and consulted broadly with industry on those. I don't think that those issues have been excessively secret and we didn't criticise how Labor managed the GATTS negotiations prior to the conclusion of Uruguay. If the Senate wants to hold an inquiry on it, that's fine, the Senate can hold an inquiry. We'll continue pursuing our objectives in the services sector in the national interest.

QUESTION: Minister, you appear to be arguing about lowering tariff barriers lowering barriers to agriculture with the EU from this notion of allowing developing world access but the EU already has very generous quota allowances for about 80 developing countries. They're going to be phasing those down from about 2008. What is the other motive for them to actually move on agriculture when the developing world's not even putting any pressure on them in that anyway?

MARK VAILE: Well, the developing world is putting pressure on them on that. Australia has also announced that we're providing duty free and tariff free access into our market for 50 LDCs without any exclusions. Just remember there are some conditions in terms of the European Union's everything but arms agreement to allow access and that there are exclusions on, I think it's on bananas, it's on sugar and other products. The United States has exclusions on access on particularly textiles. What the Prime Minister announced in APEC in Mexico was access for the 50 or less - well, 49 LDCs plus East Timor which is not yet designated an LDC without any exclusions. But still that doesn't completely clear the way in the full range of agricultural products that the developing world want to get access into those markets on, so there still is -they are still applying pressure. There's still a lot of developing countries that hold a similar view to the Cairns Group in pursuit in this area.

QUESTION: But isn't the US still the bad guy in terms of access to developing countries?

MARK VAILE: I know that people get sensitive because we continue to complain about those three major developed countries, but they're all in different ways guilty of locking up markets and not allowing access to those markets. They're all guilty of excessive levels of domestic support because their treasuries can afford to do that, that distort global domestic markets. And the classic example particularly emanating out of the US and the EU was sugar. And then there's the issue of expert subsidies and production support mechanisms that the developing world just don't - we can't compete with it so the developing world hasn't got a hope of competing with it. So that's why I say all three of those key areas are crucial and need to be addressed.

QUESTION: Minister, on the LDC decision, have you actually had any blow back from the South Pacific, SPARTECA and PACA* on that, particularly has Fiji complained to you that basically their garment industry will go down and Bangladesh will get all the benefits. Has there actually been any movement on that ….

MARK VAILE: No. We have had discussions in that regard and of course we always had some preferential arrangements in place under some specific agreements - what are the acronyms, SPARTECA and PACA. So in terms of that latest decision, I haven't had any direct comment from them in that regard on that announcement. I know that our officials had discussions with them in advance of that because we didn't want any surprises, but certainly we had some particular bilateral arrangements in place as far as Fiji is concerned.

QUESTION: Just in regards to Bob Zoellick, will he be meeting the PM or the Cabinet and what about the discussions of the FTA..

MARK VAILE: Yes, I certainly expect he'll be meeting the Prime Minister on Thursday morning, I'm just not sure whether we've got locked in place a meeting with Cabinet or a representative of Cabinet. As you know, this place is fairly hectic during sitting week on a Thursday morning we've got to actually be up in Sydney by lunch time. There's some processes in place during the day. But yes, the Prime Minister will see Ambassador Zoellick.

QUESTION: Will it get raised in terms of the discussions there?

MARK VAILE: I'm sure it will get raised in discussions but in terms of our ambitions it's work in progress. We continue to argue our case and, as we've continued to state publicly, it's now a matter for the Administration to make a decision on. They've made clear in a number of public statements, probably the most significant being the national security strategy that was put out that had an economic element to it where they nominated a range of countries, that they had a view to moving with bilaterally, and Australia was recognised in that document. Part of the communiqué out of MINCOM this year was that in strengthening economic ties it would be good to pursue a bilateral FTA, but again we've argued our case with the administration, in the Congress, with the private sector. We've developed a significant level of support from the private sector in the United States. It really is now a matter for the administration.

QUESTION: And what other countries will you be having bilaterals with?

MARK VAILE: Look, I've been having - I can't nominate them all, but during the course of the day on Thursday obviously I'll be having bilaterals with the people who we've asked and identified to lead the discussion on those specific agenda items, and they're: Lesotho, Korea, South Africa, Dr Supachai, Japan, Singapore, Indonesia, the European Union, India and Thailand. So we'll have a very busy bilateral. Now, they're formal bilateral meetings and of course during the course of the day and going to have a cup of tea and dinner commitments and lunch commitments, we'll obviously have the opportunity of talking to all the ministers that are there. But we have sort of identified a whole range of bilaterals that we're going to be doing.

QUESTION: Can you put your Deputy National Party Leader hat on for a moment and say how are Australian farmers going to feel - are they going to be satisfied with what the US has signalled its intentions are about the agricultural form, either multilaterally or bilaterally?

MARK VAILE: Look, I think that it would be fair to say that the response, although cautious from organisations like the NFF, was still positive in terms of the US position that they've put down in WTO for ag negotiations. The Australian farm leaders obviously support more vigorously the Australian and Cairns Group position. They were present in Santa Cruz in Bolivia when we had those discussions. The USTR Zoellick was also present in discussions in Bolivia. We have a significant level of like-mindedness, I suppose, in terms of agricultural trade reform. And off the impact and I suppose the shock of the Farm bill during the year, there was a positive disposition to the administration's position on agriculture that came forward with the support of the farm lobby in the US.

QUESTION: Doha is talked of as the development round, so far in view of those negotiations, so far in a year or so of trade negotiations on trade related technical assistance and capacity building, has anything actually been achieved to fix the rules of the game in favour of developed countries?

MARK VAILE: I think there's - well, you know this organisation as well as anybody - is one that sometimes gets bogged down in process. This year there's been a lot of focus on process, on

establishing committees, on establishing chairs of those committees, and that's why we're reaching a point now where we can start making the transition from process to substance. And I suppose that's why I identified those couple of critical issues as being the keys to unlock the door to get into the substance. And so by reaching this point in the round and identifying this whole range of critical issues to developing countries, I suppose the first year of discussions and negotiations have been fruitful in that regard. This now becomes the litmus test of having the ability to move on to starting to put down substantive agreements and outcomes as far as the negotiations are concerned. And that's why I say the first critical test is going to be TRIPS and public health in December of this year to start addressing some of those issues.

But by the same token, the onus is not entirely on the developed country members of the organisation in this regard. Like I said in my comments, there is certainly a responsibility on the developing countries to start clearly outlining what their ambitions are. What are their needs? What are their requests as far as special and differential treatment is concerned. Now, we need to know what the ambitions are in that regard. It's no good the developed countries coming along and saying, “This is what we think you should have as far as S&D is concerned”, because that immediately elicits a sort of a recoiling reaction. This has got to be more of an inclusive process, and to do that we need to hear reasonable requests in that regard as well. So that's why I wanted to have a critical - you know, part of this, TRIPS and public health, but also implementation of special and differential and trade related technical assistance.

QUESTION: Back to the EU - you said that Japan as you've heard might be making a submission on agricultural - - -

MARK VAILE: We're hopeful.

QUESTION: What about the EU? Have you got any intelligence about - - -

MARK VAILE: No, hopefully we will hear from Pascal Lamy on Friday.

QUESTION: And just on lamb, how much has the lamb case cost us, have you got any idea?

MARK VAILE: To be quite honest, I haven't sought that response. Whatever it cost, it was worth as far as I was concerned, both in terms of the actual reality in terms of the exports into the United States and the dollars that those exports have been earning. But just as importantly in terms of having a win, is proving the worth of the rules based system and proving the point that this is the reason that we belong to this organisation so we can use the rules in our favour, and also the continuing construction of an argument that, you know, you've got to be really sound in terms of how you use or apply safeguard actions.

Now there's been subsequent safeguard actions taken on steel that are subject to challenge. It will be interesting to see how those go. From the outset we believed that the body in the US hadn't properly applied the rules to substantiate that safeguard action and ultimately we were proven to be correct. But it was the engagement of consultants and a legal team but it was a massive amount of time in officials' capacity both here and in Geneva.

QUESTION: You've made the point that something like three-quarters of the WTO members are now developing countries but two-thirds of all dispute cases are lodged by developed countries and the one-third lodged by developing countries are all lodged by the same 10 countries. Is that going to change?

MARK VAILE: Against each other?

QUESTION: No, basically against the West but sometimes against each other.

MARK VAILE: Well, those statistics highlight the importance of that broad range of capacity building measures that must be undertaken. I mean - - -

QUESTION: Do you think Fiji will have the capacity in the future to lodge a case?

MARK VAILE: Well, I think yes. I think yes, they will because if the system - you know, if we get it refined so it's working better than it is and so that there's not the time taken in getting outcomes, if there's a transparent and better structured framework in terms of the activities that the dispute settlement panel set up so that there is a significant level of comfort in that I think that yes, you will see countries of all different levels of economic stature prosecuting their case and pursuing their interests in the realms of the WTO. That's what it exists for. That's why they are members. That's why Australia is a member.

QUESTION: Minister, you said that you have a bilateral meeting with Indonesia after the Bali bombing, do you think that - how do you reassess the relations between the two countries…

MARK VAILE: My view is the relationship is much better than has been reported. We're seeing a number of things being reported, comments from different individuals. There's been reporting in some of the press in Indonesia, for example, about the recent ASIO raids. And of course, they weren't discriminatory against any individual nationality, ethnic background or religion, they were based on evidence at hand with regard to connection to some terrorist organisations. And just as Indonesia reserves the right to undertake that process in Indonesia, that just as we respect Indonesia's right and absolute ability to undertake the investigations into what happened in Bali, and we are very grateful from the agreement of the Indonesian authorities for participation of the AFP, the Australian Federal Police in that process. It's still being run by Indonesian authorities and we should respect that.

In terms of our economic relationship, it is quite strong and quite sound. I mean, I have a very good working relationship with Rini Soewandi. We had a lengthy discussion across a broad range of issues. We had a full bilateral meeting in Los Cabos in Mexico. Again we will do the same thing again here. We are actively working in terms of removing barriers and impediments to trade between our two countries. Economically we are significantly important to each other. There's something like a $7 billion two-way trade relationship between the two countries which is critically important to both economies. So, you know, we are near neighbours. We're always going to be near neighbours. We have in the past confronted some difficult issues, we're currently working through some now. But I have confidence that both governments are going to work through those in a very mature and professional way. And all indications are that we are. In Mexico I met with Foreign Minister Wirajuda and Trade Minister Rini Soewandi. Rini Soewandi attended a ceremony - we had a memorial service in Los Cabos at the same time as the memorial service took place here in the Great Hall in Canberra. It was attended by a lot of ex-pat Australians in Mexico, a lot of the delegation from the media that were travelling with the Prime Minister, but Rini Soewandi was there representing the Indonesian government. It was a positive indication.

QUESTION: Do you believe that the Bali bombing will give impact or something or other in the economies in the region?

MARK VAILE: Well, it's obviously made us all far more aware of security issues. There was a focus in the discussions in Mexico and the leaders statement or the communiqué that came out identified the need for all APEC economies to participate, for example, in the STAR program, Securing Trade in the APEC Region so that we can implement greater measures. The Prime Minister, in Mexico, announced a further $10 million aid program to Indonesia to work to specifically focus on building up and strengthening security measures over the next four years. And so of course we will and we need to work on a regional basis in that regard. Australians need to have a certain level of comfort in terms of security arrangements in Indonesia, as do Indonesians in Australia, as to Indonesians in Malaysia, in Singapore, in the Philippines and other South East Asian countries, as do we expect from Australia. So it requires yes, an individual approach, but also a regional approach and it was something that was discussed, given APEC is a regional form, at APEC.

Okay, we might call it a day and go and get ready for question time. Thanks, everybody, very much for coming and I look forward to seeing some of you or all of you up in Sydney.

ENDS