Minister of Trade

Speech Notes

2 June Address to APEC meeting on WTO negotiations

Intervention to meeting of APEC Ministers Responsible for Trade

Ho Chi Minh City, Viet Nam

The World Trade Organisation negotiations are at a critical stage. We have until the end of the year to complete the whole package if we are not to lose the TPA window and possibly political momentum.

If we miss that window it will be years before we have another chance. We should not be complacent about the risks of failure, and its costs in terms of development, foregone benefits of trade liberalisation, and the future of the multilateral system.

To avoid that, we have to have the modalities finalised well before the northern summer break. We have just about run out of time.

There has been some forward movement on issues since Hong Kong, and some of us had an opportunity to discuss the situation last week in the margins of the OECD ministerial meeting in Paris.

There have been signals, for example from the G10 and from the EU, that they can increase proposed tariff cuts on agricultural products. The US has indicated some flexibility on further reducing domestic support. Brazil, as a key member of the G20, has signalled a willingness to go beyond its earlier position by increasing the level of cuts it could consider for industrial tariffs.

While we are still short of a basis for agreement, the offers show that at the political level, key players have been prepared to make a serious effort to find a way past the main sticking points.

We have heard this morning from WTO Director-General Lamy on the process he intends for the month of June, culminating in a Ministerial Green Room meeting.

There is a lot of work still to be done in Geneva on a range of issues including rules, development agenda and services. But the immediate challenge is to finalise agriculture and NAMA (Non-Agricultural Market Access) modalities. And the critical issues there revolve around the level of ambition.

When we talk about ambition, the basic test is whether the round delivers some real market opening; real new trade flows, and real cuts in spending on trade-distorting subsidies.

This implies changes in domestic policies in politically sensitive areas for a number of countries. They carry political risks. But the greatest risk for all of us is failure to conclude the round and make meaningful advances. To get a breakthrough countries have to show their constituents that there is gain as well as pain ? and that the pain is going to be shared fairly.

It requires parallel movement across the core issues: market access and domestic support in agriculture, and NAMA. All members will ultimately need to be part of it ? but the initial understandings have to be worked up among smaller groups including the big importers and exporters and the big subsidisers.

So where does that leave us as APEC Ministers on what we can best do to contribute to the process?

Our meeting today is the largest gathering of Ministers ahead of Geneva in June. We have to send a strong political message in our APEC stand-alone statement on the WTO that we are committed to reaching a deal in the Doha process that delivers a high level of ambition. We must also indicate that we are also prepared to face up to the hard political decisions required to make that a reality.

In agriculture we need to complete and lock-in the progress we have been making on export competition ? including on the elimination of agricultural export subsidies. And we need to come up with an agreement that provides for an effective cut in overall domestic support.

However, the pre-requisite to a successful outcome is market access in agricultural and non-agricultural goods. We are not here today to negotiate the details of the June outcome. But as APEC economies that stand to benefit considerably from further market opening, we must send a clear political signal on that issue.

Many countries have sensitivities and are looking for flexibilities to deal with them, especially developing country members. We understand their concerns and we need to try to help the adjustment process for developing countries in particular.

But development will not be served if mechanisms like sensitive products and special products are simply used to prevent any real market access. That would contradict the Doha mandate.

So let's send a strong message from this meeting about the importance of ambition. And let's back that up by facing up to the tough political decisions at home to allow us to bring new flexibilities to the negotiating table and make sure that Geneva and the Doha Round can be a success.

ENDS

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