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For Immediate Release
Office of the Press Secretary
September 14, 2005
Press Briefing by Deputy National Security Advisor Faryar Shirzad
The Hilton New York
New York, New York
1:39 P.M. EDT
MR. SHIRZAD: In the speech, the President spoke about what the United States, under his leadership, has done and will do in the fight against killer diseases, like AIDS, malaria, and Avian flu. He talked about the efforts we've made as a country to promote good governance and private sector-led growth through the Millennium Challenge Account program. He talked about the leadership and the work we've done with the G8 countries in eliminating the crushing burden of debt on poor countries through the multilateral debt relief agreement that was reached among G8 leaders at Gleneagles earlier this summer.
But today what the President did was to call on the world to recognize that we must turn to the next challenge on the development agenda, and that is the advancement of multilateral trade liberalization. Global trade liberalization has the potential to lift hundreds of millions of people out of poverty, according to a number of studies from the World Bank and the Institution of International Economics. Estimates range up to half a billion people would be lifted out of poverty through a successful completion of the Doha negotiations.
For the President and for the United States, we strongly feel that open markets have transformed into powers to promote liberty and good governance. And all that, however, takes hard work and bold leadership, and the President today stepped up to provide that leadership. He called on the world to recommit itself to the advancement of the Doha and WTO negotiations. He also demonstrated that he and the United States are willing to take the mantle of leadership necessary to get the talks going. He did so by a focus on the issue today, but he also did so by issuing a bold challenge, and that is that the United States is ready to eliminate market barriers, tariffs and subsidies that impede the free flow of commerce, so long as the rest of the world joins us in that endeavor.
The WTO talks are at a critical stage. The Hong Kong ministerial meeting of trade ministers of the WTO is scheduled to occur this December. Under the terms of the negotiations that are currently underway, the WTO talks are supposed to be done by the end of calendar year 2006. For the United States, our trade authority rests under the trade promotion authority legislation that Congress provided, and that authority expires in the middle of 2007. So for the President and for the United States, we approach this issue with a sense of urgency, both because of the humanitarian challenge, but also because of the limits of time available to us.
The opportunities that Doha provides for the American people and the world are tremendous, and our hope is that others will join the President's call to make the potential of Doha a reality.
With that, I'm happy to take any questions.
Q On the subsidy initiative, it's a little unclear to me how much practical impact or importance this proposal has. Is he saying that the entire world, every last nation in the world, must eliminate tariffs and subsidies before the U.S. will? Or is he speaking in general terms, but intending to have a graduate approach to this problem -- country X does this, the U.S. is ready to reciprocate?
MR. SHIRZAD: It's a good question. Currently under the negotiations, the terms that have defined where the talks are going call for substantial reductions, for example, in tariffs, and substantial reductions in subsidies. What the President was doing today was very boldly and in very clear terms saying that our ambition in this regard is only limited by -- as far as others are willing to go.
And so if the ambition of the world doesn't reach to a complete elimination of all the barriers that are out there, then we'll have to see how that turns out in the course of the negotiations. But we want to see a successful Doha negotiation move forward, and we're going to be there throughout, from beginning to end.
Q And he made reference to agricultural subsidies, and then spoke of subsidies as you're speaking of subsidies. It goes beyond agricultural?
MR. SHIRZAD: There are subsidies in other sectors. The primary subsidies that are the focus of the WTO negotiations are in the agricultural sector, where we, under WTO rules, are allowed something on the order of $18 billion in annual subsidies. These are what are known as -- trade distorting subsidies. The European Union, for example, is allowed something like $88 billion in subsidies; Japan is allowed something along the lines of $32 billion in subsidies.
But these are an important issue. They're an important issue from a developmental perspective, because the developing countries complain about the impact that these subsidies have. The President said at Gleneagles, and he reiterated today, that we're willing to -- that those are on the table, we're willing to negotiate them away, but it has to be under reciprocal terms.
Q Doesn't he need Congress' approval to end subsidies like this, because they're the ones who fund them?
MR. SHIRZAD: Yes, absolutely. As you know, we're entering into a season where we're going to -- the Congress is beginning to take a look at, and I know the Secretary of Agricultural, Mike Johanns, is already doing a listening tour around the country to talk to farmers about what the shape of the next farm bill will look like. The current farm bill is scheduled to expire in 2007. And so Congress will have to take up, and the administration will have to work with Congress in developing the next farm bill.
But in more general terms, Congress has said, and the American people have said that they are ready for an ambitious outcome in Doha. The United States is already among the most open economies out there, so the principle of making sure that the degree that we're open is reciprocated by the openness of other countries is a crucial element of our ability to sustain a trade policy. And so what we're trying to do, and what the President is trying to do, is to say, so long as we can maintain the goal of leveling the playing field, we're willing to do so with an extraordinary amount of ambition, as he described.
Q How many people would be brought out of poverty if the President followed through on the effort to have 0.7 percent of national income spent on poverty aid, as some have called for?
MR. SHIRZAD: Your question is -- the answer to the question you'll have to talk to others about. The issue, though, is -- I think highlights an important theme that has been a defining feature of what the President has stood for on the development front, and was an important part of what the Monterrey agreement was about, and that is that the crucial -- there's several crucial factors when you look at the development agenda. The first and foremost is that the focus has to be on outcomes: eliminating poverty, promoting education, dealing with the challenge of famine, for example.
But it also require that it be done in partnership with the developing countries, themselves, so they can access more dependable sources of financing for their development, including the private sector, trade, accessing the global capital markets. And so our vision, and the President's vision has been one built on empowering the developing countries so they can assume their own -- control of their own destiny in accessing the opportunities, for example, that private sector-led growth allows. And that's part of why the trade agenda, and the way the President laid it out in his speech today, is important, because it's part and parcel of a broader vision that private sector-led growth is the key to development.
Q So what is the percentage that's now being contributed by the U.S.?
MR. SHIRZAD: The United States is currently the global leader in official development assistance. In terms of on a per -- on a GDP basis, I believe it is at 0.1 percent is the number, is what I believe is the accurate number.
Q And European countries are at 0.7 percent, or some of them are?
MR. SHIRZAD: No, you remember, the 0.7 number is one that's been around for decades in development circles. People have talked about it as an aspiration or as a goal for years, decades even. The European Union, in the lead-up to the Gleneagles G8 meeting earlier this summer, recommitted itself to achieve the 0.7 GDP target. There are very, very few countries that have reached that level of development assistance. And that number is a number that reflects government flows. The United States, for example, leads the world in terms of charitable giving, private investment, the availability of the United States as an export market -- things like that. So there are different ways that people measure the financing flows, but the actual 0.7 is a target that very few countries have actually achieved.
Q And just one last question, to be clear. Is he
-- as I read it this morning, in Monterrey, the communique said the United States would "make concrete efforts to get to that 0.7 percent." Is that no longer valid, or what is the plan?
MR. SHIRZAD: We're fully committed to Monterrey. What Monterrey laid out, which was -- what's powerful about Monterrey is that it laid out a vision of development that was based on a partnership with the developing countries. The idea was to eliminate this concept of donor-client relationship between the developed countries and the developing countries. And incorporated into the Monterrey agreement was a commitment by the countries to make concrete steps toward increasing resources towards to goal of 0.7. So the goal -- the 0.7 number, itself, isn't a goal as much as the effort countries made to increase the official development assistance to meet the challenges that are out there.
We have in dramatic terms, under the President's leadership, increased development assistance since this administration has been in office. And you'll remember that going into Gleneagles, the President announced that we would, for example, double aid to Africa by 2010. This administration has increased official development assistance globally faster and by a larger amount than any administration has since the Marshall Plan. So the United States has done -- and this administration under the President's leadership -- has done dramatic moves in terms of increasing the amount of official development assistance, but it's all been focused on ensuring that we have outcomes that are worthy of the money that's being spent. And that is why the President has the Millennium Challenge Account program, the President's AIDS program, for example -- five-year, $15-billion program -- and so the President's focus has been on outcomes, rather than on input.
Q Beyond the value of the subsidies that you outlined for us, is there any estimate on how U.S. or global trade would be increased if transitional tariffs and other barriers were dropped?
MR. SHIRZAD: There are estimates -- I'll have to get them to you in terms of the net benefit to the U.S. economy for whatever measure of trade liberalization is achieved in the Doha Round. But the benefits of multilateral liberalization are important developmentally, but they're also important to the United States.
Q On debt relief, I noticed in the fact sheet, you guys were talking about a little more than $30 billion. I thought the Gleneagles number was $40 billion. Is that the number? And what's the U.S. share of that, roughly?
MR. SHIRZAD: Well, there's a couple of debt relief initiatives. The earlier HIPC initiative to eliminate -- to reduce the amount of indebtedness of the highly indebted poor countries to achieve a certain export-to-debt ratio. What we, the United States, agreed to do as a part of that was eliminate all bilateral debt. So the United States, for the HIPC countries, have the policy that it's implementing to eliminate all the debt to the highly indebted poor countries.
The agreement that was reached at Gleneagles was to eliminate the debt of the highly indebted poor countries to the multilateral institutions, and that is to eliminate 100 percent of the debt owed to the IMF and the World Bank, for example, and the African Development Bank.
And there -- and so there, the indebtedness we're talking about is to the multilateral institutions. And that's what the President today called for implementation of as soon as possible, because there was an agreement reached among the G-8 countries, and we're pushing very hard to get that done very soon -- hopefully, by the time of the Bank Fund meeting later this month.
Q The President said that more work remains to reform the United Nations. What steps do you see as still needed after the reform package that was agreed on here? And can you flesh out a little bit the meeting with Prime Minister Sharon? We got very little out of Mr. Sharon and didn't get much more from President Bush. Can you say where the United States wants to go forward on the Middle East?
MR. SHIRZAD: I defer to Fred on both of those. Any questions about U.N. reform, I think Fred or others will have to answer. And I wasn't in the Sharon meeting.
MR. JONES: I'll have to get you -- I'll have to get back to you.
Q That would be helpful.
Q Can you say if anything additional was said about Katrina by any of the other foreign leaders?
MR. JONES: I'm unable to answer that question. So I'd have to get back to you on that, as well.
Q Faryar, did you say how much in subsidies the United States pays? I'm sorry if I missed that. Did you say that?
MR. SHIRZAD: The amount of subsidies that we're allowed under the WTO -- and our number is lower, as is the number of the other countries -- but the amount of subsidies we're allowed under the WTO is $18 billion. These are what is known as the aggregate measure of support, in the WTO jargon. This is the trade distorting subsidies that are the focus of the negotiations. The European Union is allowed $88 billion in annual subsidies, and Japan, for example is allowed about $32 billion in subsidies. The actual numbers are lower, but the allowed amounts under the trade rules are what I just gave you.
Q And these are agriculture, or all subsidies?
MR. SHIRZAD: Agriculture. And it's worth, just as a matter of comparison, to look at the tariffs. The United States, for example, has an average agricultural import tariff. In other words, the amount of duties that somebody has to pay to ship an agricultural item into the United States, our average agricultural tariffs are about 12 percent; the global average is about 62 percent; the European Union average is 31 percent; Japan is at about 51 percent; and India is about 114 percent. So it give you a sense of the relative levels of openness and subsidization.
Q Is the President's call for the elimination of all these tariffs a new development. Is it -- is he talking about just agricultural subsidies? And is it realistic to expect that this will happen?
MR. SHIRZAD: He has been consistently, since even his first election, very bold in terms of his commitment to free trade. And we have, in the course of the WTO negotiations, already earlier in the first term, tabled proposals to, for example, eliminate all subsidies -- I mean, all tariffs on industrial goods, to open, in very sweeping terms, the services sector. The President's call to eliminate all agricultural subsidies was first made by him at Gleneagles, you may remember. So that was significant.
What the President did today was an effort to push the Doha negotiations along and to demonstrate that the United States is ready to take the leadership role on it; is to essentially make clear that, notwithstanding the push and pull and the -- what's happening in the negotiating room, the ambition that we have as a country and as an administration remains bold; that we want to go for a sweeping of degree of liberalization as other countries in the WTO are willing to join us in. And that's what was -- what you heard today.
MR. JONES: Thank you, very much. Once again, that was Mr. Faryar Shirzad. Thank you.
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