Op-Ed

December 13, 2005

(English text)...

[Ελληνικά]

A Time for Leadership in Global Trade and Development

As Trade Ministers from around the world gather in Hong Kong for the Sixth World Trade Organization Ministerial, it is important to remember what is at stake in these negotiations - nothing less than a once-in-a-generation opportunity to increase economic prosperity worldwide by reducing trade barriers that impede global growth and economic opportunity.

Trade ministers from the U.S., Cyprus and more than 145 other WTO members around the world must seize the opportunity of this week's meeting in Hong Kong to advance negotiations and lay a solid foundation for the future.

The World Bank estimates that the elimination of global trade barriers could enhance global economic welfare by $290 billion per year by 2015 and lift 300-500 million of the world's poor out of poverty. But gains will be limited unless we can all agree to make the kind of deep cuts in tariffs that can open markets and provide meaningful new commercial opportunities.

The United States is deeply committed to promoting greater economic growth and to reducing global poverty through the powerful combination of aid and trade. The United States is the world's largest single-country donor of official development assistance. The United States has nearly doubled government assistance to the world's poor from $10 billion in 2000 to $19 billion in 2004. U.S. citizens give billions more every year through private charitable funding. No amount of official assistance, however, can match the benefits to the developing world of creating new economic opportunities by reducing barriers to trade.

The United States has made ambitious proposals in each of the core areas of the trade negotiations - offering to eliminate agriculture tariffs, export subsidies and trade distorting domestic support; to cut tariffs on industrial goods; and to remove barriers to growing trade in services. We have challenged others to match our ambition with bold proposals of their own.

The U.S. and the European Union, of which Cyprus is an integral part, share a mutual interest in strengthening the multilateral trading system, stimulating higher global economic growth and promoting development though reduced barriers to trade. Many of our businesses also see the direct benefits of lowering tariffs on exports of our manufactured products and services. In particular, the United States and Cyprus, as predominantly service-based economies, both have a lot to gain from reducing barriers to trade in services.

However, agreement to cut tariffs on services and manufactured goods depends on agreement to cut tariffs on agriculture. Agricultural reform has been at the core of this trading round since its inception. This is because agriculture is afflicted with far greater tariffs and more trade distorting support than other sectors, and because agriculture is of special economic importance to developing countries, which make up two-thirds of the WTO. For example, agriculture is the largest employer in African countries, accounting for about 60 percent of the labor force. The World Bank has calculated that nearly two-thirds of the gains from full trade liberalization would come from agriculture, and 93 percent of those gains would come from reducing tariffs.

On the margins of the G7 ministerial in London, Brazil and India indicated they are prepared to move on market access in manufactured goods and services. Such leadership should help to break the logjam in the global trade talks and make the Hong Kong Ministerial and subsequent gatherings more fruitful.

The breakthrough can only occur, however, if the EU shows similar commitment. The EU needs to immediately respond with equally bold steps in its agriculture proposal to reinforce the goodwill of India and Brazil. Brussels hinting that an EU revised agriculture proposal will be forthcoming in early 2006 is simply not enough. What is needed is a real and realistic offer.

With high ambition, comprehensive vision and sustained investment, but most of all with committed leadership on all sides, the members of the WTO can take advantage of the once-in-a-generation opportunity the Doha Round represents. Nations large and small, rich and poor, from Germany to Bangladesh, from Cyprus to Senegal - will share in the benefits.