FINANCE, WAYS AND MEANS LEADERS URGE PRESIDENT TO STAND FIRM ON DOHA ROUND

Dec 2, 2008

Washington, DCFinance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa), along with House Ways and Means Chairman Charles Rangel (D-NY) and Ranking Member Jim McCrery (R-La), sent a letter today to President Bush, urging the administration to stand firm in the Doha Round negotiations at the World Trade Organization.  The letter expresses the signatories’ concern that WTO proposals currently on the table will not provide new market access for American agriculture and industrial goods, and cautions the administration against making concessions to secure a deal this year.  On November 15, 2008, leaders at the G-20 Summit on Financial Markets and the World Economy called on the WTO to strive to reach an agreement in the WTO Doha Round by year’s end.

“While I commend the G-20’s efforts to resolve the financial crisis, their call for an agreement at the WTO by year’s end was premature,” said Baucus. “The deal on the table at the WTO would not provide new trade flows needed to stabilize the global economy.   The administration should not agree to any deal that does not deliver for U.S. farmers and firms, regardless of timetable.”

“I appreciate Ambassador Schwab’s commitment to reaching a strong outcome.  But it takes willing partners.  If countries like India, Argentina, China, and Brazil are finally ready to sit down and agree on ways to open up meaningful new trade flows, then that’s a reason to meet.  Otherwise, there’s no point.  No deal is better than a bad deal, and I have yet to see the outlines emerge of what I’d consider to be a good deal,” Grassley said.

Rangel said, “We need an agreement that truly opens new markets for U.S. workers, farmers, and businesses, and raises standards of living.  The current drive to establish negotiating modalities puts form over substance, and is driven by an artificial and ill conceived timetable focused on achieving a deal regardless of its merit.  The United States should not allow this effort to interfere with the fundamental objectives of creating jobs and new business opportunities in the United States, and raising living standards in the United States and around the world by opening markets and strengthening the rules-based trading system.”

“I firmly believe in the strength, relevance, and resilience of the WTO as an institution,” stated McCrery. “The current condition of the global economy requires nothing less.   I am troubled, however, by the refusal of some of our key trading partners to negotiate in earnest.  The concessions the United States made in July still sit alone on the table, unreciprocated.  While I still hope the Doha Round can be successful, this may not be the best timing for another Ministerial that produces little if any progress.”

In their letter, the members note that little headway has been made since July, when the last WTO Ministerial meeting failed, and that many critical issues remain unresolved, so it is better not to let the clock drive the negotiations or force the United States into a bad agreement that Congress cannot support.

Full text of the letter follows here:

                                                            December 2, 2008

The President

The White House

Washington, DC  20500

Dear Mr. President:

Since the WTO Doha Round was launched in 2001, we have supported the administration’s efforts to achieve a balanced outcome that would provide meaningful new market access for U.S. agricultural products and industrial goods and services, particularly from developed and key emerging markets.  Unfortunately, the negotiating texts currently on the table would provide little if any new market access for U.S. goods, and important advanced developing countries are demanding even further concessions from the United States.

While we applaud the work of world leaders at the G-20 summit and the Asia-Pacific Economic Cooperation Forum to address the current financial crisis and to renew commitment to the Doha Round negotiations, we unfortunately have not yet seen this sentiment translate into negotiating progress.  In light of these circumstances, we have strong doubts that a ministerial meeting at this time can achieve the breakthrough that actually provides the new trade flows needed to spur the global economy and help deliver on Doha’s development promise.

In July of this year, we commended your administration for walking away from a lopsided WTO package that we in Congress would not have been able to support.  Although we appreciate the tireless efforts of USTR negotiators to try to achieve a more favorable deal over the past several months, we see no tangible progress, and in fact believe that some of our trading partners have become even further entrenched in their unacceptable positions.

We strongly urge you not to allow the calendar to drive the negotiations through efforts to hastily schedule a ministerial meeting, without adequate groundwork having been laid.  Developed and advanced developing countries must commit to provide meaningful new market access opportunities if Congress is to support a deal.  If key trading partners are unwilling to do so at this time, then negotiations on a modalities package cannot conclude.  Achieving the necessary flexibility from our trading partners could require new thinking, including revisiting the modalities approach, and our negotiators should be given time to explore such options.  Otherwise, the likely result will be a deal that Congress cannot support—an outcome that would be detrimental to U.S. farmers, workers and firms, the global economy, and the WTO itself.

International trade flows and a strong rules-based trading regime can contribute to U.S. and global economic growth, which is particularly needed at this challenging time.  To win Congressional support, any outcome to these negotiations must serve to facilitate meaningful increases in international trade flows and further strengthen the rules-based system of international trade.

Respectfully yours,

_________________                                                  _________________

Charles B. Rangel                                                         Max Baucus

Chairman                                                                      Chairman

Committee on Ways and Means                                    Committee on Finance

_________________                                                  _________________

Jim McCrery                                                                 Charles E. Grassley

Ranking Member                                                          Ranking Member

Committee on Ways and Means                                    Committee on Finance

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