OP-ED

A Time for Leadership in Global Trade and Development - By Michael Retzer

In the run-up to the Sixth World Trade Organization Ministerial in Hong Kong, Tanzania has hosted an African Union Ministerial in Arusha, participated in the G-90 Summit in Brussels and has just sent 25 delegates to what is likely the most highly anticipated round of the Doha trade negotiations. One of the key challenges of the Ministerial will be liberalizing the trade in agriculture. Where does Tanzania stand and what does Tanzania have at stake?

Improving market access by cutting tariffs in agriculture is vital for Tanzania in both the near and long term. Agriculture underpins Tanzania’s economy: agricultural products account for over 80% of Tanzania’s exports and the majority of Tanzania’s labor force. However, the products of most farmers are subject to an average world tariff of 62 percent - more than five times the average U.S. agricultural tariff of 12 percent.

Good decisions made in Hong Kong to liberalize agriculture promise to benefit Tanzania in both the short and long term. Although agriculture is a linchpin of Tanzania’s economy, Tanzania has barely begun to exploit its full potential in agricultural production. To maximize the development dividends of these and other investments, Tanzania’s trade ministers 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 ambitious outcomes across agriculture, goods and services by the end of 2006.

Some view the upcoming trade negotiations as a re-hash of old issues and others aim to diminish the round’s ambitious agenda. However, the United States takes a different view. The U.S. sees the Hong Kong Ministerial as nothing less than a once-in-a-generation opportunity to dramatically reduce trade barriers that impede economic opportunity and poverty alleviation in developing countries such as Tanzania.

The United States has made ambitious proposals in each of the core areas of the negotiations - offering to eliminate agriculture tariffs, export subsidies and trade distorting domestic support; to cut high tariffs on industrial goods; and to remove barriers to growing trade in services. We are committed to breaking the deadlock in multilateral talks on agriculture. We stand ready to make meaningful changes in our economic policies. We have challenged others to match our ambition with bold proposals of their own.

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 single largest provider of trade-related assistance, donating $1.34 billion in 2005 - an increase of nearly 50 percent since 2004 and more than 100 percent since 2001.

Those who fear liberalization should remember that the previous WTO Rounds did not require the immediate elimination of protections. Nor will the Doha Round. The Framework for negotiations provides for exempting some products from full tariff reductions, though it will be important to limit these so that the world sees the strongest possible benefit. The Doha mandate also explicitly states that special and differential treatment-ways in which developing countries are provided unique treatment such as less deep reductions and longer phase-in periods that facilitate their participation in global trade--will be an integral part of the Doha negotiations.

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, as a responsible gesture from advanced developing countries to reinvigorate the negotiations. 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 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 Mexico to Bangladesh, from Senegal to Thailand - will share in the benefits.

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Michael Retzer is the Ambassador of the United States of America in Tanzania.