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AWe must build a new world," he said, Aa far better world -- one in which the eternal dignity of man is respected." It is precisely this direction President Clinton wants to go in launching his five-point agenda for (quote) Aa new kind of trade round for a new century." (Unquote) We are talking today in some detail about the five points of his agenda for the coming Seattle Ministerial -- agriculture, e-commerce, labor and the environment, and opening up the membership of the WTO. But I want to emphasize today why this is a new kind of trade round, and why it's so important to the U.S. I want to discuss some of our conceptual thinking. Because some -- running the gamut from developed to least developed countries, to our own constituencies -- don't like what we're proposing. We face opposition on a number of fronts, and I'd like to tell you a little about our situation, and our strategy. And finally, I want to discuss some of the specifics of the President's agenda.
I don't have to tell this audience about the benefits we have seen from past rounds, which have focused primarily on the liberalization of tariffs. You know the numbers -- 20 percent of global GDP now in trade, worldwide standard of living more than doubled over the past half-century, 12 million U.S. jobs created by international trade. And I don't have to dwell on the point that one result of those previous rounds is that America is now the most open economy in the world - with tariffs averaging around 2 percent and nontariff barriers soon to disappear under the Uruguay Round textile agreement. Indeed, as Fred Bergsten has pointed out, further trade liberalization can only benefit the U.S. , because it is the only way to completely align others' barriers with our own. But there is an even greater imperative for this trade negotiation than the fact that the U.S. economy has the most to gain. The unfinished business of previous rounds - the dismantlement of the egregious barriers in agriculture, the liberalization of services sectors like telecommunications, finance, transportation, and health care, and the remaining work in the tariff area is all important. Going beyond these traditional areas to barriers that are or could potentially burden Athe new economy" - like regulatory issues and duties on e-commerce - is also critical. But even more significant is the necessity of using this round of trade negotiations as a vehicle to broaden the benefits and gain the support for trade in our own and other countries. The U.S. , EU, Japan and other developed countries have already benefitted from past rounds and will benefit more. The majority of the American people have seen better jobs and increased economic growth, and if we are successful, they will see more. But the next round is also about a brighter future for those who have yet to reap the benefits of the world trading system, and whose support is essential if we are to move forward. Because without this foundation of support for the global trading system -- within our own country and abroad -- we risk a continued stalemate that will cost us all dearly in terms of our planet's progress in the next century. For example, nothing would benefit the developing countries more than the liberalization of agriculture. This is where the comparative advantage of a number of least developed economies lies, and their economic development is hampered by tariff peaks that average about 40 percent (equivalent to the level of industrial tariffs in World War II), trade-distorting domestic supports and export subsides that have been estimated by the IMF to average 1.5 percent of the GDP of OECD countries. Similarly, developing countries will benefit enormously from further liberalization in services, which will increase incentives to restructure inefficient activities and attract fresh foreign capital. As the President pointed out recently, if we can keep the e-commerce economy barrier-free, we can help poor people in poor countries skip 20 or 30 or 40 years in the ordinary pace of development. And, we cannot go farther without addressing the linkages between trade and labor and environmental standards, so that working people everywhere feel they have a stake in trade and it is clear that the increased competition globalization brings does not become a race to the bottom. The Strategic Obstacles But while we all agree our goals are lofty, the fact remains that we only have five weeks until Seattle and we face a number of tactical hurdles. The first hurdle is the fact that Europe and Japan don't want to liberalize their agriculture sectors -- which are clearly our priority and have the greatest potential payoff for American farmers and the developing world -- and are doing everything they can to shift the focus of the negotiations away from this needed liberalization. They are insisting on a Asingle undertaking" that would include areas like investment and competition policy - which they say will broaden the results of the negotiations and make trade-offs easier. We are opposed to this approach because we believe it is a formula for delay. While we can agree to a single package approach in the area of market access, that is goods, services and agriculture, we are not ready to sign on to a single undertaking when we don't know the full agenda. This was the approach used in the Uruguay Round and it led to a 8 year negotiation that moved to the pace of the slowest negotiatoin....which was agirculture. This is a way to dilute the prospects for liberalization in the area that is most protected. Like a lot of developing countries, we also believe that overburdening the negotiations at the outset with areas where results will likely be marginal at best is not the way to go. A second obstacle is the fact some key developing countries -- despite the huge benefits at stake for them in another cycle of liberalization -- have claimed concerns about their ability to follow through on existing Uruguay Round commitments, and see the New Round as an opportunity to relitigate the Uruguay Round -- even though they haven't even begun to implement these five year old commitments. We have seen this in the last two Ministerial Draft Declarations, which spend almost as many pages discussing the need to address existing Uruguay Round agreements as setting out the principles governing the New Round. We have said we will work with countries on a case-by-case basis, but we are not about to turn the WTO into a two-tiered development organization. We have to convince the developing countries that their real problem on antidumping is with Europe , and should be addressed bilaterally. We also have to make it clear to them that trade liberalization is benefits them more than protection. And we need to back up those words by finding constructive ways to make it easier for the developing countries to integrate their economies into the global trading system.
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