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US formula for food dominance

(Monday, Dec. 23, 2002 -- CropChoice news) -- From Dec. 20 edition of AgBio India

US Secretary of Agriculture Ann Veneman has (earlier) served on the board of Calgene -- the first company to market genetically engineered foods to stores. Calgene was bought out by Monsanto, US' leading biotech company. She also served on the International Policy Council on Agriculture, Food and Trade, a group funded by major food manufacturers such as Nestle and ADM.

Ann Veneman's intentions therefore are very clear. She wants the biotechnology industry to globally reign supreme and is keen to push the commercial interests of the American food industry. She doesn't even mind saying: "Some developing countries argue that they shouldn't have to open up markets until the developed countries first make domestic support reductions. This is a formula for failure." (She didn't say failure for whom, for American agriculture or for developing country agriculture?). No wonder, the chief economist of the World Bank too echoes the same line.

At the same time, Ann Veneman lauds the efforts of the former director general of the International Food Policy Research Institute (IFPRI), Dr Pen-Pinstrup Andersen, in unabashedly promoting the interests of the biotechnology companies. And we always thought that IFPRI was an international centre and not an American think-tank! Venemann came personally to pay tribute to Anderson's efforts, something that is not the practice in CGIAR. But then, CGIAR has never come out so blatantly and openly in pushing only for American biotechnology companies!! Ann Veneman's recent speech at IFPRI, Washington DC, will provide you a clear understanding of the way the US is manipulating the food trade and agricultural research to suit its own economic interests. What happens to the rest of the world in the bargain is not its concern, it never was.

US Secretary of Agriculture, Ann Veneman's speech at IFPRI, Washington DC

Dec 6, 2002

Well, good afternoon, and thank you very much for that kind introduction, and it is indeed a pleasure to be here today and to see so many good friends. I'd like to also recognize that our Under Secretary for International -- now I'm going to call it the old thing -- Farm and Foreign Ag Services J.B. Penn is here, as are a couple of his predecessors, I see: Dick Crowder, who I worked for when he was in that position, and Dale Hathaway. So it's kind of fun because that's an area which, as you recognize, I have been involved with for a long time. It is a great honor for me to be invited to participate in this forum today and to pay tribute to Dr. Pinstrup-Andersen, who has so ably led this organization for the last ten years. He has been at the helm through some difficult times, both for IFPRI and for the CGIAR System, but he is particularly to be commended for his leadership when a new and controversial technology, agricultural biotechnology, came to the scene rather suddenly. While others hesitated, Dr. Andersen realized the potential of biotechnology especially to the developing world. In the ensuing public debate, he has been a constant and sometimes lonely voice of logic and reason. He has been a strong proponent for agricultural research for many years. His outstanding contributions over the years have been justifiably recognized with the World Food Prize, so it is an honor to personally say thank you to Dr. Andersen today.

I want to also note the outstanding leadership of my good friend Geoff Miller as Chairman of IFPRI's Board. He is one of those rare individuals who not only has vision but also can persuade others of the wisdom of the course. And I'm very sorry that he could not be with us today, and I know he's been experiencing some health problems, and we had all hoped to see him, and I was looking forward to it. I also want to say welcome to Dr. Von Braun, the new Director General, and to reaffirm that we in the department very much look forward to continuing to work with you in the future. But I want to take a moment to recognize the importance of agricultural research and the entire CGIAR System. It is all too easy for many of us to take for granted the essential role played by new technology and those who develop it. Today it is so important to continue to spread the message that Dr. Andersen and many others have crafted about the potential of biotechnology to improve the food supply. In that view, I am pleased to announce a ministerial level technology conference that USDA and USAID are jointly planning for June 23rd through the 25th of next year in Sacramento, California. This international conference will be dedicated to the critical role of science and technology and the role that they can play in boosting agricultural productivity, particularly in developing countries.

This conference is intended to broaden knowledge and understanding of agricultural science and technology, including biotechnology, and most importantly, how we access these technologies through public-private partnerships. We envision attendance by Ministers of Agriculture, Ministers of Science and Technology, of Environment, and Trade from over 180 nations and international organizations.

I announced our intent to convene this conference when I represented the United States at the World Food Summit five years later last June, and now we are making that promise come to reality. The world today is highly unsettled and perhaps at a critical point in human history. We are increasingly aware of a wide and growing economic gap between the developed and developing world. It's a disparity that cannot be sustained. And in recognition of this, a number of very important efforts of differing scale are underway to address this critical objective. These include the efforts of the CGIAR that I just mentioned, efforts to improve agricultural productivity throughout the developing world, to help increase food production while reducing hunger and malnutrition, and elevating living standards for people living in rural areas, which is the vast majority of today's population.

The developed countries all have extensive bilateral assistance efforts to facilitate growth. President Bush announced just in March of this year our commitment to expand foreign development assistance by 50 percent in three years, and that assistance is to be channeled through a new innovative approach called the Millennium Challenge Account. More specifics of that approach to be directed at the Cabinet level were announced just last week, and that brings me directly to today's topic and to the most important and far-reaching of all of the development activities underway -- that is, the several efforts to reform and to liberalize the world's trading system for food and agricultural products. These include most notably the multilateral negotiations of the Doha development agenda intended to further the achievements of the Uruguay Round negotiations concluded in 1994. It also includes other negotiations such as those to create the Free Trade Area of the Americas, a hemispheric-wide trade zone, and several other regional negotiations as well as numerous bilateral negotiations being conducted by many countries. These efforts are being made in clear recognition that trade expansion is the most powerful economic development engine of all and a critical tool for hastening the global development process.

We have the best opportunity in a generation now to liberalize trade in food and agricultural products for the benefit of developing and developed countries alike. We have an opportunity to advance significantly beyond the progress made in the Uruguay Round agriculture agreement. This is not only an opportunity to open markets and expand commerce, but also the best means available to stimulate wide-scale economic growth and development, especially in much of the developing world. More specifically, the World Bank estimates that liberalization of trade in agricultural products promises economic growth fueled by $150 billion in additional income for developing countries. We are firmly convinced that new trade agreements, that open markets, reduce distortions, and improve disciplines will produce benefits for all, especially for developing countries. And these outcomes can be possible only with developing and developed country cooperation. I believe it is in all of our economic self-interests to develop this mutual cooperation. The United States has been playing and will continue to play a leadership role throughout the multilateral and other negotiations. We were instrumental in achieving the successful launch in Doha just a year ago, and we tabled a bold, aggressive, comprehensive proposal for agricultural trade liberalization in July of this year.

While trade negotiations are often viewed narrowly in terms of sales volumes of specific products, with the overall objective of expanding that commerce, we must not lose sight of the real benefits of trade: the stimulation of economic development and the growth of consumer incomes. Study after study has shown clearly that growth is closely correlated with open economies. Strong examples in every region of the world vividly demonstrate that simple point. Countries with open markets create better opportunities for investors and attract the private sector capital that brings with it the latest technology, skilled management to stimulate productivity and competitiveness, and in turn generate even greater volumes of commerce.

In fact, the rest of the story is well known. Jobs are created, employment grows, incomes rise, and jobs and better incomes are spread throughout the country and the economy. The point to be emphasized is the essential importance of capital mobilization. Growth can be generated internally from savings, a slow process to be sure. It can come from developed country aid and from international lending institutions, but the available amounts of these resources are small in relation to need. The most feasible approach for mobilizing the large quantities of capital needed for global economic development is through trade liberalization. The combined development assistance from developed countries is perhaps $50 billion annually, while literally hundreds and hundreds of billions are needed across the developing world, but trade cannot occur in isolation. It requires some solid underpinnings and specific conditions to be present.

Today, there's much talk of good governance, as an essential condition for growth, shorthand for a stable political system, and appropriate policy environment, an open economy and the absence of corruption; in short, a democratic society with a market-oriented economic system. With these necessary conditions in place, then open markets and expanding trade can be sufficient to ensure that the capital investment process begins to work. This is the approach to be utilized by the new Millennium Challenge Account. Countries with leaders that make the hard choices and meet these conditions will be selected participants.

The clear connection between trade and economic development was underscored earlier this year at the Monterrey Summit. The final document, the Monterrey Consensus, emphasized that trade and investment are primary engines of economic growth, and the new global trade negotiations promise to help developing countries realize benefits from expanded trade and foreign investment. If expansion of trade opportunities is going to drive economic growth and developing countries, nothing will be more important than continued liberalization of trade in food and agricultural products. The single-best, and perhaps the only opportunity for achieving trade liberalization in agriculture is the Doha Development Agenda.

Only through global negotiations will we be able to address all of the distortions affecting agricultural trade--export subsidies, domestic supports, and market access barriers. We recognize that the Doha Round can't deliver the necessary reforms without US leadership. We are fully and firmly engaged, and the level of our ambition is second to none. My colleague, Ambassador Robert Zoellick, played a critical role in launching the Doha Development Agenda. Many observers suggest that without his personal efforts, there might not have been a Doha Round at all, and he continues to exert considerable energies on maintaining the momentum in these negotiations.

Beyond the launch, I also want to note that we were the first to table a comprehensive and detailed agricultural proposal last July in Geneva. Only the Cairns Group has now joined us in presenting a comprehensive proposal with meaningful detail. Our proposal addresses all three pillars agreed upon for the negotiations, and it is straightforward. We propose to phase down over five years, and then end them forever, on export subsidies, and that has been done for all other industrial sectors.

On market access, our market access ambition is the ultimate elimination of all tariffs, and we propose getting there in two steps; first, by using a Swiss 25 formula that reduces the highest tariffs the fastest and that would lower the average world tariff from 62 percent of value to only 15 percent in five years, with no product line having a tariff over 25 percent. We also propose a 20-percent expansion of TRQs over the five-year period. Then, in Phase 2, to set a specific date for complete elimination of all tariffs.

We are being equally ambitious on domestic support. We propose reducing trade-distorting domestic support limits to no more than 5 percent of the value of production in the first phase and then to negotiate a date certain for complete elimination in the second phase. We believe that this proposal removes much of the inequity remaining from the Uruguay Round and that it addresses the concerns most frequently voiced by developing countries.

The Doha Development Agenda represents a remarkable new global consensus on trade liberalization. Trade liberalization cannot, and will not, proceed unless all countries are given the opportunity to participate fully in the benefits, but with greater access to the global trading system, also comes greater responsibility. The global trade rules established in the WTO must apply equally to all countries. The WTO will not survive if it is turned into a two-track system, with one set of rules and obligations for developed countries and another for developing countries, and this is especially true in agriculture.

Some developing countries argue that they shouldn't have to open up markets until the developed countries first make domestic support reductions. This is a formula for failure. We were able to start the process of liberalizing agricultural trade in the Uruguay Round only because all countries committed to putting all policies and all sectors on the table. We were able to complete the process in this round only on -- we will be able to complete the process in this round only on that same basis. To overcome the forces that are opposed to reform, we will all have to move forward together. Developing countries can, and should, be given special and deferential treatment which takes into account adjustment challenges that they face, but they cannot be given wholesale exemptions from the trade obligations to which other countries commit.

I also want to mention another aspect of the current trade environment, to which I have already alluded; that is, the widespread recognition of the increased role and influence of the developing countries in this round of multilateral trade negotiations. This became abundantly clear at Doha last November, and it is no coincidence that the negotiations are named the Doha Development Agenda. The message of the developing countries is clear; that they must realize tangible benefits from trade agreements if they are to participate fully and grant greater access to their markets. The developing countries, increasingly, are recognizing this and many, along with international organizations such as the WTO and the World Bank, have undertaken serious trade capacity-building efforts. This is true for the US Government, and several programs now are operated by national agencies, including the Department of Commerce, the State Department, USAID, USTR and our own department, the US Department of Agriculture. For many developing countries, trade capacity-building involves, among other things, assistance in realizing tangible market access, where virtual access is already available. We are focused on one particular aspect of this at USDA, where compliance with sanitary and phytosanitary regulations is the most critical constraint now that tariffs and quotas are no longer significant barriers.

We are making special efforts to assist developing countries to improve their own understanding of SPS regulatory systems and the science base that underpins it. Moreover, the more widespread the adoption of science-based systems, as opposed to opportunistic ones, such as the precautionary principle, the more trade will be facilitated. We are, of course, eager to have developing countries gain greater appreciation of these systems, not just ours, but the approach the world approved in 1994, and to help them develop the sound science base. To the extent that we can achieve greater harmonization of systems, then the greater protection we can afford our consumers and facilitate trade at the same time.

Greater implementation of this notion of trade as a two-way street serves two purposes: It provides real market access to developing countries and stimulates the growth and development of their economies, while also, in turn, making them potentially larger markets in the future with more opportunities for our producers. Finally, I want to, again, applaud the work of IFPRI and all of the good projects that you are working on. I truly appreciate the opportunity to be with you and I want to again thank you for allowing me to be here with you. Thank you so much. (USDA Release No. 0499.02)

[We thank Patrick Mulvany/ITDG for providing us this transcript]

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