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Ries: U.S & EU Must Move Forward on Trade, Growth

U.S. EU Must Move Forward on Trade, Growth

Remarks to Baltic Development Forum Summit in Riga

The United States and the European Union "must move forward from the Cancun disappointment both with a shared commitment to find ways to promote global economic growth and to help alleviate the poverty," said State Department official Charles Ries October 7.

In his remarks to the Baltic Development Forum Summit in Riga October 7, Ries offered the U.S. perspective on the recent Cancun World Trade Organization (WTO) meeting and the U.S.-EU trade relationship.

While the United States is still analyzing what took place at Cancun, he said, two lessons have already been drawn:

-- "The trade negotiation environment today is far more complex than in the past. There are more actors that have to be accommodated and more issues on the table."

-- "The second lesson from Cancun is that WTO members need to come to the table prepared to negotiate.... The WTO will only be successful if developed and developing countries both assert their individual interests and accept a sense of mutual responsibility."

"Helping developing countries to benefit from global trade integration simply cannot be a one-way street where developed countries make all the compromises and concessions," said Ries, the State Department's principal deputy assistant secretary for European and Eurasian affairs. "In order to enjoy a healthy trading system and a strong economy, developing countries must be willing and able to import as well as export."

He said that the breakdown in Cancun occurred "over measures that would have facilitated trade and helped land-locked countries by ensuring prompt release of goods, publication of procedures, and timely and fair rulings on customs questions. These common sense steps are in the interest of all; their rejection was a political statement. Sadly, this decision was emblematic of a broader culture of protest that defined victory in terms of political acts rather than economic results."

The U.S.-EU trade relationship, he suggested, is "a better model for how to reduce barriers to trade." While the United States and the EU have disagreements, both "fundamentally agree on open transatlantic -- and global -- trading systems."

And despite some disagreements, he said, the United States and the EU "must move forward," especially on the issues of agricultural biotechnology and growth.

Concerning biotechnology, Ries said the United States "seeks scientific, rules-based review of applications as the WTO requires."

"We will work this issue through the WTO because ... we agree on a rules-based system that applies fairly to all. We hope for a speedy resolution that allows us all to realize the benefits of this technology free from the superstitions that have tinged the debate thus far," he said.

Concerning the current global economic downturn, Ries said, "The U.S. can't be the sole engine of growth to lead the world out of these economic doldrums. The current weak Eurozone economy presents an opportunity to address fundamental problems which have slowed growth in Europe, including rigid labor markets and excessive regulation."

He proposed the Baltic Sea region, with its higher growth rates than the rest of Europe, as "a model for good business practices that stimulate employment and investment."

Ries also suggested that the Baltic states constitute "a model for the world" and urged his audience to share their "wisdom with other nations and regions."

Following is the text of his remarks:

Riga, Latvia
October 7, 2003

Global Benefits from Shared Priorities
Charles Ries, Principal Deputy Assistant Secretary for European and Eurasian Affairs
Remarks to the Baltic Development Forum Summit

Chairman Ellemann-Jensen, distinguished guests. It is once again a pleasure to represent the U.S. Government at the Baltic Development Forum (BDF) Summit. If I keep coming back you may have to charge me membership dues.

Of course, the United States is back because we recognize that the BDF Summit is an opportunity to speak to hundreds of European leaders political, business, non-profit -- at one time. In the wake of the terrorist attacks of September 11, 2001, the topic of public diplomacy received much attention in Washington, in media commentary, on Capitol Hill, and at the State Department. Secretary of State Colin Powell has urged everyone in the Department to talk not only with our counterparts in other governments, but with everyone else, especially those who are affected by our foreign policies and who have ideas to share with us. In that spirit, I welcome the opportunity to talk with you on the topic you've set for this morning, Global Benefits from Shared Priorities.

In my remarks last year, I praised the shared values and common purpose that are the hallmark of the Baltic Sea region. I noted that the United States enjoys strong partnerships with the states and organizations of the region in multiple and interlocking ways. And we have superb relations with every nation represented here, marked by accomplishment in our bilateral activities this past year. Also, we work cooperatively and productively together in a thriving network of formal and informal multilateral groupings too numerous to list.

We have however taken the audacious step of adding another forum on top of the ones you already know. Two weeks ago in New York, Under Secretary of State Marc Grossman met with his counterparts from the eight Nordic and Baltic states to discuss regional policy and assistance topics. This new 8+1 framework is one aspect of our revitalized regional policy, the Enhanced Partnership in Northern Europe. The acronym, in case you can't make it out, is e-PINE. We came up with that because of course the pine tree is common both to this area and to the U.S., and putting an -- e -- in front gives the name a 21st-century ring that is very appropriate to this highly-wired, tech-savvy part of the world.

I won't say more about e-PINE at this juncture because the meeting in New York was simply the -- soft -- opening, to borrow a term from theater and business. The hard opening, the formal rollout of this policy, will take place with appropriate fanfare in Washington on October 15. My colleague Heather Conley will headline that event and I don't want to steal her thunder.

We've started this dialogue precisely because we believe that global benefits can accrue from regional cooperation. While we are still exploring how we can work together with the states of the region under this new format, we already expect that we will be able to take lessons learned from the rapid development of Latvia, Lithuania, and Estonia and apply them to other parts of Eurasia. This may also be a place in which to discuss shared concerns about the problems of the wider world, from the HIV/AIDS crisis and hunger in Africa to human rights in Asia. By working together we can magnify the impact of our policies, of our political actions and our assistance programs.

Of course, the U.S. subscribes to the notion of shared priorities in any number of places. As Secretary Powell said in May, The transatlantic partnership is strong and vibrant in Southeast Europe; it demonstrates our shared commitment to help bring peace, stability, and a sense of calm and hope to the region. We know that the aspirations of the people of Southeast Europe will become realities only with our continued involvement and cooperation.

In fact, this past spring, the U.S. was pleased to join in the creation of the Adriatic Charter. That document will serve as a roadmap for Macedonia, Albania, and Croatia on their path to Euro-Atlantic integration. This may sound familiar to some of you, as well it should. The Adriatic Charter was inspired in part by the Baltic Charter, which was and remains an excellent framework for conducting relations between the U.S. and Latvia, Estonia, and Lithuania.

The benefits of shared priorities and common philosophies have long been understood in the economic sphere, at regional levels and globally. The abrupt and inconclusive ending of the Cancun meeting of the World Trade Organization (WTO) does not shake our fundamental commitment to the power of free trade. In early September, President Bush signed Free Trade Agreements with Chile and Singapore, dissimilar states by most definitions but sharing our belief in free trade.

As President Bush said then, the United States...supports free trade because a world that trades in freedom will grow in prosperity and in security. For developing nations, free trade tied to economic reform has helped to lift hundreds of millions of people out of poverty. The growth of economic freedom and ownership in developing countries creates the habits of liberty and creates the pressure for democracy and political reform. Economic integration through trade can also foster political cooperation by promoting peace between nations. As free trade expands across the earth, the realm of human freedom expands with it.

Given that the Baltic Development Forum is modeled on the sometimes-demonized World Economic Forum and counts major international corporations among its members, I assume that I am speaking to an audience of fellow free-traders. While we believe that free trade remains a global trend, recent events have indicated that there is much yet to be done. I would like to give you a U.S. perspective on the Cancun WTO meeting and the state of the U.S.-EU (European Union) trade relationship, again looking at it from the perspective of global benefits from shared priorities our theme this morning.

The U.S. went to Cancun hoping to press ahead on global trade liberalization through the WTO. In the lead-up to Cancun, we concluded an agreement with all WTO parties on enhancing poor countries' access to needed medicines, and just as importantly, proposed with the EU an agricultural negotiating framework. Neither agreement was easy to achieve, but we hoped to set the stage for a big step forward at Cancun. We hoped that others would share our objectives.

In the event, of course, Cancun did not achieve its core objective: a negotiating plan for the rest of the Doha Agenda. We are still in the process of analyzing what took place, taking stock of the negotiations, and reflecting on the path ahead.

There are however a couple of lessons that we can draw from the outcome at Cancun. The first is that the trade negotiation environment today is far more complex than in the past. There are more actors that have to be accommodated and more issues on the table.

At the same stage in the Uruguay Round, the primary focus was on the status of discussions between U.S. and EU trade ministers.

In the Doha Round, developing countries are aggressively pushing issues of particular importance to them, most notably agricultural reform.

As the scope of issues discussed at the WTO has broadened, other ministries, such as environment and finance, have also become important participants. Furthermore, the trade negotiation process has become more transparent and subject to intense scrutiny by NGOs and other parties.

The second lesson from Cancun is that WTO members need to come to the table prepared to really negotiate. As the U.S. Trade Representative, Ambassador Robert Zoellick observed, the WTO will only be successful if developed and developing countries both assert their individual interests and accept a sense of mutual responsibility.

Helping developing countries to benefit from global trade integration simply cannot be a one-way street where developed countries make all the compromises and concessions. In order to enjoy a healthy trading system and a strong economy, developing countries must be willing and able to import as well as export.

The simple fact of the matter is that vast benefits accrue to the countries that open their markets to trade and investment. The breakdown in Cancun occurred over measures that would have facilitated trade and helped land-locked countries by ensuring prompt release of goods, publication of procedures, and timely and fair rulings on customs questions. These common sense steps are in the interest of all; their rejection was a political statement. Sadly, this decision was emblematic of a broader culture of protest that defined victory in terms of political acts rather than economic results.

While it may not seem obvious from the press, the U.S.-EU trade relationship is in fact a better model for how to reduce barriers to trade. The U.S. and EU fundamentally agree on open transatlantic -- and global -- trading systems. Between us we have a trade and investment relationship of over two trillion dollars, with our investors creating more than 5 million jobs on each side of the ocean.

We habitually take difficult disputes to the WTO for settlement, even though WTO panels are making uncomfortable decisions -- on FSC and steel for the U.S.; on bananas, beef, and soon, biotech for the EU. These trade disagreements get so much attention because to many commentators and reporters, bad news is more interesting than good.

Let me list a few other things that are right between the U.S. and the EU.

1. The relationship is working effectively in areas such as counter terrorism, nonproliferation, and regional issues from the Balkans to North Korea to Afghanistan.

2. We are excited about EU enlargement and welcome the addition of ten new EU member states. As I said last year, we are looking forward to a good dose of that Baltic trading spirit in Brussels. We are also very pleased that we were able to work with the European Commission and Accession States to find a way to preserve our bilateral investment treaties, and the important protections they provide U.S. investors.

3. We've just opened comprehensive air service negotiations that will, we hope, build on the market-oriented Open Skies framework we have already achieved with 11 of the 15 current EU member states.

I've already mentioned hard-won progress the U.S. and European Union made on specific issues just before Cancun. We must move forward from the Cancun disappointment both with a shared commitment to find ways to promote global economic growth and to help alleviate the poverty which feeds discontent in dark corners of the world.

Agricultural biotechnology is at the heart of the most recent U.S.-EU trade issue to receive media attention. It is our view that hunger is an age-old scourge that should not exist in the 21st century. Biotech products can help stimulate agricultural productivity and development in both developed and developing countries. Biotech foods have been shown to be as safe as conventional varieties. Such crops can also benefit the environment and the health of agricultural workers by reducing the need for pesticides and fertilizers.

The U.S. seeks scientific, rules-based review of applications as the WTO requires, and is not forcing acceptance of biotech food on European customers. We will work this issue through the WTO because, as I've said, we agree on a rules-based system that applies fairly to all. We hope for a speedy resolution that allows us all to realize the benefits of this technology free from the superstitions that have tinged the debate thus far.

Another area for more U.S. and EU dialogue is cooperation to help us all overcome the current global economic downturn. The U.S. can't be the sole engine of growth to lead the world out of these economic doldrums. The current weak Eurozone economy presents an opportunity to address fundamental problems which have slowed growth in Europe, including rigid labor markets and excessive regulation. The Baltic Sea region, which generally enjoys higher growth rates than the rest of Europe, can be a model for good business practices that stimulate employment and investment.

This brings our discussion back around to the Baltic. During the course of this Summit you've had the chance to discuss how the Baltic Sea region can become a global frontrunner. In our view, you are already there. In terms of open markets, sound economic policies, openness to and use of new technologies, this region is among the most competitive in the world. When the U.S. Government helped organize a conference in Baghdad on economic transition, participants from Lithuania, Latvia, and Estonia were among the stars of the show. They were able to tell Iraqi business people and officials how they did it, how privatization of industry and capital were instrumental in their current economic successes.

I believe on present form the states of this region will continue to be a model for the world. As I noted in discussing the Cancun WTO meeting, in international economic politics today there are new issues and new realities that offer challenges to the established ways of doing business. If the Baltic Sea region continues to show the ingenuity and perseverance for which it is known, you should thrive in this changing climate. I urge you to share your wisdom with other nations and regions that yet but dream of achieving all that you have here.


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