World Summit on Sustainable Development (WSSD): Trade and Finance Issues

        MODERATOR: Good morning, and welcome to the Washington Foreign Press Center. This morning we have a new briefing by the Under Secretary of State for economic, business and agricultural affairs, Mr. Alan Larson. Mr. Larson has briefed here on a number of occasions, and he is here in that capacity as a senior adviser to Secretary Powell on economic and business issues.

       As you know, the World Summit for Sustainable Development is going on right now in Johannesburg. A lot of news is coming out of there, and a lot more news will come out before the end of the summit. But something that is worth addressing, which touches on almost all of the other subjects that are being discussed in that conference, are the trade issues that are related to sustainable development and to international relations and world agreements in general. So we're very happy to have with us one of the absolute experts on that subject, Mr. Larson, today, who will make a few short remarks on this and then be happy to take any questions from you.

       Thanks very much.

       MR. LARSON: Thank you very much.

       Good morning, everyone. It's good to see you again. Glad to see that some others are at work in the week before Labor Day.

       My colleague Undersecretary Dobriansky is in Johannesburg now with a very large and substantive American delegation. What I wanted to do this morning is to share some perspectives on the economic aspects of this conference and have a chance to answer any questions you may have.

       I think for us the starting point is that sustainable development is about development. It is about the advancement through economic growth and development of nations so that poverty can be alleviated and that the social needs of the world's citizens can be addressed. And it's important to recognize that while progress in this area is not as fast as any of us might wish, there has been substantial progress in the last two decades. And this progress is without precedent in the history of mankind. We have seen the number of people at the world bank classifies as poor reduced from 29 to 24 percent since 1975. We've seen literally hundreds of millions of people lifted out of poverty.

       We've seen literacy increase from about 63 percent -- this is adult literacy -- 63 percent in 1970 to about 80 percent in the year 2000.

       And on the environmental side, that isn't my area of direct responsibility, but I'm sure some of you will have noticed in the Wall Street Journal this morning a report that due to the Clean Air Act in the United States, probably 10,000 lives have been saved.

       So everywhere you look, there has been progress over these last two decades. And again, this is progress that there is not a historical precedent for. We all would like to see it be faster. And a lot of what Johannesburg is about his how can we, working together, make even greater progress in the next 10 years.

       The second point I wanted to make this morning is that it's important to recognize that this has been a pivotal year on development policy already. In the last 12 months, there was an agreement in the World Trade Organization on something called the Doha Development Agenda, on an initiative to further liberalize international trade and to do so in a way that specifically focuses on the needs and aspirations of the developing countries. The United States, as was widely recognized at the time, played a crucial role in brokering that deal, and one of the ways that we did it was that Ambassador Zoellick and our delegation worked very hard with representatives from all over the world to identify what their goals and concerns were and to put together in a multilateral, collaborative process, a deal that was designed to launch a three-year intensive process of reducing trade barriers.

       We also had, earlier this year, the Monterrey conference on the financing of development, which I had the occasion to talk with you and colleagues about. There the United States also played a very strong role in bringing together a consensus, the Monterrey consensus, about how to mobilize the resources that are needed to advance development. There was a recognition that the largest of those resources came from domestic savings of each of our countries, through the receipts from growing international trade, from foreign investment. But we also recognize that foreign assistance played a crucial role.

       President Bush went to that conference and pledged a 50 percent increase in U.S. foreign assistance, and we have been hard at work in the months since Monterrey, in doing the spade work necessary to implement that commitment. The European Union also stepped forward at that -- or just before that meeting, and made a comparable pledge of increased assistance from the European Union.

       This is the most notable set of increased pledges on foreign aid that's occurred during my career in government, which extends almost 30 years.

       I think as important as the amounts of money that we've been talking about in this calendar year has been the spirit of partnership that the United States and developing countries and other donors have been expressing. We have been trying to work out, through the Millennium Challenge Account, an approach that would really be a different way of doing development assistance. And you'll be hearing more about that as we move forward with the implementation of the MCA.

       There's been a lot of discussion in the press over the last week -- rightly so -- that it's impossible to talk about sustainable development if you don't talk about plagues like HIV/AIDS. And here too I think that it's important to acknowledge that even though we are not as far along today as any of us would like, that the progress in even the last two years has been extraordinary.

       Two years ago, there was not a global fund on infectious diseases. It was about a year and a half ago that President Bush, in the presence of President Obasanjo of Nigeria and the secretary- general of the United Nations, announced that the United States would make the first major contribution to the global fund on infectious diseases. And since then, we have contributed a total of $500 million to that fund, making the United States the provider of 25 percent of its total resources. The president also announced earlier this year an additional 500 million contribution to deal with the transmission of HIV/AIDS between mother and child. Overall, we've been providing about $2.3 billion a year on international AIDS.

       I wanted to comment about one other initiative that hasn't really been noticed that much, even though I think it's a very significant one, and it's more directly related to the environment. Earlier this month there was a deal to not only replenish the Global Environmental Facility but to increase by more than 16 percent its total resource base. The GEF, as it's called, is an institution that is used to finance efforts to attack global environmental problems.

       And I think it's very notable that we not only were able to get a replenishment of the GEF's resources, but to increase them rather substantially.

       Another issue that I think rightly has been discussed a lot in the last week has been farm subsidies. Like some of you, perhaps, I've heard over the last few days on the radio some discussion about the issue of agricultural subsidies and their implications for development in developing countries. And I think our starting point is to say that we agree that agricultural subsidies are an important development issue, as well as being an important issue in the trade system. We feel, in the United States, that we have been a victim as well of the agricultural subsidies that have been in place in other countries.

       This chart shows the level of trade-distorting domestic support that is currently allowed by WTO rules for the European Union and Japan and the United States. And this large amount of domestic support that is offered in Europe and Japan is something that not only has an impact on developing countries, it has an impact on us as well. And one of the reasons that we have made the proposal that some of you heard Ambassador Johnson of USTR and I announcing a few weeks ago, is that we believe that it's important to bring these levels of domestic support down, both because we think it would be a fairer international trade regime from which we would benefit as an agricultural exporter, but we also think it would be developmentally fairer; it would level the playing field for developing countries. So our proposal really has two aspects on the subsidy side.

       On export subsidies, our proposal is to eliminate them over five years. We already are a very, very small export subsidizer, but we would be prepared to eliminate, over five years. We would call on others, particularly the European Union, to eliminate over that same five-year period.

       The second part of our proposal would be to bring down these domestic supports that have an influence on trade and production drastically, to the levels indicated here -- roughly 5 percent of the market value of the agricultural sectors of each country, and that that would be something that would very substantially improve the playing field for developing-country farmers.

       We would, as a second phase, be in support of the total elimination of these at a date certain that would be negotiated in the WTO.

       We've also -- we'll be announcing in Johannesburg or further elaborating in Johannesburg proposals that we have to directly address the issue of agricultural productivity in Africa by increasing assistance to African agriculture. I think that's very important to help some of these food-short countries grow more food.

       I wanted to say a word, as well, about the immediate crisis in Southern Africa over food availability -- the drought and famine. One reason I wanted to come over and visit with you today about some of these broader development issues is to underscore the point that it's very important to be precise and factual when we're talking about developmental challenges. And I think the issue of biotechnology is a wonderful example of that.

       For a number of years, there's been some controversy over agricultural biotechnology, and there have been incorrect assertions that there is a health issue related with these foods. Now all of you understand that the agricultural biotechnology products that are now on the market have undergone deep scrutiny from the United States and that all of us who live in the United States eat these foods every day. There is, in the view of the Food and Drug Administration here, no health risk associated with that that's any different or any greater from the so-called conventional food that we all eat every day.

       And yet there has been this perception that's been created in some quarters that there's something that people should worry about here. And what is troubling about this is that presently in Africa, there has been a very serious risk that that misperception could cost lives, as some African governments were concerned about importing food aid donated -- free food aid, food of the very sort that's eaten throughout the United States because of these concerns.

       Now I think we've made tremendous progress in the last week in sorting this out. I will give credit to the European Union, itself, which put out a statement on Friday that said that their own scientific studies show that the food -- the biotech food that's now on the market is just as safe as conventional food. The Food and Agriculture Organization, along with WFP and World Health Organization, has similarly put out that -- information along those lines. I believe that we're making progress with the Southern African countries on working these food-aid issues out.

       My point in underscoring it is that these issues matter; it matters. Lives sometimes depend on whether there is a correct understanding of these issues. And this issue about food aid in Southern Africa is a terrific example.

       With that, I'd close my opening remarks and I'd be happy to try to address any questions that you've got this morning.

       Yeah, in the back? Would you identify yourself before you ask your question?

       Q Jesus Escavir (sp) from the Mexican News Agency. I have a quick question about corruption. I think that's the issue that you didn't talk about it. Some countries, especially in this hemisphere, Nicaragua, for example, they are now in a very difficult battle to resolve the problem of corruption that was during the Arnoldo Aleman administration. And they are talking about that the former president took by himself money that was financial aid from the United States to reduce the level of poverty in Nicaragua. And the complaint from the -- (inaudible) -- is that the United States, especially the State Department, has been very quiet about it.

       So my question to you is why the United States never said something about corruption in terms of a former president or a former governor who has been taking money from aid directly from the United States, especially in the case of Nicaragua? I want to hear some comments about it.

       MR. LARSON: Absolutely. For me, the starting point is that in Monterrey, when we forged this consensus among all the countries in the world, front and center in that consensus was the importance of good governance. This was not something that the United -- a concept that the United States or others imposed on developing countries, it was something we all agreed; that you cannot achieve development without good, efficient governance, and governance with integrity.

       The United States has been very strongly involved in the fight against global corruption. One of the first very major steps on this was the negotiation within the OECD of the OECD Anti-bribery Convention. This is something that basically makes it a crime for a business person of OECD countries to offer a bribe to a foreign government official in order to get a contract.

       It's an example of us saying we have to do our part. When one's talking about corruption, including corruption in developing countries, it isn't a matter of simply pointing the finger at somebody else and saying, "It's your problem. You have to clean it up." There's a shared responsibility here. We've had a Foreign Corrupt Practices Act in the United States for almost 25 years that has made it a crime for an American businessman to offer bribes abroad. What we've been able to do now, in the last few years, is to get other countries to sign on to that approach. I think the international financial institutions also have a role as they push for greater transparency in the accounts of countries.

       So, in short, this is something that in fact we do speak out on a lot. It's something that I know that President Bush is deeply interested and concerned about, and it's an issue we're going to work even harder on this year.

       Q (Off mike.)

       MR. LARSON: Yeah.

       Q If you share the responsibility, why never this government says, "This guy has been taking money from the government," as you did, for example, in the case -- in other cases, on nuclear arms, for example, in Iraq, that -- you're saying Hussein has nuclear arms, but you are not presenting any facts. When you have the facts on corruption, why the United States is always quiet about it?

       MR. LARSON: Well, often we haven't had the facts. I mean, the difficulty about corruption cases -- we have prosecuted American business leaders in the few cases that we've had where we have seen instances of corruption that our businesses were involved in. And we have been prepared to speak out about corruption in cases where government leaders -- you're giving the example of a government leader who's taken money. We're working with the authorities of certain countries where past leaders are alleged to have carried off large amounts of public money. And to the extent that that money might have been -- might have found its way into U.S. banks, we're cooperating with these countries to help them track it down.

       But I think -- you know, I think when it's an issue of calling to account a particular leader, the primary responsibility, with due respect, goes to the country and perhaps the country's neighbors. I mean, we have a current case right now where we think that there's been some very bad governance on the part of a certain leader in Africa, and we -- but we think that it's first and foremost a responsibility of the African leaders to call attention to that problem, rather than having the United States always look like we're the sort of -- the big brother who's trying to call everybody else into account.

       Sir.

       Q Adu-Asare, africanewscast.com. If you wouldn't mind, can I read you a sentence from a report last night from the BBC --

       MR. LARSON: Sure.

       Q -- on WSSD.

       MR. LARSON: Sure.

       Q Observers say agreement on agriculture will prove difficult as developing countries say that both the Europeans and Americans are not prepared to discuss reform of the World Trade System and the reduction of subsidies in agriculture. Can you comment on that?

       MR. LARSON: Definitely. I think I've made it as clear as I possibly can that the United States not only is prepared to talk about reform of agriculture and agricultural subsidies, but we have put on the table in Geneva a specific proposal that would dramatically change for the better the agricultural trade system, would drastically reduce these domestic-trade-distorting subsidies and would actually eliminate over five years export subsidies. Our message to our partners in the WTO and to our friends at the conference in Johannesburg is, "Join us. Let's work together and make a proposal like this a reality and to do it within the three-year target date for completion of the WTO negotiations."

       Yes, sir.

       Q Adu-Asare. The current proposal you just spoke about -- the trade-distorting-domestic-support reduction -- is a proposal which has not been put on the table yet. So I think when the people who are making comments about the U.S. and the European attitude towards subsidies. They're talking about the current situation. They're talking the farm bill. And those of us who have been following you since Doha see that the (mathematics ?) is not coming down well.

       The rest of the world do not see the difference between domestic support and then export support because the two, when put together, become the totality of U.S. farm subsidy to its farmers, and the rest of the world is not buying that mathematics, I think. That's why the message is not going down.

       MR. LARSON: Well, I think the message needs to be repeated because -- just to make one point clear, we have tabled this proposal. We tabled it in Geneva in the WTO at the end of July in a formal U.S. presentation, a formal U.S. proposal in the WTO. Now, we all realize that the negotiation of changes in the trade rules on agriculture will take place in the WTO. The negotiation on this isn't going to take place in Johannesburg, and everyone understands that, that Johannesburg is more about, you know, setting a political direction and setting momentum. And I think it's very important in that regard. The negotiations will be in the WTO.

       We have tabled a proposal in the WTO, and the reason that we've tabled a proposal that talks in one breath about export subsidies, and in another breath about domestic trade-distorting supports, and then in another breath about market access, is because that's the way the WTO negotiations are organized. There is a working group or a process that's looking at export competition, there's another process that deals with domestic supports, and another with market access.

       The last time I was here, with Ambassador Johnson, we gave you some numbers about how our proposal would drastically reduce the overall level of subsidization. I mean, I think it's fairly straight- forward, just looking at this chart, that once this proposal were implemented, you would be taking off -- just looking at the European Union and Japan and the United States, you would be taking out of the trading system 50 plus 30 plus 10 -- you do the arithmetic -- you know, $80 billion or $90 billion worth of subsidies a year, not counting the export subsidies. That would be on top of that.

       So this is real. This is substantial. And we are going to continue to talk about this so that, you know, everyone that has a concern about these agricultural subsidies does come to understand that there is a revolutionary proposal that's on the table ready for negotiation in the WTO that does address some of the concerns -- does address the concerns that have been raised.

       Yeah?

       Q Rosaro Cinu (sp) from Radio Romania. Lifting trade barriers is okay, in principle. But don't you think that the farmers, being -- speaking about agriculture, farmers in the former communist countries and in developing countries need a little more time or maybe a little more help to adapt quickly to this new market? Because right now, if we lift all trade barriers in agriculture, the farmers from former communist countries or developing countries are simply unable to compete with modern agriculture as it is in the United States, in the European Union. They need machines. They need teaching and so on. Don't you think they need more time to adapt?

       MR. LARSON: I have two reactions to that. First of all, I think if it's a competition based on pocketbooks, the richer countries are always going to be better able to compete than countries with fewer resources.

       So I believe that if I were the agriculture minister from one of the poor countries, I would believe that implementing a proposal like this, even if it required me to eliminate my agricultural subsidies, if I had any, would be to my advantage, because I would know that my finance minister would never be able to provide the sort of resources that would let me compete on the basis of the pocketbook. So I think bringing down subsidies is something that's inherently beneficial for lower-income countries that have fewer financial resources.

       Now, having said that, the second point is, we are proposing to provide direct help to some of the poorest countries to address their agricultural productivity requirements. We have talked about a 25 percent increase for agriculture productivity initiatives in Africa. That's part of the president's fiscal year '03 budget. And we're very serious about it. The director of AID and I are both champions of that. I am working with my colleagues at Treasury to get the multilateral institutions, the World Bank and the regional banks, more involved in this as well. So we believe we have to work on this from both angles.

       But I do think that there are not many poor or developing countries that really want to compete on the basis of subsidies.

       I think they have everything to gain from the reduction of barriers and the reduction of subsidies. And that's why agriculture was such a high priority for so many developing countries at Doha. It was the really the developing countries, along with the traditional agricultural exporters, that insisted that agriculture have such a high priority.

       Sir.

       Q Hi. My name's Andrei Sitov. I'm with the Russian News Agency, ITAR. I have a question on our trade -- the hot issue of the day, the chicken issue that has been resolved. The president and the secretary of State welcomed that. Does it mean, sir, that the American producers will be ready to start working under the new rules on September 15th that the Russians suggested? Because I understand there are some doubts about that. Does it also mean that some of the former threats linked with this dispute will now be removed -- regarding the WTO, regarding the market status, regarding even the Jackson-Vanik (subject ?)?

       MR. LARSON: I -- first of all, I think that you're right to stress the welcome on both sides for the fact that this long-standing trade problem has been resolved. And I think it'll be important for both sides to work diligently to make sure that the agreement that's been reached is put into place quickly and that the trade begins to flow. You -- I would encourage you to talk to the U.S. Department of Agriculture about, you know, the specifics, in terms of implementation on our side or on the Russian side, for that matter.

       I'm not aware of any threats that were ever made on this. I think that -- but what we have said in our conversations with our counterparts in the Russian government is, we're very eager to move forward on a number of areas of economic cooperation with Russia. We moved forward on non-market-economy status. We have proposed to the Congress moving forward to lift the application of Jackson-Vanik to Russia. That requires Congressional action. I joined the U.S. trade representative's office in testifying on behalf of the administration on all of the reasons why the Congress should do that. It's something that we'll have to continue to work on with the Congress. Meantime, we're very eager to pursue a broad cooperative agenda with Russia that includes discussions related to Russia's application for membership in the World Trade Organization. That's something I think it's very much in Russia's advantage and to the advantage of Russia's partners in the world.

       Back there, and then we'll --

       Yeah, that's --

       Q Thank you. My name is Kwo Kwong Chev (ph) with Korea Economic Daily. My question is about some changes in North Korean economy. There are many reports the North Korean government raised some prices which were strictly controlled and devalued their currency. And they've conceded they started introducing their freer- market system. What is beyond that change? Can you comment on that and compare to the way that China decades ago? And regarding that, is there any possibility for international financial agencies or institutions can help North Korea to come toward more aggressively?

       MR. LARSON: I'm going to have to punt on that question, both because of the formal point that it really isn't very directly related to WSSD, but also I've been on a -- I actually managed to take a short vacation, and I don't really feel up to speed on the points that you raised. I'll mention to Ambassador Boucher that there's been some interest in this point, and perhaps we can find an opportunity to respond. But I'm just not the one that has the information that would be helpful to you.

       Yeah?

       Q Parasuram, from the Press Trust of India. I was wondering what impact this would have if you managed to remove the trade- distorting -- (word inaudible) -- support, what effect will it have on the developing countries? For instance, just now India has a huge surplus of wheat --

       MR. LARSON: Surplus of what?

       Q Wheat.

       MR. LARSON: Oh.

       Q And the granaries are bursting with surpluses somehow. I was wondering whether developing countries will be able to export more if this proposal is accepted?

       MR. LARSON: I think if this proposal is accepted -- and, of course, I should highlight -- I didn't bring the chart that talks about the reduction of market-access barriers. I think you were here at the briefing that Ambassador Johnson and I gave, and we showed how we would propose a similar reduction in tariffs and tariff-like market-access barriers. And what that is going to do is going to free up trade and make sure that agricultural products are produced in the places where there's the greatest comparative advantage, and that's likely to result in some change in trade patterns.

       I think it's very hard to predict with any precision what the results of that will be. What one can say with confidence is that it will ensure that there is an opportunity anywhere in the world for farmers to compete on a level playing field, or a much more nearly level playing field. And our view is that on balance, that will be beneficial to American farmers because we have subsidies that are so much smaller, compared to some of our major trading partners. But we also think it will be of tremendous value to producers in developing countries, which typically don't have the wherewithal to provide large subsidies themselves.

       Yes?

       Q Hanan El-Badry, Egyptian Television. I have a question, Mr. Larson, regarding your policy recently towards Egypt. You decided to cut any additional aid to Egypt because of the case of Dr. Saad Eddin Ibrahim. My question: Do you believe that is going to affect your policy at large, especially toward Egypt to support their economy?

       MR. LARSON: Well, as you pointed out, we have a difference about this specific issue. That doesn't change the fact that we have a broad spectrum of cooperation with Egypt. I think that is going to continue. We're looking forward to a meeting of the president's council in the next couple of months. And so I think that we would expect to have a very deep relationship across the board, including in the economic area. But we do have a difference on this one issue.

       Q You mean you are going to -- any chance to review that decision very soon or --

       MR. LARSON: I'm not -- I don't have any comment on that at all.

       Q Thank you.

       MR. LARSON: Yeah?

       Q Yeah, hi. Paulo Vashilett (ph) with Reuters. I have a question regarding the role -- and I guess it's related to sustainable development also -- of the World Bank, the AIADB and the reduction of poverty. Recently, the World Bank and the AIADB participated in large bail-out packages for Brazil, for negotiations ongoing with Argentina, for Uruguay also. My question is: How do you see the role -- how does the United States see the role of these multilateral agencies looking ahead? Should they focus more on the reduction of poverty? Should they come to the aid of these countries that are in fiscal difficulties? Are the two related?

       MR. LARSON: I think they are related. One of the points of emphasis of this administration has been that the multilateral development banks should, first and foremost, focus on initiatives that increase productivity and economic growth potential in recipient countries, because we firmly believe that over time, the engine of poverty alleviation and of development is economic growth, and that is driven by increases in productivity. So we've worked very hard to encourage the multilateral development banks to focus on that.

       A second point of emphasis for the administration has been that the multilateral banks should work very hard to monitor their activities and to show that they are getting the results that they want.

       We want to have a results-oriented development policy, and that's true for our own initiatives, but it's also true, in our view, of multilateral initiatives.

       There are times when hard-won gains on development and poverty alleviation can be put at risk by financial instability. And under those sorts of circumstances, I think it is appropriate that institutions like the World Bank and the Inter-American Development Bank might be part of packages that are designed to preserve some of these hard-won gains on poverty alleviation. And I think that's the sort of initiative that you've been talking about. So we see that as consistent with a fundamental mandate on development and poverty alleviation, not as something that is in a separate category or separate box.

       Yeah?

       Q Toriusta (sp) with Nikkei newspaper, Japan. My question is about genetically modified products. Now concerning the moratorium of European Community on genetically modified products, do you plan to -- do you consider if it is a possible option to bring the case to WTO to lift the moratorium?

       MR. LARSON: Yeah. I'm not going to discuss today our tactics in the WTO on addressing the moratorium, because this is a meeting or a conference -- press conference that's devoted primarily to development, the Johannesburg agenda.

       What I do want to stress is the following:

       We've seen in the last two weeks that the moratorium that the EU has had for the last three to four years has had some very disturbing developmental consequences. It has raised in the minds of some governments unwarranted doubts -- unwarranted doubts about whether they should accept free food aid that is food that everyone that lives in the United States eats every day, food that has been subjected to intensive scientific review and found in the United States -- and found by European science authorities as well -- to be as safe as conventional food.

       So, you know, it is -- I think it is a wake-up call to show just how -- that this is more than a trade issue. This is more than a trade dispute between the United States and the European Union, or between Argentina, Brazil and other agricultural exporters and the European Union. It is something that has begun to run the risk of having extraordinarily damaging consequences for some of the most vulnerable people on the face of the Earth.

       The second point I would make is that I think that I've detected, including at meetings like the Rome food summit, a very strong interest on the part of developing countries, including African developing countries, to have biotech crops be part of their response to their food-security problems. At Rome, at the World Food Summit, there was a very strongly positive reference to agriculture biotechnology in the communique. We supported it, of course. But it wouldn't have become part of the communique if only the United States had supported it. It was strongly supported by developing countries -- in particular, African countries.

       So I think this is part of the international climate that we all have to bear in mind. We have to bear in mind that we live in one world and that our actions can sometimes have unforeseen consequences.

       Sir.

       Q Andrei Sitov again. Sir, we all live in one world. We're all concerned about the American economy, so I would be very grateful if you could share with us your opinions as to what the prospects of an American recovery are and maybe on the specific issue of international importance of capital flight from the United States, as has been reported, especially from some Arab countries.

       But maybe if you don't want to talk about that, to come to the issue that we've been discussing here -- I'd like to try and rephrase the question of my Romanian colleague and say, are you willing to concede -- the American administration -- that the playing field should not be level, that for some of the countries in the world -- some of the developing countries and maybe transitional economies, the level field should not be level, at least for the foreseeable future; it should be a little bit skewered (sic) in their advantage? Because the level field is a fiction; the guys with the thick pocketbook have an advantage beforehand. So when they say, "Let's play on the level playing field," it just keeps their advantage.

       Thank you.

       MR. LARSON: Yeah, sure.

       Look, first of all, I will, at least, address in part your question about the U.S. economy. And to this extent, I think that it is without question that the world needs to have a strong, growing economy if we're going to meet the poverty-alleviation and sustainable-development goals that are being discussed in Johannesburg.

       We believe that very strongly. We are paying very close attention to the U.S. economy, and the president has already taken a number of initiatives, as have other authorities that are not part of the executive branch, namely, the Federal Reserve, to safeguard the recovery that is underway. And I think if you talk to the forecasters within the executive branch, you'll find that there continues to be the belief that we have a recovery underway and that that's reflected in the real economy.

       We are also very interested in ensuring that there is strong recovery in Europe and Japan, which are also major engines of the international economy, even as we are working to promote growth in the developing world as well.

       Now, you know, on agriculture and the WTO, we've made a proposal; this is our proposal for the WTO. We not only know that other countries will have proposals, but we welcome that. We think that there needs to be a dialogue, and if some developing countries come forward with ideas of their own about the phasing of a reduction of domestic supports or a reduction of the -- a different pace for eliminating trade barriers, of course we're going to listen to their perspective on this and we're going to negotiate in good faith.

       My point earlier, though, was really a point similar to what you made, is that any competition based on pocketbook is going to be inherently tilted against poor countries, and that's why, in my view, moving as quickly as possible towards the elimination of trade- distorting domestic support and to the elimination of export subsidies is in the interest of poor countries because a pocketbook-based competition is one that, in general, richer countries are always going to win.

       I also think that when it comes to market barriers, there are more advantages than disadvantages for developing countries in getting rid of them quickly. And that's not just my opinion, that's a view that has come across when African leaders have met with the Food and Agriculture Organization. And again, Southern Africa is sort of an example of that. There's very -- there are certain parts of Southern Africa that are desperately food-short.

       There are other parts of Southern Africa where the food scarcities are not as great. Having an ability to move food around through freer trade within Southern Africa would actually alleviate, to some extent, the very serious famine that's under way there.

       So, on balance, our view is that freer trade is a good thing for food security and a good thing for developing country agriculture. That's our analysis of it. But I'm also saying that we're going to go to Geneva, and we're going to listen very, very carefully to any proposal that would come from government of Romania or the government of one of our developing country partners about agriculture, because the important thing is to work through and get an agreement that achieves the sort of revolutionary reform that we're calling for, that brings these subsidies down and allows a fairer, more level playing field than we have today.

       Sir?

       Q Adu-Asare. It has been a few weeks since the announcement about the reduction was made.

       MR. LARSON: Right.

       Q Have you heard anything from anybody else around the world?

       MR. LARSON: We have been getting some very positive reactions. I'm not -- I didn't bring my list with me, so I'm going to be a little bit general. But from leaders in both Southeast Asia and Africa, we've gotten a lot of encouragement and a lot of support for the ideas we've put forward. We've received a lot of support, of course, from agricultural exporters like Australia and New Zealand.

       There's been a couple of countries or couple of trading partners that have expressed a little bit of doubt about the proposal, and if you look at the chart, you might be able to guess who two of those are.

       Q (Off mike.)

       MR. LARSON: I'll give you a call, and I can give you at least sort of informally a list of the sort of reactions that we have in more detail.

       When I -- the list that I saw a few days ago showed all -- you know, four or five reactions out of Africa, all positive; four or five reactions out of Southeast Asia, all positive; and then a couple of reactions that were more guarded in their approbation.

       Q (Off mike.)

       MR. LARSON: There's one or two positive ones, and certainly in my conversations -- I met with -- we've had fewer opportunities for face-to-face -- I've had fewer opportunities for face-to-face meetings with Latin American leaders.

       I have talked to the -- some of the Latin American press corps here about this before earlier this month. And my sense is very, very strong interest. I -- we here, too, will be happy to follow up as we get more reaction. But I'm genuinely expecting very, very positive reactions from the Latin American countries, because agricultural exports are key to so many of them, and I think there's a growing appreciation that it's only in the WTO that we're going to be able to make any major change in things like subsidies, because you have to have all the major players at the table.

       Yeah.

       Q (Off mike) -- oil supply for the United States still trust the partner to the United States? And my second question goes to the OPEC. The OPEC stated he's not going to increase the (barrel ?) quota. Do you have any comments on that?

       MR. LARSON: Well --

       Q (Off mike) -- in Venezuela.

       MR. LARSON: Okay. I've been privileged to have an intensive discussion with Venezuelan energy officials over the last two years. And I think my most recent meeting was in June or July with the head of Pedevesa and with the undersecretary for energy.

       We value greatly our energy relationship with Venezuela. It's an interesting relationship, in that we are a significant investor in Venezuela. Venezuela's a significant investor in the United States. Venezuela has been a country that has been a reliable supplier of energy for the United States over several decades. We are interested -- we know that the authorities in Venezuela are interested in expanding investment in their energy sector, expanding investment in the natural-gas sector. And that's something that we encourage. And I'm looking forward to intensifying my dialogue with authorities in Venezuela about how we can work together to accomplish our shared aims of increased and diversified supplies of oil and gas and increased two-way flows of investment.

       On the OPEC meeting, it's not been our practice to engage in a lot of public discussion and debate about these issues. We do think that the interests of the global -- since we're talking about WSSD and about achieving development over the medium term, I think it is important to reiterate the point I was making earlier, that you only achieve development if you can have a strongly growing global economy, and that in that context it's important to have oil prices that are not putting a brake on the growth in the global economy.

       I know from my conversations with various authorities in oil- producing countries that their goal is to keep oil prices within a certain band. I think oil prices have been at the high end or probably even outside of that band. And I think our only general encouragement would be to make sure that there is adequate supply to meet the needs of a growing world economy and to support the global recovery that is underway but is not quite as solid as we'd all like.

       All right, thank you very much.