Transcript of Tele-News Conference with Agriculture Secretary Mike Johanns Regarding the WTO Ministerial in Hong Kong

Transcript of Tele-News Conference with Agriculture Secretary Mike Johanns Regarding the WTO Ministerial in Hong Kong Washington D.C. December 19, 2005

MODERATOR: I'm Larry Quinn speaking to you from the Broadcast Center at the U.S. Department of Agriculture in Washington. Welcome to this afternoon's news conference with Secretary of Agriculture Mike Johanns to discuss the conclusion of the Sixth World Trade Organization Ministerial Conference that just concluded in Hong Kong.

A reminder for reporters, if you have questions for the secretary please press *1 on your telephone touchpad to alert us.

Now it's my pleasure to welcome back and introduce Agriculture Secretary Mike Johanns.

SEC. MIKE JOHANNS: Larry, thank you. Good afternoon, everyone. It is good to be home. We arrived back in the United States at about 5:00 a.m. this morning. But I wanted to take this early opportunity to openly offer some thoughts on our accomplishments during the Hong Kong Ministerial and the work that is ahead of us.

I am pleased to report that we did make some progress in Hong Kong, some important progress. While the ambition contained in our October U.S. offer has not yet been matched, it is important to recognize that advancements were made.

Before I go into detail I would like to offer a thought about U.S. representation in Hong Kong. Our trade representative, Ambassador Rob Portman, demonstrated tremendous skill and commitment during the ministerial. He worked tirelessly, I might add days without sleep, to encourage and inspire our counterparts to keep talking and keep working together. His leadership helped to not only keep alive the hope of progress but to ensure real and substantial progress could be made during these talks.

We have laid the groundwork to boost the global economy and help lift millions out of poverty. Least developed countries now know they have a stake in the success of the round. There is consensus among virtually all countries that more open trade is the key to increased prosperity.

So how do we do that? We do it by reforming subsidies while at the same time reforming market access to open the world's markets to trade. When subsidies are reduced and access is increased, we are on a pathway that has the potential to be good for U.S. agriculture while also profoundly impacting the well-being and prosperity of the world, especially the developing and the least-developed countries.

Let me offer a few specific thoughts in the area of duty-free/quota-free. The United States is already the most open market in the world to products from least-developed countries and yet we took an important step in announcing that developing countries should have greater access to markets duty-free and quota-free. We led the way by expanding the number of products allowed into the United States duty-free/quota-free. Least developed countries, these are the poorest of the poor, will continue to benefit from trade as they have in the past.

In the area of cotton, cotton was a major issue in Hong Kong. We had a number of productive discussions with the C-4 and with other African nations, and we announced that least developed countries will receive duty and quota-free access for cotton to the U.S. market when the Doha Agreement is implemented.

The Hong Kong Ministerial contains text that provides a general guide to future negotiations relative to cotton. Additionally, the U.S. has taken significant steps to implement the WTO cotton decision which will eliminate export subsidies for cotton in 2006, and that is also called for in the Ministerial Declaration.

In the area of Aid for Trade, the United States provided more than $1.3 billion in Aid for Trade grants this year. And we announced new money this week that would double that commitment yet again to $2.7 billion by 2010. Trade capacity-building enables developing countries to harness new markets for their products.

On food aid, we have agreed to reforms that would eliminate trade-distorting effects but continue to allow donors to have the flexibility to meet emergency situations and chronic hunger. Need for food aid has never been greater. We recognize that, and we fought for food aid while we were at the Hong Kong Ministerial.

Regarding export subsidies, all countries agreed to set a date of 2013 to eliminate trade-distorting subsidies. Negotiators have been working to set a date for the elimination of export subsidies for many years so this is no small step. Again, this elimination will occur in 2013.

This sends an important signal that we are prepared, and we're willing to complete the work of the Doha Round in the coming year.

Market access. There are many difficult decisions yet to be made here. We have said from day one and continue to stress now and we continue to stress throughout the week that market access is critical to our success and the success of this round. Tariffs simply must come down if we are to succeed. By opening the world's markets to trade, I am confident that our farmers and ranchers will be able to compete on a level playing field and reach new markets, markets that really aren't available to them today.

But a point that we have made over and over again is that this must be a complete package and progress must be substantial on all three pillars, especially market access. We will continue to press our partners to match our ambition in the area of market access.

I want to highlight for you an observation I made while participating in the Ministerial. I was impressed by the spirit of cooperation among some countries and the common desire to achieve something real and important before the clock runs out on the Doha Round in 2006.

This was my first opportunity to attend a ministerial of this nature. I can tell you, I did not see divisions based upon a country's prosperity. What I saw instead were alliances based upon common goals. The U.S. teamed up with Brazil on one issue, the African group on another, and so on. In fact I believe our alliances with least-developed countries played a significant role in achieving the agreed-upon date of 2013 to eliminate subsidies.

Our working relationship with many countries was also advanced this week. I had the opportunity to meet with many of my counterparts during the WTO ministerial meetings to advance mutual trade interests. With South Korea we discussed the importance of quickly resuming beef trade now, that the Animal Health Commission has made its positive recommendation. Korea is the most significant export market for U.S. beef that is yet to reopen. I am pleased to report that as a result of our meeting, Under Secretary JB Penn is in South Korea literally as I speak for meetings. My hope is that we will have good news about the beef trade with South Korea in the near future.

I also had an opportunity to raise the issue of beef trade in my meeting with Hong Kong's Commerce Minister and China's Ag Minister. I am confident that we are beginning to make significant progress in opening Asia's markets to U.S. beef.

But China, I'm very pleased that we successfully advanced our working relationship. China is a very good and it's a growing market for U.S. agricultural products accounting for more than $6 billion of our export sales. While in Hong Kong I signed an agreement with China that creates a new working group to address sanitary and phytosanitary issues. Our goal is to resolve potential barriers to increase trade.

I also had an opportunity to meet with Canada's Minister Mitchell to express my extreme disappointment in Canada's action to impose dumping and countervailing duties relative to U.S. corn. I urged him to join other countries in making meaningful commitments in the WTO agricultural negotiations by agreeing to deal with the Canadian Wheat Board Monopoly.

It was an intense week but well worthwhile. We ended the Ministerial determined to build upon the platform laid in Hong Kong. Our determination is inspired by the commitment of our President to create a more prosperous and a more peaceful world. President Bush's leadership in this area was the driving force behind the ambitious U.S. offer in October and continues to be central to the hopes of the world for a successful Doha Development Round.

There is no question that we must roll up our sleeves and work harder and faster than before to successfully complete the round by the end of 2006.

I would also mention that the U.S. will soon have the support of a skilled negotiator and farm policy expert, Richard Crowder, who was confirmed by the Senate over the weekend to be the chief agriculture trade negotiator. I want to take this opportunity to say that I am very pleased and eager to work with Mr. Crowder. His talents are well-known around the halls of the USDA from his time as an under secretary here, and we welcome him to the negotiation team. He has his work cut out for him.

We have set a goal to establish the modalities by the end of April in this round. I will do everything I can to support Ambassador Portman and do everything I can to make sure that that goal is met. I am confident of this-- the United States has the political will to do it thanks to the skills of our ambassador and the backing of our President.

But we will not agree to anything that would require our agricultural producers to carry a larger share of the load than those of other countries. Before the U.S. laid our ambitious offer on the table in October I spoke very publicly of the need for market access to ensure our producers come out of this round successfully. And the Ambassador has done the same.

I've continued to stress both in public and private meetings that significant market access must be a part of this package.

I will wrap up with a couple thoughts about how Hong Kong, in our upcoming efforts to bring the Doha Round to a successful conclusion, fits into our bigger picture. I will repeat that I am more convinced than ever that America's farmers and ranchers can compete with any farmer or rancher in the world if given a fair opportunity. We are striving to lay the groundwork for that opportunity through this Doha Round.

I also want to repeat my assertion that we can show tremendous support of agriculture without trade-distorting subsidies. I've long argued that investment in agriculture is a very smart choice for America. It is not an overstatement to say that our producers played a vital role in providing our country with the security we need, and they continue to do so today. We must recognize that contribution and demonstrate our support for American producers.

A true safety net for all of agriculture is more than just subsidies. It's good farm policy that opens substantial market access and addresses emerging issues faced by our producers. I have made every effort to recognize both dimensions of good farm policy as we prepare to talk about the policy behind the new Farm Bill. By that I mean that I have focused both on global trade issues and domestic emerging issues.

I traveled the country conducting Farm Bill Forums, visiting 22 states in four months to hear about the emerging issues facing our producers. I also traveled to Geneva and Hong Kong and other places around the world to help develop global trade policy that's good for America's farmers and ranchers.

Both are important. I will continue to do my very best to ensure everything we do on all fronts contributes to our vision of a vibrant rural America.

MODERATOR: Thank you, Mr. Secretary. Before we begin questions, Reporters remember if you want to ask a question please push *1 on your telephone touchpad to indicate that. And our first question will come from Peter Schinn of NAFB. And standing by should be Matt Kaye. Peter?

SEC. JOHANNS: Peter, excellent question. Here's what I would say about the lukewarm discussion from the Hill. First, keep in mind that there were no major breakthroughs in this Hong Kong ministerial. We said some weeks ago that we were not anticipating major breakthroughs, and in fact that was the case.

But we did some important things as I've identified. But the fact that there was not a major breakthrough I think leads to that lukewarm support.

The other thing I would indicate is that the issues we dealt with left off the very important issues that Congress is interested in. In fact, the issues that I would suggest Congress is most interested in, for example market access, there really wasn't any real discussion of market access. There were attempts. We kept bringing it up; Brazil kept bringing it up. But we're not going to go further without a substantial agreement on market access.

And that lies ahead of us. We did not anticipate we'd have a market access breakthrough. And so again what you're looking at here is a ministerial document that has some very important elements that are not a part of it, not a part of it yet. So it is understandable to me that their response would be lukewarm.

MODERATOR: Our next question will come from Matt Kaye of Burns Bureau, followed by Sally Schuff. Matt?

REPORTER: Yes. Thank you so much for taking my question, Mr. Secretary. Has the lack of progress on the central issues, the modality questions, hampered in any way your efforts to make progress on some of the other gnawing trade barriers that the U.S. faces? -- for example, interference in markets by single desk trading monopolies like that of Australia where we saw a number of abuses outlined in the recent [inaudible] Report, alleged kickbacks, manipulating local markets because of this ability to control the flow of wheat exports. Are you still able to get at those questions if you're not having progress on central issues?

SEC. JOHANNS: The agreement to end what has been classified as export subsidies by 2013 includes in that the state trading enterprises. Now here's a very important point about that. The date was set, but the actual specifics of what will be done has not yet been negotiated. But state trading enterprises are still in the mix if you will. So when we return to negotiations now, we still have state trading enterprises, not only in the discussion but we feel very, very strongly and said in Hong Kong that we feel they in and of themselves are trade-distorting.

So we'll continue to work on that issue and negotiate on that issue. But they are a part of the 2013 deadline. Now we get down to the specifics of what that will mean.

MODERATOR: Sally Schuff of Feedstuffs will have the next question. She'll be followed by Andrew Martin of the Chicago Tribune. Sally, go ahead, please.

REPORTER: Hi. Thanks, Mr. Secretary, for taking the question. My question is, you mentioned that the U.S. has the political will to reach and agreement on this round. Could you give us your impression of the EU political will, particularly as we we're all now aware the French farmers are seriously looking over the shoulder of their negotiators and have been instrumental last spring in the no vote on the EU constitution.

Do you think the EU will be able to work with the French and get any kind of concessions on market access?

SEC. JOHANNS: Sally, the EU responded with a proposal after we tabled our proposal in October of this year. We reviewed that proposal and the decision we made was that it did not allow very much access at all. Other countries did the same. They made a thoughtful, careful analysis of the EU proposal, reached the same conclusion, reached the conclusion that it was a very weak proposal. It had a pivot in certain areas which is a nice way of saying that it allowed them greater flexibility in deciding what products would come in, and then they wanted to identify 8 percent of their tariff lines as "sensitive products" which again would provide additional protections.

So a weak proposal, and then you add on to it a pivot for certain area, identify 8 percent of the tariff lines-- it's pretty easy to come to the conclusion that you aren't going to get a lot of market access.

I have watched with a great deal of interest the protests of the French farmers. One of the things that was said over and over again in Hong Kong by least-developed countries is that in the least-developed countries people are living on a dollar a day or less. The cow in France is subsidized at a rate of $2 a day. You can see how that feels very, very unfair to somebody who is literally on the brink of starvation trying to get by on a dollar a day.

I believe very strongly that the world is engaged. The least-developed countries are trying to figure out a way to deal with just excruciating poverty. They're looking for market access as a part of this. We helped over the weekend or over the last 10 days I should say. There were some things that were done that were positive. But I just feel very, very strongly that you've got to get to the overall reform. You've got to get to the issue that you're talking about.

Do they have the political will? I sure hope so. They hold the key to the Doha Round. The European Union really has to step up now. They really have to step up their commitment to market access and opening up their very, very protected markets to world trade.

MODERATOR: Our next question will come from Andrew Martin of Chicago Tribune. And standing by is Jim Phillips. Andrew?

REPORTER: Mr. Secretary, how are you? Just two quick questions. I wondered if you could explain, you mentioned that the proposal would reduce the trade-distorting effects of food aid. I wonder if you could explain that a little bit.

And secondly, the National Cotton Council has come out very strongly against what was proposed in Hong Kong saying that U.S. cotton was singled out without gaining anything in exchange in market access. Can you comment on that, please?

SEC. JOHANNS: Sure. In the area of food aid, we have tabled a very comprehensive proposal on food aid. And here's how it works. About 58 percent of our food aid is for emergency situations. These are the very desperate situations that you might read about, hear about on the radio, see on TV where literally people are starving. Our proposal basically says, in those circumstances whatever it takes, if you can get food there, if you can deliver cash -- whatever it takes.

The second area is chronic hunger and malnutrition situations. There are many countries out there that just live on the brink of annihilation when it comes to food, and one year depending upon rain or lack of pests they'll grow a crop and their people will be fed. The next year they have drought and their people are starving, and it's just, it goes like that. We've said that there should be some modalities in place that govern that, but still a pretty open situation.

The third area which is the smallest area of food aid, a very small area as a matter of fact, is an area where you do other things, where the situation isn't as desperate and in that area we've acknowledged that we don't want to get in a situation where a country dumps products into a marketplace and that impacts the local farmer there, that there needs to be disciplines attached to that.

So food aid is outlined in those three areas.

Now the European Union says, cash, cash, cash. They don't want us to give any food aid. They want it all to be cash. We oppose that aggressively and strongly. Why? There are some countries -- I'll just be very blunt -- you would not want to trust handing them cash. It would never get to the people. The stability of the government is not good, and I could go on and on. But it's just a bad situation, and people would die if you handed out cash.

The second area that you worry about is that budgets get tight, and or you could have surplus food that you could buy in the marketplace and distribute oftentimes what happens is that budgets are tight and food aid declines. In fact in the European Union where they have gone to cash, their food aid has declined. So that's another consideration.

The final thing I'd say about this, and I pointed this out in one of my comments in the wee hours of one of those mornings -- the European Union makes a big deal out of this food aid. This is a very, very tiny part of U.S. production. A UN report indicated that the world was $1 billion short in food aid in 2005. There's just so many reasons why we need to continue the same practice. I believe the European Union stands alone in their demand for cash. I believe the world supports our food aid. We are the largest provider of food aid anywhere in the world. The European Union is a distant second.

The Cotton Council has commented, and my answer would be somewhat along the lines of what I said relative to the lukewarm response from the Hill. We just haven't seen the whole package yet. We went to the Hong Kong Ministerial to work on some issues. We did that. But in the key areas of market access and reform and other subsidy areas, food aid another good example, there still is so much work to be done.

So what I would just suggest to people is, this is very, very much a work in progress. Negotiations are, even after all this time, are really now down to a point where hopefully we can kick off and start talking about the really important issues, the market access issues, the reform of agriculture, all of that.

So I understand their concern, but it truly is a situation where this is a work in progress. There is no finality at this point in this Doha Round. That's what we've got to accomplish in 2006.

MODERATOR: The next question will come from Jim Phillips of Progressive Farmer Magazine. And standing by should be Stuart Doane. Jim, go ahead.

REPORTER: I'd like to continue on with cotton just for a bit. Why was cotton in a sense singled out for some proposed cuts in domestic supports at this point as opposed to other commodities?

SEC. JOHANNS: This was a development round; the Doha Development Round has always been contemplated as a development round. And Hong Kong, the ministerial was going to have to deal with only a handful of issues. We did not get as far along as we had hoped.

The hope was that the entire modalities would be in place and about two-thirds of the work would be done, and we'd be in a position where the whole group of countries could sign off on those modalities and we could finish kind of the technical work in 2006. We didn't get anywhere near that far.

The decision evolved that what we should really try to deal with was some of the development issues, the really poorest of the poor countries. And some of these countries, not all but some, raise cotton. And so that's how this issue gurgled up to the top.

I would say again however, there is so much work to be done. And I'd ask people to keep in mind that this really is an ongoing work in progress. If you look at one element at this stage, you could easily reach the conclusion, oh I don't like the looks of that, or my response is very lukewarm. I understand that. But so much needs to be done in 2006.

So what we offer to Congress or to cotton or to food aid or I could go on and on is, please stay with us, keep working with us; the goals you have are the goals we have. And what we're going to try to achieve here is only going to roll out as we continue this work in 2006.

MODERATOR: Next question will come from Stuart Doane. And standing by is Chuck Abbott. Stuart Doane of Clear Channel Agriculture Network, go ahead.

REPORTER: Larry, thank you very much, and good afternoon, Mr. Secretary. I have read several statements today from farm groups, and I think you pretty well nailed it. No one seems to be too enthusiastic about this WTO draft. You acknowledged earlier on that the EU made a big deal out of food aid, an issue that really didn't amount to that much in the big picture. And the end day for farm export subsidies, while everybody had agreed that was going to happen 18 months or so ago, just had to come up with a date. And yet that dominated so much of the time.

The frustration seems to be that these two relatively minor issues took up so much of the time, the EU was successful in steering the discussion that way. If agriculture in this country is so upset about the lack of progress on three issues, how did we allow in Hong Kong the discussion to continue to be skewed to those two relatively minor issues?

SEC. JOHANNS: It really wasn't a case of allowing it at all. It again was a situation where the negotiations had not proceeded to a point where we had modalities done, the framework done for the Hong Kong meeting. The round again from the very beginning was always contemplated to be a development round.

If you'll remember things collapsed in Cancun because developing countries literally said, there's nothing here, this is a rich countries' club, or whatever the terminology was.

So the ministerial was utilized for that. I can't say that anyone steered it that way. It just literally was a situation where some of those development issues, some of the issues important to least-developing countries were going to have to be dealt with.

The other thing I would offer is this. There was a point at which we needed to get through these issues. We needed to get through them so we could break through to get to the big issues, the market access issues that ag groups around the country were looking at and looking for. I believe a lot was done in terms of the developing countries, those kinds of issues during the ministerial.

So it appears to me that's going to be very helpful to the talks.

One thing I would mention after being a part of this now literally side by side with Ambassador Portman, the key to this also is patience. If you make a decision as to the success of the round at any given point, you're going to misjudge what's happening. It is patience over an extended period of time, and it is commitment that makes it successful.

We said weeks ago, we don't see a lot coming out of the ministerial meeting in Hong Kong. There were some very important things that were done. I think it will aid the discussions for 2006. But again, until you get the final deal it's just very difficult to make any kind of assessment. And we're going to do everything we can to make sure that final deal is very good for U.S. farmers and ranchers.

MODERATOR: Chuck Abbott of Reuters will have the next question followed by Sara Wyant. Chuck, go ahead, please.

REPORTER: Yes. Good afternoon, Mr. Secretary. I'm curious, what does the United States need to do domestically to assist these negotiations? The thing that obviously comes to mind is first off repeal of the Step 2 cotton subsidy. Congress is part way through getting that chore taken care of although the Senate has yet to vote.

What things do the United States need to do legislatively or administratively in administration of its own programs that will provide the sort of proof you said that the United States is serious about wrapping up the Doha Round in 2006?

SEC. JOHANNS: Chuck, it's a great question, and the first thing I would say is, we needed to respond to that WTO ruling on cotton. You've referenced it. It's called the Step 2 program, but that is way down the field. We're anticipating that will be successful. It has made it through hurdle after hurdle, and hopefully we're in the home stretch on that. But I think had we failed to act on that our credibility would have been in very, very serious shape.

So that was viewed very, very positively. It was brought up over and over again that we were doing all we could to try to deal with that issue.

In terms of other specific legislative action, it isn't so much legislative action at this point that other countries are looking for. When we tabled our proposal in October, I think that answered their questions about whether we were serious. Until then it was very easy to say, Well we hear all of the right words, but we just don't see any action.

Well, once we tabled the proposal all of a sudden words were complimented with action, we were on the record in terms of a significantly different approach to ag policy. We were on the record in terms of our demand for market access, and so it was a huge boost to the round.

The ball is still in the court of the EU. I don't know of a single country that came up to me or during the discussions that said anything near that the EU had a good proposal. Quite the opposite. The world has really looked at the EU's proposal and totally discounted it. They studied it like we have, and they've reached the same conclusion that when it comes to market access, when it comes to real reform, there just really isn't anything there to speak of.

MODERATOR: Sara Wyant of AgriPulse will have the next question, followed by Bill Tomson. Sara?

REPORTER: Mr. Secretary, we know you worked a lot of long hours and very hard in Hong Kong. I'm just wondering as it wrapped up whether you got any commitment or what sort of sense you might be able to tell farmers that gives you optimism that in the next few months there's going to be room to budge on market access from the EU. They seem of course very entrenched there, and coming out of it didn't seem like they were willing to move any further.

SEC. JOHANNS: Well, Sara, as you know, I think you were there as a matter of fact in Hong Kong --

REPORTER: Right.

SEC. JOHANNS: So Sara, I would offer this. Number one, the world really supports what we are doing here. We are viewed as the leader, but we are especially viewed as the leader after we tabled the October proposal. Number two, and I don't think this is stretching anything, the world looked at that EU response, saw it as very timid, saw it as a proposal that did not do much with market access. And the world looked to the EU and said, "It's time for you to step up."

Now will the EU do that? That issue is really in their control. I wish it was in my control; it would make life a lot easier. But very truly, it is in their control.

But I don't believe that they can just move through this without responding in a way that matches the ambition of our October proposal.

We're going to be patient, but we're going to be aggressive. We feel that that's the key to the round. We get a breakthrough on that, and everything else starts falling together very, very quickly.

In the other two pillars we continue to be in excellent shape. So we need to solve that problem. We're going to do everything we can. We're absolutely committed. We'll be the last negotiator there when the lights go out. We're going to do everything we can to make this a successful round, and as you know the pressure very, very much is on the EU.

MODERATOR: Bill Tomson of Dow Jones will have the next question followed by Philip Brasher. Bill?

REPORTER: Mr. Secretary, welcome back. My question is on Japan. I'm curious, we've seen the first sort of symbolic exports of beef to Japan this past week. Will we be seeing substantial shipments, shipments that can't fit in an airplane, anytime soon? And will -- a lot's been said about how many packers or how many cattle, how much beef is eligible to ship to Japan. Will we see that percentage increasing as people qualify to follow USDA rules and ship beef to Japan?

SEC. JOHANNS: Yes really, to all of your questions. I do believe that this market is going to continue to grow. And your assessment is pretty accurate. You know, these early shipments are somewhat symbolic. The market's open, and people here in the United States wanted to get beef into Japan.

I do believe that we are going to gain the confidence of the Japanese consumer. And we know from past purchasing that they really, really enjoy U.S. beef -- over $1 billion worth before we had the border closure issues. So I think it's a market that we will regain. It's going to take some work. But I'm optimistic about it.

The second area is the cattle industry and the processing industry is very, very adaptable. What do I mean by that? They now know the rules of engagement in terms of trade with Japan in beef. We need to go through the verification that is required by the Japanese regulations. We need to be able to establish that the age of the beef is 20 months or under. But I believe that the marketplace is going to respond to that very quickly. Producers and packers will get into that, and they will supply all the beef that Japan can purchase.

So I'm just confident on all scores. I'm confident that we'll see a market continue to grow. I'm confident that our industry will respond to that. And I would love to have you call me, Bill, some day and ask me about a report that you heard that we're not being able to supply as much beef as the Japanese consumer wants, because that would be an excellent sign that the consumer is eating our beef.

But I don't think that's going to happen. I think we'll be able to supply all of their needs.

REPORTER: Thank you, Mr. Secretary.

MODERATOR: Our next question comes from Phillip Brasher of the Des Moines Register, and he will be followed by our final questioner, Jackie Fatka.. Phillip, go ahead, please.

REPORTER: Yes. Mr. Secretary, could you address the budget reconciliation bill the Republicans have agreed to in the House that got anything close to what the administration proposed or even the House and the Senate had passed? They have not done the extension of the commodity programs that you all are concerned. Could you talk about the administration's view of this budget and its impact on the trade negotiation?

SEC. JOHANNS: It is good news that the reconciliation is moving forward, and even while in Hong Kong we've been working very aggressively to do all we could to assist that process. It is good work by the House and Senate. They have as you know devoted hours and hours working through these issues.

In terms of the language relative to the extension of the Farm Bill, it caused concern. You know not only the Secretary of Agriculture but many are putting in a lot of work thinking about policy, trying to figure out the best approach for farm policy in the next Farm Bill. We get a chance to do this once every five years. I've been to many parts of the country. I was just in Montana where they said, You know Mr. Secretary, countercyclical and LDP just don't do anything out here, and expressed that concern. That's just the most recent.

This is an opportunity for us to think seriously about policy. So even though that was argued to be more of a scoring mechanism, I just wanted to make sure that we had an opportunity to really get down and think about policy and where do we go from here.

So all of this fits well. It's, again I have watched over the weeks, and they've worked very, very hard on this. And so we're comfortable with where they're at in terms of reconciliation, and we'll continue to do everything we can to be helpful in that process.

MODERATOR: And our final question today comes from Jackie Fatka of Farm Progress Publications. Jackie?

REPORTER: Thank you for taking my question. You've talked quite a bit about what needs to be done leading up to April. Can you talk about how maybe smaller scale negotiations might benefit this process? And what other major steps need to be taken to get something done in April?

SEC. JOHANNS: Well, there isn't. Jackie there is no easy way to do this. I have come to realize that. It is just, it just hard work. It is long days and nights. And just trying to find the right combination of things that provides an opportunity for breakthrough.

Hong Kong left the hard work for 2006. Let's just be blunt about it. We can score some things that are positive in terms of developing countries and that sort of thing. We got some things done that we had to address at some point. But the hard work really exists for 2006.

We approach this from a number of standpoints. First thing I need to say is, Ambassador Portman leads our negotiations. That's our system. But we've worked hand in hand. He's just been tremendous in terms of inviting me to participate in everything he's doing. We do everything from one-on-one meetings with countries to working with countries four, five, six, seven at a time. We've held many, many meetings in Geneva with half a dozen countries from around the world.

We're going to continue to do whatever we can to secure the right combination to get a breakthrough in 2006. So there's no easy answer to your question other than to say we're absolutely committed, we're devoted to it, we will do what it takes to lay the groundwork for this to be a successful round, and we continue to be optimistic that it can be successful.

We need movement by the European Union. That's the important thing. They really do hold the key to the future success of this round. We need to see them move forward in market access.

We're going to do everything we can to not only be tough negotiators but also to be good facilitators and accomplish the promise of this round.

MODERATOR: Thank you, Mr. Secretary. Any final thoughts you'd like to add?

SEC. JOHANNS: Well, final thought, it is great to be back in the United States, and to everybody out there, Merry Christmas.

MODERATOR: Secretary of Agriculture Mike Johanns.

I'm Larry Quinn bidding you a good afternoon from Washington.

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