NDTV: Secretary Johanns, thank you very much for joining is pm ND Television.

First question first, there is a little bit of apprehension in the corridors of power in India that with the Democrats coming back to the House of representatives what does it mean for the WTO process? Do we fumble or can we see a forward movement?

Secretary Johanns: Even with the Democrats in power I am still optimistic we can see forward movement. There may be some issues that they will have a special interest in. Labor issues I think will always gain their attention, that sort of thing. But I have to tell you, there are many many Democrats who are forward leaning on trade, believe strongly that trade has to be part of the world agenda.

I know many want to write the story that with the election of the Democrats it’s going to be impossible to get trade agreements approved. I don’t believe that’s going to be the case. We may have to work harder, we may have to do more to educate and that sort of thing, but I still think the United States is going to have a strong trade agenda.

NDTV: You’re going to meet Commerce Minister Kamal Nath tomorrow. He’s expecting some kind of fresh offer from you. Essentially he’s expecting you to move forward on cutting [great historic] subsidies. Have you got anything new for him on this particular trip?

Secretary Johanns: We’re certainly going to talk about trade issues. We’re not here to negotiate. The negotiations were suspended last July. It’s a multilateral effort. So all countries have to be involved in that effort, not just two, although we certainly regard India as a very very important player in the trade negotiations.

What I can say is this. Our President has made it very clear that he has a very bold agenda. He wants the elimination of trade distorting subsidies. He said that at the G8 Summit last year, he’s said that before the United Nations. Nothing could be more bold than that. He just simply says through the WTO process, we have to work toward the elimination of trade distorting subsidies.

Now any economic study that has ever been done on the WTO process has reached one conclusion and that is the greatest benefit for the world economy, India included, is for tariffs to come down, is for barriers to be eliminated. That is what’s really going to lift millions and millions of people out of poverty. Like I said, any study that’s ever been done points to the elimination of tariffs, the reduction of tariffs, the opening of the borders to trade. That is really going to make the difference.

NDTV: The perception here is that you’re perhaps wanting market access, but at the same time there is not the [inaudible] movement as far as on your part cutting subsidies is concerned. In fact the figures that I read suggest that you would actually raise your subsidy levels from the current $9.6 billion to in fact $22. At a time when Peter Mandelson, who was just here in India over the weekend, has said that he’s willing for a 75 percent cut in subsidies. The apprehension is the US is just not moving forward. So how do you see that [inaudible]?

Secretary Johanns: I can answer that in a very straightforward way. The European Union subsidizes its farmers higher than anybody in the world. The European Union is the largest subsidizer in the world, then Japan, then the United States. We’re actually in third place. So when he says we’re coming down 75 percent, they need to because they’re so high to start out with. We’re actually in third place when it comes to subsidies. So when they say we’re cutting 75 percent I say well gosh, that’s great, but you need to.

NDTV: So they have. They have made that offer on the table. So what about US?

Secretary Johanns: In our subsidies, the numbers you’re using are not accurate because what you’re trying to co is compare overall with Amber Box. We have actually said we’ll take Amber Box down from $19.1 billion to $7.6 billion. This is a dramatic cut in the amount of the most trade distorting subsidy which is the Amber Box subsidies. So you can see the significance of our cut.

We have said 60 percent cut and we’re not starting at the high level of the European Union. We’re starting at a much lower level. Literally it would require the complete change in how our farm policy is done.

So you have to really compare apples to apples here. Again, the European Union is very high, but even with that we’ve said look, we’ve got to be more dramatic here. We will take the Amber Box subsidies, we will cut them from $19.1, we’ll but them 60 percent to $7.6 billion. In the Blue Box subsidies which are the second most trade distorting subsidies, the world was saying we need to cut those to five percent of production. We said not enough. We need to go to 2.5 percent. We even proposed a more dramatic cut than what the world was looking for.

The net effect of all of this, and I’ve said this to the House and the Senate in the United States is that it totally requires reform of how we would do our agricultural programs in the United States.

So just to sum up, I can tell you without any hesitation it’s not the European Union that has made the bold offer. The bold offer was made by the United States a year ago in October when we said we would take our subsidies down so dramatically.

I appreciate what they’re doing. Personally I believe they need to do a lot more with subsidies because they subsidize so heavily, but again, the key issue here really long term is going to be opening markets.

NDTV: Fair enough. I guess the perception here is that they are not adverse to opening markets, but without getting into the boxes, [inaudible] still stand around $310 billion. All I’m asking you is, whatever you’ve said and whatever is the offer already, are you willing to improve that? That doesn’t seem to be able to break the deadlock.

Secretary Johanns: Again, I have to tell you I don’t know where you get the $310 billion. Our --

NDTV: It’s in the public domain.

Secretary Johanns: Our total USDA budget isn’t $310 billion. If I put 100 percent of the USDA budget into subsidies, it wouldn’t be anywhere near $310 billion, and I don’t know where those figures come from but I would just tell you, just being very --

NDTV: How much would that be, to make it more accurate?

Secretary Johanns: Last year we probably, well, this year. This year would be a better indication. We would be probably around $10 billion overall. The year before it was a little bit higher.

NDTV: You’re talking total support?

Secretary Johanns: Yeah. I’m just telling you, I don’t know where people get these numbers but $310 billion has never been the size of the farm programs in the United States, even from the very beginning. That is just, I don’t know where that number comes from but it makes no sense.

NDTV: I still need an answer to my question. You talk about the offers on the Amber Box and the Blue Box, but the fact of the matter is they are still trade distorting. For what you have already based on an offer on the table, are you willing to fatten that up? Are you willing to improve on that offer?

Secretary Johanns: We’ve always said this is negotiation. We understand that. Our President has set the goal, he has set the standard. He has been very straightforward and he’s said it a number of times, let’s work toward the total elimination of trade distorting subsidies. He didn’t mince words about that. But again, the whole idea here is that we accomplished great success in the three pillars. One pillar is subsidies and the United States really is leading the way, but our President again has set a goal of let’s try to totally eliminate trade distorting subsidies.

The second pillar is market access. We have seen nothing very exciting with market access. With the European Union offer on the table you’d still have very very limited market access. Virtually nothing would be achieved here.

Then you have the export competition pillar. I believe we can eliminate trade distorting export competition and in Hong Kong we agreed that should be accomplished by 2013. But all three pillars have to be balanced.

NDTV: Is there going to be a quid pro quo, and I’m talking G20 here. You come half way as well as slashing your subsidy or domestic support is concerned, and G20 perhaps moves up on market access in NAMA and agribudget. Is that the quid pro quo you’re looking at?

Secretary Johanns: We have all agreed to the notion that these things are interconnected. Call it what you will, they are very very much interconnected. And not only that, it becomes even more complicated. India would like to see greater market access in many parts of the world for information technology services, manufacturing services, so all of those areas become interrelated here and like I said, I think all countries have agreed that there has to be success in all of these areas to have a successful Doha Round.

NDTV: But India also has concerns on something called sensitive products. That kind of mechanism. There doesn’t seem to be any agreement on how much of SP should be allowed. While India wants 20 percent of the lines to be protected, I think the US position is just about five. So it’s a huge chasm, huge gulf. How do you bridge that?

Secretary Johanns: Actually it’s special products. Sensitive products would apply to the developed countries. Special Products applies to the developing countries like India.

Let me just offer a thought on special products, an important area. We have always acknowledged that there has to be some special product categories. We acknowledged that months and months ago in these negotiations. India on behalf of all developing countries, which would include China, which incidentally, as you know, is a world class competitor; Brazil. In soy beans Brazil is an unbelievable competitor, very world class competitor. South Korea. But they’ve taken a position that 20 percent of tariff lines had to be protected.

The WTO did an analysis of that position. This isn’t something we did. This was done by the World Trade Organization. And said that in effect what that means is that would protect 95 to 98 percent of the marketplace in ag products. So basically those countries that I mentioned, and all developing countries, would basically protect 98 percent of their marketplace.

Again, if you’re a believer that poverty is eliminated or people are lifted out of poverty by the opportunity to trade, to grow their products and ship those into the international marketplace, then you really accomplish nothing here because 98 percent is going to be protected.

So how do we bridge that gap is one of the challenges of our negotiation. I would say this, to the farmer who may be listening in on this or whatever. Today between India and the United States in agricultural trade there is an imbalance in favor of India. India sells more agricultural products to the United States than we sell back to India. I share that because that tells me that India can very definitely compete in the international marketplace. But most importantly, not only can they compete, they can benefit.

If we can create a marketplace through these trade negotiations where a farmer in India can grow a product -- mangos or whatever -- and ship that to the United States or to another part of the world, and actually get good return on the investment they’ve made to plant and grow that crop, then I think there’s tremendous potential here.

NDTV: Fair enough. I get your thoughts on that.

One last question on the shrimp exports. [Inaudible] have been feeling the pinch of the kind of continuous bond that they’ve been asked to furnish. That’s almost crippling exports as far as our shrimp is concerned. Are you willing to show ay flexibility before it actually lands up in the WTO dispute settlement [inaudible]?

Secretary Johanns: We always hope we can work through issues before we go to a WTO process, and we’ve had issues with other countries, probably with India too, where we’ve worked and worked to try to resolve issues at the technical level and even at the ministerial level. Our hope is to avoid that WTO process because it is time consuming, it is very expensive, and sometimes the results can literally be a year or two or three years away.

So my answer to your question is look, we’re going to engage, we will try to solve problems. In the end if those problems can’t be solved then the WTO is there and that’s why that process is there. But we really work hard to try to avoid that because it is time consuming, it is expensive, it’s a challenge for both sides.

NDTV: Mr. Mike Johanns, thank you very much for talking to us.