US POSITION AT DOHA
North American & Global Economy
CPL2 - 561 - 781
Professor: Kenneth N. Matziorinis
PRESENTED BY
JING ZHAO
GEORGE DOBRINESCU
260 195 799
260 198 216
Executive Summery
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Country profile
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US participation in the WTO
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The major issues at Doha and US position
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US strategy and options at Doha
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Conclusions
COUNTRY PROFILE – BRIEF HISTORY
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1776 - Britain's American colonies broke with the
mother country.
During the 19th and 20th centuries, 37 new states were
added to the original 13.
The two most traumatic experiences in the nation's
history were the Civil War (1861 -1865) and the Great
Depression of the 1930s.
Buoyed by victories in World Wars I and II and the end
of the Cold War in 1991, the US remains the world's
most powerful nation state.
COUNTRY PROFILE – POPULATION
The United States is the third most populous
country in the world following China and India.
 The U.S. population - currently more than 300
million (Nov. 2006 - 300,176,035).
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The population growth rate is 0.91% per year.
Projections - U.S. population will grow to 394
million by the year 2050
COUNTRY PROFILE – POPULATION
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Ethnic groups: white 81.7%, black 12.9%, Asian
4.2%, Amerindian and Alaska native 1%, native
Hawaiian and other Pacific islander 0.2%
Religions: Protestant 52%, Roman Catholic 24%,
Mormon 2%, Jewish 1%, Muslim 1%, other 10%,
none 10%
Languages: English 82.1%, Spanish 10.7%, other
Indo-European 3.8%, Asian and Pacific island 2.7%,
other 0.7%
COUNTRY PROFILE – GEOGRAPHY
COUNTRY PROFILE – POLITICS
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The President of the United States is both head
of state and head of government
A two-party legislative: Senate and House of
Representatives
The Supreme Court balancing the rights of each
Federal court system is based on English
common law
Each state has its own unique legal system,
based on English common law
COUNTRY PROFILE – ECONOMY
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GDP $13.3 trillion (September 2006)
Annual GDP Growth 3.5% (2006)
Inflation Rate 3.4% (September 2006)
Labor force 151 million (includes unemployed)
September 2006
Leading industrial power in the world, highly
diversified and technologically advanced
COUNTRY PROFILE – ECONOMY
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The USA achieves 30% of their external trade through
NAFTA countries AND 20% through the European
Union
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USA's top three export partners are: Canada 23.4%,
Mexico 13.3% and Japan 6.1%
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Its top three import partners are: Canada 16.9%, China
15% and Mexico 10%.
International Organizations
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Inter-American Development Bank (IADB)
The European Bank for Reconstruction and Development
(EBRD)
The Group of 8 (G-8)
The International Labor Organization (ILO)
The International Monetary Fund (IMF)
The North Atlantic Treaty Organization (NATO)
The North American Free Trade Agreement (NAFTA)
The Organization for the Prohibition of Chemical Weapons
(OPCW)
The Organization for Economic Cooperation and Development
The United Nations (UN),
The World Health Organization (WHO)
The World Trade Organization (WTO).
Global Rankings (2006)
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The United States ranks 8 in the Human
development index
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20 in the corruption index
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The 6th place for the global competitiveness
index with a score of 5.61 after Singapore (5.63)
The U.S. Position at Doha Round
Background
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The WTO - principal international organization governing
world trade.
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It has 150 members, over 95% of world trade. (last member Vietnam, January 11, 2007)
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It was established in 1995 as a successor of GATT.
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The US was an original signatory to the GATT and a leading
proponent of the GATT’s free-market principles.
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Decisions in the WTO are by consensus, but US has a highly
influential role in the WTO as the largest trader in the world.
US TRADE POLICY GOALS
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Expand open market approaches to trade;
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Expand the scope of multilateral trade regimes and development
of international rules and standards;
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Enforce rules and agreements to reduce and eliminate foreign
trade barriers, increase transparency, and strengthen the rule of
law;
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Combat foreign competitive practices that impede U.S. access to
markets in areas such as standards, barriers related to animal or
plant health, tied foreign aid, and corruption;
US TRADE POLICY GOALS
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Expand business opportunities for U.S. agricultural
producers and processors;
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Promote U.S. trade interests within the WTO and
regional trade organizations
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Promote bilateral trade and resolve specific issues that
impede such trade;
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Facilitate U.S. trade policy development
US Participation in the WTO
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US is one of the key participants in all areas of WTO activity,
including the launch of Doha Round in November 2001.
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The Doha Round aims to continue the liberalization of global
trade with the purpose of increasing economic growth in the
developing world.
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The most contentious issues :
 agricultural subsidies
 tariffs on non-agricultural products
 intellectual property protection
 the reform of the practice of anti-dumping
STATE OF DISCUSSIONS
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In 2006, talks have stalled between the developed nations and the major
developing countries.
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The Doha Round will be successful if reciprocal concessions are offered and
accepted by all members.
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If the developed world fails to address agricultural subsidies in a way that
satisfies the developing world, the Doha Round will fail.
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If the developing world does not make concessions on increasing access to
its markets, then the Doha Round will fail.
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The success of the Doha Round should be an integral part of U.S. efforts to
improve economic growth around the world, and also to reduce poverty, fight
terrorism, and stem the spread of HIV/AIDS.
The Major Issues at Doha Round
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The most contentious issues :
 agricultural subsidies
 tariffs on non-agricultural products (NAMA)
 intellectual property protection (TRIPS)
 the reform of the practice of anti-dumping
Agricultural Subsidies
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Current export subsidies and domestic support for agricultural goods mainly
in U.S. and EU, keep world agricultural prices low, preventing the developing
world to compete on the world market.
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Reducing these subsidies will help developing countries gain access to the
world market and sell their goods at higher prices, resulting in an increase of
their economic well – being.
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Many developing countries have a comparative advantage in delivering farm
goods to market, and seek a sharp reduction in rich-country trade barriers on
agricultural goods.
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As part of a grand bargain, rich countries want to increase their access to
non-agricultural manufacturing and service sectors in robust developing
countries, especially to capitalize on their strong financial, transportation and
telecommunications services.
U.S. Proposals in Global
Agriculture Trade
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Stage 1:
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Substantial reductions of trade-distorting support
measures and tariffs, along with the elimination of
export subsidies, in over a five year period.
Stage 2:
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An additional five year period that delivers the
elimination of remaining trade-distorting subsidies
and tariffs in agriculture
U.S. Position in Global Agriculture
Trade
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The United States offered to cut its agricultural subsidies by
more than 50% (on average), but conditioned the offer on major
market-access from the EU and G-20.
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EU offered to cut its tariffs by an average of 40%, but it also
wants to identify up to 160 of its agricultural products as
“sensitive” and preserve tariff protections for them.
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The United States was under pressure from the EU and the G20 to improve its subsidy reduction offer (from $22bn to $17bn).
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EU countries must make cuts in their agricultural tariffs in the
vicinity of 54%.
U.S. Position in Global
Agriculture Trade
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The United States insisted that it would not improve its offer on domestic
subsidy reduction unless the EU improves considerably its market access
offer and the G-20 countries show a willingness to open their markets both
to agricultural and industrial products and services as well.
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But an open embrace from the developing world is highly unlikely if the
United States refuses to give up its significant farm subsidies
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Another difficulty is “geographical indications,” or the protection of product
names that reflect the original location of the product. (Ex. Bordeaux wine).
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The United States refuses to negotiate a mandatory list, but will accept a
voluntary list with no enforcement power.
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The EU says it will not accept an agriculture agreement without a
geographical registry.
Non-Agricultural Market Access
(NAMA )
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The negotiations cover all goods not included in the Agreement on
Agriculture.
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The products are primarily industrial although WTO members are also
negotiating on natural resources, including fisheries, forests, gems and
minerals.
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Negotiations
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The Swiss formula
Special and differential treatment for developing countries
Reducing the incidence of non-tariff barriers, such as import licensing and
quotas
The sectoral elimination of tariffs for specific groups
Non-Agricultural Market Access
(NAMA )
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The Swiss formula will be used to reduce tariffs:
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Whereby T1 is the new bound tariff, To the initial bound rate and a, a coefficient
to be determined.
The coefficients for developed Members fall generally within the range of 5 to 10,
and for developing Members within the range of 15 to 30.
Pakistan formally presented a simple Swiss formula with coefficients of 6 for
developed countries and 30 for developing countries.
US complained that 30 was too high, and would not cut developing country
tariffs steeply enough.
Non-Agricultural Market Access
(NAMA )
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Special and Differential treatment for developing
countries
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The possibility for developing countries to exempt a small
number of tariff lines from reductions, or
to make less than formula cuts on a higher number of
products.
Both the United States and the EU have favored using
sectoral tariff elimination as an alterative modality for
the NAMA negotiations.
Negotiations have stalled on which products to cover
and the extent of participation.
Intellectual Property Rights
Protection
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Protecting the copyrights and patents of U.S. companies has been an
important component of previous U.S. stances on IPR and continues to be.
In the case of patented medicines and treatments particularly HIV/AIDS,
developing countries often are too poor to afford these patented products
and/or lack the capacity to produce similar products domestically.
Governments can grant compulsory licenses to sell the patented products at
far lower cost.
These compulsory licenses harm the financial welfare of the pharmaceutical
companies, a strong presence in the U.S.
As long as it is monitored effectively to prevent the re - exportation of these
products by third parties:
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effective means of protecting U.S. pharmaceutical companies from piracy
at the same time providing medical treatment to those who desperately need it.
Reform of WTO Rules on Antidumping
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Objective - “clarifying and improving
disciplines”
The United States has primarily been on the
defensive in the rules talks.
Many countries have attacked the use of
antidumping actions by the United States.
However, many developing countries are now
using antidumping actions themselves.
Reform of WTO Rules on Antidumping
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The leading proponents of “clarifying and improving disciplines”
have been a group of 15 developed and developing countries
known as the “Friends of Antidumping”.
In essence their proposals would reduce the incidence and
amount of duties .
Many of their proposals would require a change in U.S. laws.
In the U.S., imposing anti-dumping duties is a favored and
frequently used trade remedy for domestic import-competing
interests.
The United States has submitted proposals on subsidies, such as
expanding a list of prohibited subsidies and imposing disciplines
on support to sales of natural resources.
Other Issues
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U.S. Seeks to Expand Trade in Services
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Liberalization across a broad range of service
sectors, with a particular focus on key infrastructure
services.
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These key services include, but are not limited to,
financial, telecommunications, computer, express
delivery, distribution and energy services.
U.S. Seeks to Expand Trade in Services
Currently, the United States covers more than 60 percent of
services sectors while WTO members average 35 percent
coverage.
Other Issues
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Dispute Settlement
The United States favored additional reforms
that were not a part of the initial text.
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For example, the United States has called for open
public access to proceedings.
Environment
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The United States is pushing for rules on fisheries
subsidies, and tariff reductions on environmental
products.
Beyond Trade: Additional U.S.
Assistance to Developing Countries
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The United States nearly doubled its official
development assistance to the world’s poor from $10
billion in 2000 to $19 billion in 2004.
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U.S. citizens give billions every year through charitable
donations, and U.S. NGOs account for the vast
majority (62%) of all private institutional grants from
OECD countries.
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Debt relief is another area where the U.S. has taken the
lead. The G-8 countries agreed to cancel 100% of the
bilateral and multilateral debt for qualifying Heavily
Indebted Poor Countries.
U.S Strategy at Doha
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U.S. has a multilateral strategy to achieve its goals at the Doha Round.
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Well in advance of the official meetings, the U.S. needs to reach out to
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in order to
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developed (G8) countries,
mid-level (G20) countries,
and the least-developed (G90) countries
learn what each bloc hopes to achieve in the round,
build trust between the trade representatives of the U.S. and the other nations,
gain support for the U.S. position.
This engagement with other nations prior to meetings will:
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reduce uncertainty about other nations’ intentions
decrease the likelihood of a setback
U.S Strategy at Doha
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If the U.S. successfully at the Doha Round:
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the international community’s confidence in the U.S. as a
multilateral actor will be increased
some of the soft power the U.S. recently lost due to the
conflict in Iraq will be restored.
Any agreement that is reached at the Doha Round must
be ratified by the Senate.
It is imperative that the executive branch agencies work
closely with their colleagues on the Hill to ensure
Senate approval of the agreement.
OPTIONS FOR U.S. POSITIONS
AT DOHA ROUND
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Option 1:
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PROS:
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Reduce Agricultural Subsidies and Tariffs on Non-Agricultural Goods
Maintain Status Quo on IPR and Anti-dumping.
Addresses most immediate concern of developing world (subsidies)
Opens foreign markets to U.S. exports
Reciprocity leads to economic gains for both developing and developed
nations
Would remove subsidies from blocking progress on FTAA negotiations
Domestic import-competing industries want to maintain anti-dumping as
a tool
CONS:
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Domestic agricultural interests will lose some economic benefits
OPTIONS FOR U.S. POSITIONS
AT DOHA ROUND
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Option 2:
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Reduce Agricultural Subsidies and Tariffs on Non-Agricultural Goods;
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Improve Monitoring of Compulsory Licenses to Protect IPR;
Maintain Status Quo for Antidumping
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PROS:
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Same as Option 1
Improves access to patented medical treatment in the developing world
CONS:
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Domestic agricultural interests and pharmaceutical companies will lose
some economic benefits
OPTIONS FOR U.S. POSITIONS
AT DOHA ROUND
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Option 3:
 Reduce Agricultural Subsidies and Tariffs on Industrial Goods;
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Improve Monitoring of Compulsory Licenses to Protect IPR;
Reform Anti-dumping Rules
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PROS:
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Same as Option 2
CONS:
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Domestic import-competing industries will not allow the Senate to pass
an agreement with anti-dumping reform
OPTIONS FOR U.S. POSITIONS
AT DOHA ROUND
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Option 4:
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Maintain Status Quo on All Issues
PROS:
 Domestic agricultural interests will continue to benefit from
subsidies
CONS:
 Doha Round will fail
 Inefficiencies in developed world will persist
 Developing world will continue to be unable to compete on
the world market.
Conclusions
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It is imperative that the position of the U.S. at the
negotiations is one that can be passed in the Senate
It must also be one that can be accepted by the
international community in multilateral negotiations.
The Option 2 is the most likely to be accepted on both
the international and domestic level.
It is also the best compromise between the desires of
the developing and developed nations of the world.
Conclusions
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It all depends upon the US – how far it would travel on cutting
domestic farm subsidies.
At present, the US is ready to freeze the total subsidy payment at
US$19bn, which is marginally lower than US$21bn given in 2005.
Peter Mandelson, Europe’s trade commissioner, believes that the
way to unblock the round would be for the US to put a ceiling of
US$15bn on subsidies, compared to the current spending of
US$19bn.
The developing countries– G-20 and G-33 – however, have
demanded 75 percent cut in domestic subsidies by the US.
To satisfy this demand, the US needs to prune down its domestic
subsidies to around US$5bn.
Conclusions
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The first three months of 2007 are extremely
crucial for the Doha round.
First, the US is likely to reveal their cards on
what they have in mind about the upcoming
review of US Farm Bill.
Secondly, key WTO negotiators have already
entered into a higher gear of talks at Geneva.
THANK YOU!
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