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Remarks by Ambassador Ron Kirk At U.S. Delegation Media Availability at the 20th U.S.-China Joint Commission on Commerce and Trade

U.S. Delegation Media Availability at the
20th U.S.-China Joint Commission on Commerce and Trade
Hangzhou, China
October 28, 2009


Participants:
U.S. Trade Representative Ron Kirk
U.S. Secretary of Commerce Gary Locke
U.S. Secretary of Agriculture Thomas Vilsack


Ambassador Kirk:

Thank you ladies and gentlemen. It's a pleasure to be here in lovely, and historic, Hangzhou, for the 20th session of the US-China Joint Commission on Commerce and Trade.

We made solid progress on a series of important trade issues that can help both of our countries achieve balanced and sustainable growth. Let me name some specific examples.

First, on the issue of intellectual protection and government procurement, we really believe that the government of China [inaudible] reenergize [inaudible] accede to the WTO Government Procurement Agreement. And China, more importantly, committed to submitting a revised offer to the WTO as early as 2010.

Also within the procurement context, a context of great interest to American producers of that product, produced in China by foreign investment enterprises will be treated as Chinese domestic products and China will issue a rule to this effect. China's progress on this important issue moves s closer to creating significant new markets and opportunities for American-based companies in China's sizeable government sector.

A second issue I'd like to address briefly is in the area of intellectual property rights protection. Here we made important progress in three very important areas.

First, China gave assurances today that it will impose maximum administrative penalties on internet pirates, and has also begun a four month campaign to clamp down on internet piracy.

Second, we were very pleased to learn that just yesterday China announced that it has published written notice conveying to state-run libraries the importance of protecting intellectual property of academic and medical journals.

Finally, China agreed that it will continue to work closely with the United States to resolve our concern about a new Ministry of Culture Regulation relating to on-line music distribution which creates very serious challenges for the American music industry.

At this time I would like to turn the podium over to my co-chair, United States Secretary of Commerce, Gary Locke.

Secretary Locke: Thank you very much, Ambassador Kirk, and I want to thank you for your incredible leadership and the work of your staff in helping organize this 20th JCCT.

I echo Ambassador Kirk's assessment that this was a very successful 20th session of the JCCT.

We had a very candid discussion with the Vice Premier and other Chinese officials on a wide range of very important issues. Issues raised by the Americans and issues raised by the Chinese.

To sum up, we made very significant progress on a number of issues raised by the Americans. In the area of clean energy, which is of utmost concern, and to the President, Americans and indeed a challenge facing the entire world, we're pleased that China has agreed to remove global content requirements for foreign participation in China's wind farm market. This will open up China's energy market to American companies and create jobs for Americans.

In response to concerns raised by our government, Vice Premier [Wan Jishan] also confirmed and indicated that China's Ministry of Health and the State Food and Drug Administration would be the relevant authorities regulating medical devices and that American devices would not be subjected to duplicative or redundant regulations or agencies.

On pharmaceuticals, we were very encouraged by China's initiatives to strengthen its oversight of the production and sales and marketing of what is called active pharmaceutical ingredients. This will significantly reduce the production of counterfeit medicine.

We also agreed to several cooperative initiatives in the areas including transparency, the environment, green building and various industry standards.

We also signed several agreements. I'm particularly proud on the signing of the MOU that establishes the U.S.-China Energy Cooperation Program. This program administered by the Trade Development Agency is a public/private partnership involving 21 major U.S. companies and will be focused on the commercialization of clean energy solutions in China. This is a very important effort to help drive and foster U.S.-China commercial cooperation in the sector of clean energy. Through this collaborative effort it's our hope that China and the United States will join together in solving the energy challenges for the world and to avoid catastrophic climate change.

In addition we noted issues of concern that are still being discussed in the JCCT working groups and we're committed to continuing to discuss these issues with the aim of resolving them as soon as possible.

I want to note that the working groups that are part of the JCCT deal with very complex issues and significant progress was made in each of those working groups. Their efforts resulted in the announcements that we're able to make today.

We want to thank all the staffs and all the people involved in all the ministries and the U.S. agencies for their incredible hard work and dedication throughout the entire year leading up to the agreements and the progress that were reported as part of the JCCT.

We believe that this productive meeting of the JCCT, this 20th meeting, builds a foundation for a most successful visit by President Obama in the next few weeks.

Now I'd like to turn the microphone over to Secretary of Agriculture Tom Vilsack for his announcements.

Secretary Vilsack: Thank you, Secretary Locke. Let me first of all thank you and Ambassador Kirk for your leadership as co-chairs of the American delegation to this JCCT meeting.

I'd also like to take this opportunity to thank our Chinese hosts for a very gracious reception. We at USDA recognize that two-way trade in agriculture, fish and forest products between the U.S. and China has grown in recent years to over $21 billion a year. This trade relationship creates important connections and benefits for farmers, workers and consumers in both countries.

Recognizing the importance of that relationship, Minister Sun and I signed a reaffirmation of a Memorandum of Understanding between our two countries in agriculture.

I must say that we were encouraged by statements made by Chinese officials today of China's intent to reopen the Chinese market in United States pork and live swine, consistent with science-based international standards. We look forward to the official announcement soon. China's intent to remove the H1N1 related ban on U.S. pork marks an important step forward in cooperation between the countries on agricultural issues. It is reflective of a constructive friendship and relationship [inaudible].

Ambassador Kirk: Thank you Secretary Vilsack.

Just a few closing words. We believe that this first JCCT in which the Obama administration has participated comes at a critically important time, just two weeks before President Obama's visit to meet President Hu here in Beijing. We are all greatly encouraged that the good work that we did here today will help to strengthen the engagement of trade issues and help forge a closer trade relationship between the U.S. and China.

It is quite fitting, perhaps, that we met here on the historic shores of Westlake in Hangzhou where our leaders first opened the door for future economic, commercial and diplomatic relationships. So as we conclude this meeting we are proud and inspired by our accomplishments in the past, but we're also proud and inspired by our shared commitment to a future of even greater economic growth and opportunity for the people of the Republic of China and the people of the United States of America.

Thank you. We're happy to take your questions.

Question: My name is Zhou Yulin, from China Central Television (CCTV). I have a question for Secretary Locke.

Among the nine agreements signed today [inaudible] there was a lot of mutual investments in both countries. I'd like to know how helpful will this agreement be to Chinese companies who want to establish [inaudible] in the United States.

Secretary Locke: We believe the United States is one of the most open countries in terms of trade as well as investment. We support foreign investment, whether from Europe or from Asia or from China. In fact there are several forums planned in the next few weeks on foreign investment, Chinese investment into the United States and we believe that these agreements will help facilitate that and provide more education and more information to any Chinese that are interested in investment in the United States.

Question: My question is for Secretary Vilsack.

In regards to both exports, U.S. port exports to China, do you have any feel of the timeline in which they may resume? Definitely whether that is a permanent resumption and whether any further restrictions may be placed on those efforts?

Secretary Vilsack: In my conversations within Chinese officials, the indication was the formal announcement would come very soon, and I would expect that is probably the case given that the statements were made today both during the plenary session and during the small group session.

We were heartened by the communication of the interest on the part of the Chinese to recognize the appropriateness of abiding by and utilizing science-based international standards. We think that is the appropriate way to approach this issue and we were heartened by that.

Question: [Inaudible].

China wishes that the U.S. can recognize China's position as a market economy and [inaudible] on that. And what do you propose for China to do to prove itself as a market economy?

Secretary Locke: Actually China is, under the terms of its accession to the WTO, China will be declared a market economy in the year 2016. So the issue is whether or not there is an opportunity for China to be recognized as a market economy sooner or earlier than the year 2016.

Under our U.S. laws there are very specific criteria that must be examined, that must be satisfied before China can be declared a market economy, and that applies to any country, not just to China. So we're pleased that the working group will reconvene and then China will have the opportunity to present the various data to address those criteria that are laid out in U.S. law. We know that much progress has been made since the last time China submitted information and documentation to the working group, and we look forward to receiving that information.

Question: Elaine Kurtenbach, Associated Press.

We were intrigued by the timing of the announcement overnight about China beginning a probe into U.S. auto exports. It seemed a bit odd during [inaudible]. Can you just tell us if it had any impact on the atmosphere, how you dealt with it, and [inaudible].

Ambassador Kirk: I can tell you that we shared your intrigue. [Laughter]. The reason that we can sit here before you and I think enumerate such progress I think is evidence of the fact that it did not stand in the way of what was a very productive and necessary JCCT.

One of the observations that Secretary Locke made during our interventions today was that as Governor of the State of Washington, both he and I as Mayor of Dallas, as well as Governor Vilsack, all supported China's entry into the WTO and being granted permanent normal trade relation status.

The reason that we did so is we realized the extraordinary benefits that would accrue to the United States and China by being involved in a global rules based trade relationship. We recognize the strength of such a rules based system is that there will inevitably be disputes and in a mature trade relationship as there is between the U.S. and China, there will obviously be disagreements. But the good news is now we have a way to resolve it.

Question: I'm from the 21st Century Business Herald. My question is for Secretary Locke.

The China-U.S. Energy Cooperation Program is an innovative new public/private partnership involving China-U.S. governments and companies. What is the intent of this program? You just mentioned there are 21 countries involved with this program. What kind of companies are they? Can you give me some examples?

Secretary Locke: These are companies that encompass a wide range of different sectors from technology to green energy, but even aviation. There's interest in using green fuels, renewable fuels, non-carbon based fuels in aviation. So these are a whole range of sectors, from information technology to traditional technology that would be associated with green energy.

Question: My name is Connie Shay Young, Market News. My question is for Gary Locke.

Both you and [inaudible]. The Chinese [inaudible].

Secretary Locke: Actually, that did not come up. I think Secretary Geithner has made the position of the United States government pretty well known, and I think it's pretty well understood by the Chinese, and of course Vice Premier Wang had the discussion with Secretary Geithner that was part of the Strategic and Economic Dialogue. So that issue did not come up.

Question: James Areddy with Wall Street Journal. My questions if for Ron Kirk.

I'm interested what seems to be a tit for tat approach to trade relations, trade in China [inaudible] fallen. Can you talk about the pattern of [inaudible] trade [inaudible] these countries? And can you tell us [inaudible] on both sides [inaudible] trade [inaudible]?

Ambassador Kirk: First of all let me say I'm not that comfortable with your characterization of the United States or China, frankly, acting on their legitimate rights under the World Trade Organization to enforce our trade rules and trade [inaudible].

As President Obama commented in Pittsburgh, enforcement of our trade law is not only a necessary part of maintaining the public's belief in the wisdom of our trade policy, but it's also necessary to ensure that America's farmers, ranchers, businesses, get full access of these trade agreements that we negotiate.

As for the decline in trade between the United States and China, I think it evidences the fact that as great as these two economies are, we aren't immune to the global economic conditions. Our trade flows were restricted just as trade flows were among all countries during this recent economic crisis.

We do believe there may be some silver lining in this and that is it calls China to have a healthy and necessary debate we believe over a manufacturing and export policy that's dependent perhaps too heavily on the consumptive appetite of American consumers.

So we think there can be great promise for not only continued trade flows, but in a new examination of the China industrial policy that leans as much on creating a middle class capable of consuming some of what China produces, and as well challenges the United States to invest again in our export capabilities.

Question: This is for Ambassador Kirk.

I'm wondering if you could expound a little bit on Chinese [inaudible] in response to the WTO case. Can you talk a little bit more about the internet pirating [inaudible] for a long time now. [Inaudible].

Ambassador Kirk: [First portion of answer inaudible.] But we are encouraged that China has agreed to continue to engage us and America's music industry of our concerns with this particular [inaudible] regulation.

On the issue of intellectual property rights and internet piracy in particular, this was an area where we did make substantial progress in today's discussion. We were especially pleased with China's announcement of two important initiatives in this regard. One is a four month campaign to focus on and clamp down on internet piracy.

Secondly, in concert with that, China also committed that it would pursue the maximum administrative penalties, including [inaudible] revocation of licenses or secondly, enforcement of criminal penalty where appropriate.

I would say in closing that we think it's important that China now recognizes that it is very much in the interest of Chinese entrepreneurs, creative artists, and others to have the strongest possible intellectual property rights regime for their own domestic industry as well. We see the announcement by the Vice Premier and the President of China today as a very welcome sign.

Thank you all for being here. Thank you for your attendance. We look forward to welcoming you to the United States for the 21st JCCT.