USTR - Transcript of U.S. Trade Representative Robert B. Zoellick Closing Press Conference at the APEC Ministerial Meeting
Office of the United States Trade Representative

 

Transcript of U.S. Trade Representative Robert B. Zoellick Closing Press Conference at the APEC Ministerial Meeting
Santiago, Chile 11/18/2004


USTR Zoellick:
Well, thank you for joining us.  I’d like to start by thanking our Chilean hosts and the people of Chile for their excellent hospitality.

It’s very fitting to hold APEC meetings and discuss ways to expand trade liberalization here in Santiago, because Chile is a prime example of the benefits of opening markets.  The Chilean people have charted a course towards economic growth, development and expanding prosperity.  My first international trip as US Trade Representative was to Santiago, because I wanted to emphasize the U.S. commitment to completing the free trade agreement between our two countries.  And we did complete it.  And it’s now already starting to work to boost trade and opportunity for Chile and the United States.

As a person who was privileged to take part in the first APEC Ministerial in 1989, I was pleased to have an opportunity to speak earlier today with a number of the business leaders who have contributed so much to the APEC process.  And I was pleased to report to them that APEC has once again has proven a vigorous proponent of global trade liberalization.

APEC’s voice today is clear. APEC Ministers have made clear their commitment to the World Trade Organization and to keeping up the momentum in the Doha negotiations so as to make as much progress as possible in 2005 in advance of Hong Kong WTO Ministerial.

The voice of the United States today is also clear: we are committed to moving Doha forward.  We will continue to lead efforts to invigorate the global economy through ambitious global liberalization.

Given our recent elections, it feels particularly good to be here.  The U.S. has been a leader in pushing trade liberalization, and with the American people providing President Bush another four term, strong American leadership on trade will continue.

The United States trade agenda will continue to strive to open markets globally, regionally and bilaterally.

APEC provides a constructive engine for generating momentum, because the voice of the Pacific Rim, a voice that spans large and small, developed and developing economies, is heard around the world and can reverberate in the halls of the WTO.  Trade is the lifeblood of APEC, so when APEC speaks, people listen.

As recently as 2003 in Bangkok, APEC Members called for the WTO to resume negotiations and to build upon the negotiating text that we had developed in Cancun.  In Pucon here in Chile, as recently as June, APEC Ministers called for the launch of trade facilitation negotiations, and that helped generate momentum that we used in July to launch the trade negotiations for trade facilitation in the framework that we agreed on in Geneva.

We’ve come far in the last year, but we know we have much work to do.  We have “sharpened the focus” of the negotiations.  And now we need to move toward more specific results in agriculture, goods, services and trade facilitation.

These meetings have been fruitful, and provide a solid foundation for our respective Leaders to engage on these issues over the next couple of days and to press for our shared goals of opening markets.  The future of APEC, the future of the world’s continued economic growth and development is about trade.  And the Doha negotiations offer the best opportunity to advance the global trade agenda.  Thanks, and I’d be pleased to take your questions.

REPORTER:  Chris Rugaber, at BNA publications.  I just wanted to ask about the proposal for a free trade area or at least a proposal for a study of a free trade area in the APEC region which I guess was advanced by the business community.  I was wondering what the U.S. position was that you took during the Ministerial meeting and also how do you see that and I mean how would such a proposal differ from the Bogor goals, which also calls for free trade in the area. Thank you.

USTR ZOELLICK:  Certainly.  Well, first, as my opening comments suggested the primary U.S. objective here has been to press for the Doha agenda.  And I was pleased we had a very good discussion of that yesterday morning and there was a lot of direct support and a number of ideas discussed.  So our primary focus is on the global economic trade agenda.

Within APEC, the United States on January 1 will have had free trade agreements with five of the APEC countries Canada, Mexico, our hosts here in Chile, Australia, and Singapore and we are negotiating with two others Peru and Thailand.  On the ideas that the ABAC talked about, we had an opportunity to discuss those at a lunch session with foreign and trade ministers and I spoke to a business group afterwards.  And I think as part of the study proposal that you mentioned that was an emphasis of a number of principles about trying to advance trade liberalization and trade facilitation.  And we encouraged the business community to help us on Doha, as well as to help us on some of the specifics on that agenda.  And we’ve agreed to try to look at some of the ideas about how we could in some of the terms advance in trade liberalization and integration throughout the Asia Pacific region.

Just to give you a more specific flavor with both Ministers in the business community, I talked about the role of benchmarking the number of free trade agreements that have been negotiated not only as the business community recommended to try to develop some best practices which is an item that I think got general support here, but also to look at some of the state of the art developments.  In our free trade agreements we’ve benefited from the business community’s guidance on some cutting edge areas like e-commerce, trade facilitation, anti-corruption and some of the high tech issues.  And so others have had other experiences, so I think the best practices would be a help.  Another idea is to talk about how trade can be an engine of growth, and here we can draw on comparative experiences in developed and developing countries including from the business experiences, about how these FTAs can help in development.

For example, we talked about the services sector because many developing countries when they talk about investment sometimes they focus on public sector investment and infrastructure.  But many of the infrastructure areas that they are interested in, are in effect areas where you can draw private capital.  Telecommunications financial services, energy, distribution systems, ports and many places around the world are using private capital to generate that.  And third the role of the FTAs as they’re intersected with other topics in trade for example the Doha negotiations but also for example the role that trade and economic integration play with ASEAN, in terms of the political integration or some of the trans-national issues, whether it be environment or movement of people or other problems.

So, I think we consider that to be a valuable discussion topic.  Some people raised the exact question you did, “how is this different from the Bogor 20-20?” And since we are already committed to advancing that, I think, as you know, APEC works through a consensus, most felt that we needed to try to focus on some of these practical elements that I’ve mentioned, but to keep some of these ideas under discussion and for possible study in the future. 

REPORTER:  (BNA) As a quick follow-on, is it the understanding that the ministers are recommending to the leaders that this at least be considered?

USTR ZOELLICK:  I think to be fair to my colleagues - I know that Minister Walker had a presentation – I really should let the host do the summary of all the ministers on these particular topics.  I just tried to give you the background that I discussed and how I perceived the discussion.  Yes, sir?

REPORTER:  [unintelligible]…tv Hong Kong.  The U.S. trade deficit with China has reached a record high in September. 

USTR ZOELLICK:  Could you speak a little louder? There’s a lot of background noise in here.

REPORTER: The U.S. trade deficit with China has reached a record high in September. 

What is the reason behind that?  Is it because of renminbi?  And, the second question is how will the USA resolve this matter?

USTR ZOELLICK:  I’m glad you mentioned the point because I think many economies in the Asian Pacific have benefited from China’s growth, which has been impressive and has been one of the engines of growth.  But, one of the things we like to point out is that China is drawing in goods from other countries is, in part, because China then assembles and manufactures and works on them and sells them to the United States as well.  So, the connection – whether it be for Chile or for countries in Southeast Asia – often still goes around the United States as an engine for growth.

We made clear to the Chinese that we believe that trade and open markets are an important part of their growth strategy.  It’s helped with investment.  We see the benefits of that for all parties.  But, the trade has to be a two-way street.  So, we’ve worked with the Chinese, including earlier this year - under the leadership of Vice Premier Wu Yi and with Secretary Don Evans, our Secretary of Commerce and myself - to try to work on some of the problems that have interfered with U.S. businesses being able to get into China.  These range from technology standards like the WAPI, which was an encryption issue, technology neutrality for 3-G communications to agricultural products to the regulations on the distribution and trading systems so people can sell directly into China.  And, a very important one right now is intellectual property rights.  Vice Premier Wu Yi, on behalf of her government, committed to a number of actions in terms of lowering the threshold for criminal penalties, emphasizing a larger campaign, strengthening the criminal penalties themselves.  A number of these are supposed to be moving forward even before the end of the year, and we are working very closely with China because that’s an important part of the two-way relationship.

You mentioned as well the currency issue.  And, of course, if one have an undervalued currency, that is going to affect the trade flows.  The position of this Administration has not been to take protectionist or economic isolationist actions in response.  But, we have urged the Chinese to recognize the need to move toward more open capital markets.   There have been statements by officials working with our Treasury Department on that topic.  But, that continues to be an important issue if we’re going to have a fair trade system, and if the United States is going to continue to be the outlet for many of China’s products.  And if that will help the overall regional and global trading system.

So, the U.S.-China economic relationship is a very important one; it’s one that’s important for others in the region, and we want it to try to be an effective two-way trading relationship.  But, I would say that when Premier Wen Jiabao visited President Bush in December 2003, he emphasized these same points.  So, we have to try and make sure we have the follow-through.  

REPORTER: Mr. Zoellick, I’m from TV Globo from Brazil. I’d like to know when the negotiations on ALCA will be resumed?  What are the chances of these negotiations going on, the ALCA? 

USTR ZOELLICK:  I didn’t know Brazil was an Asian Pacific country [laughter].  On the ALCA, as you know the United States has wanted to try to move toward Western Hemisphere free trade at the same time we’re expanding to the Asia Pacific.  But, as I answered to the first question, we’ve also put an extremely high priority on moving ahead globally.  And, we worked with Brazil as recently as earlier this year to move forward with Doha negotiations.  And, I think that was a very useful step.

In the Western Hemisphere, the United States has proceeded with individual countries as well as all 34 as a set.  And I mention that because some of those countries are here.  Peru is one of them.  We still have to pass a free trade agreement with Central America and the Dominican Republic.  One with the Andean countries we’re negotiating with.   We have one with Chile.  The reason I mention that is by the time you get those agreements done - and in President Bush’s second term I think you will see the continued momentum you saw in the first term -  we will have covered two-thirds of the GDP of the Western Hemisphere, not counting the United States.  So, that’s one step. 

Now on the ALCA, the approach that we took was - in the Miami Ministerial in 2003 – we recognized that some of our partners, including the MERCOSUR partners, were not as ambitious.  They weren’t as ready to move towards free trade as some of the other countries in the region.  So, we agreed to try to develop a baseline arrangement.  But, that has not yet proven fruitful.  We hope to continue that effort to see if we can resolve those problems and move forward.  We also note that MERCOSUR has had some difficulties in their recent negotiations with the EU as well.  And, I hope – for those in Brazil that want to promote Brazil as a trading power – that this may help create some incentives to support the government to promote broader trade liberalization because you have to give to get.  And I think we have seen in some of those negotiations that Brazil and some of the MERCOSUR countries have not yet been ready to do that - they place political constraints.  We want to work with them to do that, but I hope that the business community and others in the MERCOSUR countries will support them in doing that because I think maybe the experience with both us and the Europeans would suggest there has got to be a little bit more flexibility on some of those topics. 

Let me just give you an example.  Services are very important for the European Union and the United States.  Well, in many of these negotiations there has been a real reluctance to open up the MERCOSUR services markets.  You go look at Chile, and you see that opening up service markets drives a lot of its economy, and you go look at many of the countries in the Asian Pacific.  Intellectual property, we realize that a number of the MERCOSUR countries were not ready to move to higher standards.  Many of the countries here are.  But, they were not ready to.  So, we said, “OK, but we at least have to enforce the current laws.”  Well, some of the countries were not ready to say they’d be willing to have enforcement of intellectual property.  Well, that is hard if you’re going to have a knowledge economy move forward.  Some countries wanted to include agriculture subsidies.

We hope that since we’re making progress on that in the WTO it will be less of a problem.  But, we’ve worked well with our Brazilian colleagues and others.  And, we hope we can continue to press forward on these issues because, frankly, it’s important for Brazil and Argentina and Uruguay and Paraguay’s growth.  And that, I think, is the message of APEC – is how countries can grow together.  It’s not a zero-sum game in trade.  So, we hope to try to advance more fully with the last group of countries in the region since we’re doing so well with two-thirds of the region’s economies.     

REPORTER:  I’m Mabel, [unintelligible] from tv Hong Kong.  Ok, I’ll speak up.

USTR ZOELLICK:  This is two questions from Hong Kong?

REPORTER: Yes

USTR ZOELLICK:  You know I used to live in Hong Kong.

REPORTR:  Really?

USTR ZOELLICK: Yes, that’s why you get two questions. [laughter]

President Bush and the Chinese President will hold bilateral talks.  Will they talk about the issue of renminbi?  Also, recently the Chinese government has taken certain measures to loosen the capital control.  Do you see that they have actually taken certain steps to push forward for a more flexible currency?    

USTR ZOELLICK:  One of the lessons I learned, was that, many years ago, was not to say what, at least, my President is going to talk about.  And, I certainly wouldn’t be so presumptuous as to say what the Chinese president is going to talk about.  So, they will have their meeting, and I am sure you will get briefed on it afterwards.  I did try to answer - to your colleague’s question – a number of issues that affect that relationship.  And, clearly the issue of exchange rates has been part of that.  This is really more a subject for our Treasury Department with their colleagues in the Finance Ministry in China and the People’s Bank of China.  I will say, as your question noted, that if you have a policy and a fixed exchange rate and a fixed interest rate, it’s just an economic reality that you are importing your monetary policy from the rest of the world; in this case, importing it from the United States because you’ve fixed your exchange rate to the dollar.  That may not be in China’s own interest.  You’ve seen, as China has tried to deal with its own issues of inflation and economic growth and concerns about the rate of growth and other topics.  So, I think it was a useful sign that there is movement in terms of interest rates.  And, it’s a useful sign that Chinese officials are discussing the importance of moving to open capital accounts.  We certainly recognize that with the problems in the Chinese banking system - an open capital account is not going to happen overnight.  But, there are other steps under discussion by the finance Ministries that could be constructive. 

REPORTER: Kevin Hall, Knight Ridder Newspapers.  A question a little off subject, in the report from the Ministers today, there are little tidbits on terrorism that I think were talked about in Bangkok and carried forward here.  But, there’s also something about a study on the cost of counter-terrorism efforts.  Can you shed a little light on the history of that and whether there are some concerns that the U.S. is pressing too hard on the terrorism issue here?

USTR ZOELLICK:  I am really going to defer primarily to Secretary Powell and the State Department team because they have really focused on that topic.  To try to give you some background, in prior APEC meetings, there has been a discussion about some of the issues that have gone into the Container Security Initiative (CSI) and others.  What has been interesting is that many have recognized that some of the steps that one takes on the security side can also be beneficial in terms of dealing with trade issues of concern:  counterfeiting.  And, frankly, how we need to interconnect some of the trade facilitation efforts that can cut costs.  Again, sometimes using information technology, that are important on the security side but also can help on the trade side.  So, we have not seen that these issues have to be in conflict with one another.  But, in fact, with a number of our close trading partners all around the world, we’ve actually seen how, if we work this in a cooperative fashion, many of the same steps you can do on the security side can help on some of the trade facilitation and cross-cutting side.  And, of course, let’s keep in mind that, if you don’t have fundamental security, it’s going to be hard to have an active trading system.  Look at the shock of the events of September 11 to the trade and economy system.  So, we have to get the security right.  Frankly, I have been extremely impressed with the efforts of our Department of Homeland Security and the Customs people, to be very attentive to the need to keep open an economic trade flow.  And, one of our first partners was our biggest trading partner; our Canadian partners worked very closely with us on this.

REPORTER: [unintelligible]….Could you outline the next economic guidelines of the U.S. Administration and the AP during the next four years of Mr. Bush on trade?

USTR ZOELLICK:  AP?

REPORTER:
Asia Pacific.

USTR ZOELLICK:  Oh, Asia Pacific, I’m sorry.  The key message that I was bringing here today was how we want to work with the APEC countries on the Doha and global negotiations.  I believe, after the work we did in 2004 where many people thought there wouldn’t be progress – and we made significant progress – that we have a serious opportunity to conclude this round in 2005 and 2006.  It won’t be easy.  And to do it, we’re going to need the contributions of developed and developing countries.  But, as I said in my opening statement, a number of the countries - like Chile - punch above their weight; they’re very important contributors in the global negotiations.  APEC covers some 60% percent of the world economy, so we can make some good progress here.  And, I’ve spent some time in my bilateral meetings with some of the new ministers – Indonesia, Korea.  The Korean Minister actually worked in the WTO.   He’s got a good background.  The Indonesian minister has a good trade policy background as well as some of the others from Singapore, Japan, others, Australia.  We need to move this process forward, and that requires both substantive solutions and the process ideas of how you bring one hundred-forty-eight economies together.  So, that’s my number one priority.

Secondly, we have free trade agreement negotiations going forward in the APEC region, particularly Peru and Thailand.  And, the President has put forward an initiative in 2003, called the Enterprise for ASEAN initiative which was to show deeper integration economically with the ASEAN countries – customize toward their needs.  For example, Vietnam is not yet a member of the WTO.  I met with my Vietnamese counterpart on their effort to have accession, and they have been trying to move more actively to join the WTO.  There are other countries, like Malaysia and Indonesia, with which we have talked about the context for possible free trade agreements.  Korea, while we have many issues to resolve, I think some of the reform-minded people want to use that as a basis to move forward a free trade agreement.  So, we have a very active free trade agreement agenda.

And again, just to give you a reference point, when we came into office we had free trade agreements with three countries – Canada, Mexico and Israel.  We now have concluded free trade agreements with twelve countries, and we are negotiating with twelve more.  So, we’re busy on that front.  And, finally, we also want to focus on APEC issues that focus region-wide, such as the topics related to benchmarking in the free trade agreement, to see how we can improve integration among them – like some of the ideas that have been suggested by the business community.

So, at least to give some consistency to our logic, four years ago President Bush started to talk about global, regional and bilateral.   And, that’s what my answer tells you today – global in Doha, regional in APEC and sub-regional with ASEAN and the bilateral free trade agreements.

So, we’re very pleased.  Trade is always a sensitive issue.  President Bush was very stalwart over the past four years, he ran on his record, there were people who criticized him, President Bush won, he added to his majority in the Congress, and so we are moving ahead.

REPORTER:  Fiona Ortiz, Reuters. In Pucon, you.said there might be a study of accelerating the tariff reduction clauses in the FTA with Chile.  What happened to that?

USTR ZOELLICK:  I think, understandably, our Chilean hosts were kind of busy with some of the preparations here.  As you know, I now have a new counterpart because Minister Alvear has resigned, and Minister Walker is in place.  And, so we will be setting up bilateral meetings to talk about some of the issues that we have on implementation.  We have some IPR issues we are still sort of working on with Chile.  But also ways that we can continue to further benefit from the agreement, including the item you mentioned.  I don’t know for sure what we will be able to do in that area, but we’re willing to look.  I will say that if you look at our exports to Chile so far this year, I think they are up some 30%.  Chile’s exports to us are up in the 20’s ---- 23-24%.  So, it’s off to a very good start for both economies.  And, we also hope this will help the investment climate which we know is important in Chile.

So, thank you all. 

 
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