USTR - Remarks by US Trade Representative Robert B. Zoellick at Asia Forum: An Examination of U.S. Economic and Trade Policy in Asia
Office of the United States Trade Representative


Remarks by US Trade Representative Robert B. Zoellick at Asia Forum: An Examination of U.S. Economic and Trade Policy in Asia
A conversation with Fred Bergsten of the Institute for International Economics 09/21/2004



ZOELLICK:  First, let me thank Senator Baucus for inviting me here and I know Tim Punke was here, I know he probably did a lot of the organization on this, he just returned from an extensive trip to China I understand, and America’s eminent person on Asian and APEC issues, Fred Bergsten, and all of you for joining us. 


Let me start with this Fred.  I think in terms of looking at our overall strategy in this region, of which North East Asia is a part, it needs to be consistent with our overall strategy which you outlined of the global and the regional or the sub regional, or sort of bilateral efforts.  A number of the countries you mentioned, our first priority is to try to work with them now that we’ve gotten a very focused framework on the Doha negotiations.  Where we really I think have a chance over the next year or so to make a significant difference in agriculture, goods, services, trade facilitation, those four elements.  And the reason I emphasize that is that having been through the birth and revival of this global round, it’s very clear to me that success is going to be dependant on not only the United States and Europe managing to work through differences enough to move forward but we really do need more help than we’ve traditionally gotten from the other big economy, Japan.  But, for this round, more that other rounds, I think that some of the key mid-level developing countries, China, the South-East Asian countries, Korea, India, to say nothing of others in Latin America and elsewhere, their participation is going to be fundamental.  So that needs to be a major focus as we go forward and I will be happy to talk more about that if you wish.


On the Free Trade Areas, as you obviously know, we’ve started with the Enterprise for ASEAN Initiative where we now have the Singapore Agreement, and just to give you a sense of the payoff of some of these, our exports are now growing to Singapore so far this year about twice the rate that they are growing globally, by about 24 of 25 percent.  We are in the midst of negotiations with Thailand, which is a major economy for us and I hope it’ll be important for setting a pattern for others in ASEAN.  I also just want to draw a little attention to the fact that, what many people overlook, is that the Enterprise for ASEAN Initiative has a strategy of trying to draw countries into the trading system at different levels.  So we now finally getting Cambodia’s accession to the WTO but we’re also, we’ve been working with the Vietnamese, given the size of that economy, it’s going to be very important, with Laos and others.  And, of course, we have Australia and the broader Asia-Pacific. 


On the North Asian part.  When people talk about Free Trade Agreements, and this is true in many regions in the world, the word gets thrown around rather lightly.  And under the WTO rules it’s supposed to be a comprehensive agreement.  And as you know, under the WTO rules there is flexibility to that for developing countries.  So some of what you read in developing countries Free Trade Agreements are, frankly, what I would more likely describe as some complimentary sectoral arrangements than they are really breaking the back of these issues.  I saw even in the most recent ASEAN effort to kind of push that forward with China that they said well you know there are 400 products or something that are sensitive we may not be able to include, and as you know, in the United States we had a big uproar when we left one out.  So it gives you a little sense of the difference in these.


I think for North Asia, we do need to have a comprehensive agreement that includes agriculture.  And it’s very clear that, particularly for Korea and Japan, that’s been an extremely tough issue.  As we talked about at IIE, I would like to think, if you see how these strategies has interrelated pieces, that if some of the reforms in country’s agriculture, as part of the Doha round, would move towards sort of green box programs for what are often aging farmers, and countries are interested in moving more towards a free trade arrangement, I think the first on the list that you mentioned that would be of interest would be Korea. 


Now, I’ve talked about this with President Roh’s economic advisor recently. I have talked with the URI party, but it’s more than just agriculture.  And let me, cause I think the useful sense of this forum is to look ahead at the issues.  Korea will have to be making a choice in coming years about how it sees its economy in the regional and global economy.  President Roh has talked about it being a hub and I think that is a good strategy.  But, we incur this on specific issues for example, standards development.  Now, if you’re going to be… Of course, there are different views within Korea.  One view would be to catch up with others we need to have our own technology standards as opposed to technology neutrality.  What I’ve tried to point out to our Korean colleagues is that is a formula that will get you the Korean market, but not the global market which is not Korea’s successful strategy with Samsung and others.  So what we have tried to urge is, if you really want to move into some of those high-tech industries or contribute to them in a way, you really need to accept a standard of technology neutrality. 


Now, Korea did that on an issue we pressed with dealing with broadband and cell phones, but another area they haven’t.  Telecommunications policy, intellectual property rights policy, some of the financial institutions issues, we’re still having to, I think there is a battle and a debate in Korea.  But what…given the fact that the Roh government has gone through a period of sort of restabilization here, frankly, I think it is useful to try to prod this debate in the Korean context.  You can’t do a Free Trade Agreement with countries if they are not willing to open up.  What we can do is encourage, and others can encourage, and see it as part of their overall strategy.


Japan I would have more cautions simply because it’s still an economy, despite efforts we have tried to do on the regulatory side, where there are a lot of difficulties in the regulatory system, the transparency system, the competition policies, and see really whether it is an open market. But again, I wouldn’t preclude any of those as possibilities in the strategy going forward. 


I think, in the case of China, obviously, our focus is on trying to get the follow through on China’s WTO accession and right now I would say the key issues would be the intellectual property rights, the currency issue and some textile issues globally.


And in Taiwan, similarly it fell behind in some of its accession obligations although we’re starting to get that improved and we have had some progress recently.  So I think coming back to your theme, the United States wants to be positioned. I think that our first focus is to try to make sure the global round works and there is a lot of effort at liberalization with these countries who we are going to need the help with in the global round.  But, we have to keep the bar up and we need to keep the bar up in a way that actually moves us towards comprehensive free trade.  Both, because that’s the way, I think, you create a really more open, nondiscriminatory system, but it’s also the political necessity here.  We wouldn’t be able to get support for agreements if we dropped out of agriculture and we shouldn’t.


BERGSTEN: Bob, let me come back to Doha in a minute because that is terribly important but I do want you to elaborate on your strategy there and particularly working with the Asians there.  But, let me take up your discussion of the individual East Asian countries, in particular Korea, let’s use it as an example.  You focused on it. The ambassador is in front of us.  You have been very clear, and I think very right, as you’ve developed the criteria for your strategy in choosing partners for FTA negotiations. 


What criteria has been the ability of the country to deliver reform and the impact of the FTA itself, the FTA negotiation in permitting reform.  And to put it in domestic political terms, in this country, hoping to take the internal debate within the other country in a reform and pro-liberization direction.  You noted just now in ticking off the issues that would be on the agenda in an FTA negotiation with Korea that they have internal debate.  You’ve won a couple, there are a couple that are not yet satisfactorily resolved.  But, then you noticed specifically there is internal debate on some of these topics.  Therefore, is this a case where a US, a serious credible US offer, to negotiate an FTA with the very large payoff that it would have for Korea in both economic and political terms, (unintelligible) decisively effect that internal debate including on agriculture? 


I mean I am totally with you for substantive as well as US political reasons an FTA with Korea, Japan, Taiwan, anybody else would have to include agriculture.  And so the issue (unintelligible) is how to induce or inspire those countries to take steps that they know that they will have to take ultimately anyway to make fundamental reforms in the agricultural sector, which is of course of significantly declining importance. 


We have done a study in our institute.  Our US Korea Agreement, as you know we recently updated it, it shows very substantial benefits for both countries if the agreement was comprehensive as you say.  So my question is really just picking up on what you said but pushing it a little further.  Wouldn’t it make sense to offer to negotiate an FTA with Korea in a conscious effort, no need to hide it, a conscious effort to use that very major incentive to overcome some of the hurdles to reform in Korea that you were citing?


ZOELLICK:  Let me focus on Korea but it’s an excellent question because, frankly, some of the issues that you are touching on would apply to a wealth of countries, we’re talking about Egypt and others before.  And I think the process has to be somewhat more iterative and let me explain why. 


First off, when you are approaching a challenging negotiation, these will be challenging negotiations, it’s important for the United States to suggest of our interest, which I’m doing and doing again today.  But, it is also for the other country to suggest they have a strong interest.  I would prefer to be at a table where other people say yes, we’d like to do a Free Trade Agreement with you and as opposed to me coming to them.  So that’s part of the process. 


But going beyond that formulaic part, which you can probably overcome, is the fact that, let’s take one of the situations that I have observed in Korea.  You have…a lot of the issues we’d have to get at in a comprehensive agreement are not part of the traditional trade ministers.  So, you’re going to find them in the communications ministry, you are going to find them in the agriculture ministry, and as anybody who’s been involved with this in a modern era knows, part of the challenge is how will a country deal with its own interagency processes. 


You would need, in this case, strong leadership from the Blue House.  And as I alluded to over the past couple of years, for obvious reasons that was not going to be available and the question is whether it will be available in coming years.  The United States’ private and public business community, government can do things to encourage that and indeed that is one of the reasons why I had an opportunity to speak to President Roh’s economic advisor is to try to make that point that to try to address some of these issues the Blue House would have to be more involved than I’ve seen the Blue House be involved in.


And so, obviously on some of the technical standards issues, I’ve said I can see some ministries maybe trying to be helpful, but other communications ministries have a different model.  So those are some of the assessments you have to make because you don’t want to enter into a negotiation with a good friend and, in this case a strong ally, unless you have a pretty good sense that you can see your way to Rome.  And that means having some sense of whether top level decision makers are really willing to make the tough decisions. 


Now, another part of that, and this is part of the bigger picture is and this is where I hope we can keep up the momentum that we’ve gotten in the United States, they have to make their calculation on whether the United States is serious.  And so the fact that we have Trade Promotion Authority, that I hope we will extend trade Promotion Authority, the fact that we have been able to negotiate agreements, be able to pass agreements, frankly, with the help of Senator Baucus and others with increasing margins, including in the House.  That is very important.  I have had the good fortune of having a boss who has made very clear where he wants to go on the strategy and people know that he means what he says.  Those are important because the counterpart in other countries is going to have to figure out are they going to take on their political vested interest and they need to know that the people on the other side are committed and will be a partner in working things out because with all these negotiations the goal is to try to open markets and, frankly, as I have discussed with some of my colleagues, since you move beyond the more traditional tariffs and quotas you’re setting new standards in trade and those are complicated areas. And people need to know their counterparts will help them in a problem solving way. 


So, my on sense is that the direction that you would like us to lean to, particularly with Korea, I have sent the messages, we’re trying to send the messages, but we’re going to also have to make an assessment of whether the counterpart could undertake it and is willing to undertake it and, here’s the last point on this, is the fact that what one has to watch out for, there are some people that see trade agreements are the panacea, oh give it to me we will sign it.  If you have had some experience with this you understand, people really have to understand what they’re getting into.  With most countries now, if we start a Free Trade Agreement, I personally go and try to talk to not just the trade counterpart, but also the head of the government and other heads of ministries and take them through what’s involved.


BERGSTEN:  Well, I think that is a fair answer.  I think the point of judgment in the interim procedure is simply, at what point do you take the leap, which is going to be some extent, a leap of faith to say ok let’s set as an objective an FTA, a full move to free trade, on the grounds that you were saying that it would help mobilize, in this case the Blue House, the leadership of the government to then bring in the Communications Ministry, the Agriculture Ministry, etc. into line on the view that this was a sufficiently big payoff for the country that finally the more vested interest had.


ZOELLICK:  Maybe after your next trip.


BERGSTEN:  Let me get on with the discussion.  One of the things you did not comment on in your initial remarks, tangentially, a little bit, was the movement in East Asia to develop broad regional cooperation.  You took kind of a pot shot, which I think is fair, at the standards that are involved in some of those talks, nevertheless, there is a lot of momentum a lot of interest some negotiations underway, some serious studies on creating a very broad East Asian Free Trade Agreement.  Sure, it might not be a totally Free Trade Agreement but it could be of greater commercial significance given the size of the region of what might be involved. 


Three point question.  A, do you worry about that.  B, if you saw it happening what would be your strategy to protect US interests that are involved in it.  And third, what, if any, role would you see for APEC in that.  I recall that when these issues first came up it was fifteen years ago.  Prime Minister Mahatir talked about an East Asian economic (unintelligible) and your (unintelligible) I think at the time, Secretary Baker, in that famous line “we cannot permit a line to be drawn down the middle of the Pacific” but for Asia Pacific cooperation via APEC partly in an effort to avoid agreements that would be limited to East Asia itself.  Now I think there is much more serious momentum towards agreements in East Asia itself, at least by some reckonings that would pose real challenges, maybe even threats to the United States, as well as opportunities, but what is your take?  Serious? What’s your strategy within that? Should APEC be reinvigorated in any way?


ZOELLICK:  Well, one of the major challenges in the trading system will be the effective integration of a global set of rules and non discriminatory treatment as people like Bhagwati have emphasized and the recognition of regional integration which has dimensions that are economic as well as political and transnational. 


I’ve always been somewhat sympathetic to the attention to regional integration but, as you and your colleagues have written about in an open concept, an open regional concept.  So, I didn’t mean to have my comments be negative for example for the ASEAN regional integration, which I think is an important development.  I was just trying to draw attention that when some people talk about Free Trade Agreements, just ‘cause it has the same term, you have to examine whether it has the same effect.  But I was also alluding to the fact that, and this comes back to one of your points about APEC, I do think there is some danger to the broader trading system if there aren’t some standards for these agreements.  Right now the standards are set are supposed to be for developed countries but even there, if you look at the EU and the Japanese with some of these Free Trade Agreements, at least as I have asked whether counterparts maybe sometimes it covers 45, 50 percent of agriculture and people consider themselves delighted again.  And I think this is something that APEC should actually try to focus more attention on, so the quality, not just to the developed countries agreements, but also to the developing countries agreements. 


In terms of quote “the worried end” I think that --- that steps that help create additional openness among countries, integration among the regions with the economic and the political corollaries of that can be good and useful things as long as it’s not posed against others.  I think that the appropriate response of the United States is not to say don’t but to say what we have to offer.  And again, not emphasizing the negative, but emphasizing the positive that is both at the global level and a key point here where I really do want to emphasize is that the number of the countries you mentioned are going to be key to the success of the Doha agenda from my post observation.  


But, for example, in the case of ASEAN, which is classic, will correlate one of President Bush’s strategic vantage points on this was as China moving ahead with a Free Trade Agreement with ASEAN, we should offer to move toward the same but we are doing it at a more comprehensive fashion in a item by item approach which is why I think the Thailand Agreement will be important and why we have the TIFAs. 


Let me just share with you a little story the Malaysian Ambassador may or may not know.  When I was at the last APEC meeting and I was asked a question by the press about the Free Trade Agreements we have with Asia Pacific countries and I had Canada and Mexico and move with Peru and Chile and Singapore and Australia, Minister Rifidah, who was sitting behind me, said well what about us?  Well, that is an encouraging step.  You now have a different transit, you have a different Prime Minister who I have had a chance to know for some ten or fifteen years.  In Malaysia, it’s a big economy, it is a growing economy, so you know, after Thailand well then what is next? And the possibility.


So, I think we, in other words, our response to ASEAN doing free trade with itself and others should be to offer similar opportunities as we move forward here.  I think where that brings me for APEC is kind of you focus.  I hope that APEC, under the Chilean chair and going beyond with Korea the following year can really help us move the WTO agenda.  I think it should start to scrutinize the possibilities for how these Free Trade Agreement can interrelate with one another in a positive way but that can also get people starting to examine some of the transparency issues, some of the rule of origin issues, some of the questions also about their scope in encompassing it.  And in the process, as you know from your experience, one of the factors that distinguishes APEC from many other multilateral organizations is the active role of the business community.  I think the business community can help us focus on issues.  Now, take trade facilitation.  The business community helped us focus on trade facilitation in APEC.  The APEC countries made commitments and made real progress in lowering costs and now you see that as being an issue that’s being taken up globally.  So it shows you a good flow though pattern.


BERGSTEN:  Let me ask you one further question on that and then I’ll have maybe a wrap up question on Doha.  You are widely known not only for your acumen on trade policy but on geopolitics and broad strategy.  As you look at this whole complex of trade relations with Asia, APEC, regional agreements in the region, do you see them as driven to a large extent by the rivalry between China and Japan for leadership in the region?  Any time I make a trip to the region, most recently a couple of months ago and come back or talk to people from those countries here, I am reminded of how central to almost everything going on in that part of the world is the tussle between competition and possible cooperation between the two regional giants, but there is active competition between them.  For example for Free Trade Agreements with ASEAN, China launched one, the Prime Minister of Japan announced three months later he was going to launch one.  There is some tugging vis-a-vis Korea.  How do you see that sort of overarching geo-strategic element in the region affecting both its evolution and our strategy toward it?


ZOELLICK:  Well first, the way I would start is to say that if you examine trade investment, economic growth in the region and also relate it to global position, you have to put a big focus on the economic rise of China over the past 25 years.  It’s a huge event and is going to be a huge event.  And it has micro effects thoughout.  So if you are looking at commodity prices of soybeans or cotton or steel or oil or others, this is a big issue. 


But let me give you an example.  I was struck by the statistic so I will share it with others.  We actually looked at the percentage of exports from North Asia countries. Korea, Japan, China, Taiwan, to the United States compared with 1990.  And a percentage of the global exports to the United States it’s actually fallen while China’s has obviously risen.  Well, one of the things it shows, and this obviously relates to Southeast Asia too is you gotta have a different production pattern here and China’s growth is obviously, can be beneficial while at the same time it creates competition for many of its neighbors and it’s beyond traditional trade patterns. 


A couple of years when I was talking to some of my ministerial colleagues in Southeast Asia, they talked about the effect of Chinese tourism, a whole new business and development in a lot of the Southeast Asian countries.  It was a different end of the scale in terms of income and packages, but these were changing some of the nature of the business and trade patterns.  So I think that, frankly, coming back to China’s approach on this, China has been pretty wise and shrewd in that on the one hand it’s a rising economic force, so it said to the ASEAN countries you can benefit from this, we want to have a good economic relationship with you, let’s try to do that through this trade arrangement whether free trade or whatever it turns out to be.  But it’s also sending a signal to the countries about the importance of China and I think that is fair.  And that is why as a response we also want to show to these countries they have opportunities in the global system and with us and others. 


I think that if anything this is going to be one of the greater challenges for China’s economic leadership, we have Minister Shi, my counterpart we negotiated the WTO accession on.  And it is not going to be easy because at the same time that China has huge internal challenges.  And it has made this rise very quickly.  It’s increasingly an actor on the global stage.  I say this with some empathy because it is not so easy to join the WTO in 2001 and all of a sudden have to be a big player in the negotiations within a few years.  As you know I have the view that, you mentioned Japan, Japan has been a member for a much longer time and has never really moved into that role at least the US and Europe seek it to play. 


So I think that all of these questions revolve around that China dimension.  Now what does it affect the Free Trade Agreements?  I think it has had an effect on the debate which you know is going on in Japan back with MITI and the Foreign Ministry some ten or twelve years ago about the role of Free Trade Agreements and it certainly has prodded the Japanese to look towards Free Trade Agreements as a compliment.  I think they still will have difficulty because of the agricultural issue and you saw how their agreement with Mexico went on for another year because of some pork quotas, to be honest, it is not even opening the pork market. 


I think that you will have, I wouldn’t state the bilateral competition quite as strong as you would, but certainly it’s a dimension for these two powers about their role in the region, how it’s cooperative, there’s a lot of investment of Japan and China.  It’s clearly part of their own production strategies.  And if it prods both to consider their mutual interest in integration within a global system, that’s all the more reason why the United States needs to be playing an active role at the global table as well as a regional table. 


So when you take the geo-political, I know some people who have approached economics from a security and political perspective I think are a little too quick to look at the balance of power, set of dimensions of this and not quick enough to recognize some the mutual benefits of the economic integration.  But on the other hand, do these dimensions effect the positioning of countries?  They certainly do.  And to come back from the United States position, that’s one reason why one of our major challenges is to continue to develop an effective two-way street economically with China and at the same time, with Japan which has been a traditional partner and ally, try to use the movements that are halting but of some greater dimension that years ago in terms of deregulation and structural change in Japan.  The same time we do the things with Korea.  So the United States represents, depending on exchange rates, about 25% to 30% of the world economy, we have to be engaged in all these places.  And the question is how to get that balance in terms of sub-regionalism, broader regionalism and the global policy.


BERGSTEN:  Well said. Competitive liberalization is alive and well in East Asia, too.  As they pride each other. 


Follow-up question because I know your time is now tight and we are close to your witching hour.  I want to segue back to the DOHA round.  You started by reiterating your priority area that you have had a new life to the round since the agreement you worked out in Geneva in late-July.  Give us your perspective now.  What can we expect by way of substantive progress?  What’s the timing?  How do you now see that really big one evolve and will provide the kind of momentum to pull in a (inaudible) trade policy that you and I would certainly like to see over the next year or so?


ZOELLICK:  Well, as I mentioned, I think that the progress that all of us made in Geneva positions us well now to drive down into a greater level of substance in the three core areas, goods, agriculture, services, but also develop trade facilitation which I think could be one of the sleeper benefits of this from what I’ve seen in APEC and reducing costs and also dealing with some issues of corruption, transparency with customs that I see are real disadvantages for countries trying to participate in the global sourcing system.  So I think in some ways trade facilitation could be a real benefit for business but also a big benefit for development as well.


I think that at the most basic strategic level, as you look ahead to 2005 you’re going to have a new commission in the EU. I’ve know Peter Mendelson for a number of years.  I don’t know the new Ag commissioner.  Lamy and Fischler were a very important team and while I certainly had my disagreements with some of their policies, I think they were committed to trying to move this process forward.  I hope their successors will be, it will obviously depend how they interact with the successors of the United States.  Ann Veneman and I had a very good, close working relationship.  I’ve been so fortunate to have a partner in agriculture so committed to international trade and agricultural reform.  So you have to look at that core relationship. 


And then, I think beyond that, one must need to start to recognize the difference networks in developing countries.  It’s very clear to me that the willingness of some of the mid-level developing country players to participate in a way that also shows that they will open up.  Recognizing sensitivities in countries will be vital.  And then you have a poorer group, whether they be in sub-Saharan Africa, Caribbean, other smaller players, that in an organization that acts on unanimity can be very important and it very much depends on key leaders in key countries willing to help us create the network. 


I saw this in both DOHA and I saw it Geneva, and I also so it in Cancun in another forum.  The Minister from Rwanda, for example, played a very key role with the African Union.  On the build-up to that, the Minister from Kenya, Jacob Nkate from Botswana, and this changes obviously because it’s individuals and countries in their own network, but the governance of the WTO is a challenging task.  So, I think that making those networks work is critical.  Now from the private sector, many people here are, I think the key will be, we’re at present trying to work at another round of in-depth closeness with agriculture, goods, service industry to try to deal with, understand where the real priorities are in terms of markets and products ‘cause so far it’s sort of been done in a formulaic way to try to put together something that will help us build support. 


And there will be elements that we are going to have to do on the domestic front.  I mentioned Trade Promotional Authority, obviously, which has to be extended.  But let’s identify another one.  Services which are, you know the United States has a $60 billion surplus in services, it’s 80% of our employment, 2/3 of our GDP, right now the reaction of some in Congress to include any mode for movement of people was so hostile in our Chile and Singapore free trade agreements, we’re going to need the service sector to work with the judiciary committees, which again are different jurisdiction, to be able to see whether there is some possibilities there.  And absent that, it will be hard to move forward to deal because that’s something of interest to some of the developing (inaudible) players. 


So right now is a period where, at a semi-technical level, but it’s technical substance politics, I think it’s important for the countries to trying to kind of see where we can take these frameworks with specifics.  But also, within your own countries, you need to make sure you’re really nailing it down because some may not have been as focused on this until we got the car back on the track.  And also in terms of whatever your political authorizing environment is, Commissioner Lamy would say. 


Having said this, I think that there is a strategic economic opportunity because I think if we could combine what has been some global economic recovery, not as strong as I would see, with over the next year or so the possibility of closing out a global round.  That could give a real boost to extending the recovery, deepening the recovery, making sure that it’s linked to development.  There are big, big stakes here.  And one reason I’ve emphasized this in this context is that (inaudible) the United States, I mean the United States and the European Union play a critical role.  It’s necessary but its not sufficient.  And to make this happen, we are going to need that interaction.  And a lot of what it comes down to, it’s easy to kind of debate points and kind of state your position and play to your domestic audiences, but you need problem solvers, you need people to try to find, you know, no one can beyond what they can take politically, but so how do you keep the process of opening moving forward while meeting people’s political needs. 


The one point you didn’t touch on but I want to flag for this audience, just because if I were going to look ahead for the next year.  I know obviously there is a lot of attention to the China economic relationship.  In addition to the points I mentioned about… First off, I will say and I’m pleased to complement to our Chinese colleagues that the Chamber of Commerce, the American Chamber of Commerce, reports noted recently, other than intellectual property, the progress in implementing the WTO obligations has been pretty good and we made good progress on that with the meeting with Madame Wu Yi in April.  But, clearly we have work ahead in IPR, and in currency, the broader issue of textiles.  But I want to focus people’s attention on, if you spend one meeting with Chinese officials, you learn that market economy status is a very key issue.  And so, of course, under our law, and it differs by different countries, market economy status is a various criteria.  In our case it’s actually link to some currency issues, some wage rate flexibility issues, some government ownership issues.  A good set of issues for an agenda.  And I know from talking with Commissioner Lamy this is the European Union has a different sense; the Japanese also have this decision.  But if I were in a position to be guiding much of this in the future, I would say how we engage with China on that issue of market economy status, which is something that they are seeking, which we have criteria, would be in some ways what some of the PNTR or WTO succession issues were from the past.  Now I would put people’s attention on that.


BERGSTEN:  That’s terrific.  We have reached our witching hour.  I want to thank, we could go on for a long time, but you have to go, we thank you very much for sharing your views with us.  I personally thank you for this third installment of our dialogue.  I don’t know if we’ll have another episode given all the variables out there with the next few months or so.  But, I do want to take the occasion to say, and I think I can speak for most the people in the trade policy community, how much we congratulate you on what you have achieved in these four years. 

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