AMBASSADOR PORTMAN: Thank you all for being here this morning. We hope you
had better luck than we did with the elevator. Minister Bo Xilai and I have had
many opportunities to speak together, and to meet together, but never in such
close proximity as we just did stuck in an elevator here in the hotel. And while
we were stuck in that elevator we made a very important decision.
Seriously, today I’m very pleased to announce that we have concluded the U.S.
China Textile Agreement.
I’d like to personally thank Chinese Minister of Commerce Bo Xilai for his
very constructive and personal involvement throughout the negotiations. We’ve
communicated regularly on this issue and I believe this textile agreement is an
example of how the U.S. and China do have the ability to resolve tough trade
disputes in a manner that benefits both countries.
This is a comprehensive agreement that results from a significant
contribution of time, energy and effort on the part of both countries over the
course of the last three months. Much of the credit goes to our teams I want to
personally thank our chief textile negotiator David Spooner and Chinese chief
textile negotiator Mr. Lu also. I want to thank them for their hard work and
their perseverance to get to this point.
In brief, this Agreement lasts through the life of the China WTO Textile
Safeguard, through 2008, it covers more than 30 individual products and contains
quotas that begin at low levels, but that grow somewhat over the 3 years. The
Agreement covers 46 percent of previously regulated China textile exports to the
United States. Nineteen of the thirty-four products covered are currently
covered by safeguards; fifteen are not.
The U.S. goals in this agreement have been clear from the start. We sought an
agreement that achieves the stability and predictability sought by our retailers
but also by our textile producers, who understandably found it hard to plan in
the face of unpredictable safeguards. Five times we walked away from a deal that
didn’t meet this objective.
The Agreement we’ve reached is fair to the industries in both countries.
Based on consultations, U.S. manufacturers are pleased with both the product
coverage and quota levels. I encourage the press to talk directly to our textile
producers in the United States, as well as to the retailers and the associations
that represent both.
This is a good example where through hard work and good faith we converge our
differences and we can solve tough trade issues between the United States and
China. Again I congratulate my colleague Minister Bo Xilai for his hard work. And
now I would like to ask him for his comments.
MINISTER BO XILAI (Translator): After five months and seven rounds of
negotiations, China and the United States finally completed an agreement on
textiles and this is a result of practical and equal negotiations.
The result of the negotiations actually have provided a stable environment
for the industries both in China and the United States and in this sense there
is a win-win result.
Despite the huge difference in terms of national conditions between China and
the United States these two countries are mutually important trading partners
and have a long way to go in terms of future cooperation and therefore this
agreement has paved a very good way for that.
When dealing with these trade issues we always hope we can solve these
problems more and more through common concerted efforts and consultation and to
address these issues in effective and equal manner.
This time we have properly solved this dispute and therefore I have now the
confidence and also I am hopeful that in the future in treating similar disputes
we can do so in a principal of being rational and calm and wise and also equal
to each other.
The current or this textile issue between China and the United States has
been the biggest of such kind of disputes over the years and it is indeed a very
complicated matter involving both economic issues, social issues and also legal
issues and also it's under the attention of the media.
We don't expect that this single achievement can help us to solve all the
conflicts or problems between us, but we don't want to see such a small trade
obstacle to impede the overall trade and economic cooperation between the two
I appreciate the technical levels of both China and the United States for
their professionalism and also their practical spirit in finally solving the
issue through various rounds of negotiations. I also appreciate the efforts by
Ambassador Portman, U.S. Trade Representative.
It is because of the flexibilities shown by the US side in the sixth and
seventh rounds of negotiations that we finally succeeded in concluding the
agreement. I would also like to tell our friends from the media that the Chinese
side very consciousnly honors and respects their WTO commitments.
Firstly the textile industry actually directly employs 1.9 million people in
China and therefore is a highly sensitive industry in China. And these workers
in the textile industry are mostly low-income families or low-income populations
and through the manufacturing of textiles they will have to make their money and
support their families and therefore the textile issue is a very important
social issue in China.
The Chinese government always believes that it is entitled to the rights and
interests provided by the textile integration which started on January 1st,
2005. Even if China is still a developing country with lots of difficulties
waiting for it, we still advocate global free trade and global trade
We believe that for developing countries like China which have not easy over
the years to have set up and nurtured the textile industries and other
industries which are in the lower or medium ends of the manufacturing. Countries
in the world should show them some understanding in terms of providing free
trade environment. Thank you.
SIGNING OF THE AGREEMENT
QUESTION: (Translator). First of all I would like to offer our
congratulations to both of the Ministers for concluding this textile agreement
between China and the United States. My first question goes to Minister Bo
Xilai, as you know our President is going to land in London in just a few hours,
what do you think that today's news, is it going to be very good news for him?
MINISTER BO XILAI (Translator) I believe that the President's visit to Europe
is a very important visit. The Chinese government has always been proactively
pushing forward the conclusion of the textile agreement between China and the
United States and the representatives from both China and the United States has
made tremendous efforts for that. I have just praised the professionalism of the
technical officials on the two sides.
QUESTION: (In Chinese).
MINISTER BO XILAI (Translator): I believe that the trade agreements, the
textile agreements China signed with the EU and the United States are balanced
agreements. On June 11, China and the EU signed a textile agreement and the EU
side has demonstrated tremendous good faith in signing the agreement. This time
these two agreements have created a good environment for the normal and stable
trade of textiles between the two sides and this time the agreement between
China and the United States is also done on the basis of political and equal
equality and therefore I think that this agreement can serve as a good
compliment to the existing and former agreement with the EU and I believe that
these two agreements can also serve to create a good atmosphere for normal
QUESTION: Good morning, AFP, French News Agency. Mr. Bo Xilai, are you going
to accompany Ambassador Portman today to Geneva for talks on the WTO, Doha
negotiation? What is your opinion on the talks that took place yesterday in
London between Ambassador Portman and four other actors of the WTO?
MINISTER BO XILAI (Translator): First of all the Chinese government attaches
great important to the DDA. Even if China is still a developing country, three
years ago when we succeeded to the WTO we had already made lots of commitments
in opening up our markets and taking serious mergers in that regard. But
however, the Chinese side is still holding the proactive and open attitude
towards the DDA negotiations, hoping the world can move towards (inaudible) and
AMBASSADOR PORTMAN: If I can comment and follow up to that. The first time
Minister Bo Xilai and I met which was in Paris five months ago, we discussed DDA
and again this morning we discussed DDA. Once we had resolved our main
differences on the textile agreement we immediately turned to these World Trade
Organization talks and, as I told Mr. Bo Xilai this morning, I do appreciate the
way China and the United States have worked together in DDA, because both of us
believe that it is very important for world economic growth that we come to a
successful conclusion of the Doha round.
QUESTION: Martin Benedyk AP Television. Some American union leaders have said
that you have been unnecessarily generous to the Chinese and that your
generosity will cost Americans thousands of jobs. What is your response to
AMBASSADOR PORTMAN: I like being called generous. I feel just the opposite.
What this will do is to enable us to have the predictability and certainty to
retain and indeed to be able to add jobs. As I said in my opening remarks, only
19 of the 34 products are currently under safeguard. Fifteen are not even under
the safeguards, even for those products that were subject to safeguards there is
an unpredictability that is associated with the way in which we involved our
safeguards which is done on a maximum on an annual basis. This provides for a
three-year predictable and certain environment which will result in work and not
less employment in the United States. I also believe that it's a win, win in the
sense that it's also good for the Chinese employment picture because they can
also be able to plan better. But if you look at the number of products covered,
if you look at the base quota, in other words the rate upon which the annual
growth rates are determined. And if you look at the growth rates, you will see
that our US negotiators were very tough and in end this is a good agreement for
American textile manufacturers.
QUESTION: My name is Simon Cox from the Economist. Minster Bo Xilai praised
the flexibility shown by the US in their sixth and seventh rounds of
negotiations, I don't know whether they happened in the elevator or before. What
were those flexibilities?
AMBASSADOR PORTMAN: Well, I would like to praise China's flexibility in the
sixth and seventh rounds too. The truth is we were still fairly far apart with
regard to the product coverage and with regard to growth rates which are the two
key elements here in addition to what the base quota is. The honest truth is we
took our time. We worked out a very careful agreement that we think will avoid
any logistical problems. We think it's one that is fair and balanced. We think
it's very helpful to American textile manufacturers but is also fair to our
retailers and our consumers by adding this predictability and certainty. These
are not easy agreements. Both sides were tough and at the end of the day after
seven rounds I believe we just came closer and closer again with a carefully
thought out agreement that we think will work in both in terms of its practical
implementation and in terms of its impact on our economies.
MINISTER BO XILAI (Translator): We believe in the process of the negotiation
both sides have faced tremendous pressures from the industries and I believe
that this negotiation was a most difficult one which is why we have gone into
the seventh round.
On former negotiations we were almost at the edge of the cliff. Speaking of
pressures, the US is of course facing pressures from employment of hundreds of
thousands of people, but in China we are facing the employment of around 20
million people, that's why we have actually our biggest pressure from the
I know that Ambassador Portman was pressurized by the US industries but it
doesn't mean that whoever cries louder is more reasonable. There is an old
saying in China that crying baby gets the milk first. Actually as we all know
there is a huge economic discrepancy between the US and China the US GDP per
capita is forty times that of China's.
If the Chinese government cannot maintain or secure the export interests of
the textile workers then lots of people will lose their jobs and this will have
a greater impact, much greater than that of the US.
We know that Ambassador Portman has shown some flexibility at the end of the
day but I don't think that's enough, actually that's still a far cry from our
Our expectation is that Chinese textiles should be entitled to the textile
integration starting January 1st, 2005. However, we have this paragraph 242 on
which we have signed our names, and China is a credit worthy country and follows
and abides all kinds of WTO rules which is why we finally decided to negotiate
and have this agreement.
I think that for developed countries and also for our friends from the media
you should be acutely aware that the textile integration of the globe is an
inevitable trend and to have (inaudible) is not correct for the time. Actually,
I was inspired by the question regarding flexibility for Ambassador Portman.
QUESTION: I think the previous cap on textile limits was something like
7.5.%. Can you describe in greater detail how we should compare that 7.5% with
the agreement that you've reached today? I also think one of the unresolved
issues, if I'm not mistaken, is what happens with textiles that have piled up on
US ports. This was a big question in Europe and Mr. Mandelson worked hard to
unblock those textiles. I just wonder whether in the same way you have also
reached an accord to unblock those shipments to.
AMBASSADOR PORTMAN: As I said earlier, we took our time. We worked though our
issues and among other things we created enough flexibility within the agreement
to be able to avoid those kinds of logistical problems, that is certainly our
anticipation. We also established a start date on January 1st which does provide
the importers and exporters a two-month period to prepare. Those two things, the
flexibility to avoid the overshipments and the two months to prepare for the
agreement going into effect we believe will enable us to avoid those kind of
logistical issues. That was certainly one of our intentions in working through
this agreement. With regard to the growth rates in the first year which is 2006,
the base quota used when combined with the growth rates means that under the
safeguards, assuming all these products were covered by safeguards which again
15 were not, you would of actually of had higher growth. In 2007, if you look at
the base quota and you look at the percentage increase, it's slightly more than
2008. Overall, as I analyse the agreement, I think there's about a 3% increase
as compared to every one of those products having been covered by a safeguard,
if that answers your question. And again, as you know, not all these products
were covered, 15 of the 34 were not, and in addition there is a certain
unpredictability associated with safeguards themselves.
So, frankly speaking this is a very good agreement for the American worker.
It is also a good agreement though on the Chinese side because it adds
certainty, predictability and stability and Minister Bo Xilai has spoken
eloquently about the Chinese textile workers and their concerns. I do have those
concerns on the US side, and it's our job to come up with an agreement which
addresses those issues, and does so in a responsible and constructive way to
provide for again, in this case, the kind of certainty that can help not just
with regard with our respective workers but also with respect to our bigger
trade relationship. I think that this is an example, as I said at the outset,
how China and US can work together, to bridge our differences in a constructive
way that's mutually beneficial.