The Office of the United States Trade Representative

USTR Portman Press Conference at Closing of APEC Trade Minister’s Meeting
International Convention Center, Cheju, Korea 06/03/2005

EMBASSY SPOKESWOMAN:  Good afternoon ladies and gentlemen, thank you for joining us.   We welcome U.S. Trade Representative Rob Portman who will begin with opening remarks.  We will be providing consecutive interpretation into Korean.  Once we finish the remarks we will take your questions.  Thank you.

AMBASSADOR PORTMAN:  Well, first thank you all very much for staying around to hear directly from me.   We had an opportunity to have a larger press conference a little while ago, and I thought Chairman Kim did a good job of summarizing the results of the last couple of days, but I wanted to add my perspective to that.  

I first want to thank our hosts, the government of Korea and the people of Cheju, who showed us warm hospitality.  I was delighted to have the opportunity to see this beautiful part of Korea. 

The United States attaches great importance to APEC.  The APEC countries are vital partners of ours, accounting for nearly two-thirds of U.S. exports and almost half of all global trade.   This was my first visit to Asia since taking on the assignment as U.S. Trade Representative one month ago.  

We view this as a very successful meeting, thanks in part, as I said at the other press conference, to the leadership of Chairman Kim.  He did a good job of keeping us on track, of being sure that we came to a resolution on the critical issue of market access for non-agricultural products.  He is to be commended for the good work he did this week.

Through his leadership we kept to the strong tradition of APEC, which is to provide an impetus within the global trade talks for trade liberalization, in particular for reducing tariffs and non-tariff barriers.  Under his leadership, we were able to achieve a significant breakthrough in our efforts as part of the Doha WTO negotiations to cut tariffs and to create real market access.  This will be very helpful in Geneva, where our officials are now working to complete work by the end of July, for the first approximation going toward the end of the year to be sure the Doha Round is successful.

By endorsing the Swiss formula, we have provided an important encouragement to the talks in Geneva.  This builds on the work that APEC has done in the past, in particular to liberalize sectors and to address non-tariff barriers.  I will give you an example.  APEC set the bar long ago by galvanizing support for the Information Technology Agreement, the ITA, where ultimately WTO members zeroed out all their duties in the significant IT sector. 

In addition to our success with the Swiss formula, we also made progress in the two other major areas of the WTO, agriculture and services.   Finally, APEC has also been a leader in trade facilitation efforts, and we were able through our work with the senior Ministers to continue the effort to make trade facilitation an important pillar of the APEC work in our region. 

All of these gains help with regard to development – whether it is reducing market barriers and increasing market access for non-agricultural products; whether it is in the agriculture area, where we are improving market access, reducing domestic support, dealing with export competition; whether it is in services – all of these elements will help with regard to development. One of the key goals of this DDA Round is in its name, the Doha Development Round, so that is important. 

The Doha negotiations hold the potential for dramatically improving the economic situation and reducing poverty, not only in the Asia Pacific area but around the world.  In particular, let me give you a statistic.  The Center for Global Development has found that a successful conclusion to the DDA in market-opening negotiations could lift more than 500 million people out of poverty and add $200 billion dollars annually to the economies of developing countries. 

INTERPRETER:  That was $200 billion dollars sir?

AMBASSADOR PORTMAN:  $200 billion dollars, yes.  It seems like you spoke more than I did. (laughter)

INTERPRETER:  It takes longer in Korean.

AMBASSADOR PORTMAN:  If it takes longer in Korean, I apologize for the length of the press conference.

AMBASSADOR PORTMAN:  This was an invigorating week for me.  There have been a lot of negative comments made about the progress in Doha, and this week I was able to be surrounded by Ministers who are all devoted and committed to the goals of free trade, and committed to moving the Doha process forward.  So it was a very positive and encouraging series of meetings. 

I now look forward to staying in touch with all of these Ministers and seeing real results of our actions that we took these last couple of days.  In addition to Doha, there are other issues we also made progress on.  And that has to do with APEC helping to build an Asia Pacific business environment that protects intellectual property, and promotes high-quality free trade agreements and transparent procedures for the movement of goods across borders. 

I want to focus on the very important action we took to protect innovation by endorsing a comprehensive Anti-counterfeiting and Piracy Initiative, that was sponsored by the United States, Korea and Japan.    This intellectual property initiative calls for the development of strong, region-wide measures by the end of the year to combat a growing regional challenge of trade in counterfeit and pirated goods, and online piracy.    Last night I had the opportunity to hear from Jung Sae-Hoon, who is a very talented Korean singer.  He was there at the dinner, and he gave a marvelous performance.  Someone gave me this CD, which is one of his CDs.  We want to be sure that his talents are protected – that artists like him have the ability to protect their work.  We want to be sure that businesses and individuals are able to protect their intellectual property.    So that’s why this initiative is so important, and I was delighted to see APEC take a leadership role this week with this new initiative. 

Again, this was a very good week, and I look forward to continuing to work with these Ministers to take the actions that we were able to accomplish this week and now translate them into concrete results.  Again, thank you for being here, I look forward to any questions you might have. 

QUESTION:  Bloomberg News, Beijing

AMBASSADOR PORTMAN:  I’ve seen you before…

QUESTION:  I just wanted to follow up on the question I know you’ve heard before so many times.  The talks with Trade Minister Bo Xilai – could you give us some details what about what came out of that regarding the textile trade?  He mentioned that China doesn’t want to see a substantial increase in its trade surplus.  Can you give us any more light about what he means by that?  Will there be any concrete steps taken regarding the increase in textile exports to the U.S.?  Will this go to a WTO resolution forum?  Also, my other question is regarding the Yuan.  Did you discuss the Yuan with Trade Minister Bo Xilai?  If so, what was said about this?  Thank you.

AMBASSADOR PORTMAN:  First of all, thank you for your patience, because I know you had these questions yesterday and I wasn’t able to answer them.  We had a meeting this morning, and we had a very productive exchange as we’ve had in the past.   We did talk about textiles, we also talked about currency, although more in general terms.  As you know, the currency portfolio is not with my office, it’s with the Department of the Treasury.  With regard to textiles, we talked about when China acceded to the WTO three years ago, they agreed to certain safeguard measures in paragraph 242 in their accession agreement, and specifically agreed to textile safeguards.  What the United States is doing is entirely consistent with that accession agreement, and consistent with the WTO. 

I heard Minister Bo Xilai’s response to your question earlier and I do understand his concerns.  We do need to put this in some perspective.  China currently does enjoy a significant trade surplus with us, as you indicated.  It is $162 billion as of last year.  U.S. imports from China have increased 29% from 2003 to 2004, so a significant increase even going into last year.   So that’s the broader context to look at here.

The textile trade is actually relatively small when you add up all of the products that either have currently come under the safeguards or might come under the safeguards in the future [pending safeguard requests], it’s 1.5% of that U.S.-China trade, so only 1.5% of China exports [to the United States] would even be subject to the safeguards. 

Again, all the current safeguard actions in the pending requests would account for 1.5% of China’s exports [to the U.S.].  If the safeguards were imposed, China would also have the ability to increase their textile exports, even under the safeguards by seven and a half percent [per year].  So, I just wanted to put that in some perspective.  In terms of the increase in textile exports, China’s global increase over the first three months of 2005, compared to last year, was 19%, which is significant.  In the United States, it's even more, from March 2004 to March 2005, there's a 100% increase [first quarter ending March 2004 compared to first quarter ending March 2005].  In some categories where the safeguard actions have been taken, the U.S. imports of Chinese textiles have increased by as much as 1500%.  With cotton trousers, it’s 1520%, with cotton shirts it’s a 1351% increase, and so on, so it’s a significant surge.  The facts speak for themselves. 

It’s my goal to be sure that we manage the issue carefully, because we value our trade relationship with China, but also to be sure that people who follow this issue, including the media, understand that the United States is taking this action pursuant to the WTO and to our rights under the WTO.

QUESTION: Can you please repeat the last part of your previous statement?

AMBASSADOR PORTMAN: I’ll try to repeat what I said but I may not remember it exactly.  The U.S. safeguard actions are consistent with the WTO, and consistent with our rights as WTO members.

Any other APEC questions?

QUESTION:  YTN-TV  – You just said that the success in adopting the “Swiss Formula” will contribute greatly to pushing forward with the DDA.  However, the WTO has 148 member states, and also all of the member states have to follow agree.  So, there are some pessimistic views that the success here in APEC will not have significant influence on the success of the WTO, so can you comment on this, sir?

AMBASSADOR PORTMAN:  That’s an excellent question.  The WTO works by consensus, and there are 148 members.  But today, the announcement by Minister Kim was very significant, because now you have a group of 21 economies representing most of the world’s trade, of the most dynamic region in the world, agreeing on a specific formula to be able to address one of the toughest issues in the WTO.  There is a need to work with other countries to form that consensus.  We will all be redoubling our efforts between now and the end of July to do just that. 

QUESTION:  Arirang TV - Sir, I would like to ask you the prospects of the U.S. and Korea forging a free trade agreement.  Will there be a substantial development only after the pending bilateral trade concerns are resolved, like Korea’s lifting of its ban on U.S. beef imports?

AMBASSADOR PORTMAN:  As you know, Korea is a very important trading partner for the United States, and in fact Korea is our seventh largest trading partner.  Korea is also a very important ally of the United States, and we are constantly seeking ways to deepen our relationship, including our economic relationship.  We have met several times this year already on a bilateral basis to work on some of the trade issues that you mention.  I believe we’re making progress on those issues.  We have not had the opportunity to discuss a Free Trade Agreement during these APEC meetings, but any decision on the U.S. side to initiate Free Trade Agreement negotiations with Korea would only be made after consultations with the U.S. Congress, with U.S. stakeholders, and only after seeing additional progress on those trade issues you mentioned.

QUESTION:  In your earlier reply on the discussions with China’s Minister Bo, you mentioned in passing that the discussions included talks on the currency as well.  Can you just shed a little bit more detail on the currency aspect of the discussions?  And also, could you comment whether you think that the issue of the surge in Chinese exports to the U.S., and their fixed currency exchange rate – are the two related from the USTR’s perspective, or are they two separate issues?

U.S. EMBASSY SPOKESWOMAN:  Would you identify yourself, if you please?

QUESTION:  Bloomberg News, Singapore

AMBASSADOR PORTMAN:   Good questions.  Let me say that the meeting was on a broad range of issues.  I raised, of course, market access issues, which is the central issue, from my position as U.S. Trade Representative, with China, to be sure that we have access for U.S. products.  These include software procurement issues by the Chinese government; the beef issue, which also is an issue with China; distribution rights of U.S. products throughout China, and direct selling, which is an issue that we continue to raise, and finally, intellectual property rights.  Despite some efforts by China, intellectual property right violations are still rampant.  I mentioned that earlier in the context of the CD from the Korean singer, that we need to be sure that we have much more effective deterrence in the region.  China has major enforcement problems with intellectual property, and so we raised those issues as well.  And they do affect the trade deficit, in my view, because to the extent we can make progress on market access, we will see more U.S. exports. 

With regard to your question on currency, again, we only discussed that in very general terms, because that’s not within my portfolio.  I think I’ve given you probably more than you asked for with regard to textiles in response to the earlier question, but we did not make the connection or discuss it in those terms. 

QUESTION:  Korean Financial News –

AMBASSADOR PORTMAN: (to Interpreter) Did you answer the question for me?

INTERPRETER:  No, no. (laughter)

QUESTION:  There were some reports that initially in the automobile sector, and now in the U.S. Congress, there are people who are saying that Korea is trying to control its currency, is a nation that tries to control or manipulate its currency.  So, in the automobile sector, this has come out before, 10 years ago – 1988, almost 20 years ago, I think, so the question is, can you comment on this, have you ever heard about this, do you know anything about this?  The second question is, has the U.S. automobile industry, such as GM or Ford or these companies ever pressed the USTR to take action towards the Korean automobile industry?

AMBASSADOR PORTMAN:  I’m not sure of the answer to your first question.  I can do some research for you, if you want to give me your card, we’ll follow up with you.  With regard to the second issue, that has not been raised with me by any of those companies.

QUESTION:  Chosun Ilbo – I understand that you will have a talk with the Korean side during dinnertime, so what will be the U.S. position that you will present to the Korean side on the issues such as lifting the ban on U.S. beef and also reducing the screen quota?

AMBASSADOR PORTMAN: I wish we could be eating U.S. beef tonight.  Because I believe it’s safe.  My children eat it everyday, as do millions of Americans and thousands of Koreans who are in the United States on vacation or on business.  So, restoring the beef trade to Korea is a top priority of mine.  I will say that there are other APEC markets that are also closed.  One, of course, is Japan, and another is China.  For the past seventeen months, almost a year and a half, we have worked very closely with the Korean government to provide answers to all questions that they have and all concerns that they have regarding food safety and animal health.  As you know, just recently, the OIE issued their guidelines, indicating that based on scientific evidence, U.S. beef is safe, and that the beef trade should resume.  So, I’m hopeful that we can see an opening of the market.  I think it’s good for the U.S. cattle producers.  I think it’s also good for Korean consumers, and this is an issue that I will be addressing tonight. 

I do have an opportunity to have a dinner meeting tonight with Minister Kim and some of his colleagues, and we’ll be addressing a full range of issues, including the beef issue. 


AMBASSADOR PORTMAN:  World Organization of Animal Health.  That’s why they call it the OIE – because it doesn’t translate well.

QUESTION:  Can you also answer about the screen quota?

AMBASSADOR PORTMAN:  Oh, screen quota.  It was his question, not yours.  (laughter).  I will raise that issue tonight.  As you know, we believe that the quota should be reduced, and this has been a consistent U.S. position, that the quota should be increased – there should be a reduction to the barrier against U.S. films [see below for clarification].  I will make a personal comment here, which is that Korean films are very competitive.  They are considered some of the best films in the world, and we believe that progress can be made there as well, that there should not be this issue between our countries, and that the Korean films are quite competitive.

(after interpretation)

Let me just be clear on the answer in terms of the quota.  We believe the quota should be reduced on the number of Korean films, so the barrier should be reduced to U.S. films, and the quota for the Korean films should be reduced, and that has been our consistent position.

What else have I forgotten?  Thank you all again.  I’ve developed a good relationship with Minister Kim over the past month, and I consider him to be one of the leaders now globally on trade issues, and I look forward to working with him and the Korean government going forward.

Thank you.