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.