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Barshefsky, Sperling Briefing on WTO (PART 1)

Barshefsky, Sperling Briefing on WTO (PART 1)

26 November 1999

Transcript: Barshefsky, Sperling Briefing on WTO

(Clinton only national leader to attend) (6650)

President Clinton will be the only leader of a country attending the World Trade Organization (WTO) ministers' meeting in Seattle, White House officials say.

In a November 24 White House briefing ahead of the November 30-December 3 Seattle meeting, National Economic Council Chairman Gene Sperling said the administration considered inviting other leaders but decided against it.

U.S. Trade Representative Charlene Barshefsky said at the briefing that Clinton will attend both as the leader of the host country and as a proponent of a new round of trade negotiations.

Some European leaders have suggested that remaining differences among the 140 WTO members are so great that the ministers might not be able to agree at Seattle on launching a new round, but Barshefsky was positive they would.

"You see, at the end, everyone knows that failure is not an option; so it will come together," she said. "I have a very high degree of confidence in that."

Barshefsky described four broad U.S. goals for the agenda of the next round:

-- reducing trade barriers for agriculture, services and industrial goods.

-- integrating developing countries better into the global trading system.

-- preventing duties on electronic commerce transmissions and creating due process in biotechnology regulation.

-- raising labor and environmental standards.

Note: The following are acronyms used in the transcript:

-- CBI: Caribbean Basin Initiative

-- DLC: Democratic Leadership Council

-- EU: European Union

-- GATT: General Agreement on Tariffs and Trade

-- G-7: Group of Seven industrialized countries

-- ILO: International Labor Organization

-- IMF: International Monetary Fund

-- ITA: Information Technology Agreement

-- Mercosur: Southern Common Market

-- WTO: World Trade Organization

Following is the transcript of the briefing:

(begin transcript)

THE WHITE HOUSE Office of the Press Secretary November 24, 1999

PRESS BRIEFING BY NATIONAL ECONOMIC ADVISOR GENE SPERLING AND U.S. TRADE REPRESENTATIVE CHARLENE BARSHEFSKY The Briefing Room 12:45 P.M. EST

MR. SPERLING: On October 13th, when the President spoke to the Democratic Leadership Council, he presented his vision for a full and comprehensive agenda for the new WTO round in Seattle. As you know, since that time, a variety of Cabinet members and senior administration officials, most particularly our USTR, Charlene Barshefsky, have laid more details and have talked in various parts of the country about the specific aspects of our agenda in Seattle.

As we've said before, this will be an historic and new round, the first round for a new century, first round to seek completion in three years, first round to allow for early results. It is the first comprehensive round of the Internet era, the first round to have reduction of agriculture subsidies and tariffs, as perhaps its top market-access agenda. And it is a new round because it is the first that will have such a focus on what the president refers to as putting a human face on the global economy in its focus on labor, environment, and making the WTO itself more open, more transparent, to include more of the views of civil society, groups of all sorts.

This is, obviously, a critical part of the president's economic agenda. We've often said the president's economic agenda has been characterized by three overall focuses -- one on the fiscal discipline that has brought increased savings and spurred new private sector -- dramatic private sector investment, two, a focus on investing in people and the tools they need to succeed and be more productive; and third, a more open global economy that raises prosperity not only within the United States but around the world.

We have seen real progress in the president's international economic agenda over the last few months with the successful completion of the China WTO agreement, with the very substantial progress made on the President's HIPC initiative to bring debt relief to the most Heavily Indebted Poor Countries in the world. We've seen progress towards passage of the CBI and Africa Act, and we've seen the child labor convention be ratified, that the president called for and laid out in his State of the Union.

And so, now, as we come to the end of the year, again we seek another major item, which is a successful launch of a new global trade round in Seattle.

Let me just say a word about what the president described in his DLC speech as his five focuses -- on one, expanding opportunities for agriculture; two, opening markets for goods and services, including greater transparency in government procurement and fighting corruption; three, continued progress in the new industries of the future, e-commerce, the Internet, ITA; fourth, putting a human face on the global economy, with the focus on labor, environment, child labor, and more transparency in the WTO process; and fifth, the truly remarkable progress of bringing formerly communist countries into the global trading system in a rules-based way that focuses on open trade, rule of law, transparency.

And Charlene will go through more of the details of our agenda. Let me just, before doing that, say a word about the schedule there. First of all, Karen Tramontano is here, who is a counselor to the president, who has played a major role in what has to be certainly one of the most challenging assignments one could have, which is helping us put together the whole agenda in Seattle.

The Seattle host organization and others have put a focus on different issues on different days. On Monday, it is NGO day. And the United States pushed to have a day in Seattle that was built around ensuring that a cross-section of non-governmental organizations had a voice in Seattle. And these events will include a day-long symposium for nongovernmental organizations.

Q: What's that date?

MR. SPERLING: That is Monday, the 29th.

On Tuesday, the 30th, is e-commerce day, and there will be a variety of events that will focus on the importance of e-commerce in international trade, and our very strong agenda item of keeping e- commerce tariff free.

On Wednesday the focus is on agriculture, as well as Africa and labor. And there will be day-long events on all of those topics. And then Thursday we'll focus on services and the environment.

As to the President's schedule, he will arrive into Seattle late Tuesday night and will have his first event Wednesday morning. He will have a public event on agriculture with farmers. He will have a chance to make some brief remarks dealing with the high importance that we place on reducing agriculture tariffs and subsidies in this round. He'll be talking directly with farmers, agricultural producers on Wednesday morning.

Then Wednesday at the lunchtime, he will give a more significant address to the trade ministers. And then during Wednesday afternoon, after his speech to the trade ministers, he will have a meeting with heads of international organizations that will focus on both what can be done in terms of technical assistance for development, developing countries, and also the way that international organizations can work together with the WTO in including more of the concerns of civil society groups and the human face agenda that the president has spoken of.

He will also, during this time, have at least some opportunity on Wednesday to speak with some other representatives of non-governmental organizations.

On Thursday morning, the President will sign the child labor convention. This is the ILO convention on the worst forms of child labor, prohibiting the worst forms of child labor. This was something the president called for in his State of the Union, and Secretary of Labor Herman, John Sweeney, others who were on the U.S. delegation will be there. And then the president will depart after signing the child labor convention on Thursday morning and will, I believe, go to Philadelphia from there.

Obviously, that will not be the end. I'm sure the next 24 hours will be much of the final, difficult work that Charlene and her team will have to go through in coming to a conclusion on what we hope will be a successful launch.

I will, with no more, bring up our very successful USTR, Charlene Barshefsky, who has ensured that she has no shortage of drama in her last -- at the end of this year.

So, Charlene?

AMBASSADOR BARSHEFSKY: I could actually do with a little less drama. But that's OK. As Gene said, the key goal here is a successful launch of the new round of global trade negotiations. As you know, the president, at the end of his first year, closed the Uruguay round. And now, at the beginning of his last year, he will preside over the opening of a new global round of trade talks.

The key here is manageability of the round. A three-year time frame is the consensus time frame already agreed upon in Geneva. And we want to be sure, however, that the round meets standards of success that are important to the U.S.

There are four broad goals that we have for Seattle with respect to the launch of a round. One, the negotiating agenda, we believe, should encompass agriculture, services, and tariff and nontariff barriers. With respect to agriculture, of course, key goals revolve around the issue of export subsidies, trade-distorting domestic supports, lowering of tariffs; disciplining state trading enterprises, which tend to have a monopoly on purchases or sales of agricultural commodities to our great disadvantage, and the issue of biotechnology, which will need to be looked at, I think, quite carefully.

With respect to services, the Uruguay round essentially locked all countries into place. It locked in the current level of services' market opening that existed at the time the Uruguay round closed in 1994. But that doesn't provide nearly the market access we should have. So whether it's telecom, whether it's financial services, construction, the professions, distribution, the full range of services sectors, we want to advance absolute -- We want to be sure that we achieve market access goals in the services sectors.

Services sectors account for 70 percent of our economy and about a seventh of the global economy, and yet the market access globally is not nearly what it should be.

And on tariffs, both tariffs and non-tariff barriers, this is a traditional area for negotiating rounds, and we expect to see further progress there. There may be other issues on the negotiating agenda, but certainly this is the core group on the negotiating agenda.

In that regard, let me say, the purpose of Seattle is to negotiate the broad agenda. It is not to pre-negotiate the results of the round. So don't look for results which would come upon three years from now to be evidenced, I think, coming out of Seattle. We need to be sure that we have the ability to put on the table as a serious matter of negotiation the issues that are of the utmost importance to us. And I think that we will achieve that.

Second broad goal -- When the WTO system was founded in 1947, as part of the Bretton Woods agreements, which created the GATT, which was the forerunner of the WTO, you had at that time 23 nations, no developing countries in that group. One of those 23, by the way, was China. No developing countries in that group. And over time, the system has grown and grown, and we now have 140-plus countries in it.

There are two difficulties. Number one, particularly the least developed countries are not well integrated into the system. They are falling further and further behind, and this is a matter of serious concern on many levels -- not just on the economic side, but there's a moral imperative here as well. So the second broad goal has to do with integrating much better into the system the least-developing countries; one, so they can gain the full benefits of a more open economy, and number two, so they can participate fully in the rounds as they move forward.

There's a great complaint on the part of the least-developed countries that they had almost no role in the Uruguay Round, didn't really understand the parameters of it very well at the time. And given, of course, the poor infrastructure that many of these countries have, that's completely understandable.

We and Europe have been working closely on an initiative with respect to the least-developed countries in order to enhance market access for them on a preferential basis in developed countries as well as in the high-income developing countries, who should also contribute to this effort, as well as formulating a program for much more targeted technical assistance and capacity building, using much more effectively not just the WTO but the World Bank, the regional development banks and other institutions so these countries can be brought more fully into the system.

There's a second element with respect to integration, and that is all of the economies not in the system -- principally, former Soviet republics or economies like China, which had operated essentially on the principle of command and control -- and in this regard, I think we have made very, very good progress. By the time of the round, we will see the accession of perhaps 8 or 10 of the former Soviet republics. This is, I think, a remarkable achievement following the fall of the Berlin Wall, following great political and economic turmoil in many of these countries which have now chosen a market economy path.

And, of course, as you know, we've completed our bilateral negotiations with China. They have a lot of work left to do with other countries and globally on rules, but that bilateral agreement certainly moves the process forward in a substantial way.

So bringing in these former Soviet republics, bringing in the countries of the Middle East like Jordan, Oman, Saudi Arabia -- these are all very high priority areas and we're making very, very good progress on all fronts in that regard. That builds out the system originally envisioned in 1947, which was the inclusion of all countries in a global regime.

Third broad goal has to do with high-tech trade. We've laid the foundation already in three very large agreements which we've negotiated -- the Information Technology agreement, the Global Telecom agreement, the Global Financial Services agreement. Next step is e-commerce, a very complicated area because right now the effort is to keep e-commerce open.

We have a very unusual situation in e-commerce, unlike with respect to agriculture, services or goods. There are relatively few barriers with respect to e-commerce. We want to keep it that way. So we want to take preventive action -- preventive action -- so we don't repeat the mistakes in e-commerce made with respect to, for example, industrial goods.

If you look at industrial goods, all the global system is still doing is reducing the tariffs that were imposed between World War I and World War II, because post-war, post-World War II, you have tariff levels that are sky-high, you had the experience of our own depression, and this past 50 years has been bringing those tariff levels down. In other words, policy made an open-world economy pre-World War I; policy reversed that openness between the two world wars, contributing, as you know, to a variety of economic and diplomatic disasters along the way.

So in e-commerce we don't have those barriers; they've not yet been imposed. And the key will now be to keep those barriers off, the traditional trade barriers off. So we'll see a rollover of our duty- free cyberspace initiative, which is to make sure that electronic transmissions on the net are not subject to customs duties. And I think we'll see forward work in a variety of very critical e-commerce issues, again to ensure that e-commerce can flourish to the maximum extent possible.

I think we will also see forward work on biotechnology. Our proposals in that area revolve around the notion that all countries should have timely, non-politicized science-based processes for determining biotech approval. So our response to the biotech issues, our proposal, really revolves around the notion that trade ministers are in no position to judge the science -- after all, that's for the scientists to do -- but we can create due process in the course of the decisions that need to be made on biotech. This is very, very important -- very, very important.

Last issue, what we call, loosely, quality of life and democratization. Democratization basically is the transparency which domestic publics want in their own governments, transferred also to the WTO -- the multilateral institutions need to operate on a more transparent basis, and we have a variety of proposals in that area.

On the quality of life issues, the question of labor and environment, we put a very high priority for progress in these areas. This is, I think, very, very important that we move forward with respect to the issue of core labor standards and its intersection with trade, and with respect to the intersection of trade and the environment.

I think not to move forward on those issues puts the global trading system at peril because the biggest threat to open markets is the lack of public support for it. And if the public, not only in the U.S. but in Europe and elsewhere, believes that basic concerns are not being addressed, I think that that puts at risk a 50-year legacy for the United States and for the global economy.

With that, I will stop. And let me just say just a quick word, and that is to thank most profusely Karen Tramontano -- I don't know if she's still here -- who Gene has already mentioned, and my chief of staff, Nancy LeaMond, who have worked day and night now for months on helping to put these meetings together. It's a massive effort. It's much more complicated than any negotiation we are going to have in Seattle, and so I just wanted to acknowledge them and to thank them very much.

Q: What is the status over China? -- is she actually in WTO? And also, are nations under sanctions, economic sanctions, are they allowed to participate -- Iraq, Libya, Iran, Cuba?

AMBASSADOR BARSHEFSKY: I don't know the answer to your second question, I'll confess. My assumption is Cuba will participate. But I don't know -- we'll have to get you the answer.

Let me tell you on China. China's next tasks are the following -- no, they are not a member of the WTO. In order to be a member of the WTO, they are going to have to finish out bilaterally with their other major trading partners, as they did with us. That means Europe, Canada, Brazil -- there are a range of countries. And we have urged China to be flexible with those countries because, obviously, those countries may have some priorities different from U.S. priorities, but those are priorities that will need to be addressed by China.

Then there is a big negotiation, in Geneva, to finish up China's adherence to all the rules. We negotiated some special rules, which we felt were necessary, but there are hundreds of rules.

Q: Does every nation have to go through that?

AMBASSADOR BARSHEFSKY: Yes. This is a process for every nation. It's the same process for every nation.

Q: How many world leaders, in addition to President Clinton, will be there and what was the administration doing in trying to get more world leaders there? And is there some concern that if there aren't many leaders there that there won't be the heads of state to make the politically difficult decisions to get negotiations going?

MR. SPERLING: What you need for the negotiations is the trade ministers. I mean, this is -- sometimes we have all seen international meetings where everything is kind of set in stone by the time it gets there and you just announce the communique. That's not what the launch of a new round is. This is a very consequential meeting in which the trade ministers, themselves, need to come together, under the chairmanship of Ambassador Barshefsky, and hammer out the remaining differences. That's where the real work is.

Obviously, those trade ministers will, I'm sure, have to consult back with their leaders, as I'm sure Ambassador Barshefsky will do several times over the days there, on what agreements, et cetera, they can make. But we never felt that the leaders being there physically in Seattle was going to play a role in any way.

We did have discussions kind of at the staff level of whether we should invite some leaders to be able to speak to the trade ministers in the way that the President is, as much as a courtesy as anything. Quite honestly, not to take you into the doldrums of our many deliberations on these type of things, but the issue is, how do you invite some without inviting others; what if 15 people come -- what if you have 15 heads of state arriving at the Seattle Airport on the same day, et cetera? We kind of went back and forth on some of these things and a few days ago we decided that perhaps one way you could have a neutral principle is to invite the heads of some of the major blocs, like the head of the EU, head of Mercosur, et cetera.

When we did our initial feeling-out, though, a couple of them, like us, had major parliamentary, budgetary things happening on literally that day, and our feeling was it was late and it didn't -- it seemed like we would be asking them to disrupt their schedules enormously. So, while this was an issue for us in terms of what the presentations were at the trade ministers, this was not ever an issue, we thought, that was going to be consequential towards the deliberation. And, actually, honestly, if you look at the people we were even thinking of inviting, they weren't necessarily in any way -- you wouldn't be able to figure out any strategy as to why those particular people would help. It was more whether we wanted to extend the courtesy of having other leaders be able to speak to the trade ministers.

Q: This goes to that issue, though, in a sense that how do you fight the perception that this round of talks, which was so sought after by the United States, is not so largely designed to help the United States?

MR. SPERLING: Okay. Just let me finish another thing. When the finance ministers meet to go over some of the key architecture issues, occasionally, the President who is head of that country where they're meeting might come and make a statement, et cetera. One never thinks of the leaders actually coming into the G-7 finance ministers and becoming part of it. But you know, it really was, again, an issue of courtesy, and with the balance, it might be nice to have a few leaders versus the physical logjams we might cause in Seattle and the problems of offending heads of state that you didn't invite, et cetera -- not exciting stuff.

AMBASSADOR BARSHEFSKY: Let me just take that question. I think the agenda that I've laid out is broadly in the interest of all members, and on many key aspects we have support for many, many countries. Services -- market opening is essentially non-controversial. Agriculture -- of 140 countries, roughly 135 countries want very substantial market opening in agriculture. With respect to industrial tariffs, many of the developing countries want industrial tariffs and non-tariff barriers in the mix.

If you look at the least-developed countries, we and Europe have been consulting with a variety of countries -- I think there is broad support for some special initiative that would deal with the problems of the poorest countries in the system who just aren't capable of realizing the benefits of global trade.

With respect to, obviously, new accessions, everyone is very, very pleased, very excited about that. High-tech trade -- all countries want to be in the high-tech game. There isn't any country that doesn't want to be in that game. Not just developed, but developing countries, as well, especially the higher-income developing countries -- the Koreas, the Brazils, the Argentinas, and so on and so forth.

On labor and environment, those issues are more difficult, there's no question about it. Environment is less difficult than labor, but difficult, nonetheless. But here, again, in 1996, at the last big ministerial meeting in Singapore, we didn't even have Europe on our labor agenda, at all. Now, Europe has its own proposal. There's been quite a shift in Europe in the past two and a half years. So even there I think we have garnered additional support from other countries.

And likewise, with respect to transparency, there is broad support for increased transparency. People differ on what measures you should take, but there's broad support and understanding for the need for increased transparency. I think it's a win-win agenda, basically, not just a U.S. agenda.

Q: Can I just follow up on that last question? I mean, how many leaders will be there then, in addition to Clinton? Is it zero at this point?

AMBASSADOR BARSHEFSKY: The President -- President Clinton.

Q: So it's not a disappointment to the President that he wasn't able to persuade other world leaders to join him?

AMBASSADOR BARSHEFSKY: He didn't try and persuade anybody.

MR. SPERLING: The President didn't try to persuade any leaders. This was -- if you kind of go back to our initial discussions, I guess one reason why you might not have wanted to even enter the discussion is that you would, in a sense, raise expectations or some importance to it. There's no expectation at a G-7 finance ministers meeting or at an APEC finance ministers meeting or at a trade ministerial-trade conference that leaders come and participate. It was simply an idea, kind of at our staff level as a way of maybe spicing up the presentation side there by having some leaders be able to make some speeches to the trade ministers. But it was not something that was consequential.

And again, I mean, I'm happy to go into even more detail if it's interesting to people, but I can take you through. We try to see if there are different categories that we could invite. State Department and -- (laughter.) That was my purpose. (Laughter.)

Q: He's there because he's the host?

AMBASSADOR BARSHEFSKY: Yes. Well, I think the President is there for several reasons. One, we're the host country and in all of these meetings -- at Singapore, the President of Singapore came. In Marrakech, the President of Morocco came. In other words, there's a tradition that the President of the host country attends at least part of the time.

But there's an additional point here, and that is the President specifically called for a new global round of trade negotiations in his State of the Union address last year. He wants to see this round be launched; he wants to see it be launched successfully. So there's also a substantive reason why he feels he should be there. And, of course, obviously, we agree entirely.

Q: Some of your counterparts in Europe are a little more pessimistic about the way things are going to go here and think it's going to take an awful lot of work just to reach common views on an agenda. You seem more optimistic. Can you give us some concrete reasons why?

AMBASSADOR BARSHEFSKY: Oh, yeah. Look, this is a negotiation, that's all it is. So it goes up and down, and up and down, and sometimes the amplitude is great. You know, you get some agreement on some particular issue and everyone is thrilled in Geneva, and then, all of a sudden, things fall apart. There's a pattern to these things. And at the end, it will all come together because it has to come together. You see, at the end, everyone knows that failure is not an option. So it will come together; I have a very high degree of confidence in that. If you looked at Singapore in 1996, if you looked at Marrakech in 1994, which closed the Uruguay Round, if you looked at the Punta del Este negotiations that opened the Uruguay Round in 1986, you'd see exactly the same pattern -- dire warnings, grave concern -- and everything at the end comes out just fine.

Q: May I ask you a follow-up please? You've been talking about agriculture and tariffs and so forth. Specifically on the lamb issue, which has been challenged before the WTO, do you expect any discussion about it -- or will there will be discussion -- and how long before it's going to be resolved?

AMBASSADOR BARSHEFSKY: Well, it's in litigation before the WTO, which is certainly the right of Australia and New Zealand.

(See next item for continuation....)

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