Deputy U.S. Trade Representative Fisher on WTO
Deputy U.S. Trade Representative Fisher on WTO Round
(U.S. seeks enhanced market access, reduced trade barriers) (9590)
At the upcoming World Trade Organization (WTO) negotiations in Seattle, the United States will work toward enhancing market access in agriculture and services and reducing tariffs and non-tariff barriers in other trade sectors, according to Deputy U.S. Trade Representative Richard W. Fisher.
"We have the so-called built-in agenda carrying over from the previous round, which is agriculture and services, and then non-agricultural tariffs and non-tariff barriers," Fisher said during a November 16 "Dialogue" program organized by the U.S. Department of State. "That is the core of the market access package that we think is manageable and should be the substance of the round."
Other agenda items include WTO reform and expansion, an extension of a moratorium on the imposition of duties on electronic commerce, a pledge for transparency of government procurement, and "as early a liberalization as possible in specific sectors that have been identified in the APEC countries, by the APEC countries . . . ranging from jewelry to fisheries."
Another important part of what the United States hopes to achieve in Seattle is to make sure that capacity-building and technical assistance is enhanced so that developing countries can keep their commitments to WTO agreements, Fisher told interlocutors in Kuala Lumpur, Jakarta, and Manila. Overall, he said, the goal was to make the WTO "a mechanism that serves the interests of developing countries."
"We are especially committed, and the president of the United States as well as the president of the European Commission are especially committed, to making sure that this particular round will benefit developing countries," Fisher said.
Fisher stressed the importance of intellectual property rights protection to strengthening economies.
"We are living in a globalized environment where people compete for capital," he said. "The more open, the more transparent the laws are, the more it's clear -- and intellectual property is a wonderful area to demonstrate this -- that the rule of law applies, the greater the likelihood that capital will be attracted, that jobs will be created, that industrial plants and equipment will be put in place, and that indeed the lives of people can be improved through more employment."
Following is a transcript of the program:
"DIALOGUE" UNITED STATES DEPARTMENT OF STATE OFFICE OF BROADCAST SERVICES
GUEST: Ambassador Richard W. Fisher, Deputy United States Trade Representative
TOPIC: WTO Seattle Round
POSTS: Kuala Lumpur, Jakarta, Manila
HOST: Judlyn Lilly
DATE: November 16, 1999 TIME: 20:00 - 21:00 EST
MODERATOR: Good morning, and welcome to "Dialogue," I'm Judlyn Lilly.
On November 30th a new round of World Trade Organization, WTO, negotiations are set to begin in the United States in Seattle, Washington. Officially called the third WTO ministerial conference, this ministerial will launch major new negotiations to further liberalize international trade and to review some current trade rules. It will also set in motion a work program to look at other important issues.
President Clinton outlined his agenda for the new round of World Trade Organization negotiations on October 13th, 1999. Working with the other nations of the WTO, the president wants the Seattle round to be about expanding prosperity and improving the quality of life and work around the globe.
For today's "Dialogue," we are very honored to have as our guest Ambassador Richard W. Fisher. Ambassador Fisher is the deputy United States Trade Representative with responsibility for Asia, Latin America and Canada, and he also serves as vice chairman of the board of directors of the Overseas Private Investment Corporation, or OPIC. Ambassador, thank you for coming at what I know is an extremely busy time for you and your colleagues around the world. I believe you have some opening remarks.
FISHER: Well, Judlyn, this particular ministerial meeting is a tremendously important meeting for the world of trade. It comes at a critical time, particularly as regards the ASEAN countries and the countries that we are addressing this evening.
First, we are all just beginning to see these wonderful countries come out of a (tumultuous ?) and serious financial crisis. One of the things that allowed this recovery process to take place has been an open rules-based trading system. As the president said, we want to move the system forward. And of course we have now had several antecedent meetings that have taken place, most notably in the region was the APEC meeting, the leaders meeting that took place in Auckland, in New Zealand, where the ASEAN countries and other countries that are members of APEC came forward and made a very strong statement that it was important that we launch at Seattle a round of negotiations that is manageable, both in terms of its scope but also its time frame, that hopefully within three years we are able to accomplish substantial liberalization in agriculture and in services and in non-agricultural tariffs. For example, we have to take what was built into the old agenda of the GATT and carry it forward in the WTO.
What we wish to do in agriculture, and also in services -- these are very important to the ASEAN countries, and also in non-agricultural tariffs. At the same time, what we wish to do is bring about some institutional changes in the WTO in order for it to be more useful in terms of the role it plays in developing countries, the way it interacts with the international financial institutions, something that we learned is critical particularly in times of financial crisis, and to, as the president likes to say, put a more human face on trade so it becomes more user friendly and of greater utility for all countries in the world.
So that's what we have set out for ourselves in Seattle. It's a tall agenda. I might add that I think all the world now knows that one of the largest and most populous countries in the world, China, and the United States have reached agreement on Chinese accession to the WTO, and I think that is very important in terms of bringing in a critical player in the global economy into the rules-based system we know as the WTO. And there are over 30 other countries that seek to accede to the organization. It's important that we launch a new round and that we bring these new members in, and that we all join together to bring about success in continuing trade liberalization so we can lift the standards of living of our people.
MODERATOR: Thank you, ambassador. We now welcome our participants standing by in Kuala Lumpur, Manila, Bangkok and Jakarta. We definitely expect today's program to be a full and active one. Kuala Lumpur, you get to pose the first question or comment to Ambassador Fisher. Please go ahead, Kuala Lumpur.
Q: Thank you. My name is -- (inaudible) -- I am from Kuala Lumpur. Ambassador, at the ministerial in 1996 it was agreed that the ILO is the competent body to deal with labor issues and that the text of the Singapore agreement would not lead the WTO to undertake further work in the relationship between trade and core labor issues. Yet now the U.S. is seeking to do precisely that. Why, as Professor -- (inaudible) -- asks, use one stone to use two birds when a second stone is handy? And why not let the appropriate institution deal with the labor issues?
FISHER: That's a very good question, and the professor is very erudite and quite well informed.
I think it's very important to realize what we are talking about and some of the other member countries of the WTO. In essence what we are thinking about is the need to study and document the impact that trade has on core labor rights and on the improvement of our workers and the peoples of our countries. We are not trying to impose some device that basically becomes a protectionist device and keeps competition away from our markets. But I think it's very, very important that what we end up here with is an understanding that trade leads to improvements in the standards of not only workers but the living standards of all of our people.
And the core labor standards which you referred to -- it's important that the people and particularly those who have protectionist impulses -- we have them in our country, and we have them elsewhere throughout the world -- realize that again labor is positively impacted by trade. We believe this is the case. There are those that question it. And the United States is simply proposing that a study be done over, say, a period of two years, and that they report perhaps at the next ministerial or at that two-year time interval what their findings are.
This is not in any way an attempt to impose a new body or a new discipline within the WTO, but simply to take a look at these questions. And there is a reason for it, particularly here in the United States, and that is that we are very aware of the fact that we bear a major responsibility as the largest marketplace in the world. We are the biggest consumers in the world. During this period of financial crisis in essence our economic growth has kept the world afloat. When we go into a recession, or the business cycle runs its way, others will have that responsibility. But right now even in the very best of times there are protectionist impulses in the United States. We would like to show that increasing trade liberalization, the growth of trade throughout the world, is actually good for the working people of the world, and we think a study would bear out such findings. We want to stay ahead of the curve and make sure that we keep back these protectionist forces. That's our selfish interest here in the United States.
But more broadly speaking, we feel that other countries as well would benefit from the fact that -- and might learn from studying these aspects of trade. So that basically is the nature of what we are suggesting, and we are discussing this with other WTO members, and we will see if this study then proceeds.
Q: My name is -- (inaudible) -- Malaysia. Ambassador, you referred in your opening remarks that there is now a general acceptance the next round of multilateral trade negotiations should be completed in two years, as opposed to more than seven in the Uruguay Round. Therefore, in that context, we believe that the agenda should therefore be reasonable and manageable. Given the current progress in Geneva, what are your expectations in Seattle and on the scope of the next round? Thank you.
FISHER: Well, first, I know that we share a desire with the ASEAN countries, and I might add parenthetically with developing countries around the world, including those that are much less fortunate than the countries we are addressing this evening, that this not be something that goes on forever and becomes hopelessly complicated. As we sometimes joke here in the United States, the millennium round should not take a millennium to negotiate. It has to be manageable in a time frame.
Again, we have a very tight suggestion for -- and I think we are moving in this direction in terms of the other WTO partners -- the first emphasis should be on enhanced market access. We have the so-called built-in agenda carrying over from the previous round, which is agriculture and services, and then non-agricultural tariffs and non-tariff barriers. That is the core of the market access package that we think is manageable and should be the substance of the round.
In addition to that, we of course have the institutional aspects of WTO reform and expansion -- putting a human face on the WTO, but importantly making sure that it is more user friendly for developing countries, is better able to integrate with the international financial institutions, and basically is constantly updated to do the job that it sets out to do, which is to continue to liberalize trade, set the rules of the road, be understandable for those participants who utilize it.
And then, thirdly, I think very importantly, is what we know we can already deliver what are referred to as "deliverables" in Seattle at the meeting in the State of Washington. And that is that we have in place -- have from the last ministerial held in Geneva, when the president went to speak and other leaders went to speak, a moratorium on the electronic commerce -- that is, to keep electronic commerce from being dutiable, and making sure that we don't erect the kind of barriers that we have spent now 50 years on doing in the agricultural and goods sectors -- we don't create a barrier to electronic commerce which we believe incidentally would be a barrier to many developing countries; that we forward the process we agreed to, ASEAN countries and the United States and other APEC members, of as early a liberalization as possible in specific sectors that have been identified in the APEC countries, by the APEC countries, eight countries in particular, ranging from jewelry to fisheries for example.
And, thirdly, that we know that we can deliver in Seattle a statement about the transparency of government procurement -- that is, a pledge for transparency of government procurement. I might add on that front that this is not a market-access issue as we contemplate it or anybody else contemplates it; it is simply a way to send to the marketplace -- especially the capital markets during this recovery period in Asia -- that there are transparent procedures when governments who have direct control over government procurements are adhering to, that they are rules-based, and that whether it is in Indonesia or Thailand or Malaysia or the Philippines, that these procedures are well known and that they are adhered to without necessarily opening up these government procurement processes to other countries and other bidders.
So that's a very simple, straightforward agenda. What our concern is, frankly is that those who have the least interest in liberalizing particularly in agriculture, say the European Union with a common agricultural policy, will try to muck up the agenda and throw things in there that will stretch it out beyond three years and make it more difficult. And I think jointly -- I know jointly with the ASEAN countries and with many other of our fellow traders here in North America within the NAFTA, within the Free Trade Area of the Americas and other trading groups, we are trying to make sure that we can get done what we set out to do, that those that are the opponents of liberalization, particularly agricultural liberalization in the case of the common agricultural policy of Europe, where 85 percent of the market-distorting export subsidies take place, that they don't sort of get an easy off and that united we can have a close, tight, compact agenda that keeps our eye on the ball and gets done what we set out to do, basically liberalization, enhanced market access in agriculture and services that builds an agenda and in the non-agricultural industrial goods area. I hope that gets to the point of your question.
MODERATOR: Thank you, ambassador. And thank you, Kuala Lumpur. We will be returning to you a little later in the program, but now let's go to Manila for your two questions. Go ahead, Manila.
Q: Good morning. I'm -- (inaudible) -- I am a reporter for Business World. Ambassador Fisher, you are aware that there is a proposal from developing countries to strengthen the special and deferential treatment in WTO trade agreements. Is the U.S. government willing to support this proposal? And what conditions would it want to suggest in exchange for strengthened special and deferential treatment?
FISHER: Well, first of all, there has been built into the Uruguay Round, and into the structure of trade liberalization over the last many years, a recognition that there is special and deferential treatment. For example, in the institution or implementation of the TRIMS and other agreements there has been a delayed period or a prolonged period for developing countries.
With regard to the implementation, existing commitments, obviously if implementation commitments have been made we would expect them to be adhered to. And I think we have to be very, very careful that -- and be particularly cautious that we don't have a wholesale reneging of or abandoning of the various commitments that have been made. To be sure, we know that there are cases where individual countries have special situations and under duress, and we are willing to look at those on a case-by-case basis. But the one thing we don't want to do, particularly in this very ginger period of recovery from the Asian financial crisis, is to send a signal to the marketplace that there will be sort of a wholesale write-off of commitments that were made.
So in that sense, if we are talking about special and deferential treatment in terms of committing to or rather delivering on the commitments that were made in the Uruguay Round, as differentiated as they were by the way between developing countries and developed countries, I think that's a very dangerous path to tread down. On the other hand, in terms of exceptions that might be made and the need for technical assistance to deal with these situations for capacity-building, for people to keep their commitments to implementation, we certainly are interested in the latter, and we think it's dangerous to go down the former path.
Q: Good morning, thank you. George Monsano (ph) is my name, of the University of Asia and the Pacific. Mr. Ambassador, I would like to ask this question: What are the prospects of having social clauses such as those on environmental standards and labor as we talked about earlier tie up the trade negotiations? Thank you.
FISHER: Well, of course we don't want to tie up the trade negotiations -- I don't know if I heard you correctly through my earpiece, but again we are suggesting that there be a study of the interaction between trade and workers advancement, and also between trade and social safety nets and various aspects of how trade impacts working women and working men around the world and how it impacts our society. But in terms of the prospects of this recommendation, tying up the trade liberalization efforts, we will of course work to avoid that. The purpose of the exercise is further trade liberalization. The purpose of the exercise is to enhance market access of all countries, especially the developing countries. And again I am a bit concerned that there is a misinterpretation of our intent in terms of this discussion of the so-called social issues.
One thing that we notice growing around the world is a very active participation of what are known as non-governmental organizations. All of us have different procedures for putting our leaders in positions of leadership through elections and other means, and we know that those people are in place to represent their countries. Of course none of us have a monopoly on all the answers and right ideas, and we in this country in particular, the United States, listen to the input that we get from civil society, including our workers, but also those that are interested in environment and so on. And I think it's important to take into account the input of all these people. We have made a proposal and are refining that proposal in terms of how we might study the impact as I mentioned earlier that trade has had on the living standards of our people and of workers. And we hope that that is a constructive exercise if indeed it ensues. But it certainly is not intended to disrupt the market liberalization exercise. And I think the inference of your question is that it would be counter to the purposes of WTO. We don't believe that. We believe it complements the purpose of the WTO, which is to lift living standards throughout the world and to understand the effect that trade has in lifting those living standards.
MODERATOR: Thank you, Manila. We'll be returning to you a little later in the program. Now let's go on to Bangkok for your questions. Go ahead, Bangkok.
Q: Thank you. Ambassador Fisher, my name is -- (inaudible) -- I would like to ask you the first question is that how the United States perceives the successful launch and conclusion of a new round that could ensure the balance of interests and in particular in benefits for the developing countries. Will this round be a real development round as called for by many countries?
FISHER: Well, it very much should be. You know, it's interesting that roughly 45 percent of U.S. imports now come from developing countries. And actually they're running now a $150 billion deficit with the less-developed countries. And interestingly the exports as a share of the gross domestic product of developing countries has risen from 17 percent in 1986 to roughly 30 percent now. So we know that exports are important to developing countries. We know that it's important to the prosperity of our own economy in terms of keeping prices down in the United States in terms of increasing the betterment of the livelihood of all of our people, the great consumers that they are here in the United States.
And we are especially committed, and the president of the United States as well as the president of the European Commission are especially committed, to making sure that this particular round will benefit developing countries. For example, agriculture, which is at the core of our market access efforts here and the built-in agenda -- agriculture is a principal export area for developing countries. In the case of services, we are not just talking about high-end services; we are also talking about tourism and other services, financial services, that make it possible to have more liquid markets and greater ability to build plant and equipment and create investment in developing countries.
So I think the core agenda for market liberalization is very much developing country oriented. And of course the United States as a large developed country has an interest in expanding its markets abroad. But in return for that we have to provide markets here in the United States and elsewhere in the developed world for developing countries. There will not be a special development round as it were.
But one thing that we feel very strongly about is that unless we can bring the developing countries fully into the system, unless we can make the WTO more user friendly for the developing countries as a structure, where you don't have literally armies of lawyers in many developed countries -- like we have in the United States -- that seems to be one of our largest growth industries here in the country -- who are specialists in this kind of thing -- that the WTO be useable, that it be more user-friendly, that the structure of what we do in terms of trade liberalization brings in the developing countries, and particularly the least developed countries in the world, that it be a mechanism for improving their living standards, is very critical to the United States. And incidentally, I think you will hear more about this in the next few weeks coming directly from the president of the United States rather than his lesser representatives like me. Thank you for the question.
Q: I have another question. Now, as we all know that there are (prolific uses ?) of non-tariff measures. And one of the measures of course is antidumping duty. And for this measure particularly it causes a lot of problems for developing countries. And right now the U.S. is resisting the proposal for the renegotiation of the antidumping agreement that would be something that would affect the protection of the U.S. self-interests that some people would think like that. So I would like you to please clarify the U.S. decision on this issue please.
FISHER: Well, it's a very good question. We know of this concern in the world at large. I think it's important to put it in proportion. We import a little over a trillion dollars in imports every year. If you calculate the volume of trade that is subject to antidumping or countervailing duties, it is less than 0.5 percent -- so less than one half of one percent are subject to this kind of activity. Now, as a percentage of a trillion that's a large number, and we understand the concern that exists.
We are concerned that if we were to open up and try to renegotiate the rules that govern antidumping that actually the system that might be ended up with will be even more difficult for developing countries in particular than the system we currently have. The current antidumping regime, or the rules that have been agreed to under the Uruguay Round, is still to be perfected. Many countries have not implemented fully their antidumping systems.
And incidentally, under the structure of the current system there certainly is room to study and criticize and reform antidumping regimes that are in place and improve upon them. But I think those that are critical of the existing system need to be very careful what they wish for, because I am afraid that if we do open this up, given that for example our imports of textiles into the United States have risen 50 percent since the end of the Uruguay Round. That's a significant displacement of workers. We have certain textile unions and also textile companies that would like to restrict that entry into the United States, by the way which is very important for the Asia-Pacific region.
So if we were to open up, renew, and try to put in place a new antidumping regime, one of our concern is that it could be much more onerous, more difficult than existing systems which have been negotiated, have been agreed to, certainly is able to be continually perfected under the existing rules. And that is our position here. That is why we are so reluctant to engage in this exercise which could indeed divide many of our trading partners rather than bringing them together, and could take our ball off the market access measures that we think must be the emphasis in agriculture and in services and in non-agricultural and industrial tariffs.
I think it's very important too to realize that in the United States here our average applied tariff is 3.2 percent. It's one of the very lowest, if not the very lowest in the world at large. When you look down the list of the extremes, like India, say, 67 percent or you look at Thailand, 29 percent -- we have liberalized significantly our system. To be sure, we know of the concerns with regard to antidumping. I think it's important to keep it in perspective, A; and, B, to realize that if we do open this up and go down the path of trying to construct a new regime it might even be much more onerous and much more difficult for those that are even critical of the current system; and, thirdly, that the current system of debt can be perfected under the existing rules that are in place, and indeed we would be willing to discuss that with our other trading partners in the rest of the world. I hope that clarifies your understanding of our view.
MODERATOR: Thank you, Bangkok. We will return to you later in the program. And now let's go to Jakarta for your questions. Go ahead, Jakarta.
Q: Thank you. My name is -- (inaudible). Ambassador Fisher, the recent global financial crisis in particular hit some Asian countries, has resulted in the need of international regulation of financial trade. How does the United States respond to this?
FISHER: Well, again, one of the things that we have learned from this exercise is the importance of better coordination between the international financial institutions like the IMF and the World Bank and the World Trade Organization. Many of the remedies that were proscribed by the so-called IFIs, the international financial institutions, had significant trade consequences as they sought to bring about a correction in distortions of balance of payments and financial reform and greater transparency in financial systems and so on. So the issue of coordinating and having a better exchange of views between the World Trade Organization and the international financial institutions is something that we very much wish to stress in our discussions going forward to make sure that there is indeed a better coordination and that one doesn't occur at the expense of the other.
I might add, by the way, one of the interesting aspects of what we have just negotiated with the People's Republic of China is a significant potential liberalization over a fairly quick time period of the financial structure; that is, the ability of foreign financial institutions in insurance, in banking and in auto financing, to compete in the Chinese market. One of the problems with the existing banking and deposit-taking system in China -- and by the way, whether it's at that end or just to take another extreme, in the case of Japan, is that these financial systems aren't working to the degree that's necessary to bring about the kind of reforms that the leaders of those countries would like to have.
So more competition in financial services we believe is good, and again this all falls under the rubric of the built-in agenda on services. So better coordination between the WTO and international financial institutions, more progressive liberalization of services generally speaking, including financial services, we believe is in the interest of perfecting the trading system, and especially helping the developing countries.
Q: Mr. Fisher, my name is -- (inaudible) -- from Business News. In our experience at the IMF we have seen that they have adjusted their attitude and have become much more lenient than before. For instance, while in the beginning they insisted on a budget surplus of one percent. Right now they have already agreed to a budget deficit of four percent. Now, do you think that the WTO can generate that kind of flexibility with regard to for instance the TRIPS and the other things? Because by opening up the conditions on intellectual property rights for instance hundreds of thousands of jobless will be added to the already millions that have lost a job. Thank you.
FISHER: Well, your question is can there be more liberal treatment of trade related intellectual property or investment measures and so on, TRIPS and TRIMS. Again, I repeat something that I mentioned earlier. I think that clearly in cases of duress, on a case-by-case basis we certainly are willing, the United States and I think the other countries in the WTO, to deal with those case-by-case situations.
But to walk away or to give a blanket forgiveness as it were for indefinite extension of commitments that have already been made again does not send a reassuring signal to those that are seeking to invest in your countries; nor is it prudent policy. It's important that we have discipline that when we make commitments, whether it's your country or mine, that we keep to those commitments, except for under extraordinary circumstances. And we would not be in favor of providing a blanket ability to just walk away from those commitments or just stretch them out indefinitely or even for a prolonged period beyond where countries have committed to meet commitments. But again, we would be willing to look at things on a case-by-case basis.
Another important part of what we hope to achieve in Seattle is to make sure that capacity-building and technical assistance is indeed enhanced, so that we can help countries keep their commitments. Intellectual property is a very interesting area, and that intersects by the way with one of the issues that we are particularly interested in, and that is keeping electronic commerce as free from barriers as possible. That's why we talk about the extension of a moratorium on e-commerce, on electronic commerce, because one thing electronic commerce does is it basically allows countries not to be trapped in the old need for economies of scale from the agricultural age and from the industrial age.
A country of whatever size can be a competitor in electronic commerce. And in order to be a competitor in electronic commerce you have to attract investment that allows the blossoming of intellectual property and for this electronic commerce in essence to take root. But unless one keeps to the commitments and has a clean intellectual property protection, identifiable intellectual property protection and adheres to the rules that have been set globally, it's very hard to imagine that investment will be attracted to that country or to those countries. And if investment is not attracted to those countries from whatever source it's from, then it is very difficult to create jobs.
So we have to realize we are living in a globalized environment where people compete for capital. And again, the more open, the more transparent the laws are, the more it's clear -- and intellectual property is a wonderful area to demonstrate this -- that the rule of law applies, the greater the likelihood that capital will be attracted, that jobs will be created, that industrial plants and equipment will be put in place, and that indeed the lives of people can be improved through more employment. So that's our perspective on intellectual property. We do believe intellectual property rights is very, very important.
And incidentally, we noted again during our discussions with the Chinese last week, as we brought this to a conclusion, that this is an area that they have taken note of, the need to make clear that property will indeed be protected so they can develop their indigenous industry. India has come to this realization. These are large countries of course with many, many people, but they understand the value of having definable intellectual property rights -- not only defining them under the laws of the land, but being able to enforce those rights. So I would ask you to consider the fact that intellectual property rights is of great importance and that we in terms of our desire here is to make sure that we can provide the capacity for and the technical assistance for making sure that the commitments that have been made will be kept to. Thank you.
MODERATOR: Thank you, Jakarta. And we will be returning to Jakarta, Kuala Lumpur, Manila and Bangkok in just a few moments. And when we come back we'll be asking you to give one question -- ask one question. We are speaking with Ambassador Richard W. Fisher, who is the deputy United States Trade Representative, about the upcoming ministerial conference in Seattle.
Now, Kuala Lumpur, your one question please. Go ahead.
Q: Good morning, ambassador. Being one of the last speakers, I have the wisdom of all the rest. I am very glad to hear of your empathy for the developing countries, especially you said about building capacity, making the WTO more friendly, and increasing the living standards, because if developing countries cannot have the capacity to earn enough to trade, then trade is going to be one-sided, and I think you are going to get a serious backlash so to speak from developing countries.
But the other thing I want to ask is what is the view of the United States in terms of the multilateral investment agreement which the European Union proposed, especially on national treatment? That's one. And if you don't mind, the other question is on intellectual property rights, although I am not too sure whether it's fair to ask it, because it's sort of technical, especially in the area of patenting of life form, genetically -- (inaudible) -- life form, and also the genetic seeds for tomato seeds and so forth, whether that sort of intellectual property rights is fair to be considered because it has to deal with the food security and some of the genetic patenting of genetic patents.
FISHER: Well, on the second subject first, and then I'll ask you to repeat the first -- second. But biotechnology, just to use that general phrase, is a subject of great interest to the United States and many of the members of the WTO. We take note of the fact that there are presently six billion people on the surface of this earth. In another 50 years there are likely to be nine billion people on the surface of the Earth. The question is how do we feed those people. And many of our countries have basically planted almost every acre that is possible to plant, and many of us of course could perfect our ability to harvest that acreage.
But we do believe that there is a possibility for -- and we are still learning a great deal about this process -- for science to enhance the yields of our crops to make them pest resistant and so on, and therefore increase the ability to feed the people of the Earth, whether a product is grown in your country or mine.
The key here is to make sure that it is science-driven, that it is not driven by political science but by hard science. As you know, and you probably followed, we had a tremendous row with the European Union with regard to genetically modified organisms, particularly in beef, and these are -- and arguments taking place between England and for example the French and what-not in terms of the safety of meat. But this is a subject area we have an interest in, and we hope that there is an intelligent discussion of this in the future, particularly going forward from Seattle, because it's an urgent issue and we have to figure out how to solve it. It's not, by the way, just an issue for the United States. The largest seed company in the world is in Mexico, and they have an interest in this idea of how one safely utilized the genetic modification of seeds.
I think this is a subject, by the way, that will be misunderstood. We don't quite understand it fully here in the United States -- we are trying to perfect our understanding of it -- but which will be with us for quite a while.
Now, please repeat your first question, and I will do my best to answer it in a short and concise form.
Q: The first question is you know the European Union has proposed a multilateral investment agreement which includes the national treatment. What are the views of the United States on that?
FISHER: I think that injected into this current round and this exercise will be very disruptive. I think the Europeans know that. We went through a period of -- and, by the way, we are the largest investor in the world -- we have an interest certainly as a country in having the rules of the road straightened out. But it proved to be an exercise which didn't move forward. There was a lot of suspicion about the secrecy with which this was being conducted. It was being conducted by at least the expense of the people and so on. One of the lessons we learned is that it's important we do have a more open WTO and something that's more understandable to the people at large, and therefore the transparency issues become paramount as we go forward with the WTO. But the Europeans know that to raise investment here will just make more complex our ability to finish our market-access agenda. And therefore we don't think it's advisable to embrace something like that where there is not a uniform view that this is indeed an area that is need of renewed negotiation.
MODERATOR: We are going to Manila now. Thank you, Kuala Lumpur. Go ahead, Manila, with your next question.
Q: This is George Monsano (ph) from the University of Asia Pacific in Manila. Mr. Ambassador, I would like to ask this question: What are the prospects of including or raising competition policy in the Seattle agenda? Thank you.
FISHER: Well, again, we want to make sure that competition policy is not something that is used to distract us from the task at hand but rather keeps us on beam of the task at hand. So this is an area that I think we still need to work out. But our fear is that by raising investment and competition policy and so on where there isn't unanimous agreement that this should be part of the exercise may prove a distraction rather than a supplement to or a complement to the core activities that we had contemplated here and that the APEC countries and other groups of countries have agreed should be the major part of the exercise.
Q: I'd like to ask you about the ITA II. The negotiation in Geneva remains inconclusive. And I just wonder what the United States plans to do in Seattle on this issue.
FISHER: Well, we would like to see an ITA II exercise. We have some differences of views with some countries on this. It really is a matter of perfecting what was left out of the previous round of the previous ITA round. But again, this is something that we would be encouraging of; that is, for an ITA II exercise. To be sure, not every product can be included in this exercise. I looked over, by the way, with my colleague Don Phillips, the list of products that are on the current list of inventory for ITA II. I am not a technical person -- it's very hard to understand what most of these things are -- but they basically deal with the ability to extend and complete what was initiated with ITA I, which was a tremendously successful effort by the way made possible and instigated as it were by the APEC countries.
Whether we can have the kind of complete product coverage that countries -- for example Malaysia would like to include consumer electronic products and so on -- I don't know if that can be accomplished in this next round. But we do have an interest in pushing the envelope on IT, and therefore we do contemplate an ITA II exercise if possible.
Q: Ambassador Fisher, I am -- (inaudible) -- daily newspaper, Jakarta. I would like to ask you a specific question about the White House forest proposal known as ATL, accelerated tariff liberalization. Just suddenly the White House launched or the U.S. -- (inaudible) -- launched a proposal. The proposal would slash the tariffs for the forest products -- the reaction from the WTO members, and also from the environmental groups, that this proposal will give benefits to the U.S. or to the industrial countries but in the other side will -- (inaudible) -- deforestation and -- (inaudible). I want your comment in this case. Thank you.
FISHER: Well, first of all, so we are all on common ground here, the ATL exercised, advanced tariff or accelerated tariff liberalization, stems from a commitment made by all the APEC countries from our meeting in Malaysia, and then later endorsed in the meeting in Auckland, that there were eight different sectors of which forestry is one -- fisheries is another, gems and jewelry is a third, and so on. And all the APEC countries, not just the United States, made a recommendation that there be an advanced or accelerated tariff liberalization in that area. It was originally called the EVSL within APEC, and that we would carry this forward united as the group of APEC into the WTO, and look to have that acted upon early on in the process. And indeed the APEC countries wanted it to occur as a deliverable at the Seattle ministerial, so that we would agree on the end rates and the end dates and the modalities while we were in Seattle.
And from our perspective, the United States of course is a signatory to APEC. We support that goal, and this is something that we believe should happen in Seattle. So we are I think extremely conscious. Our vice president of the United States has been perhaps one of the most outspoken world leaders about our concern about the environment, about deforestation. And we believe that the progress that can be made within the confines of the way the package has been outlined under the accelerated tariff liberalization, or ATL, we can manage that in a way that does not lead to environmental degradation or destruction in the world at large.
I am afraid that the countries that put forward that argument -- Japan comes to mind -- may just be using those arguments -- although I don't doubt their sincerity. But it's uncanny how it doesn't -- it interferes with progressing with the ATL exercise that we all agreed upon as a group. And another argument that I've heard is that on fisheries that somehow this is counter to the interests of consumers. But the fact is we traded a balanced package. There are eight different sectors in this package of accelerated tariff liberalization. It was agreed to in the APEC countries. Others have now come on board in terms of supporting that package. And I think too often some of the excuses used against a particular sector in this package of eight different sectors, which covers by the way about a trillion and a half dollars of annual trade, is just an excuse to protect any one country from participating in the package overall.
Q: Ambassador -- (inaudible) -- again from Kuala Lumpur. I wonder what assurances the developing countries have that their concerns and interests will not be sidelined by the concerns and issues that are being brought up by developed countries, and especially when there is going to be a lot of discussion and debate on agriculture between the U.S. and Europe and additional new issues that are being brought up which developing countries do not even have the capacity to deal with.
FISHER: Well, the proof is in the pudding. We are committed to make sure that this round envelops and brings in and gives real equity to the developing countries, and especially the least developing countries of the world. We realize that we cannot grow and prosper unless they are part of the system. We realize that's where the future growth is going to be. That's where the demographics are in terms of youthful population, the potential great consumption that can take place in the world, and where growth will take place at the margin.
I know I can say these things over and over again. We will have to demonstrate this in terms of our behavior and the behavior of other developed countries at Seattle and in the round going forward. But I think you will see, and I know this will be validated soon by speeches that the president of the United States is going to make and statements that will likely be made also by the leader of the European common area -- that is, President Prodi -- that indeed we are very sincere about the developing countries. And again the idea of having capacity-building exercises, the idea of providing technical assistance, the idea of making the WTO a mechanism that serves the interests of developing countries is very much in our interests.
Now, I can say that and I am sure you are skeptical. So let's watch and see what happens in Seattle and see if it obtains.
Q: (Inaudible) -- Business World. Mr. Fisher, just a brief question. The members of APEC have agreed to -- or have a consensus to support the elimination of export subsidies in the next round of trade talks in the WTO. Do you think the elimination of export subsidies will be enough to level the playing field in world trade in light of the fact that domestic support, the more important area, will still be retained?
FISHER: Well, actually the export subsidies issue is a very, very important issue. We recently concluded a round of discussion in the Free Trade Area of the Americas, the 34 democratically-elected countries in our hemisphere, and we came out from that meeting in Canada just two weeks ago with a unified 34 countries signing a statement to the effect that we wanted indeed to remove agricultural export policies from the world at large. APEC did the same thing when we were meeting in Auckland.
Again, we know that a lot of this is embodied in one large area, which is the European Union and the common agricultural policy of Europe. But even the United States has some agricultural export subsidies, and those are on the table and we will work to remove them if indeed we can get this subject up and running.
I think there is tremendous support in that one particular area. But in addition to that area, which I wouldn't understate the damage that it does -- it certainly is damaging in terms of the size and distortion that creates in the system -- but also there are other agricultural areas of interest, for example state-owned enterprises, state trading enterprises. There is a willingness to look at the domestic support systems that exist in different countries to make sure they are WTO consistent.
These areas within agriculture, given the fact that so many countries have the capacity to produce, given the fact that we need to feed so many people in the world, we need to remove as many barriers as possible to make it a really competitive market. And then those that are the most able to compete will be able to succeed. We think it's a very important issue area. It's the core of this agenda. It's why it's built into and required of us to negotiate starting this year. It's a tough area. This is an area that we couldn't complete during the Uruguay Round. But it is at the core of what we expect to do, particularly in terms of the market access area. And I think if we are able to start with a very firm effort against agricultural export subsidies and look at the other areas that distort trade and agriculture and make room for competition, we will have accomplished a great deal in the round we launch in Seattle.
Q: Yes, ambassador, with the new trade round, I think the developing countries are under increasing pressure for rapid liberalization, and also the feeling that we don't get enough benefits from the previous round. So it's likely that the North-South confrontation will increase during the round. And with China coming in I could foresee that this question would become more serious. So I would like to have your comment on this.
FISHER: You know, I haven't heard "North-South" referred to in many, many years. To me that strikes me as a dialogue that we rarely hear in the world at large now. This is the '90s. The fact is we have a globalized economy. Capital markets are fully integrated. We sort of -- although there are cultural differences that definitely need to be respected, the old ideological divides that used to divide the North and South I think have gone by the wayside. But still you make a very important point, which is there are the big rich countries and there are the countries that are in transition, there are countries that are developing, there are countries that are at the least developed possible level. And again I think all of us realize that unless we work towards the prosperity of all we end up short-changing our potential.
Again, as I said earlier, we note that as a percentage of gross domestic product in 1986, 17 percent of the GDP of the developing world was exports, and now it's closer to 30 percent. So I find it hard to believe that the developing world has been victimized by trade liberalization, by a greater market access.
Now, the financial crisis that occurred, I would argue, and we would argue as a country, did not occur because of trade liberalization. There were other distortions in the system that brought about the financial crisis. I want to make sure -- we want to make sure that the trading system is not victimized by that financial crisis and by a misinterpretation of what created the financial crisis. We have long argued that greater transparency, less crony capitalism, a more open and free trading financial system, will lead to greater prosperity; whereas a more opaque system leads to build-ups of mistakes. And indeed, again, this is one of the reasons that the Chinese reformers want to bring China into the system.
You make a very good point -- that is, that China is a very large country and they will certainly be a powerful force in the trading system. I would argue that it is better for all of us that they be part of a rules-based system rather than just an arbitrary force that's sort of loose cannon rolling around on the deck.
So, to be sure, challenges are being presented. We are fully aware of the fact that the living standards of people, particularly in the areas of the world affected by the financial crisis, have retreated and have not advanced. But it is not because of trade liberalization that that occurred. And it's also I think been improved by the fact that we do have a rules-based system where indeed countries cannot be victimized in an arbitrary fashion by big powerful forces who suddenly decide to cut somebody out. You can't do that anymore.
Now, is the system perfect? It is not. Can it be improved? It certainly can be. And that should be one of the purposes of this round launched in Seattle, and that's one of the things we hope to accomplish.
Q: (Inaudible) -- again.
MODERATOR: We are going to now have a brief question from Jakarta. Go ahead, Jakarta.
Q: The United States and China have signed an agreement on China membership to the WTO. Previous reports say that Taiwan also expressed it will join the WTO. Since the United States committed to the one-China policy, what is the United States stand for this matter? And in what category does the United States accept China membership, as a developed country or developing country? Thank you.
FISHER: Well, first of all, with regard to your first question, as you know we have proceeded with both Chinese Taipei and China on independent tracks. Indeed we completed the bilateral negotiations with Taiwan early on. They still have other countries that they need to complete their work with. There is one in particular, or one trading area, which is Hong Kong, that they are further along in the process than the People's Republic of China. We now have completed our bilateral negotiations with the People's Republic of China. They now have to complete their work with the European Union and with Canada in particular.
And we would fully expect that when one country -- that is, when the People's Republic of China accedes to the WTO that indeed Taiwan would accede to the WTO. And with regard to the issue of developing country status, I think if you read through the announcements that we made yesterday and the day before -- I am losing track of my clock here, but most recently the last few days -- none of us have had very much sleep -- you will see that indeed some of the safeguard protections and rules that govern the issue that we talked about a little bit tonight, antidumping and so on, take account of the fact that China in many regards is a non-market economy, and as it makes a transition to being a more market economy those safeguard measures and the times with which they're applied begin to fade out.
So I don't want to get into a sterile discussion, developed-developing. We do want China as part of the World Trade Organization system. We are happy to have completed our bilateral round with them, and we are eager to see them join the WTO, just as we are eager to see Taiwan join the WTO. Thank you very much.
MODERATOR: Well, thank you, ambassador. Unfortunately we have run out of time, even though we have not run out of questions. Before we end the program, however, I would like to thank everyone for their participation in Kuala Lumpur, Manila, Bangkok and Jakarta. And I especially want to thank you, Ambassador Fisher, for being here on what has to be a very long day. It's been good talking with all of you. From Studio 48 in Washington, I'm Judlyn Lilly. Good day.
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