Transcript: Boucher August 26 Worldnet Program on APEC Issues
(APEC meetings to focus on economic reform, markets, Y2K)The upcoming meetings of the Asia-Pacific Economic Cooperation (APEC) forum in New Zealand in early September will focus on economic reform, strengthening markets, and the Year 2000 Problem (Y2K), according to U.S. APEC Coordinator Richard Boucher.
During an August 26 Worldnet "Dialogue" program with participants in Wellington, Beijing, Tokyo, Manila, and Hong Kong, Boucher stressed that strengthening markets is critical to the region's economic recovery efforts.
"I think it is important to remember that the effects of the crisis aren't over, that economic problems remain; employment problems remain," Boucher said. "There's still a need for better restructuring."
"When we talk about strengthening the marketplace, we really mean putting in place the institutions that let competition flourish on a safe and a stable basis," he said. "It's having the right regulations, having the right regulators, having people trained, having rules that are fair for everybody, that don't provide special advantage in one place or somewhere else." The disadvantaged, he emphasized, are the ones "most disadvantaged by favoritism and preferences."
Having stronger markets "helps everybody in these economies and provides new opportunities to get into business, opportunities for entrepreneurs, opportunities for new employment," Boucher said. "The more we can strengthen competition, the more we can build strong market mechanisms, the more that private sector money, that entrepreneurial spirit, those opportunities to create new employment will come out in our economies."
"That's the way to take care of the lingering effects, the ongoing effects of the crisis," he said.
The timing of this year's APEC meetings -- just prior to the World Trade Organization (WTO) Ministerial in Seattle -- will also provide an opportunity to "give a big push to the next round of WTO negotiations," Boucher said.
"I think APEC has an important role as we start off a new round of trade talks in sending a very strong message to the ministers, the WTO ministers, when they meet in Seattle about what kind of a round we want, what kind of steps we want to take up front," he said.
Boucher stressed that the United States remains "very strongly committed" to bringing China into the WTO on commercially viable terms.
"We don't have any specific arrangements at this point. But I do think, for the United States' part, we very much want to get together (with China) and we want to finish" negotiating an agreement, he said. "We want to strike a good deal ... and get on with having China at the Seattle ministerial and going forward into the WTO," Boucher said.
Following is a transcript of the program:
(begin transcript)
WORLDNET "DIALOGUE"
UNITED STATES INFORMATION AGENCY
Television and Film Service of Washington, D.C.GUEST: Ambassador Richard Boucher, U.S. APEC Coordinator
TOPIC: APEC Issues
POSTS: Wellington, Beijing, Tokyo, Manila, Hong Kong
HOST: Doris McMillon
DATE: August 26, 1999
TIME: 9:00 - 10:00 EDTMODERATOR: Hello, and welcome to Worldnet's "Dialogue." I'm Doris McMillon. The seventh APEC leaders' meeting will be held in Auckland, New Zealand next month. Along with the APEC ministerial meeting, it will include a CEO summit on the theme of globalization in the 21st century. Now, it seems like a large and daunting topic. Exactly what shape might the world's economics take on as the new millennium gets underway?
Well, today on "Dialogue," we'll examine some of APEC's issues with participants from five different APEC nations and our guest here in Washington, Ambassador Richard Boucher, coordinator and senior U.S. official for APEC.
Ambassador, welcome to the program.
AMB. BOUCHER: Good evening. Thanks. It's nice to be here.
MODERATOR: Let's go to our -- I'm sorry, but before we go there, I'd like to ask you a question. There's going to be a lot of activity in Auckland next month. And if you would, begin by highlighting what's going to take place and tell us what you think are some of the central themes of APEC's work. AMB. BOUCHER: Okay. The meetings in Auckland are really the culmination of all the activity that goes on in APEC all the time -- working groups, officials' meetings, et cetera. When we get to Auckland, we have officials who meet and then we have ministers who meet and then we have the leaders who meet for the APEC economies.
At these meetings we'll be discussing trade issues, especially the WTO. We'll be discussing economic reform and strengthening markets. I'm sure we'll be discussing the Year 2000 problem since we're about a little more than 100 days from the new millennium.
MODERATOR: All right. Thank you very much. Let's go now to Wellington. We have guests standing by in New Zealand, China, Japan and the Philippines. And so Wellington will be our first stop. Welcome to the program, and please go ahead.
Q: (Name inaudible) -- from Radio New Zealand. Ambassador Boucher, in a recent speech before the House panel, you talked about the 1996 information technology agreement as an example of what APEC can do. Do you imagine anything of such significance coming out of this APEC meeting in Auckland?
AMB. BOUCHER: I think the most important thing we can do on the trade and tariff side is to really give a big push to the next round of WTO negotiations. The information technology agreement was a particular case that worked very, very well. It was between rounds, as far as I can remember. APEC had an important role in bringing the Uruguay Round to the end. I think APEC has an important role as we start off a new round of trade talks in sending a very strong message to the ministers, the WTO ministers, when they meet in Seattle about what kind of a round we want, what kind of steps we want to take up front.
MODERATOR: Thank you, Wellington. Let's go to our guests in Beijing. Welcome, and please go ahead with your first question or comment for Ambassador Boucher.
Q: Hello, Ambassador. Very nice to see you here. I'm -- (name inaudible) -- from the Ministry of Foreign Trade & Economic Cooperation. I have a specific question to ask you. I remember during the -- (inaudible) -- that one of the U.S. delegates indicated the APEC needed to apply stringent market principles to specific areas, such as electronic commerce, civil aviation and -- (inaudible) -- call for implementation strategy on these factors. I wonder whether you could elaborate a little bit more on this issue. Thank you.
AMB. BOUCHER: Yeah, I think that was me who said it. Part of the way we look at APEC is that APEC brings the region together around some issues and some directions that are important to us all. But it also does some very practical things that help business, that help expand the opportunities for trade and investment, and really that make life better for the people in the region.
APEC has done a lot of work in some of these areas. On electronic commerce, they've developed a set of steps that governments can take to make electronic commerce grow better. On natural gas, they've designed a series of steps that come -- having been worked with business, that governments can take to make natural gas investment and distribution work better. And they've got mechanisms by sending people out to countries to figure out how we can apply these in each individual locality, according to its own laws and traditions. And similarly, enhancing air services has been something that the APEC working group and the APEC transportation ministers have worked on. They've identified four important areas.
These are three steps that we think that the governments can actually take, that the leaders can look at and say, "Let's go do these things." Isn't it time that we moved beyond principles and practices and said, "If you want to be ready for electronic commerce, you know, let's go ahead and do this, and we have the teams, we have the mechanisms, to help you apply the policies that you can use to make this go." "Do you want to have expanded natural gas investment and distribution? You know, give us a call. We in APEC can do this." And the same with enhanced air services.
So I think one of the things that we look at when we look at APEC is there's been a lot of discussion. There's been a lot of useful work on principles and best practices. Some of these areas are ripe for actually going ahead and changing policy and making the business grow.
MODERATOR: Thank you, Beijing, for your question. We turn now to Tokyo. Welcome, and please go ahead.
Q: (Name inaudible) -- from Asahi Shimbun. Some believe that previous APEC meetings did not do much to solve the currency and economic crises in Asia and wonder whether APEC meetings are necessary. In your opinion, what is the perspective of the United States, first of all, of APEC meetings? What is the basic stance of the United States towards the upcoming APEC meeting?
AMB. BOUCHER: I appreciate that. And I've heard those criticisms. Frankly, I think the criticisms are a bit unfair. APEC did have a very important role in keeping the region pointed in the right direction, keeping the region pointed at restructuring, reform and more openness as the way to get out of the crisis. And at the beginning of this, there was a lot of talk about terrible things that would happen. People would withdraw from the world system. They would close their borders. They would not engage in liberalization. They would protect industries that didn't -- you know, that really needed to be restructured.
It didn't happen. The fact was that APEC kept us all pointed in the same direction and we understood what kind of policies were needed. We brought together in Kuala Lumpur kind of a series of international steps that jelled at Kuala Lumpur on how to deal with the crisis. The whole strategy of dealing with the international financial architecture, dealing with problems of poverty and welfare in the region, dealing with credit problems in the region, and going through a better restructuring and bank supervision and security supervision process, that came together at Kuala Lumpur. It was discussed in a variety of fora.
We still use APEC as one of the most important places where we can discuss with a lot of countries some of these international issues. But it's also, I think, part of the momentum for further reform, part of the momentum that's going to carry us through this crisis and get us out of this crisis with a more stable basis, with economies having better capacity to use trade and use international capital to grow.
And I think with that kind of contribution, APEC remains quite important to the United States. It's important for what we can achieve in specific terms that help business, help the economy. And it's important because it brings us all together pointed in the same direction, let's our leaders discuss what we need to do next and the kind of steps we need to take next to make sure that this kind of crisis doesn't happen again.
MODERATOR: Thank you, Tokyo. Our program now shifts to Manila. Welcome, and please go ahead with your question.
Q: Good morning from Manila. My name is Jose Gala (ph). I'm with Business World. It's the only business paper in the Philippines. The private sector, which you, Mr. Ambassador, have identified recently as the driving force behind the APEC process, has expressed some impatience over the pace of work in the APEC. Last week in Singapore, ABAC, for instance, the APEC Business Advisory Council, said individual actions being taken by member economies are not (on business?) enough in content or time frame. They also said, "We still need to see some more serious and substantial commitments, especially from developed economies." Your reaction on that, sir?
AMB. BOUCHER: I think, you know, I don't doubt that they're right. I think all of us believe that we could all be doing more. We could be doing better. I think APEC does have a very important role in seeing that these things move forward, and all of us inside the organization need to make sure that we try to achieve the goals that we set out to do. That's why implementation is becoming more and more important. What can we really do that makes a difference, that either speeds up customs or provides a better product standard or moves an economy forward so it has more competition in various areas of importance?
I think a lot of this measurement of how tariffs have been cut and where we're going and how fast the reductions are has to do with the time period. And I realize that, you know, the implementation of the Uruguay Round commitments had a certain momentum to it. And now, as we go into a new round, we'll probably regain a certain momentum in tariff cuts and trade cuts. But certainly the package, for example, that APEC has put forward of accelerated tariff liberalization would put a big chunk of world trade at zero tariffs. So our effort to get the rest of the world to that could see a dramatic acceleration in the pace of tariff reduction.
Our efforts at facilitation, I think, have that potential as well. So I accept their words. I accept their criticism. And I accept the real pressure that they bring on us to show serious results and real results. And that's why they're so intent on implementation steps. Natural gas, electronic commerce, air services -- these are areas that the Business Advisory Committee has raised with us. They've pushed us to develop an APEC food system, and that's going forward.
So a lot of those things that they've asked us to do, we're working on very hard. And we're going to try to see them all the way through to an early implementation. We work very closely with our business community. I'm sure other governments do as well. And that's where a lot of the efforts and a lot of the scrutiny of us, a lot of the pressure on us, comes from. And that's good.
MODERATOR: Thank you, Manila. We now welcome our guests standing by in Hong Kong. Please go ahead.
Q: This is -- (name and affiliation inaudible) -- Hong Kong. Ambassador Boucher, first of all, congratulations to you in your post. I wish you had stayed in Hong Kong a little bit longer. The question is whether China's potential WTO entry is linked to China's effort of reducing export subsidies and phasing out tariffs, and also whether there is any link with potentially more flexible exchange regime in China.
AMB. BOUCHER: (Laughs.) That's a good question. That means -- that's my way of saying it's not a question I can answer very well. The details of the WTO talks with China -- we put out a lot of information of where we got to in April. We're going to have to get together again and solve some other issues, including some of the financial issues. So until we do that, it's very hard to talk about these details.
Obviously we've said it has to be on commercially viable terms. The Chinese have said they want to make the commitment to bring them into the organization as a compatible member. And therefore, it will involve a lot of the questions of subsidies or at least tariffs and the (treatment?) of different industries. Entry -- market access to their foreign goods, obviously, is an important point as well.
As far as the link to any exchange rate regime, you know, I'm not aware of any. But frankly, I don't know. And so I don't think that's a question I can really answer either.
MODERATOR: And we thank you for that excellent first round of questions. Let's continue with Ambassador Richard Boucher, U.S. APEC coordinator. We're going to return now to Wellington, New Zealand. Please go ahead.
Q: Hi, Ambassador Boucher. Margaret Clark (sp) speaking at Victoria University.
AMB. BOUCHER: Hello.
Q: From a New Zealand perspective, there seems to be some growth in the United States of the forces favoring protectionism. Is this so? And if it is, will it seriously limit the capacity of the United States to play a leadership role in APEC?
AMB. BOUCHER: Yes, of course, and no. Our trade deficit has been growing a lot. We've been buying more imports because our economy is growing very fast. We've had fewer exports because of problems overseas. We have an expanding trade deficit that's just burgeoning. In those circumstances, people obviously look at that. There's concern about the balance of trade, and there's always concern from our side about whether we have the same access to other markets that people have to our market. And that's why this whole process of opening up trade, of removing barriers, is so important to us.
And I think in New Zealand, you've done so much to remove barriers as well and to open up your economy that you have the same feeling. You want others to do the same thing. And that's why we're all in this together in APEC and we're all sort of pushing each other along.
Whenever you have that big a trade deficit, there's going to be calls in the United States for protection for this or that industry. When you have a rapid expansion of imports, there's going to be calls. So far, this administration has resisted them, calls for steel quotas and things like that. We've tried to take care of people with problems in other ways. Yes, there have been occasional things that we've done. But frankly, if you look at the overall trade picture, the United States remains one of the most open economies in the world.
We certainly import so much more than anybody else. The fact that we've been able to import so many goods and we continue to do so has been one of the major sustaining factors in producing the signs of recovery we have in Asia. So I don't think we have any apologies to make. But we will continue to lead the effort to reduce barriers, because it's good for us. It's good for everybody. And the way to solve the problem of burgeoning trade deficits or rising fears of imports is actually to increase exports, to open up markets, to make it better for all of us.
Q: I'm also very interested in Sino-U.S. relations in association with China's participation in WTO. And what's your comment on this? And do you think that APEC meeting will be helpful for the negotiation? Thank you.
AMB. BOUCHER: Yes, I think it will be helpful. The fact that President Jiang and President Clinton will be getting together, I think, is very good. Obviously, we remain very strongly committed to bringing China into the WTO on commercially viable terms. And we hear from China and have seen the statement that China remains committed as well. So it's important that we get back together, that we sit down and solve the remaining issues. And I'm hopeful that that can be done.
How exactly this happens, whether we get there before the leaders get together -- the leaders have to get together to start things up again -- I really don't know. We'll have to see how that turns out. We don't have any specific arrangements at this point. But I do think, for the United States' part, we very much want to get together and we want to finish this up. We want to strike a good deal, finish the areas we need to strike, and get on with having China at the Seattle ministerial and going forward into the WTO.
Q: (Name inaudible) -- with NHK. I'm honored to have this opportunity. At the coming APEC meeting -- (inaudible) -- the next round of WTO, there will be a major theme of coordinating (positions?) among nations and for WTO. What kind of a result will the United States seek with the APEC meeting? On agricultural subsidies, where the U.S. has advantages, the U.S. is trying to focus on those advantageous positions. And on government procurement, the U.S. government is seeking some results, and the Japanese government sees that U.S. is trying to make some gains in areas where the U.S. has an advantage. Now, what kind of stance will the U.S. take in the APEC meeting? And what kind of result is the U.S. seeking to achieve?
AMB. BOUCHER: Well, I think what we want is a good, strong result that serves everybody. I mean, let's remember that these things that APEC has been working on that we've been pushing, they've been just things that serve the United States. They've been things that we in the region have all agreed upon are important to do. I mean, we were at the origins, as somebody pointed out, of the information technology agreement. That was something we felt served all our economies.
The APEC countries have been pushing this duty-free cyberspace, and extending that would continue to serve all our economies. APEC countries agreed last year -- all of us, including every single one of us, agreed on a package of accelerated tariff liberalization. It's a balanced package of sectors where everybody gets something out of it. And that's why it was accepted by all the economies. We agreed we should push that forward to the WTO and we should try to get it done in 1999.
So what we're doing is trying to keep the commitments that APEC has made to our industry and to the world to try to get that to happen. I don't think we're taking advantage of anybody in particular. These things we all agreed upon. The fact is that APEC, as a group of countries, has been a dynamic force in opening up world trade. We're continuing to serve an important purpose at a crucial time when we're going into a new WTO round.
We need to continue to be a dynamic force in world trade and we need to continue to push whatever it is we can agree together to push. We have -- in June, the ministers of APEC agreed that we should have a new set of negotiations that had dealt with market access for industrial goods as well as the built-in agenda of agriculture and services. We agreed that we should try to do some things up front in that round to show that we were serious and to get some of the benefits for everybody right up front. And we're going to have to at this meeting, I think, pin down what some of those things are and see how we can move our whole agenda forward. So I think that's in all our interest. It's not something that we are particularly doing. It's really fulfilling the promise that APEC has already made in years past.
Q: At the U.S. House International Relations Committee earlier this month, you said trade liberalization is an essential ingredient for long-term sustainable growth. Last week, ABAC called for strong signals to investors they are willing to take decisive action to further liberalize trade and investment. At the G-7 summit in June in Cologne, the leaders cautioned against mindless globalization and liberalization. The statement issued at the end of the summit meeting said, "Nations must also promote social policies to protect the poor and the most vulnerable." How do you reconcile these objectives, particularly since there are now perceived protectionist tendencies, especially among developed economies?
AMB. BOUCHER: Well, once again, I really want to reject this charge of protectionism. I mean, just look at the numbers. You know, if we're going to import $200 billion more of goods than we export, it's hard to call that protectionist. If we're going to have a trade deficit that doubles or triples over previous years, it's hard to call that protectionist. So let's deal with the facts.
I think one of the ways to reconcile the factors that you raise is exactly the way that APEC is trying to do it. We know that liberalization and openness, investment is good. We know that people who can trade can earn a better wage. They can make a better product and they can prosper more. We know that capital comes into economies, that private capital comes in a more stable manner when it comes in as foreign direct investment, when it gets rooted in the economy and has a change to build there and to grow there and create jobs, create prosperity in an economy. We know the kind of steps that people have to take to attract that capital.
So what do you do? Well, you try to put it together so that people in the economies can really take advantage of it. You have to have good supervision. You have to have solid structures where the money comes in. You have to have good support for the traders. You have to have what we call in APEC capacity-building. We have a lot of programs in APEC to try to give people the wherewithal to engage in trade.
One of the things that electronic commerce will do, if we can remove the barriers to electronic commerce, we can allow a whole lot of people to get involved in trade that haven't been involved before, because it gets a lot easier. You can have a worldwide presence without getting on airplanes and spending a lot of money.
So a lot of these programs will really reach down. And APEC has made a very special point of dealing with all aspects of society, not just solely tariffs, not just solely rules for investment, but looking at social safety nets. We had in Washington a month ago a human resources ministerial when our labor and employment people got together ministerial level to talk about labor markets, training, pension schemes, the kind of safety nets you need in an economy that gives workers both the security and the flexibilities that they need in the new economy.
We do a lot in the finance process to train bank examiners. We have a good program in there that we've done with Malaysia. A lot of the training goes into building the structures that mean that when the capital comes in, when it's used, when it's invested, it can be safely used and it can help all the members of society.
So I think one of the great things about APEC is it's not just a trade organization. It's not just an investment organization. It's not just a community discussion. It's practical and it can deal with all aspects of the problem. It can deal with domestic issues, trade issues, investment issues, harmonization issues, even industry issues. We have an auto dialogue going on that brings the industry people together from around the region to try to look at how that industry is going to go. So we can deal with problems and issues in all their aspects and deal with all segments of society.
Q: Hi. Good morning. This is -- (name inaudible) -- from Hong Kong Economic Journal. And my question is, if the U.S. and China resume a negotiation early next month on China's entry into the WTO, what kind of obstacles will prevent the U.S. and China from reaching agreement? Thank you.
AMB. BOUCHER: I don't know how to answer that. I'm not close enough to the actual substance of the talks. I think I'd just have to say that if we do resume, there's a few issues we have to solve. There are a few things that were not quite finished in April. We got a long way down the road. But we're going to have to deal with those issues. And if both sides want to do it, we'll do it. And we really look forward to getting back together and giving it a try.
Q: (Name inaudible) -- Radio New Zealand. With regards to the WTO round, there have been a lot of things suggested about it -- that it's going to be a broad round, a quick round, a manageable round. How do you reconcile all of these things? And what are the United States priorities when it does come to the round?
AMB. BOUCHER: Well, we've -- I think we're sort of going through that process with the other countries in APEC, and that's one of the things we'll probably want to do as we get to Auckland is talk to the others at different levels and try to define more precisely what APEC wants from this round. We certainly want to see negotiations that go beyond the built-in agenda of agriculture and services. So we want to make sure we include some industrial goods, market access for industrial goods as well.
We certainly want to see some things up front in Seattle, and I've given before a list of some of the ideas that are out there about things that we can do. I think we all want to see the elimination of agricultural export subsidies. That's a trade-distorting factor. That's something we'd like to see come out of the round and something that we've already had some discussions on in APEC.
But precisely how far we want to go, exactly what we want to see in agriculture, services, industrial goods, that's something we're going to be talking to each other about in the next few weeks. And I think that's something we'll try to be more precise about as we do that work.
Q: Good morning. Following is a question suggested by one of our guests here in Beijing. Beijing -- or, excuse me, China will be hosting the APEC meeting in 2001. Looking ahead to that time, what do you think will be the main accomplishments by then, and what issues will people still be arguing over?
AMB. BOUCHER: (Laughs.) Well, I think we'll all be arguing about how fast and how far we can get towards our (broader?) goals of really free trade by 2010 for developed countries and 2020 for developing countries. And that's part of the process of APEC is to keep pushing each other forward so we can get there.
In terms of accomplishments, I think, first of all, if we make some of the decisions now to implement new policies in certain areas, we can start to see the growth of electronic commerce, an expansion of air services, an expansion of natural gas. I think we'll see a lot stronger financial system because of some of the work that's being done and decided in APEC right now.
But let me cite a very specific example that you will see in China, because I've met with some of the Chinese delegations this year now, and there's an APEC project that's going to revitalize the process and the customs at Shanghai. Shanghai port has -- you know, we all know -- enormous volumes. And they want to modernize. China has a modernization program for its ports. And we -- United States customs, Shanghai customs and a group of private-sector people -- are getting together with an APEC project in Shanghai to try to improve the efficiency and the speed and the technology that's used to process goods for the port of Shanghai.
And when we get to Shanghai in two years, I think that will be a model for the whole region. It will be an example of where we can do something very practical. We can work with our private sector. We can do something that's of great benefit. And we can really take that jump into that new millennium that we all want to take to make our trade more efficient and to reduce the barriers.
And I go back once again to what I said before. You reduce the barriers. You reduce the number of forms you have to fill out, the numbers of standards you have to set, and you really open up trade to a lot of people who aren't involved now. There's 21 different customs standards or customs forms. The little guy has got to fill them all out himself. He's got to figure out the whole idea. Big companies, they hire somebody who fills out forms for them. But the little guy finds it impossible to trade.
So really getting a lot of the broader people in our economies, some of the people that can put up Web sites, that can advertising their presence, they still have to ship goods, still have to pass customs. And doing a lot of that kind of things is very important. So I think the Shanghai customs project will be a great example of the very positive, practical steps done under the auspices of APEC. And when we get to Shanghai in two years, I think it'll be quite a model.
Q: Hi. Nice to see you again. When I was covering the State Department, I was at Sankei. But right now I'm at the Japan Industrial Journal -- (inaudible).
AMB. BOUCHER: Oh, I see.
Q: My question is, how important is this APEC meeting compared to the others? And what would you like to achieve the most? You mentioned about good results. Could you be very, very specific?
AMB. BOUCHER: I think what we'd like to achieve is a really meaningful and useful meeting that does something for business, does something for the region, and sends a message to people around the world and people in the region that we are -- Asia is coming back as a dynamic area. It's committed towards more openness. It's working hard to move forward on reform, on openness. We're coming back, and we're coming back to help the world be more open and create more opportunities for people.
Specifically, a good, strong message for the WTO round that's coming up; some agreements on things that we should be able to do up front in that round that can bring quick benefits to people; a real strong commitment to strengthening markets, more market competition in our economies, and actually moving to strengthen the markets in a couple of areas that are important; and I think a good look at what we've done on the Year 2000 problem and a reassurance that we've done a lot of contingency planning, that we're getting ready for whatever might happen -- we can't tell you exactly what's going to happen on January 1st, but that we are doing the planning and getting ready for whatever might happen.
If we come out of Auckland with those things, I think we will have had a meaningful, a very useful meeting; maybe not another grand vision, a big goal, but really something that works in the region, that sends a message to the world, this region is on the move ahead. And that's what people need to understand.
MODERATOR: And we're going to continue our conversation with Ambassador Richard Boucher, U.S. APEC coordinator, as we talk about the upcoming leaders' meeting in Auckland, New Zealand next month. Let's take our next question from Manila. Please go ahead.
Q: Hi. You mentioned earlier the twin missions for APEC -- opening markets and strengthening the marketplace. Can you please tell us how APEC plans to go about strengthening the marketplace while some of the member economies are still struggling with the effects of the economic crisis?
AMB. BOUCHER: I think it is important to remember that the effects of the crisis aren't over, that economic problems remain; employment problems remain. There's still a need for better restructuring. When we talk about strengthening the marketplace, we really mean putting in place the institutions that let competition flourish on a safe and a stable basis. It's sort of having the right regulations, having the right regulators, having people trained, having rules that are fair for everybody, that don't provide special advantage in one place or somewhere else, because, again, the disadvantaged are the ones that are most disadvantaged by favoritism and preferences.
So, having a market that can really function well, stronger markets helps everybody in these economies and provides new opportunities to get into business, opportunities for entrepreneurs, opportunities for new employment. So I think the more we can strengthen competition, the more we can build strong market mechanisms, the more that private sector money, that entrepreneurial spirit, those opportunities to create new employment will come out in our economies. And we all know that's the way to take care of the lingering effects, the ongoing effects of the crisis.
Q: (Inaudible) -- sectors with the U.S. like China to open specifically? And if the U.S. and China reach agreement on WTO issue, how much can the U.S. narrow its trade deficit with China? Thanks.
AMB. BOUCHER: I don't know. The sector question -- to be commercially viable, to be compatible with WTO, there has to be more openness in a whole lot of areas in China. And that's what the negotiators have to deal with, and I'm not going to get into that.
As far as what the exact effect in numerical terms would be on the trade deficit, I don't know. I'm sure intra-Asian trade, I'm sure trade from ASEAN to China, will go up. I'm sure trade from Hong Kong to China will go up. There will be a lot of good effects in the region. But exactly how much depends on a lot of economic factors in China, things that are untested; propensities to import and things like that.
So I think what Americans are most concerned about -- the numbers are disturbing. What we're really concerned about is, are markets open to us? Do we have the same or similar opportunities in other places that we give to people here? And that's why more open trading systems are very important to us.
Q: Ambassador, last Sunday in our newspaper, a member of the APEC monitoring group accused APEC of having a democratic deficit and wrote that "Many APEC countries face growing opposition to the poverty and increased inequality free markets have caused," quote/unquote. What would you respond to that?
AMB. BOUCHER: I'm not familiar with the piece or the APEC monitoring group. I firmly believe that free markets, foreign direct investment, opportunities to trade, have, in fact, created a lot of the prosperity in Asia; have, in fact, created a lot of the benefits that Asians have seen over the last 10, 15, 20 years.
Some of the unfound policies, some of the weaknesses in markets, some of the weaknesses in the international financial architecture, produced a crisis, produced a real problem in a lot of places; set us back, in some cases, several years in terms of (wealth?). But let's remember the long sweep; 10, 15, 20 years of really solid growth in Asia that's changed the face of Asia certainly since I first got there.
I mean, I look at what China's done to open up since 1979, when I first went there. I look at the lives of my Chinese friends. I look at the lives of the people in Hong Kong that I knew at that time. People have benefited enormously from these last several decades of free-market growth. And I think the examples that we have in Asia are that people benefit, not just companies. Companies employ people, but ordinary people benefit. Economies get better. There are more opportunities for people. There's more opportunity for individual creativity.
So I don't think we should apologize for pursuing this path. I think we need to pursue it, fully aware that there's plenty of people in society who need training, who need confidence, who need social safety nets, and who need the capacity to really participate. But as long as we go forward bringing those people in, creating opportunities for them, I really think the benefits to the people in our region, certainly to the people that I know in the region, have been enormous.
Q: (Name and affiliation inaudible.) I would like to invite your view representing the United States, especially concerning (ATL?). The United States has given up reaching an agreement on ATL prior to WTO ministerial in November, according to some. There is not much time remaining. Not much progress has been achieved. And concerning the (six?) sectors at (Wellington?) trade ministers' meeting, it was agreed that -- (inaudible) -- the WTO ministerial, but the exact timing and also the final tariff rate has not been agreed amongst the ministers. Is this satisfactory, in your eyes?
AMB. BOUCHER: Yeah, on the (back six?) sectors, I think that was satisfactory to us. There is going to have to be a more detailed discussion in the WTO. But APEC has put those forward as sectors where we do want to see substantial liberalization. And as you look at the language, we said we need to -- I forget what it was -- take into account or make sure that we put forward the work that we've done in those sectors as well.
On the front eight, the accelerated tariff liberalization, it's not correct to say that we've given up. We and others are working hard. The New Zealanders have led the effort to get some other countries on board. There are some other countries in the world that are interested in this. We're still working on the European Union.
But let's remember, these are sectors that APEC identified as a package, that have balance for all of us, that have importance for all of us, that we agreed we would try to pursue. And so APEC continues to pursue those. And we're trying to convince others to do it. And I think the more strength that APEC members can show on those sectors, the more likely it is that we're going to get the results that we all wanted, which was to get this balanced package through and to bring down tariffs, to open up markets for a lot of goods that we all trade and sell.
Q: You also mentioned earlier that Y2K problems have the potential to retard the positive economic signs that we are now seeing in the region. From your vantage point, do you think the region is now ready for the Y2K bug? If not, is there enough remediation work being done to make industries, services, governments, ready for it by rollover time? How exactly will Y2K problems retard growth? And which sectors do you think are more vulnerable?
AMB. BOUCHER: That's an interesting question, and I'll give you the answer on January 2nd, 2000. I think none of us exactly know how it's going to affect different parts of our economies, how it's going to affect the relationship between our economies. We'll see when we get there. Maybe the preparations that we've done are going to be inadequate. It may be they're insufficient. It may be they work in some places and not in others.
I think overall, with the United Nations effort, the APEC effort, the efforts that we've done bilaterally with a lot of economies, focus on some key sectors like health and transport and finance and a couple of others that people have looked at that are really linchpins of our economies -- power generation, telecommunications, things that -- without those, nothing else works. So we've focused on key sectors.
In APEC, we've focused on contingency planning. How can you go through the process, figuring out where you are, where your problems are, where your vulnerabilities are? And where do you rely on your neighbors? If everybody decides that we're going to turn to somebody else for electric power, well, we need to ask him if he's got enough for us. If everything in your economy depends on the water at a certain point, you'd better figure out if you've got the water there or not.
So that's the kind of contingency planning work we've been doing. We've been exchanging information in APEC. We're going to go ahead with some planning workshops where we get together. There's one in Bangkok September 1st. There's going to be another one in Korea, another one in Peru. This is what I call doing your homework with your friends. You get together. You work through your problems. You look at it one more time. All of us have done work in this area. And you compare notes and talk to each other and help each other out and see where your real problems are.
I think the best we can do on this is to do the planning, to get people to do as much remediation as they can -- and they should have done a whole lot by now -- to look at, you know, whatever additional preparedness we have to do, but to use every moment between now and January 1st to deal with the problems that might result. And then on January 2nd, I'll tell you what the problems were. But right now, it's just hard to say.
Q: Hello, Ambassador. This is James Herrity (sp) with Dow Jones in Hong Kong. I wonder if you could explain what you see the role of APEC vis-a-vis the WTO from this perspective. It seems increasingly that APEC is satisfied to pass a liberalization effort on to the WTO, to let the WTO do the work. Does that suggest at all that the Asian region has lost its moment for trade liberalization or that APEC isn't really a region?
AMB. BOUCHER: I don't think either of those is precisely the case. I think some of us have always been aware that if you don't bind the tariff reductions in the WTO, you don't get the full benefits. And second of all, you have (free rider?) problems. You have a lot of issues that would arise if you do this on a smaller basis.
So if you look at where APEC has succeeded in the past with the information technology agreement or the work we did on the Uruguay Round, we've been an important factor in getting those worldwide reductions that benefit us all much more than something in the region would. And so that's the way we've tried to go forward with the accelerated tariffs. That's the way we tried to go forward with some of the other points that we've made in APEC.
As we do that, APEC can be a dynamic force. It can be a place where we identify sectors, areas, goals, timetables that we want to see happen. And if we get together solidly, we could make these things happen. We've shown that already. So let's try to do that again with a new round coming up in the WTO. And I'm sure APEC will have a continuing role in doing that as a dynamic region that's committed to free trade or committed to more open trade.
APEC countries, APEC economies, have been reducing tariffs. I think that's clear. If you -- as murky and difficult to read as the individual action plans are, as sometimes unsatisfactory as the business people have said some of the tariff reductions are, there's real progress there. There's some real reductions there. If you go through them carefully, you'll see that people are taking steps for the Uruguay Round. They're taking steps for their own economic purposes. They're taking steps because of the urging of APEC. But whatever reason, this region is moving every day, I think, to more and more open trade. And if we can get the others to do it through a round of negotiations, well, that just gives us a big jump and a big push that we can take together.
Q: (Inaudible) -- Radio New Zealand. Ambassador Boucher, I'd like to ask a very specific question about the APEC Business Advisory Council's proposal on the food system. They want to see the complete elimination of tariffs and subsidies on food by the end of 2001. Will the United States be supporting this at the leaders' meeting?
AMB. BOUCHER: We have said already, I think, in the APEC food system work that we've done in APEC that we want to see the elimination of agricultural export subsidies. And that's something we think everybody can agree on. The broader steps to eliminate subsidies in general, I think we've said very clearly we'd like to take that to the WTO and make that part of the discussion in the new round. So, yes, we're generally in favor of doing this. How exactly it happens, what timetable, will depend on some discussions that are yet to come. But eliminating agricultural export subsidies, certainly for many of us, is right at the top of the agenda.
Q: Hello. (Inaudible.) We noticed that you have been working in Shanghai, China from 1984 to 1986. During that time -- (inaudible) -- one of the most active (times?). And now the economy is more and more globalized. Would you please predict the effects China's entry into WTO will bring? Thank you.
AMB. BOUCHER: During that time, 1984 to '86, what was happening in China was an absolutely explosive growth in town and local enterprises. Shanghai was still pretty much a statist economic model. But right now, in southern Jangxu (ph), there was this enormous growth of new opportunity, because opportunities to enter the domestic market have been created for Chinese. And you had these township enterprises just blossoming forth. And they started out really small, and then, before you knew it, they were making, you know, a thousand pianos a month or making suits for people overseas.
Those kind of opportunities that came from opening up new markets and giving people the ability to trade domestically, I think, will come out of giving people the ability to trade internationally, both imports and exports. And the kinds of benefits that China can get from joining the WTO, the kind of market rationalization, the kind of new opportunities for people inside China, the better use of capital, the better flow of investment, I think that could be a real boost for the Chinese economy, and for deeper and deeper into the Chinese economy.
We all know that much of the export opportunity has been concentrated near the coast. As the internal Chinese market grows and trading opportunities are expanded more broadly, I think you'll see a lot of those benefits go more deeply and broader into the Chinese economy. So I do think those of us who've looked at this see some real economic benefits for China in joining the WTO. It helps the process of reform, creates new opportunities, brings the opportunities and the benefits of trade deeper into the Chinese economy.
Q: (Name inaudible) -- speaking again. Certain media in Asia reported recently that your side will resume negotiations with China on WTO. Is this true? And this is not a question, but next time you come to Tokyo, please let me know.
AMB. BOUCHER: Okay. I do look forward to seeing a lot of my friends in the region. And one thing I need to do in this job is to travel to places, talk to people, find out what they're interested in, and make sure that we're serving the needs of people in different locations. We don't have any specific arrangements at this point to get back together with China. We're hopeful. We look forward to doing it whenever they're ready. But at this point, there's nothing specifically scheduled.
Q: Mr. Ambassador, next week the Manila framework finance ministers and central bank governors will be meeting in Singapore. I don't know if this is within your jurisdiction, but is there any chance the AMF will still be revived? And isn't the U.S. convinced yet about the viability of the AMF?
AMB. BOUCHER: I think -- you're talking about the Asia Monetary Fund? Is that the idea that you were talking about, AMF? Okay, I'll assume that's right. They cut you off. The deputy finance ministers get together next week, the 25th and 26th. They've been discussing all along how to approach the revitalization of the region. And there are different ideas out there, and this is one that they've discussed and dealt with before.
I think there's a lot of concern in some places that the region not falter on its reform efforts. There are things we need to do, continue to do, in restructuring, in moving forward with better banking systems, with restructured financial systems, that we really take those out and that we carry those through. And that's been one of the major features of IMF financing and some of the other mechanisms that have been put forward. So I think that's where the finance ministers have us. I think they've done a pretty good job of that. And I'm sure they'll look at whatever ideas are out there in that context.
Let's all remember, in terms of the experience that we have in the region and the way things go today, private capital is much more powerful and much more available and much more plentiful than any money we can get together through development banks or public funds or government funding. So what's really important is creating solid conditions so that private capital can flow easily, but so that it flows safely and efficiently in creating a sort of safety net and structures, so that it's channeled right, so that it uses good mechanisms, so it comes in a healthy manner.
I think that's what our finance ministers and deputy finance ministers have been working on. And they've really done a lot of work in that regard. So they'll keep pushing this process forward so that the big money, the funds that come from private capital, can flow and can be used well in the region.
Q: Ambassador, you've mentioned E-commerce, natural gas and air services several times. Can you be very specific in explaining what you expect to be accomplished at these meetings in those areas?
AMB. BOUCHER: I have kind of a feeling somebody's keeping book out there to see, the day after the meetings, whether I got exactly what I wanted or not. These are areas APEC has done a lot of work in before. Perhaps others will bring forward other examples of areas where we can really go forth.
In electronic commerce, we've worked with the private sector to identify a whole series of steps that economies can take to foster an environment where electronic commerce can grow. We've developed a mechanism where economies can invite teams in to sit down with their policy people, with their regulators and with their industry to design programs to take those steps inside the economy.
A similar thing in the energy sector; a series of steps that can be taken. Economies can have people come over and help out and actually implement them; so the willingness to implement them. There's mechanisms available. There's best practices and recommendations available. So it's time to go forward and try to do these wherever people want to see better investment in natural gas, wherever people want to see better electronic commerce.
Air services is a subject that we've often stressed in the past. It's essential to the kind of trade within the region and the kind of export trade to the United States that we have going on; enhanced air services, enhanced mobility for business, easier job doing business. These are things we've looked at. (Inaudible) -- are important to do.
So, again, you know, let's get our experts to go out. Let's get our ministers to go out, figure out how to implement enhanced air services in the areas that APEC agreed we want to do; those things. You know, whether we get exactly these formulations in each of these areas, I don't know. We'll work it out with our friends in the other economies of APEC.
But the important thing is that we look at these areas where we are ready to move forward and strengthen markets and that we go forward and do it. And I'm happy to say in a couple of these areas we've already lined some other governments up. We know which of the economies that want to go forward. And so you'll start seeing teams go out. You'll start seeing some effects. And I think the leaders and the ministers can give a big push to that.
Q: Ambassador, at the last minute, President Clinton didn't go to Kuala Lumpur. Do you think it's certain he'll come to Auckland?
AMB. BOUCHER: I'm as certain as I can be, and I know he's as certain as he can be. You know, I can't predict everything in the world. I can't predict acts of God and wars and things like that. But certainly all the planning is going forward. He is certainly looking forward to going and is determined to go. So I'm not -- that's not a contingency I worry about. I find other things to spend my worries are.
Q: Good morning, Mr. Ambassador. I am -- (name inaudible) -- from Chinese Institute of International Studies. I've got two questions about APEC. Now, as I know, the coming APEC meeting will discuss the issues on the WTO next round negotiations. My question is, what suggestions will the United States put forward on this topic? My second question is on Ecotech (sp) Corporation. Besides the (will?) of trade and investment, liberalization and facilitation -- (inaudible) -- of APEC. So I want to know, what progress was made -- (inaudible) -- Ecotech Corporation? What specific arrangements have been made?
AMB. BOUCHER: There's a broad agenda in the Ecotech side of APEC. A lot of the projects, a lot of the programs that we engage in, are designed to help people implement their commitments, carry out the better policies that APEC has talked about and recommended. We've taken steps to improve pollution control. This project in Shanghai is a good example of where we're doing a project that contributes to better trade conditions. There's a lot of social infrastructure work that's being done. There's a lot of training that's being done. So really, Ecotech is an integral part of all the other activity, whether it's facilitation, liberalization, reform, whatever else is going on in APEC.
Having said that, I forgot the first part of your question. Doris, did you write it down?
MODERATOR: I didn't get it, no.
AMB. BOUCHER: Okay.
MODERATOR: But we're out of time.
AMB. BOUCHER: Oh, well, I don't have time to answer the first part of your question. But I'll answer it when I come to Beijing.
MODERATOR: Okay. And with that, I'm afraid our program must come to a close. But many thanks to our participants in Wellington, Beijing, Tokyo, Manila and Hong Kong. And good luck with your summit next month. And my great thanks as well to Ambassador Richard Boucher, the United States senior official for APEC. Good luck to you as well, sir.
And for all of us at Worldnet, I'm Doris McMillon. Good day.
(end transcript)
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