*EPF408 10/12/00
Transcript: USTR Barshefsky Oct. 12 Beijing Press Conference
(China must fully implement bilateral WTO commitments) (5570)

While acknowledging the difficulty China faces in putting the items it agreed to in bilateral talks with the United States into its final accession document for entry to the World Trade Organization (WTO), U.S. Trade Representative (USTR) Charlene Barshefsky emphasized "the absolute importance of full implementation by China of its bilateral commitments" in an October 12 press conference in Beijing.

Barshefsky, who left from the United States for China one day after President Clinton signed into law the bill that grants China Permanent Normal Trade Relations (PNTR) status, referred to Chinese Premier Zhu Rongji's "emphatic, absolutely emphatic, declaration that China is not, and will not back away from its bilateral commitments made with the U.S. or with any of its other trading partners."

"The Premier was very animated, very emphatic about this point," Barshefsky added.

China could enter the WTO during this year, she suggested.

The United States, Barshefsky said, "will move as fast as China wants to move."

The bilateral negotiation between the United States and China is completed, she said, "PNTR has been passed."

Once China's final accession package is finished, Barshefsky said, "the President will be in a position to certify that package to the Congress per our legislation."

The issue, she said, "is how rapidly the work can be done."

If, Barshefsky said, "the parties proceed with dispatch, particularly China, but the other parties as well, then it can still be done this year."

Following is a transcript of the press conference:

(begin transcript)

USTR Charlene Barshefsky Press Conference
October 12, 2000
Beijing, China

AMBASSADOR BARSHEFSKY: You, of course, all know our Ambassador Prueher, Bob Novick, General Counsel at USTR and Don Phillips who heads our China shop. Let me make a couple of remarks and then I will take questions. As you know, the U.S., the EU and other WTO members have been working very hard on China's accession. It's no secret that the September working party meetings in Geneva yielded only modest progress. And what we, and Europe, and others had been struggling with is how best to move this process along, bearing in mind that the process is no longer bilateral, but instead, is now in Geneva with a group of forty countries which form the working party on China's accession. And as you can imagine, when you add that many players into the mix, the issues are many and varied and often there is a lot of complexity that is added in that might not be there in a bilateral setting. During the September working party meetings, Shi Guangsheng, my counterpart, and I had a very long discussion and he had suggested that we get together. It has taken some time to set that meeting up, because when I come here, I see him, I see Zhu Rongji, as you know, and others. But that is what accounts for the timing of my trip now. We started to try and set this trip up mid-September.

The reason for the trip is two-fold. First, to discuss with Premier Zhu and with Minister Shi a number of issues relevant to the accession process. There is a large array of issues. This is common to every accession. And it is also common in every accession that the acceding country gets somewhat overwhelmed by the extent and the number of the issues. Because, again, you are dealing with forty countries, and not just with one or two. Second, to distill for China the issues that its negotiators should be prepared to address in the next working party meeting which would likely be in the last week in October or first week in November. By distilling what China needs to address, the question for the working party is how, exactly, will China's commitments, made in the bilateral agreements, be fully memorialized in the final accession package. This is incredibly complicated. Third, of course, I wanted to emphasize the absolute importance of full implementation by China of its bilateral commitments. Those are the three purposes for the trip, all of which Shi and I had discussed in mid-September.

The meetings -- we began meeting this morning at about nine or nine-thirty, and we just broke up about three o'clock -- first with Premier Zhu and then Minister Shi. I thought the meetings we had were very good, quite constructive. Our teams will continue to meet tomorrow all day, and then we will take it from there. I think the most significant aspect of the meeting with Premier Zhu was his emphatic, absolutely emphatic, declaration that China is not, and will not back away from its bilateral commitments made with the U.S. or with any of its other trading partners. The Premier was very animated, very emphatic about this point. With respect to my meetings with Minister Shi, we went through the full range of issues that we believe that China will need to be prepared to address. I think there is a much better basis, now, of understanding of these issues. As I said, our teams will continue to meet. Last point, we are, as you know firmly committed to China's rapid accession. You all saw, I am sure, the pictures of the bill signing ceremony yesterday, on PNTR, which both the Premier and the Trade Minister thanked President Clinton for. We and a number of our trading partners still envision, hope, that China's working party requirements will be completed this year, and that it will be a member of the WTO. But the speed with which this will be done will depend in large part upon China, and on how quickly the working party as a whole -- all forty countries -- can complete the work that is required. But most especially, as in every accession, there is a substantial burden that falls on the acceding country. That is simply how the process works. So that is where we are, and I am happy to take questions.

Q: I am Ian Johnson with the Wall Street Journal. Would it be fair to say that after the September meetings that the talks have stalled, and do you think they are not stalled any more now? And even though it is theoretically possible for China to get in by the end of the year, isn't it highly unlikely, given the amount of time and the various processes that have to go on in Geneva?

AMBASSADOR BARSHEFSKY: I think on your second point, I am not sure I would want to quantify the likeliness or unlikeliness except to say that we, Europe, and others can still envision China's entry this year. There is a way that that can happen, but a lot now depends on speed and vigor, and we will move as fast as China wants to move. The U.S. is done, in other words, the bilateral is done, PNTR has been passed. Once the final accession package is finished, the President will be in a position to certify that package to the Congress per our legislation. So the issue now is how rapidly the work can be done. But if the parties proceed with dispatch, particularly China, but the other parties as well, then it can still be done this year. But time is of the essence, certainly, given where the calendar is. On the question of the September working party meetings, I think it is fair to say that virtually every country in the working party felt that the negotiations -- I don't know that the word "stalled" is right -- I think, felt that the negotiations had devolved into something not very well organized, not able to be grasped very readily by China -- this is very common; it happens in many accessions -- as well as by the other countries. I do not want to characterize the state of negotiations now. We will have a working party meeting coming up in three weeks or so, and we will be able at that point to see how rapidly things move. But I do think that this trip will help crystallize for the Chinese the range of issues in specific that need to be dealt with and that need to be a little better understood in terms of their memorialization in the final protocol of the accession.

Q: I am Lisa Weaver, CNN. Did the Chinese make clear to you, at all, which sectors they are worried about protecting, in any way at all?

AMBASSADOR BARSHEFSKY: Not at all, and I thought the Premier's comments were particularly good in the sense that, as you know, in our bilateral agreement, as well as in their agreement with Europe, China made a range of commitments that are absolutely across the board -- all goods, all services, all agriculture -- virtually without exception, or only very limited exception. And he made it absolutely clear, crystal clear, as I said, emphatically and with great animation that China would not back away, not even from a single commitment -- nothing.

Q: I am Michael Lev of the Chicago Tribune. Can you give us any clear idea with some examples perhaps of what had devolved?

AMBASSADOR BARSHEFSKY: Some of this is incredibly dry but very, very important. For example, in agriculture our bilateral agreement establishes a system of tariff-rate quotas. The question is how will those be administered? This is a very complicated area. It is very dry, but how they are administered affects market access. When you take an issue like that, which is in and of itself a large issue, and you add in forty countries, and everybody else's issues, and of course, many, many issues of your own, it just becomes a lot to deal with -- a lot for China. I also think that the Chinese in September were waiting to see if PNTR would pass. There was quite a bit of surmise on the part of a number of our trading partners that China was treading water, a little bit, just to see if PNTR would pass. Now, of course, that has been taken care of. But a lot of the issues are very dry, they are not sexy, but they bear on the way the commitments are memorialized, and the way the commitments themselves lead to effective market access.

Q: Are those technical issues or political issues?

AMBASSADOR BARSHEFSKY: Well, they are both. Some are technical, some are likely political, and I do not want to go into a great body of detail. But take an area like standards -- product standards. They are critical to market access. What happens when you have a regime where the standards differ [on the basis of being] imported versus domestic products? And if that is your regime, which it is today in China, how are you going to go about changing it to make it conform? That will require some political decision-making as to the how -- not the whether -- but the how you would change it. It is also a technical issue. So there are just a large number of issues of that sort. Nothing insurmountable, but each issue requires a certain amount of attention.

Q: I am Shai Oster from the Bureau of National Affairs. When you say that you need to make the issues crystal clear for the negotiators, are you saying that they were unprepared in some way?

AMBASSADOR BARSHEFSKY: No, it is just really a question of providing a kind of road map. Certain issues will fall into a certain kind of category process-wise in the WTO, or discipline-wise, in other words, certain WTO rules that might apply to a variety of issues. And it was really a question of sitting down and basically saying "here is how we see the issues grouping, that have been discussed in the working party, here is what we see as the kinds of decisions that you are going to need to make, or the kinds of issues that you are going to need to address. This will go on tomorrow as well when we continue our meetings. And we did very much this same kind of thing when we were negotiating the bilateral agreement. We gave China a roadmap years ago, followed by any one of a number of trips that went back through and said let's recapitulate, let's take a look at the constellation of issues, let's find a means of dealing with them on an orderly basis that yield the result we want -- in this case 'we' being a mutual term. Anyway, that is what we have been doing most of the day.

Q: Can you give some examples of other issues?

AMBASSADOR BARSHEFSKY: Well, I just gave one -- how does the agriculture quota work? How does it get administered? Product standards? How is the current regime in China going to change, and what will that mean for the WTO commitment made? Similar questions, how will trading rights be phased in? What specifically will the phase-in mechanism be? And obviously, there is a political component and there is a technical component. But this isn't very sexy stuff for the most part, but it is critical. Put aside China, it is critical for any accession.

Q: I am Jason Dean from Dow Jones Newswires. You personally have a lot of experience with negotiating with the Chinese. How much of what is happening now do you see as just typical of the Chinese negotiating pattern of pushing things off until the absolute last minute of their timetable? And on the other side, how much of this do you see as possibly signaling some kind of cold feet in the leadership, perhaps not at Zhu Rongji's level but perhaps at the ministerial level, among people who were never than gung-ho for WTO entry?

AMBASSADOR BARSHEFSKY: I am not at all persuaded there is an issue here of cold feet. What I am seeing is what I have seen in thirty accessions we have done in this administration, which is to say that the accession moves along, you make a bit of progress each time in each of the working parties. And at some point, and this happens with almost every country, there is a jumble of issues on the table. They are not really sorted out, perhaps, in the best way. It is hard to see the light at the end of the tunnel and things slow down a little bit until you step back, sit down and go through it all. We see this all the time in every accession we have dealt with. And I am talking now, in many of the accessions of very small economies, you see a very similar pattern. So I am not overly concerned. The issue with China's accession is no longer whether, it is when. And as I said, our hope would still be for this year. But that will depend on the speed with which China can move.

Q: When you say your hope for accession this year, do you mean that the hope is that they can actually join the WTO as opposed to just finishing the working party stage of the process?

AMBASSADOR BARSHEFSKY: Well, the way it typically works is -- you do your bilaterals; you finish the working party process; then, among the general body of the WTO there is a "vote" -- everything proceeds by consensus -- there is a "vote", which would be both China and Taiwan, of course. Then there is a process called "depositing the instruments of ratification" -- that's a formal process by which you say, "yes our relevant legal bodies have approved the accession; you deposit the series of formal documents; and under the rules there is a thirty-day mandatory period so that you can examine the documents; and then you are in. And that is how the process works.

Q: Cindy Sui from AFP. Did Mr. Zhu give you any indication today that China's willing to move quickly on some of the issues that you just mentioned so that China can join WTO by the end of this year?

AMBASSADOR BARSHEFSKY: He indicated that the accession is very important to China and that China has made extraordinary progress and taken extraordinary steps thus far. And I would agree with him wholeheartedly on that. So, while he and I didn't get into specific discussion of dates, certainly he has expressed on behalf of his government a deep commitment to WTO accession for China.

Q: Chris Bodeen from the Associated Press. A while ago China was making noise about Taiwan's official name as a trade area of China. Was that at all raised during your talks?

AMBASSADOR BARSHEFSKY: No, we didn't discuss that today. We had previously received assurances from the Chinese that it would abide by a 1992 decision taken in the WTO working party to which China had agreed that Taiwan would enter right after China as a separate customs territory, which is completely appropriate, period. A separate customs territory period.

Q: Is their interpretation of that the same as the U.S.?

AMBASSADOR BARSHEFSKY: Yes, that is how they would enter.

Q: Mike Forsythe, Bloomberg News: You said some other countries, mostly small countries, had experienced similar accession problems. I was wondering if you could give some examples and ....

AMBASSADOR BARSHEFSKY: I could give you about a million. I just had the Prime Minister of Moldova in. This happens with almost every accession and sometimes at various points in time, not just necessarily once. But there's a point at which there is, for many countries, overload. And that's the nature of the beast when you're talking about forty countries in a room, and there are a lot of issues, and there are a lot of countries that have different views, so the acceding country is hearing, "the answer is A" from country number one, "no the answer is C" from country number two and the question is, well how is all of that resolved? It is a very cumbersome process. It leads to good results, but it takes time to get there.

Q: Just another question as you had mentioned that the talks are going to continue tomorrow. It's my understanding that Shi Guangsheng and Zhu Rongji are both leaving the country for Japan...

AMBASSADOR BARSHEFSKY: Yes, and we have a very good work plan that our team, headed by Don Philips, and their team, headed by Mr. Yi will undertake tomorrow. We've isolated a range of issues which will be discussed further by those two teams and they are the teams that also are in Geneva, so we have continuity.

Q: So you won't be involved in the talks tomorrow then?

AMBASSADOR BARSHEFSKY: No. I plan tomorrow to spend a fair amount of time with our business community who's here, as well as with the Ambassador and the embassy.

Q: Lisa Weaver of CNN. I just wanted to ask: Do you get the sense that China would like to sort of get in the door with just a few trade regulations and rules and then once in, perhaps, let the details sort of filter in as they go, and then in that sense the WTO members' demands for all of these details to be hammered out and really clarified is overwhelming because they just didn't foresee having to have all this stuff hammered out?

AMBASSADOR BARSHEFSKY: China is not being asked to provide more detail than other accessions. Accessions are very detailed because the WTO is a contractual institution. That is, the commitments you make are fully enforceable, so the level of specificity member country want is very high. And that's appropriate because you're talking now about everybody's rights, including rights if you have a dispute and how those rights get resolved. You're looking here at an accession covering a very large economy. This is a much bigger accession than anything we've done for many, many, many, many years. This is a huge economy in WTO terms because China is an export powerhouse. So this is a huge economy and you have the complication in addition that China is an economy in transition, so you have to get from where China is now economically to, through the bilateral agreements negotiated, where it plans to end up as a rather transformed economy. So, there's a level of complication here owing to the size of China's economy and the fact that it's an economy in transition that isn't characteristic of most of the other accessions that we've done. And that's because most big countries are in the WTO already, China and Russia being the two big exceptions. Ukraine, three big exceptions. So, I think what we see is a combination of all of those factors coming into play, as well as the situation that we hit in every accession, even the smallest, where countries simply feel "whoa, this is just too much coming at me."

Q: About two weeks ago, five Latin American countries with which China doesn't have official ties, came forward stating that, in fact, they had yet to sign bilateral trade agreements with China, despite the fact that China maintains that only the deal with Mexico remains outstanding. Is this something that the working party is taking seriously and could it in any way affect this whole accession process?

AMBASSADOR BARSHEFSKY: The working party doesn't really get involved in the bilateral negotiations. Certainly, we all know that China and Mexico have not yet closed out, though I would expect that that could happen relatively easily. There are some smaller countries in our hemisphere which haven't yet closed out, but these are very simple bilateral agreements to do. I don't see the bilateral side of this as dictating timing. The timing really is a question of when the working party can complete its work and that will largely be a function of how quickly China can move.

Q: Eric Eckholm with the New York Times: In the last couple of days there have been some reports in the press, I can't remember which paper, perhaps my own, or perhaps my leading competitor, quoting American officials that there have been more political disputes and that Chinese officials have raised this old thing about "treat us like a developing country, we want to slow down certain schedules.." and so on. There was extensive discussion in some articles.

AMBASSADOR BARSHEFSKY: That wasn't from an American official.

Q: OK. Are you saying that that did not happen? That there's been no dispute of that nature.

AMBASSADOR BARSHEFSKY: The issue of whether China is a developing country has been an issue that has always been with us in the negotiation. We have always taken the position, and continue to take the position, that it doesn't matter what China calls itself. What matters are the specific commitments China makes. Because we've taken that approach, we were able to conclude a bilateral agreement in which, in many ways, China goes beyond what developing countries do. In some ways, China does just what developing countries do. In other words, each negotiation is tailored to the country involved. At the end of the process, countries self-select: are they developing or developed? That doesn't affect the commitments they've made. So, I always found this debate of developing country status rather a red herring. Certainly, China is not a developed country. On the other hand, it has a well-developed international trade regime and is one of the world's largest exporters, so it's a funny hybrid which you also don't see very frequently. The accession agreement that we did with China reflects that hybrid quality. Certainly, there'll be political decisions the Chinese leadership will have to make. I've given you some examples. There are many examples. And in most countries you see political leaders getting involved in the accession process and in the protocol because that's what's taken to the relevant Congress or the legislative body, that's the treaty. So everybody gets involved. But, the developing country has been with us for fourteen years.

Q: This really pertains to the way that this has been bogged down since September. You're describing a rather benign set of, overwhelmed with detail process. Some of these reports describe a much more pointed debate about whether China can more slowly open its markets or not.

AMBASSADOR BARSHEFSKY: Let me make a couple of things clear. I posited a couple of reasons September came out the way it did. One was overwhelmed. One was PNTR had not yet passed and there was speculation that China was essentially treading water waiting for PNTR to pass. And the third, which I will add is, talks are talks and all countries want to try and do less if they can. That's the nature of WTO accession negotiations for every country. China is no different from anybody else in that regard. Having said that, I was pleased that Premier Zhu was as emphatic as he was with respect to China's bona fides. Now, obviously we have to see that translated into the protocol of accession. We have to see that commitment memorialized by China in a concrete way in its protocol of accession, but the fact that the Premier was as strong and unequivocal as he was, at least suggests that to the extent some in China questioned the commitments made, the resolve here is that they will be implemented.

Q: If it's not a question of if but when, what exactly is the significance of this end of the year deadline? The only thing I can think of is the change in the U.S. administration. What are the other repercussions of slopping over into next year?

AMBASSADOR BARSHEFSKY: First of all, the year 2000 was a deadline first enunciated by China which looked upon this year as simply a marker year as many of us have. The year 2000 comes once and it seems a significant year. From our point of view, of course, we would like to get the accession done as soon as possible. But, but, we have always let substance be the keystone. Always. We've always proceeded methodically and meticulously and that will not change. Absolutely will not change. We'll continue to pursue this as we've always pursued it. But the issue first arose because China and many of the working party members felt, "Wouldn't 2000 be a great year to have this done?" We agreed with that absolutely. Absolutely.

Q: But two days into 2001 doesn't delay by another year the timing of other things? There's no money issue for example involved getting into 2001?

AMBASSADOR BARSHEFSKY: Some commitments that China made become effective on date of accession. That's typically in the services area, which is common among the way accessions are done. But things like tariff commitments are bound by a beginning date regardless of the date of accession. So, there's no prejudice. If you accede late, you've got to catch up in terms of your tariff cuts because you're bounded by a series of dates. Services commitments, in the main, not all but in the main, begin as of date of accession and then are pegged to dates from that point on, intervals of six months or twelve months or whatever, down the line as you liberalize further. So, if China does not accede this year, on the services side, the benefits won't begin to be realized until accession. On the tariff side, China would have to itself catch-up and reach the point of tariff concession it would have been had it entered now.

Q: Does a change in administration affect it?

AMBASSADOR BARSHEFSKY: The change of administration doesn't affect it at all. Not at all because remember how the PNTR legislation works. That is, we've done the bilateral agreement. The President has to certify to Congress that the final accession package does not in any way diminish the bilateral agreement and that forms the basis of the President's certification for PNTR. So, any President would be bound by the terms of our bilateral agreement ensuring that the final protocol of accession does not in any way undercut or diminish that agreement and then the certification process.

Q: You mentioned agriculture and some other sections as places that needed to be clarified. What about, you mentioned some other areas and specifically I'm interested in telecommunications if that has been an issue that sort of got slowed down. There's also been a sense, at least from some press reports, that they're trying to renegotiate stuff that's already been concluded in the bilateral talks. Has that in fact been the case? And some of the Europeans have complained that other issues that they've promised, for example issuing licenses for insurance companies, that the Chinese have been slowing down. Is that also something that the U.S. has been confronted with in this process?

AMBASSADOR BARSHEFSKY: No. The answer to your last question is no. I would go back to the point I made before. WTO accession is a series of talks, first at the bilateral level, then in the multilateral working party. Every country that accedes would like to do less rather than more. Every country. China is no exception to that. Certainly if they can get in doing less, being less specific in areas, they would want to do that. That, though, won't suffice for the working party and the working party has a rather unanimous view of the situation. You see this typically in working parties. That is to say, more specificity, more specificity in the protocol in the descriptive portions of how commitments will be implemented or what certain commitments mean. You'll see much more specificity, not less. And the accessions as they've gone on, even over the course of our administration, have gotten much, much more specific. That is the trend. That's how it is. And that is certainly the view of the working party with respect to China and Taiwan, as well as even the accession pending now with Russia. Or rather the working party work now with Russia. Greater specificity, much greater specificity.

Q: Wang Shuo from Finance Magazine. China State Council has just passed two important bills. One is on telecom and the other is on the internet. I wonder did you notice that and what is your comment?

AMBASSADOR BARSHEFSKY: I'm familiar with both and to the extent that there are any inconsistencies in those laws with China's WTO commitments, part of China implementing its commitments will be obviously to alter those laws. I think Joe wanted to say something.

AMBASSADOR PRUEHER: I just wanted to make a couple of points from the Embassy's vantage point. First, I'd like to re-emphasize how important it was that Premier Zhu reiterated his steadfast commitment which has led us to the view that it's not whether but when and that China will back up all the commitments it made. They will not back down from the commitments they have made.

The other thing that has come out in Charlene's presentation to you, if you didn't know about it already, is that even under the best of circumstances, there's a huge amount of work involved once the bilateral agreements are made getting through the working party. Geneva is now the work site for China's accession to WTO and there's a lot of work going on there.

And the other point she made a couple of times is that the difference with China is it is already a significant trading partner. This came out in the discussions today a lot. And they have a lot of patterns for doing business that are not necessarily WTO-compliant. So, instead of just forming new ones, they have to back away from those and then move into new ones.

The fourth point I want to make is to thank Charlene for coming here. I think of it as the bilateral architect coming out to visit the work site a little bit, though I think Geneva really is the place. If you haven't known her before, you can tell from her thoroughness, her acumen and the enthusiasm, energy and style that she brings to this negotiation, it would not be going forward as well without her. So, I think if the talks in Geneva, which are hard work and are going a little slowly, have an injection of Charlene Barshefsky's enthusiasm, it would certainly jack up the process. We thank you very much for that.

AMBASSADOR BARSHEFSKY: Thank you. I would add just one final point which is that my European counterpart will be here in about two or three weeks. We and Europe, as many of you know, have been very close collaborators on China's accession for many, many years. I would expect that the array of issues that we have talked about and are talking about with the Chinese now, in terms of the protocol and the working party report and so on, will also be reviewed by the Europeans with the Chinese. The Japanese are also reviewing a number of these issues. So, you have a lot of, I would say, heavy hitters in the working party trying to better rationalize the way this work is proceeding to make much more substantial progress. But again, the key will be China. Thank you.

(end transcript)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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