*EPF302 10/17/01
Transcript: U.S. Trade Rep. Zoellick Remarks to APEC Ministerial
(Pushes governments to launch new global trade round) (2100)

U.S. Trade Representative Robert Zoellick is urging Asia-Pacific governments to focus their energies on launching a new round of global trade talks at the World Trade Organization (WTO) meeting planned for early November.

"The price of failure is very high in terms of confidence for the global economy and in terms of the strength of the WTO itself," Zoellick said during ministerial talks October 17 in Shanghai, China. Bilateral and regional trade agreements are steps in the right direction, "but they need to be complemented by a system of strong global rules," he said. "I also think that the WTO has been falling behind changes in the business world and in the economic climate, and so it has to catch up."

Zoellick noted that trade ministers face a number of obstacles, including differences over agriculture subsidies. He reiterated the U.S. position in favor of focusing the agenda on market access for agriculture goods and services, but acknowledged that Japan and the European Union prefer a broader agenda. He said that in order to bridge the gap, governments must approach the WTO talks "with a substantive agenda, but also with good attention to political sensitivities for all our countries."

He told the APEC ministers that they have a key role to play as members of an organization focused on promoting easier and more efficient trade. "I think it's important that we maintain the liberalization ethos within APEC," Zoellick said.

To that end, the Shanghai Accord developed during the ministers' meeting sends a good signal, Zoellick said, noting that the document expresses firm support for open trade policies and greater transparency in government, and urges agreement on measures to reduce the costs of trade by removing bureaucratic red tape.

Trade issues have gained in importance since the September 11 terrorist attacks against the United States, he said, because trade liberalization can be an effective way to "boost market confidence at an important point" and to counter the protectionist tendencies that arise during difficult times.

"I think that we can use trade liberalization to lower the added premium for risk that is increased because of market uncertainty and fears," Zoellick added. "I am certainly well aware that this added premium is most important for developing countries because I think they have been hit the hardest."

The ministerial talks were part of the annual Asia-Pacific Economic Cooperation (APEC) forum, which culminates October 20-21 with meetings of 21 regional leaders including President Bush, Russian President Vladimir Putin and Chinese President Jiang Zemin.

Following is a transcript of Zoellick's remarks:

(begin transcript)

Office of the U.S. Trade Representative
(At APEC in Shanghai, China)
October 17, 2001

Statement at the Ministerial Meeting By Ambassador Robert Zoellick

First, Mr. Chairman, as a former Under Secretary of State, I would like to thank you for having the rare honor for Trade Ministers to sit with Foreign Ministers, for I know what a special privilege that is. I would also like to thank you, Chairman, for the excellent arrangements and warm hospitality which I think all of us encountered from the very moment that we arrived in Shanghai. With the hard work of you and your colleagues we had a very successful meeting in June and since then I can see that Shanghai itself looks even more extraordinary. I'd also like to take a brief moment to thank everyone around the table for the statements of sympathy and support that we as a government received and that I personally received from many of you after the attacks of September 11th. As Minister Pettigrew mentioned, the destruction attacked people from over 60 nations, all faiths -- including about 500 Muslims -- and I think, as Minister Rafidah mentioned, this is a tragedy that requires a response that is economic and political as well as military. So I think, Mr. Chairman, we meet at a very important moment.

The global economy is slowing; so is international trade. The trade of Canada, Japan and the United States in the first seven months of the year fell about 2-1/2 percent. That was in contrast with an increase for those three countries of about 19 percent last year. If 2001 continues as it has so far, this will be the first year since 1982 that the United States trade has actually fallen. Given that last year we bought some seven hundred billion dollars from the countries around this table, that loss will affect all of us. So I think we have some important work to do.

I believe, and I think all of us believe, we can use trade liberalization to boost market confidence at an important point. We can use trade liberalization to counter protectionism that always arises during difficult times, in my country as well as others. I think that we can use trade liberalization to lower the added premium for risk that is increased because of market uncertainty and fears. I am certainly well aware that this added premium is most important for developing countries because I think they have been hit the hardest. I have seen this with my own eyes in the work that people have been trying to do in Indonesia, or Peru, or Malaysia, or Singapore -- countries that made impressive economic reforms and now have a taller hill to climb. I also think that we can use trade liberalization to demonstrate the values of openness and a peaceful exchange, because we cannot retreat in the face of those whose beliefs are focused on destruction not creation, and those who are focused on killing with intolerance as opposed to living with tolerance.

President Bush has emphasized throughout the year since he took office that the United States will promote trade liberalization globally, regionally, and bilaterally. Globally, we are delighted, Mr. Chairman, as you well know from our work together, that we will now finally, after 15 years, have China and Chinese Taipei enter the WTO. It's a major accomplishment for both of you and for the world trading system. I also had an opportunity to visit Moscow recently and I am certainly of the view that President Putin is very strongly committed, as are his colleagues, to move Russia's accession forward quickly. I believe that we should help them accomplish this goal. I am also pleased that we were able to complete our bilateral trade agreement with Vietnam, and I think all of us believe that the next step would be for Vietnam to enter the WTO.

Now here we have an opportunity, as my friend Brian said, to reverse the failure in Seattle to launch new global trade negotiations. There is a stain from Seattle that hangs over the WTO. He said, very clearly, why that needs to be erased. In June, with your strong leadership, Mr. Chairman, this organization set forth a strong vision of the benefits of moving forward the WTO round and I frankly think it helped it get some momentum at a very important time. So I hope now that this group and our leaders will also give a strong push as we approach the final weeks. The price of failure is very high in terms of confidence for the global economy and in terms of the strength of the WTO itself. All of us know that there has been a movement for various bilateral and regional accords. We have all been part of them. I think they can play an important role in liberalization but they need to be complemented by a system of strong global rules. I also think that the WTO has been falling behind changes in the business world and in the economic climate, and so it has to catch up.

Now Minister Yeo described the work in Singapore, I think very well, as well as the challenges. So I will just make one point on that topic and that is to recall that our task over the next three weeks is to launch a negotiation -- not to complete a negotiation. Our task is to draft a document that gets us started. We don't have to finish. I think, therefore, we need to approach this as a blend of a good substantive agenda, but also with good attention to political sensitivities for all our countries. From the perspective of the United States, we would probably find ourselves most aligned with many of the developing countries in preferring an agenda that focuses on market access for agriculture goods and services. But we are realists and we acknowledge that our friends from Japan and the European Union seek a broader agenda. So, we need to bridge those gaps. We need to be creative in doing so. I personally associate myself with a number of points which Minister Rafidah mentioned about creativity in terms of trade capacity and phasing in these possibilities.

As in the past, I do think the countries of APEC do have a key role to play. At least in terms of the United States, you represent some two-thirds of our trade, so the countries around this room play a big role for us. I think it's important that we maintain the liberalization ethos within APEC. Therefore, Mr. Chairman, I am very pleased with the work that you have contributed in terms of developing the Shanghai Accord because I think it sends a good signal. It has three key components. One is to anchor the new economy [through] appropriate trade policies. A second is to support transparency principles to promote good governance. The third is to focus on trade facilitation to try to cut red tape and lower costs -- to try at least some rough idea of trying to reduce these costs by some five percent at a time that the events after September 11th have increased them for all of us.

I also think that the notion of a pathfinder initiative is a nice balance because it allows us to avoid a least common denominator approach. It allows countries to set a pace for further liberalization and stimulate a competitive dynamic. But it does so within an APEC framework so we can all benefit from this together. I think we should also be alert over the next few days, Mr. Chairman, about how we can use other dimensions of APEC to try to promote trade liberalization, whether globally or regionally. We have special dialogues, for example, on autos and biotechnology. I think that these, over time, can identify key issues and help us frame issues for a global discussion. APEC has always been distinguished for its integration of the private business community. Here again, we need to tap their knowledge and their support for trade liberalization. As a number of my colleagues have mentioned, the role of capacity building is increasingly vital if we are going to broaden the agenda and help countries take part in this trade liberalization in different ways.

Over the past three years the United States has spent about $1.3 billion on this subject, about $230 million in Asia. As I talk to some of my colleagues around the table, for example Minister Rojas or Minister Rafidah, I think all of us can do a better job of how we integrate that aid into specific aspects related to trade liberalization. So in sum, Mr. Chairman, I think we are at a point of a key decision. I noted not long ago that the UNDP pointed out that there has been a greater reduction in poverty in the world in the past 50 years than there has been in the prior 500 years. Part of that was due to the fact that over the past 50 years there has been an increase of trade flows of 17 times -- a very significant jump in historical terms. I think it's an excellent cause that we are in China and we are in Shanghai because China is a country, more than any other, that has recognized that the integration of reform, rule of law, growth and trade liberalization is vital to your country's well-being and to the improvement of the well-being of your people. I hope that coming out of this meeting in China all of us in APEC can send that broader signal to the world. I will rely on your leadership, Chairman, to help us do so.

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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