Pre- APEC Talk With Susan C. Schwab, US Trade Rep

Ambassador Susan C. Schwab, United States Trade Representative
Foreign Press Center Roundtable Briefing
Washington, DC
August 29, 2007
10:00 A.M. EDT

Pre-APEC Roundtable

AMBASSADOR SCHWAB: Good morning, everyone. Is Sean going to say something? You're going to start.

MR. SPICER: Well, I think the Ambassador is going to make a couple of quick comments. As you all know, she leaves for APEC later this week and we look forward to engaging in discussions as far as what's going on in APEC and be available to take some other questions. And we've got just shy of an hour with you all, so hopefully we can take any questions you have and go from there.

Without further ado, Ambassador Schwab, the U.S. Trade Rep.

AMBASSADOR SCHWAB: Thank you. I'm just going to keep my remarks very brief, so we have time for questions and discussions. We are very much looking forward to heading back to Australia. This is actually my third visit in a year, right, because we were -- last September we were in Australia for the 20th anniversary of the Cannes Group and July for a ministerial APEC ministerial, and now for our ministerial and obviously the APEC summit. And the Government of Australia has done a terrific job of organizing all of these meetings and I'm sure will again play host in a wonderful welcoming fashion that is characteristic of Australia.

Last year's APEC summit in Hanoi was very interesting and very useful. And this year, there are some new issues and we've got some issues that we have addressed in the past. If you think about APEC, you think about the countries represented, the economies represented. You're talking about 60 percent of global GDP and you're talking about 50 percent of global trade. And so we really are talking about a very, very significant region of the world. A lot of the conversation at APEC involves regional integration. And we're looking forward to receiving a report on further steps, on regional economic integration. The long-term prospect of a free trade area, the Asia Pacific, will be one of those topics.

In the meantime, though, since the FTAAP idea is a longer-term concept, we also have a lot going on, leading up to the implementation of the Bogor Goals in 2010. We have model chapters of free trade agreements that have been developed by APEC so that, given the network of bilateral and regional agreements that characterize the region, that there are some models that we can turn to.

And then of course, we will be talking about the Doha round, among other things. As you all know, the negotiating chairs of the agriculture and the industrial goods negotiating groups -- and the industrial groups negotiating group is referred to as NAMA -- Non-Agricultural Market Access. The agriculture in NAMA groups, their chairs issued draft negotiating papers in July. And when the WTO reconvenes or when everyone gets back to Geneva from their vacation in the first week of September, discussion will begin on the agriculture text. Second week in September discussion will begin on the NAMA text. And it is very important that the Doha round talks go forward on the basis of these texts and we are hoping that the ministers and the leaders at APEC next week will reinforce that message. There was a strong message that came out of the ministerial retreat that took place in July about Doha. That was before the text came out. But again, we're looking forward to reinforcing that message with our colleagues at the ministerial level and with the leaders.

Maybe I'll just stop there. Sean, was there anything else that I should have covered?

MR. SPICER: No, obviously, the other issue that we have when we return is we've got a heavy domestic agenda with four free trade agreements with Peru, Colombia, Panama and South Korea. And when the Ambassador returns, in fact, we'll work on the Doha agreement internationally. That will be the brunt of our domestic agenda.

AMBASSADOR SCHWAB: That's right. That's right. Exactly. Good.

MODERATOR: I'd like to remind everyone before we start, to make sure you say you're name and your news organization.

QUESTION: Dmitry Sidorov, Kommersant, Russian business and political daily. First of all, are you planning to have a meeting with Minister Medvedkov and how realistic are plans, the Russian plans to access WTO by the end of this year?

AMBASSADOR SCHWAB: We have -- we have had a lot of meetings going on during the last several months with Minister Medvedkov. My team has met with him sometimes bilaterally, sometimes with the EU, sometimes in Geneva with the working party. Russia's accession to the WTO is very important to the United States. We feel very strongly that Russia belongs in the WTO. And I'm looking forward to seeing Minister Gref, I hope, in Sydney.

And in November of last year, the United States and Russia concluded our own bilateral agreement on Russia's accession. And we are now working through the multilateral process in trying to do everything that we can to help facilitate Russia's entry into the WTO. As to timing, the timing ultimately rests with Russia and how quickly Russia is able to meet the obligations of entry into the WTO. There are some implementation issues, for example, associated with the bilateral agreement with the United States with some of the other bilateral agreements. But there are also some key issues associated with the multilateral framework that Minister Medvedkov is focused on. So the key really -- the key to the timing is in Russia's hands, but we are trying to do everything we can to help facilitate that.

QUESTION: And to follow up, if I may? What do you think about the -- as far as I understand the Russians' will offer the 2012 APEC meeting to take place in Vladivostock? What do you think about that?

AMBASSADOR SCHULTZ: I won't -- I'm not going to comment. There has not been a formal offer. I'm not going to comment on it.

QUESTION: Stay with Russia for a moment. Andrei Sitov from TASS. First off, PNTR. What will it take for the PNTR status to pass through Congress? And also, are you satisfied with how well the Russians are dealing with their intellectual property rights issues violations?

AMBASSADOR SCHWAB: Both good questions. On PNTR, obviously the President is on record and strongly supports the end of the application of the Jackson-Vanik restrictions on Russia. That requires congressional action here and we would like to see that congressional action sooner rather than later. It has not yet been scheduled, and I think from a practical perspective, the farther along Russia is in the accession process and the implementation of commitment, the easier it becomes to see a successful congressional action on PNTR. But we definitely look forward to Russia's PNTR.

In terms of intellectual property rights, that obviously is an issue, and improvement in protection for intellectual property in Russia will facilitate not just Russia's entry into the WTO but also action on PNTR here. And there is a mixed result so far. It's very clear that Russian authorities have been working very hard to improve intellectual property protection in Russia. I think there is a clear recognition on the part of President Putin and other Russian authorities that it is in Russia's own interest. It is in the interest of Russian consumers and Russian entrepreneurs, Russian inventors, Russian artists for their intellectual accomplishments to be protected. And there are legal and enforcement actions that need to move ahead so as to fully realize the importance of protecting IPR in Russia.

QUESTION: Could I ask about the free trade agreement for the Asia-Pacific? What are your expectations as far as APEC and APEC declaration is concerned about timing or commitment? And secondly, what do you say to the criticism or assertion that the U.S. is promoting this idea because you want to dominate the trade agenda in the region?

AMBASSADOR SCHWAB: APEC has 21 members. Look, on the free trade area -- prospect of a potential free trade area in the Asia-Pacific region, this is obviously a long-term prospect. And it's fully consistent, for example, with the Bogor Goals where we are supposed to see a significant liberalization in trade among developed country members of APEC by 2010 and developing country members of APEC by 2020. So this is a really a path that APEC has been on for some time, and I think there is a widespread recognition that we're talking about a longer term goal here, not an immediate exercise.

When we were in Cannes in July, we talked a lot about, you know, how would you operationalize, how would you get there. And there are a number of different ways you could do it. You could, you know, sort of start from scratch -- you've got 21 economies -- you could start from scratch, a blank sheet of paper and create a new agreement. You could take one of the existing agreements in the region, bilateral or one of the regional agreements, and then build on it and make that the basis for a broader, you know, APEC-wide FTAAP. Or you could take the network or spaghetti bowl of bilateral and regional deals in the region and try and knit them together. So those are three different options.

We're expecting a report to the leaders on prospects for an FTAAP. I don't think -- in fact if you look at free trade agreements, whether you look at the U.S. -- FTAs that the U.S. is a party to or other regional agreements, particularly agreements in the Asia-Pacific region already, there is a network that really has no -- when you're in an FTA, there are no dominant partners. I mean, you are talking about engagement on a free and fair basis, whether it's bilateral or regional. We tend -- the U.S. tends to negotiate what we consider to be gold standard free trade agreements, very comprehensive, very broad, very deep as with Australia, for example, as with Singapore, and as with Korea. We also have free trade agreements with a number of other APEC members: Chile being an example, Mexico, Canada, for example, Peru. So this network makes for a very, very interesting network, but you have ASEAN and you have -- you know, you've got a number of other P4 and a lot of bilateral deals in the region that would need to be accommodated on the way to an FTAAP. So it's a complicated proposition and it is, as I said, a long-term vision, long-term goal.

QUESTION: Can I just follow up on that one? Anne Davies from The Sydney Morning Herald. There's been talk about doing some sort of pilot out of -- on the free trade area. Which countries do you think are well placed to be part of that early pilot? Is there any discussion around that --

AMBASSADOR SCHWAB: Well, that's another -- that's sort of a variation on taking something that exists and building on it, for example. I think in terms of -- when you get to the point about operationalizing, it is too early to pick a specific approach. The idea of the pilot -- I think the answer to your question is you'd have to start with countries that really want to do it. I mean, so this would be self-selected countries that are prepared to take on the responsibilities associated with an FTA. But again, as I said, there are multiple ways of getting -- you know, APEC is very complicated in terms of the economies associated with it, different levels of development. You've got developed countries, you've got developing countries, you've got advanced developing countries, you've got poorer developing countries, you have, as I said, this network of existing agreements. And so, for example, the kind of model measures approach that we've been taking, while perhaps slow, it's steady and it is a way of building a very practical, you know, framework over time.

But ultimately, if a decision was made to start with a pilot, and I must say -- I mean, the pilot, when you talk about pilot, is that sort of the model of taking an existing regional or bilateral deal and building on it?

QUESTION: Yeah, or taking two or three that are still not -- say, Korea, Singapore, Australia with it and America where there are common elements and building on that.

AMBASSADOR SCHWAB: Right. And I think that is the kind of thing that you would want to work through not just with the countries -- not just with the volunteers but also with other members of APEC that would have an opinion about whether this is a way -- you know, is this a good path, is this a good approach.

QUESTION: Geoff Elliott from The Australian. Just further --

AMBASSADOR SCHWAB: Those are our hosts. Will be our hosts, then back over --

QUESTION: Yeah, right -- yeah. Just again on FTAAP, I mean, the history shows after Seattle, for instance, there was a strong statement on trade then and it helped -- it helped galvanize perhaps the Europeans into the Uruguay round. It sparked the next round of talks with them and the ultimate conclusion of Uruguay. Is there a strong statement in the offering out of Sydney? Is that your hope on trade, on a regional trade agreement that somehow sparks Doha?

AMBASSADOR SCHWAB: I think in terms -- if you look at the statements that came -- ministerial statements that came out in July, the stronger statement is likely to be the Doha statement, because that's the immediate -- the immediate focus. And there is a real concern, and I think on the part of most APEC members, a real commitment to seeing the Doha round reach a successful conclusion.

We believe and it was clear that most APEC members, at least the trade ministers, believe that the concept of FTAAP is fully consistent with the concept of a Doha round, you know, a multilateral round. What you end up with in your multilateral round is you have many more economies affected, so they're much broader in terms of participants, but the impact is shallower; whereas in your bilateral or your regional FTAs, they're much more comprehensive in terms of the content and much deeper in terms of the impact.

And so we've used our free trade agreements in many cases to try out approaches to trade facilitation that perhaps then later can be transferred into a multilateral venue, I mean, it's a way of trying out concepts. So I think, you know, the statement doesn't exist yet. So you're asking me to comment on a statement that is being written. Clearly, the Government of Australia has the lead on this statement, on the leader's statement, and that has not been made available yet.

But presumably, if it is teed off of, if it reflects what the ministers -- the trade ministers discussed in July, there will be more of an emphasis on Doha than on FTAAP, but that reflects the -- you know, it sort of reflects the state of play and where we are in the queue and in the timing.

QUESTION: My name is Donghui Yu with the China Press. And Secretary (inaudible) said the United States will talk about the (inaudible) safety issue in APEC. And I just wonder if the United States will just raise the concern with the China side or will propose uncertain (ph) trend to establish a mechanism a mechanism in APEC or JCCP, towards China and the cooperation with all the member in this area or with China?

And my second question is some senators appear to suspend all the toy and fruit imports from China. Do you think it's practical -- and the elected way to solve this problem? What's the -- what's the best way to solve this problem?

AMBASSADOR SCHWAB: Good questions. On the first question on food safety and APEC, this is actually not a U.S. initiative. This is an APEC agenda item. China has been involved in helping to shape this item on the APEC agenda. A number of other economies in APEC have been involved in shaping this. You know, food safety is something that concerns all of us. It concerns Chinese citizens, it concerns American citizens, it concerns Malaysian citizens. You know, it's something that we all -- we all want to know that the food that we eat is safe and we all want to know that the toys our children play with are safe and so on. And so it's a good topic for APEC members to discuss and as I said, China has been involved, just like the U.S. has been involved, in shaping that agenda item.

I think the key is this balance between making absolutely certain that everyone's food is safe, that the food that we consume is safe and not creating artificial barriers to trade or using health and safety as an excuse to close markets -- you know, as an excuse for protectionism. And in a way that sort of segues into your second question, because the key is to make sure every country, every -- you know, sovereign entity, economy, wants to be and has a right to be absolutely certain that their people, their population is going to be safe.

On the other hand, it is critical that this not -- the approach that is taken be an approach that is effective without, as I said, becoming an excuse for protection. And there are some countries that have used, for example, SPS -- sanitary phytosanitary measures as an excuse to keep out safe products. It's a problem the United States has on beef, as you know. And so we are very conscience of the need to protect legitimate health and safety concerns -- address legitimate health and safety concerns without resorting to bad science or no science and just using this as an excuse to keep out products. So that's the kind of thing that APEC -- it's a good topic for APEC to discuss, because APEC -- we talk a lot about trade facilitation and how does that fit in with making sure that our populations are protected.

QUESTION: Jose Carreno with the El Universal, Mexico. Two questions: What will be the role of security as a means of these proposals to secure U.S. ports and borders (ph) et cetera? Do you have (inaudible) in the conversations in Australia? And second, in terms of the free trade, there seems to be very little appetite from this country for more free trade agreements. How could the U.S. Administration guarantee the rest of the countries of APEC that there will be a way for more free trade in the close or near -- in the future, considering for instance that you have -- that there are agreements at this point that they're frozen in Congress?

AMBASSADOR SCHWAB: Congress is in recess right now. (Laughter.)

QUESTION: And they will be (inaudible) in September, anyway.

AMBASSADOR SCHWAB: Don't count on it. (Laughter.)

QUESTION: Are (inaudible) for instance?

AMBASSADOR SCHWAB: We have lined up -- I'll come back to that question. The issue of -- shall I start with --

QUESTION: Security.

AMBASSADOR SCHWAB: Security. Let me do that briefly, because in a way the answer on security is very similar to the answer on food safety, which is every country has a legitimate reason to protect its citizens, whether that's from, you know, tainted product or from terrorists. And no country is going to relinquish its right to protect its citizens. On the other hand, it is critical that -- again, that not be used as (a) an excuse for (inaudible) protection and (2) that it be implemented in a way that it's sensible, you know, that makes sense. And I think we are open to working with, and have been actively engaged with our trading partners about making sure that we strike that balance, just as every other country wants to strike that balance.

In terms of the intent of the United States Congress and the posture of the United States, we were commenting internally in my office this morning, those of us who have been involved in the international trade business a while, that every year, or every few years, somebody has to write stories about how protectionist the United States is becoming or how protectionist the United States Congress is. And I've been in and out of this business for almost 30 years and I have -- if you look at the data, the data does not bear out the assertion that somehow the Congress has become more protectionist. The Congress has passed, well, depending on how you count it, what, 11 free trade agreements that have been enacted, or free trade agreements with 11 countries that have been implemented since this President came into office.

We have two more that are pending, and we have two more pending entries in force and we have four more pending congressional action. In May, as you know, we reached a bipartisan accord with the Congress, designed to lay the groundwork for bipartisan action on the free trade agreements. It's taking longer than we would have liked, or our trade partners would have liked, but I think we've got a reasonable path forward. And the free trade agreements, starting with a Peru FTA, which we hope and expect to see action on in September. So you know, we're looking forward to seeing the free trade agreements move ahead.

In terms of the future trade agreements, we have agreements now through Colombia, Panama and Korea that need to be -- to go through the United States Congress and the President is fully committed to seeing all four of those go into law, go into effect.

And in terms of future agreements, the President has made very clear his support for an extension of trade promotion authority. The leaders of the Ways and Means and Finance Committees -- Senate Finance Committee, House and Ways and Means Committee -- has said that if there is a Doha round breakthrough that they would be prepared to look at trade promotion authority.

So I think we've laid out a reasonable path forward. Trade is never -- politically, trade has never been an easy sell in the Congress. It's so easy to demagogue trade. And this is not just in the United States. I would say with the exception -- let's say with the exception of Singapore, there is not a -- every country represented here deals with countries that have import sensitivities. And what is required to achieve market liberalization and market opening is political will, and the recognition that trade liberalization ultimately really benefits all of us and that where there's a negative impact from trade its impact usually is quite narrow in terms of who it affects.

But we need to be sensitive to that negative impact and make sure that we're helping those individuals and those communities who are negatively impacted, but doing so in a way that doesn't jeopardize economic growth and the rest of the economy. And I think that's something we deal with. It's something that Minister Rafidah and I have talked about on numerous occasions. I mean, she -- Minister Rafidah of Malaysia is the dean of -- she is the dean of the trade ministers. She has been a trade minister, I believe, longer than -- (laughter). I think we just celebrated her 20-year anniversary as trade minister. But she really -- I mean, she just -- you know, she has been through all of this and she does a magnificent job of articulating these issues.

And you know, you talk about free trade agreements. We're fully committed to continuing our FTA negotiations with Malaysia.

QUESTION: Salmy from Bernama. Just wondering about the (inaudible) and the U.S.-Malaysia FTA talks and what are the major stumbling blocks in the U.S. view. And where is it in terms of percentage-wise? Are you 80 percent near there? (Laughter.)

AMBASSADOR SCHWAB: You know, the problem with the percentage game is it's always the last 10 percent that's the hardest, right? So we're very far along in terms of the FTA negotiations with Malaysia. Obviously, the United States -- we will need trade promotion authority on our side to implement any trade agreement with -- FTA with Malaysia.

There are a number of outstanding issues. The toughest issues are always the ones at the end in any trade negotiation. So we have had conversations going on, I believe at least every month. My Deputy, Ambassador Bhatia, is on his way to or about to land in -- isn't he about to land in KL? Ambassador Bhatia is about to land in -- is just arriving in Malaysia as part of the U.S. -- official U.S. delegation celebrating 50 years of Malaysian independence. And we'll continue having conversations about the FTA going forward. I think it's something -- it -- free trade agreement is not a gift that one country gives to another. They're never easy to negotiate. But ultimately, they are gifts that we give to ourselves and our citizens. Our manufacturers and farmers become more competitive and our consumers get more quality and more choice in terms of the goods that they have access to.

QUESTION: I wonder if -- oh, I'm sorry.

QUESTION: Just a little bit. I'm just wondering talk by Rafidah about, you know, improvements (inaudible) does that hurt the talks?

AMBASSADOR SCHWAB: Yeah, I think Minister Rafidah -- Minister Rafidah's job is to reflect the national interests of Malaysia. My job is to reflect the national interest of the United States. I think both of us believe that both of our countries stand to benefit significantly from a free trade agreement, which is why we continue to pursue it. And Malaysia is not going to close a free trade agreement with the United States, but is -- that Minister Rafidah and others in the Government of Malaysia believe is contrary to the national interests of Malaysia, just as the United States is not going to -- and we won't close an FTA that we believe is inconsistent with our interests. So I think Minister Rafidah is a very strong advocate for Malaysia's policies and Malaysia's interests and that's good. It's good for Malaysia and it's good for the United States.

QUESTION: Beth Gorham from the Canadian Press. I wanted to ask you the perennial Canadian question about Softwood.

AMBASSADOR SCHWAB: Well --

QUESTION: (Laughter.) No meeting is complete without it. I was wondering if you could tell me if you think that the upcoming arbitration is a crucial test of the Softwood Lumber Agreement and also if the arbitration works, if it could be a model for other tough bilateral issues, rather than the WTO or NAFTA?

AMBASSADOR SCHWAB: As you know, we really regret the fact that we had to -- we've had to resort to arbitration. We are less than a year into an agreement that was designed to resolve a 20-year problem -- 24 years, 25 years. And we want to see this agreement work for the seven to nine year lifespan that was intended and is intended to operate. Unfortunately, we felt compelled to go to arbitration.

Now that we're there, we want to see it work. It's not in the trade arena and, I mean, as implied by your question. It's not something that we generally use. We have very little experience with this kind of arbitration. And so yes, the arbitration will be very significant in terms of telling us how successful the SLA will be, the Softwood Lumber Agreement. But it also will be very interesting for those of us with much more experience with WTO and NAFTA dispute resolution.

I think the key will be, you know, in the case of the WTO, we have a lot more experience with that kind of dispute resolution and the panel process. And the United States has a very strong record of, you know, living up to the decisions, the panel decisions and we push very hard for our trading partners to live up to or to, you know, respond to the panel decisions when they lose. And we'll see how it -- we'll see how it plays out in arbitration. It should be quite interesting. And as you know, this is an accelerated arbitration process where it's a six-month arbitration process, following up to two months where we identify potential arbitrators. We're going through that now.

QUESTION: Okay, just one quick one. Is there any sense of when you're going to file the complaint about the Ontario and Quebec support group -- industry support group?

AMBASSADOR SCHWAB: Within the next couple of weeks. And we had wanted to get -- we would -- wanted to get the ball rolling in terms of our principal concern was the lack of enforcement of the surge mechanism.

QUESTION: Again, Florence Chong, Asia Today. I wanted to go back to Doha round. I gather that the main thing in Pakistan group, they haven't got -- India was not quite happy with another tax. So I really want to try and understand exactly how far apart are the key players now -- at this current stage of the negotiation because they're -- we kept hearing deadlines and other deadlines. And exactly where are things now? And also realistically, what can be achieved during APEC?

AMBASSADOR SCHWAB: We -- as you noted, the talks in Pakistan in June broke down, really because India and Brazil didn't want to cut -- make any meaningful cuts in their industrial tariffs. The Doha round is designed -- is supposed to be a development round. And to generate economic development and alleviate poverty through trade, you need to create new trade flows. And the only way you create new trade flows is if you cut into applied tariff rates, you know, actual tariff rates, rather than bound rates, theoretical rates, allowable rates. And we also believe that while developed countries need to shoulder most of the burden, that advanced developing countries, you know, the rapidly emerging markets, have a critical role to play and have to make a contribution in terms of further opening their markets to each other and to lesser developing countries.

So if you're going to generate economic growth in this day and age, it is as important for India or Brazil or China to be opening their markets. Mexico, for example, Minister Sojo recognizes this, acknowledges this. Minister Rafidah has talked about this. So you've got, you know, emerging markets, rapidly growing markets that need to be the markets for each other and for 80 to 100 developing countries at a much lower level of development.

Those talks broke down -- those were among the G-4 -- U.S., EU, Brazil, India. The G-4 process is gone now. I mean, we were not able to create the kind of model, or propose a recommendation for our colleagues, so we are now in a multilateral process, back in the multilateral process where the papers have been presented by the chairs. We will have a better sense in September about the direction that we're going in and that's why the APEC member discussion about Doha becomes so important.

September 3rd is when the agriculture group will start its deliberations in Geneva. September 10th is when the NOMA group will start their deliberations in Geneva. And the question is will the text, will the draft text, be the basis for those negotiations and, you know, we believe the draft text has to be the basis for the negotiations. And I will be honest with you, the United States -- we are quite uncomfortable with some of the elements of the draft texts.

That said -- you know, and we would have written -- if I had written it, I would have written it differently. But you've got an organization with 150 members. The chairs -- in this case, the chair of the agriculture committee is Crawford Faulkner from New Zealand. The chair of the NOMA committee is Don Stephenson from Canada, actually both APEC members. Although when they write these texts, they're not doing it as representing their own national interests. They're doing it on behalf of the full.

But if there isn't -- I think there really needs to be a strong endorsement of the text as the basis for negotiations going forward. Otherwise, it's hard to imagine the WTO getting traction to move forward to propel the talks forward in September.

QUESTION: Lee from Yonhap News Agency of South Korea. I have two questions. First one is, is there any possibility of a renegotiation on some parts of a U.S.-Korea FTA?

AMBASSADOR SCHWAB: We do not intend to renegotiate. We do not intend to renegotiate.

QUESTION: For -- even then for (inaudible) issues?

AMBASSADOR SCHWAB: It's a good free trade agreement for both South Korea and the United States.

QUESTION: And second question --

AMBASSADOR SCHWAB: As is.

QUESTION: (Laughter.) Are you satisfied with the openness of a South Korean beef market?

AMBASSADOR SCHWAB: That's a different question. It is critically important -- and this really goes to the point we were talking about earlier about food safety. Every government has a responsibility to its citizens to be able to ensure that the food that is available to them is safe. That needs to be based on real science. And if countries adopt import standards that go beyond internationally agreed scientific basis, that can be an excuse that can be used as an excuse for import protection.

In the case of beef, in May, the OIE found the United States to be -- United States beef to be safe -- all ages, all products -- with the exception of SRMs, this very narrowly drawn set of products. This is an international standard, OIE, and it's time for Korea and Japan and China to recognize that American beef is fully safe, all products -- you know, all cuts of beef, all ages.

We're going through the consultative process to get that done. It is not tied directly to the FTA, but honestly, I can't imagine the Congress of the United States approving the free trade agreement without the beef issue being resolved. And I would note that President Roh and the Deputy Prime Minister and others have made very strong statements about Korea bringing its import regime into compliance with OIE standards. And we are looking forward to that being implemented.

QUESTION: Ambassador, Jose Katigbak, Philippine Star. Is the U.S. actively pursuing an FTA with ASEAN and how would this impact a similar deal with APEC?

AMBASSADOR SCHWAB: Well, that's a -- we have in the last year we reached -- we negotiated and signed a TIFA, Trade and Investment Framework Agreement, arrangement with ASEAN. And in many cases we have used TIFAs as building blocks for future free trade agreements. I mean, it's a step-by-step approach and we've used TIFAs as the basis for FTAs. We do not currently have -- planned an FTA negotiation with ASEAN. On the other hand, we have free trade agreements with several ASEAN members and are negotiating free trade agreements with others, so that's one approach.

And again, I go back to my points earlier about how do we get to an APEC-wide trade agreement and there are multiple ways of getting there. And you can knit together existing regional or bilateral deals, you could take an existing regional deal and build onto that with other members joining that or you could start from scratch, and so all of these approaches have potential when it comes to ASEAN and U.S. trade.

QUESTION: Ambassador, just --

AMBASSADOR SCHWAB: Everyone gets to ask a question.

QUESTION: Okay.

AMBASSADOR SCHWAB: Do we have first -- is there anyone who hasn't asked a question yet?

QUESTION: I was wondering do you support the U.S. appetite for trade -- American appetite for free trade. What are your best arguments for convincing an ordinary American that (inaudible)? How do you get through to him?

AMBASSADOR SCHWAB: How do you make the point?

QUESTION: Uh-huh.

AMBASSADOR SCHWAB: I think there are several levels on which you can make the point. One is sort of the macro level where you draw on statistics and you look at some of the studies put out by, for example, the Institute for International Economics, the Peterson Institute for International Economics, where trade liberalization over the years, you know, since World War II has accounted for -- what's the number, $9,000 per family of four, right -- for a family of four in the United States which is from trade liberalization. You look at the fact that -- if you look, for example, at U.S. economic growth rates, unemployment rates or employment rates, manufacturing output, all of those measures -- before NAFTA and the ten years before NAFTA in the Uruguay Round and in the ten years following NAFTA and the Uruguay Round, there was an improvement in every single one of those statistical measures: unemployment was down, economic growth was up, manufacturing output was up. So your first arguments are statistical arguments.

Your second set of arguments has to do with U.S. competitiveness and benefits to U.S. consumers. So if you are an American manufacturer, you really -- trade agreements help us to meet competition internationally before competition arrives in the United States. It helps a producer in the United States by virtue of importing parts, for example, to be more competitive, to create a more competitive product. Services flow with manufactured goods trade. And the single most important concept, and these are sort of the concepts associated with trade, is that the economic pie can grow. And the way trade is demigod, the way trade is attacked, is with an implicit notion that trade is a zero sum. That if you win, then I have to be losing in trade or vice versa. In fact, trade is a win-win and can be a win-win.

Your third -- I would say the third set of arguments really are at the micro level where you point out to an individual family that the fact that you can buy a pair of shoes, imported -- an imported pair of shoes that is cheaper today than ten years ago because of additional competition and imports in footwear, that the extra money that you save, the extra money that's in your pocket means you can buy books for your kids for school or a backpack for your kids for school. It means that if you are, you know, if you as a consumer have access to a broader array of products, higher quality, better prices, again, that you benefit as a consumer that also enables you to turn around and to buy more for your family. So those are sort of examples from broad statistical conceptual and then individual micro.

We also need to recognize, as I said, that there are individuals and individual firms and individual communities that are negatively impacted by trade. And in the United States, the estimate is that maybe two to three percent of those who are unemployed are -- can attribute that unemployment to trade. It's a very small number, unless you happen to be one of that two to three percent and that's a really big deal, if you're one of that two to three percent. And therefore, we need to use trade adjustment assistance and other unemployment type benefits to help those individuals, to support those individuals economically and to help them transition into other lines of work. We create -- this is a very vibrant economy. We create 17 million jobs a year in this economy. We lose 15 million jobs a year in this economy. And the challenge is to what extent are those individuals affected by the 15 million jobs that are lost going to be able to take advantage of the 17 million jobs that are created. And so it's -- and there you're getting into issues related to education, you get into issues related to safety nets.

MODERATOR: Ambassador Schwab has time for just a few more questions.

AMBASSADOR SCHWAB: You're going to have to choose, because I'm -- (laughter.)

QUESTION: Can I ask another one?

AMBASSADOR SCHWAB: Mr. Elliott.

QUESTION: Notwithstanding your robust defense earlier, all those hundreds of free traders up in Congress --

AMBASSADOR SCHWAB: I thought it was pretty good. (Laughter.)

QUESTION: The FTAs that have been struck in America over the last ten years or so have been in a climate of pretty good economic circumstances, though there's a lot of serious clouds on the horizon now. Would you concede that free trade is difficult to sell politically in times of economic downturn?

AMBASSADOR SCHWAB: No, I wouldn't even say that. Free trade is always a hard sell in any country, as I said, except Singapore. Singapore is just smarter than the rest of us about trade. (Laughter.)

I think that we obviously worry about the potential for partisanship in trade in this country. It's one of the reasons that we reached this historic deal in May with a Congress -- with congressional Democrats. Partisanship and the politics of trade associated with partisanship really would be damaging to the U.S. trade stance. But the Congress of the United States has passed more free trade agreements in the last six years than in the history of the United States Congress, some of them harder -- you know, harder to do than others.

At the present time the economy is very strong. And you look at the fundamental indicators when you're talking about economic growth, and particularly if you're talking about the impact of U.S. exports on our GDP growth last year, for example, I think 29 percent -- 29 percent of -- 29 or 24 -- of U.S. GDP growth last year was accounted for by our exports. But our, you know, economic growth is strong, our employment is low, manufacturing output is up. All of those indicators would dictate that we should be able to move ahead on an economic basis with free trade agreements moving through the Congress.

And it's worth noting -- it's worth noting that in the case of the Latin FTAs -- Peru, Colombia, Panama -- at the present time, those countries have preferential trade arrangements where they have almost unlimited access to the U.S. market already. The problem is it's temporary and it has to be renewed periodically. And if you want the kind of investment, you know, the kind of foreign direct investment associated with free trade, you need that to be permanent and need it to be cemented.

There is, however, precedent even for trade liberalizing legislation to go through the United States Congress during recessions or during bad economic times, but happily we're not, we're not faced with that situation now. And certainly on the basis of the economics, these trade agreements should be moving through Congress quite rapidly. It's always the politics that is the constraint. And we'll see in September as we move into this fall, whether we're able to start moving forward with these FTAs as we'd intended, and I would note as the congressional leadership, Democratic congressional leadership, has said their intent -- they intend to.

QUESTION: I have a follow-up, ma'am. I wanted to ask about -- about an issue. I understand, at least for Russia, maybe for China also, rightly or wrongly, there is a perception in Russia that the U.S. is limiting -- planning to curb foreign investment, specifically from Russia and China, probably they mean the CFIUS legislation. The question for you is whether you see this as a risk for our bilateral trade relations and whether it might even undermine the potential benefits from the WTO accession?

AMBASSADOR SCHWAB: I would say -- I'd say the following -- this actually fits in very well with the conversation we were having about safety and security and the fact that any sovereign government needs to ensure its citizens of -- that they are safe and secure, however not as an excuse to block trade or investment.

And I think the new CFIUS -- in fact, the new CFIUS legislation, I think is solid legislation designed to reduce the politics, you know, to make sure that the security issues are the focus and to reduce any kind of political -- any kind of political impact. The United States is an open market. It is an open market to trade. It is an open market to investment. And we believe it is in our interest, our national interest, to have free trade, free flows of trade in goods and in investments from any country.

QUESTION: May I have a follow-up question about Administration and Congress relations? And some experts in Washington, D.C., predict that the Bush Administration will apply more administrative measures like anti-dumping and appeal to WTO to solve the trade disputes with China. And they said its purpose is to relieve the anger on Capitol Hill and persuade them not to pass too aggressive legislation. So what's your comment on that?

AMBASSADOR SCHWAB: Well, the first thing I would mention is that if you are looking at anti-dumping or anti-subsidy countervailing duty laws and actions, in fact, China uses its anti-dumping and countervailing duty laws more often than the United States does.

QUESTION: 48.

AMBASSADOR SCHWAB: Yes, right?

QUESTION: 48.

AMBASSADOR SCHWAB: Yep. The United States, in fact, I think is like the eighth or ninth largest user, so we're way down the list. India is a very active user. China is a very active user. The EU is an active user. So again, under the WTO, you have the right to apply these measures as long as they're consistent with the WTO.

In the case of U.S. law, there is very little discretion in U.S. law. You know, if a country -- a company files a case or a set of companies or industry files a case, the International Trade Commission determines whether there's injury, the Commerce Department determines whether there's dumping or subsidization, and then there is no discretion whatsoever to act.

And so I think if you look statistically, our anti-dumping actions and countervailing duty actions have, in fact, gone down over the last several years because industry has not been filing as much. So I think that the statistics tell the story. I will say that with WTO membership, there are both rights and obligations and I think all of us understand that if you want to negotiate new trade agreements and you want to get them implemented by our respective government entities, you have to enforce them. You have to be able to show your producers, your workers, your farmers that you are enforcing them.

So we are actively enforcing U.S. trade laws and agreements. And when you're talking about anti-dumping and countervailing duty actions, China uses -- China uses its laws much more frequently than the United States does.

QUESTION: Can I --

MODERATOR: I'll give the last question to Mr. Walker.

QUESTION: Sorry.

QUESTION: That's all right.

QUESTION: (Inaudible.) Anyway, can I just go back to Doha --

AMBASSADOR SCHWAB: Sure.

QUESTION: -- and ask whether this APEC session -- and bearing in mind that APEC, two years ago, set the end of 2006 as a deadline to complete the Doha round of negotiations --

AMBASSADOR SCHWAB: You need to go back and look at previous statements.

QUESTION: Is this APEC session followed by these meetings in Geneva a sort of last throw of the dice as far as getting a conclusion of Doha done before this Administration runs its course?

And the second question is how much of a burden is it that this Administration, this Bush Administration, is so preoccupied with external events, in Iraq in particular, that it doesn't have the energy at the highest level to devote to pushing this thing forward?

AMBASSADOR SCHWAB: Oh my goodness. Let me start with the second one, which is the President -- President Bush is very focused on the trade agenda. I have the privilege and the opportunity to interact with him on a regular basis and he is constantly asking about the status of the Doha negotiations, the status, for example, of the FTA, where are we in terms of congressional passage of the free trade agreement. He asks about -- he asks about Russia's WTO accession. He is -- he and a lot of my colleagues at the White House and in other agencies at cabinet level are very much focused on the trade agenda. It is a high-priority, integral part of what this Administration does, and we have been willing to use political capital to get the job done. We've been willing to compromise where compromise is necessary, hence the bipartisan deal from May. That's a good reflection of the level of priority that is placed on trade in this Administration, in that that was designed to create the path for the FTA implementation and eventually for trade promotion authority, which we need for the Doha round.

Going to your first question, deadlines -- artificial deadlines for trade agreements -- any trade agreement, but clearly the Doha round, have not done us a whole lot of good. I mean, have not worked for us. I think there is a recognition that we're starting to run out of options when it comes to the Doha round.

Now, there is no single country -- United States, Australia, China -- that can determine the success or failure of the Doha round or the success -- let's say the success of the Doha round. A single country can actually determine the failure of the Doha round, but that's a harder -- that's harder to articulate. That's sort of the end of the process if a country stands up and refuses to be a part of the consensus. So, you know, set that aside as sort of a theoretical issue.

But groups of countries can really make a difference in propelling the talks forward or slowing them down. And as we saw when the texts came out, there are a number of countries -- Brazil, India, Argentina, South Africa, others -- that have taken a rather negative approach to the texts that want to change the numbers or change the ranges or, you know, make -- or use something -- in the case of Argentina and Venezuela and a couple other countries, South Africa, they don't want to use the text at all. You know, they don't want the text to be the basis of the negotiations. That really could derail the Doha talks.

QUESTION: And of course, a presidential election year would add another layer of complications, would it not, here in this country?

AMBASSADOR SCHWAB: Yes and no. I would say -- actually, if you go back in 1988, for example -- so you were in a -- in a -- almost an analogous situation, you had the end of the Reagan Administration, you were in an election year, and in the summer of 1988, trade promotion authority -- well, the predecessor of trade promotion authority, at that point, fast track, was enacted into law. So there are, in fact, precedents in election year for major trade legislation being enacted.

Was China PNTR -- is that another one?

MR. SPICER: And Africa/Caribbean Preferences Trade Development Act of 2000 --

AMBASSADOR SCHWAB: So in 2000. So again, in an election year. So there are precedents in election years for the Congress to enact --

QUESTION: But the atmosphere then was not as contentious, of course, as it is now.

(Laughter.)

AMBASSADOR SCHWAB: (Inaudible.) But in terms of Doha, in terms of Doha and APEC, it just so happens that this is the last major ministerial and last major leaders summit that will take place before the WTO reconvenes in September. And therefore, the leaders at APEC have the opportunity to help propel the talks forward. It doesn't guarantee that the Doha round will be a success, but it certainly -- you know, the APEC members have the opportunity to really help build some traction for the papers, you know, for the multilateral process based on these papers.

MR. SPICER: Thank you, guys.

ENDS

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