Reuben Jeffery III & Sean McCormack On FTAs

Reuben Jeffery III
Under Secretary for Economic, Energy and Agricultural Affairs

Sean McCormack
State Department Spokesman

Washington, DC

Free Trade Agreements

QUESTION: Under Secretary of State Reuben Jeffery, thanks for joining us here.

UNDER SECRETARY JEFFERY: Good morning, Sean.

QUESTION: You are Under Secretary of State for Economic, Business and Agricultural Affairs. Now people, when they think about the State Department, don't typically think about the State Department involved in trade negotiations, in civil aviation agreements, in energy agreements. Talk to us a little bit about your portfolio and what it is that you're doing on a daily basis for the State Department for Americans.unidor

UNDER SECRETARY JEFFERY: Sure, thank you very much. The actual portfolio is Economics, Energy, and Agricultural Affairs. As you correctly point out, it's a very broad, all-encompassing economic portfolio. It cross-cuts and complement all of the regions of the world where the United States has diplomatic security and economic interests.

As we think about what we do day in to day out in our bureau, it really falls into three broad categories generally along the lines of the job title, but specifically, trade and investment, energy security, and economic development. And we organize ourselves around those three broad functional areas, obviously doing different things with respect to each different region of the world depending upon the needs and our own governmental strategic priorities and those of our friends and allies around the world.

QUESTION: Let me ask you a specific question about something that's been in the headlines recently, Doha.

UNDER SECRETARY JEFFERY: Yes.

QUESTION: Doha's global trade negotiation. Where do we stand on those negotiations? Can you fill us in a little bit on what the next steps are? Thus far, I understand we haven't been able to come to an agreement yet.

UNDER SECRETARY JEFFERY: Yes. Doha is a -- first of all, what is Doha? Doha is a comprehensive global trade and investment framework under negotiation. It is in process amongst all the major and other economies in the world designed to bring a reduction in trade barriers, specifically tariffs on agricultural products, on manufactured products, on services, and also to reduce subsidies in a way that creates the opportunity for significant new trade flows around the world.

Why is that important? Trade has been proven, through the decades and through the years, to be one of the most powerful engines of economic growth and the creation of economic opportunity and jobs and the promotion of open and competitive markets. In other words, achieving a successful Doha trade negotiation on a comprehensive basis is critically important to the overall continued success and prosperity on the world economy for both developed and developing nations alike. We're committed to achieve that result.

QUESTION: And just to accentuate that, I heard a statistic recently about India, that over the past period of time when they've really opened up their markets, that they have lifted about 400 million people out of -- above the poverty lines, really extraordinary.

UNDER SECRETARY JEFFERY: Similar statistics apply in China and the significant emerging markets around the world. An open and competitive trading and investment market have been a significant impetus to that growth. And I might add, with significant economic growth in other countries and opening of their markets to U.S. products and services, agricultural, manufactured and others, that creates tremendous jobs and investment back in our own market, offering the opportunity -- new opportunities for American workers and farmers and service providers.

QUESTION: Let me ask you some questions about --

UNDER SECRETARY JEFFERY: There's some -- and the U.S. is a very significant statistic. There's some 5 million U.S. jobs tied to manufacturing exports.

QUESTION: There's 5 million jobs?

UNDER SECRETARY JEFFERY: Yeah.

QUESTION: That's incredible. Let me ask you about some topics that are really going to be heating up in the news.

UNDER SECRETARY JEFFERY: Yes.

QUESTION: We've already started to see some of the activity up on -- in Congress up on the Hill about this. The free trade agreements with some of our neighbors in the hemisphere: Peru, Colombia, Panama. I don't know if I've left any --

UNDER SECRETARY JEFFERY: Korea.

QUESTION: Korea. So talk a little bit about --

UNDER SECRETARY JEFFERY: It's not in the hemisphere, but it's one of the four that are pending.

QUESTION: Talk a little bit about where we are globally on these FTAs, and maybe a little bit about the importance of these agreements and individually where we stand with the Congress on the agreements.

UNDER SECRETARY JEFFERY: Yeah. In addition to Doha, which is a global multilateral trading framework, we have, over the years, negotiated any number of bilateral free trade agreements such as those of which you speak. In fact, at the beginning of the Bush Administration, there were three or four free trade agreements in place. Currently, there are nine with 14 countries. Four of those are agreements with Peru, Colombia, Panama and Korea.

As you point out, these have been negotiated in tremendous detail with our counterparties, by our trading negotiators over the course of the past couple of years and several months. And they are waiting now to be enacted into law by the Congress because, under our Constitution, it's the power of the Congress and the prerogative of the Congress to enact laws related to our international trade.

Procedurally, Peru is being considered by the Congress as we speak. There have been various reviews by the Senate Banking, the Senate Finance Committee and the House Ways and Means Committee on the Peru trade agreement. We're optimistic that that will move forward on an expedited basis and we have every intention of moving the other three as soon as is practicable through the Congress, but on an accelerated pace.

QUESTION: And I want to focus now on one of them, Colombia.

UNDER SECRETARY JEFFERY: Yeah.

QUESTION: Now, this is not only important with respect to our trade, bilateral trade between the United States and Colombia, but I hear a lot about the fact that this is also important to our security in the hemisphere, to our foreign policy status in the hemisphere. Can you talk a little bit about that, the sort of global -- the wider importance of this agreement?

UNDER SECRETARY JEFFERY: The Colombia Free Trade Agreement -- just to put it in context, Colombia is -- bilateral trade between the United States and Colombia is $15, $16 billion in the most recent year, slightly more than -- they're one of the largest exporters of flowers, for example, to the U.S. This agreement would open up the Colombian market to U.S. goods and services even more than that market is open -- has been open heretofore.

Colombia -- I was down there in mid-summer, in August, and I had the opportunity to experience firsthand some of the tremendous progress that has been made security-wise, politically in terms of building and reinforcing democratic institutions, and economically in Colombian society over the past seven years, since Plan Colombia was initiated. Getting to your question, Plan Colombia was initiated in the Clinton Administration, actually, on a bipartisan basis. Why was that done? It was done out of recognition of the critical security and geopolitical significance of the Colombia-U.S. relationship and also the need to help our Colombian friends go after narcotraffickers and crack down on illegal commerce and illegal drugs, which most of which were ending up in our cities. That plan is in place today and along with very, very significant reforms that President Uribe and his administration have undertaken has borne tremendous fruit in terms of fundamentally transforming Colombia as a country and as an economy.

As one young woman said to me when we were talking in Medellin -- Medellin, and the imagine of Medellin goes back to drug cartels and an environment where one couldn't go out on the streets without fear of violence. That's not the case today. It's a thriving commercial area. Her comment was it really put the Colombia situation in stark relief. We, in a short period of time, less than a decade, have moved from a society of fear to a society of hope. And that really summarizes and it sort of crystallizes in a very graphic way the story in Colombia.

The free trade agreement is a significant part of preserving and perpetuating the tremendous economic success that Colombia has built for themselves over the past several years as they have reinforced the security environment, clamped down on the drug trafficking, built up their political institutions and thereby opened up their economy. And we want to continue to encourage that development. That's in our national interest. It's obviously critically important to the Colombians. And it's as a matter of regional diplomacy, security and economic development is an important linchpin of our involvement in our neighborhood, our own neighborhood.

QUESTION: Two more quick questions. One on Colombia. One of the issues that's come up that I've seen in the press is the importance of rule of law in Colombia, and that is essentially bringing to justice those people involved in extrajudicial killings. And there's been a lot of debate up in Congress about this. And I know President Uribe has enacted quite a few reforms. Can you talk just a little bit about how we view the progress that they've made thus far in Colombia on this issue?

AMBASSADOR JEFFERY: This is a matter which is very significant to the Colombians. You're talking about the issue of impunity, prosecution for crimes in a prior environment. President Uribe is taking that with the utmost seriousness. If one looks at the statistics relative to criminality -- you know, homicide, kidnapping, terrorist incidents -- they are down substantially. Substantially. I mean, over 50 percent, 70 percent, depending on what statistic one picks over the past several years.

Colombia has reinforced their judiciary. They've appointed a special prosecutor to go after the more egregious offenders and bring them to justice. This will take time, but the results in terms of labor violence, which was one of the most troubling abuses that emerged in the darker years, have greatly diminished. I mean, any crime, any transgression of human rights, is unacceptable. Uribe and his administration are working to minimize -- minimize that kind of behavior and to bring those who have perpetrated human rights and other violations to justice.

QUESTION: One quick question on a personal note. You've operated at the highest levels of the U.S. financial industry as well as the U.S. Government. But I know last week, you were with Secretary Rice when she opened the market, the New York Stock Exchange. Talk to me a little bit what that was like, looking out on the trading floor as she started up the market.

AMBASSADOR JEFFERY: Well, I can't speak for her. I can speak for myself. But I'd venture to say that her feelings probably weren't substantially different from my own. It's an exhilarating moment. First of all, the Secretary goes out there; people notice her. They stand up and applaud. You know, that was pretty impressive and I was proud to be at her side with the head of the New York Stock Exchange.

Secondly, this is a market. It's one of the symbols of American economic strength and prosperity and success. There is a palpable sense of energy and excitement in that room, and you just feel it. And then we had the opportunity after the official opening for the Secretary to walk around, talk to some traders, market makers, to really get a feel for what they're doing down there, making markets in U.S. securities.

QUESTION: Great. Reuben Jeffery, thank you very much for joining us.

AMBASSADOR JEFFERY: Thank you. Appreciate it.

ENDS

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