THE WHITE HOUSE
Office of the Press Secretary (Tokyo, Japan)
PRESS BRIEFING BY U.S. TRADE REPRESENTATIVE AMBASSADOR MICKEY KANTOR
Okura Hotel Tokyo, Japan
4:06 P.M. (L)
MR. GEARAN: Good afternoon. For purposes of briefing for on the record, on camera, is United States Trade Representative, Ambassador Mickey Kantor.
AMBASSADOR KANTOR: I'm going to use the old one, of all the introductions I've ever had, that was the most recent. Thank you, Mr. Gearan.
I think all of you have the talking points and I will not make a lengthy opening statement.
Q: We don't have any --
AMBASSADOR KANTOR: You don't? Well, I will then -- today, the Quad ministers, that is the ministers representing Japan, Canada, the European Community and the United States, reached agreement on a report on the Uruguay Round and achieved a major breakthrough. We, as you know, have been attempting to reach a market access agreement at the behest of the President since February. The President, in first pursuing the renewal of fast track for the Uruguay Round, and then insisting we take up market access or lowering tariff barriers first, and then insisting that we use the G-7 as the end point for trying to achieve for the first time in seven years, seven years of negotiation a market access package in the Uruguay Round, his efforts have been met with success here in Tokyo.
We have achieved a preliminary agreement --preliminary because we have obviously not finished the Uruguay Round, which we intend to finish by December 15th of this year -- which represents the largest tariff cut in history. It also represents, as noted by DRI, Data Resources, in a 1991 report, approximately 1.4 million net jobs in the next 10 years in the United States alone in addition to our gross product of $1.1 trillion over that same period of time. I would note over 13 years, it represents about two million jobs.
Not only does this represent the largest tariff cut, but it also represents a reengagement and reinvigoration of the Uruguay Round. It gives us great confidence as a country, led by our President, and also as a Quad, the four entities, that we can reach at successful Uruguay Round by the end of 1992 -- 1993, excuse me.
I would be delighted to take questions and answer any of your detailed questions about what's in this agreement or about the Uruguay Round itself. Yes, sir?
Q: Can you tell us whether you got textiles, whether you reached -- is this in the agreement? Give us just a rundown on what it is. The word we're getting is that it's a very minimal package with most of the hard issues you've decided just not to --
AMBASSADOR KANTOR: In fact, we reached agreement on 18 different sectors, and let me break you down this way which I think is more -- first of all, we agreed to reduce tariffs to zero on eight of those sectors. We agreed to reduce to harmonized tariffs and chemicals on another, so on half the sectors we reached maximum agreement. In four other sectors we agreed to cut peak tariffs up to 50 percent in some cases. In five other sectors, we agreed to minimum cuts of 33 percent which was the Montreal target -- was the maximum target in Montreal for cuts in 1988 under the Uruguay Round -- and have agreed to try to grow those cuts up to and including, we hope, zero cuts in those or zero tariffs in those areas as well.
So, in fact, what we have among the Quad is a very impressive package. Now, we have a lot of work to be done. Let me not mislead anyone. We have tough issues in services and agriculture and in the trade rules themselves to go in the Uruguay Round. We will have a -- negotiations will continue with regard to trying to reach zero tariffs in the five areas that I was talking about. And, obviously, there will be other issues which arise as well. So we have some months of bargaining and negotiation to go, but today is clearly a breakthrough.
Q: What brought this about?
AMBASSADOR KANTOR: Well, I think a number of things. First of all, I have nothing but the highest praise for my colleagues, the negotiators for the other entities. And I think that the Japanese deserve special note for their contributions during these last few days.
Second, I think the President's contribution in, one, insisting that we take up market access; that, two, we look at the G-7 as the end point for developing a market access package; three, his pursuing a fast track agreement with the Congress and getting it through, as you know, without amendment before we came here to Tokyo; number four, his engagement of world leaders and trying to persuade them to get behind the Uruguay Round made a huge difference.
All of these -- and last, of course, the President insisting that we take up market access first. All of those things, I think, resulted in this agreement. Both our colleagues, and of course, the President's leadership.
Q: You mean, there's nothing on agriculture, forest services?
AMBASSADOR KANTOR: No, that's not true. On agriculture, there was a decision about a month ago to wait until Geneva, starting on Monday of this coming week. On services, we have made progress in the five service areas. Now, we have not reached final agreement in those areas, but we have made progress which, frankly, was heartening to all of us. Services is one of the fastest growing areas of U.S. exports, and it represents very high paying jobs. So service is a very important area for us. The 18 manufacturing sectors are critical, but services is tremendously important because they're high-wage, high-skilled jobs for the most part.
Q: Does this amount to just putting together an agreement on the noncontroversial parts and putting off any agreement on controversial --
AMBASSADOR KANTOR: Not at all. This is the first time in seven years any market access package has been reached in the Uruguay Round. This was a daunting task. And the President's leadership and my colleagues' abilities to negotiate and to be responsible really led to this agreement.
Number two, let me just say there are other issues that face us, as I said before, that are going to be difficult. The trade rules, services, agriculture. But we believe given the momentum which we have obtained through this breakthrough today, we'll be able to reach agreement by December 15th.
Q: If I could just follow up, is this the first time in seven years you've taken agriculture and financial services off the table --
AMBASSADOR KANTOR: They weren't taken -- in fact, just the opposite, frankly. Agriculture -- in fact, we have a Blair House Agreement already, as you know. Number two, agriculture will be taken up starting Monday in Geneva. Number three, we have been addressing the services area and, in fact, have made progress. So, therefore, that's just not correct.
Q: But in what way, sir, do your tariff agreements go beyond the Blair House Agreement?
AMBASSADOR KANTOR: Well, the Blair House Agreement has nothing to do with tariffs. The Blair House Agreement only has to do with cutting agricultural subsidies. So therefore, this goes way beyond. There has never been a market access agreement -- or a tariff reduction would be a better way of saying it -- in the Uruguay Round. And it is the biggest tariff reduction in history. And so, therefore, it gives great momentum to the Round.
The Blair House Agreement cuts agricultural subsidies -- I could go through it in some detail, but you probably would all -- I'd have an unfair trade practice by Sominex -- but let me just say it cuts agricultural subsidies by 21 percent over six years and addresses issues like oil seeds, corn gluten feed, mulch pellets, enlargement and other issues. Therefore, it is an agricultural agreement, but does not reach either tariffication or market access in the agricultural area.
Q: I understand one of the last concessions that moves the agreement along in the last 24 hours or so was Japanese agreement to drop assistance on tariffs on distilled spirits. Was there a reciprocal U.S. concession that went along with that? Was there a sector where the U.S. agreed to --
AMBASSADOR KANTOR: I would say there was a reaction on the part of all three trading partners to the Japanese when the Japanese agreed to contribute distilled spirits to the zero category. And that, indeed, was a very important moment in these discussions.
Q: What was the U.S. contribution --
AMBASSADOR KANTOR: Well, we had already made a tentative contribution, but we had indicated -- and I don't want to get into the specific sectors -- that unless we got contributions from others, including the Japanese, that the package wouldn't come together.
Let me just say again that the Japanese government's contribution was a critical element, and they played a vital role in these discussions.
Q: What about the earlier question -- what exactly happened on textiles?
AMBASSADOR KANTOR: Well, we have already -- in fact, we've had an agreement on textiles with the European Community now for a couple of weeks. We've agreed to certain cuts in peak textile tariffs. We also, though, agreed they would be tied to market access and also tied to circumvention language, and also they would be staged, and that they would be staged --there will be lesser cuts than were put on the table by the previous administration, and we would insist on market access and circumvention language. This is a completely different package than was on the table in January. If you're referring to that January night, 1993.
Q: Mr. Kantor, can you list the sectors that fall on the categories you described? The five and the four -- the four sectors we have agreed to cut peak tariffs and the five other where you've had minimum tariffs?
AMBASSADOR KANTOR: Okay, I will list -- the four are ceramics, glass, textiles, and apparel. The five, if my memory serves me correctly, are scientific equipment, wood, paper, nonferrous metals, and electronics. I think that's five, if I -- I think that's right.
Q: What about the other nine?
AMBASSADOR KANTOR: The nine sectors -- there are eight zeros -- one is chemical harmonization, that's one. The other eight sectors are pharmaceutical, medical equipment, construction equipment, steel, beer, furniture, farm equipment, distilled spirits. Now, remember this: We hope there's more to be added. We have set a base line on the five of 33 percent, which as I said before, was the target for Montreal and we're going to build from there. And so we've not finished our negotiations on those areas. But the fact is we have the biggest tariff reduction agreement already in history and we're going to build from there.
Q: Mickey, can you update us on the U.S.-Japanese bilateral trade agreement? Where does that stand and is there any chance there will be a breakthrough on that front in the next two days?
AMBASSADOR KANTOR: Discussions are continuing. We hope that the Japanese are as forthcoming in these discussions as they were in the market access agreement. And I'm sure there will be discussions about that later.
Q: Are they as forthcoming?
AMBASSADOR KANTOR: I wouldn't comment on that.
Q: A year ago, it was said that agriculture blocked the overall agreement. That deal was done. The French have complained about it. They still complain about the European Community going along with that. Now they complain about the American steel business. What about the French -- how are they likely to -- were you given assurances that this will indeed be accepted by all and thus really open the way for conclusion --
AMBASSADOR KANTOR: Yeah, right. Well, first of all this does not affect U.S. steel duties, number one -- or the dumping cases. Number two, we would hope that everyone, whether in the European Community involving the French or anyone else, would welcome this breakthrough. Number three, we will be willing and will work with everyone in order to achieve a successful conclusion to the Uruguay Round.
Q: I'm not sure I understood the textile thing. In layman's terms, did you say that the cuts that you're coming up with are less than were proposed by the past administration?
AMBASSADOR KANTOR: Substantially less.
Q: You've rolled back or you've tightened --
AMBASSADOR KANTOR: Textiles and apparel, yes.
Q: Can you explain that as to why you made that, what that means to American workers?
AMBASSADOR KANTOR: Well, there are great numbers of Americans employed in the textile and apparel industries. We believe that the combination of the phase-out of the multifiber arrangement over a 10-year period and textile cuts as proposed by the previous administration would not have been helpful to that industry.
We believe what we have done with insisting on market access as a precondition in both the phase-out of the MFA or multifiber arrangement and in reaching textile tariff cuts and in phasing those cuts over a longer period of time and insisting on an anticircumvention language. That is language which would prohibit certain countries from getting around quota laws in textiles and or apparels are critical if we're going to allow these industries in the various countries to progress.
And so, we believe what we have done is healthier not only for the U.S. textile industry but for textile industries in Europe and around the world. Frankly, the European textile industry and the U.S. textile industry both agreed with our position in this.
Q: Mr. Ambassador, is there any future with the agreement today which you can sell to the developing countries -- do you think the United States has done enough to satisfy --
AMBASSADOR KANTOR: We believe, of course, that we can. The Quad reached this agreement unanimously. We believe that market access in, for instance, textiles is in everyone's interest; that in fact, the combination of market access in any circumvention language, along with the cuts that have been many in certain peak tariffs in the textile and apparel area, will be helpful not only the developed countries, but to the developing countries as well.
And so we're confident we can. And we begin the multilateralization -- that's the word they use -- of this process in Geneva on Monday.
Q: Are you ruling out further cuts on textiles beyond what you've agreed to with the Europeans?
AMBASSADOR KANTOR: We've reached agreement on textiles and apparels.
Q: This concern of the whole issue in the Congress of trade and the environment, does it show that NAFTA, for example, and the discussions before the U.N. Commission on Sustainable Development -- has there been any talk about environmental mandates for the next round, for the NTO? How are you going to address those issues?
AMBASSADOR KANTOR: We've had informal discussions about the next round of the GATT and what it would involve. One of the areas would be the environment, competition policy, technology policy, but only in the most informal settings, I would say. The fact is, there is some language addressing environmental concerns, as you know, in the draft final act, or Dunkel text now. That will be discussed beginning in Geneva again on Monday. All these issues now we go to with this momentum we carry out of Tokyo. But you're right, we have had informal discussions about the environment, which would hopefully be part of the next round of GATT once we've completed the Uruguay Round.
Q: Mr. Ambassador, is it fair to say that the strategy here is to strip the negotiations down, leaving agriculture to the end, address it then with all this momentum behind you? And if so --
AMBASSADOR KANTOR: Well, I don't think beginning on Monday of next week is leaving it to the end. The fact is, we do have a Blair House Agreement. There have been discussions on tariffication, as they call it, lowering tariff barriers and nontariff barriers in agriculture. We are talking about other issues, not to get too technical, such as current and minimum access, as well as disaggregation. All those issues will come up in Geneva.
The fact is that we needed to jump-start the Uruguay Round. We needed to boost global growth. We needed to create jobs not only in the United States but around the world. This agreement will do it. And the fact is, the President's leadership and his prescience really in understanding this was vital.
MS. MYERS: Last question.
Q: Just to put the job growth in context, the President says that 940,000, 950,000 jobs have been created over the last five months. This is 1.4 million over 10 years.
AMBASSADOR KANTOR: Net jobs.
Q: Net jobs.
AMBASSADOR KANTOR: Net jobs. And let me say, what happens -- this is only off one agreement and one set of tariff cuts. In fact, it's a huge job growth. Remember, this is in addition to natural growth that occur anyway. This is just because of one agreement. It will add about, I think, three percent to the GDP, if I'm not mistaken. I think that's in the -- that comes out of the report as well.
Q: That's the GDP?
AMBASSADOR KANTOR: Right. Yes, it is a -- no one single trade agreement, of course, is going to be the sole source for global growth. But taken together with natural growth and expansion and training and cutting deficits and lowering interest rates in Germany or stimulating the economy in Japan, taken together, they exponentially will grow the world economy. No one single area or instance will be -- is a silver bullet in this area.
END4:25 P.M. (L)