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Office of the Press Secretary

For Immediate Release November 30, 1993
                            PRESS BRIEFING

                          The Briefing Room

1:52 P.M. EST

MS. MYERS: Without further ado, Ambassador Kantor.

AMBASSADOR KANTOR: Good afternoon. I have no formal opening statement, but obviously this is all ON THE RECORD. I leave for Brussels this evening for two days of negotiations with the European Community, headed by their Trade Commissioner Sir Leon Brittan. We hope to make progress in the Uruguay Round in order to finish talks that began in 1986.

When we came into office, the President made it clear that he wanted the Uruguay Round finished by the end of the year. We asked for a fast track extension, the Congress gave it to us. It's the first trade bill, by the way, to ever pass in American history that was not amended.

In order to reinvigorate the round, the President called for a market access agreement by the G-7 meeting in Tokyo. That was successful. The Round was reinvigorated, and we reengaged at that point. Obviously, there have been some concerns along the way, including the French concerns, over the Blair House Agreement in Agriculture.

As you know, what the Round is attempting to do is very simple, is, lower barriers to trade around the world, which is much in the interest of the United States and our workers, because we have the most productive workers in the world today. To lower these barriers around the world, tariff and non-tariff, and to protect services as well as intellectual property means we've taken advantage of the most productive workers in the world with growing jobs here at home.

It's estimated that if and when the Round becomes a reality, that we'll grow about 2 million jobs, net, over the next 13 years, we'll increase, cumulative, the U.S. gross product over 10 years by $1 trillion. The world gross product, over that term, by the way, will increase $6 trillion, and of course, this will lead to global growth, which is also in our interest.

I'll be delighted to take questions.

Q Regarding some of the reports the Japanese are getting ready to open the rice market in time for the December 15th deadline, what do you think of those reports? Are they encouraging, or have you had the time to look at them?

AMBASSADOR KANTOR: I've seen the same reports. I'm not going to have any specific comment on those. But we are obviously interested in market access in agriculture throughout the world. It's important that we get what they call "current access," that means a current level -- we start at that base -- or a minimum max as in certain products that haven't been opened, as well as we begin to lower tariff barriers in agriculture, which is one of our biggest export products -- it's 10 percent of our exports to the world.

And so, as the reports coming out of Japan and other places, that's encouraging; but, of course, we have no agreement.

Q Ambassador Kantor, is Blair House open or closed at this point? And if it's open, is that going to jeopardize specific agreements that would be harmful to specific sectors of American agriculture -- namely soybeans, corn --

AMBASSADOR KANTOR: Yes. We will not renegotiate or reopen the Blair House Agreement itself. However, within the market access discussions, there's plenty of flexibility in order to be hopeful to everyone in order to open trade in agriculture, not only the European Community, but around the world. And I think within that, we have flexibility.

Q Does that change the subsidy numbers, for instance, in Blair House?

AMBASSADOR KANTOR: We've not discussed changing the subsidy numbers. It's the cut in subsidies, just to make sure, because I'm not over here much. The cut in subsidy numbers have not been discussed, and will not be discussed. That number will remain the same.

Q Ambassador Kantor, December 15th is the date for the expiration of fast track, there's only 15 days left. You're going to Europe. Is President Clinton also personally involved, speaking to European leaders?

AMBASSADOR KANTOR: President Clinton spoke to President Kohl yesterday. He's been fully engaged since the beginning of this administration in trade, whether it's been the market access agreement or the framework agreement with Japan, or obviously with the North American Free Trade Agreement and the side agreements, and of course, the congressional approval of the NAFTA, and he's much involved in these discussions as well.

Q Ambassador Kantor, as Blair House does not cover the whole of U.S.-European agricultural trade, and after French Prime Minister Balladur made a most conciliatory statement, do you see any room for a compromise if not directly in Blair House, but in global terms, on agriculture?

AMBASSADOR KANTOR: Prime Minister Balladur's statement, which I read in our local newspaper this morning, were very helpful. They show a flexibility, I think, that is welcome at this point. But let me make it clear, we want a good agreement, not just any agreement. We've had that position from the very first. A good Uruguay Round agreement means more jobs for American workers, growing capital base, lower costs for American consumers, and more productivity for our workers.

That is in the U.S. interest as well as in the interest of global growth. And so we want to make sure that what we come out with protects our trade laws, opens up market access in goods, that is, lowering trade barriers to goods around the world -- the socalled zero for zero categories, as we go to zero in many areas as we've already agreed on nine areas, that we open up agriculture, that we open up trade and services especially financial services, and that we, as I said before, protect our trade laws and, as they say, discipline subsidies, make sure that we both put a cap on as well as limit the number of subsidies for production marketing and other areas which distort trade around the world.

Q From a budget standpoint, assuming that GATT is successful, what will be the cost, a ballpark cost, of the lost tariffs, and how is the administration proposing to pay it to GATT?

AMBASSADOR KANTOR: Well, frankly, if you're talking about pay-go, that's one thing. If you're talking there'll be in fact, we'll get more revenues from it than it costs in lost tariffs by multiples. It is, in fact, an economic winner in terms of revenues into the federal treasury. In terms of the so-called static budget concept of pay-go system, it's estimated, I think, over 10 years -- $20 billion over 10 years in lowering tariffs. But, of course, that is -- a tariff is only a tax on consumers, it's really a tax break for consumers, we'll get more money than that into the federal treasury and we'll do what we did in the NAFTA under the paygo system, we'll find a way to pay for it.

Q What are the possibilities? What are the options --

AMBASSADOR KANTOR: Well, you'll have to ask Mr. Panetta for that.

Q In terms of what's at stake for the American economy, could you compare the gains with the passage of NAFTA with those that still lie ahead with the -- of GATT? And explain the discrepancy between the intensive effort that the President devoted to the NAFTA fight and the relatively little attention he's given to this one?

AMBASSADOR KANTOR: Well, I wouldn't -- that's your characterization, not my characterization. We've been talking about the Uruguay Round since the -- January 21 was when I was sworn in. In fact, we talked about it during the transition period. The Uruguay Round had been going on seven years -- the President was ambitious and I think for good reason -- to get this done this year because we're running out of, really, political momentum in getting a Uruguay Round done. The President has paid a tremendous amount of attention to the Round. Obviously, the NAFTA was more prominent in the media because there was a fight in Congress over the NAFTA. That doesn't mean we haven't spent a tremendous amount of time on the Round itself.

Q What about the stake for the U.S. economy --

AMBASSADOR KANTOR: The stakes -- obviously, when you're talking about lowering barriers to trade in over 110 countries, it has enormous potential economic impact. It has psychological -- a positive psychological impact at first, even if it passes, with stagnant economies in Europe and Japan. It would be helpful even in that regard. It certainly will be helpful, as I indicated, adding about $6 trillion over 10 years to global growth.

The NAFTA, of course, begins in North America as it extends into the second fastest-growing region in the world, which is Latin America, where 400 million people live south of the Rio Grande. It will have more and more economic impact. But, obviously, immediately, the Uruguay Round will have more economic impact than NAFTA would have.

Q Ambassador Kantor, regarding Japanese rice markets, Secretary Espy was saying this morning that the reported Japanese proposal to increase the minimum market access from 3 percent to 5 percent to 4 percent to 8 percent over a six-year period would be the kind of meaningful market access as a meaningful quid pro quo for the difficulty of -- do you think that -- for the Japanese -- to be able to accept immediate clarification -- what is your comment to that?

AMBASSADOR KANTOR: My comment is, minimum access is critical in this area, whether it's opening up the Japanese rice market or the rice market in Korea, or opening up other agricultural markets around the world. That's why the minimum access concept comes into the Round itself. I don't want to comment on the specific figures, I'll let Secretary Espy comment on those.

Q Sir, is the United States prepared to make any concessions whatsoever at this point to get an agreement that you're satisfied with, given the suggestions in both Asia and Europe that some concessions from the United States will have to come forward?

AMBASSADOR KANTOR: We want a good agreement, not just any agreement, in that there is a lot of flexibility. This is the largest lowering of trade, tariff and non-tariff barriers, trade barriers in history. Within that, there is flexibility, I believe, on all sides. However, there's certain principles that we're going to adhere of -- once, there has to be an enhancement of the market access package in goods. Second, there has to be a market access opening in agriculture. Third, we cannot have the kind of restrictions on audio-visual that are currently contemplated in what is called the draft final act. That is a draft text that has been on the table for three or four years now. We need the completion of a government procurement package. We need active assistance in order to open up financial services, especially in Japan. We want to make sure that some basic changes are made with regard to the environment, and we want the protection of our trade laws.

Much of that has been accomplished, some hasn't. That's what's going to be required as an outline for a good agreement. However, let me make it clear that there's a lot of flexibility within that.

Q Mr. Kantor, President Clinton made several promises to Texas state members before the NAFTA vote related to provisions he would seek for textiles in GATT -- specifically a 15-year phaseout on MFA. Have you had any sort of indication from the European Community on how they're feeling about those promises, or whether they are receptive?

AMBASSADOR KANTOR: That proposal has been tabled. Not tabled in the sense of Congress, it's been put on the table.

Q Have you had any kind of reaction from the Europeans?

AMBASSADOR KANTOR: We did not discuss it at our meetings last week, we have just put it -- I assume it will be -- something that will be discussed in the next 48 or 72 hours.

Q That's one of the things you'll be talking about?


Q What are the administration's options should Canada not proclaim NAFTA --

AMBASSADOR KANTOR: We have full confidence that NAFTA will be proclaimed by Canada.

Q What are your options if they don't?

AMBASSADOR KANTOR: We have full confidence it'll be proclaimed by Canada.

Q What are you willing to say the likelihood is?

Q I've been observing the performance of the President very closely. I saw his success on NAFTA, his trip to Seattle with the Asian countries, now Central American countries have come here. Secretary Brown is in South Africa making a -- I wonder if you believe that that that -- in Africa will be extended to the whole continent, and that that will produce by selling our products and service to that continent here for the American people -- in that way the labor movement will be more -- with the President before NAFTA. How do you respond?

AMBASSADOR KANTOR: Anytime we can, on a fair basis, open up new markets and be able to sell our products on a nondiscriminatory basis given the fact we're the most competitive workers in the world today, the United States is put in a good position; we'll grow jobs. It also, frankly, is good for the countries you're dealing with.

Let me give you an example: We, of course, have a trade surplus with all of Latin America from south of the Rio Grande. In spite of that trade surplus, Latin America has grown many jobs over the last five years, their economies are growing at a very impressive rate. For instance, the Chilean economy last year grew by 10 percent; they had only four percent unemployment; they had a trade surplus and a budget surplus with the world, they had a trade surplus with the world. But they had the trade deficit with us, yet importing U.S. goods, building their industries, being able to compete both within South America and with other countries has been helpful to Latin America, as I think it would be helpful to Africa.

So, opening markets, exporting goods is not necessarily, just because you import goods doesn't mean it's good, not does it necessarily mean, sometimes we exports goods -- it is helpful. Exports generally create higher paying jobs, about 17 percent on the average, and create about 19,000 jobs for every billion dollars more in exports. So, it's in our interest when you have the kind of productive workers that we have.

Q Ambassador Kantor, if you're going to meet the December 15th deadline, what do you need to achieve in these next 48 hours? And do you agree with Prime Minister Balladur that you need to get a draft agreement to the national governments by the end of the week?

AMBASSADOR KANTOR: I'm not quite sure what Prime Minister Balladur meant by a draft agreement. We'd like to make good progress in the next 72 hours. We believe it's possible. What Sir Leon Brittan is able to put on the table for his GATT counsel meeting on Thursday night is a matter of, I guess, interpretation whether it's a draft, let's assume we make good progress -- a draft agreement or outlines of an agreement or whatever. I don't think we need to deal in semantics here. Obviously we want to make progress, it's part of a process of then going back to Geneva and multilateralizing our agreement with over 110 countries.

Q Leading up to the NAFTA week, two weeks out you all were willing to say that it would pass. What will you say the probability or possibility of this final agreement being reached is?

AMBASSADOR KANTOR: If we get to a good agreement, it'll be -- we'll be successful. But it has to be a good agreement in our terms.

Q What's the possibility of getting a good agreement?

AMBASSADOR KANTOR: I am not very good at odds making.

Q Are you optimistic, pessimistic?

AMBASSADOR KANTOR: I'm not pessimistic. (Laughter.)

Q Is there one particular area -- you mentioned a couple of sticking points between you and the EC. Is there one particular area that you're especially hopeful for, that you think that you and the EC are closest to resolving?

AMBASSADOR KANTOR: I wouldn't pick out any particular area. We made progress last week in a number of areas. Obviously agriculture has hung up the Round year after year after year. It's the one people have paid the most attention to in terms of a particular problem area. We hope we can make progress in that in order to open up other areas for discussion -- not only for discussion, but resolution -- that are obviously critical.

Q Prime Minister Balladur made no secret of his desire to try and overcome the recession in Europe by getting a GATT agreement. How much political momentum do you think the recessionary concerns are adding to the negotiating process? And could it be the force that gets this thing over the top?

AMBASSADOR KANTOR: It's very difficult to answer. You'd have to assume intent or motivation on the part of people without being able to look into their minds. Obviously, the Prime Minister Balladur has said, and so has President Kohl, that the European economy needs a jumpstart.

We've always believed that the Uruguay Round, the NAFTA, the market acts agreement in Tokyo, a framework agreement with Japan, all combined together are opening markets, expanding trade and giving a psychological boost to the world's economy if you put them all together. The Round is an important part of that. Can we still accomplish global growth without the Round? Yes, we can. Is it easier with a Round? Yes, much easier. And it would be helpful, I think, both in Europe and Japan and around the world for confidence -- for the sake of confidence. It will obviously be helpful economically in the short run as well as long run.

But I can't assess motivation on the part of the European Community. You'd have to ask them.

Q Do you think you can work out the outstanding issues with Canada about NAFTA through side letters, and will Mexico be asked to be part of that?

AMBASSADOR KANTOR: First of all, this is a tri-national agreement and Mexico is asked to be part of everything we do in this, as well as the United States, as well as Canada. Number two, we're fully confident that we can reach a reasonable agreement with Canada on the issues of subsidies and -- reviewing those issues that they have raised. And we look forward to their proclamation, or proclaiming the NAFTA.

Thank you.

Q How about the --

AMBASSADOR KANTOR: I think the form of it is really irrelevant at this point.

Q What about the energy aspects -- the Canadian concerns about energy?

AMBASSADOR KANTOR: We've made it very clear we're not going to renegotiate the energy provisions.

END2:12 P.M. EST