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Office of the Press Secretary

For Immediate Release May 11, 1994
                            PRESS BRIEFING

The Briefing Room

10:30 A.M. EDT

AMBASSADOR KANTOR: Good morning. This morning we have the President of the Consumers Union, Rhoda Karpatkin for purposes of our announcement, and, of course, Secretary of the Treasury, Lloyd Bentsen who will follow Ms. Karpatkin, to talk about the Uruguay Round, its importance, and the need to ratify it this year.


MS. KARPATKIN: Good morning. I'm here in behalf of Consumers Union, the nonprofit publisher of Consumer Reports magazine, a publication you may be familiar with.

I'm pleased to announce today that Consumers Union supports the GATT Uruguay Round agreement. That agreement dramatically affects the consumer interest. It's important, therefore, that the consumer voice be heard on this issue.

Through competition and economic expansion, this agreement will benefit American consumers and consumers around the world. At that same time, it will permit the United States to maintain strong health, safety and environmental standards. We urge the Congress to ratify the agreement this year so that consumers could begin to reap its benefits in 1995.

This agreement must be the first step in a continuing effort to make the rules of world trade more consumer-friendly. It will eliminate or phase out a variety of barriers to trade that have prevented marketplace competition, and therefore artificially increased consumer prices and reduced consumer choice.

In this connection, I want to say that Consumers Union is an active member of the International Organization of Consumers Unions -- IOCU. This represents 184 consumer organizations in more than 84 countries around the world. Many of our member organizations are in countries with very large numbers of very low income consumers by world standards.

IOCU supports the Uruguay Round agreement as a means of improving the lives of these consumers. Improved access to the global marketplace for the goods their countries can make or grow means for many of these consumers a chance for meaningful jobs and for the income necessary to be consumers beyond the level of mere subsistence where many of them are now.

The final agreement reached in Geneva last December is by no means perfect. But it represents a significant improvement overall. We view it as the first step, the first step in an evolving process through which further necessary improvements are made.

These include broader recognition by the World Trade Organization and the GATT of environmental concerns; a more public dispute resolution process; greater equity for the least developed nations through further reduction in tariffication quotes and other trade barriers; implementation of the decision by GATT members to compensate food importing developing nations for the expected increase in food prices as agricultural subsidies are reduced under the agreement; the maintenance of high national standards as members engage in the GATT process of harmonizing national standards; and other improvements outlined in my written statement.

Trade expansion is not a zero sum game. It can lead to overall economic gains for consumers, both at home, here in the United States, and abroad. Consumers Union will be working to see that the potential benefits of the Uruguay Round agreement are realized by consumers. To achieve this, the voice of the consumer must be heard in the formulation of U.S. policy and world trade policy.

With these concerns in mind, Consumers Union strongly urges members of Congress to ratify the Uruguay Round agreement in 1994. Consumers Union commits itself to work for ratification and for the continuing consumer-friendly improvement of the rules of Global Trade.

Thank you.

SECRETARY BENTSEN: Rhoda, as an interested subscriber to Consumer Reports who looks forward to each issue, I know of your concern and your interest in consumers and the influence that your organization has.

Let's get rid of all the technicalities and talk about what we're saying here when we pass GATT. We're talking about a very major reduction in the taxes that are put on our products when they are shipped overseas. That means a major reduction in cost to consumers in those countries and a creation of jobs here and a help to business here. On the other side of it, it further means a substantial cut in the cost of products we buy from those countries and helps the consumer in this country from that standpoint.

So it's a winner for consumers, for jobs in this country, for workers in this country, and for business. And for us, the major trading nation in the world, the one that led much of the fight in the negotiations to see that we had a successful culmination of the GATT negotiations. With Ambassador Kantor leading that fight for us, it's very important that we extend that leadership and show it by passing GATT this year through the United States Congress.

I've had repeated calls from finance ministers in other parts of the world saying, is it possible that you're not going to pass it this year? How can that be? It's not an easy task, but we need consumers behind this, business behind it, and we need workers behind it. It's a win-win-win situation.

Q Ms. Karpatkin, maybe you could comment on Public Citizen's critique of the GATT agreement. They claim that they represent consumers. Why is their claim not valid and yours valid?

MS. KARPATKIN: Well, there are many consumer organizations in this country. Our position is based on studies that we've made of the GATT agreement. And we are satisfied, very satisfied, that it is a very successful first step in advancing the interests of consumers in this country and around the world.

That's our analysis.

Q Could you elaborate, though, why the Public Citizen analysis doesn't hold water; why you don't think this is a threat to standards in the United States?

MS. KARPATKIN: Well, I can elaborate on what we think about the current protection for consumers with respect to standards in the proposed agreement. And Mark Silbergeld, who is the director of our Washington office here, will speak on that.

MR. SILBERGELD: We've looked very carefully at the standards provisions. Standard provisions very specifically allow nations that have standards higher than international standards to retain those. And that appears several places in the text. And the standards permit us to maintain those health and safety standards that are based on science, which U.S. standards are, and that are deemed necessary to limit consumers' risks to the risks that the Congress deems appropriate.

Having looked at those provisions, we are satisfied. I don't think I need to comment on other groups' particular studies, except to say that we have studied it, and the consumers of the United States will be safe with respect to their food supply and their other health and safety standards.

Q Is the first time that Consumers Union has gotten into politics, or do I just not remember previous occasions?

MS. KARPATKIN: Well, I don't see us as into politics, I see us as in to trade. And we've been in trade for a long time, going back to the 1970s when Consumer Reports magazine carried several articles relating the consumer interest to the presence or absence of trade barriers. And we covered steel issues, and we even covered the import of tomatoes from Mexico in the wintertime.

Q This is obviously politics that you're in now. You're talking -- in essence, you're lobbying Congress.

MS. KARPATKIN: Well, we have a Washington office here, and we have had since 1973. And that office tries, with the resources we have here, to make the consumer voice heard on issues that affect consumers. And we do lobby. And we have lobbied for many years.

Q Secretary Bentsen, when foreign leaders ask you, is it possible the United States will not ratify GATT this year, what do you tell them?

SECRETARY BENTSEN: I take a deep breath, and I say, yes, we're going to ratify it this year. It's going to be tough because, obviously, we have to pay for it. And these other countries don't face that kind of budgetary limitation. The idea that we have a static analysis and don't reflect the fact that actually we're going to have ultimately more income, more money coming into Treasury, we don't get to credit for that. They are surprised at that.

Q What is your latest thinking on how GATT should be paid for?

SECRETARY BENTSEN: Well, we're talking to the appropriate committees on that, and I don't want to get ahead of our negotiations with them concerning that. So I will not be trying to run out the options at this point.

Q Well, is there any practical way to avoid taxes?

SECRETARY BENTSEN: I think that what you're going to see is a combination cuts and taxes to do it.

Q? And you say you've pretty much ruled out waiving the deficit rules?

SECRETARY BENTSEN: I'd much prefer not to do that. Now, if you're talking about -- we're trying to stay within the rules as they apply to the House to get them to apply to the Senate in the same way for the first five years.

Q Can you give us an update on your talks with the Fed on bank regulation and oversight and the reports that you're near a compromise with the Fed on that?

SECRETARY BENTSEN: We still have some very essential things that we have to work out in the way of negotiations. We're not there yet.

Q How long do you think it will take to wrap this up -- another month or so?

SECRETARY BENTSEN: I think if we don't get it wrapped up within a month that we'll be going on into next year.

Q Ambassador Kantor, Congressmen Mineta and Regula are circulating specific legislation. Is that something that's being coordinated with your office? Is this kind of a stalking horse, a lightning rod for when you put in your legislation it will not be subject to amendment? Is this some kind of a test?

AMBASSADOR KANTOR: Well, first of all, we start the non-markup process in the fast track on Monday of this coming week. And that is when you begin your negotiations with the House and Senate. I'm meeting with Congressman Mineta this afternoon, and we're talking about those issues. In most cases we agree with their concepts in terms of antidumping -- as you know, the antidumping portion of the implementation legislation, which we'll be drafting.

Q Ambassador Kantor, let me ask you a question about one specific example where U.S. environmental laws are being challenged in the GATT. This has to do with imports of gasoline from Venezuela. It appeared that the GATT was about to force the United States to change its laws in this decision, and a lot of Democrats on the Hill are upset about the fact that a deal was cut where Venezuela will be able to continue sending their gasoline even though it technically violates the Clean Air Act. Isn't this a kind of example of how laws are going to have to be changed under the WTO, that public citizens are concerned about?

AMBASSADOR KANTOR: Number one, the WTO does not require the United States to change any law, regulation at the federal or state or local level as the result of any decision made under this use -- dispute settlement process. That's up to the Congress or other legislative bodies, whether or not they wish to take that act. We've not given up any sovereignty in that regard.

Number two, the assumptions in your question, of course, are not shared by EPA. We don't believe -- EPA does not believe any U.S. regulation has been violated technically or otherwise. Number three, the fact is the GATT never ruled on this. The case -- I'm not even sure the case was filed. I know it was threatened to be filed in Venezuela, but I'm not sure it ever was filed, so we don't know what the outcome would have been.

Q Ms. Karpatkin, three members of your board object to Consumers Union supporting GATT. They are Joan Claybrook, Clarence Ditlow (phonetic) and a representative of the Center for Science. They say there was a knock-down, drag-out fight, there was not vote of the board, and they questioned how you could do this without their approval.

MS. KARPATKIN: At the last board meeting, Joan Claybrook raised this issue, and we presented, and she presented her point of view. We presented the paper prepared by our Washington office, giving our reasons for the position we've just taken. It was a good paper. The board reviewed Joan Claybrook's position and reviewed the statement of our Washington office, and came to the conclusion that it had no further role to play and that the staff should just continue what it was doing.

Q Was there a vote of the board on this, or no?

MS. KARPATKIN: Well, I don't remember. If there were a vote, it would have not been a vote on GATT, it would have been a vote on whether to get further involved. And the board decision was not to get further involved. And leaving the Washington office, and of course, leaving me to continue on the course that we have started, which was to take the position we heard today.

Q Secretary Bentsen, what about rising interest rates? What's the latest on that?

SECRETARY BENTSEN: What's the status on rising interest rates?

Q Yes.

SECRETARY BENTSEN: Well, what you've actually seen is long-term bonds actually moderate, and we welcome that. We're pleased to see that. What you have seen insofar as the yen and the mark, at least for the present, our intervention has succeeded. I underline "for the present."

Q Are you satisfied with these levels, then?

SECRETARY BENTSEN: I'm not going to answer that. (Laughter)

MS. TERZANO: One more question.

Q Mickey, would you go over the political landscape in Congress right now on GATT? I mean, a, if a vote were taken today, what do you think would be the outcome? And, b, analyze the opposition for it -- the Republicans -- is this a partisan issue for them? Is it Democrats and Republicans coming against you? What are you up against here?

AMBASSADOR KANTOR: Well, first of all, I think there is wide support for the Uruguay Round in both parties. Number two, this does not have some of the same kinds of arguments being lodged against it as did the North American Free Trade Agreement. Number three, we're working hard to maintain a bipartisan, nonpartisan approach as we have in trade in this administration. And, in fact, I think we're being very successful in pursuing that course of action.

Number four, as I have held meetings -- and I think the Secretary would -- on the Hill, we find support is growing. The last thing I'm going to do, though, is speak for the Congress of the United States. They will work their will in their own way. We hope to continue to convince them that this is the -- not only the proper course, but extremely important for the country.

Q Would you say that you're in a better position now than you were at a comparable point on NAFTA?

AMBASSADOR KANTOR: I think I can say that without fear of contradiction.

Q Mickey, can you answer a question on Japan? You've talked a bit in recent days about restarting negotiations. During the time in which the Japanese came up with their proposal -- market opening proposal -- you had several comments in terms of things that they needed to do -- accept objective criteria and three or four other things. Have you changed your view? Has the administration changed view in any way?


Q So they still are expected to --

AMBASSADOR KANTOR: Let me make just three brief comments. I think, one, we expect the Japanese government to live up to its obligations under the framework. Two, we had a good meeting in Marrakesh and made progress on macroeconomic policy in Japan; two, on objective criteria; and, three, on the goals of each of the sectors. Number three, then-Foreign Minister Hata, now Prime Minister Hata, made it clear that the ball was in their court and that they would be responding to that conversation in Marrakesh. As you know, they just finished Golden Week in Japan, and we are awaiting to hear from them. We, of course, made it clear to them my door is open.

Q Mr. Secretary, just before you go, would you clarify what it is that you're asking those who you've contacted to lobby Congress on GATT to do? You've talked to consumers here, you've already called on business to lobby Congress for GATT passage. What's blocking it other than the budget rules at this point? And what do you want these people and business to do?

Sorry, did I get it across the plate slow enough? (Laughter.)

SECRETARY BENTSEN: Well, obviously we're not asking anyone to lobby. That's not our role in this situation. And, frankly, under the law, can't do that.

But we're asking them to explain the situation, and to get the facts across to the American people and to the Congress. And then we're optimistic as to what the conclusions will be.

Q Well, but to do what? If you find the --

SECRETARY BENTSEN: The problem you run into, as I have stated earlier, the problem you run into is that we have to pay for it. That's the tough part -- to face up to that. But we have to face up to it. That's our responsibility as the major trading nation in the world, as the leading trading nation in the world, as the one that played a very major role in the negotiations to bring about GATT.

THE PRESS: Thank you.

END 10:52 A.M. EDT