UNITED STATES MEMBER COMMITTEE | EVENTS | U.S. EVENTS | 2001 APC | FULL REPORT
PACIFIC BASIN ECONOMIC COUNCIL
UNITED STATES MEMBER COMMITTEE | EVENTS | U.S. EVENTS | 2001 APC | FULL REPORT
The PBEC US Annual Policy Conference 2001US Trade Policy in the Pacific Rim: Priorities for the New AdministrationJanuary 31, 2001 · Washington, DC PBEC US's day-long Annual Policy Conference was designed to highlight trade and investment priorities the new Administration will face in the Pacific Rim. The conference was divided into four panel sessions and a breakfast and lunch keynote speech. The format allowed members of business, academic, and government communities-foreign as well as domestic-to weigh in on issues important to PBEC US members. The day preceding the conference, the PBEC US Board of Directors adopted a statement on PBEC US priorities, which summarizes the opportunities and challenges in the region. Internal Developments in China The first panel of the day focused on the economic and political environment in China and the implications for US business. The discussion, moderated by Mark Borthwick, Executive Director of US PECC, began with Dr. Robert Suettinger of Rand Corporation who provided an overview of China's internal political conditions and reforms. Ms. Zhao Xia-hua, Partner, Fletcher, Heald & Hildreth, LLP, discussed the status of telecommunications reforms in China and posited that the trend in telecommunications reform has been towards openness and globalization. She also voiced the increasing need for international standards to govern the Internet industry. Australian native Will Martin, Lead Economist in the Development Economics Research Group at The World Bank, who has done extensive research on the impact of China's WTO accession, provided a thorough overview of the implications of economic reforms on China and throughout the region. With a detailed slide presentation, Dr. Martin demonstrated the advantages and opportunities WTO accession will provide China and her many trading partners. China's External Trade Relations The second panel, moderated by Chris Hansen, Senior Vice President of Boeing, dealt with China's external trade relations, specifically their trade relations with other nations, and priorities for 2001. Embassy of China Charge d' affaires LIU Xiao Ming outlined China's trade goals for 2001, including, as chair of APEC, enhanced financial cooperation in the region. Liu noted that China is considering establishment of an APEC Finance and Development Center in Shanghai to strengthen human and institutional capacity building, promoting macroeconomic policy dialogue, and launching structural reforms, thereby giving APEC a "new lease on life." Robert Novick, former General Counsel for the Office of the US Trade Representative, underscored the need to keep China's accession to the WTO a top priority. Novick emphasized the need to bring China into the global community and to not become complacent about the process. He also outlined a series of steps that the Bush Administration should act on immediately. Providing a corporate perspective, Motorola Executive Vice President Arnold Brenner highlighted the strong support of his company and the U.S. business community at large for China's membership in the WTO. Accession will help China drive its reform agenda and implement changes necessary to transform China to a market directed economy. This, in turn, will result in wealth creation in China, new jobs, a healthy market and expanded business opportunities. Brenner cautioned that, as experience with Japan has demonstrated, WTO accession will be no panacea to market access barriers facing American companies, and he urged that the U.S government work closely with American firms to manage trade controversies and expectations. Bilateral, Regional, and Multilateral Strategies Moderated by Dr. Gary Hufbauer of the Institute for International Economics, the third panel examined the increasing trend towards bilateral, regional, and multilateral trade strategies and the implications for the US trade and the WTO. Australian Ambassador to the United States Michael Thawley emphasized the need for a new round of WTO talks and expressed hope that President Bush will be able to obtain fast track negotiating authority. Ambassador Thawley said that, while the Australian government supports any initiatives that promote free trade, it is essential that any bilateral or sub-regional agreement be both consistent with the WTO and a building block towards a new round of trade talks. Providing a Congressional perspective, House Ways and Means Committee Minority Trade Counsel Tim Reif said that a strong core of international trade rules remains essential. He noted that elaborate plans being developed in Geneva could lead to a five to ten year negotiation, which is unrealistic in light of growing pressures and tensions on trade issues. Reif called for a narrow WTO agenda that can be concluded quickly, and said that bilateral and regional free trade agreements may offer opportunities that are not possible in a multilateral approach. He emphasized importance of business community support for winning congressional approval of any trade legislation. Fred Bergsten, leader of APEC's Eminent Persons Group from 1994 to 1996, reviewed the growing trend to bilateral and regional free trade agreements in the Pacific Rim, and the trade discrimination that results from such agreements. Citing recent research, Bergsten estimated that the impact of such agreements could reduce U.S. exports by $ 25 billion and cut U.S. GDP by a quarter of a percentage point. He called for Congress and the Administration to resolve the trade stalemate in Washington, and noted the opportunity for APEC to provide global leadership this year in the WTO. US Trade Policy: Immediate Challenges The final panel sought to address the immediate challenges to US trade policy including proposed linkages to the environment and labor. Dr. Peter Morici of the Economic Strategy Institute introduced the panel and provided an overview of the new trade policy agenda. He emphasized that the "social issues" on the agenda-labor and the environment-have a significant economic impact. The questions, Dr. Morici posited, is not whether we should uphold international standards, but how and in what way we should do so. Annie Petsonk, International Counsel at the Environmental Defense Fund, discussed the seriousness of international environmental problems, the context of the problems, and how we deal with these problems in the context of free trade. She suggested that a country's failure to enforce domestic environmental laws confers an unfair trade advantage. Petsonk argued that this is a point where the environmental lobby and business have a common interest. She also outlined the idea of using market mechanisms to encourage protection of the environment. Steve Beckman, Chief Economist for the United Auto Workers, discussed the history of labor and trade. He stated that labor is an economic issue in the same way that subsidies, intellectual property rights, and any other cost of production are economic issues. Beckman suggested that the protests at world trade forums like the WTO, World Bank, and IMF will not stop until issues like labor and the environment are taken seriously and addressed in these venues. Ambassador Craig Johnstone, Senior Vice President for International Economic & National Security Affairs, US Chamber of Commerce, emphasized the common interests of business and the environment and labor lobbies. He stated that it is not the goals of these lobbies that are in dispute, but rather the means by which we achieve them. According to Ambassador Johnstone, historically, the most effective mechanisms to advance environmental quality and working conditions has been economic growth, which is bolstered by expanded international trade. In Sum Chairman and CEO of New York Life Gary Benanav summarized the day's events and outlined priorities for the Administration. Benanav emphasized the need for domestic consensus on trade before international issues can be addressed. He urged the Administration to engage our partners in the region to work toward resolution on obstacles of increased trade liberalization.
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