Undersecretary Of State Larson On WTO And Launching A New Trade Round

(Promoting higher labor standards is in everyone's interests)(7590)


WORLDNET "DIALOGUE"
U.S. Department of State
Television and Film Service of Washington, D.C.
December 15, 1999


MS. MCMILLON: Hello, everyone, and welcome to "Dialogue." I'm Doris
McMillon. From last November 30th through December 3rd, the leaders
and trade ministers of 135 nations gathered in Seattle to discuss
World Trade Organization issues. Although significant differences
remain among member nations, President Clinton is optimistic that the
coming months can be used to narrow differences and launch a
successful new round of global trade talks.

For today's "Dialogue," we are privileged to have as our guest
Ambassador Alan Larson, undersecretary of State for economic, business
and agricultural affairs. Ambassador Larson advises the secretary of
State on international economic policy, and leads the work of the
department on issues ranging from trade and aviation to bilateral
relations with America's economic partners.

Ambassador Larson, welcome back to Worldnet "Dialogue." And I
understand you have some opening remarks for us.


AMBASSADOR LARSON: Well, thank you for having me. And I would like to
thank our guests for participating in the program.

I would like to just make a few brief remarks about the World Trade
Organization and the recent Seattle ministerial meeting. The United
States of course was disappointed, as were all the participants, that
it was impossible during this short time we had in Seattle to reach
agreement on the launch of a new round of trade negotiations.
Nevertheless, we are very committed to working with all of our
partners around the world over the weeks and months ahead to find a
basis for consensus for moving forward.

I think this is extremely important for developing countries, because
all of the evidence that I have seen suggests that for developing
countries in particular open markets, trade and full participation in
the global economy is absolutely essential for their aspirations to
raise their living standards and to provide a higher quality of life
for their own people. We have seen recent studies from the OECD
(Organization for Economic Cooperation and Development), for example,
that suggest that developing countries will be the big winners from
the tariff cuts and other market-opening measures that are envisioned
for this next round of trade negotiations.

We do agree with those who suggest that for developing countries to
take advantage of these types of opportunities there needs to be a
very targeted program of assistance, including technical assistance in
the areas of capacity-building. It was for that reason that President
Clinton at Seattle took the opportunity to meet with the heads of a
number of international organizations, including the World Bank and
the various regional development banks, as well as technical agencies
that are involved in helping developing countries develop the
consensus to really participate effectively in the global economy.

We want to work with other developed countries like the European
Union, Japan and Canada, to refine a program of technical cooperation
that will help developing countries take advantage of the
opportunities that are available in the global economy.

We also are very interested in the broad issue of inclusion in the
benefits of the global economy, and I think that's an issue for
developing countries as well as for segments within each of our
countries. I think it's just terribly important that there be a very
strong appreciation of the fact that the gains from trade will be
broadly shared within our societies and across our societies. And
that's why we place so much emphasis on continuing work in the WTO on
issues related to trade and working conditions. I know that's a
proposal that arouses some concern in developing countries, and I
certainly hope we'll have time during our discussion today to talk
through those issues.

Just to conclude, I think it was again a disappointment that we were
not able to launch in Seattle, but I think we all recognize that the
stakes are very high, and we are going to have to find a way to
rebuild the consensus that would allow us to go forward. Thank you
very much, and I look forward to our discussion.


MS. MCMILLON: And thank you, sir. We now welcome our participants
standing by in Dhaka and Antananarivo. Dhaka, your first question or
comment please.


QUESTION: Good morning, Ambassador Larson. This is -- (inaudible) --
Financial Express. Many analysts say that the debacle in Seattle was a
setback for free trade and a boost for critics of globalization.
However, there is no doubt that the Seattle conference has dealt a
huge blow to the World Trade Organization in its role as the regulator
of global trade. We understand that the U.S. administration has been
pressing for increased WTO transparency and also for reforms of the
WTO's dispute settlement system. With these divisions not only between
America and Europe, but also between rich and poor countries on
different trade issues, the WTO's role is somewhat inherently
controversial. It cannot satisfy all different conflicting interest
groups at the same time. What then should be the nature and purpose of
actions for making the WTO transparent and open?


LARSON: Well, thank you for those comments and a very good question.
First of all, I would agree with you that this was an important,
significant setback, and we need to be very honest and recognize that.
At the same time, I think we don't want to over dramatize it. In the
past we have had situations where there was an intention to launch a
new round of negotiations and it was impossible in the first try to do
it. For example, in 1982 there was an effort to launch a new round of
trade negotiations in Geneva which ended in deadlock. And it was only
later that it was possible to put together an agreement to launch a
round of trade negotiations.

On the specific question of transparency and dispute settlement, I
think the best way for me to answer your question is to give you an
example. We think that one of the ways the WTO could be more open and
transparent to citizens in all of our countries is to have quicker
information about dispute settlement proceedings to be made public,
and to provide for an opportunity through amicus curiae or friend of
the court briefs for interested parties under carefully controlled
settings to offer views to panels on dispute settlement cases. This
institution of friends of the court briefs, or amicus curiae,
something that is very common in many of our court systems, does not
mean that the panel has to take into account the views of the
petitioners. It certainly does not mean that the petitioners have a
right to appeal if they don't like the results of the panel decision.
But it does offer the panelists an opportunity to hear views of
interested third parties. And we think that's one of the ways that the
WTO process could be more open and transparent, particularly in the
dispute settlement area.


MS. MCMILLON: Thank you, Dhaka. We'll now take a question or comment
from Antananarivo. Please go ahead.


Q: Yes, good morning. Arian Murfadan (ph) is my name. I work in the
field of economics here in Antananarivo. We would like to ask you
questions, Mr. Ambassador, on the possible consequences of the
signature of WTO agreements on economic agents in the Third World. We
are aware that the markets can give us advantages -- this cannot be
disputed. But our problem is that we are not ready to face up to the
giants of America. So my question is how in Washington are you
thinking of reassuring us about the objectives of the WTO, especially
when it comes to the question of fair trade? How could it be fair?
What kind of fair use can we make of this in trade? How realistic is
this opening of markets for economic operators such as myself in the
Third World? Thank you.


LARSON: I think it's very important to realize that the sort of
apprehensions about "how can I compete in the global economy," are
apprehensions that are felt all around the world. In developed
countries I often hear people say in words very similar to yours: "How
can we possibly compete against Third World countries where wage rates
are much lower?"

I think that the truth is that all of us bring to the global economy
certain comparative advantages, certain areas where we can make some
unique contributions. And in effect it is a global economy that lets
us do that. For the United States it is very important for us to sell
to citizens outside of our own borders, because they make up 96
percent of the world's population. But, similarly, this is even more
true of small developing country economies. It is not possible to have
the highest rate of development if you are only working for and
producing for your own domestic market. It is really those economies
that have learned how to produce for a global market that have seen
huge increases in income and in development over the last generation.

I do agree very much with the point that developing countries can't be
expected on their own and without some type of outside help in fully
realizing these opportunities. I think there are at least two aspects
of this that are very important. First of all, many of the obligations
of the WTO can be daunting just administratively. And I think that
having technical assistance to meet some of those obligations is
important. I think all of the major international organizations, like
the International Telecommunications Union, Food and Agricultural
Organization and others are involved in providing this type of
technical assistance, and this needs to be done better in a more
coordinated way.

In addition, it will be important for organizations like the
multilateral development banks that actually lend money to help
countries produce more and to train their people to play a larger role
in this regard. We have pushed in the United States for the World Bank
and the various regional development banks to devote a larger share of
their loans to support for education, or what President Clinton
sometimes calls "investing in people." And we think that by investing
in people and giving them the education and skills they need that
countries in the developing world and the developed world will be
better able to be effective in the global economy.


MS. MCMILLON: Let's go back to Dhaka for further discussion. Please go
ahead, Dhaka.


Q: Good morning, Mr. Ambassador. Ambassador, my name is -- (inaudible)
-- from Bangladesh. I am working for a daily economic in --
(inaudible). I believe that your weather there is quite cold, but not
that cold to the issues raised by the developing countries in the
Seattle ministerial conference.

My first question would be that you know that it was globalization of
the trade and economy -- your country -- (inaudible) -- free flow of
commodities. And this measure will not be completed if moved into a
free service sector -- that is free flow of services in the whole
world. Again, for the correct and judicious implementation of --
(inaudible) -- the WTO will ensure the free flow of investment -- that
is, capital. But what are the comments you have against the movement
of natural persons? That is my question before you.


LARSON: Well, I think that you raised an important issue, but I think
you slightly misunderstood our position. We think the WTO plays a very
important role in promoting the free as possible exchange of goods.
That's been the traditional role of the trade organization. And we
have supported the increasing role of the WTO in helping countries
open up trade and services, services ranging from telecommunications
to financial services.

The WTO actually plays a relatively minimal role in the areas of
investment and the free flow of capital. And as you rightly pointed
out, it plays only the most limited role in the area of immigration or
the free flow of people.

It was our view at Seattle, and continues to be our view, that opening
up barriers to foreign direct investment is an important thing for
countries to undertake as part of their own development strategies.
But we are frankly very skeptical that the world is ready for a WTO
agreement on investment. Some of our partners in other parts of the
world -- the European Union in particular -- press very hard for an
agreement on investment, an agreement that would promote the free as
possible flow of capital. Our experience at Seattle suggests that most
developing countries weren't ready for that, and so consequently, even
though we believe it is a desirable goal, we did not push hard for WTO
rules on capital flows.

I think on the point about immigration, the first point I would make
is I do believe it's absolutely incontestable that as compared to the
European Union and Japan, the other two major industrial countries,
that the United States is more open to immigration and flow of labor
into our country than the others. We have traditionally been a country
that has supported the inward flow of people, and we have tried to be
a place where there are opportunities for people around the world to
come and work. But we are not going to have a totally open immigration
policy, just as I am unaware of any other country that has a policy of
being totally open to immigration.

And I think that one of the reasons for that is that there is just a
limit to how successfully countries can integrate into their societies
excessively large flows of people. I do think though that there in one
sense trade provides an alternative to that, because trade provides a
way for each of us to embody in products and services sort of the
unique capabilities that are people have and then to share that with
other countries through trade. And electronic commerce is going to
create even more opportunities for us to capture those types of
benefits.


Q: This is -- (inaudible) -- again from Dhaka actually. Mr. Larson,
the developing countries -- (inaudible) -- America and the European
Union to bring trade to level standards. On its part, the U.S.A. is
not willing to balance its protection for textiles on this users of
antidumping laws. Also, the European Union wants to carry on keeping
out foreign farm products. In this situation, while both the U.S.A.
and Europe are yet to show more genuine commitment, what does it say
to fair trade? How fair is it on their part to export their level
rules of standards to the developing countries that will make the
latter's factories less viable? Are the developing countries then
wrong in considering the stance of the U.S.A. and the European Union
in linking level standards with trade issues as protectionist flaws?


LARSON: Well, no, thank you for that question. First of all, on
textiles, they do want to make sure that you and our other listeners
are aware that under provisions of the agreement on textiles and
clothing, which was concluded in 1994, we have seen a growth of just
under 60 percent in textile imports by the United States in the short
period of five years. And during that same period of time our textile
imports from Bangladesh have increased by over 80 percent.
So I think that even though this is, I would agree, a sector of our
economy that has higher protection than some other parts, it is also
indisputable that under the agreement that we have already concluded
these textile quotas are going to be phased out by 2005. And just in
the last five years we have seen an extraordinary growth in trade in
textiles under the provisions of this agreement.

So the first point is that we have in place an agreement
internationally that is going to phase out by the year 2005 textile
quotas, and countries like Bangladesh and Nepal and others are already
benefiting from this agreement.

Second, our interest in the issue of promoting high labor standards is
not in my opinion a goal that works against in any way whatsoever the
interests of developing countries. I don't think that anyone would
really argue that it is important in order to seize your comparative
advantage to have conditions that are exploitative or that are abusive
in areas like child labor. I think in fact the opposite is the case.
We found that as a result of the cooperation that we have been able to
have with Bangladesh on issues like child labor that we have actually
been able to increase imports because your willingness to address some
of these issues has removed a major source of concern on the part of
consumers.

It's very important to underscore that this has nothing to do with
wage rates, it has nothing to do with exporting the details of our
particular labor rules. It is really about some very fundamental
principles, about whether countries are prepared, as they were in the
International Labor Organization, to advance basic principles of not
supporting abusive child labor, not supporting slave or forced labor,
not supporting discrimination and not supporting rules and regulations
that restrict the rights of workers to associate and to bargain
collectively. And I don't think there is anything protectionist about
those principles which have been endorsed by the International Labor
Organization and virtually all of its members.


Q: You have mentioned child labor. I would like to ask another
question. The potential solution of labor and human rights abuses are
blocked by the WTO. I would like to give you an example. In a country
like Bangladesh we developed export processing zones very definitely.
When we developed processing zones we told the foreign investors that
the trade union activities will not be there. At that moment neither
the ILO nor your country or any developed country said anything about
that. So we developed export processing zones without trade union
activities. That's properly suits us at this stage of economic
development. At that moment when the World Bank and -- (inaudible) --
we are talking about discipline in the banking sector, they say that
the trade union activities there are really not helping the
institution for getting back the discipline in institutions.

Now when you are starting up and doing a little better your country
and the World Bank, including ILO, are saying that, no, it is a human
right. You cannot have -- labor should have that right -- trade union
business. And again when you say in the banking sector that trade
union activity should be respected. Don't you think this is a double
standard, including your country?


LARSON: Well, I guess I'd like to understand better the sense in which
you think it's a double standard. The concern that we have had about
export processing zones has been when governments have said, we agree
that there needs to be certain standards in our country in the area of
labor, whether it's workplace safety or rules about not employing
underage workers, or whether it was about the right to associate. But
then said, we are going to create a special territory or an export
processing zone where we are going to exempt employers from our basic
rules.

I think there is -- the people that worry about international
competition driving down standards worry about situations where
countries try to compete with each other based on their willingness to
derogate from their own standards. And I think this is an area where
it is from my vantage point not my country that is thinking about a
double standard, but the countries that are actually practicing the
double standard themselves, where they say, We have some basic rules
and regulations that we think are the right ones for our country. But
in this export zone where we are trying to sell products to other
countries, and where we think we are competing with our neighbor in
order to attract certain processing industries, then we are going to
have a double standard -- in fact, we are going to have a lower
standard. And that is a case where it really does appear as if
international trade and international competition is working in the
direction to force standards down or is what some people call a race
to the bottom.

Now, I happen to believe that as a general matter trade works in
exactly the opposite way. I think that by having our market open to
your products we are providing an opportunity for your workers to earn
higher incomes and to provide in a better way for their families, and
that that has the effect over time of raising labor standards. But I
am very worried, frankly, about the situation where a country itself
practices a double standard -- one standard for the general economy,
but then a separate lower standard of protection in export processing
zones.


Q: Ambassador Larson, I would like to know from you actually how will
the demonstration in Seattle affect the American trade policy. Many
analysts have expressed the view that negotiations for trade
liberalization are unlikely to go far before the American presidential
election next year. How far will the Clinton administration be ready
to push to try for freer trade at this stage?


LARSON: I don't think that the American presidential elections next
year will prevent us from working very hard for the launch of a new
round of trade negotiations. I do think that, as many other observers
have noticed, it will be important to work very hard to build the
right political consensus for the launch of trade negotiations. And I
think that's going to require that all of us think hard about the
reasons why we weren't able to come to agreement in Seattle, and see
if we can figure out the compromises and the accommodations that will
be necessary for us to find common ground on the launch of a new
round. It may be that that will take a little bit of time. I certainly
don't advocate rushing back. But I do advocate working very, very hard
and very collaboratively with all of our partners to find the
political basis for a re-launch of these negotiations. And I can
assure you that there is nothing about our domestic political
timetable that will incapacitate my country from being a full
participant and a leader with others in trying to put this new round
together.


Q: You mentioned about (the one standard should have ?) a country. But
I would like to say regarding the your production measure in textiles
and in agricultural sector subsidies, don't you think that when you
were talking about the free movement of everything, the globalization
of the whole economy, when we are talking about the -- when our
products get into your markets, your product at any time any moment
are invading our market -- anybody, not only the Americans, but
Europeans, Indians and Japanese. But I cannot send my products or
export my products to your country. But again it's the question of a
double standard. You are -- sometimes you are very open -- you means
your country, where your -- (inaudible) -- is bigger. But you are
protectionist when you feel that the economy should be in your
control.

And again the last question, and I say that you mention about child
labor, which should not be used a fundamental resource. But would you
mind giving us some alternative that these children should have?
Because you understand our economy or a country like ours. The way you
develop the economy -- we could not have that chance until now. It is
only 29 years -- (inaudible) -- in 100 years. At the beginning you had
production, and you had production in all the sectors, and in some
parts even today. But in ours -- you are not a free economy, the
precondition of perfect competition, which nobody in the world can
see. In such a situation, would you give us some light on -- I would
like for you to give us some light on this, what should be done,
because until or unless we have our output and capacity bigger or we
can increase our output and capacity, we cannot buy the products. We
cannot have any international market or anything if you think about
it. So again it's not the question of double standards; it's the
question of the right or the question of the ability, the question of
--

So my question finally about what should be the alternative for the
child in a country like ours -- production in agriculture and
subsidies -- sorry, in textiles and subsidies in these cultures. Would
you mind just to have your comment?


LARSON: Certainly. First of all, just to reemphasize a point that I
made earlier, in the area of textiles the United States is on a path
for ending all quotas with respect to textile trade within five years
-- all quotas ended. And in the last five years we have progressively
eased these quotas to the extent that Bangladesh has increased its
exports of textiles and apparel to the United States by 80 percent. So
if we are protectionist in textiles, we are sure not very good at it,
because we have seen our trade in this, our imports in this area, grow
very rapidly. And they are going to grow even more rapidly in the next
five years.

Moreover, we were prepared in Seattle, as part of a total package, to
put all industrial product tariffs on the table. In the end it was not
possible to do that, because it wasn't possible to put together a
total package. But we were prepared to put all tariffs for
manufactured goods on the table for negotiation.

Now, on the question of child labor, I think that it's very important
to note that in Bangladesh there has already been important progress
on a project to end child labor and to put child workers into school.
And this is something that has happened in the area of textiles or the
garment industry, and this has happened even though the garment --
this has happened at a time when the garment industry has expanded its
employment from roughly 50,000 workers in the early 1980s to over 1.5
million workers today. Eighty percent of these workers are women who
are working in their first paying job.

I think this is a perfect example of what can happen when there is a
thoughtful approach to this policy, to this area. I mean, it is not in
any country's interest to have its children locked into relatively
low-paying, unproductive jobs. It's in their interests to develop the
capacities of these children through education so that they are
equipped to be full participants in the society and can take much more
productive and higher-paying jobs in the future. And that's why this
program that Bangladesh itself has initiated is such a wonderful
example of the fact that ending exploitative and abusive child labor
is a pro-development policy. It is not an anti-development policy.


MS. MCMILLON: Thank you, Dhaka, for your questions. We'll now return
to Antananarivo to continue our discussion. Please go ahead with your
questions and comments.


Q: Yes, Mr. Ambassador -- (inaudible) -- is my name. I am director
general of commerce and commercialization of Madagascar. I am
participating in the ministerial conferences of the WTO. I was at
Seattle. I would like to ask you a question about the follow-up on the
Seattle negotiations. It was scheduled to continue the negotiations
among the ambassadors in Geneva. Could you tell us the deadline to
find a solution for the differences of opinion among the countries and
to establish a ministerial declaration draft? Thank you.


LARSON: Thank you for that question, it's a good one. But there is not
an easy answer to it. When at the end of the week in Seattle the
ministers decided to suspend the conference -- that means it wasn't
finished or concluded, it was just suspended -- but a new day for
resuming the meeting was not chosen at that time. Now I think it's
very important that the director general of the World Trade
Organization, Mr. Mike Moore, will be actively consulting all of the
trading partners in the WTO to get their best advice on how and when
to proceed. I have stressed in our conversation today the importance
of finding a political basis for a resumed negotiation. I think it's
clear that countries around the world are going to need to think about
their positions. They are going to need to reflect on the importance
of having a new round of trade negotiations.

A number of observers have commented that many countries came to
Seattle with a lot that they wanted and very little that they were
prepared to give up in order to get a new round. And to put it very
simply, I think that all countries are going to have to make a new
calculation of how much they have to lose if we don't get a new round
of trade negotiations launched, and therefore a new calculation about
how much they are prepared to put on the table, how much they are
prepared to offer to get this round started.


Q: Yes, good morning, Mr. Ambassador. (Inaudible.) I am a journalist
at a daily newspaper in Antananarivo. Three questions. For countries
such as Madagascar, the proposition of trade -- I wonder if it is
really a panacea in order to be able to enrich ourselves for our
well-being.

From 1995 to 1999, international trade has increased at the rate of 8
to 9 percent per year, but trade in Africa and in Madagascar has been
going down from 7 to 10 percent per year with the rest of the world.
Now, only 5 percent of world trade is accounted for by these figures.
Also, the trade in Madagascar is only roughly $250 million. Is there a
chance that we could impose ourselves in the world market, or even in
the United States market? As you said in your brief opening remarks,
international trade can generate income to improve the well-being of
citizens. So my question is how can the gains of international trade
be shared to the extent that it's not governments that engage in
trade, it's the private sector, it's enterprises? Are there means of
pressure to force enterprises to share their profits with their
workers and with all citizens? Thank you.


LARSON: I don't think there are policies that force us, but I think
there are policies that strongly encourage that type of result.

I agree with your analysis that one of the real handicaps that many
African countries have faced in the last decade is that unlike many
other parts of the world they have not been able to participate fully
in the global economy. They haven't been able to enjoy this boom in
international trade. The reasons for that are complicated and probably
go beyond the amount of time we have for this program. But I think one
thing I am convinced of, having spent five years of my life living in
Africa, and that is there is absolutely no reason why African
countries can't benefit from trade in the same way that so many of the
emerging countries of Southeast Asia have enjoyed benefits from trade.
Part of the issue, part of the challenge, is to provide the sort of
education so that workers are equipped to be effective and productive
workers. Part of the challenge is to open up the economy to foreign
investment so that productive capacity in the country can be built up.
It's important to have domestic investment, but it's also important to
open up to foreign investment, because very few countries have within
themselves enough capital and enough expertise to do everything that
needs to be done. So I think the openness to investment is important.

Then in addition there are some important trade policy decisions that
have to be made. In many African countries the level of protection is
extraordinarily high, and some of the basic insights of trade policy
is that the more you have protection against imports the more likely
is your economy to be structured in a way that you are not going to
effectively be able to export. So there needs to be a fundamental
policy choice on the part of governments about whether they are going
to really hitch their star to the world economy. I think that if
governments make those decisions in the right way there is no reason
whatsoever that African countries 20 years from now will not be able
to look back on a period of unprecedented growth in trade and
unprecedented growth in development and prosperity for their own
people, just as many of the Asian countries are able to do that today.


Q: Good morning, Mr. Ambassador. Madame Alice Alavariz (ph) is my
name. I am a journalist at ACO (ph). Recently it's often been heard
that there are bills in the U.S. on the African Growth and Opportunity
Act. Is there a hope that this act will be enacted? And if you could
give us an outline of the bill please.


LARSON: Sure. We worked very hard to secure congressional approval of
the African Growth and Opportunity Act. I had high hopes in November
that it could be passed this year before the Congress went into
recess, but to some extent it's like the situation in Seattle -- time
ran out during a very busy session of our Congress and there simply
wasn't enough time to enact either the African Growth and Opportunity
Act or the Caribbean Basin Trade Enhancement Act. We are going to work
very hard when the Congress returns to session early next year to
secure enactment of these bills.

The major provisions of the African Growth and Opportunity Act are to
provide duty-free access, tariff-free access to our market for the
majority of products in our tariff classification. And I think this
would provide preferential access to African countries, and provides
some real opportunities. We talked a lot about textiles in the program
this morning. One of the things that the African Growth and
Opportunity Act would provide would be for duty-free access for
textiles produced or garments produced in Africa. One of the
controversies that actually prevented the Congress from approving the
bill last year was a disagreement about exactly how the textile and
apparel provisions of the agreement would be structured, because there
are lots of details in that regard that have to be decided before that
provision could be agreed.

But I do remain optimistic that it will be enacted next year, and I
can assure you that the administration is going to make an all-out
effort to secure enactment.


Q: (Inaudible) -- is my name. I work in the Ministry of Commerce in
Madagascar. The implementation of WTO rules has always been a
difficult issue for developing countries, even for developed
countries, in spite of the various information that we have received
and for which we thank the United States government. The problem is
that it is difficult to conduct investigations, and it is difficult to
provide proof if we have conflicts with large countries, if we don't
have resources to give subsidies to firms which might be facing such
difficulties. Can you offer a solution to this issue, Mr. Ambassador?


LARSON: Sure. First of all, my own conviction is that it almost never
is good government policy or particularly effective to grant subsidies
to firms. But I do agree with your point that many countries --
developed, developing countries, and in some cases developed countries
-- don't feel they have all the technical capacity they would like to
have either to meet obligations or to analyze the effect on them of
certain trade provisions.

When President Clinton met with the heads of international
organizations that are providing technical assistance in this area, we
heard a lot of wonderful ideas. For example, I believe it's the United
Nations Development Program that is experimenting with a program that
will provide assistance to countries that think that they spotted a
practice somewhere else in the world that is harmful to their
interests and may be contrary to the contrary to the rules of the WTO,
but they just don't have enough analysts or lawyers to help them
figure out what's going on, and that maybe the UNDP can help in that
area.

Secondly, the Food and Agricultural Organization, the head of that
organization, Mr. Diouf from Senegal was talking about the types of
programs the FAO has to help countries analyze the very important but
also very technical areas of sanitary and phytosanitary standards. And
again this has both an element of making sure that countries comply
with WTO obligations, but also helping them understand situations
where they may fear that their products are being kept out of a market
for reasons that aren't appropriate.


And these are just two examples of areas where international
organizations are helping developing countries protect their rights in
the world trading system.


MS. MCMILLON: We'll return to Dhaka now for more questions and
comments. Please go ahead Dhaka.


Q: This is -- (inaudible) -- from Financial Express, Dhaka. I had the
opportunity to cover the WTO ministerial conference directly in
Seattle, and I have seen there was a general impression even among the
U.S. journalists that the conference failed because the United States
wanted the conference to fail, because of political reasons. The logic
is simple: the U.S. government understood that it will fail to include
some of the issues such as labor standards in trade talks; and if it
fails to include these issues in trade talks, then the prospect of
winning the next general election for the ruling party will be
difficult. What's your comment?

LARSON: The logic is simple, and the logic is wrong. It simply is not
true. We worked very, very hard, and would have liked to have seen
nothing more than to have had the Seattle meetings end with a
declaration that announced the launch of a new round of trade
negotiations.

I think that for any of us that were in the negotiations the reality
was more complicated than the simple logic that you outline. One of
the realities was that there was an enormous amount of work to be
done, and a number of very, very complex issues, some of which had not
really been dealt with in the trading system. These included areas
like transparency, the environment, some of the issues that we have
been talking about today -- capacity building for developing
countries, the issue of how worker issues might be brought up in the
WTO.

Beyond that, some of the more traditional trade issues have always
been difficult. As I mentioned, earlier efforts to launch WTO or at
that time trade negotiations under the General Agreements to Trade, or
the GATT, foundered in 1982, and traditional issues like trade in
agriculture were a big part of the differences that arose at that
time.

I think we also have an issue that we need to come to terms with on
the internal working procedures of the WTO. There are now 135 members
of the WTO. It has grown enormously. And that's a good thing, because
it's very important for the WTO to be an inclusive organization and
for countries all around the world to be a part of this rules-based
trading system.

We tried hard, and the director general of the WTO, Mike Moore, tried
hard, to have a process in Seattle that was very open, there were
working groups on four major issues -- they were open to all
countries. But it is hard in that type of conference to get 135
different countries to agree on a common document.

Finally, I think that the preparations for the meeting were not as
good as we might have hoped. The process in Geneva among the
ambassadors to the WTO had produced a very long document with many,
many brackets; that is to say many, many areas of disagreement. And I
think that to some extent reflects the political reality I mentioned
earlier in our conversation; that is, that many countries came to
Seattle seeking much but willing to give up very little. And in the
end that made it impossible to reach a deal.

But I really must take issue with the characterization that the
questioner offered, because it simply isn't correct. We wanted this
conference to succeed. We are working hard now with other countries to
establish the political foundation so that the launch can occur as
soon as possible.

MS. MCMILLON: We have about two minutes remaining, and we would like
to take one quick question from Dhaka and a brief answer. Thank you.
(Technical difficulties.) Well, Ambassador Larson, we would like to
have closing remarks from you then. Please go ahead.

LARSON: Well, thank you very much. And again, I would like to thank
everyone who has participated in this discussion. I think that it's
extraordinarily important within our countries and across countries to
have a very honest dialogue about trade. Trade is a very controversial
issue, and it's controversial here in the United States as well. It's
striking to me that so many of the comments and questions that we
heard on today's program, if phrased only slightly differently, could
be questions of the type I would hear if I were to visit cities within
the United States like Detroit -- you know, How can we compete in the
world economy? How can we be sure that trade is fair when other
countries have all these advantages?

I think we have to appreciate the fact that trade is a win-win
proposition. It is something that allows all of us to prosper and to
provide a better life for ourselves and for our children, that because
it affects everyone so deeply it is necessarily going to be
controversial, and that makes it all the more important that we have a
very open dialogue of the type we had on today's program. Thank you.

MS. MCMILLON: And that is all the time that we have for today's
dialogue. I would like to thank everyone for their participation in
Dhaka and Antananarivo. We would especially like to thank Ambassador
Alan Larson for giving us his time and being our guest today. Thank
you, sir. I'm Doris McMillon. Seasons greetings and best wishes from
all of us in Washington.


(end text)


(Distributed by the Office of International Information Programs, U.S.
Department of State.)