U.S. Relations with the People's Republic of China (2005)

U.S. Department of State

Press Roundtable in Brazil

Robert B. Zoellick, Deputy Secretary of State
United States Embassy
Brasília, Brazil
October 6, 2005

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DEPUTY SECRETARY ZOELLICK: Well, let me deal with the second one and then come back to the cotton issue.

The United States has always approached free trade areas as something that can complement each other. We don't have a mercantilist vision of saying we can only trade with countries that have a free trade agreement with us.

Chile, which is one of the leaders in creating free trade agreements, is a free trade partner with Mexico. And I find no shortage of countries interested in doing free trade agreements with the United States. So, you know, I don't think it is going to stop the Andean countries from wanting to pursue their free trade agreements. There is countries in the Middle East that are knocking on the door. We have the South Koreans and other countries that want to do them. So, I don't think that they interfere with one another. These things need not be seen in a competitive sense. They need to be seen - I think the question is the quality of the free trade agreement and, you know, do you - under the WTO rules you're supposed to have a comprehensive agreement that opens up all sectors. There are slightly different standards for developing countries, but you want to try to avoid agreements that just become trade diverting - as opposed to trade-creating - in the process. But, if you can deepen economic integration in South America and people can use this as a way of supporting the economic growth and development of the region, that's a good thing.

On cotton, I didn't raise it, but it's partly because of the meetings that I've had so far in the process. But, as for your question about the cotton case, look, I think there's two perspectives; One is, you know, we're members of the World Trade Organization for a reason, which is when there's a dispute on issues like this bring it to panels, you know, you have an impartial arbiter make the decision. And the goal is then to take action, not just retaliate: in other words retaliation blocks trade. So, you know, our position, as you know, has been: we have put forth legislative proposals to try to come into compliance with the WTO decision. We, like Brazil, have a constitutional system where we have to work with our congress to do that. We're committed to trying to do that and, frankly, I think retaliation would be counterproductive in doing that. And, you know, just from my trade experience, you start those set of actions and there's a lot of other things that can start to happen and it gets additional aggravation. So, retaliation is a tool, but you have to be careful when you use the tool that you are trying to actually keep an eye on solving the ultimate problem.

Now the other issue is the one that I mentioned before, which is that the real way to address the issues of subsidies and market access for agriculture is in the Doha agenda. President Bush just restated before the U.N., you know, our commitment to try to address, if others would, all subsidies and market access. Others haven't necessarily been willing to do that, but what we have set up in the Doha agenda is a potential result that would be much more wide-ranging than one we had in the Uruguay round. Now, the world isn't only agriculture. One also has to have goods and services, ok? And sometimes Brazil is very aggressive about wanting to sell agricultural goods -- it's not so aggressive about wanting to open up its manufactured good market, to say nothing of its services market. And indeed, you know, there have been some areas that Brazil said that it would do in the Cardoso administration it still hasn't done. Which may be a reminder to people about being a little careful about taking some of these actions about following through on commitments, because, you know, Brazil hasn't been able to follow through on all of it's from the Cardoso administration in some of the areas of finance and investment. So, the goal here, keeping in mind, is -- Brazil is an economy that has great potential and you can see in agriculture and other areas it could be one of the driving economies of the world system. It needs to be able to sell, but most countries have also learned that you have to open up your economy to competition to also truly develop productivity.

Oh, I know what it was what I was going to say and your, in fact, kind of, your question prompted this. One of the other thoughts that I had and this is...

[crosstalk]

No, I'm sorry. Remember I said I forgot one, is that, what I mentioned in a couple of my meetings so far, was that, as I was flying down to Brazil I was reflecting on the fact that a month or so ago I engaged in a strategic dialogue with the Chinese about a wide range of interests: economics, nuclear proliferation, political, other issues. And I actually gave a speech not long ago where I sort of set out an agenda for that. And the response that I've seen from the Chinese is one that, even though I am sort of pushing them to see how we can engage together more as stewards of the international system, I think their response is positive. I also was reflecting on the fact that with India we're trying to move the relationship to a new threshold and going beyond some of the ties of the past. And it seems that we should be able to do more with Brazil too.

Brazil is a democracy, China isn't. And so, in some ways, whether it be working on democracy issues or economic issues or other topics, I hope that, you know, again, this is going to be an election year in Brazil, it's hard to sometimes do things in election years, but we can plant the seeds for recognizing that Brazil is one of the major developing counties in the world, that we should aspire to a more in-depth relationship.

Cristiano Romero, Valor Econômico: [translation] During Fernando Henrique's government, in the two terms of President Fernando Henrique there was an approximation, a very strong approximation between Brazil and the United States. This approximation looked like it would continue at the beginning of the Lula government, especially since there was a meeting between the two cabinets, President Lula's visit to Washington with half of his cabinet. It was a demonstration that Brazil apparently was going to continue giving the United States priority in its foreign policy. What we've seen since this has been just the opposite. Brazilian foreign policy today doesn't give priority to dialogue with the United States, it looks to intensify the dialogue, the so-called south-south dialogue. It's sought to intensify Brazil's approximation to international players that aren't the United States. So, I'd like you to evaluate this, in addition, how do you evaluate the fact that, economically and commercially, Brazil is isolating itself - taking up a bit the question which she asked at the beginning - and if this couldn't be a problem for Brazil's future relations with the United States, to the extent that the United States is making bilateral agreements in the entire region and Brazil, in fact, is getting isolated. You said that you'd be consulting during this - that President Bush will be, and you're also consulting with Brazilian authorities about the situation of democracies in Latin America, principally in South America, the [inaudible] democracies. And you cited Venezuela. Recently, President Lula said that there was an excess of democracy in Venezuela. Do you agree with President Lula's statement?

DEPUTY SECRETARY ZOELLICK: Well, as I started out by saying, Brazil is a good partner of the United States and one of the reasons I'm down here is to consult with that partner. And I believe that our shared commitment to democracy provides a common bond that is very important, but I also believe that there is more potential to develop the relationship. And one of the reasons that I'm here is to try to get views from the Brazilian perspective about how best to do that, where there'll be commonalities, how to pursue those issues. I worked very closely with Minister Amorim to move the Doha negotiations forward, so there is a very close cooperation in terms of our trade interests, and I as suggested in the answer to Ms. Chrispim's question, I think that I hope that the United States and Brazil can move forward the Doha negotiations now. So, you know, it's up to Brazilians to evaluate, you know, kind of, their overall priorities and foreign policy.

I, again, I would say that, from a U.S. perspective, we're a global player, I mean, so I spend my time, you know, in East Asia, Latin America, you know, Africa, I'm going to Sudan in a couple of weeks probably, and we value partners that can work with us and I think particularly there's a potential for some of the major developing countries to step up into larger roles in that sense.

You know, this is an issue that, and one of the reasons I gave the speech was to say to China, our policy for China for some seven administrations was to integrate it into the world economic system. Well, it's integrated.

You look at commodity prices, capital exchange rates other things. But, so, now we need to aspire for something beyond that and I talked about the responsibility of common stakeholders in the system. Well, you know, we work with India on a series of these issues too, whether they be, you know, dangers of nuclear proliferation in Iran, whether they be the relationship with the Islamic world, whether they be economic Islamic ties.

And, so, I would like to try to see something like that develop more with Brazil. But, you know, this is, this, in part, you know, depends on where we can find the sort of the commonalities of interest. So that's one of the reasons that I'm here to try to discuss some of the topics, is that, you know, I - when I met with Mr. Garcia today, and we talked about an upcoming trip he'd make to Nicaragua and I talked about my sense of the situation there and how the United States can work together again with the OAS. So, you know, we welcome stronger ties and, I guess, you know, what I found over my diplomatic experience in the past and now and Trade Representative, is that it's important not just to discuss these in theoretical terms. You know, what can you practically do together. And the one that I'm focused on is the challenge of democracy and economic opportunity in Latin America for the reasons I said. I think this is going to - there are some fragile countries. And we should have some common interests in working on this stuff.

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