Interview of Chief of Staff John Podesta and Secretary of Agriculture Dan Glickman by Members of National Association of Farm Broadcasters

The Roosevelt Room

5:15 P.M. EDT

MR. PODESTA: Thank you all for coming today. I'm John Podesta, the President's Chief of Staff. And I want to spend a couple of minutes talking about why we're here today as part of normal trade relations with China, then let Secretary Glickman make a brief statement,and then be happy to take your questions. And I want to thank you all for giving us the opportunity to address the issues on the minds of, frankly, many people here in Washington and those farmers and people in rural America around the country -- China's entry into the WTO.

I want to begin by saying that the President had hoped to be here himself today, and regrets that he couldn't be here. As you know, he's attending Cardinal O'Connor's funeral in New York, which has kept him away from this event, but did want me to let you know that.

There is no more pressing issue on the President's agenda, and on the agenda, frankly, we believe of America's farmers than this agreement. And there is no other sector in the American economy that is going to benefit more from the vote that the House will take in a little more than two weeks. A fair and open global trading system offers U.S. agriculture the best hopes for a prosperous future.

Today, one out of every three acres of America's farms is dedicated to exports. To farmers, exports means income, jobs and a reduced risk for American agriculture. With exports accounting for an estimated 30 percent of gross cash receipts, it's not surprising then that America's farmers are twice as reliant, twice as reliant, on foreign trade as the U.S. economy as a whole.

No nation offers a greater potential consumer base for American business and agriculture than China. Last quarter its economy grew at a rate of 8.1 percent, and has grown at 9 percent annually since 1994. Incomes are increasing. The Chinese middle class is expanding. Private enterprise is taking root in China. As the world's most populous nation, China is in the midst of a gradual, but far-reaching economic reform.

In the past our access to the Chinese market has been tightly restricted, as you all well know -- high tariffs, government subsidies lack of transparency, no rule of law. Last year, every man, woman, and child in China consumed less than a single dollar's worth of American agricultural goods. But by joining the WTO, China is opening its market to American products.

This agreement provides a comprehensive approach to dealing with China's trade policies and will assist in leveling the playing field for U.S. products. Tariffs on priority products will drop from 31 percent to 14 percent. Many tariffs would be lower than those assessed by our traditional trading partners. Export subsidies would be eliminated, which will have a major impact in nations like Korea, where we're competing with Chinese exports for market share.

Domestic price supports would be capped and then reduced. State trading enterprises would be phased out, allowing direct business-to-business contact. New tariff rate quotas with lower tariff rates and higher caps would be introduced. Removal of import bans on citrus, wheat and meat, which have already paved the way for the first exports to China in more than 20 years, which we've just seen recently, in the last couple of months.

American agriculture needs these concessions, especially after two or three years of coping with soft export demand and wheat prices brought on initially by the Asian financial crisis.

For the family farmer in America, trade is not an abstraction, it is vital to their bottom line. But no one is hurt more by dips in commodity prices than family farmers. In joining the WTO China is committed to disciplining its agricultural trade policy, which will lead to greater stability in world markets. All told, we expect that by 2005 we could see an increase of $2 billion a year in American farm exports. And as Dan is going to mention, some new studies indicate that that number could even be higher. That's almost twice as much as last year's total farm exports to China.

Unlike most conventional free trade agreements, where there's give and take on both sides, in this case all the concessions are on the Chinese side, because our market is already open to them. We have absolutely nothing to lose. On the other hand, we have everything to lose by rejecting permanent normal trade relations. China will still join the WTO, but the United States will be left on the outside looking in, as our competitors march into China and seize the market share that we helped to open. It would take us years to regain any kind of commercial momentum in China.

Let me conclude by noting that the U.S. is the largest and most efficient agricultural producer in the world. If our farmers have the right access, we can out-compete anyone.

With record economic growth, 21 million new jobs, and deficits on decline, this is a moment of great promise for America. This vote will help ensure that despite the hard times of recent years, it will also be a moment of great promise for American farmers and the rural communities they support.

So we urge you, and we urge the people casting this vote, to move forward together and seize this opportunity.

Let me turn it over to Secretary Glickman.

SECRETARY GLICKMAN: Thank you very much, John. Let me just makea couple of additional points. The administration negotiated what I called stunning reductions in trade, and in increases in tariff rate quotas, reductions in export subsidies, and elimination of sanitary and phytosanitary barriers in all products, virtually -- meats from beef, pork, poultry; dairy; citrus; specialty crops of all sorts. I mean, things we would give our eyeteeth with, if other countries would negotiate the same thing. So this is just an enormous, tremendous opportunity.

I came back from China last week, where I led a presidential delegation, where I saw American soybeans coming into the port of Shanghai; where I visited a large grocery store, kind of like a hypermart, in Shanghai, where we saw American citrus, American beef, American specialty crops. And the fact is they like our products because our quality is great. So it gives us an enormous opportunity into a market in which the middle class is rapidly expanding.

And one final point: There have been some recent studies which would indicate that even some of our figures on American exports of grain to China may be conservative. A Harvard study done recently indicates that China would increase substantially grain imports after it joins the World Trade Organization. And recently Lester Brown of the World Watch Institute indicates a very bleak future for Chinese grain production because of lack of water supplies.

Now, all I'm saying is, we have an opportunity here, given our production, to take advantage of those markets, which I don't want to see us lose to our competitors in other parts of the world.

MR. PODESTA: Will take questions. Rick, do you want to start?

Q: Thank you. And on behalf of the professional members of the National Association of Farm Broadcasters, thanks for taking time out of your day to join us here, gentlemen. We do appreciate it.

Given the importance that PNTR for China has for American agriculture, can this administration circumvent the political posturing that we're seeing going on on Capitol Hill to bring this vote to the successful conclusion? And how close are you to having enough votes to pass it in the House and the Senate?

MR. PODESTA: Well, we're working on it every day. I think that we -- the President has been out, he's spoken about it publicly, and he's speaking to members individually, privately.

Every member of the administration is engaged in this effort. I think we're making good progress. I think we have a ways to go. The magic number, as you know, is 218 -- that's what we need to do to get over the top. We're working very cooperatively with the leadership in the House starting with Speaker Hastert and the whole leadership team there to make sure that this vote is successful.

I think we're feeling good about it. We had a number of both Democrats and Republicans come out last week in favor of PNTR who had been previously undecided. But it's going to -- we've got more work to do and we've got questions to answer. And we're all out, as I said, in force trying to convince members that this is the right thing to do for America, and it's the right thing to do ultimately for our national security posture. And we're doing that with every tool that we have. But we're hopeful, I would say, bordering on confident -- but you're never confident in these things until the vote's cast that we'll be able to secure the votes for this.

Dan, do you want to add anything?

SECRETARY GLICKMAN: No.

MR. PODESTA: Dan just took four members --

SECRETARY GLICKMAN: I will say this. I took four members, and two were committed yes, two were undecided. And I, as of last week, the undecided hadn't committed. But they were astounded at the change that has taken place in China. And the fact is there are perceptions about China in this country that you might get from certain advocates, certainly, and I understand that. But when you go over there and you see that it's not as monolithic as one would expect -- there is massive change, economic change, a lot of middle class, a lot of use of the Internet, a lot of interest in communication with the world, and a significant amount of change in human and religious rights as well -- I think they were very impressed with that.

Q: John, even those who oppose this deal, this PNTR deal, admit that it's going to be good for agriculture. But they say our balance of trade is obviously lopsided with China, and that if we sign this, it will only get worse. How do you respond to the balance of trade? Will it help narrow it, or will it broaden it further?

MR. PODESTA: Well, we already talked about the outlooks for American agriculture, which is selling our products over there. We think it will -- in the end, it will help boost American exports to China in both high technology, in goods and services, and in agricultural products, which can only help reduce the trade deficit -- because, quite frankly, the U.S. market is relatively open to Chinese goods. For the last 20 years, every year, the Congress has voted for normal trade relations, which provides the benefits that PNTR, on a permanent basis, would give to Chinese exports.

So I think from that perspective, it will only help to sell more product, more American products, more American services, into China. And again, their side of the deal is that they get to join the WTO. That's important to them; it will help modernize their economy, make it more competitive. But I think that this is a winner for America and for American industry.

And that's why we have, I think, so much support from export-oriented industries. And I think those members of Congress that are in districts that are particularly affected by trade and by exports are beginning to see that and feel that strongly.

SECRETARY GLICKMAN: I'd just say a couple things. One, the United States Trade Representative's Office negotiated this tremendous agreement with China. If we were to vote this down, there is some question about whether we could get the benefits of the tariff reductions. But it's clear we couldn't get the other benefits-- the TRQ: changes, the sanitary and phytosanitary changes. So who's going to get those? Our competitors in the EU and in Australia and other places in the world. Everything we negotiated they're going to get the benefit of if we vote this thing down.

So, I mean, it strikes you that it's kind of not a constructive and rational thing for our country to be doing, just unilaterally giving all these great agreements that we negotiated to every other country in the world that didn't expend any resources to get those agreements. And I think that's one of the main reasons why it's very important that we participate in the same way that the rest of the world does.

MR. PODESTA: I think the other point I would note is that as part of the agreement, Charlene Barshefsky, our Trade Representative, negotiated some special protections that will deal with import surges from China that go beyond what we currently have under U.S. trade law and Section 201. So there's actually additional protection on a product-specific basis that will aid in reducing any threat that you suggest of actually expanding the question of --

Q: How long will it take to realize our agricultural potential? Months? Years?

SECRETARY GLICKMAN: Well, we've already started with our sales of citrus and meats and Pacific Northwest wheat. And my judgment is that as the Chinese --

MR. PODESTA: And citrus.

SECRETARY GLICKMAN: And citrus -- as the Chinese move into the WTO, those purchases will begin to increase fairly significantly and fairly rapidly. I mean, our estimates are, by the year 2004, we're talking about $2 billion in additional sales. But as I've said, some of the recent numbers on the grain side indicate that that may be conservative.

Q: How can a positive or negative vote on PNTR for China affect human rights or worker protection standards?

MR. PODESTA: Well, we believe, obviously, strongly in the cause of human rights. We've battled with the Chinese on their record on human rights. We just supported a resolution in Geneva condemning some of their human rights practices, and we'll continue to press that case. And we think that we want to use whatever levers we can to press ahead, to improve human rights and working conditions in China.

But it is our view that this agreement and bringing China into the WTO will actually help the cause of human rights in China, by opening China up to new technology, more Internet access, more sources of information, business practices that U.S. firms will actually bring into China when they hire workers, and provide the kind of basic workers' standards in businesses overseas.

And I think that that is in part why people like -- last week Martin Lee was here, who's a great democracy advocate from Hong Kong, who said that -- he said to the President, he said to members of Congress -- many of whom he has dealt with over the course of many years, some of whom are opposing this agreement because of the human rights issues -- and he said that he saw -- while he continues to be troubled by the human rights practices of Beijing, he saw no other route than to try to bring them into a rules-based trading system, to try to improve the rule of law in China, to try to bring China into -- make it more integrated into the world system. And in the long run, the cause of human rights would be well-served by that.

And I think that's why the president-elect of Taiwan, for example, supports PNTR for China. They see Taiwan entering along with China, and that will actually, in our view, reduce tensions in the Straits of Taiwan and result in a peaceful resolution of that conflict, as well.

SECRETARY GLICKMAN: Let me just add a couple anecdotes from my trip. One is, we visited with Bishop Jin (phonetic). He is the Catholic Archbishop of Shanghai. He was in prison for 27 years, from 1955 to 1982, for allegedly spying for the Vatican. He commented that the only reason he survived the cultural revolution was that he was in jail, and they couldn't find him, didn't know where he was. (Laughter.)

But his point was, he now has, he says, about 5,000 people every Sunday come to Mass at his church. He says they haven't reached perfection or nirvana in China at all on religious liberties, but he says that things are moving in the right direction. And if the United States were to disengage from China right now -- which a no-vote would do -- it would make it extraordinarily difficult to get the Chinese to move in the right,correct direction in human rights and religious liberties, and those kinds of things. Not that they'd move that far yet -- they still have a long way to go.

Then one other anecdote was interesting. We went to the Shanghai Stock Exchange, interestingly, headed up by a former Kansan from the University of Kansas. And I think he's still an American citizen -- he was on Wall Street. And we went into the Stock Exchange where -- it was probably one of the most modern exchange floors in the world -- all electronic trading. And there were American investment bankers there doing their stuff, I mean, with Chinese people running them. And on the wall in the back was the Reuters display.

And they had the ticker going across the board, and they had all the exchange prices from every country in the world. And I thought to myself, how is it ever going to be the same; it will never be the same there because they've seen the world. And they've got to be part of this world. And it's going to change the way they do everything -- maybe not overnight, but at least it's moving in the right direction.

Q: You're right on China, and I think there are a lot of other countries in Southeast Asia that we ought to be willing to trade with. I was on the trip with Secretary Schumacher -- we hit Japan, Korea, Hong Kong, Singapore, Indonesia. Our ATO offices are saying it's going to bust wide open, they're going to be able to sell a whole lot more. We talked with many importers who said they would buy more.

Our ATO offices could stand a lot of help. And we gave out free rice, free milk in some of the areas of Java, and they could use a lot more U.S. products. They want U.S. products. Now, if we put on a big push in all of Southeast Asia, I think we could get rid of a lot of American farm products.

MR. PODESTA: The Secretary and I have just been discussing that. We may have something more to say about that in the next month or so.

SECRETARY GLICKMAN: Well, clearly, Under Secretary Schumacher and his team are really trying to move into Vietnam and Indonesia, Singapore. Certainly Korea and Japan have been longtime big customers of ours. And we're pushing to get as much resources as we can in terms of ourforeign agriculture service and our agriculture trade offices. We met the folks in Shanghai and in Hong Kong, and we will continue to push that as best we can.

Q: Mr. Podesta -- if in the evening hours of Sunday, May 21 looks like you do not have the votes and it would be very difficult to round up enough during that week, will you go to the Speaker and ask him to delay it past Memorial Day, or is the administration prepared to let the chips fall --

MR. PODESTA: I think we are committed to trying to get the votes that week. And I think that until -- the Speaker scheduled a vote, which we encouraged him to do, I think that people found all kinds of places to run and hide and ask questions. And this is -- given the opposition to this vote on the outside, it's a tough vote for a lot of members. And we recognize that. We think it's the right vote. We think it's the right vote for the country; we think it's the right vote for people in most districts, right vote politically. And it's clearly, I think, in the national security interests of this country.

But I think that at this point we have scheduled the vote, we want to see that vote occur, and I don't think we'll back off from having the vote. And as I said, the Speaker scheduled it for that week. And you never say never in this business, but we're committed to seeing the vote that week.

Q: You mentioned human rights and getting countries in the right direction, and you talk of other nations in Southeast Asia. But why not try to open up relations with Cuba?

MR. PODESTA: Well, as you know, we had been embarked on a course of trying to open up more relations with Cuba, prior to the shootdown of the Brothers to the Rescue plane. And the result of that, which was, even if they were in Cuban airspace -- which we don't believe they were -- but even if they were over Cuban airspace, was unlawful under international conventions -- caused a real, I think, freeze in that situation, and caused the Congress to pass the Helms-Burton law.

We have tried to use the Helms-Burton law as much as we can to provide humanitarian assistance, et cetera. But that's under discussion on Capitol Hill, about a blanket approach, especially on food and medicine, to see if we can work out a provision. That's controversial on the Hill, but we've tried to engage with people on the Hill in a constructive way to reduce the use of agricultural embargoes, et cetera, by eliminating what we can under the law.

We've tried to take certain steps under our discretionary authorities to go a fair piece towards reducing things that the administration has imposed that are not multilateral, and that are not required by law. But we think there's some room to go there, and we're trying to work with Congress to see if that can happen.

Dan, you want to add anything to that?

SECRETARY GLICKMAN: No.

Q: Mr. Podesta, on that point, there's a bill introduced just a week or so ago concerning those sanctions. Is the administration behind it?

MR. PODESTA: I haven't seen the exact language of --

SECRETARY GLICKMAN: It's the amendment on the appropriations bill, I think that Nethercutt offered, which is basically what was offered before, I think.

Q: -- against Cuba.

SECRETARY GLICKMAN: Yes.

MR. PODESTA: I think we had -- when we were in negotiations last year, before this essentially kind of fell apart, more or less because there were disagreements in the Republican caucus over the Cuba question, I think we had some concerns about -- I thought they were not country-specific, but we were seeking some additional language in that amendment. And we would like to work constructively with Congress to see if we can get that through.

MS. MOLONEY: Ladies and gentlemen, we need to wrap up.

MR. PODESTA: I have one last announcement, which -- I was handed a sheet. So, because we've disappointed you by not having one President here today -- (laughter) -- the consolation prize is, there are going to be three Presidents here tomorrow. President Ford and President Carter are joining President Clinton and a number of notable Americans in support of PNTR. And I want to invite any of you who are still going to be around after your final meeting to the event -- do you know the time of the event?

MS. MOLONEY: 10:30 a.m., tomorrow morning.

MR. PODESTA: At 10:30 a.m. tomorrow morning. So you may have to get here a little bit earlier than that --

SECRETARY GLICKMAN: You get the privilege of hearing me first, but I can accelerate my remarks if you want me to. (Laughter.)

Q: Appreciate that. Thank you for your time.

MR. PODESTA: Thank you.

END 5:40 P.M. EDT