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U.S. Trade Representative Robert Zoellick briefs the media on the campus of Baylor University in Waco, Texas, at the conclusion of the President's Economic Forum. Half of President Bush's cabinet, including Vice President Dick Cheney, as well as some 240 people representing diverse economic sectors, are attending the forum in this mid-size city near Bush's ranch.
By Producer
msnbc.com
CHAT TRANSCRIPT

Joining MSNBC.com chat from Baylor University in Waco, Texas where President Bush is hosting an economic forum with members of his cabinet and many represntatives from diverse areas of business, United States Trade Representative Robert Zoellick discusses global trade, trade promotion authority for the President, and the Bush administration’s plans to rejuvenate the U.S. economy. Ambassador Zoellick took questions over the phone. Chat produer Will Femia moderates.

MSNBC-Will Femia: Our guest today is U.S. Trade Representative Robert Zoellick. As U.S. Trade Representative, Mr. Zoellick is a member of President Bush’s Cabinet, with the rank of Ambassador, and serves as the President’s principal trade policy adviser and chief trade negotiator.

Welcome Mr. Ambassador.

Question from Gareth Harper: I heard one quotes from the trade promotion authority story that the US has spent the last 8 years standing around picking the wax out of its ears. Do you share that feeling? And do you now feel like a kid in a candy shop on allowance day with the power of presidential trade promotion authority restored?

Robert Zoellick: It is true that the President has not had this authority for eight years and during that time a lot of other countries around the world have negotiated free or special trade agreements. There are now about 190 of these around the world and the U.S. is only party to three. One of the things we discussed with people on our panel is how this affects their business.

As for the second half of the question, it’s certainly great that Congress and President Bush have agreed on this, but as far as a kid in a candy shop... now there’s real work ahead of us because we have to negotiate those agreements and bring them back. We’re close to completing pre-agreements with Chile and Singapore. From there we’re going on to Morocco and Central America and Southern Africa and perhaps Australia and the authority is most important for brining back the really big trade agreements like the global agreement that involves 140 countries.

We’re delighted that this president’s been able to accomplish something his predecessor couldn’t get done with three tries and work can go ahead.

Question from Steve Manwell:

Will the new trade promotion authority law increase exports of U.S. autos, steel and other machinery? If not, why not? ...and how will the trade deficit problem be solved other than ongoing product dumping and the 30 year old currency wars?.....Why doesn’t the President have his forum in places like Flint Michigan?

Robert Zoellick: We hope to use the trade promotion authority to negotiate broad based agreements covering everything from agriculture to manufacturing to services to intellectual property, everything that makes part of a modern economy. Today in our forum we had the head of the National Association of Manufacturers who’s one of our biggest supporters, and we had some very small metal fabricator producers. We’ve had people that make products, from a person who makes Boeing airplanes to people that make road razers.

But we also had people that were part of America’s software industry. And one of the things that was most striking was one of the people who summarized things for the President: a UPS driver, who made the point that every for 40 packages sold abroad that’s one more UPS worker employed. So part of the story coming out was that trade is a two way street. It’s a win-win venture. When we import goods, we lower prices for consumers. If we have tariffs and barriers, those with lowest income often have to pay more. What was striking about today, we had people from big and small business singing the same song about this and they wanted us to do more.

Question from Troy: Given the dire state of foreign markets, what is your strategy to help the US economy? Isn’t the US basically alone in having to pull the rest of the world (and itself) out of this recession?

Question from Bonobonobono:

Is debt forgiveness and loosening of other loan restrictions part of the plan so that third world countries can have the money to actually buy American products?

Robert Zoellick: Those are two good questions to interconnect. On the first, the U.S. represents about 25% of the world economy so clearly the condition of our economy is important for the whole world. We are the biggest exporter so that means a lot of goods from America have to go around the world. Just to give you one numerical example over the last decade exports represented about a quarter of America’s growth.

It is the case that there is slowness in the world economy but this is a situation where frankly if we grow, we help them grow and if they grow, it helps us grow.

As for the debt forgiveness, this is an issue for many developing countries and it’s something the U.S. and other countries have done for developing countries. You don’t want to forgive debt unless the countries take action to get themselves healthy again. It has to be part of an overall program to get them back to health, otherwise you’re giving money away that comes from international finance institutions or private banks and investors. It’s like a work out strategy to get them back to health and development.

Question from deletefiles: Are companies going to have to pay taxes now? Or are Off-Shore hidden accounts going to be allowed under this administration?

MSNBC-Will Femia: Obviously the White House doesn’t control what’s allowed in other countries, but has anything from the recent scandals, off-shore tax shelters or other issues fallen on your desk?

Robert Zoellick: What that question really refers to is the fact that the tax writing committees in Congress are looking at methods that some companies have tried to use to shift their companies overseas to low or no tax areas. The administration has been working with Congress to try to close any of those loopholes. That’s really not a direct trade issue, but does affect world economy.

It reminds me that what a lot of people often overlook when we talk about negotiating trade agreements is cutting taxes on trade. We are lowering the costs of goods for Americans to buy. The last two really big trade agreements in the 90’s, NAFTA and the Uruguay Round negotiation, those benefits, in terms of lower prices and added income, amounted to about $13,000 a year for a family of four.

Another thing to think about as families get ready to take their children back to school, there are a number of states and localities giving a sales tax break. They have a tax free week so that prices are lower by five to ten percent. Why not lower the tariffs on those items so you can cut prices all year by ten, fifteen, twenty percent?

Question from Mike Sargent: What’s being done to get the US off Arab oil? What about Russian and South American?

MSNBC-Will Femia: A common topic in the chat room.

Robert Zoellick: There was a session here on energy. The point you’re asking about is one the President was stressing on why he wants Congress to finish his energy legislation before it finishes this year. But you also raise an excellent point in that there are sources of energy in Russia for example that will allow us to diversify. Given that oil drives the world economy, it’s not something we can escape because even if we produce it ourselves, the best strategy is to have a multiplicity of sources.

Question from Brett Wheelman: How much resistance to trade deals have you encountered as a result of non-trade issues like Kyoto, the war on terror, the death penalty… and whatever else the world hates America for?

MSNBC-Will Femia: Can you talk a bit about how you have to work with the rest of the government on stuff like that?

Robert Zoellick: That’s a very interesting question. In general, trade is something that frankly can help America make its case abroad as opposed to via conflict.

Take the war on terrorism. One of the things the President has emphasized is that while we don’t believe poverty around the world causes terrorism, it is the case that some impoverished countries become breeding grounds for dangerous people. I was in Indonesia a while ago and the president there is trying to fight Islamic radicals. One of our methods of doing that is expanding trade and creating growth and opportunity.

Our policy helps support not only economic growth but America’s most basic values. The heart of it is in this administration, the President has urged us to be sure our foreign and trade policies are working in tandem together.

Question from Denise Halaban: I understand the President hopes to broaden free trade pacts with the return of trade promotion authority. Since we gave exemptions to steel tariffs to our free trade partners, might expanding that partnership to many other countries take away U.S. ability to protect itself from some of the hazards of free trade (as it did for steel)?

Robert Zoellick: That’s a good question. It is the case that when we put in the steel safeguards, we did exempt our partners. We asked the International Trade Commission to give us an analysis, and the injury would have been cured even if they weren’t exempted.

But there’s another logic to exempting the free trade partners. If we can develop a good and open trade system with other countries where we can get at the practices we object to in other countries, it makes more sense to have a free and open market.

I’m afraid I’m going to have to be moving on, but I hope I was of some use to you.

MSNBC-Will Femia: Thank you very much Ambassador, I appreciate you taking this time with us, I know you’re busy.

More on the forum where Ambassador Zoellick is now.

More on trade promotion authority.

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