[Weekly Compilation of Presidential Documents Volume 35, Number 48 (Monday, December 6, 1999)]
[Pages 2485-2489]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Telephone Interview With Michael Paulson of the Seattle Post-
Intelligencer From San Francisco, California

November 30, 1999

    The President. How are you?
    Mr. Paulson. I'm good. How are you doing?
    The President. I'm great. I'm going to the San Francisco Airport, on 
my way to L.A. and then to Seattle.

Disruption of the Seattle Round

    Mr. Paulson. Excellent. So as far as you know, are there still talks 
taking place? We just heard on CNN, claiming that the talks are actually 
canceled, which--we don't even know if that's true.
    The President. Well, that's certainly news to me. I heard that the 
talks were still going on.
    Mr. Paulson. Tell me--I'm sure you've heard it's been kind of a 
chaotic day here. Do you regret choosing Seattle as the location for 
this? Do you wish you were heading some place sunny, like Honolulu and 
San Diego?
    The President. Well, I don't think the--I think certainly if we had 
had it any place in the continental United States, we would have had the 
same thing. And even if we had gone to Honolulu, there might have been 
thousands of people there.
    What I regret is not that there are protesters there. I have 
supported the right of people whose interests represent labor union, who 
represent environmental groups, people who represent the poorer 
countries of the world coming and expressing their opinions. And I've 
repeatedly said I thought the WTO process was too closed. It ought to be 
opened up, and labor and environmental interests ought to be 
represented, and it ought to be fair for poor countries as well as 
wealthy countries. What I regret is that a small number of people have 
done nonpeaceful things and have tried to block access and to prevent 
meetings. That's wrong. It's not only illegal; it's just wrong.
    On the other hand, I think the larger number of people that are 
there, for peaceful purposes, are healthy. I think what they represent 
is that in the last 5 years you've seen a dramatic change. Trade is now 
no longer the province of CEO's, organized interest groups that deal 
with the economy, and political leaders. It's now--we not only live in a 
global economy. You've got a global information society, and this whole 
process is being democratized. And we're going to have to build a new 
consensus that goes down deeper into every society about what kind of 
trade policy we want. And I think that is, on balance, a healthy thing.
    Anyway, that's kind of where I am on it. I regret very much that a 
few people have given the protesters a bad name, because I think the 
fact that the protesters are there--were it not for those stopping 
meetings, stopping movements, not being peaceful--would be a positive.

Protesters and the World Trade Organization

    Mr. Paulson. Right. What is your theory about why people are so 
upset here?
    The President. Well, for one thing, I think that a lot of people 
feel threatened by all

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these changes that are going on in the global economy and the process by 
which the decisions are made--changing the rules of trade--are made by 
people who generally have not been very accountable. I mean, the whole 
WTO--I went to Geneva last year to tell them they ought to open their 
records.
    Mr. Paulson. Right.
    The President. I mean, they have secret proceedings and things of 
that kind.
    For another thing, a lot of times when decisions have been made, 
they aren't honored. The United States won 22 out of 24 cases we filed, 
and in several cases the people say, ``Well, so what?''
    And then I think, finally, there are people who question whether 
these trading rules are benefiting lower income countries, poor 
countries, and who question whether they're a damage to the environment 
from certain trading arrangements that wouldn't otherwise be there, and 
who question whether this is a race to the bottom or the top--so that 
labor unions in wealthier countries want to have certain basic, core 
labor standards observed in poorer countries because they think it will 
be better for average people, so that the trading system actually 
benefits them. So I think that is bringing all those people out.

Goals of the Seattle Round

    Mr. Paulson. What in your mind will make this week a success or a 
failure?
    The President. Well, I think if we can continue to negotiate and can 
reach some accord on the terms under which to start a new trade round 
and if I can persuade more of my colleagues that if you don't want 
people like the protesters outside of every trade meeting from now until 
the end of time, they're going to have to open the process so that the 
voices of labor, the environment, and the developing countries can be 
heard and so that the decisions are transparent, the records are open, 
and the consequences are clear, we're going to continue to have 
problems.
    And I think, on balance, the world is much better off because we've 
expanded trade over the last 50 years. And I bet you a lot of the 
protesters came to the protest wearing shoes that were made in other 
countries, using cell phones, and maybe a lot of them drove cars that 
were made----
    Mr. Paulson. Right.
    The President. ----or foreign manufactured. We live in a global 
economy that on balance has been quite good for the United Stats, but 
also good for developing countries. But we've got to make a better case 
down deeper into society. It's not just trying to convince a few elites 
in every society that the system of integrated trade on fair and open 
terms is good for them.

Labor Issues, Trade Sanctions, and the WTO

    Mr. Paulson. Let me ask you about labor, which, you know, is a big 
issue here. What is your position on allowing trade sanctions against 
countries that violate core labor standards?
    The President. I think what we ought to do, first of all, is to 
adopt the United States position on having a working group on labor 
within the WTO. And then that working group should develop these core 
labor standards, and then they ought to be a part of every trade 
agreement. And ultimately, I would favor a system in which sanctions 
would come for violating any provision of a trade agreement. But we've 
got to do this in steps.
    I do think it is worth noting that the strongest opposition to this 
position, however, come from the leaders of developing countries, 
including a lot of developing countries that have leftwing governments, 
not rightwing governments, who believe that this is a strategy by the 
American labor movement to keep them down and keep them poor and keep 
them from selling products that they would otherwise be highly 
competitive in, in the American market.
    Mr. Paulson. Right. Are they right?
    The President. Well, I don't think so. That is, it certainly could 
be used that way. But what the American labor movement has a right, it 
seems to me, to is to know that their brothers and sisters throughout 
the world are actually going to be benefiting from expanded trade.
    When I ran for President, there were some countries, small countries 
in the Caribbean where we had dramatically expanded trade

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in the years before I became President, where average hourly wages had 
fallen during the time trade had expanded and the incomes of the 
countries had gone up. That's not right.
    So I wouldn't support labor's objectives if I thought they were just 
purely protectionist and they didn't want Americans to compete with 
people from other places, because we can compete quite well. And for 
every job we've lost in America, we've gained two or three more. That's 
why we've got 19.8 million jobs in the last 7 years. We never had job 
growth like this before. And the trade-related jobs pay higher wages. So 
if I thought the labor agenda was purely protectionist, I wouldn't be 
for that.
    On the other hand, I think it is legitimate to say that if people 
are out there working and selling their projects in the international 
arena and Americans are going to buy them and Europeans are going to buy 
them--all of us who come from wealthy countries where most people have 
the basic necessities of life--we ought not to buy from countries that 
violate the child labor norms; we ought not to buy from countries that 
basically oppress their workers with labor conditions and lack of a 
living income. And there is a way to strike the right balance here so 
that we put a more human face on the global economy.
    I feel the same way about environmental standards.

Sovereignty, Environmental Issues, and the WTO

    Mr. Paulson. That's the subject I want to ask you about next. As you 
know, critics are pointing at cases like the shrimp-turtle dispute and 
saying that corporate lawyers, meeting in secret, can invalidate U.S. 
laws. Are we yielding some of our sovereignty in being part of the WTO?
    The President. Well, we yield the right to be unilateral and not 
bound by a system of rules every time we join any kind of organization. 
I mean, if you join any kind of organization in which there are going to 
be disputes, you can't say that ``I'll only follow the rules when we 
win.''
    Mr. Paulson. Right.
    The President. And you can't say that any organization made up of 
human beings will be error-free. But I know there was a lot of concern 
about the way the turtle case was handled. There is also--earlier the 
Venezuelan oil----
    Mr. Paulson. Right.
    The President. ----where we had a lot of concerns. But I think the 
answer to that is to make sure that these environmental standards are 
properly integrated into the WTO deliberation and that we agree that 
countries ought to have more leeway on higher environmental standards 
than in other areas.
    And again, some people in the developing countries may say, well, 
that's a protectionist strategy. But from my point of view, it is not at 
all. I think that with climate change being the number one environmental 
problem in the world, it is a mistake not to take into account the 
environmental consequences, to not only a particular nation but to the 
climate as a whole, to anything that leads to accelerated deforestation 
or the increase in greenhouse gas emission.
    But see, I've got a whole different take on this than most people 
do. I believe that one of the biggest economic as well as environmental 
problems the world has today is that most decisionmakers, not only in 
the United States but in all the developing countries, still believe the 
only way to get rich is the way the U.S. and Europe got rich in the 
industrial era, by burning more coal, burning more oil, putting more 
greenhouse gases into the atmosphere. And then countries say, ``When we 
get as rich as they are, then we'll turn around and clean it up.'' But 
as you know, with climate change, it doesn't work that way. If you warm 
the climate--you put all this stuff into the air--it takes between 50 
and 100 years to turn a lot of this around.
    But we know now that it is technologically possible to grow the 
economy and reduce greenhouse gas emission, if you're a rich country, 
and stabilize them, if you're a poor country, by taking a totally 
different energy course into the future. The technologies are available 
right now. And that's what I think we have to sell people on. And then 
we've

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got to really work hard to get these technologies widely disseminated 
into the developing economies, so that India, China, these other places 
can use them to create jobs and raise income while they protect their 
environment. That's a sale we've got to make. And it ought to be part of 
the decisionmaking process of the WTO to promote that policy.

U.S. Goals in the Seattle Round

    Mr. Paulson. Let me ask you one last question. What is the U.S. 
willing to give up at these talks? I mean, these are negotiations, and 
other countries would like to talk about our antidumping laws. What can 
we put on the table?
    The President. Well, first of all, I think we ought to support the 
general rules that reduce tariffs and other trade barriers. And we ought 
to be for accelerating access to our market, for countries that follow 
responsible policies. That's at the heart of my Caribbean Basin 
Initiative and my Africa trade bill, and I have reached out to those 
countries to try to do that. And we ought to do that.
    But I would not be for giving up our dumping laws, and I'll tell you 
why: because we already have the most open markets in the world. We 
have--when the Asian economy collapsed in '97, we could have closed our 
markets, and we didn't. And so it exploded our trade deficit. Our trade 
deficit is about 4 percent of our income now.
    I'm for open borders because we get more products at lower cost, and 
it's a great pressure against inflation coming back into our economy. 
And we still have created almost 20 million jobs. But I don't think it's 
right to allow a temporary economic emergency to lead to a surge of 
steel dumping, for example, like we went through, and then to throw a 
lot of Americans out of business in capital-intensive industries who 
might not be able to get back into business, just because of an economic 
crisis somewhere else and because nobody else will take the products. I 
mean, for the Europeans to tell us we should stop dumping, when during 
the Asian crisis we bought literally 10 times as much foreign steel as 
they did, is a little ludicrous--when they have absolute quotas on the 
number of foreign cars they will buy, that we don't have--is ludicrous.
    So we can't give up our dumping laws as long as we have the most 
open markets in the world, and we keep them open to help these countries 
keep going, and other countries don't do the same. They shouldn't be 
able to take advantage of temporary economic developments to do 
something that otherwise the free market economy wouldn't support.
    If you look at what our steel industry did, they shed over half of 
their employment; they spent billions of dollars modernizing technology. 
They were, under normal circumstances, internationally competitive. They 
should not have been put out of business by people dumping from Japan, 
from Russia, from any other country during the period of crisis that we 
just went through.

Disruption of the Seattle Round

    Mr. Paulson. Okay. So as far as you know, the talks are still on, 
right? You haven't learned anything----
    The President. Yes. While we've been talking, as far as I know, 
they're still on. And I think they ought to stay on. And I think, again, 
if we can just get by the few people that are being--that aren't being 
peaceful and the people that are trying to stop people from meeting, I 
think the presence of others with legitimate questions about the WTO 
process, the environment and labor and how poor countries are treated, I 
think this can be a net positive because we're going to have to build a 
much deeper consensus for global trade to carry it forward.
    Mr. Paulson. Okay. We'll see you tomorrow.
    The President. Thank you.

Note: The President spoke at approximately 4:50 p.m from the 
Presidential motorcade en route to San Francisco International Airport. 
The transcript of this interview was released by the Office of the Press 
Secretary on December 1. A tape was not available for verification of 
the content of this interview.

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