4:07 P.M.

MR. LOCKHART: Hello, everybody. Can you hear in the back? We're going to get started right away. Our United States Trade Representative, Charlene Barshefsky is here. The head of the National Economic Council, Gene Sperling, is here. They will walk you through the day, take your questions, and then I will be glad to take any questions on any other subject that's on your mind. Thanks.

AMBASSADOR BARSHEFSKY: We felt we would just give you a brief factual rundown of how the WTO talks are progressing, and also to highlight two initiatives that the President announced in the speech he gave before the trade ministers this afternoon.

With respect to the work that's proceeding, as you know from our discussion yesterday, there are four working groups that are actively drafting text, essentially simultaneously, in the areas of agriculture, market access, a variety of rules-related issues, and a variety of new issues such as competition, investment, so on and so forth.

I had an opportunity to meet with all of the trade ministers this morning, and following that meeting the working groups, which are at the ministerial level, resumed their work. Very late last night, we generated a new agricultural text. This was done by the chair of the agricultural working group, which is Singapore. That text was reviewed this morning. Further drafting is going on, but plainly a number of differences are being narrowed. I will not go into specifics on the narrowing, except to say that the draft text from late last night and the text revisions that are going on now will help to yet further narrow differences that are already beginning to diminish.

Equally, there is quite revised text on issues of market access in general, also, which have narrowed considerably a range of differences. Two of the other -- the other two working areas on a variety of rules-related issues and new issues began meeting about noon today -- 11:00 a.m. today, I'm sorry. They're still meeting now, and I don't have a readout of that at this juncture.

But I am quite comfortable with where we are right now. We will have another ministers' meeting tomorrow morning at 9:00 a.m. where we will review precisely area by area where we are, where the outstanding issues are, and we'll be discussing some ways of resolving those outstanding differences.

There are two initiatives that are somewhat separate from the WTO proceedings which the President announced today. One has to do with increased market access for the least developed countries, that is, the poorest countries, the largest concentration of which, as you know, is in sub-Saharan Africa, although there are very poor countries also elsewhere. And on this, as agreed by the President and by President Prodi of the European Union when they met last month, the United States will commit to enhanced and preferential market access for imports from the least developed countries, and in addition will promote very substantial technical assistance and capacity building functions. And to that end -- and Gene will report on this more fully -- the President is meeting as we speak with the heads of the multilateral institutions like the World Bank, the IMF and others to discuss that series of initiatives.

The second initiative the President addressed has to do with HIV/AIDS and intellectual property rights. There has been a growing concern among poor countries which are facing a health crisis emergency, particularly in respect of HIV/AIDS, with respect to the availability and affordability of medicines, AZT being an example. We faced the question of the intersection between health policy and intellectual property rights protection with respect to South Africa and, in particular, with respect to the HIV/AIDS crisis in South Africa. And in that case, we found a means to ensure that the minimal requirements of WTO agreements in this area could be met while providing flexibility for South Africa to ensure the more ready availability of lower priced medicine.

The President today announced that per an agreement between the U.S. Trade Representative's Office -- me -- and Donna Shalala of HHS, that for the first time the two agencies will now work together at any point at which a country identifies a health care emergency, particularly in respect of HIV/AIDS, in order to ensure that together we can apply the appropriate flexibility, consistent with our international laws in this regard, to assist in the dissemination and availability of lower-cost medicines with respect to the health care emergency that is identified.

Apart from that, as you know, HHS itself works very closely, particularly with developing countries, on effective treatment regimens, because obviously simply importing medicines is not enough. One has to be sure of their safety and efficacy, and one also has to be assured that the treatments that are being provided are effective. And that is obviously within the province of HHS, and their programs with respect to developing countries will be enhanced in that regard.

So those are the two initiatives that the President announced today. I would also say that today is HIV/AIDS awareness day globally.

With that, let me turn this over to Gene Sperling.

MR. SPERLING: I have little to add. But just to say that the President is now going to be meeting with the heads of several international organizations, including Juan Samovia, at the ILO, Mike Moore of the WTO, James Wolfensohn of the World Bank, Stanley Fisher of the IMF, and as many as eight heads or representatives from eight or nine other organizations.

He will, after that, meet with environmental leaders from the National Wildlife Federation, the World Wildlife Federation -- Mark Van Putten from the National Wildlife Federation; Kathryn Fuller from the World Wildlife Fund; Durwood Zaelke from the Center for International Environmental Law; Carl Pope from the Sierra Club; and William Ruckelshaus from the World Resource Institute. Following that, the President will have a one-on-one meeting with John Sweeney of the AFL/CIO.

So Charlene and I are available to take your questions.

Q Charlene, could you talk a little bit more specifically about the sort of state of play at the particular negotiations? Are you predicting that there will be specifically an agricultural agreement? What do you mean by market access? Are those tariff cuts? And, one other thing, has anyone put on the table, is it still on the table, the issue of dumping?

AMBASSADOR BARSHEFSKY: The issue of dumping remains on the table. It is obviously not an issue that is resolved, except to say that the United States does not believe that new negotiations on dumping are appropriate. However, we do want to see enhancement of the discussions revolving around implementation of Uruguay Round rules on dumping. The Uruguay Round added a broad range of procedural rules with respect to application of the dumping law, largely to ensure due process, an appellate process, so on and so forth. Many countries have not implemented any of those procedural changes or only partially implemented the procedural changes, and we would like to see those changes implemented before any discussion of reopening a negotiation on dumping as a whole.

With respect to market access and what I mean, largely we are looking at the nonagricultural market access issues.

Services, the issue of industrial tariffs and non-tariff measures. I think progress in those areas is absolutely excellent. I think that as I said a day or two ago, there is something of an attitudinal sea change on the question of services trade, which in the Uruguay Round, was highly controversial and which led in the Uruguay Round to merely an agreement among countries that their current services regime would not get more restrictive. But the Uruguay Round did not effect any significant market access opening in the existing services regimes at that time.

There is an attitudinal change of quite substantial magnitude now among countries in large part because of things like the Global Telecommunications Agreement and the Global Financial Services Agreement which were negotiated after the Uruguay Round closed. Countries are beginning to see more and more that services-based trade is not only necessary to a modern economy, it's infrastructure-related. Telecom is infrastructure. Financial services, banking, insurance, securities is infrastructure. Construction is infrastructure. Professional services are also a form of infrastructure. They are looking at the services issues radically differently from the way they did in the Uruguay Round.

I think that the advent of the Internet and the advent of much more modern telecommunications has really affected this kind of attitudinal change. The result is that we've made very, very good progress on a very strong mandate, and broad mandate, on the services issue. There are no services that are excluded. You're looking at the full range -- telecom, financial services, construction, the professions, distribution -- anything and everything one could think of, because there will be no exclusions allowed in the text and countries, I believe, are fully comfortable with that formulation.

Tariffs, tariffs is an issue with which everybody is familiar. We want to maximize zero-for-zero tariffs. If countries will go to zero, we'll go to zero. And we're working with a number of countries. And remember this isn't the negotiation; this is setting the agenda. But we are working with a number of countries, even beginning now, so that in the coming months, as we put proposals on the table, we are going to do everything we can to maximize, including in the agricultural sector, zero-for-zero tariffs. And I think that exercise is also coming along very well.

Q Yes, Madam Barshefsky, you said the President took several opportunities today to say that these demonstrations in the street represented a shift away from a sort of closed-door policy of trade policy formulation to a more open sort of a forum. Was he in essence saying that we've reached a sort of high-water mark for global trade? I mean, now it's time to retrench, step back, take a deep breath? How would you distinguish that?

MR. SPERLING: What the President was talking about was really reiterating the call that he made, not just this summer in Geneva, but the previous year in the summer of '98 when he went to the WTO and spoke directly to the WTO and stated that there needed to be greater openness.

And he called for very specific measures, including having panel reports made immediately available, having a system for amicus briefs, having open proceedings and having submissions being made public. Those were the specific tangibles behind a broader point -- which is, as the President has repeatedly said, trade will never again be only an issue for the experts and industries. Its ramifications are too large. Its impact too significant to not seek processes that bring in the voices and the interest of concerns from child labor to the environment to human rights, as well as the interest of economic liberalization and tariff reduction.

And so what the President was saying is not at all that we've reached the high-water mark. The President believes that this is an opportunity to reach to another level of economic market opening, but that that market opening now must be accompanied by opening of the trade processes to new voices and new concerns. And that only by doing that will you be able to get the type of participation and support that will allow continued market opening to continue into the next century.

Q Ambassador Barshefsky, are you still pressing for the creation of a working group on biosafety? Is that something you're still pushing for? Europeans are very worried about this -- whether there had been some movement.

AMBASSADOR BARSHEFSKY: We've taken, actually, a cautious approach on the question of a working group in biotechnology. We had not originally been pushing for a working group on biotechnology because of our concern that the scope of that working group might be so ill-defined as to bring in any one of a number of issues, including, for example, the issue of biotechnology with respect to pharmaceutical trade. Insulin is bioengineered. Are we going to discuss insulin in the WTO?

So there was a real concern on our part. So we proceeded very cautiously. Canada originally put in a proposal for a working group on biotech. It was a proposal of such breadth and scope that even Canada withdrew it because it was far too broad, including in the areas of expertise needed for the WTO.

Now, what we have done is to put a paper in the WTO which basically says what we need to see in biotech is not a discussion of the science. The WTO is incapable of assessing the science, and the scientific evidence will lay where it lays.

But the WTO can play an important role with respect to the process by which countries approve bioengineered agricultural products. And so our position has been that if there is to be a working group, its essential mandate should be to look at the question of science-based timely and transparent regulatory processes for the approval of bioengineered product. We don't go into the question should they be approved or not, that's a matter for science. But we know in our experience with Europe there is absolutely a complete process breakdown. The process is politicized, it's opaque. The EU doesn't even follow its own regulations on the most basic elements, for example, time frames. Data requirements are unknown and keep changing.

So we would like a process solution. And we've indicated that if a working group can address the process-related issues, that would be a valuable edition. And that's really where the issue rests right now.

Q The Wall Street Journal reported Monday that you were trying to get this round dubbed the Clinton Round. And I wondered if you were still trying to do that?

AMBASSADOR BARSHEFSKY: No, no, no. I'm not trying to get it dubbed any particular name. Our focus is very much on the substance of what we're doing. Gene and I, and the President, are quite unconcerned about the name, provided the United States feels the agenda that's developed will cover all of our principle aims. If the agenda doesn't cover that, then we have a real cause for concern.

Q What do you think it ought to be called?

Q The "Barshefsky Round."

AMBASSADOR BARSHEFSKY: There you go. You got a winner.

Q Gene, on the lists of the groups that he is meeting with today, it seemed like it was mostly environmental groups and Sweeney of the AFL/CIO. Is there a reason why those and not some of the other groups --

MR. SPERLING: Well, he met with agriculture. He spoke with some agriculture -- he did an agriculture event today and obviously had a chance to speak with some -- the interest. The international organization meeting that he is doing today is very much related to the initiative that we've done. And many of you will also remember that as part of the financial architecture process over the last year-and-a-half, the President and Treasury Department have reached out to the IFIs, to the International Financial Institutions, in trying to broaden their role to consider issues of poverty reduction and social safety nets.

I think this is another situation where the President is recognizing the breadth of the issues being dealt with and the degree that these institutions can help deal with the capacity building that allows the poorest countries to benefit from export opportunities and what kind of technical assistance that they can provide. So this first meeting is very much related to the initiative that was put out today.

And then really the President just wanted to have some opportunity to talk with representatives of some of the groups or interests that are of interest. Obviously, labor and environment are two of the issues that he has mentioned since the campaign of 1992 on trade. And any of you who followed the President's initial position on NAFTA in 1992 know that he stressed the importance of labor and environment, and that's been something he's been pushing for six or seven years. So it's not unexpected, with a limited schedule, that he would want to reach out to both environmental and labor groups.

As to the composition, I think that was something really that just John Podesta and Karen Tramontano tried to talk to the interested parties and reflected, I think, the desires of the representatives of those interests.

Q Are those are the ones he agreed with -- the protesters he agrees with are the ones he's meeting with. Is he not meeting with any of the protesters he disagrees with?

MR. SPERLING: Well, first of all, if you've paid attention to statements on the China WTO agreement that Charlene and I were instrumental in, you would know that it's -- there's obviously significant disagreements with the AFL/CIO on issues. And so I don't think that that is -- so I don't agree at all. I think what he is doing is he is meeting with the labor and environmental interests that reflect two of the broad interests that he has stressed inclusion of in trading discussions since the summer of 1992.

Q Has there been any softening to your -- a composition to your proposal for a labor working group? And in which of the five groups is that being addressed?

AMBASSADOR BARSHEFSKY: It's being addressed mainly by all of them. No, there is no softening in our position. The EU, as you know, put forward a proposal as well on labor and trade, and we've been working with the EU and with other countries with respect to the overall issue. There's no question it is highly controversial. You have a number of developing countries in particular who are concerned that wealthier countries, as the President said in his lunch speech, will use the issue of labor or, indeed, the environment as a protectionist device designed to hamper the development of the developing world.

That's not remotely the case and certainly is not reflected in the proposal that we made for a working group, because the working group is explicitly a non-negotiating, analytic working group; it is not a negotiating group. And the EU proposal, likewise, is essentially an analytic proposal, a non-negotiating proposal.

The two proposals are similar in some ways. The EU wants a joint forum, WTO/ILO. The U.S. would like a working group but, on the working group would be the ILO, the Bank, the Fund, UNCTAD the OECD. And so I think we both have envisioned the working group is not isolated from any of the other key multilateral institutions. But the idea was to join forces, essentially with them, both in our proposal and in their proposal, to ensure that you had the analytic expertise and to ensure that you had the person power to do the kind of work that we thought needed to be done in the area.

So we are continuing to work on it and we hope to make some progress in that regard. I think also, just in response to one of the questions earlier, I think we will make progress on the transparency issues with respect to the WTO, particularly in connection with dispute settlement. And I think we will make some very good progress on the environmental side.

In all, I think we are reasonably, comfortably positioned at this point.

Q The WTO spokesman, Mr. Rockwell, seems to be a little bit more negative about how things are going. He said the talks have sort of been stymied and that's why the dinner and reception were canceled this evening. Can you respond to that?

AMBASSADOR BARSHEFSKY: Yes, the dinner and reception were canceled because Mike Moore and I felt that we were making progress late into the night on, for example, agriculture. And once you have progress going, you don't stop for a reception, much as people might like receptions. But once you have momentum going, you just don't stop. And he and I actually talked about this very late last night and we conferred again in the morning. And when we announced that our expectation was that the groups would meet today and tonight, people were extremely positive on that because I think people feel there is a momentum that's building, delegations are clearly moving, in terms of position, in a number of areas. And once that starts, you don't stop it for a 7:00 p.m. reception.

MR. LOCKHART: Anything else on your mind?

Q The Secret Service has -- they locked down the Westin. What's the situation over there and why the --

MR. LOCKHART: I'm not aware of any change and certainly none has been reported to me. I know that there are some restrictions getting in and out, as there always are when we go to stay some place. But I haven't heard of anything new in the last couple hours.

Q And was there tear gas used outside the hotel?

MR. LOCKHART: I don't know, I've been with the President most of the day. So I don't know.

Q Joe, could you take that and get back to us on it?

MR. LOCKHART: Well, listen, I would put that question to the Secret Service. You know who to call in their Public Affairs, if they've got any restrictions that they want to talk about, they'll talk about it.

Q Joe, did the protestors get close to the President at all? Did he see them? Did he have a sense of their being out there?

MR. LOCKHART: You know, you could see them from the hotel room this morning, they were marching up a street away from the hotel. Along the motorcade route there were generally just the kind of crowds that we see when we travel around, people who are standing -- trying to get a look at the President, waving and such. So I'd say, no; I'd say the exposure that the President had was when we arrived last night. Before going to bed he watched some of the local news and saw some of the footage that was taken yesterday.

Q Can you talk about the ILO signing tomorrow, what the President hopes to accomplish with that?

MR. LOCKHART: Well, I think it's -- we've been working on this for some time. The President spoke to the organization some time ago. This is a landmark agreement in terms of protecting and promoting proper labor standards around the world. And I think the President will speak directly to that tomorrow at the signing.

Q Did the U.S. ever work out the problem with respect to children working on farms, family farms?

MR. LOCKHART: Let me check on that for you, Mark. I'm not familiar with that.

Q Anything on Vieques?

MR. LOCKHART: No. I think, as you know, we've been consulting closely with the Department of Defense and promoting a dialogue between Defense and interested parties in Puerto Rico. The President, I think, has taken time over the last few weeks to deal with all the interested parties, gain a further understanding into the issues and try to work through a solution to this problem. We still await the Secretary of Defense's recommendation. When we get that, I think the President will have something to say shortly thereafter.

Q So he hasn't worked out --

MR. LOCKHART: No.

Q Why are we -- why not more labor leaders?

MR. LOCKHART: I think we went to labor and told them that we had some time this afternoon, as we did with the environmental organizations and the multilateral organizations. And I think the labor people felt that the best use of their time was to have Mr. Sweeney come in and talk one on one. We certainly would be open to, you know, whatever configuration they wanted to do. But, obviously, we think they're in the best position to decide how they want to use the time.

Q Anything on Boris Yeltsin? Has the President had any communication with him?

MR. LOCKHART: No, I don't think we have any further substantive update since yesterday. As he indicated yesterday, we believe the reports are accurate, that it's a case of pneumonia. I think the President said yesterday that, you know, we've been told that he expects to get well and wished him a speedy recovery.

Q How long is the meeting with Sweeney and with the environmental leaders?

MR. LOCKHART: I think they're scheduled for about 45 minutes.

Q Forty-five minutes each?

MR. LOCKHART: Yes. So I think what we will do on that is John Podesta and Karen Tramontano and some others are in all three, so we'll find some way to get some brief readout later in the day. I will have somebody work on that for you all, because I am sure you will be here a little bit longer.

Q Joe, have you learned what other foreign trip the President was referring to yesterday, when he said he wouldn't go to Panama because he might have something else?

MR. LOCKHART: No.

Q Have you asked him?

MR. LOCKHART: Have I asked him? Yes, I asked him and he won't tell me. (Laughter.)

Okay, thank you.

END 4:40 P.M. PST

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