U.S.-China Trade a Key Topic of President Hu's Visit

Chinese President Hu Jintao began a weeklong visit to the United States this week, where he is scheduled to meet with President Bush and business leaders to talk about trade. Madeleine Brand speaks with Mickey Kantor, the former U.S. trade representative under President Clinton, about the visit and America's $200 billion trade deficit with the rising superpower.

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MADELEINE BRAND, host:

Chinese President Hu Jintao begins a coast-to-coast visit to the U.S. today, starting in Seattle. He's there for meetings with Chinese-American business people and dinner with Microsoft Chairman Bill Gates. Hu will work his way to Washington for meetings with President Bush on Thursday.

Trade issues top his agenda this week.

Mickey Kantor was the U.S. trade representative under President Clinton. Welcome to the show.

Mr. MICKEY KANTOR (Former U.S. Trade Representative) Thank you very much, Madeleine.

BRAND: Well, what is the most pressing trade issue Hu will discuss with President Bush?

Mr. KANTOR: Well, there are three or four areas. Currency issues, which we've all read and talked about; whether China's manipulating its currency to take advantage of its trade relationship with the United States. Protection of intellectual property rates, where there's been great frustration over great number of years by the U.S. of over China's failure to, in many ways, protect intellectual property rights. But let me add they're doing much better now. Market access for U.S. goods, services, and agricultural goods and financial services; and last they'll be, as usual, continuing discussion over textiles with the caveat that we reached a--an arrangement or a combination with the Chinese just a few months ago on that issue, so it will not take a front seat.

BRAND: And what's the nature of the intellectual property dispute?

Mr. KANTOR: Well, it--it takes on a couple of aspects. Number one is the rate of piracy in China is still high. Although not the way it was fifteen years ago. We have two intellectual property rights protection agreements with China, we also have agreements under their accession to the World Trade Organization; given those areas, they have passed laws and regulations, Madeleine, which, in effect, are pretty good. It's the enforcement across the country, and a country as big as China with no real history of, of, of protecting intellectual property rights that is difficult. It may be one thing to talk about it in Beijing, it's another to enforce it outside of Beijing.

BRAND: Mm-hmm, in a huge country like China. What's--what's an example of, of a good, of an idea of something that, that is a problem, that China has violated in...

Mr. KANTOR: Well, in pharmaceuticals, in music, in movies, in other areas--computer software, Windows and other products. Windows being a Microsoft product since you mentioned Bill Gates.

BRAND: Well, what happens then, someone like Microsoft, for example, develops something like Windows, for example, and all of a sudden someone in China is knocking it off?

Mr. KANTOR: It's not just someone; it's the Chinese government itself. Many of the ministries use what you might call knock-off Windows and other Microsoft products which is--not only costs a lot of money, but of course it is embarrassing not only for Microsoft, it's embarrassing for the Chinese government. Madame Wu Yi who's a Vice Premier, the highest ranking woman in the Chinese government and someone with--who I negotiated with for four years, has done a good job in heading an internal committee in an attempt to enforce, not only in government, out of government, the rights of software users, as well as movies and music and pharmaceuticals and other areas. And they're starting to make progress, but there is still a long way to go.

BRAND: What is it like negotiating with the Chinese? What kinds of negotiators are they?

Mr. KANTOR: Good; strong; knowledgeable; direct. Well, when we, we negotiated both IPR agreements in '95 and '96, I guess is when we signed them.

BRAND: Intellectual Property Rights?

Mr. KANTOR: Intellectual Property Rights Agreements. The Chinese were quite clear about not only their unwillingness to enforce certain rights but also their inability to do it outside of Beijing given the usual strength or the historic strength of their provinces. And as a result, we made progress, but we made progress because we were very clear about what they could do and what they couldn't do and where they thought their situation stood. That is not the case in negotiations with many other countries.

BRAND: Mickey Kantor was the U.S. Trade Representative under President Clinton. Thank you for joining us.

Mr. KANTOR: Oh, it's my pleasure.

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