CNN Interview with Secretary of Commerce Carlos M. Gutierrez

Beijing, China
June 3, 2005

Posted on Jun 6, 2005

QUESTION: So, thank you very much for your time. There's a feeling amongst the Chinese about being unfairly put upon by the U.S. policy on Chinese textiles. Should they feel that way? Is it legitimate?

SECRETARY GUTIERREZ: Well, in terms of textiles, we simply looked at our information, looked at the data. It was very much of a data-driven and process-driven approach. And, determined that there had been market disruption. Under our rights in our WTO agreements, we exercised those rights and put in place safeguards.

We have concerns with the relationship today related to intellectual property. Chinese officials have made progress in establishing a legal framework for intellectual property. We are asking them to enforce those laws. We believe that counterfeiting goods and counterfeiting services is equal to the counterfeit of money and we believe it should be treated as such.

We also have areas to discuss in aspects of market access. We have the largest market and the most dynamic economy in the world and they pretty much have open access to it. We simply want access to the Chinese market.

QUESTION: But the Chinese are saying what they want is the unlimited access, particularly when it comes to something like textiles.

SECRETARY GUTIERREZ: Well, this is one specific example. Today they --

QUESTION: It's a big example, isn't it? It's almost really got them hot under the collar.

SECRETARY GUTIERREZ: Well, they continue to have access to our market. You know, the safeguards simply provide a ceiling above which they can't grow. So they continue to grow. We haven't pulled back their business. And, the safeguards are temporary. So we understand this is a time to allow our industry to adjust and then they can come back into the market as they were before.

QUESTION: The argument from China's side is that the United States now has had ten years to prepare for this. Did the United States simply not prepare?

SECRETARY GUTIERREZ: Well, the important thing is to look at the facts. We looked at the facts. We determined there was market disruption. We looked towards the future. And, on the basis of the analysis, we determined there was market disruption. And that's what counts here, not whether what happened or what didn't happen. We simply had to put in safeguards to avoid further market disruption.

QUESTION: When you look at the arguments with textiles and you look at the pressure that's been put on China to revalue its currency, you mentioned intellectual property as well, could you understand the perception amongst the Chinese that America, perhaps Europe, as well, is looking at engaging in a trade war with China? That this is an opportunity to stand China up a little bit?

SECRETARY GUTIERREZ: No one benefits from a trade war, not the United States and not China. President Bush has been very clear that we do not want and we do not seek a trade war. We are simply asking for a level playing field. We want our intellectual property respected. We believe that's very important for American workers, for American businesses. Creativity is at the heart of a lot of what we do. And, in order to compete worldwide, our brands and our technology and our innovations need to be respected. This also applies to China. I saw today that applications, patent applications in China, more than half of them are from Chinese companies, which means that Chinese companies are innovative. They also have a stake in intellectual property violations. And, as time goes by and as they innovate more, they will want their intellectual property respected, as well. So this is for the good of everyone involved.

QUESTION: Given the pressure that's on China over textiles, over the currency, does that create a conducive environment to have a discussion without something as sensitive as intellectual property? Can you come and negotiate when the Chinese feel that they're put upon, victimized, whatever phrase you want to use?

SECRETARY GUTIERREZ: Well, we believe that the time is now for results. This is as good a time as any for results for intellectual property. And, it's very important and we believe that the laws are in place. The Chinese government officials have done a good job in putting in place laws and we recognize that. We are now simply asking that they enforce their own laws.

QUESTION: Is it a negotiable point? Are you prepared to deal on this?

SECRETARY GUTIERREZ: Intellectual property rights are not a point of negotiation in the trade agreement. This is the law. We are --

QUESTION: It's a crime (unintelligible).

SECRETARY GUTIERREZ: -- simply asking them to enforce their law. And, as I mentioned before, I believe that counterfeiting someone's product, counterfeiting someone's intellect property, counterfeiting goods is akin to counterfeiting money and it should be treated as such.

QUESTION: The question of the currency, I know it's a little bit outside of your portfolio but it's very much central to China's position in the world, the world economy and world trade. When should China move on devaluing the currency? The Chinese say the time is not right at the moment. What's your judgment?

SECRETARY GUTIERREZ: I'll tell what I can do is I can give you Secretary John Snow's business card and I'll let him know that you'll be calling.

QUESTION: Well, we'll have to (unintelligible).

SECRETARY GUTIERREZ: Okay.

QUESTION: (Unintelligible) thank you very much.

SECRETARY GUTIERREZ: Thank you very much. I appreciate that. Thanks.