Following is a transcript of the press conference:

COMMERCE SECRETARY DONALD L. EVANS
PRESS CONFERENCE

APRIL 19, 2002
U.S. EMBASSY, TOKYO

SECRETARY EVANS: Thank you very much, good afternoon, and welcome. Delighted to be here. Been here less than twenty-four hours. As Ms. Crawford said, this is my first stop of about a one-week trip through Asia. I'll be here through tomorrow and then on to China. I've appreciated my warm welcome here. I have had the chance to not only talk to a number of our team here within the Embassy. Of course, I've spent the last evening and this morning, today, with the Ambassador. I had a very constructive visit with Chief Cabinet Secretary Fukuda this morning. It was an opportunity for us to get acquainted-just to establish a dialog. To let him know that he has another friend in Washington that he's certainly welcome to call on anytime he feels it might be appropriate. I certainly first extended to him our country's great appreciation to this country's support of our war on terrorism. It is something that is certainly well recognized across America-Japan's steady, solid, meaningful kind of support for this war. The President has expressed his appreciation a number of times. Believe me, that comes from people all across America. While Japan has faced some challenging economic times, we've had some of our own in the last year or so that we've been dealing with. I expressed optimism about our own situation in America, as to our economy and the recovery that we are beginning to see. Also wanted to give words of encouragement and optimism for this economy. I know there's some great underlying strength that will play a roll in its recovery in the years ahead.

Later today, I will have a couple more, I'm sure, productive meetings-one with Minister Hiranuma. We'll talk about trade, of course. We'll talk about the importance of opening up trade around the world. I'll be thanking him for his participation at the OECD in our steel discussions and steel talks. I'll be thanking him for their cooperation with us at Doha and the WTO. Talk about the importance of making sure that we move the WTO process along in a timely manner. We have the date of January 2005 to complete this round of WTO negotiations.

Also, we'll have a chance to visit with Minister Oogi and we will be talking about cooperative efforts between the United States and Japan as it relates to travel and tourism. There are already a number of initiatives and efforts underway, particularly post-September 11. And I will be thanking her for her support to encourage tourism to the United States of America. And thanking her for playing an instrumental role in opening up a new runway at your airport. And also talking about ways we can constructively work together to further enhance travel and tourism between our countries.

Finally, again, I'm pleased to have this opportunity to be here for forty-eight hours. Our countries have common goals and common purposes, as to increasing the quality of life of the people that live in our countries. And Japan, of course, knows they have a strong friend and ally in America. And I want to do whatever I can do to strengthen that. And having made those comments, I'm glad to take any questions that you might have for me.

QUESTION: Secretary Evans. Megumi Suenaga, Sankei Newspapers. My first question is regarding your safeguard on your steel imports. The Japanese (inaudible) has now said that they are ready to take an action of retaliation unless you accept your compensation that the Japanese government is asking for. You are going to pay the compensation to Japan or not? And plus, are you planning to expand exclusion of Japanese steel? And secondly, because of your safeguard, the prices of automobiles, cars, and home appliances are going up in the States at this moment. And it looks like that new taxes are put on and torturing American consumers. And moreover, are you going impose tariffs on Canadian lumber for housing, as well? Is it to the benefit of what you called "free trade structure" that you actually are encouraging the developing countries to put forward?

SECRETARY EVANS: Thank you very much for the question. It's a very large question and it's going to take a little time to answer it adequately and fully and completely. And I think it's very important to. First of all, as to whether or not we're going to -- you asked the question about compensation. What we will do is fully comply with the rules of the WTO. We think that it's very important that all parties continue to proceed forward in full compliance with the rules of the WTO. So we have given the indication that, when appropriate, we're willing to have consultations, and we're glad to do that and we will do that. But, you know, I do know not of any laws within the WTO that would require us to pay compensation in the near term.

Two, with respect to exclusions. We have already granted some twenty-six exclusions to Japan. We have an ongoing process of considering exclusions. That process has about another ninety days or so before it expires. Whether it be more exclusions? It's possible. I'm not sure. But we will continue to consider other exclusions.

It's also, I think, very important to keep this in perspective, not only in the world but also with respect to trade between our two countries. The 201 Tariff and trade impacted by the 201 represents about 0.4 percent of the trade, the exports, from Japan to the United States. So the other 99.6 percent -- "we're doing fine." We don't have major issues that are being talked about right now. So relative to the total trade between our two countries, it's very, very small.

But the other point about free trade, as it relates to the 201 decision, one thing that we believe is very important is for us to enforce our trade laws. And it is also very important for us to do that in a very transparent, open kind of manner. The process that we went through of enforcing our trade laws was a process that took a number of months and many hearings and opportunities for all parties to fully express their positions, their views on the issue. So this was done in the open, in a transparent way, went through our International Trade Commission, and the International Trade Commission made the decision that, yes, there had been injury and recommended to the President that tariffs be imposed for a temporary period of time -- a period of time that would allow the industry a little breathing room to restructure.

I think it's also important to understand that this was just one element of a comprehensive plan that was led by this President to deal with global overcapacity of steel. It has been a global problem for a number of decades, and America has taken the leadership role to see to it that this problem be resolved once and for all. We initiated talks at the OECD, which the Japanese have been a very constructive participant in. And those talks continue. And those talks have been productive. The problem in steel in the world is basically overcapacity of steel-inefficient overcapacity of steel. So we have led the discussions of sitting down with steel makers around the world to focus on that overcapacity issue.

A second issue has been ongoing market distorting practices around the world. And we have, again through the OECD, led those discussions, creating a committee whereby the committee continues to watch and observe other countries, companies -- as to possible market-distorting practices -- and then we'll put a spotlight on those when they (inaudible) market-distorting practices.

When it comes to -- you also mentioned lumber in your question and how that squares with free trade and open trade. First of all, let me say that, as to lumber, once again we're simply enforcing our trade laws, which is what our responsibility is. And we take an oath of office to enforce our laws and that's simply what we have done here. There's a -- again, transparent, open process that we go through and make a determination through the ITC, once again, as to what the conclusion should be after the issue has been thoroughly and completely reviewed in an open, transparent way. So I think it's clear that this President will continue to lead this world in free trade. This President will continue to push this world forward toward free trade. But a very important part of that is also a level playing field. And everybody playing by the same rules. And everybody complying by the rules. And countries doing it in a transparent, open kind of way. And so, it seems to me that these actually go hand-in-hand with respect to, you know, if you're going have free trade you must have fair trade. In order to have fair trade, it's clear that we need to obey the rules and need to follow the rules. And we need to enforce our laws. And so, that's simply what is going on here. We went through a thoughtful, transparent process. We enforced our laws. They are fully consistent with the WTO rules. We're fully within our rights within the WTO and that was the reason for the decision. Yes sir.

QUESTION: I'm Toshio Aritake from BNA. First, I'd like to ask you about your trip to China. What kind of issues would you like to discuss with the Chinese officials during this trip to China? Does that include specifically something about the IPR, intellectual property issues?

SECRETARY EVANS: Thank you. First of all, I'll congratulate China for becoming a member of the WTO. Express our view that this will give them great opportunity to continue to move into an international, global economy and global marketplace. I will express not only our notes of congratulations, but the importance of compliance. And offer our support to them to assure that they become in full compliance of their WTO obligations. Those include obligations that relate to intellectual property right protection. And so I'm sure the issue will come up as to how important it is that they have strong intellectual property right laws in place, and also make sure that they enforce those laws. So I'm certainly looking forward to the trip. It will be my first occasion to be there. It's a chance, as I said, to congratulate them, but also talk about the importance of compliance and, with respect to that, let them know the support that we are prepared to provide -- we already are. We have teams of people that are working with them in various areas of the WTO rules so that they will come into compliance as soon as possible. (indicating person) Yes, sir.

QUESTION: Thank you, Mr. Secretary. My name is Hideaki Matsuda from Jiji Press. The U.S. trade deficit with the rest of the world, as well as Japan, sharply increased in February. And are you concerned with the growing U.S. current account deficit and its impact on the yen-dollar exchange rate? Thank you.

SECRETARY EVANS: We have enjoyed a good solid fifteen years or so of economic growth. We certainly, in that fifteen-year period, have had a couple of downturns -- we're coming out of one right now. We had one in the early 90s also. We had our more recent downturn begin in 2000, and it appears to have come to an end sometime in late 2001. So while people sometimes point to different areas of the economy that might be of some concern, I think overall -- and I think it's important to look at the big picture as to how our economy has been doing-and it's been doing very, very well. We had a decade of creating some 20 million jobs. We had a decade of 3% plus GDP growth. Our productivity numbers continue to be very, very strong. So, while some like to focus in certain, specific areas from time to time, I like to look at the big picture and how is our economy doing, and are we continuing to create jobs, which is really the key in our country. Are we continuing to create good jobs for American workers and the answer over the last decade or so has been "yes." And that continues to be our focus and, you know, we will continue to improve the conditions, quite frankly, for job creation in our country. But don't have any major concerns about, you know, account trade deficits right now. Yes sir.

QUESTION: Vladimir Solentev, ITAR-TASS news agency. Just before coming to Tokyo you had, I think, very productive talks in Washington with your Russian counterpart, Mr. Griff (phonetic), the Minister for Economic Development and Trade. And as far as I understand, the Russian side once again raised the matter of certain limitations in bilateral trade, which Russia considers discriminatory. I remember well enough that in 1993 here in Tokyo after G-7 summit meeting there was a bilateral of the then President Clinton and the then President Yeltsin, and I asked Mr. Clinton how soon the American side is going to remove discriminatory limitations in trade. And at that time, in 1993, he told: "Well, that we are going to remove most of them within this year." So now we have the year 2002, but the Jackson-Vannick amendment is still there. So what can you say about the prospects for removing those kind of limitations for bilateral trade, especially taking into consideration the fact of the forthcoming summit meeting in May. Thank you.

SECRETARY EVANS: Thank you. The Administration has been very clear that we are very supportive of removing Russia from Jackson-Vannick status. That's an issue that is -- the President has been very clear on his position where he is on that matter -- it's now being discussed in Congress and it's up to Congress to make its decision. I am optimistic. I'm hopeful. We are continuing to encourage Congress, but I'm not going to -- I don't want to-predict or I don't want to try and forecast the timing. Yes, sir.

QUESTION: My name is Aida with Kyodo News. A couple of times you mentioned the OECD global talks about, or aimed at reducing excess steel production capacity. And I'm just wondering, we understand that some forty countries have already reached an agreement to reduce, I guess, some 120 million tons of this excess capacity. But what is the U.S. aiming at, at this moment now, you know, in these continued talks you mentioned? And secondly, is it a good idea that, you know, most of the countries, your trading partners, are embarrassed where, you know, there is an awkward situation there to have this kind of talks maybe, with the U.S. having put safeguard measures in place which those countries consider against the WTO rules. Is it a good idea to have those talks to be continued?

SECRETARY EVANS: Well, we certainly believe it's a good idea to continue the talks and apparently everybody else does as well because they continue to be present and engage in constructive dialog and constructive discussion. But I do want to take one issue with what you said in terms of others saying that, you know, what we've done here is against WTO rules. It's not. I mean we're totally within the rights of WTO safeguards. Others that don't agree with that can take it to the dispute resolution council in the WTO and we can talk about it there, but we know that we are certainly within our rights under the WTO to impose these safeguard measures.

I always think it's good to talk whenever you have problems or issues that should be resolved and I think that when it comes to steel, as I mentioned earlier, this has been a global capacity, overcapacity problem of inefficient steel for decades. Other countries have dealt with it different kinds of ways. If you look at the history of the steel industry, it's probably helpful to note that in the mid-1980s, 75% of the steel capacity in the world was government owned. Not any of that was U.S. capacity because U.S. capacity has never been government owned. But in the mid-80s in the world, 75% of the steel capacity was government owned. Now, less than 25% is government owned. And what has happened in the last seventeen years or so is that other governments have privatized their industries and they have done it by subsidizing their industries with billions and billions and billions of dollars, well north of 50 billion dollars. That's the way they decided to deal with the issue. Had the issue not been dealt with in that kind of manner, well, maybe we might not be dealing with the overcapacity that we have in the world today. But the facts are, we are. And so this President decided, let's have a comprehensive approach to solving this problem, and I've already enumerated the elements, the three elements of the comprehensive approach. It appears to me that the discussions have been constructive and helpful. As I look at just the market values that steel companies all around the world, not just the United States, but around the world, those market values have been up over the last twelve months. Maybe an indicator that we're on a constructive course, but, you know, I think dialog is always good. Communication is always good when you have issues and problems that need to be solved. Yes sir.

QUESTION: Excuse me. James Simms with Dow Jones. I understand that you're going to talking about tourism with Minister Oogi later today. I was wondering what the U.S. position was on the Narita Airport. There has been some talk that instead of actually reducing landing fees, but they're going to actually raise them. And there is some concern that under the umbrella of structural reform, that Narita, which is actually making money, will end up cross-subsidizing other loss-making airports such as Osaka.

SECRETARY EVANS: Right. Unfortunately, I haven't been briefed on, you know, a specific position we have with respect to landing right fees. I have been encouraged, I was encouraged, to learn that they have agreed to open a second runway there. I was encouraged to hear that United Airlines actually has more flights in and out that airport than it had prior to September 11 and that's the only airport they can make that statement about in the world. So that's, you know, I think, a constructive signal. But as to landing right fees, I'm sorry, I'm not aware of the issue. Yes sir.

QUESTION: David Pilling, Financial Times. Let's see. That was one of my questions, but my second question is another issue that perhaps you might be raising with Mr. Hiranuma later. Some U.S. car manufacturers have protested against what they see as unfair practices by Japanese manufacturers in penetrating the U.S. market. I wondered if that was something that you were going to bring up today.

SECRETARY EVANS: No, what we have agreed to do is we've got an automotive consultative group that I know has been formed and working not only between our two governments but with the private sector as well. They will be meeting on at least an annual basis. I know the meeting has not been set yet for this year, but there will be one shortly, and I think that's the appropriate forum for those issues to be raised and brought up, and then brought to our respective governments. One more? OK, yes sir.

QUESTION: Thank you. Rajat Bhattacharya from Bloomberg News. Going back to steel again. Looks like the countries... It's the interpretation of those WTO rules, which are at question this week. Japan sought out to set up a WTO panel on certain tariffs that you imposed in 1993, which were supposed to be expiring five years later and they want those tariffs to be ended. (Inaudible) of Europe is meeting his representatives from member countries in Europe today to decide whether he wants to impose a unilateral tariff on U.S. steel imports into Europe. My question is how would you respond if those, let's say EU, goes ahead with those tariffs on U.S. steel exports and Japan gets to set up a panel in WTO against your tariffs. Thank you.

SECRETARY EVANS: Well, you know, as I said I think in my earlier remarks, I think as we continue to expand trade around the world, it's very important for us to have a system of rules, a system of laws, a system of standards that we all live by and we all honor. I think when countries begin to take unilateral action outside of those rules and regulations -- I think that's very dangerous. I think it can be very damaging to the system itself. I mean I think what we have is an international system of laws and rules and those -- and it's not a system of men or women making decisions. We ought to be all operating in a transparent, open way within the WTO rules. And so, you know, I can understand differences of opinion. I can understand others that may want to take issue with our position. What I can't understand is people taking unilateral action in a nontransparent manner outside the rules of the WTO. Thank you all.