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A Year of “Significant Achievement” in International Trade Foreseen

Christopher A. Padilla, the new under secretary of commerce for international trade, answers questions about the global economy, free trade, and opportunities for U.S. exporters.

On December 19, 2007, the U.S. Senate confirmed Christopher A. Padilla as the new under secretary of commerce for international trade. Padilla comes to the International Trade Administration with a background in trade, having previously served as assistant secretary of commerce for export administration; as chief of staff and senior advisor to Robert B. Zoellick; deputy secretary of state; and from 2002 to 2005, as assistant U.S. trade representative for intergovernmental affairs and public liaison. Before his work in the government, Padilla held a number of international positions at AT&T and Lucent Technologies. He was also director of international trade relations at Eastman Kodak Company.

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Under Secretary of Commerce Christopher A. Padilla speaks in Washington, D.C.
Under Secretary of Commerce Christopher A. Padilla speaks in Washington, D.C., on February 7, 2008. He demonstrated the advantages of free trade with Colombia by showing his audience models of some of the U.S. products that will enter Colombia duty-free under terms of the free trade agreement that is awaiting ratification by Congress. (U.S. Department of Commerce photo)


Under Secretary Padilla recently met with International Trade Update (ITU) to discuss the opportunities for U.S. exporters in the coming year.

ITU: There is one year left in the Bush administration as you assume office. What do you believe can be accomplished in 2008?

Padilla: I believe that 2008 will be a year of significant accomplishment in international trade. There is a strong precedent for getting things done on trade on a bipartisan basis in the final year of an administration. In 1988, Congress passed, and President Ronald Reagan signed into law, the Omnibus Foreign Trade and Competitiveness Act. In 1992, President George H. W. Bush signed the North American Free Trade Agreement, and in 2000, Congress approved a bill granting permanent normal trade relations with the People’s Republic of China.

There are three major priorities for international trade in the coming year. First, I believe we should work to successfully conclude the Doha Development Agenda of negotiations in the World Trade Organization. I am also confident that with bipartisan support, we will see the passage of free trade agreements with Colombia, Panama, and South Korea. We are also at a critical juncture in our economic relationship with China. If we choose engagement and dialogue—backed by tough enforcement—over punitive trade legislation, I am confident that China will move further toward fully and fairly integrating into the world economy.

ITU: How do you perceive the International Trade Administration’s role in achieving success?

Padilla: I’ve worked with the International Trade Administration throughout my career and have long respected and admired ITA professionals for their expertise and dedication. I’m honored to have been chosen by President George W. Bush and Secretary of Commerce Carlos Gutierrez to lead this superb agency as we continue to vigorously make the case for free and open trade.

ITA professionals are on the front lines of making America competitive in the global economy. The dedicated individuals of ITA work tirelessly for economic openness, whether they help American companies export, work to lower barriers to trade and ensure compliance with our agreements, or improve the competitiveness of our businesses and enforce our trade laws. To date, our employees and senior officials, including Secretary Gutierrez, have successfully completed 301 events in at least 30 states promoting the political, economic, and social benefits of free trade agreements. We have an important track record on trade on which we base our promotion efforts. In February, I will highlight the remarkable early success of the United States–Central America–Dominican Republic Free Trade Agreement in visits around the nation and in Central America.

ITU: In his State of the Union address on January 28, 2008, President Bush emphasized the importance of free trade agreements and the Colombia agreement in particular. Why is the agreement with Colombia so important?

Padilla: The Colombia free trade agreement is one that I feel very strongly about. When I visited Medellín, Colombia, with Secretary Gutierrez and several members of Congress last fall, I expected to see a violent city—something like the image of Colombia that we have from American movies. Instead, what I saw was a vibrant city of people engaged in the global economy—growing flowers, making apparel, providing services—in an atmosphere of increased safety and peace. I met former paramilitary members who came in from the jungle, laying down their weapons in exchange for jobs, education, and a chance to raise a family. Medellín’s murder rate is now lower than some major U.S. cities. In Colombia, terrorism, violence, and instability are being replaced by the rule of law, investment in people, and free markets. The transformation is nothing short of remarkable.

It’s not widely understood that Colombia already has free trade with the United States. But, it is one-way free trade. Since the mid-1990s, Congress has voted routinely—and overwhelmingly—to throw open the U.S. market to duty-free imports from Colombia. The Colombia free trade agreement rectifies what is currently an unbalanced, one-way free trade relationship.

ITU: What is the status of the free trade agreements with Panama and South Korea?

Padilla: I recently met with President Martín Torrijos of Panama and emphasized to him that the administration remains committed to our free trade agreement with Panama and that we hoped that country would not pass up the rare opportunity to have permanent free trade with the largest economy on Earth. In regard to South Korea, this would be the most commercially significant trade agreement for the United States in over a decade and a powerful symbol of the U.S. commitment in East Asia. Before we can proceed further, however, it is critical that the South Korean government address the current trade barriers to American beef.

ITU: What is the administration’s strategy for achieving results in our economic engagement with China?

Padilla: The United States faces numerous challenges in its economic relationship with China. There is growing economic nationalism in both countries and, in China, inadequate policing of the economy and structural economic imbalances. The administration’s strategy for dealing with these challenges consists of a three-pronged strategy that combines dialogue with the intelligent use of enforcement tools and leverage.

First, we will continue our intensive dialogue with China through the Joint Commission on Commerce and Trade and the Strategic Economic Dialogue. Both have proven to be effective vehicles of communication in areas such as intellectual property rights and product safety.

Second, we will make full and effective use of the World Trade Organization’s dispute settlement system. This administration launched the first case by any nation against China at the World Trade Organization and will continue to exercise U.S. rights under the dispute settlement system when necessary.

Third, the administration will make effective use of U.S. trade remedies, vigorously enforcing laws against dumping and government subsidies. In March 2007, for example, the Commerce Department reversed a 23-year policy of not applying countervailing duty law to Chinese imports. The Commerce Department has initiated eight countervailing duty investigations of government subsidies to Chinese industry thus far. Meanwhile, we continue to vigorously enforce the antidumping laws. The Commerce Department has in force more than 60 antidumping duty orders against imports from China, and products from China consist of more than half of all the ongoing AD/CVD [antidumpling and countervailing duty] investigations.