Commerce secretary Wilbur Ross breaks down the trade framework President Trump agreed to Wednesday with leaders of the E.U.
SECRETARY WILBUR ROSS: I think there are several very significant aspects. There were no preconditions, no requirement that we drop any 232 tariffs just to get talks going, which had been an original EU request. They came prepared to do business, we came prepared to do business. This really breaks the ground, because it has now set the parameters: Everything is on the table.
BRET BAIER. FNC: You're talking zero tariffs, ultimately.
ROSS: The president made it clear at the G7, although you remember no one paid any attention, that his endgame is zero tariffs, zero non-tariff trade barriers, zero subsidies, and zero barriers to our market access, so four big zeroes...
And it is more than soybeans -- all agricultural products will be discussed.
Full transcript, via FOX News:
BRET BAIER, FNC HOST: As we promised at the top of the show in that lead story about trade, let’s get more on the trade agreement, Commerce Secretary, Wilbur Ross has made his way over from the White House and joins us on set. Mr. Secretary thanks for being here.
WILBUR ROSS, U.S. COMMERCE SECRETARY: Good to be on here.
BAIER: We had the set up piece but not too many details. Where can you fill in the blanks about this trade deal with the E.U.?
ROSS: Well, I think there’s several very significant aspects. There were no preconditions to the negotiations, no requirement that we drop any of the 232 tariffs just to get talks to going. As you know that had been an original E.U. request. They came very prepared to do business. We came prepared to do business, and I think this really breaks the ground because it has now set the parameters. Everything is on the table.
BAIER: Yes. I’m talking zero tariffs possibly?
ROSS: Right. President made clear at the G7, although as you remember nobody paid any attention, that his end game is zero tariffs, zero non trade -- non tariff trade barriers, zero subsidies and zero barriers to our market access - so four big zeros.
BAIER: Yes. He also specifically talked about soybeans and also industrial products.
ROSS: Right. Well it’s more than soy beans. All agricultural products are something that will be discussed. Soybeans was simply a very timely example of those.
BAIER: So as you know, farmers are concerned and a lot of farmers in the Midwest and different areas. Here is one farmer we talked to who was just not sure. Take a listen.
UNIDENTIFIED MALE: What concerns me is they have made this announcement and the details are not yet clear. They probably won’t be clear until a month before the election so this is an election ploy and we as farmers are playing the dupes again in this whole process. That’s what concerns me.
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BAIER: So they’re feeling it. So does this -- can I relieve that a little bit? I mean what do you tell farmers tonight?
ROSS: Well, first of all, the announcement of yesterday that we're going to spend up to $12 billion to help the farmers is a pretty tangible announcement and a very strong one. Second, we're very keenly aware that they have the harvest coming in September and October, that's a very critical time period for them.
We're also aware that China apparently loaded up on soybeans some months earlier deliberately to go out of the market for a little while to depress the prices prior to the midterm elections, trying to put political pressure on the president.
BAIER: You -- you've got these -- these folks speaking out in their states. Republican lawmakers who are supportive of your administration who are really feeling the pinch back home, some of them saying -- I mean, it's not just soybeans, it's corn, it's other agricultural products.
ROSS: Sure. Sure.
BAIER: That there have to be other things to do. I mean, are you thinking of other things while you're in this battle with China?
ROSS: Well, surely. One -- one very good example is the arrangements we started to make today with the E.U., because it's not only China that has put in retaliatory tariffs, it's also E.U., in addition, Mexico. Mexico's a very big importer of agricultural goods, and --
BAIER: So is the NAFTA deal almost wrapped up?
ROSS: Well, we -- I wouldn't say almost wrapped up, but it's coming along very, very well. We hope that could be within the next couple of months. The new president is engaging. He's picked his team, there's an overlap with the former administration's team, he's indicated he's broadly on board with what's been done thus far and is looking forward to closing the last few gaps.
BAIER: You know, the president asked for patience the other day, and there are lawmakers up there who are getting a little impatient and they -- they are not sure of the strategy here. If you were to lay it out in a blueprint for people sitting at home, what is it?
ROSS: Well the strategy is this, it took us since World War II to get to the current unfortunate trade deficit. Right after World War II, American public policy was rebuild Europe, rebuild Asia, partly with Marshall Plan and things like that, but also partly with unilateral trade concessions. Those were good then, but should have been time limited.
Concessions that we made that were appropriate to Germany, to Japan, to China in 1950 are no longer appropriate, because they're no longer small, struggling economies; they're now world powerhouses, particularly in export.
So it's a lot of history that we have to deal with. What we now need is to lower the barriers that they were permitted to erect relative to us, get market access, which is really what the farmers want and what our manufacturers want, get market access, get rid of these artificial trade barriers, and get rid of the tariffs.
E.U. tariffs average over 10 percent on farm products and they have a lot of non-science based standards that preclude our products coming in.
BAIER: I had a corn farmer coming in the other day say, "What about increase the ethanol mandate a few percentage points while you're doing this battle?"
ROSS: Right, well that's not a trade issue, that's really a policy issue for the congressional leaders to get -- to deal with as well.
BAIER: China, it seems, deals within a different calendar. Are you going to be able to wait them out and pressure them enough while feeling some of this pain, and some of these states -- and many of them are targeted because they're Republican swing states that could mean the difference to control of Congress?
ROSS: Well sure, the Chinese have done a very, very good job figuring out the political map and how to target it. But you look at their recent announcements, confusions of capital into the (ph) banks, the lowering reserve requirement, letting their currency drift downward; they're feeling pain themselves.
They're also finding it not so easy to substitute for all of our farm products. You'll -- you're going to see once they run out of the soybeans that they artificially built up, they can't just get all the beans from Brazil. And here's why: Brazil is 55 percent of the beans they buy, we're 33 percent. For Brazil to replace us, they would have to increase their exports to China by 16 (ph) percent.
Well guess what? If Brazil could have done it, that much an increase at a economical price, they already would have done it. They didn't have to wait for this conflict. So they're finding it not so simple to deal with their own retaliation.
BAIER: But you're calling today a win.
ROSS: I think today is a win both for the E.U. and for the United States, because our objective is zero tariffs, zero trade barriers, zero subsidies, zero restriction on market access. We think the E.U. now is interested in the same direction.
BAIER: Mr. Secretary, we appreciate you hustling over from the White House. Thanks for the time.
ROSS: Thank you.