LIMA, PERU - VOA’s Celia Mendoza interviewed U.S. Secretary of Commerce Wilbur Ross on the sidelines of the Summit of the Americas in Peru. This is an edited transcript of that interview.
Question: Secretary Ross, tell us what the importance is for the United States to do business with Latin America, especially now that we have a global market and China is trying to come into the region. China has been arriving in the past few years, bringing more investment and starting to bring more goods and services to the region.
Wilbur Ross: The U.S. has 12 of its foreign trade agreements, free trade agreements with Latin America. That is 12 out of the 20 that we have, so the majority of our trade arrangements are with Latin America. Second, Latin America exports far more to us than it does to China, and third, Latin America has a surplus with the U.S. and a deficit with China, in fact the surplus with us is almost twice the deficit that the region has with China.
Question: In the past few weeks, we have talked about tariffs, we have talked about the exchange of goods, but recently we learned that Argentina might be one of those countries that might be buying pork from the United States. How does that affect that exchange?
Ross: We’ve been having very constructive dialogues with Argentina. President [Mauricio] Macri and President [Donald] Trump have a very good working relationship and so we are exploring all sorts of things, bilateral things, things that Argentina can sell us, and things that we can sell Argentina.
Question: You have mentioned that China is more protectionist than a free market country, explain how that could affect the relationship with Latin America as many countries try to broaden their market.
Ross: What China is buying from Latin America is basically raw material, agricultural commodities, mineral resources, oil and things of that sort. They’re buying very little in the way of high value ... manufactured goods. But in terms of the U.S., more than 70 percent of what we are buying is high value-added manufactured goods. That’s much more stimulative for the Latin American economy, because you have the basic labor content from mining or ag (agriculture) plus the value added in the factories, so it has a more therapeutic effect and is also a favorable trade balance for Latin America versus a negative one.
Question: Something you have mentioned in the past, which I think is very interesting, is how you have said that United States can be a better partner to Latin America because of ecommerce. How will that work? And how do you see that benefiting the region?
Ross: Well, the region has relatively little trade within the region itself and the reason for that is the borders. The borders are complicated. One of the producers I spoke with at this conference said it’s very hard to comply with the labeling requirements in each country, because each has a little different word. Well if the labeling requirements become ecommerce, e-labeling, rather than physical, that will facilitate trade among the Latin American countries. Further, it takes nine days and something like $800 to clear goods through customs on average. In the U.S. it takes a few hours and a couple of hundred dollars to clear a container [of goods]. Those are unnecessary barriers to trade and, worse than that, when you have complex regulations, that lends itself to corruption. The more delays, the more complexity, the more regulation, the easier it is for improprieties to spring in.
Question: And since you bring that up, that is the subject of the Summit of the Americas: corruption and how that affects relations with those countries, because a lot of times American companies and the United States are not very confident that the companies that they are doing business with can keep up with the regulations of the United States.
Ross: Well, the United States has the Foreign Corrupt Practices Act, which prohibits American companies from giving bribes or any other form of corruption. So when Latin American government procurement agents deal with an American company, they know they are relatively safe from problems like the Odebrecht situation. I think Odebrecht is going to be a turning point for Latin America. I believe all the public opinion polls say that the public is insisting on less corruption, and the way to deal with corruption is to have voluntary standards worked out with the regulators. We learn today about self-regulation by four nations of medical devices, including quite a few practitioners, quite a few countries, and I believe the next one will be pharmaceuticals and the one after that will be construction, that is a good thing, the more transparency, the less corruption.
Question: Right now we have negotiations between Canada, the United States and Mexico. How do you see those conversations going, and are we close to a final deal? We have heard this morning that President Trump might be thinking about coming back to the trans-Pacific agreement, which Peru was part of the negotiations, as well as some of the other countries. Is that a possibility in the future?
Ross: Well, those are two very different questions. On NAFTA, there have now been about eight sessions, eight formal sessions. A lot of the easy issues have been resolved. They’re now working on the more difficult issues and that was a deliberate system. The idea was let’s get out of the way the easy things, let's build some momentum toward the more difficult ones. So within the next month or two we should know pretty well whether we’ll have a reasonably quick deal or whether it will come after the elections that are coming up in the third and fourth quarters.
Question: In terms of the Pacific alliance, for now is a negotiation being considered?
Ross: Well, I've learned in this conference that there are much friendlier relations between the Pacific Alliance and [South American trade bloc] Mercosur, than there have been before, partly because the change in government in Argentina and also in Brazil. If those two could get together, on a less protectionist basis, you’d have a huge powerful trading bloc that could be a real factor globally. So, I think it will be in everyone's interest, longer term, to encourage that development.
Question: Finally, Venezuela is a big subject during this conference not because it is on the agenda but in the surroundings of the conference. Just a few minutes ago, Vice President [Mike] Pence announced $60 million for countries that are taking refugees from Venezuela. But in terms of the economy, Venezuela has levels never seen in the region. Do you think that could affect the other countries? What do you think could happen there?
Ross: Venezuela is abusing its population and that is not a satisfactory thing to happen. We are grateful to the Lima group for their support of our actions against Venezuela, and I think that is very good and shows the partnership spirit. The vice president’s announcement about giving funding to the countries that have taken in refugees, our intention is not to burden those countries, our burden is to try to deal with the problems in Venezuela.”
Question: What do you think could happen in the next year or two in terms of relations between the U.S. and Latin America countries, because we have many presidents on the way out. The Mexican president is on the way out, as well of the president of El Salvador … and we have countries that are establishing markets that are complicated, like Bolivia and Cuba, that continue to be a problem for the region.
Ross: Well, I think in general the U.S. is going to be paying much more attention to and working much more closely with Latin America than prior administrations had. Given how important Latin America is to the U.S. geographically, and in national defense and trade, is a very natural thing for us to be very close allies. So we are going to try to facilitate that, an example is the gesture that the United States made through Vice President Pence. I hope that people understand what it is. We are sharing the hardship with them of the refugees that have come out of Venezuela.