• English Site
• > Business

SPIEGEL Interview with US Commerce Secretary Gutierrez

'Isolationist Policies Would Be a Big Mistake'

Should Russia face economic repercussions from the Georgia war? US Commerce Secretary Carlos Gutierrez told SPIEGEL how the West should respond, discussed the state of free trade in the world and talked about US presidential candidate John McCain.

SPIEGEL: Mr. Secretary, Russian troops are still in Georgia. NATO just decided to freeze its relationship with Moscow. Should the West limit its economic dealings with Russia as well?

Carlos Gutierrez: Russia is putting itself into a very difficult situation. President Bush has been very clear on this: We have worked with Russia and we have been an advocate for Russia's entry into the world community. We have welcomed them into the group of the leading industrial nations. We welcomed Russia's desire to join the World Trade Organisation. They are putting all that at risk.

SPIEGEL: That means: Russia should be kicked out of the G-8 and should not be allowed to join the WTO?

Gutierrez: We should always keep our options open and not start negotiating with ourselves. The Russians have to reconsider their own interests.

SPIEGEL: What options are you referring to exactly?

Gutierrez: That we stop being an advocate for Russia's entry into the world community. They need to abide to the six-point agreement in Georgia that was signed. And I believe that President Bush acted wisely when he did not rule out any further options. Other nations should follow up.

SPIEGEL: Punitive measures are tricky for Europeans -- perhaps given the dependence of many countries in Europe on Russian oil and gas. How dangerous is this dependence?

Gutierrez: We are all too dependent on oil and gas from countries that don’t necessarily share our interests. Americans and Europeans should work together to reduce this dependency. Oil can be used as a political tool.

SPIEGEL: You mean as a political weapon?

Gutierrez: As something to impact our national well-being and our national security.

SPIEGEL: Many talk about energy independence. How to achieve it, though, is much more controversial.

Gutierrez: The president said we have to produce more of our oil. We also should be willing to do what many countries in Europe have done -- using more nuclear power, for instance. We think it is a smart policy not to exclude any national source of energy. We can learn from each other.

SPIEGEL: There are indications, though, that we are entering a new era in which countries focus more on their own national interests. The Doha Round -- which aimed to lower trade barriers and increase global trade -- just failed. Who is to blame?

Gutierrez: I have not given up hope that we can one day achieve a multilateral agreement. And the reason for that is because there is too much to be gained by free trade. That’s one of the really great ideas. You have probably seen the projections for the hundreds of millions of people that could be lifted out of poverty and helped with an agreement. But we couldn't achieve a worldwide consensus at this moment.

SPIEGEL: Why?

Gutierrez: Well, getting 153 WTO member nations to come to an agreement is a challenge. That’s why the US for years has created a trade policy based on bilateral agreement. We should continue to be very aggressive with these bilateral free trade agreements. We have done it already with Mexico, Canada und countries in Latin America. It has been good for our exports.

SPIEGEL: But not necessarily for American jobs. There is a heated debate in the US on the benefits of free trade. Workers in Ohio, Michigan, Pennsylvania and Illinois -- once the industrial heartland of the country -- see themselves as being the losers of free trade policies.

Gutierrez: If there is an individual that has been impacted by trade and lost his job, there is nothing I can tell him that would justify what happened. The problem is that too often people use trade as an excuse. And in the world of sound bites and quick statements, that is what people hear. They blame free trade but it is technical progress that’s responsible.

SPIEGEL: Millions of Americans want trade that isn't just free, but is also fair.

Gutierrez: I agree in fair and free trade -- as long as the word "fair" is not a code word for isolationism.

SPIEGEL: In the US, a number of politicians have suggested that they would like to renegotiate NAFTA -- the free trade agreement between Mexico, Canada and the US.

Gutierrez: I find it, frankly, almost embarrassing that the $14 trillion dollar economy wants to renegotiate with the $800 million dollar economy.

SPIEGEL: Would you go so far as to say that free trade in the US is at risk if a Democrat gets elected in November?

Gutierrez: I would say that if we were to adopt isolationist policies, that would be a big mistake.

SPIEGEL: Aren't you concerned at all about the enormous trade deficit in the US? America was once the biggest exporter in the world, but now, the country is the biggest importer in the world.

Gutierrez: There are also other more significant numbers to show if an economy is succeeding: the growth rate, the unemployment rate, or inflation. We could tackle the trade deficit pretty aggressively if we wanted to, but the question is, what would it do to those three numbers? There are countries in Europe that have trade surpluses, but their unemployment rate is much higher and their growth rate has not been as fast as in our country.

SPIEGEL: Are you talking about export-success-story Germany?

Gutierrez: I just want to say in general: There are countries in Europe with a trade surplus but a growth rate of 1.5 percent compared with our 2.5 to 3.0 percent growth over the past six years. Their unemployment rate is not 5.7 percent as in the US, but rather 8 percent.

SPIEGEL: Early last year, Chancellor Angela Merkel promoted a trans-Atlantic free trade pact with the US. Initially, President Bush seemed supportive of the idea, but not much has happened since.

Gutierrez: We had one or two meetings. That is obviously not enough, but we are getting started. These are issues that require consistency and patience and it is going to require a lot of work. We need to be closer together and with our eyes open in terms of what is happening in the world economy. We should take a stand on the importance and the value of intellectual property -- in defense against those abusing our brands and licenses.

SPIEGEL: Are you referring to China?

Gutierrez: Our brands or patents or trademarks are very important for our economies. Americans and Europeans need to collaborate on this shared interest. Is a BMW produced in South Carolina more of an American car than a Ford produced in Germany? There is a lot of shared interest in intellectual property on both sides of the Atlantic.

SPIEGEL: Maybe the global economy is less of a problem than the state of "Corporate America." Prior to becoming Secretary of Commers, you served as CEO of Kellogg's. Given the current crisis, what are your thoughts about corporate management these days?