HAYES TO SENATE: LAU NO FACTOR IN CHINA PACT

Byline: Joyce Barrett

WASHINGTON — Hitting out against press reports, U.S. chief textile negotiator Rita Hayes told a Senate committee hearing Wednesday that a Hong Kong textile manufacturer had no influence over the Chinese textile bilateral agreement reached early this year.
Hayes appeared before the Senate Finance Committee for a confirmation hearing of her appointment as Deputy U.S. Trade Representative to the World Trade Organization in Geneva.
Stories appearing this month in Newsweek and Time suggested that Stephen Lau, chairman of Synergy Sports International of Kowloon, may have influenced the pact’s negotiations. Lau attended two Democratic fund-raising dinners, in 1995 and 1996, and a Lau lobbyist, William Houston, sat in at Hayes’s briefings on the talks for U.S. industry officials in January in Beijing.
(An article citing Houston’s presence at the briefings appeared in WWD in April.)
Hayes said that in negotiating the agreement she was influenced primarily by “U.S. textile workers, manufacturers and retail customers.”
Hayes charged that the stories in Time and Newsweek were written by “reporters that don’t know textile trade.
“This was maliciously done just before my confirmation. I don’t know why they don’t like me.”
Hayes still must respond in writing to further questions about meetings in China with Lau. The committee has no schedule for its vote on her confirmation.
Defending herself at the hearing, Hayes touted the bilateral agreement with the Chinese as benefiting the U.S. because it achieved market access into China without disrupting trade between the two countries.
“The textile agreement is a very complex and technical agreement. I tried to be very transparent, open and accessible to all in negotiating,” she said. Her briefings to industry representatives during ongoing negotiations are “snapshots and updates of where we are,” she said, noting that she does not release confidential information and makes sure to tell everyone that what she is telling them is not final but could be subject to further negotiation.
The holding of a briefing in the Chinese Trade Ministry also has raised some questions, and Hayes said she did not want to leave the building for fear of “losing momentum” in the negotiations.
About Houston’s presence, Hayes said, “I had no right to ask him to leave. I didn’t know he represented Mr. Lau. Mr. Lau had no influence whatsoever on this agreement. Those who had the most influence over me in the negotiations were textile workers, manufacturers and retail customers.”
She also addressed reports that she rode in a Chinese limousine to negotiations with Lau. “I’m not to tell the Minister of China’s Trade who can get in his limousine,” she said. “There were no negotiations in the limousine. There were other people present.”
Sen. Phil Gramm (R., Tex.) took issue with Hayes’s claim that she negotiated in the interest of U.S. retail customers.
“I understand how reducing quotas helps U.S. manufacturers and textile workers,” Gramm said. “But I don’t understand how it helps consumers, and I don’t see how this agreement can in any way be described as representing consumers.”
Hayes responded that by reducing overall Chinese textile quotas by 2.6 percent she was acting to preserve U.S. market access for the largest trading partner with the U.S.
“They weren’t abiding by the WTO agreement, and we had to enforce it,” she said. “I’m not denying consumers the right to anything, but my responsibility is to enforce these agreements.”
Sen. Charles Grassley (R., Iowa), chairman of the Senate Trade Subcommittee, questioned Hayes on how she could promote negotiating transparency in her new post in Geneva when she is past chairman of the Committee on Implementation of Textile Agreements, which he said “operates in secrecy.” He also urged her to encourage more open decision making by CITA and said the organization should release its minutes and priorities.
Hayes responded that she had never had any requests for the minutes of a CITA meeting. “I will consistently have openness,” she said.
Sen. John Breaux (D., La.) came to Hayes’s defense and said the articles about Hayes’s briefing before Houston and in a Chinese building “were a whole lot to do about nothing. I’ve been to those briefings before, and people who disagree with the U.S. position also attend. You can’t screen those who attend.”

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