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Daley defends China trade
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March 10, 1999: 8:50 a.m. ET
Commerce Secretary underlines broad nature of relations with China
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NEW YORK (CNNfn) - Commerce Secretary William Daley said Wednesday recent allegations of Chinese nuclear espionage should be "taken seriously," but he emphasized it is no reason to shut China out in other areas.
In an interview with CNNfn's "Business Day," the secretary denied the Clinton Administration had taken too long to deal with the allegations and underlined the wide-ranging nature of U.S.-Chinese relations.
"We take (this incident) very seriously, but… this is a very broad engagement that we have with China as we do with many other countries around the world," he said. "We have to stay engaged with China to see them progress economically, politically, and continue to open that society."
The secretary denied that a decision this week by Hughes Electronics to cancel a $450 million satellite sale to a Chinese-led consortium was at all related to the Los Alamos spying incident.
"It's a totally separate situation… the interagency process made a decision that it was not an appropriate sale, that's all," Daley said. "It's unfortunate to see a U.S. company lose an opportunity that would mean jobs here. But the interagency process worked and I believe Hughes will have other opportunities to sell their satellites."
Daley also defended the notion that additional precautions were needed when dealing with Chinese businesses in light of the nuclear espionage allegations.
"There are safeguards in place and they have been in place," he said.
The secretary also said he supports Chinese entry into the World Trade Organization.
"I think it is important that China be in the WTO. But they must come in a commercially-meaningful way. And that means that their market has to be open for U.S. products to be sold into.… They should live by the rules the rest of the world lives by." Daley said.
Although U.S. exports to China have climbed 10 percent recently, that figure is well below what it should be, according to Daley.
On a separate note, Daley defended the U.S. position in the recent trade battle with Europe over bananas.
"We're hopeful that there will be progress. The fact of the matter is that the banana dispute is about defending the rules-based system of the WTO," Daley said. "We've gone through two panels. We've been successful. There must be a conclusion to these types of cases. They cannot go on forever. The losing party can't keep looking for further relief if they lose the panel."
Daley said he expects the United States to take further action if a conclusion is not reached soon.
"We've outlined the sort of products we would add penalties on and we think that is helping move the process forward, frankly," he said. 
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Commerce Department
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