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Office of the Press Secretary

                         BACKGROUND BRIEFING

November 16, 1993

The Briefing Room

3:33 P.M. EST

MS. MYERS: This is again a BACKGROUNDER -- [name-deleted-1] who you all know, [name-deleted-2] who you all know, [name-deleted-3] who you all know. [name-deleted-1] will open with a statement, just an overview of APEC, and then take questions. So, [name-deleted-1] --

SENIOR ADMINISTRATION OFFICIAL: NAFTA, APEC. We'll just -- one acronym to another. I thought I would spend a few moments talking about what we see as the larger importance or implications of the meeting. [name-deleted-2] will talk a little more specifically about some of the elements of the meeting which begins at a ministerial level tomorrow and will culminate with the leaders' meeting on Saturday.

I think there are really four larger implications of this APEC leaders' meeting as far as we're concerned. First, it represents a distinctive imprint of the Clinton presidency to put international economics on the front burner of foreign policy for the first time.

Those of you who traveled with Governor Clinton in the campaign remember that he spoke often about the interrelationship of foreign policy and domestic policy. In order to be strong at home, we have to be engaged abroad. In order to be actively engaged abroad, we have to be strong at home. And I think if there's a hallmark of the first 10 months of international policy, starting with the G-7 meeting, the discussions with Japan and then, in particular, this period that goes from NAFTA to APEC to GATT. It is the placement of international economic policy at the front burner of American foreign policy.

Second, the leaders' meeting represents an historic broadening of America's focus. We, for 50 years of the Cold War, were focused on the East-West relationship and also on the West-West relationship. And security defined those relationships. In a sense, we now are shifting from an East-West focus, perhaps, to a West-East focus. That is, recognizing that not only is Europe important to America, but also to Asia. Fifty percent of the world's gross domestic product will be represented in the room with the President on Saturday. The Asian growth over the next 10 years will equal the current size of the American economy. East Asia, that is the countries there without the United States and Canada, represent a larger economy than either North America or Western Europe.

So the very fact of such a meeting advances the idea of an emerging Pacific community the President talked about first in the Waseda University speech in Japan. It is the first time that these leaders will have met together. Indeed, it is the first time that this many Asian leaders will have met together at any point. And that process in and of itself will advance the integration of the Asian community.

Third, the development of APEC itself as an institution is part of the developing architecture of a post-Cold War period. One may think of this a little bit like being at perhaps a NATO meeting in 1950 with a key difference, and that is NATO is organized around a common enemy, organized around a common security threat whereas APEC is organized common economic interests. APEC has only been in existence since 1989, and has very much been an Asian indigenously developed institution, founded by the ASEAN countries Australia and others being very much an impetus. This meeting elevates APEC, I think, to a new level of institutional engagement.

And finally, building bridges with Asia obviously is part of a strategy of creating American jobs. This is a market of two billion people. There will be $1 trillion of infrastructure projects placed for bid in Asia in the next few years. The economic growth is projected to average six to seven percent per year for the region for the next 10 years. One percent in the U.S. market share of this region by itself would represent 300,000 American jobs. So that, obviously, turning to Asia as part of a strategy, particularly coming off of hopefully a NAFTA victory, is part of an overall effort to continue to have exports be a driving engine of the American economy.

I'll let my colleague quickly walk through the elements of the meeting and then take your questions.

SENIOR ADMINISTRATION OFFICIAL: Hi. I'll take you through the four elements of the meeting, characterize the -- try to set the whole things in a context and then we'll turn to your questions.

Think of the week, or the remainder of the week, as having four strands. There's the -- and I'll describe each --there's the ministerial strand, the ministerial meetings which begin tomorrow and conclude after lunch on Friday.

There are the bilaterals that the President will have with the leaders of other nations, one on one. There are some major statements by the administration -- centrally, the speech by the President on Friday morning, plus additional major speeches by administration spokesmen, and then there's the leaders' meeting on Saturday.

Let me just give you a sense about each one. The ministerial meeting -- remember what APEC is, is formally is a meeting of trade ministers and foreign ministers. And so the ministerial meeting continues the traditional work of APEC, although "traditional" is a word that ought to be in quotes, since APEC is only four years old. The principal output of that meeting will be the approval of a trade and investment framework which will begin to establish the sort of basic ground rules and rules for proceeding for trade and investment in the Pacific community.

In addition, the ministerial group will consider the report of what is called the Eminent Persons Group which was commissioned a year ago to look to the future of APEC and report on it, and this is composed of citizens of the United States and the other nations.

The second strand is the bilaterals. The President will be meeting with four heads of government: The Prime Minister of Japan, the President of China, the Prime Minister of Thailand and the Prime Minister of Canada. In each case, there is important business to do. Two of the meetings have been underlined I think more than others; the meeting with the Prime Minister of Japan and with the President of China; the other two matter to us, also. The meeting with the Prime Minister of Japan is obviously the first meeting between the President and Chretien after Chretien's election.

The third strand are the set of statements by major administration spokesmen. Secretary Christopher, Secretary Brown and Ambassador Kantor will all be making major addresses while they're there, each addressing sort of centrally the topics that you would suggest that they would. Ambassador Kantor will be looking at the next step of trade relationships, which is the multilateral trade regime -- the GATT, the Uruguay Round which we'll be turning our attention to after APEC. Secretary Brown will be looking at the possibility and the opportunities for reciprocal business relationships throughout the Pacific.

Secretary Christopher will give an overview and a kind of vista for APEC itself, and the President will address the sort of fundamental questions of why does this matter to Americans and to America, and what's the sort of long-run strategy that he sees.

The final strand is the leaders' meeting, which will be on Saturday on Blake Island. It's seen as an informal meeting. It will be leaders only. There will be a note-taker in the room, but there will not be other -- there will not be ministers and there will not be assistants.

Q Why?

SENIOR ADMINISTRATION OFFICIAL: Because all of us felt, and the Asians were quite enthusiastic about this, that given that this was the first meeting of the leaders, that it was a time for an informal discussion in an effort to come to an understanding of how they see the priorities of the region.

Those are the four main strands of APEC. That final meeting, the leaders' meeting will culminate in what we hope is the agreement on a common vision for APEC among the leaders.

If I could just conclude by putting this in a kind of context, Dean Atcheson wrote a book some years ago in which he looked at the period right after World War II called "Present at the Creation." As we look at what has happened since the G-7 meetings and at the series of decisions that the country is called upon to make, and the issues and lines that the President has drawn, we see this as being present at another creation; that the meetings and decisions and battles with respect to the global economy that are at the center of the NAFTA debate that are called into question by the APEC meetings and are at the center of the GATT debate really do redefine the nature of the global economy.

Q What would be the attitude of Europe toward this, all this?

SENIOR ADMINISTRATION OFFICIAL: The attitude that we have seen personally in bilateral discussions is a deep interest that it all be successful, because from the European point of view, the gathering momentum that both NAFTA and the GATT represent together will enhance the prospects of the GATT succeeding, of there being a successful GATT.

Q At the bilateral with the Japanese Prime Minister, you'll have about seven weeks between the bilateral and the deadline for the first round of framework talks to be concluded. Are you hoping that you can use this bilateral to break some deadlocks in those talks to move the talks forward? How do those two fit together?

SENIOR ADMINISTRATION OFFICIAL: Obviously, I guess I'd like to make two points about that. The first is we would -- we know the President will and we hope the Prime Minister will underline his strong support for the framework and his desire to make certain that progress is shown and that there is movement. We had never seen this meeting as one in which deadlines are accelerated or in which there would be specific negotiations occurring, and that hasn't changed. We don't know.

Q So what tangible results do you expect to come from these meetings with the leaders of China and Japan? I mean, he's going to go in there and ask for what? What do you expect to come out with?

SENIOR ADMINISTRATION OFFICIAL: Why don't I take one and my colleague take one?

SENIOR ADMINISTRATION OFFICIAL: See if I can guess which one you want to take.

SENIOR ADMINISTRATION OFFICIAL: I'll take the easy one. In terms of the meeting with the Prime Minister of Thailand -- (laughter.) No, in terms of the meeting with the Prime Minister of Japan, remember these are two leaders who have both come into office recognizing and arguing for the profound changes that are occurring in their economies and their societies. It's important that they know and understand each other. It remains to us the most important bilateral economic relationship in the world, although there are others that clearly matter a great deal.

We don't see this in the Japan piece as an occasion for a highly specific communique or a highly specific result. We'll have the occasion for that meeting in roughly two months, when they get together in turn -- consistent with the terms of the framework.

I'll let my colleague comment on China.

Q Can I just follow up?

SENIOR ADMINISTRATION OFFICIAL: Why don't you let my colleague finish, and then --

SENIOR ADMINISTRATION OFFICIAL: In terms of the meeting with President Jiang, we decided a few months ago that we thought it would be important to expand the nature of the dialogue with China so that we are engaging them in ways in which we can raise our concerns. And I think the purpose of the meeting with President Jiang is twofold.

Number one, is to reaffirm that we recognize China's importance, that we see China as an increasingly major player on the global economic and political stage, that we don't seek to isolate China. But on the other hand, that there are serious issues in our relationship that need to be addressed in order for the relationship to continue to develop, most particularly our concerns on human rights, our concerns on some proliferation issues and our concerns on trade. So the meeting provides an opportunity to make both of those points. We could either stand outside and lob our concerns over the wall or we can engage face to face with the Chinese leadership and make clear that we recognize that China is a great country with enormous potential. But that for our relationship to continue to progress, there has to be sensitivity on their part to the concerns that we have.

Q Are you considering announcing concrete steps on Friday, like for instance lifting the sanctions you imposed in August?

SENIOR ADMINISTRATION OFFICIAL: No, I would not imagine any -- these again are -- like the meeting with Hosokawa, I would not see any of these meetings as being negotiations. This is the first time the President has met with Jiang, or Jiang has met with the President. I think they are opportunities to, face to face, explain the two basic propositions that I described.

Q But you don't expect any tangible results. I mean, you don't expect them to come out with any kind of an agreement or --

SENIOR ADMINISTRATION OFFICIAL: I think all of these, whether it's APEC, the Hosokawa meeting, the Jiang meeting are part of a process. And I think this meeting -- to go a little bit more broadly in answering your question -- unlike the G-7 meeting where you have lots of concrete negotiated outcomes, the meeting itself is extraordinarily important. The fact that the leaders will get together, the fact that they will be able to think in Asian Pacific and talk in Asian Pacific times for the first time in history have that large a part of the world's population, that large a part of the leadership of the international community, in a room together without aides, without foreign ministers, without finance ministers, talking about how they see their regional common interests, I think in and of itself is the most important thing we want to get out.

Q Isn't there a risk that China could see this new openness in your attitude toward them, what some people call about face, in fact as a sign of weakness?

SENIOR ADMINISTRATION OFFICIAL: It is not -- certainly not an about face, and as I say, you can either stand outside the wall and loft your concerns over the wall and hope they land someplace, or you can engage and discuss those concerns directly. And there is no diminution at all in the concerns that we have, but there is a broader context in which they arise, and this is an opportunity to discuss that.

Q In the past, Secretary Christopher has said that there will be no turning away by the United States from its commitments and its attention to Europe. But from what you have said, at least relatively speaking, there is going to be a diminution of U.S. interest and commitment and attention to Europe, given the fact that U.S. resources are finite, there are so many hours in the day.

SENIOR ADMINISTRATION OFFICIAL: No, I don't think that's true. I think to say that we have probably given too little attention to Asia over the past 15 years as Asia has emerged as 25 percent of the global economy and that we are now going to give it its due attention does not mean that you are going to not also continue to develop and cultivate and nurture the extraordinarily important transatlantic relationship. The President will be going to Europe at least three times next year, and this is -- and already has met with the G-7 and is in contact with them on a regular basis. So it is not to say that the transatlantic relationship is not still a cornerstone of American security, it's to say that if you see the world as a global economy, you've got to look to your east and to the west -- and to the south and to the north.

Q But, given that economics are going to be the driving force, the locomotive of U.S. foreign policy, and the center of gravity is now moving, as you say, to the Pacific region -- relatively speaking, anyway -- doesn't that imply also that there will be a turning away of available resources in terms of attention and commitment by the United States to Asia?

SENIOR ADMINISTRATION OFFICIAL: I would not say that economics is the locomotive of international relations. What I said in my earlier remarks is that this President, for the first time has put it on the front burner. But, clearly, this is a world that remains extraordinarily dangerous. There are a range of security threats, from proliferation to terrorism to ethnic conflict to the success or failure of democracy. Those are all at the forefront of our concerns, and clearly the U.S.-Atlantic partnership has been the cornerstone of dealing with those security concerns.

Q The President hinted -- not hinted -- said today that he would have an announcement on Korea within a few days. Does that mean he's going to make some kind of announcement at the APEC?

SENIOR ADMINISTRATION OFFICIAL: I didn't hear what the President said.

Q Do you know of anything about to break on that?

SENIOR ADMINISTRATION OFFICIAL: I'm not aware of what the President said.

Q Regarding the meeting between the President and Prime Minister Hosokawa, you had said earlier you wouldn't expect any highly specific communique, don't expect any highly specific result. The President has said on many occasions that he's unhappy with the efforts that Japan's been making regarding its trade imbalance with us. Other administration officials have expressed unhappiness with the extent to which Japan is moving to try to stimulate its economy. What message is the President going to be bringing to Prime Minister Hosokawa regarding those issues?

SENIOR ADMINISTRATION OFFICIAL: There will be basically two subjects. One will not be economic, one will be an underlining of his commitment to the security relationship, particularly in light of developments in Korea and mutual concerns about North Korea. The second set of issues will be economic, and the President will underline the importance of Japan pursuing a policy of stimulation, given the state of world global growth and the fact that while the United States economy has begun to perform quite nicely, the Japanese economy has not turned around and the European economy has not turned around. So he'll underline that both, in terms of the importance to the world and in terms of the specific importance to Japanese consumers and voters, there's enormous importance to a policy of macroeconomic stimulus.

In addition, he will underline that his commitment to and his interest in progress with respect to the baskets of the framework, but this is not, as my colleague said, a negotiating meeting, and we have said that to our Japanese counterparts for a long time.

Q Would you expect the Japanese to come and present some new proposals in terms of stimulus?

SENIOR ADMINISTRATION OFFICIAL: I don't think that they're going to present new proposals. I think that there will probably be an explanation to the President -- I think that it would be natural for this to occur -- of the state of development of the political reform efforts, and then I think that the Prime Minister will probably talk both about the tax reform commission and the Hiraiwa Commission -- the economic structural reform commission. But I don't think that they're going to be bringing specific proposals.

Q [name-deleted-1], to follow up on Helen's question, out here earlier today when the President was asked about these reports that the NSC has given the President a recommendation on Korea, he did say he would have something to say about this in the next few days. What is your guidance on what we can expect at the APEC meeting on this subject?

SENIOR ADMINISTRATION OFFICIAL: Well, Dee Dee just said to me that what the President said was that he was not going to comment -- make any comments because he would be having a series of meetings over the next week or so. He'll be meeting with Hosokawa. He'll be meeting with President Kim both out there and then Kim is coming here. So I don't take that to mean that there is some imminent statement. Rather that he was not --

Q He said within a few days.

SENIOR ADMINISTRATION OFFICIAL: Well, again, I did not hear what the President said. And one thing I've learned is not to comment on things that I haven't heard, particularly if they are made by the President.

Q Whether you heard it or not, what's your guidance on what you expect at APEC on Korea?

SENIOR ADMINISTRATION OFFICIAL: I would say that clearly this will be something that the President will want to discuss with Prime Minister Hosokawa, with -- to the extent that there is time with President Kim and perhaps with President Jiang.

The APEC, as you know, is an economic organization, has an economic focus, not a security focus. So it is not something that will come up in the context of the meetings themselves. But it is obviously a matter of serious concern, a matter that we have been reviewing continually, and continue to do so.

Q Will the President give President Jiang a specific list of things he expects if MFN is to be renewed? Is he going to put his cards on the table on that issue?

SENIOR ADMINISTRATION OFFICIAL: First of all, the executive order itself has seven categories, seven specific areas in which there must be overall significant progress. So in the general sense, it is quite well defined.

Second of all, Assistant Secretary of State John Shattuck went to Beijing last month and talked -- had a very specific conversation with the Chinese about our concerns. He will also be meeting with his counterpart in Seattle I believe tomorrow. So there will be a good deal of, I think, discussion of nature of our concerns on the human rights area and others. The President will --

Q But will that be a focal point of the summit this time -- not just of the lower level?

SENIOR ADMINISTRATION OFFICIAL: I want to put it back in the context of the two points that I made before, which is, number one, to reaffirm that the China-U.S. relationship is an important one, has been for many years. China is a country whose evolution will have great importance to our security and to the security of the region. We want to have a -- go in and engage constructively with China. And, second of all, that there are some concerns that we have in areas that we will discuss, and they have concerns about things that we've done that they, I'm sure, will put on the table. But again, it's not a negotiation, it is an opportunity to try to put all this in context and make it very clear that Jiang understands that we would like to see a better relationship, but it's going to take movement on both sides for that to happen.

Q Also on China, what is your view of the growing trade deficit we have with them? It was last year 18 percent and now I understand it's gone up to, what, 24 percent for the current year?

SENIOR ADMINISTRATION OFFICIAL: Again, this will not come up at the summit or the meeting between the two presidents. It will come up in the meeting with Secretary Christopher and his counterpart, Qian Qichen, the Chinese Foreign Minister. It's also a subject that Charlene Barshefsky went into during her trip to China. As you mentioned, the outlook looks bleak for leveling out the deficit. It's only going up.

Q So are we very concerned about that? What can be done?

SENIOR ADMINISTRATION OFFICIAL: We're very concerned. Well, we have a market access agreement which is not being fully implemented by the Chinese. Charlene went into that in great detail during her trip to Beijing. We're constantly pressing the Chinese to implement that. We have problems with textile quotas, transshipments of textiles which we're working with them on.

And then, IPR. They signed an agreement on IPR and they passed legislation regarding it, but they have not implemented it like they should, and American companies are losing hundreds of millions of dollars because of it.

Q I'm sorry -- is --

SENIOR ADMINISTRATION OFFICIAL: This is intellectual property rights.

Q Can you tell us a little bit about the President's speech? Is this Waseda II, or --

SENIOR ADMINISTRATION OFFICIAL: It's Seattle I. It is work in progress. (Laughter.) So it's always a little --

Q Right up to that limo ride to the mike.

Q If Martin Luther King spoke to the Asian leaders -- (laughter) --

SENIOR ADMINISTRATION OFFICIAL: You got a copy of it. (Laughter.)

I think the fundamental point of this speech is what my colleague said, which is to really speak primarily to an American audience on the eve of this conclave of Asian leaders to explain why this does this matter, why it's important that we are engaged in the world, why it's important that the international economy is given a higher priority. And I think that you -- if we are successful tomorrow, talk about -- begin to shift the focus a bit from NAFTA to GATT.

Q There is a feeling at least in Europe that the administration is using this APEC conference as a kind of a veiled threat to the EC in connection with GATT talks. Could you elaborate on that? And to what extent is this threat credible, considering that there a lot of different views in Asia about what APEC should be, and that your vision of APEC is not shared by all Asian countries --

SENIOR ADMINISTRATION OFFICIAL: It should not be seen by Europe as a threat. It is analogous to the discussion we had with the Japanese at the beginning of this administration when we said for us to place more of an importance on the economic dimension is not to suggest the security dimension is not important and the political dimension is not important.

For us to recognize that we're a Pacific power is not to forget that we're an Atlantic power. I think that if NAFTA passes tomorrow, you will see the President move his attention very much towards the home stretch for GATT. And we can't have a GATT agreement without Europe and Asia and the international community coming together on that objective. So I don't think there should be -- it is not intended, should not be seen in any way as threatening.

Q But you agree this will put a lot of pressure on the EC to conclude GATT and to make concessions --

SENIOR ADMINISTRATION OFFICIAL: Well I think that all the countries of the world as we now are roughly a month away from the deadline on GATT should feel pressure. There is an enormous amount at stake in completion of the GATT Round for -- and particularly for Europe, whose economies are not very vigorous at this point. GATT can be an instrument that really lifts up the global economy and so it's not something that is any more focused on Europe than any other part of the world.

Q [name-deleted-1], you portray this as the United States taking the lead in defining a new vision for Asia's future. But some in Asia -- particularly Malaysia -- think that the United States is taking too much of a leading role in APEC, taking over what was supposed to be an Asian organization. How do you respond to that criticism?

SENIOR ADMINISTRATION OFFICIAL: I'm glad you asked that question. APEC is an organization, as I said before, that was started in Asia. It wasn't started in the United States. It was started by ASEAN. Prime Minister Hawke was one of the early proponents of it. It has grown and developed over the last four or five years in a particularly Asian way. We are the chairmen -- we are the chair of APEC this year; that is just the way in which the cycle developed. We would be having an APEC ministerial in Seattle if anybody else were President -- 1993 was our year to do that.

The President decided, in fact, as we were getting ready for the G-7 meeting, that it could be useful to have a head of state meeting, or leaders' meeting. He sent [name-deleted-3], our all-purpose sherpa out to do consulting, to see whether or not this was something that would meet with the approval of other leaders. It's not something we did unilaterally. And there was general enthusiasm for the idea. You're correct that Malaysia has had a problem and Mahathir will not be attending. I think he sees APEC as -- he would like to see this evolve without regard to the United States and Canada and some of the Latin American countries that are now coming into APEC. But that is -- we would hope that he would evolve in his view on that. And the fact that every leader is coming, with the possible exception of Prime Minister Bolger, who's trying to put together his fragile government -- I think reflects the fact that this is something that they want as well.

Thank you.

Q But is this an American vision for Asia, or is it an Asian vision for Asia.

SENIOR ADMINISTRATION OFFICIAL: No, I think it is. I think it has to be an Asia-Pacific shared vision. It is not something that we want to, can impose in Asia. But I would point out, for example, that 49 percent of all East Asian trade is now interregional. That's a dramatic increase than what it was a few years ago. So there is an integration that is happening economically within Asia and within the Asia-Pacific community. The Asia-Pacific community is happening economically, and this will be a step in it happening politically.

Thank you.

END4:10 P.M. EST