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                    Office of the Press Secretary
                           (Naples, Italy)
For Immediate Release                                       July 8, 1994

                        BACKGROUND BRIEFING
                          Palazzo Reale
                          Naples, Italy

7:40 P.M. (L)

SENIOR ADMINISTRATION OFFICIAL: I'll be happy to brief you on the President's meeting with Prime Minister Chretien, which began a little after 6:15 p.m. They met alone for approximately 25 minutes, then were joined by the Secretary of State Christopher, Secretary of the Treasury Bentsen, myself, other U.S. officials; and were joined on the Canadian side by their Foreign Minister, Finance Minister and their Chief of Staff, Mr. Peltier.

They covered both foreign policy issues, including Haiti and Bosnia, as well as trade issues involving the United States and Canada, as well as broad issues concerning the Uruguay Round.

I'd be happy to take your questions.

Q This isn't a question about the meeting, but I was wondering if you could confirm if there's any agreement on the Open Markets 2000 initiative and where that might be going?

SENIOR ADMINISTRATION OFFICIAL: Obviously, it's not been raised yet because the leaders don't meet until 8:00 p.m. tonight at dinner. We fully expect the President will raise it at that point.

The Open Markets 2000 initiative, of course, is the President's desire that the leaders direct their finance and trade ministers to spend a year reviewing the various impediments of trade among and between the G-7 countries, and consulting the OECD and the World Trade Organization to develop any appropriate recommendations for next year's G-7 as to how to address these issues, what issues to address, and in what forum they should be addressed.

It is an initiative by the President in order to continue the momentum to build on the Uruguay Round, to address those issues that were not -- either were not met by the Round, itself, or were not considered in the seven-and-a-half years' negotiation.

Q Ambassador Kantor, was this initiative ever considered to be possibly a launching of a new round?

SENIOR ADMINISTRATION OFFICIAL: No. It's neither negotiation, nor the launching of a new round; was never considered to be. It was always articulated, including in a letter from the President to the other G-7 leaders, as well as to President Delors as a review and study for one year in order to accomplish what I indicated to you earlier.

Q Does it deal -- are we dealing specifically only with G-7 nations and the EC, or is it broader than that?

SENIOR ADMINISTRATION OFFICIAL: Because we're talking about consulting with the OECD as well as the WTO, obviously it has broader potential implications. The question for the finance and trade ministers is not only to review the concerns, but to try to determine what might be done and what forms might be the most appropriate. It's, frankly, an open review in order to consider those issues that continue to provide -- or continue to be imbedded impediments to world trade.

Q What are the subjects to be addressed, and what are the likely subjects to be addressed?

SENIOR ADMINISTRATION OFFICIAL: There are no suggestions by the President as to what the agenda should be in terms of subject matter. However, it might -- we'd only note that whether it's in investments or in standards or in financial services there are areas, of course, that were not addressed by the Uruguay Round or as effectively as other areas like tariffs and certain other nontariff barriers as intellectual property, as the dispute settlement mechanism. Therefore, it's the President's view, and I think shared by many other leaders, that a review at this time is helpful to keep the momentum going.

But there is no set issue. So in other words, that's for discussion among the leaders.

Q Did the Prime Minister support the President on his Bosnian policy, particularly the recommendations of the Contact Group?

SENIOR ADMINISTRATION OFFICIAL: Let me just say the Canadian government, under the leadership of Prime Minister Chretien have supported the President and the United States government on its Bosnian policy. I'm not going to get into any particular aspects of that discussion, other than to say that, yes, there is general support.

Q Anything at all today that gives any hint or suggestion of forward motion on the framework talks?

SENIOR ADMINISTRATION OFFICIAL: I think you could say there were no either positive or negative indications that would lead us to believe that the framework talks, which will proceed, of course, beginning next week, will either be more or less successful than they have been over the past year.

Q Did the President raise the trade initiative with the Japanese Prime Minister?

SENIOR ADMINISTRATION OFFICIAL: I think I heard you right -- did the President raise the Open Markets 2000 suggestion with the Japanese Prime Minister, and you asked what his response was. It was discussed; the Japanese are considering it seriously. I think it would be not appropriate to go any further than that.

Q To follow up with this Markets 2000 idea, is this perhaps a putting pressure on the Japanese multilaterally to do something about opening their markets?

SENIOR ADMINISTRATION OFFICIAL: The question is, is the Open Markets 2000 idea a way to put pressure on the Japanese to open their markets on a multilateral basis that I assume your implication is that it hasn't been accomplished on a bilateral basis in those certain areas.

First let me say that during the past year we have reached more trade agreements with the Japanese than at any time in U.S. or U.S.-Japan history. That doesn't mean we're satisfied; the President was quite clear today that he believes that the framework talks have not been as successful as we might have liked. The question addresses the Open Markets 2000 suggestion. This suggestion, frankly, goes way beyond, of course, U.S.-Japan or even Japan market problems. It addresses not only the G-7, but of course, we're consulting with the OECD and the WTO as well; at least that's the suggestion.

Therefore, of course, it might have some impact on it, but it's not designed, necessarily, to do that.

Q There have been a lot of reports about what was in the President's letter to the other G-7 leaders on this initiative and various ideas that were thrown out about different topics that you covered -- trade and investment negotiations. But can you run down some of the things like investment or standards or --

SENIOR ADMINISTRATION OFFICIAL: The question is in the President's letter to the other G-7 leaders, it's been reported there were certain topics -- I think you used the words "thrown out," -- not my quote, unquote -- that would suggest what the topics might be to be reviewed by the trade finance ministers if there's general agreement on this suggestion by the G-7.

There were examples given, not suggestions. The examples covered investments, financial services, standards and I think there were a couple of others that -- I'm sorry, John, I don't have the letter with me -- but they were only examples, and so anything else I would give you would not be helpful to you. Because the President did not want to predetermine what the leaders might think are the important topics to be reviewed over the next year.

Q Is it reasonable to suggest or to think that the meeting of the G-7 trade ministers --

SENIOR ADMINISTRATION OFFICIAL: The question is, is it reasonable to suggest or to think that the meeting of the G-7 trade ministers -- and let me say it's not all the G-7 trade ministers; they're not all here -- tomorrow would discuss the Open Market 2000 suggestion.

First of all, the meeting of the trade ministers who are in attendance is an informal meeting suggested by Minister Bernini of Italy, which we all accepted. There will be a number of bilateral meetings. I'll be meeting with Minister Hashimoto of Japan, I'll be meeting with Minister Bernini separately. I'll be meeting with Minister Rexordt. I'll be meeting with Sir Leon Brittan when he arrives tomorrow, and I'll be meeting with Sarah Hogg who, of course, is the head of the staff of the Prime Minister of Great Britain, also.

The lunch we're having together is informal. I'm sure we'll discuss a number of subjects. It would not surprise me if the Open Markets 2000 came up. Now, remember this is informal, not formal, it has no formal connection to the G-7 whatsoever. It just happens we all happen to be in the same city at the same time. And Minister Bernini correctly believes it would be important for us to get together and talk about not only that, but to talk about the ratification of the Uruguay Round, which is, of course, number one on our agenda.

Q Could you give us the context in which the President and Prime Minister discussed Haiti? Is it simply an explanation of each other's position, or did the President actually see some kind of public support from Canada for the U.S. policy?

SENIOR ADMINISTRATION OFFICIAL: Would I give some sort of context in which the President and the Prime Minister discussed Haiti and the circumstances. Is that a fair --

The answer to the question is, they had a full, complete, thorough consultation on most, if not all, the important aspects of the Haitian situation.

Q In the President's meeting with the Canadian Prime Minister, was there any discussion about the wheat export issue?

SENIOR ADMINISTRATION OFFICIAL: I'm tempted to say no, but you wouldn't believe me, would you? The answer is, of course, there was. It was suggested that we'll have to send Wayne Gretsky back to Canada if we can't resolve the issue. We didn't agree to that.

There was a full discussion about that. I talked to Minister MacLaren, in fact, just this afternoon. There's a general sentiment on both sides we should try to work this out on the short and long-term basis. We'll continue to meet. As you know, we met the 27th in Chicago -- June 27th. Officials talked twice on the phone last week. I've talked to Minister MacLaren just this afternoon for quite a while by telephone. The President and the Prime Minister had a full and thorough discussion. And I can say that both agreed that we should handle this as we did so effectively other trade problems, including the recent salmon fishing problem.

Let me just say the trade between Canada and the United States is the largest trade relation in the world between any two countries. Last year it was $210 billion in goods alone. If even five percent is at issue, meaning 95 percent is going well, that means $10.5 billion is in question. Therefore, of course, even a small dispute looms large in the case of both countries. So it shouldn't surprise anyone that from time to time we have differences of opinion with our Canadian friends and allies, but that we usually work our way through it quite nicely, and I think we'll do so in this case as well.

Q With your Open Markets 2000 initiative, do you see the trade ministers having a more formal role next year in this summit?

SENIOR ADMINISTRATION OFFICIAL: I can safely say it's not been discussed, nor -- at any level. Not in the United States government. It's not even been considered. I don't think it's necessary, frankly.

Q Can we just back up and get the President's thinking about why the G-7 is the appropriate forum to maybe expand the idea of opening markets so broadly?

SENIOR ADMINISTRATION OFFICIAL: Let me take you back to one year ago in Tokyo where we reached an agreement on market access in the Uruguay Round, which was the point at which we really re-engaged the Round, and I think it was the critical point in defining a successful conclusion of the Round.

The President, in harkening back to that, believes that the G-7 can be a catalyst for change -- not an engine, a catalyst. In other words, that the G-7 provides a leadership role and it should continue to do so. And he believes last year that that was effective, and he would hope that this Open Market 2000 suggestion would provide the same kind of catalyst toward the 21st century.

Q But did you think that then the G-7 might be just the beginning and then it will shift -- the discussions will shift?

SENIOR ADMINISTRATION OFFICIAL: The President is open to suggestions.

Q He hasn't suggested anything himself?

SENIOR ADMINISTRATION OFFICIAL: No, the President hasn't suggested what particular forum, how this would work, in terms of after one year after the one year review. No, not at all.

Q What would be the role of the OECD countries? I mean, would they be consulted after Halifax or the -- review before next year's summit?

SENIOR ADMINISTRATION OFFICIAL: They'll be consulted -- in the President's suggestion, the OECD and the WTO, the World Trade Organization, would be consulted during the year review. It would be inappropriate, of course, to go ahead with the review without bringing these two major trade organization and research organizations.

Q Is it the first step of what some people call already the Clinton round of trade talks?

SENIOR ADMINISTRATION OFFICIAL: We're not talking -- is this the first step in what some have called -- I don't know who, I've not heard anyone call it this -- the Clinton round of trade talks? The answer is we're not talking about negotiation, we're not talking about a round. We're talking about a review for one year and then suggestions or recommendations at Halifax a year from now.

Q What has happened to the environment and labor issues in the Uruguay Round -- will these two issues be also related to the Open Market 2000 idea?

SENIOR ADMINISTRATION OFFICIAL: The question is what has happened to the environmental and labor issues in the Uruguay Round, will they be related in any way to the Open Market 2000 initiative.

As all of you know, there is a trade environment permanent committee of the WTO, it will be the forum for the discussion of environmental issues and the intersection with trade. The preparatory committee of the World Trade Organization is taking up the question of the intersection of labor, international labor standards and trade. That is a forum that will deal with that issue.

Thank you very much.

END7:56 P.M. (L)