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Office of the Press Secretary

                         BACKGROUND BRIEFING

November 2, 1994

Room 450, Old Executive Office Building

2:44 P.M. EST

SENIOR ADMINISTRATION OFFICIAL: I want to talk a little bit -- some background on -- about the Asia trip, and what its overall purpose is. I'll begin, and then my colleague will pick it up.

Let's back up to early '93. It has been, from the very beginning of this administration, a very strong commitment of the President to engage the United States with Asia in a way that has not been the case in the past.

If you're a president and you see the world, essentially as an East-West conflict, as has been the case -- you sit in Washington and you look towards Europe and Russia. If you are a president, as is President Clinton, who sees the world, at least in part, as a global economy, you sit in Washington and you have to not only look to the Atlantic, but you have to look to the Pacific.

And the first trip we made was to Japan, and it has been a consistent thrust of the administration since. The reasons are quite obvious, both in economic and security terms.

In economic terms, Asia represents half of the world's gross domestic product. It now absorbs a third of American exports. There are roughly 2.6 million American jobs that are engaged in exporting to -- in production that is exported to Asia. For every one percent that we increase our market share in Asia, we increase American jobs by 300,000. So, as the most economically dynamic region in the world, obviously it is essential that America engage in Asia.

Second, from a security standpoint, we had to make clear at the beginning to the Asians that we saw ourselves as an Asian power; that we intended to remain as an Asian power. We have not altered our forced posture in terms of aggregate size in Asia, even as we've drawn down some in Europe. And with the completion of the North Korean nuclear agreement, believe that we have created a framework within which we deal with the number one security challenge facing the region; and do so in a regional context.

So, this trip is a natural outgrowth of that thrust.

The second fundamental point I would make is that I think it's important to look at the next -- the six-week period from APEC through the Summit of the Americas as a whole. We certainly are.

There are three extraordinary events taken together: the APEC meeting, the GATT vote, the Summit of the Americas; all of which are part of the administration's effort to try to develop the economic architecture in which the United States is going to be working and growing into the next century.

Third, let me just talk a bit about APEC and the evolution of this institution and the role I think that we have played. APEC was formed in 1989. As most of you know, it existed for three or four years, essentially as an annual meeting of foreign ministers and as an institution that provided technical support, customs manuals, and various kinds of educational exchanges that facilitated trade. But it did not really, I think, see itself as a primary institution in Asia until last year when the President brought the leaders together for the first time in Seattle; the first time that all of the Asian-Pacific leaders had met together -- and introduced the concept of an Asian-Pacific community.

I think we can't lose sight in the small print of the large changes taking place here, which is taking place slowly, it's a sea change -- but which is the evolution of a frame of reference in which a Pacific community as seen as a whole and obviously, therefore, we are part of Asia's evolution.

So, last year really was investing the in leaders in this institution and in this vision of an Asian-Pacific community. This year, in Bogor, it is the next step which is investing them in a common purpose, a common direction for APEC, i.e., trade liberalization as a principal focus of this institution over the next 20 years.

There are two fundamental objectives that we have at the APEC meeting, which is the centerpiece of the trip. One will be to obtain from the leaders a commitment to -- a political commitment at least, to achieve open trade in the region by the year 2020; though we'll talk more about how that might be staged.

And second, as a general commitment -- in a sense, a common frame of reference -- a common direction. And the second objective is to attain an agreement that, by the APEC meeting in 1995, which will take place in Japan -- that the governments, presumably the Trade Ministers principally, will develop a blueprint for how open trade in the region by 2020 is to be achieved. Those are the two fundamental objectives of the APEC part of the trip.

I'll ask my colleague to describe more specifically how we see that unfolding and look at the rest of the trip.

SENIOR ADMINISTRATION OFFICIAL: I'll pick up from where my colleague was. We see two objectives coming out of it. A political leadership -- their political level commitment to open trade in 2020. And an agreement to establish -- I'll try to talk louder -- an agreement to establish, over the next year, a blueprint. Let me just reverse the order.

The way we see that latter being done is a series of meetings presided over by the trade ministers, with working groups established under them, leading to some form of report and blueprint for the meeting of the leaders in 1995.

Let me talk about what we mean by open trade 2020. What we wanted to do is to establish an overall direction or framework that allows the kind of day-to-day, sort of, detailed work to get done -- that is going to have to get done to get to the point where very heterogenous economies are considerably more harmonized.

While this will have to emerge out of the work of the trade ministers, the kind of steps that we've had in mind are the following -- and this will be the kind of point and argument that we'll be making over the next year: that a first step, let's say might cover two, three years after you get a blueprint, would be to focus very heavily on trade and investment facilitation and on GATT implementation.

Trade and investment facilitation means things like agreements on customs armatization, access to distribution systems, national treatment, common origin rules, that sort of thing.

A next level of agreement would be a -- a kind of next phase would be to agree on things like GATT accelerations, where the bindings -- a lot of these, as you know, these agreements and the bindings are -- have phase-ins and we'd like, when the stage is set, to try to negotiate accelerations of those. On a -- across the community investment agreements so that's there's a common investment agreement on the intellectual property -- in the whole area of intellectual property and intellectual property enforcement. Actually, we'd like to focus on intellectual property enforcement in those states that have intellectual property regimes in our first phase.

And a third area, or a third phase would be to begin to focus on sectoral and functional agreements. One could have an agreement within this area on services that extended GATT and was an extension -- went beyond that. We could go into further tariff reductions and to more zero for zeros. We could look at particular structures or particular sectors like telecommunications.

All of that is a model. But our basic idea is to have the blueprint layout a series of phases through which discussions would begin to occur and cross-community agreements could begin to be reached.

I'd like to comment on two other things before we just open it up. One is on, kind of the whole process of institution building and then the other is to compare, contrast, the kind of book-ends of this six-week period that my colleague mentioned.

We see the Seattle to Jakarta, Bogor to Japan sequence as a building process that we began quite consciously in Seattle. In Seattle, the leader committed to an institution. In Jakarta, we want the leaders to commit to a direction. In Japan, we want the leaders commit to a blueprint.

What's behind that and what is incredibly hard to do is an effort to build an institution in a region which is not institution-rich. Just to build on a point my colleague made somewhat earlier, that if you look over the last 50 years in U.S.- European relationships, it's really been devoted to the building of trans-Atlantic institutions. Those things don't exist in the Asian community. And in the economic arena, the ones that do exist, the U.S. isn't part of. So having perceived the point that my colleague started with -- that Asia is really critical -- for the long-run, the U.S. to be engaged in, we're trying to now build the set of institutions which will make that engagement possible on a multilateral basis.

A final conclusion -- because we begin this -- a final point. We begin this period with a trip to Jakarta, a trip to Asia. We end it with the Summit of the Americas. In the middle is the GATT vote. My colleague commented on the GATT vote -- I want to talk about the bookends for just for a second.

You have to see the differences in the regions to see the differences in the approaches. Contrast Asia: it's heterogenous; institution-poor; economies at very different levels of development, very different levels of agreement on degree of access, on how markets work; radically different languages; different cultures, etc.

Latin America: institution-rich; far more homogeneous, a -- now over a decade of really quite dramatic movement toward open markets and open societies. The Summit of the Americas, there will be 34 nations there which have moved in both ways; every government will be an elected government.

In addition, in NAFTA in Latin America, there's a template. So, to use, to steal from my colleague a phrase that he's used to characterize this difference, the long-run development toward integration in the Hemisphere of the Americas is going to be vertical: it's going to be bringing nations together through NAFTAlike mechanisms.

The development in Asia is necessarily going to be more horizontal. It's going to be the building of modular agreements in a phased way that I just laid out across the whole community, because you simply could not pursue the first direction that's quite appropriate for Latin America and Asia.

So what we've really tried to do is put together on either ends of this trip a focus and a direction that's consistent with the area, but moves us in the direction of engagement in the two most important regions in the world.

SENIOR ADMINISTRATION OFFICIAL: Let me say, one more minute on the other parts of the trip, just so you have the whole picture and then -- we start off -- the President will be speaking on November 10th to the Georgetown Foreign Service School at the occasion of, I think, their 75th anniversary. And that speech, at least in part, will lay out some of the themes and purposes of the trip. It leaves on the 11th, stop in Elmendorf Air Force Base, may say some things up there.

But we go to Manila, and there are a series of events in Manila at Corregidor and at the largest cemetery of military Americans killed at war in the world, for what will really be a commemoration of the 50th anniversary of the Pacific War, or the Pacific equivalent of the Normandy events.

From there to Jakarta, where he will have bilateral meetings before going off to Bogor with Jiang of China, with Murayama, with Kim and with Keating from Australia. Then, out to -- down to --I don't know my geography -- over to Bogor for the APEC meeting --


SENIOR ADMINISTRATION OFFICIAL: Out to. Right. Back to Jakarta for a bilateral meeting with Suharto. Then, stopping in Hawaii on the way back, where he probably go over to CINCPAC for some briefings. That's the whole package.

Q You both used the term "open trade." Are you just tired of talking about free trade, or is there some significance there to using the term "open trade" instead?

SENIOR ADMINISTRATION OFFICIAL: We're tired of -- first of all, we don't know how the letter that is coming back from Suharto's principal assistant is going to read; we'll get it tomorrow.

SENIOR ADMINISTRATION OFFICIAL: I think -- there's a certain amount of -- I assume you'll hear both phrases used -- open trade, free trade, open and free trade, free and open trade. Wouldn't invest too much in it, except that it is useful, I think, in helping to clarify in people's minds what happening in Asia and what may happen at the Summit of the Americas soon thereafter.

What we really are talking about a free trade area that, over some period of time, will be, presumably, a hemispheric freetrade area. Whether it's NAFTA expanded, or some other modality, it is a free trade area. Whereas, perhaps a slightly different terminology helps to make clear that we're talking about, in Asia, a major trade liberalization initiative, which will lead to more open and free trade. But we're not talking here -- I don't think the leaders are talking about an EU for the Pacific.

Q I know APEC is an economic forum, but it seems like Korea is going to be important issue. And I'm just curious, what can APEC as a group do to stabilize the situation on the peninsula? And secondly, what do you expect to be happening at the bilaterals in terms of Korean stability?

SENIOR ADMINISTRATION OFFICIAL: I don't think that APEC will come up. I don't think that Korea will come up in the APEC context. That is, APEC really is an economic forum -- and economic institution. But Korea will come up as a central and important objective in this trip, and will be an important part of the meeting with Kim, the meeting with Murayama, to some degree the meeting with Jiang.

And we will be -- the President will be seeking to advance the implementation process with our two major partners in this enterprise: the Japanese and the Koreans.

I think this is an historic agreement in many respects. And I really do believe that. It is the first time that we will have negotiated the end of a nuclear program. In one respect in which it's historic is that this is an ambitious undertaking in regional security cooperation -- you know, the United States, Korea and Japan undertaking a long-term, major, cooperative effort to eliminate what is unmistakably the clearest security threat to Asia. And I suspect, that out of that will come -- hopefully -- and China, China is a very important part of that. And out of that, I suspect, may develop stronger habits of security cooperation.

Q In terms of human rights, how will that come up during the conference, if at all? Do you expect it in the communique at the end?

SENIOR ADMINISTRATION OFFICIAL: I don't -- again, bear in mind that APEC really -- APEC is, as the ASEAN regional forum, is a security; APEC is an economic arena. But having said that, we obviously tend to raise human rights bilaterally. The President will raise our concerns with President Jiang. Delinkage to MFN did not mean to us that we no longer care about human rights in China. We will raise our concerns with Jiang as part of that meeting. We will raise our concerns with Suharto as part of the meeting when the President meets with Suharto.

Q I may have missed this, but there has been some speculation about target dates for -- setting target dates for free trade in both contexts of Latin America and --

SENIOR ADMINISTRATION OFFICIAL: Well, the one in Asia, as we said, was what we would like to see is the communique, or the Chairman's statement to say the leaders have agreed to open trade in Asia by 2020.

Q What about -- (inaudible) --

SENIOR ADMINISTRATION OFFICIAL: We haven't come to review yet. I mean -- we just finished last week, consultations with all of the subregional groups. The view is mixed as to the value or importance of doing it. When you're dealing with 34 countries, it winds up being surprisingly hard to get them to agree to a set of specifics. We kind of expect that if we come back from the APEC meeting, and this is in fact what's happened, that some of their views might change on that. But we don't have a way of anticipating that right now.

SENIOR ADMINISTRATION OFFICIAL: Let me add one point on that APEC piece, which is that we would expect the ultimate date to be 2020. There may be interim dates that are also established, and the possibility, for example, that the more developed countries would have an earlier date to reach some agreements. It's conceivable -- that's one of the things that are being discussed. The outer date would be 2020, there might be an inner date.

Q On the hemispheric conference -- am I right in thinking the President has never yet, as President, been south of Rio Grande?


Q Any plans to do so? I mean, it's slightly strange, given the importance you've attached to the region and his travels far and wide elsewhere -- why he hasn't, you know, been so close to home.

SENIOR ADMINISTRATION OFFICIAL: Without being quibbling, I won't argue that parts of Florida are south of the Rio Grande. But I think your basic point's right. (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: We met with President Salinas during the transition, but it was in Austin, Texas, which is north --

Q Are there any plans?

SENIOR ADMINISTRATION OFFICIAL: I think the President would like to go to Latin America and I think it's just a question of when. I mean, we've done a lot of traveling this year. There have been three trips to Europe, one trip to Asia, one trip to the Middle East. We're looking at '95 now and in view of a range of options. But I know the President, personally, would like to do it. He wants to go up to Canada, too, which he hasn't done.

Q Can I pick up just on the Korea question? South Koreans seem concerned that the Japanese and the Chinese have an interest in seeing the peninsula remain divided. Does the administration -- do you see any of that going on, and is there anything that Washington can do to sort of calm these concerns or any tensions that may start to arise among Seoul, Tokyo, and Beijing?

SENIOR ADMINISTRATION OFFICIAL: I don't see that. I don't see evidence of that. I think there is a some pretty broad commonalities of interest. There certainly was an interest between Japan, China, South Korea and us in eliminating the North Korean nuclear threat. I think the Chinese were helpful in this process with the North Koreans. I think it was an absolute clear agreement that none of them wanted to see a nuclear -- wants to see a nuclear North Korea with missiles that are capable of reaching Osaka.

I think in the context -- I think, therefore, that there will be cooperation among the four in implementing the agreement in different ways -- they'll participate. I think we all share a common interest in a reunification of Korea that is sort of a soft landing, rather than a hard landing, rather than a collapse of North Korea. So, I don't see the kind of tension that you're referring to.

Q Thank you.

Q Now that the agreement is reached, could you be more specific about what the Chinese did with the North Koreans in terms of bringing them along?

SENIOR ADMINISTRATION OFFICIAL: I think the Chinese, at various points, were helpful. I'm not sure that the North Koreans believed -- one of the turning points here, I think, was when we clearly were headed to the Security Council. I don't think the North Koreans were absolutely convinced that the Chinese would have saved them from sanctions, number one. Number two, I think it's hard to know exactly how much influence the Chinese have on the North Koreans. They tend to understate it. But I think they, all along, have made it clear to North Korea that they wanted to see a negotiated solution here and an end to the nuclear program. I think in private, diplomatic ways, they've been helpful.

Q How does APEC get you to the GATT vote? What's the direct linkage there?

SENIOR ADMINISTRATION OFFICIAL: What we'd like is to highlight both a kind of climactic point and a specific point. The specific point is the following. We want to make very clear and we know we'll be able to, that Japan, Korea support and are going to move forward with implementation also. Indonesia already has implemented or has ratified. And in a sort of converse way, that we intend -- and we can get back to this -- in terms of accession of China to the GATT, while we support it, to stick hard on the judgment that it has to be done on acceptable economic terms. And so, we think on the specifics, that there will be clear evidence that this is a sort of multilateral movement, that there's a broad swath of nations that are moving in this direction.

More generally, what we'd really like to make the point to is that the kind of fundamental turning to the world economy the president has attempted to do, is perceived and is successful, but that it really does depend at the base and on the ground on this vote.

The U.S. cannot maintain that it is a leader in terms of the establishment of the next steps in the global economy if it doesn't pass the GATT, if it doesn't pass the Round.

SENIOR ADMINISTRATION OFFICIAL: Let me make two other points. Obviously, it has been very simple -- the terms of the trip is a platform in which the President will be talking about the international economy, and therefore, probably to a larger extent, he'll be busy doing -- a clean air event in Cincinnati has an opportunity to speak to the importance of GATT and the importance of the vote; and I think you'll hear a good deal about it during the trip.

Second of all, the only way in which we can fairly aggressively expand our trading opportunities regionally, without creating a stampede for regional trade blocs is in the context of a multilateral trading system. It is only if you've got GATT in place and healthy can you talk about sort of open regionalism in these various areas in a way that does not then stimulate trading blocs that are closed to others.

So it is indispensible to the way in which we and, just as important, the rest of the world sees the economy being organized into the 21st century.

Q Can you talk about China and GATT and what we're prepared to do to help them --

SENIOR ADMINISTRATION OFFICIAL: We support accession, we feel that in terms of specific binding, specific commitments, they simply haven't come up to any reasonable definition of the mark yet. A sign of that is that the Europeans have continued to agree with us on this point. And by that, I mean, is that they have not come to judgments about tariff reductions. They've not come to judgments about transparency. They've not come to judgments about access to distribution systems, about national treatment that are kind of base issues in the GATT.

Is there flexibility beyond that? Yes. Yes. We've indicated that. But there are certain kind of base commitments across all aspects of the GATT that they simply have to come up to.

I think this will be an important item on the agenda when Jiang and the President meet. They will raise the question of early accession, and I think we will try to make it clear to them what we believe and what others in the GATT believe needs to be done in order to attain that accession, which we would be supportive of.

Q Tell us a little bit more about the President's speech to Georgetown. Is it going to be just focusing on these three things -- APEC, GATT and the Summit of the Americas -- or, is it going to sort of launch a broader --

SENIOR ADMINISTRATION OFFICIAL: Trying to tell you what a speech is going to be 10 days from now --

Q Well, it's not --

SENIOR ADMINISTRATION OFFICIAL: I think that there will be themes along the line that we have talked about. That is, looking at the three upcoming events together, the APEC meeting and the GATT vote and the summit. I think it will be about the importance of engagement generally, the importance of engagement in Asia. But we really haven't talked to the President much about this yet. So what -- others' conception of the speech is almost important than what his conception is.

Q The Asians seem to want the U.S. President to show leadership, be presidential. At the same time they always seem very sensitive to being pushed around. How is that factored into the presence of either agenda, the -- this is going to push, or how you've been planning for the meeting.

You know, the agenda items seem fairly low-key.

SENIOR ADMINISTRATION OFFICIAL: I think it's very important that this is really the open trade, free trade, open and free trade by 2020 is a Suharto initiative that we have been very supportive of. So -- in part, this is happening by virtue of the dynamic of the meeting.

A flashback to an interesting situation back in Seattle. We talked about -- this just shows you how -- illustrates your point, and also shows you how this is going to be -- this is going to evolve in an Asian way. We talked a lot leading up to Seattle about the Asian Pacific Community. And there was a lot of uneasiness with that term.

SENIOR ADMINISTRATION OFFICIAL: That was the big issue in Seattle.

SENIOR ADMINISTRATION OFFICIAL: It turned out -- the word "community" translated into 18 different languages in very different ways. And some of them felt -- what do you mean by community -- do you mean like the EC? And this all came to a head on the Friday night dinner before the Saturday -- they went out to Blake Island. And the President said, we mean "community" like a neighborhood. That is, the people who are in the same area that have common interests.

And it was kind of a turning point, because it was not the United States saying we have a preordained vision of -- model of what this is going to look like. It was a concept that we, together, worked towards growing integration across the Pacific that made a big difference.

I think the point you raise is a very important one. That is, this is not an American institution, it's an Asian Pacific institution in which I think we have tried to provide leadership, but it's got to be very much in kind of an Asian context.

SENIOR ADMINISTRATION OFFICIAL: Let me add two points. The first is, one of the things we have come to agree with is the point that the Asians have made over and over, that this institution functions better as an iterative, consultative, consensus-building kind of institution.

The second is, to quarrel just with one term, is lowkey. This will be the first time, if it happens, that this broad a swath of Asian nations, Asian leaders have ever agreed on a kind of - - sort of common economic direction. And yes, it's -- in one sense, it's not a whole lot, and in the other sense, it is paramount.

SENIOR ADMINISTRATION OFFICIAL: I've got time -- one more.

Q Can I just ask about fast track -- how much of an inhibition the absence of fast track is in reaching any agreements and the converse of that, whether any agreements you reach will be useful in getting fast track.

SENIOR ADMINISTRATION OFFICIAL: Well, what we would like to do -- the answer to fast track and to the second part of your question is really the same as the answer to the question about GATT, is that the trip gives us a platform from which to clarify and to underline the importance of these directions and the importance of these kinds of objectives.

We don't anticipate that -- at least in the sort of first phase of any fast track effort, that agreements that we would reach in the APEC phasing would require use of fast track. It will clearly require -- the agreements, the kinds of free trade association agreements that we perceive for the Summit of the Americas -- emerge out of that would clearly require it. And, therefore, fast track is an essential, and it will be one of our highest priorities next year. It'll be one of, if not the first thing we send up.

SENIOR ADMINISTRATION OFFICIAL: It gives us an opportunity to explain to the American people, it's not the discription of the third race at Pimlico.

END3:25 P.M. EST