View Header


Office of the Press Secretary

                         BACKGROUND BRIEFING

November 8, 1994

The Briefing Room

2:40 P.M. EST

SENIOR ADMINISTRATION OFFICIAL: (IN PROGRESS) -- the objectives are of the APEC trip, which begins on Friday. Since the beginning of this administration, the President has worked very hard to put the United States in a position to compete in the new global economy, to achieve jobs and growth through trade and exports. We've seen the results of that already with what has happened since NAFTA has come into effect.

The next six weeks, really, beginning the end of this week through the second week of December provides a crucial opportunity to put in place three important building blocks that will take this country into the 21st century in terms of the economic structures through which we work.

The meeting at APEC, which I'll speak about in a second, the GATT vote the beginning of the month, and the Summit of the Americas, which will take place in the beginning of December. We have planned for and seen these three events as a unit, as linked together in an effort to try to construct the economic architecture of the next century.

APEC, in particular, reflects the focus the administration has placed on Asia since the very beginning. We've sought to elevate Asia on our foreign policy agenda for a very good reason: it's the fastest-growing region of the world, it constitutes roughly half of the gross -- the world product in goods and services. A third of our exports now go to Asia. More than 2.5 million American jobs produce for export to Asia. And every one percent increase in market share that we gain in Asia increases American jobs by another 300,000. So the stakes are large, the changes in that region are sweeping, and it is central that we engage.

Third, we focused over the last two years on APEC in particular, because it is one institution that links the United States with Asia, economically. It does not draw a line down the middle of the Pacific, which was a tendency that I think some saw emerging over the past decade, but rather looks at the Asia Pacific region as a whole.

APEC, as most of you know, was begun in 1989 and for two or three, four years, its beginning, it was simply a ministerial annual meeting, a dialogue among foreign ministers, some kind of technical support, manuals about customs procedures.

Last year the President made a fundamental decision to try to elevate APEC by inviting all of its leaders to Seattle and investing them in this organization called APEC and gaining an agreement there to a common vision of the region as an Asia Pacific community.

This year, 1994, in Indonesia, this process takes another important step forward, where the leaders will embrace a common direction -- that is, setting a target for free and open trade in the region, a political commitment that each of the countries will make no later than the year 2020, some perhaps reaching that sooner than that date.

The leaders also will, in Indonesia, task their trade ministers to come back in '95 in the APEC meeting that will take place in Osaka with a blueprint for actually moving towards this goal of open and free trade.

So that with this meeting in Indonesia, trade liberalization moves to the center of the stage for APEC, and it is really a sea change with respect to the evolution of this institution and the evolution of the Asia Pacific region.

My colleague will spell out in some more detail what specifically we have in mind when we're talking about open and free trade in the region. Let me just spend one last minute on other elements of the trip. The trip, after a stop in Elmendorf, we'll go to the Philippines, where the President will not only meet with President Ramos, but also speak at the American Cemetery there, which is the largest graveyard of Americans outside of the United States. He will visit Corregidor and I think later this afternoon there will be a briefing on those events and the background and history of those events.

There will be a series, as he gets to Indonesia, a series of bilateral meetings the President will have with President Jiang of China, President Kim of Korea, Prime Minister Murayama and Prime Minister Keating of Australia. This will be the first time that he will meet with Kim and Murayama since we entered into the agreement with North Korea to end their nuclear program, and this will be an opportunity for the President to discuss with both Kim and Murayama the implementation of that agreement.

We'll also, obviously, in the meetings with China, we'll be raising issues of trade, issues of Korea in nonproliferation, as well as our concerns about human rights. In our meeting with Suharto, which will take place in the same -- actually, after the APEC meeting the following Wednesday, when the President comes back to Jakarta, he obviously will also be raising our concerns about human rights in Indonesia.

Let me ask my colleague to spell out in a little more detail what we're talking about in terms of the trade aspects of this and then take your questions.

SENIOR ADMINISTRATION OFFICIAL: I'm going to hit the following points. I'm going to talk a little bit more about what is meant by the outcome of the APEC meeting. I'm going to talk about what are the stages of development after that. I'll define again a little bit more what we've meant by the building of the APEC architecture, and I'll conclude at looking at the six weeks as a unit.

We want two things to come out of the leaders' meeting, which begins -- which is Tuesday a week. The first is a commitment, an end-point commitment by the leaders to open and free trade by 2020 or by a date-certain, which we expect to be 2020 and it's possible that the developed nations might reach that sooner. And second, an agreement that the next year -- this is 1995 -- will be spent by the trade ministers developing a blueprint to realize what that -- to realize movement toward that, which requires me to explain it.

What we mean by open and free trade and what the leaders mean is not a movement to the negotiation of free trade areas, but rather, the negotiation of a set of what you might call modular agreements which build the capacity to conduct trade and to conduct business across the region. And the kind of thing I mean by that might be the following kinds of stages, which is sort of our sense of how it might develop, so that this is notational, but it probably won't be too far from this.

A first period -- three, four years -- would be spent on trade and investment facilitation issues, which are customs harmonization, intellectual property regimes and enforcement of intellectual property.

A second stage, which might be the next three or four years, would be spent on GATT acceleration. A lot of the countries in the region have bound themselves to schedules for tariff reductions which are slow than other parts of the world, and we would like to see some of those phase-ins phase in faster. During that period, we'd also like to see an overall investment agreement for the region be negotiated and be put in place.

And then, a period after that, one might begin to go beyond GATT, beyond GATT in the sense of additional tariff reductions. The tariffs in the region are still relatively high, even after the Uruguay Round. And agreements in particular sectors - - telecommunications, for example, other kinds of service areas, further agreements on intellectual property harmonization.

So the notion is the development of a progressive series of stages which move harmonization or move integration more and more and more, and represent, at the end, a substantial move in trade liberalization.

I want to emphasize two final points that my colleague had already made, is that this is a part of a process of building of APEC, which is the only economic institution in Asia of which the United States is a part, that has had three distinct phases, that each of the last three years we see as a phase.

In the lead-up to Seattle, what occurred was the leaders committed themselves to the institution. In the lead-up to this meeting and at this meeting the leaders will commit themselves to a direction. Over the next year and through the work of the trade ministers, and then at the meeting in Japan, the leaders will commit themselves to a blueprint.

So institution, direction, blueprint is the way in which we have seen this institution develop; clearly, there will be other phases.

A final comment on thinking about the six weeks as a unit, and I'd like to look at the two bookends before I look at the middle, the bookends being APEC and Latin America. And what we see in both cases is an effort to take on the momentum that the Uruguay Round signing last year, NAFTA last year, the APEC meeting last year meant, and to create a sustained

4 here

Q My understanding is that yesterday the United States blocked a voluntary agreement, a principal's agreement on investment; and that that's bumped up to a higher meeting that's going to take place, I think, this week. Can you give me an indication of what it is the United States' position is and how that might be resolved?

SENIOR ADMINISTRATION OFFICIAL: It's kind of at this point, it's sort of sparring at a working-group level. There will be -- we disagree with some of the wording that was in the draft sent around by the Australians. I doubt if it will go -- if it will be bumped up to the ministerial level. But in any case, that's what the issue is.

Q Do you think that it will be resolved in the U.S. favor, in terms of the language?

SENIOR ADMINISTRATION OFFICIAL: I don't think it's at this point a U.S. favor, or not U.S. favor. There were several countries had differences on real particular wordings, and I think that they'll come -- that in the end, it'll come in the middle.

It's a voluntary agreement. And from our perspective, the importance, therefore, of -- there's an importance to starting out right; because if you begin with a voluntary agreement and the levels at which you start discussions for an investment agreement that might eventually be binding some years from now, it's important that we start with terms properly defined, like what national treatment means and what transparency means.

So at this point, I think rather than say it's at our direction or any other direction, I'd rather say that there's a technical dispute about what terms mean.

Q What specific human rights concerns will the President raise with Suharto?

SENIOR ADMINISTRATION OFFICIAL: First of all, let me put it in overall context. Our relationship with Indonesia in many respects is a strong one. Indonesia is an important country; it's one of growing economic importance; the largest Muslim country in the world. And Suharto himself has exercised constructive leadership in the (inaudible) movement -- issues like Cambodia, even on North Korea.

But we do obviously have concerns about a process of opening and liberalization which seems to have receded. And the President, I'm sure, with Suharto, will raise concerns about issues of press freedom and worker rights and questions involving rights of the people in East Timor. I think all of those will come up in the meeting.

Q Is there -- to follow up on that, is there any carrot and stick here? I mean, as with China now, has human rights been relegated to a totally different sphere in terms of our negotiations and dealings with countries like Indonesia, China and other places that have human rights problems?

SENIOR ADMINISTRATION OFFICIAL: Now, there's a premise hidden in there about China, which I can come back to. We continue to be concerned about human rights in China and pursue and promote respect for human rights, and will do so in the meeting with President Jiang.

We have, where appropriate, taken actions with respect to Indonesia that we thought would be constructive. We have, for example, compared to the previous administration, restricted our arms sale policy so that we do not sell to Indonesia small arms or other munitions or things that could possibly be used in connection with human rights abuses. We have cosponsored, in the United Nations Human Rights Commission, for the first time, a resolution raising concerns about East Timor. This has come up in every meeting that not only the President had with Suharto -- President Suharto -- back in Japan in '93, but every other meeting that's taken place between Secretary Christopher and the foreign minister.

So it's something we press persistently and try to promote as much progress as possible.

Q There's been some discussion about the distinction between the eminent persons group approach to APEC, versus a building-block approach that -- (inaudible) -- and others have articulated. Do you see the goals that you've described here as an amalgam of those two approaches, or do you think there is a distinction between -- a realistic distinction between those two approaches?

SENIOR ADMINISTRATION OFFICIAL: Well, I've read -- I mean, I've read all the articles that your referring and seen all of the stuff in the newspaper and talked to both of them. I guess the best way to say it, is that the eminent persons group goal is one that we've accepted, which is open and free trade in the region by 2020. But we don't think you can proceed that way with free trade areas; that we think that it has to be for the foreseeable future, the rest of this decade -- it's going to have to be this modular approach, because that's the status of that region, as opposed to, say Latin -- as opposed to, as I said, Latin America. So it's not so much an amalgam as it's an agreement with the end point, but a sense that the mechanism really has to be different.

Q How worried are you about GATT and the possibility that maybe it wouldn't be passed in the lame duck, or would be carried over and then re-written in '95?

SENIOR ADMINISTRATION OFFICIAL: I think all of us think that in terms of support for GATT substantively, that there hasn't been any erosion. But the worry is the budget waiver that is required, and whether or not while we wouldn't see professed erosion on the substantive level, we might begin to see people using the budget problem as an excuse. And it's a problem. I mean, I think it's sufficiently worrisome for us to worry about it.

Q? Meaning that if you don't do it in the lame duck, it's going to get harder?

SENIOR ADMINISTRATION OFFICIAL: I think there is a -- I'm about to play lawyer, and that's a danger. I think that there is an open question as to whether or not, given that we have used the fast track that, if, in fact, it were turned down, you could go into the next session. I don't know the answer to that question; and I'm just telling you that it has been open.

Q No, no. I mean, if it didn't come up. I mean, it was blocked and held over.


SENIOR ADMINISTRATION OFFICIAL: I am the lawyer and I won't give you a lawyer's answer. I'll give you a political answer, and that is, whatever the procedure is, I think it would be a great setback for the United States and for the multilateral trading system if the Uruguay Round were not approved in this short period, November-December. There are lots of other countries around the world who are waiting to see what the United States is going to do before they move forward with their own implementation.

If we now see a delay, assuming that it's procedurally possible, you run a very substantial risk of things unraveling, and the eight years of work that went into the Uruguay Round over three administrations coming unstuck.

SENIOR ADMINISTRATION OFFICIAL: I thought you were asking the narrower question of, could it, in fact, lapse over, and even that is problematical. But the politics and the momentum questions are, it would be very, very, very troublesome; the whole thing could unravel.

Q In the President's bilateral with Mr. Murayama, do you expect him to push for further movement in the trade talk area? There have been problems with glass and other sectors.

SENIOR ADMINISTRATION OFFICIAL: I think we would expect two things -- that we would expect for -- we would want to have clarified intentions with respect to both glass and autos -- glass, while a difficult problem, is probably somewhat more easy -- is somewhat easier to resolve than autos, which is a very, very difficult question.

And there, what we're going to want to know is intentions with respect to how negotiations and discussions are going to occur. But we also want to have a process by which we relatively quickly decide what are the next steps in the framework, in what baskets, in what issues within the baskets are we going to be talking about, and our preference is to begin to look at some systemic questions such as overall deregulation, the deregulation of the distribution system within Japan, as well as additional sectors.

Q In your bilateral with China, do you expect President Jiang to repeat his invitation to President Clinton to come to China?

SENIOR ADMINISTRATION OFFICIAL: I have no idea what President Jiang will raise in the bilateral.

Q At this point, is there a press conference planned after the Murayama bilateral?

SENIOR ADMINISTRATION OFFICIAL: The President will have two press conferences. There will be a press conference on Monday afternoon -- this is all Asia time, which is the middle of the night here. There will be a press conference late in the afternoon on Monday after the four bilaterals -- the Jiang, Kim, Murayama, Keating press conference.

Then, Tuesday, the leaders go off to Bogor. There is a press conference in Bogor, but it is only as last year, Blake Island, the President spoke, the other leaders didn't. This will be Suharto, a very brief press conference. Then the President will come back to Jakarta on Tuesday afternoon and have a press conference about the APEC meeting itself. And then on Wednesday, the President will be giving a speech in Jakarta -- economic speech.

THE PRESS: Thank you.

END3:00 P.M. EST