THE WHITE HOUSE
Office of the Press Secretary (Halifax, Nova Scotia) ________________________________________________________________________ For Immediate Release June 16, 1995
PRESS BRIEFING BY JOAN SPERO, UNDER SECRETARY OF STATE FOR ECONOMIC AND AGRICULTURAL AFFAIRS; DANIEL TARULLO, ASSISTANT SECRETARY OF STATE FOR ECONOMIC AND BUSINESS AFFAIRS; LAWRENCE SUMMERS, UNDER SECRETARY OF THE TREASURY FOR INTERNATIONAL ECONOMICS; AND MIKE MCCURRY, PRESS SECRETARY
World Trade and Convention Center Halifax, Nova Scotia
5:45 P.M. (L)
MR. MCCURRY: Ladies and gentlemen, good afternoon, once again. I've asked Joan Spero, Under Secretary of State for Economic Affairs; Larry Summers, who's the Under Secretary of the Treasury for International Affairs; and Dan Tarullo, the Assistant Secretary of State for Economic and Business Affairs, and our lead sherpa, here to very briefly go through some of the high points of the G-7 communique, which you've now received, and point to some of those areas in which we believe the United States had particular impact. Dan can also tell you a little more about the President's participation in some of the discussions today.
And then I know there are one or two other matters on other unrelated issues -- at the end of all that, I'll be happy to clean -- anything that you're still working on.
Let me start with Dan, and then turn it over to Joan and Larry.
ASSISTANT SECRETARY TARULLO: Working with the ritual, less than two hours sleep for sherpas the night before the G-7, my incoherence level may be explicable at least today.
Let me give you -- let me give you a little bit of a flavor of the leaders meeting and then let Joan and Larry walk through the most important points of the communique.
The leaders discussion, I think, was unusually lively this morning. President Chirac, as the newest member of the G-7, at his first meeting, having only been in office for a few weeks actually, brought, I thought, an enormous amount of energy and a lot of ideas into the discussion. Prime Minister Chretien was, I thought, quite masterful in the way that he moved the discussion along and drew people out to make sure that all kinds of views were on the floor.
The main topics that were discussed in the course of the morning, which was the small leaders-only session, included an awful lot of attention to financial stabilization efforts, to the issues that the international monetary system has been facing over the last six to 12 months, to employment and economic situations in each of the member states.
The leaders also, I think, began looking ahead to some of the new issues that are going to affect those same sets of economic issues. There was a good deal of talk about the effects of aging populations upon national savings rates, upon unemployment and employment issues, and also in general upon the capacity of countries to maintain the level of social services that they have had in the past.
This, I might add, so far as I can tell, was totally unprepared. That is, there weren't a lot of talking points that the leaders had on these issues. I suspect there were none that any of them had. It came up in the course of conversation about unemployment and economic prospects, and as I think happens under these circumstances, galvanized the interest of the leaders themselves.
The President had several fairly lengthy interventions, one of which kind of gave a tour of the U.S. economic situation, the deceleration in our growth rate this year, his appraisal of our prospects for maintaining and then resuming higher levels of growth in the coming year.
He also paid, as won't surprise any of you, a good deal of attention to issues of structural unemployment, of difficulties in people getting higher wages over the course of the last 15 to 20 years, the kinds of issues that he's been talking about since he began running for President.
The President also engaged in a fairly lively interchange on the financial markets issues. He was recounting the experience the United States has had with Mexico and emphasized the importance he attached to the specificity of proposals for both prevention, transparency, on the one hand, and also the capacity to react with adequate resources when emergencies strike on the other.
Finally, to anticipate what I suspect what would have been an early question from you, yes, the issue of U.S.-Japan auto dispute did come up. It came up when raised by one or two of the other leaders who asked about U.S. activities and suggested that perhaps this was a problem.
The President, I must say, was succinct but made two very strong points in response. First, he stated quite forthrightly that this is a course that he's quite serious about, that he intended to use Section 301 in order open markets for U.S. auto and auto parts producers abroad. But secondly, after stating that very succinctly, he suggested that this was not the place for he and Prime Minister Murayama to get into some sort of extended discussion on the merits of the issue; that there was important work to be done in the areas of international financial stabilization, development bank reform, reform of U.N. agencies and economic prospects of the countries. And he wanted to be able to talk about that.
The two areas where I think there's the most specificity, which is as all of you know, something that we had very much been in favor of, are in the area of international financial stabilization, which Larry Summers will address in a moment, and the issue of institutional reform, including U.N. agencies and multilateral development banks, which Joan can address now.
UNDER SECRETARY SPERO: Let me just mention two areas that the United States pressed very strongly in these discussions -- in these negotiations and which you will find in the summit communique.
The first one, as Dan mentioned, is U.N. reform, and the second one that I want to mention is economic support for the peace process in the Middle East.
The -- I think there's a growing consensus, not only in the United States, but elsewhere, that the economic and social parts of the United Nations machinery have grown rather creaky and cumbersome over the last 50 years. That has special resonance in the United States in today's budget climate. We simply have to show that the multilateral system can use our dollars effectively.
And I think, increasingly, Americans who are very generous people, are questioning the ability of the multilateral system to make a difference. And in the end that is going to have an impact on our ability to financially support the United Nations system.
So in these discussions, the U.S. proposed several strategies for making the U.N.'s economic and social structure more effective, and you'll see those in the final communique. First of all, we recommended consolidating agencies with similar or overlapping functions -- that is, making some rational sense out of the humanitarian relief and the development assistance area, for example.
Secondly, we've asked for a hard look at the mandates of a number of existing bodies -- some of them such as UNCTAD and UNIDO are specifically mentioned in the communique -- to see whether they are still relevant. And finally, we recommended a reform of the U.N. Secretariat to bring it up to modern standards of efficiency and accountability -- in effect, to bring it into the 20th century. You will find all three of these recommendations in the communique.
We also, in the area of the U.N., made recommendations for improving -- we made specific recommendations for improving U.N. operations in a number of very detailed areas -- in crisis management, in disaster relief, and in the area of environment.
And then, finally, we will be working with the G-7 in a follow-up mechanism -- and you'll see a reference to follow-up generally in the communique. We've agreed that we will continue work together inside and outside the United Nations as G-7 to push forward this reform agenda. We're not kidding ourselves, we know that this is a first step. And what's really going to matter is what is going to happen after Halifax. So we have committed that we are going to continue to be on the case.
The second issue that I want to mention very briefly is the question of the Middle East peace process. As you know, this is very high on the U.S. agenda and that we have long argued that we cannot have a lasting peace if we do not have a viable economic support for the peace process. We have strongly supported, therefore, an initiative that has come from the four regional parties for the creation of a Middle East development bank. And we have been sharing in international negotiation to address that issue.
You will see in the summit communique support for the establishment of a new institution and a financing mechanism to support the Middle East peace process. And you will also see that we urge the completion of the work in preparing for this new institution to be completed at the Amman summit, which will be held next November.
With that, let me turn the podium over to Larry Summers.
UNDER SECRETARY SUMMERS: I think that in the financial area, this was one of the most successful summits in recent years in terms of concrete accomplishments. There were four concrete accomplishments that I think are particularly important.
First, a program to address the kind of problem pointed out by the Mexican crisis. The program laid out in the communique has four elements. First, a call on the IMF to improve its surveillance procedures. Second, and I think most important, a call for a change in culture at the IMF, in the markets, and in developing countries, towards an emphasis on transparency as the best way of ensuring that the data is all there, and markets can respond to any problems very quickly. A third element of that program is a call for an emergency financing mechanism based on heavy conditionality that can provide large-scale assistance rapidly if such support is necessary given the conditions and can do so in a multilateral fashion. Fourth, a recognition that debt problems of the future will require different mechanisms, because the finance for emerging market countries has shifted from bank debt to bond debt, and the institutions need to adjust at the same time.
The second concrete accomplishment is an agreement among the heads and their finance ministers on enhanced regulatory cooperation -- to develop and enhance concrete standards and safeguards to ensure the successful functioning of the global financial system, to avoid the kinds of problems that were pointed out by the Barings crisis.
The third accomplishment is a blueprint for reform of the multilateral development banks that puts into the G-7 communique some of the kinds of things that President Clinton and his administration have been trying to achieve with the multilateral development banks for some years -- an increased investment -- emphasis on increased investment in people; increased emphasis on popular participation and on environmental preservation; a change in the culture of those institutions towards one of transparency to the public; and increased reliance on instruments that support rather than supplant the private sector, particularly the use of targeted guarantees to support private sector investments in the private sector in developing countries.
Finally -- fourth -- this summit has a breakthrough on the issue of debt for the poorest countries, which is an issue that these summits have been considering for some years. At this summit, the leaders call on the multilateral institutions -- the IMF, the World Bank and the regional development banks, to undertake a comprehensive program to address the debt problems to those institutions of the poorest countries, drawing on all of the resources and reserves of those institutions.
In addition to the communique, this year is supplemented by a background paper that provides more information on the thinking and on the substance of the particular reforms that I have just described in the financial area.
I think we'd all be happy to take any questions.
Q -- I don't mean to detract at all from these accomplishments, but isn't it fair to say that in many of these areas, particularly reform of the multilateral development institutions, the enhanced emergency funding, et cetera, the G-7 really needs the support of many other countries, many of the members of these institutions? As we saw in Madrid last year, the G-7 tried to push an issue involving quotas, at the IMF through without success. Have you contacted these other countries about this? Can you count on their support? And where do we stand, particularly on the issues of funding for the doubling of the GAB?
ASSISTANT SECRETARY TARULLO: Let me make a general point and Larry or Joan may want to add some specifics.
The purpose of this entire review by the G-7 was to provide some leadership across the range of international economic institutions. And what we've done, both at staff level and, more importantly, at a leaders level, has been to identify what needs to be done most specifically in the areas of international financial stabilization and development institutions, and to lay out blueprints of considerable specificity, a kind of road map to reform or to adjustment. It obviously has entailed some consultation, in different ways, under different circumstances, a lot of it bilateral, a lot of talking to other countries. I think the Canadians as hosts, have actually done some institutional consultation along the way, as well.
But the purpose of this -- the purpose of the exercise and of the communique is to encapsulate ideas and proposals to commit the G-7, as a group, to work for their realization, and now to go forward within those institutions and with members of the rest of the world to make those proposals a reality.
UNDER SECRETARY SUMMERS: I'd just say, Keith, that the President has consulted with the heads of state of a number of countries about the question of review of the international financial institutions in the course of his meetings with them over the last few months. And Secretaries Christopher and Rubin have consulted extensively with their counterparts in other parts of the world.
I think it will take some months, but I am confident, based on those consultations, that each of these concrete objectives will be something that is achievable and will represent some quite significant changes in the international institutions.
UNDER SECRETARY SPERO: Let me just -- could I just follow up with one comment, Keith, on the U.N. system. I want to emphasize that we also did a lot of consultation there, as well -- that there was a lot of concern that we are only seven out of 185 members of the U.N., would this not be offending developing countries or some of the smaller European countries, for example.
What we found when we started to talk to others, including the developing countries, and it wasn't just the United States -- the Canadians, our Japanese colleagues, the U.K. and others -- was that they were actually looking to the G-7 for leadership. They said, you're not a directorate, but we look to you -- this is the 50th anniversary of the U.N.; this is an opportunity for change; we recognize that we need it, too.
So I think that it's -- there's a strong agreement that not only did we consult before, but what you'll see in the follow-up mechanism is we recognize we have to continue that process.
Q Is there any -- could you give us any idea of what, quote, "greater transparency and more frequent reporting" means? Does this mean that a country should report its current account and its -- its reserve position six times a year instead of three times, like Mexico is doing, with several month lag? I mean, what's frequent? What's transparent?
UNDER SECRETARY SUMMERS: I would expect this goal not to be achieved immediately, but I would look forward to a time when all major countries that have substantial contact with international capital markets engaged in reporting similar to that that the industrialized countries now do, which would mean reporting of the central bank balance sheet at least on a monthly basis and perhaps significantly more frequently.
It would also mean up-to-date information, again, on a monthly or more frequent basis on government receipts and government outlays.
Q Larry, regarding the currency markets, the communique simply restated the April finance ministers' communique. Are you worried that that might leave the currency markets with the feeling that the G-7 is not fully committed to a firmer dollar?
UNDER SECRETARY SUMMERS: No, I think the April language was quite clear, and I think the subsequent action by the G-7 was clear as well. And so I think it was appropriate that -- and I welcome the leaders' decision to reaffirm the earlier -- the earlier statement.
Q How much and how soon do you expect the general agreements to borrow be doubled?
UNDER SECRETARY SUMMERS: How much doubling -- and there's about $27 billion -- there's about $27 billion there now. I expect an agreement on that to be reached within the next several months, and it will then take some time for the actual funding to be -- actually funding to be implemented.
Q The President said today that the United States could no longer be the lender of last resort. One presumes that there will be no single lender of last resort, that it will be spread broadly. Can you tell me anything about the mechanism by which this cup will be passed around from country to country, and how many countries you would see taking part in --
UNDER SECRETARY SUMMERS: There are actually 11 countries that are in the current G-10 --
Q Ten plus --
UNDER SECRETARY SUMMERS: Yes. And that is an emergency financing mechanism that they have maintained since 1962 for the help of each other, with the prospect also for assisting countries outside of the G-10.
I would expect that some of the resources for this doubling will come from those countries, and some will come from other countries. The other countries that they will come from will be in two categories: One will be the smaller industrialized countries, primarily in Europe, who are not part of the G-10 --
Q Scandinavia, Austria, that --
UNDER SECRETARY SUMMERS: -- exactly. And the other will be the new financial centers, particularly but not only in Asia, who now hold a quite significant fraction of the world's reserves.
Q Would the United States contribute more --
UNDER SECRETARY SUMMERS: I would expect that there will be an additional United States' contribution. But just what the size of that U.S. contribution will be is difficult to estimate at this point.
Q Will you be soliciting contributions from the government of Taiwan?
UNDER SECRETARY SUMMERS: That's not a decision that's been reached yet.
Q Have you had any discussions with members of Congress about that additional U.S. contribution? And how difficult do you think it's going to be --
UNDER SECRETARY SUMMERS: We have had some very preliminary discussions in which we have indicated the type of proposal that we thought the G-7 might be making here and in which we and the members of Congress we've discussed this with have agreed on the importance of any finance that is provided -- being provided in a highly conditional way, that finance not come solely or primarily from the United States; and that the financial arrangements be such that they don't burden the American taxpayer and appear in the budget. And I think that the GAB mechanism will meet those criteria.
Q Well, Larry, when you -- when you say that you're going to get other countries to contribute to this, will they then also have a voice in how the GAB is disbursed?
UNDER SECRETARY SUMMERS: I expect that any contributors to the emergency financing mechanism will certainly have a voice in how the -- in how emergency finance is provided. Whether the -- the precise relationship between the existing GAB and the larger, both in terms of money and membership, constituency of the emergency financing mechanism, is yet to be worked out, in consultation with other new members.
Q -- say something about the regulatory cooperation? Do you have any more specifics regarding -- (inaudible) -- more volatile capital markets, which probably -- (inaudible) -- Barings --
UNDER SECRETARY SUMMERS: I'd refer you to the background paper. As a first step, the finance ministers have commissioned reports from the banking regulators and the securities regulators in consultation with each other. I think there's a feeling, a strong feeling, that coordination here is essential, both between the regulation of the same types of -- similar types of activities when they're undertaken by banks and securities companies, and also similar types of activities when they're undertaken in different markets.
Among the areas that are particularly important are the transparency of reporting and capital requirements, as well as safeguards for the payment systems in, for example, the margin area.
Q Could I take you back to your comment that you had talked in a preliminary way with members of Congress -- I presume Republican members as well as Democrat -- about these three conditions. What was their reaction?
UNDER SECRETARY SUMMERS: I think that their reaction was that these were appropriate criteria and they certainly wanted to look at the proposal when the proposal when the proposal was in a form, which it certainly is not yet, to be brought to the Congress in the form of legislation.
I think there is a recognition of the importance to the United States of this type of emergency being addressed in a multilateral way and there being a capacity to do that.
Q But did they give you any kind of preliminary assurances that they would be willing to sign off on an additional American contribution?
UNDER SECRETARY SUMMERS: I think there was a great deal of receptivity to the idea that -- appropriately conditioned -- and that is something that Secretary Rubin in talking about support from the first day of the Mexican crisis has emphasized, that appropriately conditioned, there is receptivity, yes.
Q On the new -- can you discuss the specifics of conditionality and how the objections to moral hazard were overcome?
UNDER SECRETARY SUMMERS: Well, the affects of moral hazard are, I think, addressed by imposing conditions, such that countries would not seek to undertake the kinds of measures that -- and would be at great pains to avoid the kinds of mistakes that would put them in need of this kind of emergency finance. And I think that countries looking at the experience that Mexico is going through would be unlikely to do anything consciously that would put them on a -- put them on a path like that.
Q -- this may be a questions for Dan, I don't know. Can you talk a bit more about the tone of the leaders discussion of the short-term economic situation? Did the word recession come up, and was there a discussion of Japan's economic policies, the banking crisis there?
ASSISTANT SECRETARY TARULLO: The word recession did come up, although it came up in the context of a provisional conclusion that at least some drew that the G-7 was not slipping into a recession.
There were concerns expressed about the slowing down of growth, but those were coupled with a fair degree of assurance, varying from country to country, that growth rates would be picking up over the coming 6 to 12 months.
I don't recall any specific discussion of the Japanese banking crisis.
Q Is Larry Summers gone?
ASSISTANT SECRETARY TARULLO: No, he's not gone. We'll pull him back. (Laughter.)
They love your finance stuff, Larry.
Q There's been some suggestion that the French are pushing an idea for some sort of new stabilization mechanism for currencies, somehow balancing liquidity among the three reserve currencies, the three leading reserve currencies. What's -- can you tell us about how the U.S. views that sort of proposal.
UNDER SECRETARY SUMMERS: I think the U.S. is comfortable with where we came out in the communique. And I was not a participant in any extended discussion of any mechanism of that kind at the level of the finance ministerial discussion.
Q -- why in the backgrounder you did go on for more than a page on your thinking concerning foreign exchange --(inaudible) -- long explication, as these things go? What was the message you were trying to send?
UNDER SECRETARY SUMMERS: I think it was obviously a -- one of the important issues that one has to think through -- have to be addressed at this summit in the context of the remit from the Naples summit.
Q Could Mr. Tarullo tell us what one or two countries raised objections to the U.S.'s Japan policy? And also would you address Paragraph 40 and whether you see the praise --the high praise for the WTO and the dispute settlement mechanism as a rebuke of the U.S. position in Japan?
ASSISTANT SECRETARY TARULLO: The ground rules of the G-7 leaders' meetings are "you can quote your own leader, but you can't specify what anybody else said, as such." So, as you can tell, what I've been trying to do is to characterize conversations generally and --
Q Second question.
ASSISTANT SECRETARY TARULLO: Second question? Not at all. I don't consider it a rebuke at all. We had no problem with the language there. I think it's very similar to the language which was in the OECD ministerial communique earlier this spring. It certainly reflects the position of the United States, as does, I think, some of the earlier language about concern with the need to have initiatives to break down barriers to market access.
Q Would Mr. Summers put on the record some of the conditions that the Mexicans are having to meet, which generically would be typical of those that new borrowers in the same circumstance would have to meet, to address this issue of conditionality?
UNDER SECRETARY SUMMERS: The Mexican program includes conditions on the growth of credit, conditions on Mexican budget policy that require a budget surplus, conditions on the central bank's process in terms of steps towards transparency that puts their central bank today in terms of its reporting requirements on a basis very similar to that of the Federal Reserve or one of the European central banks, and conditions on structural reform to emphasize in particular the importance of privatization.
Q -- model for strong conditionality you referred to in the communique?
UNDER SECRETARY SUMMERS: I think it is difficult because -- to extrapolate -- because financial emergencies differ and each financial emergency -- and we hope there will be few -- comes in a quite different context with a different set -- with a different set of problems.
Q So strong conditionalities have to be worked out -- (inaudible) -- would it entail?
UNDER SECRETARY SUMMERS: Strong conditionality has to be worked -- the substance of the strong conditions have to be worked out in the context of any individual problem. A crucial point of agreement on which all seven were agreed is that it would be a grave mistake to have any mechanism based on automaticity -- that is, to have any mechanism that was there, and then if something happened, countries automatically got money, without any review of their economic policy and without any explicit acceptance on their part of a set of new conditions.
And that is an important point of debate in this area, but the judgment of the G-7 was very clear that the moral hazard problems associated with any mechanism that contained automaticity were such that that would be quite inappropriate.
Q Is the idea -- (inaudible) -- open markets still open? And what is the U.S. position about that?
UNDER SECRETARY SUMMERS: I think that does not seem to us to be the primary way forward in addressing these kinds of emergencies. It seems to us more appropriate to the IMF's role as the lender of last resort in the system for it to be financed in other ways.
Q You say there's a discussion -- further discussion opened up for IMF --
MR. MCCURRY: Can I suggest that the two or three of you that are still after Mr. Summers, maybe can chat with him over here. Okay?
Let me just tell you the letter that I had promised earlier that the President has now sent off to Speaker Gingrich is being distributed now. You'll see in that, that the President -- to follow up on the New Hampshire handshake agreement last week -- has proposed a base closing-type commission for the subject of political reform in which members would be able to review issues and then present them to the President and the Congress with sort of a thumbs-up, thumbs-down, take-it-or-leave-it mission. And the letter -- you'll see from the letter how the President proposes that they proceed.
I'd like to make it clear that the President, in writing to the Speaker, is continuing the spirit of bipartisan cooperation that was exhibited in the first instance at the time of their meeting in New Hampshire is suggesting to the Speaker that he look at this outline of a proposal, that he instruct his staff to meet with the President's staff so that we can get on with the business of actually drafting the necessary legislation.
And I will also tell you that the President has sent a copy of this letter to the Speaker to Majority Leader Dole so that the Majority Leader is aware of the proposal that the President has now made as the letter to the Speaker indicates we assume that the Majority Leader will be delighted with the President's proposal since he has previously proposed the exact same type of commission himself.
Q The President, at his press conference, said he was working on the financing formula for the rapid reaction force. A lot of this work, I gather, is being done by Albright in New York. Do you have an expectation as to whether we might still get something today, or is this going to take a few more days? What --
MR. MCCURRY: The statement that I saw from Ambassador Albright indicated they would be working on this in coming days. And my expectation is they will not resolve this in this current news cycle. Let's leave it at that.
MR. MCCURRY: Won't resolve it in this news cycle. And I don't think -- but obviously we will have several more days of discussion on the issue.
Mr. Apple. Mr. Purdhum.
Q Has the President spoken to the Speaker or have the staffs had consultation, because apparently there was some confusion on the part of the Speaker's staff earlier today saying they were utterly unaware of this.
MR. MCCURRY: I believe that there has been such contact now, and we have, prior to releasing the letter, now visited with the Speaker's staff on the proposal. I don't know whether anyone in Washington has talked directly to the Speaker. The President has not.
Q But Mike your word from this podium earlier had been the first -- we got a little ahead of --
MR. MCCURRY: I was trying to be helpful to those in this room that might have needed to know that we would be making a little news on this, and I apologize to the Speaker if I was a little ahead of the game.
Q Does the President plan to talk to the Speaker about this, and what --
MR. MCCURRY: Oh, he would like to follow up on this. I think -- I think in fairness, what the President wanted to do was come forward with some ideas to get a more specific approach design so that we can pass the enabling legislation quickly. And if they need to visit again on this subject, the President would be delighted to do so.
Q What deadline is the President setting for the Speaker's response on this?
MR. MCCURRY: He's -- we're not -- the nature of the conversation they've had to date on the subject would not suggest any need to set deadlines or to be arbitrary. I think that we can move fairly swiftly in the spirit of cooperation and compromise that was suggested in the in the encounter between the Speaker and the President.
Q It sounds like you have not talked with Dole or vice-versa or his people -- (inaudible) -- is that correct?
MR. MCCURRY: Well, we wanted, since the handshake was between the Speaker and the President, it seems sensible to work from that point. But today, in a sense, we're inviting the Majority Leader into the process by sending a copy of the letter to him, and by noting that we are following up on an idea that Senator Dole should legitimately claim some authorship of in the first instance.
Q (inaudible) -- hasn't talked to --
MR. MCCURRY: That, I don't know. We'll have to check -- we're have to check on whether they've had any discussion on the Senate side.
Q Mike, on China?
MR. MCCURRY: Yes. On China, I think some of you know there's been a report from China that the Chinese have withdrawn its ambassador to the United States in protest of the decision to allow Li Teng-hui to visit Cornell University on a private visit. The United States regrets this decision by China.
This decision by the President was made as a courtesy to a distinguished graduate of an American college, and was in keeping with American values and American feelings. Very often, when we have raised our concerns about human rights with China, we are told that we ought to be more understanding of cultural traditions in China. We would ask of China that they understand the importance that Americans attach in our culture to freedom of association and to honoring the academic achievements of those who graduate from American universities.
That said, we would stress that the President's original decision was not aimed in any way at China and carried no implication of a change in U.S. policy toward either China or Taiwan. We have made that clear on many occasions, and the President made that clear to the Chinese Ambassador when the President met with the Chinese Ambassador recently.
Notwithstanding this unfortunate action on China's part, the United States will continue to abide by its commitment to a one China Policy, and will adhere to the three communiques that form the foundation of our relationship.
Q Is it your -- is it our impression that the Chinese intend to downgrade their representation in Washington, or that they will replace the Ambassador?
MR. MCCURRY: He has been withdrawn for an unspecified period, and we would hope the period would be a short one so we could continue our constructive engagement on a range of issues.
Q Excuse me, what is our assessment as opposed to our hope?
MR. MCCURRY: It is unknown at this point.
Q Mike, given that fact that the American Ambassador in Beijing is departing a little earlier than you had planned and has not yet been replaced, and that the Chinese Ambassador is gone, what is the administration planning to do to maintain some kind of a high-level discussion with the Chinese leadership?
MR. MCCURRY: Well, the departure of the current ambassador, Stapleton Roy, was previously scheduled, and unrelated to this action on China's part. The United States would hope to move very quickly to name a full ambassador, and has been moving quickly to do so. And we have been in dialogue with the Chinese government on that subject.
Q Mike, your description of the permission granted the President of Taiwan to be at the Cornell -- the Cornell -- (inaudible) as an alumnist suggests that it was a one-time-only exception to U.S. policy. Is that the way we should hear it? Because it's been -- yes, obviously, the Taiwanese and others see it as the beginning of a process of letting them come in and letting him come back.
MR. MCCURRY: This was an occasion in which Mr. Li was making a private, unofficial visit to his university in connection with a reunion, I believe, that he wanted to attend. And I'm not aware of any other circumstances that would suggest that he has a private, unofficial visit planned or contemplated.
Q Mike, has China said whether it will agree to the nomination of a new U.S. ambassador under these circumstances?
MR. MCCURRY: That involves diplomatic conversations that I best not discuss in public.
Q So it's a possibility -- (inaudible) --
MR. MCCURRY: I don't know. I wouldn't read too terribly much into that.
Q Could you just clarify on the issue of the funding for the augmented peacekeeping force?
MR. MCCURRY: I think that subject has been addressed now at considerable length by the President and by me earlier, and I don't have anything new to add to what we've already said. Is there something that is not clear?
Q Well, I -- we actively asking Middle Eastern and the Asian countries to put -- help participate in the funding?
MR. MCCURRY: No, that would suggest that we -- that would suggest we would have resolved the issue of how you do the funding. And as we've indicated several times today, we are actively consulting with others at the United Nations how best to proceed on the funding question. There has not been any decision made by the United Nations to put this out for contributions, voluntary contributions. They're still discussing the nature of the contributions themselves and others on the Security Council have different views than the United States view on how that should proceed.
Any other cats and dogs hanging out? Okay, thank you all.
MR. MCCURRY: What?
Q (inaudible) (Laughter.)
MR. MCCURRY: We're going to do -- again, we'll promise a readout for the pool after the dinner tonight. We are -- given the President's press conference today and the several times that he has commented on things today, we are giving some thought to -- so that everybody can move quickly through the program tomorrow -- not to doing a formal press conference tomorrow but having Strobe Talbott or someone like that do the readout on the Yeltsin meeting.
MR. MCCURRY: That's our decision and you're free to complain if you want, but that's -- we are -- just to alert you that, we are thinking of doing that.
Q Is the President afraid to face the press, Michael?
MR. MCCURRY: Of course not, Ms. Devroy, and he did so at great length today. And that's part of our thinking that maybe he doesn't need to do it at great length again tomorrow.
Q Is Strobe going to be in on the meetings tomorrow?
MR. MCCURRY: Yes. He will be a authoritative interlocutor for you, as we say.
Q Not quite as authoritative --
Q Why, does he need to get to the golf game that early?
MR. MCCURRY: We noticed that the sunset time scheduled for tomorrow is 9:02 p.m., and our program of activities tomorrow would imply a rather late departure for any recreational activities that the President might contemplate.
Thank you all. See you.
THE PRESS: Thank you.
END 6:35 P.M. (L)