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Office of the Press Secretary

For Immediate Release December 13, 1996
                         BACKGROUND BRIEFING BY

The Briefing Room

10:45 A.M. EST

MR. JOHNSON: Good morning, ladies and gentlemen, and welcome to the White House Briefing Room. This morning we will have a BACKGROUND BRIEFING on the meeting that the President has scheduled on Monday, the 16th, a summit meeting with the European Union. He will be hosting Irish Prime Minister John Bruton in his capacity as President of the European Union Council of Ministers; and Jacques Santer, the President of the European Commission.

This is an important meeting. We have a summit with the European Union twice a year during each presidency and term of office. During this six months, of course, it's the Irish. It's part of a broad agenda on the part of the President and the European Union fits in a very important way in both the effort to create a united democratic Europe and in making -- creating the institutions of the international market place which give American workers and American companies the opportunity to compete in a fair way.

SENIOR ADMINISTRATION OFFICIAL: I know this is not the hottest news story of the day; you're waiting for this afternoon. But it is an important meeting I think we're having on Monday, one of a series of meetings that have taken place with Europe over the past several weeks.

The relationship with the European Union is part of the President's strategic approach to Europe. You saw the OSCE summit where the Vice President led our delegation, had a number of successful results. The NATO ministerial Secretary Christopher attended in Brussels last week, and this is the sort of third pillar of that relationship, building an overall partnership in the transatlantic community.

The value added on the European Union side to this relationship is trade and economic, but not only trade and economic; it has to do with a whole range of cooperation on political and foreign policy and global issues around the world. The European Union is increasingly acting in these non-economic and non-trade areas as to the degree that it's been known for a long time as an economic powerhouse, their trade powerhouse. So what the President tried to do a year ago in Madrid was to set up a new process which we called "the new transatlantic agenda," to build this partnership over a five-year period or so, five or seven -- with this not defined as five years, but the idea of being a multiyear period of building practical cooperation with the European Union. And so, in a sense, this is a year-after meeting, and we're starting to see some of the first results of this partnership.

It's just interesting, I think, to note strategically that it also links into what the President's been trying to do with the Asia-Pacific region in building a vibrant partnership with APEC. And I think we saw the fruit of that in the ITA agreement which, as you all know, was reached in Singapore today/yesterday, depending on where we are on the dateline.

One of the interesting points of that is both Asia and Europe had to come along, but in bringing the Europeans along to that, one of the big pushes on Europe was something called "the transatlantic business dialogue." And I can mention that a little bit further on, but basically that's something that came out of this U.S.-EU process, bringing businesspeople together from both sides of the Atlantic. And they pushed the ITA, as well as a number of other items which I'll mention, that made this information technology agreement possible.

In general, there will be a broad agenda that's going to be covered. The economic agenda will be an important part of that. Part of what will be discussed are some disputes that we have. We regularly have disputes with the EU. It's our biggest trading partner. It's sort of natural that there will be disputes. Some of these disagreements are in the agricultural area. There are some that have a short time frame they're going to be discussing and see if these can't be worked out.

There are also a number of areas where we've reached some pretty interesting agreements. One of those areas is something called Mutual Recognition Agreements -- MRAs for short. It took me a long time to master what this really meant because it's a fairly complicated set of issues. But basically what it is is once you've gotten tariffs down to a certain level, as we have between the U.S. and Europe in most areas, what's left are the set of barriers to trade that have to do with regulation, with testing, with standards requirements. And what we've been working on is to reach agreement in different sectors so something will only have to be tested on one side of the Atlantic and then will be accepted on the other side. And we're quite close to agreement and we hope that the leaders will verify and confirm this agreement at the summit on Monday to an agreement in principle with details to be worked out over the next month and a half for an initial set of sectors which would cover about $40 billion worth of trade.

And just to make this a little concrete, what it basically means is somebody like Motorola now, if they're doing a mobile phone, has to meet FCC requirements and then when they go over to Europe they have to meet European requirements. This both costs them money; it also takes more time. And especially in the high-tech areas, this can make a real difference.

Once we get these agreements in place they won't have to do that. It will be tested once, tested everywhere. So the business community is very enthusiastic about that and, in fact, played an important role in making these agreements possible.

Indeed, I mentioned earlier the transatlantic business dialogue. This started also a year ago. What it does is it brings together CEOs from both sides of the Atlantic. They basically work with each other and then talk to governments on both sides of the Atlantic about what they'd like to see done. The MRAs was one of those areas and, in fact, in Chicago we had a conference -- the business community actually helped bring the negotiators on both sides together to make this conceptual agreement which we have right now to be confirmed possible.

But there are a number of other areas that they've identified where they want us to work, and this is a really vibrant part of this relationship that wouldn't have existed if the President hadn't started this new transatlantic agenda process a year ago.

To give an idea of the breadth of this process, we not only talked about trade issues and foreign policy issues, which I can mention some of in a minute, but we're starting to talk about drug trafficking. We have an initial agreement with the EU to fight drug trafficking in the Caribbean, where we're going to put for the first time our money together, $10 million worth of money together to help build up some of the capabilities of local states in the area to fight drugs.

We're working on, we have conceptual agreement on something that will help us trace chemical precursors. These are legal chemicals that are used in the production of illegal drugs, and a lot of times these legal shipments are diverted, and governments need to work together to track these diversions. We're close now to a first agreement ever with Europe on the whole, with the EU on the whole to help track these things.

In the health area, we've for the first time in this process brought together the U.S. and EU health experts as a whole -- not just U.S. and British scientists, or U.S. and French scientists, but U.S. and EU scientists together -- with the goal of building a global network to respond immediately to outbreaks of communicable diseases. And they've made a lot of interesting progress.

I admit I do not understand all of that progress in all of its great detail, but some of the things they're looking at, they're focusing right now on diseases that are carried by food, and they're trying to set up a rapid response network to track that down. This doesn't exist globally right now. And under this process the U.S. and the EU are working with the WHO and a number of others and a number of African countries and other countries to try to put this network together.

Malaria is another area that they're looking at to again try to build a global network for rapid response to malaria. There are a number of others areas where this kind of work together is going on that are just different than we've ever done before.

Now, there will be discussion about a range of political foreign policy issues. Bosnia is one that will come up significantly. The EU and the U.S. are the two largest contributors of economic assistance, reconstruction assistance to Bosnia. The EU has put over $700 million in pledges down. They're going to be hosting a conference with the World Bank early next year, so part of what will be discussed on Bosnia is how to effectively get this reconstruction money out there.

As you know, part of the decision to create a new follow-on force to IFOR was to have the proper security environment so reconstruction can go forward. Well, that's the NATO part of this plan. The EU-civilian agency-World Bank part of the plan is then working together to get the construction money out there and also to get money and resources out there for the civilian police force -- again, where the EU is going to be an important contributor both of funds and EU members states of police personnel to go out and do that.

They will talk about a range of other foreign policy issues -- the Middle East, probably what's happening in various parts of the world; I'm sure that what's happening in Serbia will come up depending on the situation where they are right then.

And I think that's a good introduction to where we are. Just again, to reiterate, as my colleague said, these meetings take place every six months, it's part of an ongoing working process that we've now tried to change under this new process over the past year to not just a talk shop, but to something where we're actually doing concrete things together on the ground. Both sides admit we need to keep working on this and get more concrete things done, but we have, I think, a good initial harvest coming out.

I'd be happy to have your questions.

Q You mentioned agriculture really briefly, but is there any hope of any kind of a breakthrough on that, given that's probably one of the leading --

SENIOR ADMINISTRATION OFFICIAL: Yes. They've been intense -- the negotiators from both sides have been intensely working together over the past two weeks. They're continuing on a number of these issues to talk today. They'll work over the weekend. I don't think all of the differences are going to be worked out by Monday, but one thing we have made clear is that -- there's one agreement I might just mention. There's a discussion of veterinary standards, veterinary issues, and this affects a large amount of agricultural trade. The EU has a number of regulations that are scheduled to go into effect January 1st. We have not yet reached agreement with them on how this would affect our trade. We're working very hard and the Agriculture Department and USTR have a number of negotiators working on the details of that, with the goal of getting that worked out before January 1st.

I think that will be discussed around and in this meeting, though I don't -- there's no way they're going to resolve all the technical issues. I mean, this involves everything from pet food to rendered products.

Q Aren't tariffs the big sticking point?

SENIOR ADMINISTRATION OFFICIAL: No, tariffs are not the issue here. It's basically equivalency of testing of various quality.

Q No, I'm talking about agriculture in general.

SENIOR ADMINISTRATION OFFICIAL: In agriculture in general, we, on a standard basis for a long time, have problems with the EU on tariffs. They have a common external tariff on the agricultural area. That's a longer-term problem that we need to work through with them that's been around for a while, it's going to be around for a while. Within the WTO process, there's a commitment to look at agriculture again in 1999. So the big tariff issue won't be addressed again for a while.

Q Is veterinary medicine then the big agricultural issue that you're going to be dealing with here, or are there others?

SENIOR ADMINISTRATION OFFICIAL: Veterinary standards is the big issue that's being looked at, that's being worked on right now to try and find a solution.

Q In this meeting?

SENIOR ADMINISTRATION OFFICIAL: Around the meeting --it will be discussed, at the meeting, but, as you can understand, it's an extremely technical issue. So I don't think they're going to get into the technical discussion, but they're going to discuss the principle of resolving this -- getting -- not having an end of trade by January 1st. But that's not going to be -- I don't think that's going to be the center of this, of the meeting.

Q What is?

SENIOR ADMINISTRATION OFFICIAL: Well, the center -- I mean, I think it's going to be the set of issues in a sense. What they're -- the focus of the meeting is really on the practical partnership in these different areas. Yes, this one dispute will be something that gets discussed. But part of setting up this whole process is to make this into a real partnership of things we're doing together positively, as well as dealing with the areas that come up on a normal basis where we disagree. I know that's a --

Q I'm sorry, I being confused by what you're -- are you talking about the standards that are involved in the MRAs -- in essence, the process of negotiating what would wind up being a common standard for a whole variety of things?

SENIOR ADMINISTRATION OFFICIAL: There are two separate sets of standards here. The veterinary trade issue is separate from the MRA issue. The MRAs that we're looking at right now -- and I know it's -- I'm sorry if I'm not being clear; it's because it's complicated -- the MRAs that we're looking at right now involve telecommunications, all mobile phones, they involve anything you plug in for electrical safety standards -- radios, razors, anything like that. We're looking at making it tested once on one side of the Atlantic, tested freely on the other side of the Atlantic. I know we'll give you a more detailed background sheet on this over the next couple of days, because it is a very complicated issue.

But standards, indeed, are a wide-ranging question that touch on all sorts of issues in the $200-billion-plus merchandise trade we have in EU all the time. Our current -- we have the areas where we've reached, we're just about to agreement. There's also some questions on the agricultural side where we're disagreeing now that also touch on standards. But those are veterinary standards, and we are -- eventually, we hope to get agreement on those set of standards. What we're trying to do right now is avoid a disruption of trade because the EU would be going ahead with its own standards.

What it does is, it reflects how big this relationship is and how complicated it is. I've worked on it for about five years now. I would say I still learned about some new subject once each month that I hadn't heard of before.

Q This is a general question. I am not very fluent in EU policy, but when you're talking about political and foreign policy issues, is the EU trying to bring any of Central Europe or Russia into it?

SENIOR ADMINISTRATION OFFICIAL: It's an excellent question, and that, indeed, goes into -- yes, it is. Basically, a process is underway in the EU; at the same time we have a process of enlargement being considered for NATO to bring Central European countries and potentially the Baltics, potentially Cyprus, into the EU. Now, that's why -- in part, what the EU is doing and our relationship with the EU touches on our basic security interests in Europe, because part of having Central Europe, for example, feel secure and continue on its reform effort has to do with what the EU is doing.

As an example, the EU assistance to Central Europe dwarfs our own on the economic side. We are providing a very important link through our economic aid, but also through what we're doing in NATO. The EU is reinforcing that in its own way with massive amounts of technical assistance and with the promise to bring Poland, Hungary, Czechoslovakia, Romania, everybody else, et cetera, into their unified market and into their common political system -- over something like roughly the same timetable that NATO is going to. They aren't going lock-step forward -- because for the EU it's as if we were bringing new states into the Union. There are a lot of domestic tradeoffs between who is going to pay for this, how many subsidies do we have to give the Czechs or the Poles, to the Hungarians; are they really ready to compete in our internal market. So it's going to take probably a while for a number of those states actually to come into the EU. But the process is already well underway.

Q What about Russia?

SENIOR ADMINISTRATION OFFICIAL: With Russia, they have a cooperation agreement which covers trade cooperation in a number of non-trade technical areas, and they have the possibility of moving to a free trade area. But they have not signaled the possibility of bringing Russia into the EU. Basically --

Q Who hasn't?


Q If you have a new Commerce Secretary-designate on Monday, does he play any unofficial role here, even if it's only to meet the players? Will he be doing anything at all?

SENIOR ADMINISTRATION OFFICIAL: I don't think so. He or she would not be ready to do that.

SENIOR ADMINISTRATION OFFICIAL: The confirmation process, I think, would make that a bit complicated.

Q You referred earlier to a Chicago conference that led to at least a conceptual agreement -- did Mr. Daley play any role in that Chicago --

SENIOR ADMINISTRATION OFFICIAL: Well, he came and he gave an opening and closing speech, and he hosted a dinner for that conference. This was in early November in Chicago. It was a conference hosted by the business private sector, by the transatlantic dialogue itself.

There is going to be a transatlantic dialogue event as part of this. There will be the leader of the U.S. side and the leader of the European side -- it's Dana Mead of Tenneco and Timmer of Philips will be coming and participate briefly -- meet briefly with the leaders during the summit.

Q On the MRAs, you mention a couple of categories --the telecommunications and some electronic equipment. What are the other specific categories, or are there any others?

SENIOR ADMINISTRATION OFFICIAL: Yes, let me just look here to make sure I get them all correctly for you. The areas that we're looking at right now are telecommunications, terminal equipment and information technology equipment, pharmaceutical good manufacturing practices -- this is how you make drugs, are they made cleanly, safely, et cetera -- medical devices, magnetic compatibility and electrical safety -- this has to do with the safety of electronic things that you make -- recreational craft, and that's maybe driving around in your sports boat or whatever. Now, this is an initial set of sectors. The idea is to keep building on this.

One of the concepts in the new transatlantic agenda is that we're going to, over time, build a transatlantic marketplace where we will have a whole range of sectors brought in. As you can understand, it gets more complicated -- it's complicated when you're talking about people's safety and health and it's very difficult to negotiate these.

Q When would you expect the new -- the MRAs to take effect? And how much trade is represented by these sectors?

SENIOR ADMINISTRATION OFFICIAL: Well, the goal is to have -- we're close if their leaders confirm it, which they need to do on Monday. We have a conceptual agreement. We'd have to get the specialists together early next year and work out all the details. This would cover about $40 billion worth of trade. Commerce estimates that trade in these sectors would save about $100 million a year for U.S. companies. And the idea would be to get them underway and going as soon as they're fully approved on both sides, so within certainly within the next six-month period.

Q Let me just ask one other thing. Are you expecting any new initiative, I guess, from the EU on Helms-Burton, a new push?

SENIOR ADMINISTRATION OFFICIAL: Well, as I think you probably all noted, there was a positive development from the EU in that they adopted a common position on support for democracy in Cuba, and we welcomed that. I imagine that Cuba will be discussed during the summit. I don't know that we will -- I don't expect a new push. I expect we'll hear concerns as we have before.

Q How much time will the leaders actually spend together on Monday?

SENIOR ADMINISTRATION OFFICIAL: It starts at 11:00 a.m., I believe, and goes through 2:30 p.m., total time. This involves a restricted meeting, a plenary session, a working lunch, and then a press conference. So if you take the half-hour press conference away, that's about three -- you know, with transportation and everything, two and a half hours, probably, of discussing various --

Q There's an awful lot of stuff to try and go over and --

SENIOR ADMINISTRATION OFFICIAL: You're right that they will have to make priorities, and they probably have in their own minds what they want to talk about and focus some more time on, and some of it will be reported as work done, which they will bless. There will be a report of the senior-level group which oversees this whole process, sort of summarizing the pros and cons that, once it's agreed and approved by the summit, I think will be available also.

Q Cyprus will be an item of the discussion?

SENIOR ADMINISTRATION OFFICIAL: Cyprus will potentially come up also on the agenda, that's right, I think in the sense that both the U.S. and the EU want to work together to support the efforts to find a resolution to those longstanding problems.

Q How has Helms-Burton and other laws affected the relationship?


Q Helms-Burton and other laws, similar laws that -- the one on Iran -- how has it affected the relationship between the EU and the United States?

SENIOR ADMINISTRATION OFFICIAL: Well, we clearly have had, there have been differences over Helms-Burton; no question about that. We've had for our part Under Secretary and Ambassador Stuart Eizenstat has been working not only with the EU and Canada, but others as well on the whole process of support for democracy in Cuba. I think he's done a superb job of talking these issues through with the Europeans and the Canadians, and I think we see some of the results in some of the positive developments. I mean, I think what's clear is that we and the Europeans share a common objective of seeing the establishment of democracy in Cuba, and they've made that clear on their own.

Q Given the fact that the EU is kind of consumed at the moment by monetary union and the timetable and all that, is there -- one, is the United States -- how does the United States feel -- how important does the United States feel it is and is there anything the United States could do to help make sure that goes through as planned, and will that in any way be coming up?

SENIOR ADMINISTRATION OFFICIAL: Right. Well, I think we'll probably -- the European leaders will give a briefing on where they are in their discussion of moving to monetary union. And also, they're undergoing sort of a constitutional revision process in what's called the intergovernmental conference, where they're looking at their basic treaties and see how those treaties should be updated, made more effective. And this is in part preparation for that enlargement that you were mentioning, of bringing more countries in, because there is a general concern on their part that structures and processes that were initially built for 12 might now be dealing with 20. So they're making that effort. So we expect they will tell us where they are in that process.

Q Is the United States anxious to see that go through -- does the United States have a particular interest in seeing this go through now, and is there anything that the United States can do to relieve some of the concerns about whether the monetary union can actually work?

SENIOR ADMINISTRATION OFFICIAL: No, in a sense, I think that's up to them to deal with that. What we've regularly said is that we will support you in your efforts to integrate further in Europe if you decide to do so, and we look forward -- we want to work with you, we want you to be our partner, but we aren't involving ourselves in the process.

Q One of the things you didn't mention -- when you talked about the foreign policy issues, you didn't mention Northern Ireland. And given that Bruton is going to be here, does that mean there's nothing cooking at all there?

SENIOR ADMINISTRATION OFFICIAL: No, I believe there will be a separate meeting with Prime Minister Bruton on Tuesday, and I think that might come up in that context. But as he's coming for the U.S.-EU summit, he's coming in his role as the leader of the EU Council, President of the EU Council. So Northern Ireland won't come up in the U.S.-EU meeting, but there will be a separate meeting.

Q That's a separate meeting with the President, or a separate --

SENIOR ADMINISTRATION OFFICIAL: I think we're still working on it.

SENIOR ADMINISTRATION OFFICIAL: Oh, sorry. Take that back. Excuse me. I didn't say that. I didn't say that. Possible. Possible.

Q Possible bilateral with Santer?


SENIOR ADMINISTRATION OFFICIAL: This is the meeting with Santer.

SENIOR ADMINISTRATION OFFICIAL: No. The meeting with Santer and Bruton are -- that's the meeting with the EU altogether. There may be --

Q There may be an additional bilateral with Bruton?


SENIOR ADMINISTRATION OFFICIAL: There could be an additional bilateral with Bruton. And if there is, that's where Northern Ireland would come up. It won't come up in the U.S.-EU summit.

Q What countries participate in this Caribbean effort against drugs?

SENIOR ADMINISTRATION OFFICIAL: There is a UNDP overall program that's been set up to try to support the Caribbean countries in their fight against drugs. Underneath that, the U.S. and the EU have decided not only to do a number of things individually, but we've identified some projects where we think we can do more if we work together. And that's what is happening here.

There are a number of EU countries that have direct bilateral programs also. What it points up, however -- and this is an interesting point to make -- is that the EU is increasingly a source of funds for assistance in development programs around the world. In Central Europe it's making $12 billion available, I think, over the next five years. It's making about half that much available in the Mediterranean, so an additional $6 billion or $8 billion, something in that nature. I might be a billion or two off there.

The same thing in Africa and the Caribbean with its Lome Program. So it's a very large source of funds for extremely worthwhile projects and where we both share common objectives. I mean, for the Palestinians, for example, it is the largest single donor for aid to the Palestinians. This adds a concrete importance to our partnership in various parts of the world.

SENIOR ADMINISTRATION OFFICIAL: Is there a final question? Thank you.


END 11:30 A.M. EST