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                      Office of the Press Secretary
                         (Rio de Janeiro, Brazil)
For Immediate Release                                   October 15, 1997
                              PRESS BRIEFING
                               Sheraton Rio
                          Rio de Janeiro, Brazil

4:05 P.M. (L)

MR. LOCKHART: We're going to start first with the National Security Advisor Sandy Berger. Following that, Mike will come out. This is on the record and for camera.

MR. BERGER: Thank you, Joe. This will be a short briefing, no sweat. I want to talk just briefly about the two events together today because I think these pair of events vividly illustrate the President's strategy for harnessing the forces of globalization for the benefit of the people of America and the world.

Both the speech this morning at Sao Paulo and the event at the school this afternoon at Mangueira bring together as the President embraced them the elements of the President's larger vision about how you grow and lead in a global economy. And perhaps he captured it best in the speech this morning when he said, we must embrace the global economy while preserving the social contract. If I would annotate that sentence, I would say, we must embrace the global economy; that is we must compete in the global economy on a level playing field while preserving the social contract -- that is, recognizing that the benefits and the burdens of open and expanding trade don't fall evenly and the government has to cushion the blow and the shocks and equip its people to join the mainstream with education and training and other assistance.

And what's interesting is that the larger context within which the President is speaking -- that is the context of what is happening in the Americas -- parallel very much the debate that is going on in the United States, or fast track. And I will come back to that -- because both of these are debates about how you embrace the global economy while maintaining the social compact.

So what are the elements of this strategy that the President laid out today I think as distinctly as he has in the past? First, it's a recognition that you can't stop globalization and you can't stop global integration. We saw that yesterday at Sao Paulo. We heard President Cardoso say Brazil is going to be a global trading nation. We've seen that Argentina -- has become the number one export market for Argentina has become Brazil, whereas, throughout their history these were two countries that had very little commerce.

Second, U.S. growth is not threatened by the growth of others. It benefits from that growth. And we heard the President say that both this morning and yesterday at the press conference with President Cardoso. Since we are 4 percent of the world, in order for us to be able to grow we have to have not only markets, we have to have growing markets. We have to have wealth being created elsewhere for us to benefit from that wealth. This is not a zero-sum game, the President is saying, between us and Brazil. And that is the way it has been defined by Brazilians, certainly, and by Americans I think for decades, if not centuries.

Third, the President is saying that this economic integration and the mutually reinforcing growth that I spoke about is important not only to our economy, but it's important to peace and stability and democracy. It's not an accident that economic growth and democracy have emerged in this hemisphere in tandem. They reinforce each other. The more prosperous these countries become, the more stable they become. And the more their leaders can prove that democracy delivers, the stronger democracy becomes.

But fourth -- and this really shifts us to this afternoon, although the President spoke about it this morning -- the President also recognizes that globalization creates winners and losers, that a rising tide does not lift all the boats equally -- if I can misquote a great President -- and that we must also pursue strategies to promote social cohesion and to close the gap both in the United States and certainly throughout the Americas.

In Brazil, we see President Cardoso doing this, and we saw it I think vividly illustrated at the school today, which not only is a school, not only teaches sports, not only is a health clinic for the community, not only is a vocational training program for people in the community, it is a model of how to achieve upward mobility in an economy like Brazil that is growing at a very rapid rate. And this has been an important value of President Cardoso.

And it's the same philosophy the President has brought to the United States, by doubling worker training, by creating empowerment zones, by increasing funding for education. In both cases, we're dealing essentially with the same equation, which is that, if we want to sustain global growth, we must compete in this economy; we cannot turn back the tides of globalization any more than King Knute could turn back the tides. But we also have to recognize that in order to sustain that progress towards open markets that creates growth, we have to deal with often the unequal distribution of benefits and burdens that fall on our people.

And the last thing I'd say, and then just see if you have any questions, is that this is actually in essence what the fast track debate is about. The fast track debate in some sense is -- the opponents of fast track in many ways are opposing trade, and they say really that you have to make a choice between either dealing with the inequities of our society or dealing with open markets and expanding trade.

And what the President has been saying over these past weeks and months, and what this debate, I think, comes down to in large measure as we go back to Washington is the fact that we don't have the luxury of that choice. We have to continue to open markets because that's where the customers are.

You know, Willie Sutton said, that's why he went into banks. We have a mature market -- we have to expand, we have to grow. But we can't turn our backs on the people in the United States who, for example, in poor, urban communities are not in the economy and don't feel the effects of the economy. And that's why technology is such a liberating, empowering force that the President and the Vice President pushed so hard, because it does connect a lot of people who are disconnected from a thriving -- the most thriving economy in the world to that economy and creates opportunity for them.

So I really do think today was very interesting, because I do think what you see being articulated here increasingly by the President is a coherent view of how the United States grows, creates jobs, creates prosperity in a global economy while, at the same time, creating opportunity for all of its people and making sure that none are left behind.

Let me end it there and see if there are any questions.

Q Sandy, from a foreign policy standpoint, how does the uproar back home involving the fundraising tapes and Janet Reno's testimony and all of that, how does that impact on an overseas trip, like coming in the midst of an overseas trip like this?

MR. BERGER: I don't think it deflects us from our job. I think this has been an enormously important trip for the United States. I think that the relationship between the United States and Brazil has undergone a sea change leading up to and definitely given momentum by this trip.

Don't forget, Brazil is a country almost as large as the United States. It's 160 million people. It's the eighth largest economy in the world. We're in one of the most important economies -- countries in the world. It's an economy and it's a country that has tended to define itself, as you all know, very often in distinction to the United States.

And I think that the conversations that Cardoso and Clinton had over two days, and the degree of common interest that they were reflected, the fact that the President indicated that he doesn't see this as a zero-sum game, the fact that he thinks the growth of Mercosur is not threatening to the United States. All of these things have an enormously positive effect on the relationship. So of all of the trips we've been on -- I mean, obviously, we go to Helsinki and we sign historic arms control agreements with Yeltsin, it's a dramatic event. But I think in terms of shifts in a relationship, this is a dramatic shift. And I've heard more than one Cabinet member say to me in the last day that their meetings subsequent to the meetings between President Cardoso and President Clinton have been the best meetings they've had with their Brazilian counterparts.

Q What do you make of the signs of the anti-American sentiment that we've seen throughout this trip -- the signs, things being thrown at the President's limo, some of the newspapers seeming to run deliberately unflattering pictures of the President and the First Lady --

MR. BERGER: I'll give you some books to read about the history of protests in Brazil where hundreds of thousands, millions of people on the street, the kind of reception the previous Presidents have received in Latin America -- of course, Nixon in Venezuela is one that's vividly in mind. The fact is the attitude towards the United States has dramatically, dramatically altered. It's part of that -- part of that is what's happening in their own countries. The leadership that President Cardoso and President Caldera are giving to their countries, moving them towards democracy, moving them toward market economies. They want relationships with the United States.

The fact that there are people protesting, number one, shows that there is freedom of expression here, which I think is good. But they're hardly deserving of the good old days of protest.

Q Sandy, can you set up tomorrow and the rest of the trip --

MR. BERGER: Tomorrow we have a bilateral meeting with President Menem in Argentina. There will be a range of subjects on the agenda, including the wide-ranging peacekeeping responsibilities that Argentina has undertaken and in many places where we are together. From the early days of Haiti to current days of Bosnia, the Argentines have been, I think, on 16 peacekeeping missions. And in recognition of that, the President has conferred -- has sent up to the Hill a notice that he intends to designate Argentina as a non-Nato military ally. So that's one subject we'll talk about, clearly.

They'll talk about counternarcotics, also the extraordinary march toward democracy that has taken place in Argentina. There will be a wide-ranging agenda, and we'll have more to say about it tomorrow.

The other major event tomorrow will be a town hall, the town hall meeting in which the President will be actually in the room -- this will be connected throughout the hemisphere by Univision, but it will be -- it will be interactive, obviously from the room, and also from Miami and Los Angeles.

Q -- sometime during the day? Is that just to show sympathy, or is there actually something we can do the help solve those --

MR. BERGER: Well, we have -- both. We have been deeply concerned about the two bombings that took place in Argentina against Jewish facilities in '92 and '94. We've worked cooperatively, where desired by the government of Argentina, in terms of information. And we obviously will do anything that they seek for us to do in terms of helping them to solve these atrocious terrorist acts against a synagogue in one case and a Jewish community center in another case.

Q Sandy, historically South America has been a place where the affluent have been insensitive to the needs of the poor. What's the evidence that that's changing? And the President said there has got to be a development of the middle class. How much of a middle class does Brazil have? Most of us probably aren't familiar with it. And also, since the United States under even this economy is having greater disparities of wealth and income, how can we hold that up as a model here? The U.S. economy is having greater inequalities of wealth, is it not?

MR. BERGER: Well, I'm not an expert on that, John. I'll leave it to others. I thought that some of those statistics were beginning to show some -- there is still too much disparity. We'll stipulate to that.

First of all, the leaders of these countries -- this is a new breed of leadership. Menem, Cardoso, Caldera is not exactly a young man, but he is a man of deep conviction in terms of his belief in democracy and in economic reform. The program that took place here, for example, 2,500 percent inflation in 1993, and now the inflation rate I believe is about 5 percent -- that in and of itself -- I've had conversations over the last few days with people who have told me how their mothers and how their uncles had to deal in an economy that has 2,500 percent inflation -- some people think it may have been higher at some points -- and how in some ways the most elaborate controller of the biggest Fortune 500 were not as creative as people trying to make ends meet in that kind of an economy. So simply bringing the macro elements of the economy under control is enormously upgrading.

Second of all, there is growth in these economies, there is growth being created. I think out of -- Jim, there's 4 million jobs and 4 million people in the middle class -- is that the right number?

MR. DOBBINS: Something like 13 million have moved up above the poverty line --

MR. BERGER: -- 13 million have moved up above the poverty line. There still is enormous poverty here. We saw it. And one of the reasons the President wanted to go to the school was not only to speak to a model school, but also to reflect the fact that all of the problems have not been solved, by any means, in South America. But I think you have a leadership now dedicated to economic programs that are creating wealth, growth and jobs. And I think that that's demonstrable.

Q Sandy, what is the counternarcotics component in Argentina? What is the main concern on that subject there?

MR. BERGER: For those of you who don't know, Jim Dobbins, our Senior Director for Latin America.

MR. DOBBINS: Argentina is not a major transit country, not to the degree that either Brazil or Venezuela are. So it's not quite the same, doesn't have quite the same profile in terms of the bilateral relationship. But there are significant drug flows and we do have a significant bilateral cooperative program.

In addition, we've been talking in each of the stops that we've been at about a process designed to strengthen the multilateral aspects of our cooperation throughout the hemisphere. The administration submitted a report to Congress now about four weeks ago with some proposals and suggestions in that regard. We've provided that, of course, to our partners in the hemisphere. We're hopeful that some of these proposals and suggestions can be adopted at the Santiago Summit, and so we've been discussing it at each of these stops. And Director McCaffrey has been also having side discussions with his opposite numbers at each of these stops.

One of these suggestions if for the creation of a hemispheric judicial training facility, which would be funded by the international financial institutions and supplement and assist in the training of hemispheric judiciaries. A second is a program to strengthen the OAS mechanisms for establishing a process of national planning, and then monitoring and evaluating the degree to which each country meets its national plan.

Q It seems to me that there is a little bit of a disconnect between the message the President has been giving on trade and the need for a social compact and his actual trade policy at home, which is there should be no riders on human rights, on labor, on environment, and so forth. Can you address that? Or is this just a --

MR. BERGER: Are you talking about on the fast track bill?

Q On fast track. Or is this just a reaction to what Gephardt was saying?

MR. BERGER: No. I think that the fast track bill that has passed the Ways and Means Committee, that has passed the Finance Committee is a bipartisan bill which under current circumstances seems prudent, if you want to pass the piece of legislation. The President has all the authority that he needs to negotiate environmental agreements or labor agreements as side agreements as he did in NAFTA. So we don't need fast track for those particular agreements that he might want to negotiate.

But obviously the overall effect that a trade agreement has on the environment, has on worker rights and standards are important and will be things that will be taken into account.

What the President simply seeks is the authority to negotiate either good trade deals or bad trade deals. If they're bad trade deals, then Congress ought to vote them down. If they're good trade deals, then Congress shouldn't vote them down. But they shouldn't deprive this President -- as they haven't deprived every President really since Franklin Roosevelt and every modern President since Ford -- the form of the legislation changing, from the simple authority to engage with others in making a good deal, of leveling the playing field for the United States.

We had a lot of discussion in the '80s about a level playing field. Well, the situation now is we've got very few market barriers and others have a lot. So if we negotiate down trade barriers, by and large, they're going to help the United States. They're going to level the playing field. And that's what American workers ought to want. That's what the President wants.

Thank you.

MR. MCCURRY: Joe tells me that here's our situation on filing time. The closer to 6:00 p.m. you leave, the better the traffic is and the sooner you'll get to Buenos Aires, but we will protect anybody who is in extremis. My suggestion is that those of you in extremis don't listen to this and file.

Q Mike, could you tell us your assessment of the release of this latest batch of videotapes? What do they say as far as the White House is concerned?

MR. MCCURRY: I don't have an assessment.

Q What was your answer, Michael?

MR. MCCURRY: I don't have an assessment. I'm not following that. It's happening in Washington.

Q Has the President had any reaction to it? Is he aware of it? Has he heard any reports on how they're playing?

MR. MCCURRY: I'm not aware of any reaction that he had.

Anything else? Okay, good. See you in Argentina.

END 4:30 P.M. (L)