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THE WHITE HOUSE

                     Office of the Press Secretary
                         (Birmingham, England)
________________________________________________________________________
For Immediate Release                                       May 15, 1998
                            PRESS BRIEFING
                                  BY
                             Mike McCurry
                             Swallow Hotel 
                          Birmingham, England

12:08 P.M. (L)

MR. MCCURRY: The President and Prime Minister Hashimoto just had a very good, substantive, detailed, almost 90-minute bilateral meeting here. They spoke on current events in Asia and the mutual interest we have in strengthening the global economy. It was a good opportunity for both leaders to renew their personal friendship and use their personal friendship to address many of the issues we have in common as concerns.

The President, as you probably know from the photo opportunity, extended an invitation for an official visit to the United States by Prime Minister Hashimoto in late July, following elections in Japan, which the Prime Minister accepted -- as he indicated jocularly, depending on whether his wife would agree to it.

Some subjects that the leaders discussed: First, Indonesia, the situation there. Prime Minister Hashimoto briefed the President on information he had with respect to conditions in Jakarta and around the country. That was very much appreciated by the President. We exchanged views on our understanding of the situation. Both leaders agreed that there needs to be restraint exercised by all sides, including those protesting and those responsible for security, and that the leaders here in Birmingham attending the G-8 sessions ought to spend some time discussing the subject of political reform in Indonesia and how the government of Indonesia can build on a dialogue with its people that can lead to less violence and more accountability.

On the subject of India and Pakistan, the leaders talked about ways in which we could urge the government of Pakistan to show restraint. They reviewed -- much of the discussion was previewed in the public Q&A that they had during the photo opportunity.

On the economy they had very good, substantive discussions of ways in which the Japanese economy can be strengthened. The President reiterated what he said in the photo opportunity, that there needs to be a combination of deregulation and accountability in sectors like banking to accompany the bold fiscal stimulus package that the Prime Minister has put forward.

They had a very intense discussion of that issue that was very helpful and useful. I think as everyone knows, we anticipate a report being issued either later today or sometime during the G-8, reporting on the progress of the deregulation initiative that the Prime Minister and the President launched last year at the Denver G-8 meeting. And as the President indicated, they also noted and celebrated the electronic commerce agreement that had been reached. I've got Gene Sperling here with me, who can provide more information on that if anyone is interested.

Prime Minister Hashimoto raised the subject of United Nations reform. Both leaders reaffirmed the importance of U.N. Security Council reform and the United States restated its view that Japan and Germany need to be represented with permanent seats on the U.N. Security Council. We restated and reaffirmed that longstanding view of our government.

The President previewed his coming trip to China and asked for the Prime Minister's counsel and advice on areas in which he could profitably exchange views with President Jiang Zemin and President Clinton very much appreciated his friend Ryu's advice on his coming travel.

They exchanged views on North Korea and the importance of maintaining the commitments that will allow the October 1994 agreed framework to proceed. They talked about the important role that KEDO will play in that process. And that is pretty much it.

I'll relay the questions for you.

Q Did the President encourage the Japanese to cut taxes?

MR. MCCURRY: The President actually answered that question very directly in the photo opportunity. We do believe that there's some things that can be done to expand the importance of the fiscal stimulus package that has already been presented by the Prime Minister. The Prime Minister has views on that and he shared those with the President and explained what the situation is with respect to his economic stimulus program in the diet.

Let me ask Gene Sperling to chime in on this question.

MR. SPERLING: The majority of their economic discussion, which was substantive and lengthy, was on the issue of the steps Japan is taking to strengthen and reform their banking system. And Prime Minister Hashimoto gave an account of what they were doing concerning their efforts to strengthen the banking system to deal with the non-performing or bad loan issues.

The President spoke about what the lessons that this country has learned from the S&L crisis on the need for open and transparent information in dealing with the situation decisively. And it was a very -- again, very substantive.

They did talk some about that issue of taxes, but most of the discussion was on recognizing that the stimulus plan had been positive, but the banking reform was the key issue. And, again, the President laid out what they were doing. The President shared our views on the situations and the lessons that we had learned on the need for prompt and decisive steps.

Q A question on telecom and the March 2000 issue.

MR. SPERLING: Deputy USTR Fisher was up all night with his counterparts and by this morning they had called to say that they did feel that they have a package that we could announce today that would be a first -- show progress for the first year, which we think is a good, positive step for the first year progress, though we'll need effort on the next -- redoubled efforts on the next two years. We're going to try to put out those details. Obviously, on the telecommunications issue the issue of the long-run incremental cost accounting, there was -- we'll try to put out later what the details are on the effort to get that by at least the end of calendar year 2000.

MR. MCCURRY: Just because not everyone might know, this deregulation dialogue that Prime Minister Hashimoto and President Clinton began in Denver has examined several industry sectors, including housing, financial services, telecommunications, medical devices and pharmaceuticals, and then some structural areas like distribution and transparency, legal services and competition policy. What Gene referenced were discussions that were going on between Japanese trade officials and USTR officials here in Birmingham on the progress report that the Prime Minister and the President will issue on that deregulation initiative. That's the document that Gene is referring to, and we do believe that sometime during the day today the Prime Minister and the President will jointly issue this progress report. So that's something that you'll will be looking forward to, I know.

Q Can you elaborate on the Prime Minister's information from Jakarta?

MR. MCCURRY: I would describe it only as just their assessment of the situation on the ground in Indonesia. It certainly squares with the information available to the United States and underscores the concern we feel about the general political situation there, the level of violence, concerns we have about security and underscores the calls both leaders made for restraint on all sides as the people of Indonesia deal with what is a very turbulent moment in their political history.

Q The question is about the situation in Jakarta seems to be worsening today. Is there any consideration of additional steps to intervene or to act?

MR. MCCURRY: I think as President Clinton indicated, this is certainly going to be -- the general subject the situation in Indonesia will likely be a conversation subject for tonight at the dinner, and we'll see which direction the leaders want to take any pronouncement that they make.

Q Did they discuss any specifics on any formula that they might use to get the Pakistanis to refrain from testing?

MR. MCCURRY: They did discuss some specifics. I'm going to decline to detail those here, but obviously, Pakistan and its current disposition with respect to testing will likely be a subject that the leaders address during the course of the meetings here.

Q Is the President contemplating using U.S. forces to evacuate U.S. personnel from Indonesia?

MR. MCCURRY: As most of you know, the Department of State has authorized a voluntary departure for U.S. personnel and we have extended information to U.S. citizens who are in Indonesia on what their situation may be. So far the information available to us is that there is transportation in and out of major metropolitan centers and in and out of the country via Jakarta. We obviously will continue to monitor that situation closely and will be in close contact with Ambassador Roy and look for any recommendation that he might make.

Q Can I follow on that, Mike? Are they moving assets, military assets into the region?

MR. MCCURRY: I'll have to check further with the Pentagon on that, or P.J., maybe you can do that. I have not had any report to that effect here, but I'll check.

Q Mike, was the President informed about Frank Sinatra's death?

MR. MCCURRY: Yes, the President did have an opportunity to react to Frank Sinatra's death during the photo opportunity.

Q Did he promise any kind of timetable for getting back --

MR. MCCURRY: The two leaders did discuss the Korean Energy Development Organization, which is critical to the implementation of the agreed framework on the North Korean nuclear program. President Clinton underscored the importance of everyone making good on their obligations; that includes the United States as well as Japan. They discussed ways in which we can continue to build support for that program in our respective legislatures and the President thought that was a productive exchange of views. They discussed timing and all of the funding issues that are connected to KEDO and to the agreed framework.

Q Back on Pakistan, could you explain what the President meant again when he said that he thought that they had found a way to work out the F-16s --

MR. MCCURRY: I think as people know, there's been an effort on our part to see if we can't arrange some third-party transactions with respect to the money that is owed the government of Pakistan -- that goes back prior to the testing issue -- goes all the way back to the President's commitment to then-Prime Minister Bhutto -- that he would attempt to arrange that. We continue to work on that issue, but nothing to announce just yet.

Q Did he receive a report yet from Strobe Talbott?

MR. MCCURRY: The answer is no. Deputy Secretary Talbott and General Zinni are having their meetings today in Islamabad. They are expecting to see Prime Minister Sharif as well as other defense and foreign ministry officials. They were going to have an evening dinner meeting and then depart for London, and we expect them in London at some point tomorrow.

Q Will the President see --

MR. MCCURRY: The President will likely see Deputy Secretary Talbott either sometime later in the day tomorrow or early Sunday. Talbott was expected to be here in Birmingham for the President's bilateral meeting with President Yeltsin on Sunday.

Q Is the President anticipated to offer other incentives to Pakistan, other than trying to work out the details of the F-16 deal?

MR. MCCURRY: Obviously, he wanted Deputy Secretary Talbott and General Zinni to explore a host of issues related to Pakistan's regional security situation, including the status of whatever nuclear program it has. I'm just going to decline to get into any specifics because those are under discussion now by senior U.S. diplomats who are in Pakistan.

I'm done with the pool here, is there any burning question there at the filing center? If you've got a burning question, I don't know -- you know how to relay it here anyhow, because we may not have two-way.

Last question, yes.

Q Any change in the readiness authority?

MR. MCCURRY: Been asked and answered. P.J. is checking on that back at the filing center. Asked and answered. Thank you. Good-bye.

END 12:25 P.M. (L)