US Department of State 

Dispatch, Vol 3, No 14, April 6, 1992

Title:

Efforts To Aid New Independent States At 'Defining Moment in History'

Bush Source: President Bush Description: Excerpts from remarks at a news conference, Washington, DC Date: Apr, 1 19924/1/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Trade/Economics, Democratization [TEXT] I have a statement that is a little longer than the normal, but let me just say that I have just met with the congressional leadership to request their bipartisan backing for a new, comprehensive, and integrated program to support the struggle of freedom underway in Russia, Ukraine, and the other new states that have replaced the Soviet Union. The revolution in these states is a defining moment in history with profound consequences for America's own national interests. The stakes are as high for us now as any that we have faced in this century. Our adversary for 45 years, the one nation that posed a worldwide threat to freedom and peace, is now seeking to join the community of democratic nations. A victory for democracy and freedom in the former USSR creates the possibility of a new world of peace for our children and grandchildren. But if this democratic revolution is defeated, it could plunge us into a world more dangerous, in some respects, than the dark years of the Cold War. America must meet this challenge, joining with those who stood beside us in the battle against imperial communism--Germany, the United Kingdom, Japan, France, Canada, Italy, and other allies. Together we won the Cold War, and today we must win the peace. This effort will require new resources from the industrial democracies but nothing like the price we would pay if democracy and reform failed in Russia and Ukraine and Byelarus and Armenia and the states of Central Asia. It will require the commitment of [a] united America, strengthened by a consensus that transcends even the heated partisanship of a presidential election campaign. Today, I call upon Congress--Republicans and Democrats alike--and the American people to stand behind this united effort. Our national effort must be part of a global effort. I've been in contact with [German] Chancellor Kohl, [UK] Prime Minister Major, [French] President Mitterrand, [and] other key allies to discuss our plans and to assure them of the high priority I place on the success of this endeavor. To this end, I would like to announce, today, a plan to support democracy in the states of the former Soviet Union. This is a complex set of issues which took months to sort out; working within the Administration, working with our major allies, and with the leaders of the new independent states of the former Soviet Union. A number of things had to come together to make sure we got it right. Let me give you a little bit of the history. I asked Secretary Baker to outline our fundamental approach in his December 12 speech at Princeton [see Dispatch, Vol. 2, No. 50, December 16, 1991]. I spoke again on the need to embrace Russia and the other new states of the former Soviet Union in my January 22 speech at the Washington conference to coordinate the humanitarian assistance. On February 1, [Russian Federation President] Boris Yeltsin and I discussed these issues at Camp David. That same day, Secretary Brady met with Boris Yeltsin's key economic adviser, Igor Gaydar, to discuss how we could support Russian reforms. A week later, Jim Baker followed up during his meeting with Kozyrev-- [Russian] Foreign Minister Kozyrev--and Boris Yeltsin in Moscow. Just yesterday, the International Monetary Fund [IMF] reached tentative agreement with Russia on its market reform program. After weeks of intensive consultations in the G-7 [Group of 7 industrialized nations], Chancellor Kohl--currently serving as chairman of the G-7--has announced, today, G-7 support for an IMF program for Russia. The program that I'm announcing today builds on this progress and includes three major components: First, the United States has been working with its Western allies and the international financial institutions on an unprecedented multilateral program to support reform in the newly independent states. The success of this program will depend upon their commitment to reform and their willingness to work with the international community. Russia is exhibiting that commitment. I'm announcing, today, that the United States is prepared to join in a substantial multilateral financial assistance package in support of Russia's reforms. We are working to develop, with our allies and the IMF, a $6-billion currency stabilization fund to help maintain confidence in the Russian ruble. The United States will also join in a multilateral effort to marshal roughly $18 billion in financial support in 1992 to assist Russian efforts to stabilize and restructure their economy. We have been working with the Russian Government for 3 months to help it develop an economic reform plan to permit the major industrialized countries to provide support. We will work to complete action on this approximately $24-billion package by the end of April. I pledge the full cooperation of the United States in this effort. Secondly, the United States will also act to broaden its own capacity to extend assistance to the new states. I am transmitting to Congress a comprehensive bill, the FREEDOM [Freedom for Russia and Emerging Eurasia Democracies and Open Markets] Support Act, to mobilize the executive branch, the Congress and, indeed, our private sector around a comprehensive and integrated package of support for the new states. Now, this package will authorize a US quota increase of $12 billion for the IMF, which is critical to supporting Russia and the other new states. The IMF and World Bank will be the primary source of funding for the major financial assistance needs of the new governments. The US quota increase for the IMF was specifically assumed in the budget agreement and does not require a budget outlay. [It will] support my existing authority to work with the G-7 and the IMF to put together the stabilization program for Russia and support possible subsequent programs for other states of the former Soviet Union as they embarked on landmark reforms, including up to $3 billion for stabilization funds. It would also repeal restrictive Cold War legislation so that American business can compete on an even footing in these new markets. I am determined that American business be given the chance to invest and trade with the new states. And to that end, I've also directed that the United States negotiate trade and bilateral investment and tax treaties with these countries just as soon as possible. Significant new trade relationships can create jobs right here in this country. The package will broaden the use of $500 million appropriated by Congress last year to encompass not only the safe dismantling and destruction of nuclear weapons but also the broader goals of nuclear plant safety, demilitarization, and defense conversion. It will also establish a major people-to-people program between the United States and the states of the former Soviet Union to create the type of lasting personal bonds among our peoples and Russian understanding of democratic institutions so critical to long-term peace. This effort will complement our existing programs to bring hundreds of businessmen to the United States from the Commonwealth [of Independent States] and then send hundreds of Peace Corps volunteers to the new states. In sending this authorization legislation to Congress, I call upon the Congress to act concurrently to provide the appropriations necessary to make these authorizations a reality. Third, in addition to the $3.8 billion already extended by the United States since January 1991, I'm announcing today $1.1 billion in new Commodity Credit Corporation [CCC] credit guarantees for the purchase of American agricultural products. Six hundred million of that will go for US sales to Russia and an additional $500 million for US sales to the Ukraine and other states. Now, let me close on a personal note. I think every day about the challenge of securing a peaceful future for the American people. And I believe very strongly that President Yeltsin's reform program holds the greatest hope for the future of the Russian people and for the security of the American people as we define a new relationship with that great country. President Yeltsin has taken some very courageous steps for democracy and free markets. I am convinced that it is in our own national interest to support him strongly. For more than 45 years, the highest responsibility of nine American presidents--Democrats and Republicans--was to wage and win the Cold War. It was my privilege to work with Ronald Reagan on these broad programs and now to lead the American people in winning the peace by embracing the people so recently freed from tyranny to welcome them into the community of democratic nations. I know there are those who say we should pull back: concentrate our energies, our interests, and our resources on our pressing domestic problems--and they are very important. But I ask them to think of the consequences here at home of peace in the world. We've got to act now. If we turn away, if we do not do what we can to help democracy succeed in the lands of the old Soviet Union, our failure to act will carry a far higher price. If we face up to the challenge, matching the courage of President Yeltsin, of Ukrainian President Kravchuk, of Armenian President Ter-Petrosyan, many other future generations of Americans will thank us for having had the foresight and the conviction to stand up for democracy and work for peace in this decade and into the next century. That's the end of this statement. I'll be glad to take just a handful of questions, and then Jim Baker and Secretary Brady--I think Secretary Baker--will go into more detail on the legislation, and Secretary Brady and others will be available. I think Ed Madigan will talk to you about the agricultural sect[ion] of it.
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Efforts To Aid New Independent States At 'Defining Moment in History'

Baker Source: Secretary Baker Description: Excerpts from remarks at a news conference, Washington, DC Date: Apr, 1 19924/1/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Trade/Economics, Democratization [TEXT] Let me make a couple of brief comments, and then I'd be glad to try and respond to your questions, as I know [Treasury] Secretary Brady would. First of all, you heard the President in his opening remarks mention that this is, in effect, a three-part program; it's a three-way approach. First, you have a multilateral component of this which has to do with the agreement among the G-7 to provide $24 billion in support for Russia. That applies to the Russian Federation. Second, you have the Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992, which we are going to call the FREEDOM Support Act and which we are today sending to the Congress in legislative form, together with fact sheets, in the hopes that Congress will join with us in what you've heard the President characterize as a very, very important national imperative. This bill is very comprehensive. It is very broad. It is very far-reaching, and it is our view that it will help mobilize support not just among the legislative branch but among the US public as well. This is, in our view, a once-in-a-century opportunity that we cannot miss. We spent trillions of dollars to win the Cold War, and we ought to be willing to spend a few billion dollars to secure the peace, or we might find ourselves in the position of having to spend far more again if things go in the wrong direction over there. And this is, therefore, a very important national security issue. And it is an issue that is very important to the American people. The third element of the program you heard the President mention is the provisioning of additional CCC credits to an amount of about $1.1 billion-- $600 million of that destined for the Russian Federation; $500 million for the other former republics of the former Soviet Union. I'll be glad to give you some detail, if you want it, on the bill. Let me simply say that it is a 10-point plan, a comprehensive one, as I've mentioned, that speaks to the provisioning of additional humanitarian assistance; that talks to the issue of nuclear safety and responsibility. It expands assistance opportunities in building free markets. It increases support for democratic institutions in these new countries. It improves access to credits for purchases of food. It stimulates greater trade and investment opportunities for and with these new countries. It supports in many ways the development of a private sector. It leverages our financial contributions through the IMF. It points up the importance to the United States and to this issue of moving on the quota increase for the IMF. It supports US leadership in developing a stabilization fund or funds for these newly emerging nations up to an amount of $3 billion, and it expands the American presence on the ground in Russia and the new states and their presence here. And opens up quite a few opportunities for person-to-person contact. There's only one other thing I want to say, and then I'm glad to respond to your questions--Nick [Brady] may have something he wants to say before we get to that--and that is picking up on the questions that were asked of the President about why now. This is not a recent effort. We have been doing this for not just a period of months but indeed, I would argue, a period of years--that's supporting the historic transformations that are taking place in the former Soviet Union. Transformations in which Americans have a very major stake. Indeed, as the President mentioned, I said in my speech at Princeton last December 12: "As we organized an alliance against Stalinism during the Cold War, today America can mobilize a coalition in support of freedom." That's what we're doing. We've also said over the course of the past several months that the first step, of course, was to match outside support with self-help. And it has been recently, in the last few months, that we've seen Russia, particularly, move in the area of adopting credible economic reform programs. We began with humanitarian and technical assistance. You will remember the coordinating conference in January in which we involved many, many other nations and through which we provided a substantial amount of humanitarian assistance to these new states. We will have follow-up coordinating conferences to be hosted by other countries. By the beginning of 1992, we had already pledged over $5 billion in assistance as well as having held a coordinating conference. The time, we think, to mobilize American public support for this--and we don't underestimate the responsibility that that is and the job that is before us--is now. We think that this is a way in which we can integrate our efforts across the board and in which we can coordinate American contributions with the contributions of many, many other governments. Now is the time, we think, to catalyze congressional action, and now is particularly the time for us to send a very powerful signal to the democrats and reformers in the former Soviet Union who are trying to convert to democracy, freedom, and free markets. . . . (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

[FREEDOM Support Act of 1992:] Assistance to New States Of the Former Soviet Union

Bush Source: President Bush Description: Legislative proposal transmitted to Congress Date: Apr, 3 19924/3/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Trade/Economics, Democratization [TEXT] FREEDOM Support Act of 1992 To the Congress of the United States: I am pleased to transmit a legislative proposal entitled the "Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992" (the FREEDOM Support Act of 1992). Also transmitted is a section- by-section analysis of the proposed legislation. I am sending this proposal to the Congress now for one urgent reason: With the collapse of the Soviet Union, we face an unprecedented historical opportunity to help freedom flourish in the new, independent states that have replaced the old Soviet Union. The success of democracy and open markets in these states is one of our highest foreign policy priorities. It can help ensure our security for years to come. The growth of political and economic freedom in these states can also provide markets for our investors and businesses and great opportunities for friendship between our peoples. While this is an election year, this is an issue that transcends any election. I have consulted with the congressional leadership and have heard the expressions of support from both sides of the aisle for active American leadership. I urge all Members of Congress to set aside partisan and parochial interests. Just as Democrats and Republicans united together for over 40 years to advance the cause of freedom during the Cold War, now we need to unite together to win the peace, a democratic peace built on the solid foundations of political and economic freedom in Russia and the other independent states. This proposal gives me the tools I need to work with the international community to help secure the post-Cold War peace. It provides a flexible framework to cope with the fast-changing and unpredictable events transforming Russia, Ukraine, Armenia, and the other states. This proposal will allow us to: -- Mobilize fully the executive branch, the Congress, and the private sector to support democracy and free markets in Russia and the other independent states of the former Soviet Union; -- Address comprehensively the military, political, and economic opportunities created by the collapse of the Soviet Union, targeting our efforts and sharing responsibilities with others in the international community; and -- Remove decisively the Cold War legislative restrictions that hamstring the government in providing assistance and impede American companies and businesses from competing fairly in developing trade and investment with the new independent states. Passage of this proposal will enable the United States to maintain its leadership role as we seek to integrate Russia and the other new independent states into the democratic family of nations. Without the tools this proposal provides, our policy of collective engagement will be constrained, our leadership jeopardized.
This proposal has 10 key elements:
First, this proposal provides the necessary flexibility for the United States to extend emergency humanitarian assistance to Russia and the other new independent states. Emergency humanitarian assistance will help the peoples of the former Soviet Union to avoid disaster and to reduce the danger of a grave humanitarian emergency next winter. In this endeavor, the United States will not go it alone but will continue to work closely with the international community, a process we initiated at the Washington Coordinating Conference in January and will continue in the months ahead in regular conferences with our allies. By dividing our labors and sharing our responsibilities, we will maximize the effects of our efforts and minimize the costs. Second, this proposal will make it easier for us to work with the Russians and others in dealing with issues of nuclear power safety and demilitarization. This proposal broadens the authority for Department of Defense monies appropriated last fall for weapons destruction and humanitarian transportation to make these funds, as well as foreign military financing funds, available for non-proliferation efforts, nuclear power safety, and demilitarization and defense conversion. Third, technical assistance can help the Russians and others to help themselves as they build free markets. Seventy years of totalitarianism and command economics prevented the knowledge of free markets from taking a firm hold in the lands of Russia and Eurasia. By providing know- how, we can help the peoples and governments of the new independent states to build their own free market systems, open to our trade and investment. It will also allow agencies authorized to conduct activities in Eastern Europe under the "Support for East European Democracy (SEED) Act of 1989" to conduct comparable but separate activities in the independent states of the former Soviet Union. Through organizations such as a Eurasia Foundation, we will be able to support a wide range of technical assistance efforts. Fourth, this proposal will allow us to significantly expand our technical assistance programs that facilitate democratization in the new states, including our expanding rule of law program. It will authorize support for programs such as "America Houses." It also provides support for expanded military-to-military programs with Russia and the other new independent states to cultivate a proper role for the military in a democratic society. Fifth, this proposal provides a clear expression of bipartisan support to continue to extend Commodity Credit Corporation credit guarantees to Russia and the other new independent states in light of the progress they are making toward free markets. As they overcome their financial difficulties, we should take into account their commitment to economic freedom in providing credit guarantees that will help feed their peoples while helping American farmers. Sixth, for American business, this proposal expands authority for credit and investment guarantee programs such as those conducted by the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank. It will allow us to waive statutory ceilings on credit guarantee programs of the Export-Import Bank Act and other agencies that applied to the Soviet Union and the restrictions of the Johnson Debt Default Act on private lending. In this way, it will expand US exports to and investment in Russia and the other new independent states. Seventh, this bill will facilitate the development of the private sector in the former Soviet Union. This bill removes Cold War impediments while promoting outside investment and enhanced trade. It will also allow waiver of restrictions on imports from the independent states of the former Soviet Union beyond those applied to other friendly countries. It will support efforts to further ease Coordinating Committee (COCOM) restrictions on high technology. The bill will also allow the establishment of enterprise funds and a capital increase for the International Financial Corporation. Eighth, this proposal will allow the United States to work multilaterally with other nations and the international financial institutions toward macroeconomic stabilization. At the end of World War II, the United States stood alone in helping the nations of Western Europe recover from the devastation of the war. Now, after the Cold War, we have the institutions in place--the International Monetary Fund (IMF) and the World Bank--that can play a leading role in supporting economic reform in Russia and Eurasia. Therefore, this proposal endorses an increase in the IMF quota for the United States. This will help position the IMF to support fully a program of macroeconomic stabilization. I request the Congress to pass both the authorization and appropriations necessary for this purpose. Ninth, this proposal endorses a significant US contribution to a multilateral currency stabilization fund. Working with the international financial institutions and the other members of the G-7, we are putting together a stabilization fund that will support economic reform in Russia and the other independent states. Tenth, this proposal provides for an expanded American presence in Russia and the other new independent states, facilitating both government-to- government relations and opportunities for American business. Through organizations such as the Peace Corps and the Citizens Democracy Corps, we will be able to put a large number of American advisers on the ground in the former Soviet Union. In sending this authorization legislation to the Congress, I also request concurrent action to provide the appropriations necessary to make these authorizations a reality. In order to support fully multilateral efforts at macroeconomic stabilization, I urge the Congress to move quickly to fulfill the commitment of the United States to the IMF quota increase. I urge prompt enactment of the appropriations requests for the former Soviet Union contained in the FY 1992 and 1993 budget requests presently before the Congress. I call upon the Congress to show the American people that in our democratic system, both parties can set aside their political differences to meet this historic challenge and to join together to do what is right. On this occasion, there should be only one interest that drives us forward: America's national interest. George Bush
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Multilateral Financial Assistance Package for Russia

Fitzwater Source: White House Press Secretary Marlin Fitzwater Description: Statement released by the White House, Office of the Press Secretary, Washington, DC Date: Apr, 1 19924/1/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Trade/Economics, Democratization [TEXT] President Bush today announced US support for a multilateral financial assistance package to help Russia and the other new states of the former Soviet Union transform their economies to free market systems. There are three elements of this program: -- Roughly $18 billion in financial support in 1992 to help Russia stabilize and restructure its economy; -- [A] $6-billion currency stabilization fund to bolster confidence in the Russian ruble; and -- Early membership for Russia and the other new states in the International Monetary Fund (IMF). The President has urged the G-7 to complete action on this approximately $24-billion package by the end of April.
Financial Support
The United States is working with its allies and the international financial institutions to marshal $18 billion in financial assistance in 1992 to support Russia's economic reform efforts. Russia is already embarked on the path of bold market-oriented economic reforms. The reforms taken to date are part of an IMF-endorsed "shadow program" which does not involve financing. Negotiations are now underway between Russia and the IMF with the aim of converting the shadow program as soon as possible into a full and comprehensive reform program which would merit IMF financial support. These reforms would include reduction of the budget deficit, curbing inflation, privatization, and reform of the agricultural and energy sectors. Eighteen billion dollars in financial support could be obtained from: -- $11 billion of existing and new bilateral commitments from key industrial countries, including the United States. Negotiations on specific contributions are underway among the G-7 countries; -- $4.5 billion from the international financial institutions, including the IMF, World Bank, and European Bank for Reconstruction and Development (EBRD); and -- The remaining $2.5 billion in deferral of debt payments owed to Western creditors.
Currency Stabilization Fund (CSF)
An integral part of Russia's reform program is an effort to stabilize the ruble and bolster the public's confidence in it by making it freely convertible. To help achieve these objectives, [Russian] President Yeltsin has requested the creation of a currency stabilization fund. The major industrial countries recognize that a stable, convertible ruble would have important benefits for the Russian reform effort. Thus, the United States and the other major countries are working together to establish such a fund for Russia. The fund would total $6 billion, an amount equal to roughly 3 months of Russia's 1991 hard currency imports. Russian membership in the IMF and compliance with a formal IMF program would be a precondition for use of the fund. The resources for the fund will be financed entirely by activating the IMF's General Arrangements To Borrow (GAB). The GAB consists of emergency credit lines to the IMF from the G-7 and other industrial countries. The United States share of the GAB is 25%. US participation in the GAB and the funds required for the US contribution have been authorized and appropriated by Congress. Use of the GAB involves no net US budgetary outlays.
Early Membership in the IMF
Russian and the other new states have applied for IMF membership. The United States has strongly supported early membership for them to promote market reforms and forge strong links with the West. Russia as well as some of the other new states should become members of the IMF by early May. The IMF Executive Board is in the final stages of determining Russia's terms of entry into the Fund, including the size of Russia's quota, which will establish the basis for Russia's representation, voting power, and access to IMF resources. The board has agreed upon a 3% Russian quota share, which will place Russia in the ninth position in the IMF. It will soon forward membership resolutions to the IMF Board of Governors. In turn, under standard IMF procedures, the Board of Governors would have 30 days to cast ballots in support of the resolutions. A vote by the Board of Governors requires a quorum of one-half of IMF members with two-thirds of the voting power, with approval by a simple majority of those voting. The President has called for legislation providing for US participation in the IMF quota increase in order to ensure that the IMF has adequate resources to meet perspective demands for financing.
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Agricultural Assistance for the New Independent States

Fitzwater Source: White House Press Secretary Marlin Fitzwater Description: Statement released by the White House, Office of the Press Secretary, Washington, DC Date: Apr, 1 19924/1/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: USSR (former), Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Subject: Trade/Economics, Democratization [TEXT] The President today announced a series of additional measures to assist the independent states of the former Soviet Union. These include an immediate increase of $1.1 billion in credit guarantees for the purchase of US agricultural commodities. Up to an additional $1.1 billion will be made available under the GSM-102 program. Of this, $600 million will be available to Russia and $500 million for Ukraine, Armenia, and other states. The Russian guarantees will be made operational in four monthly tranches beginning on May 1. The other $500 million will become available to the other republics provided they meet program qualifications. The GSM-102 program provides Commodity Credit Corporation (CCC) guarantees of credit extended by private US banks for the purchase of US agricultural commodities. The credits are usually repayable over 3 years with three equal annual installments of principal. The total amount of credit guarantees made available since January 1991, when the first allocation for the then-Soviet Union was made, is now $4.85 billion. Russia and the other republics are fully up to date in repayments to banks of credits guaranteed earlier by the CCC. Since January 1, 1992, these have amounted to over $270 million. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

OPIC Agreements: US-Armenia

Baker Source: Secretary Baker Description: Secretary Baker's remarks at the treaty signing ceremony with Armenian Deputy Prime Minister Hrant Bagratian, Washington, DC Date: Apr, 2 19924/2/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Armenia Subject: Trade/Economics [TEXT] I am delighted to be here with the Deputy Prime Minister of Armenia. We will be signing two agreements: an OPIC [Overseas Private Investment Corporation] agreement and a trade agreement. The signing of these two agreements puts into place the foundation of the US-Armenian economic relationship. It's important now that we conclude a bilateral investment treaty and a bilateral tax treaty so as to move the economic relationship between our two countries forward. We will look forward to working on those at your earliest convenience. Let me say finally that this, I think, is the first OPIC agreement that we have signed with a new state of the former Soviet Union. We are very pleased to be signing it with Armenia. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

OPIC Agreements: US-Armenia

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement, Washington, DC Date: Apr, 2 19924/2/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Armenia Subject: Trade/Economics [TEXT] Secretary James Baker and Armenian Deputy Prime Minister Hrant Bagratian signed a bilateral OPIC agreement today at 4:00 pm at the State Department. This is an executive agreement that does not require congressional approval. The US-Armenian agreement enables OPIC to provide investment insurance, project financing, and investor services for US private investors in Armenia. Armenia is the first of the new independent states on the territory of the former Soviet Union to sign such an agreement with the United States. Signature of this agreement demonstrates the commitment of the United States to help the private sector in Armenia develop and to assist US companies seeking to invest there. As such, it marks an important step in establishing normal commercial relations with Armenia. OPIC is a US Government agency that provides assistance to American investors in over 120 developing countries and emerging economies throughout the world. Projects supported by OPIC also create US jobs and exports and strengthen America's international competitiveness. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

OPIC Agreements: US-Russia

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement, Washington, DC Date: Apr, 3 19924/3/92 Category: Speeches, Testimony, Statements Region: Eurasia Country: Russia Subject: Trade/Economics [TEXT] Secretary James A. Baker, III, and Russian Ambassador Vladimir Lukin signed a bilateral OPIC agreement today at 9:00 am at the State Department. The US-Russian agreement will enable OPIC to provide investment insurance, project financing, and investor services for US private investors in the Russian Federation. The agreement must now be ratified by the Russian Parliament. It does not require US congressional approval. Signature of this agreement demonstrates the commitment of the United States to help the private sector in Russia develop and to assist US companies seeking to invest there. As such, it marks an important step in establishing normal commercial relations with Russia. OPIC is a US Government agency that provides assistance to American investors in over 120 developing countries and emerging economies throughout the world. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

UNSC Resolutions Against Libya

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Department Statement, Washington, DC Date: Mar, 31 19923/31/92 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Libya Subject: United Nations, Terrorism [TEXT] Once again, the UN Security Council has spoken out for collective action against state-supported terrorism, in this case the bombings of Pan Am [Flight] 103 and UTA [Flight] 772 that resulted in the loss of 441 lives. Today, the UN Security Council adopted a second resolution that will impose mandatory sanctions on the Government of Libya if Libya fails to comply with UN Security Council Resolution 731 by April 15. Once sanctions are imposed, they will remain in effect until the Security Council determines that Libya has complied fully with the requests referenced in UN Security Council Resolution 731, which was approved unanimously on January 21. These require Libya to: -- Surrender the bombing suspects for trial in the United States or United Kingdom and accept responsibility for their actions; -- Disclose all relevant information about the crime; -- Pay appropriate compensation; and -- Cease all terrorist actions and support of terrorist groups, which it must prove by concrete actions. The sanctions voted by the UN Security Council are specifically related to Libya's sponsorship of state terrorism, particularly against civil aviation. The Government of Libya has repeatedly attempted to delay and divert attention from that fundamental issue: its continuing support for terrorism and its direct involvement in the two civilian airline bombings. We repeat that the US Government strongly advises any American citizens who may be present in Libya to depart immediately. We cannot predict Libya's response once UN Security Council sanctions are in force. In any event, once air links are broken, it will be more difficult to leave the country. US passports have been invalid for travel to Libya since 1981 unless specially endorsed by the US Government. Similarly, any financial transaction with Libya is prohibited under the provisions of the Libyan sanctions regulations issued by the Office of Foreign Assets Control of the Treasury Department.
Resolution 731
UN Security Council resolution of January 21, 1992. The Security Council, Deeply disturbed by the world-wide persistence of acts of international terrorism in all its forms, including those in which States are directly or indirectly involved, which endanger or take innocent lives, have a deleterious effect on international relations and jeopardize the security of States, Deeply concerned by all illegal activities directed against international civil aviation and affirming the right of all States, in accordance with the Charter of the United Nations and relevant principles of international law, to protect their nationals from acts of international terrorism that constitute threats to international peace and security, Reaffirming its resolution 286 (1970) in which it called on States to take all possible legal steps to prevent any interference with international civil air travel, Reaffirming also its resolution 635 (1989) in which it condemned all acts of unlawful interference against the security of civil aviation and called upon all States to cooperate in devising and implementing measures to prevent all acts of terrorism, including those involving explosives, Recalling the statement made on 30 December 1988 by the President of the Council on behalf of the members of the Council strongly condemning the destruction of Pan Am flight 103 and calling on all States to assist in the apprehension and prosecution of those responsible for this criminal act, Deeply concerned over results of investigations which implicate officials of the Libyan Government and which are contained in Security Council documents that include the requests addressed to the Libyan authorities by France, the United Kingdom of Great Britain and Northern Ireland and the United States of America in connection with the legal procedures related to the attacks carried out against Pan Am flight 103 and UTA flight 772 (S/23306*; S/23307*; S/23308*; S/23309*; S/23317), Determined to eliminate international terrorism, 1. Condemns the destruction of Pan Am flight 103 and UTA flight 772 and the resultant loss of hundreds of lives; 2. Strongly deplores the fact that the Libyan Government has not yet responded effectively to the above requests to cooperate fully in establishing responsibility for the terrorist acts referred to above against Pan Am flight 103 and UTA flight 772; 3. Urges the Libyan Government immediately to provide a full and effective response to those requests so as to contribute to the elimination of international terrorism; 4. Requests the Secretary-General to seek the cooperation of the Libyan Government to provide a full and effective response to those requests; 5. Urges all States individually and collectively to encourage the Libyan Government to respond fully and effectively to those requests; 6. Decides to remain seized of the matter. VOTE: Unanimous 15-0. Resolution 748 UN Security Council resolution of March 31, 1992. The Security Council, Reaffirming its resolution 731 (1992) of 21 January 1992, Noting the reports of the Secretary-General, 1, 2 Deeply concerned that the Libyan Government has still not provided a full and effective response to the requests in its resolution 731 (1992) of 21 January 1992, Convinced that the suppression of acts of international terrorism, including those in which States are directly or indirectly involved, is essential for the maintenance of international peace and security, Recalling that, in the statement issued on 31 January 1992 on the occasion of the meeting of the Security Council at the level of heads of State and Government, 3 the members of the Council expressed their deep concern over acts of international terrorism, and emphasized the need for the international community to deal effectively with all such acts, Reaffirming that, in accordance with the principle in Article 2, paragraph 4, of the Charter of the United Nations, every State has the duty to refrain from organizing, instigating, assisting or participating in terrorist acts in another State or acquiescing in organized activities within its territory directed towards the commission of such acts, when such acts involve a threat or use of force, Determining, in this context, that the failure of the Libyan Government to demonstrate by concrete actions its renunciation of terrorism and in particular its continued failure to respond fully and effectively to the requests in resolution 731 (1992) constitute a threat to international peace and security, Determined to eliminate international terrorism, Recalling the right of States, under Article 50 of the Charter, to consult the Security Council where they find themselves confronted with special economic problems arising from the carrying out of preventive or enforcement measures, Acting under Chapter VII of the Charter, 1. Decides that the Libyan Government must now comply without any further delay with paragraph 3 of resolution 731 (1992) regarding the requests contained in documents S/23306, S/23308 and S/23309; 2. Decides also that the Libyan Government must commit itself definitively to cease all forms of terrorist action and all assistance to terrorist groups and that it must promptly, by concrete actions, demonstrate its renunciation of terrorism; 3. Decides that, on 15 April 1992 all States shall adopt the measures set out below, which shall apply until the Security Council decides that the Libyan Government has complied with paragraphs 1 and 2 above; 4. Decides also that all States shall: a. Deny permission to any aircraft to take off from, land in or overfly their territory if it is destined to land in or has taken off from the territory of Libya, unless the particular flight has been approved on grounds of significant humanitarian need by the Committee established by paragraph 9 below; b. Prohibit, by their nationals or from their territory, the supply of any aircraft or aircraft components to Libya, the provision of engineering and maintenance servicing of Libyan aircraft or aircraft components, the certification of airworthiness for Libyan aircraft, the payment of new claims against existing insurance contracts and the provision of new direct insurance for Libyan aircraft; 5. Decides further that all States shall: a. Prohibit any provision to Libya by their nationals or from their territory of arms and related material of all types, including the sale or transfer of weapons and ammunition, military vehicles and equipment, paramilitary police equipment and spare parts for the aforementioned, as well as the provision of any types of equipment, supplies and grants of licensing arrangements, for the manufacture or maintenance of the aforementioned; b. Prohibit any provision to Libya by their nationals or from their territory of technical advice, assistance or training related to the provision, manufacture, maintenance, or use of the items in (a) above; c. Withdraw any of their officials or agents present in Libya to advise the Libyan authorities on military matters; 6. Decides that all States shall: a. Significantly reduce the number and the level of the staff at Libyan diplomatic missions and consular posts and restrict or control the movement within their territory of all such staff who remain; in the case of Libyan missions to international organizations, the host State may, as it deems necessary, consult the organization concerned on the measure required to implement this subparagraph; b. Prevent the operation of all Libyan Arab Airlines offices; c. Take all appropriate steps to deny entry to or expel Libyan nationals who have been denied entry to or expelled from other States because of their involvement in terrorist activities; 7. Calls upon all States, including States not members of the United Nations, and all international organizations, to act strictly in accordance with the provisions of the present resolution, notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or any contract entered into or any license or permit granted prior to 15 April 1992; 8. Requests all States to report to the Secretary-General by 15 May 1992 on the measures they have instituted for meeting the obligations set out in paragraphs 3 to 7 above; 9. Decides to establish, in accordance with rule 28 of its provisional rules of procedure, a Committee of the Security Council consisting of all the members of the Council, to undertake the following tasks and to report on its work to the Council with its observations and recommendations: a. To examine the reports submitted pursuant to paragraph 8 above; b. To seek from all States further information regarding the action taken by them concerning the effective implementation of the measures imposed by paragraphs 3 to 7 above; c. To consider any information brought to its attention by States concerning violations of the measures imposed by paragraphs 3 to 7 above and, in that context, to make recommendations to the Council on ways to increase their effectiveness; d. To recommend appropriate measures in response to violations of the measures imposed by paragraphs 3 to 7 above and provide information on a regular basis to the Secretary-General for general distribution to Member States; e. To consider and to decide upon expeditiously any application by States for the approval of flights on grounds of significant humanitarian need in accordance with paragraph 4 above; f. To give special attention to any communications in accordance with Article 50 of the Charter from any neighbouring or other State with special economic problems that might arise from the carrying out of the measures imposed by paragraphs 3 to 7 above; 10. Calls upon all States to cooperate fully with the Committee in the fulfillment of its task, including supplying such information as may be sought by the Committee in pursuance of the present resolution; 11. Requests the Secretary-General to provide all necessary assistance to the Committee and to make the necessary arrangements in the Secretariat for this purpose; 12. Invites the Secretary-General to continue his role as set out in paragraph 4 of resolution 731 (1992); 13. Decides that the Security Council shall, every 120 days or sooner should the situation so require, review the measures imposed by paragraphs 3 to 7 above in the light of the compliance by the Libyan Government with paragraphs 1 and 2 above taking into account, as appropriate, any reports provided by the Secretary-General on his role as set out in paragraph 4 of resolution 731 (1992); 14. Decides to remain seized of the matter. VOTE: 10 for, 0 against, 5 abstentions. 1 S/23574. 2 S/23672. 3 S/23500. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Middle East Peace Talks and Patriot Missile

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Excerpts from the Department daily press briefing by Margaret Tutwiler, Washington, DC Date: Apr, 2 19924/2/92 Category: Speeches, Testimony, Statements Region: MidEast/North Africa Country: Israel Subject: Mideast Peace Process, Security Assistance and Sales [TEXT] ...My first statement concerns the fifth round of the Middle East peace talks. The United States, as a co-sponsor of the Arab-Israeli peace process, is very pleased to be able to state that we have received word from all the parties to the bilateral negotiations that they will attend the next session in Washington, DC, on April 27. We have also received informally from all the parties lists of acceptable venues for the following round. There is some commonality between the Arab and Israeli lists. We are, therefore, in a position today to announce that the fifth round of the bilaterals will take place in Washington starting April 27 and that the following round will be held in a venue closer to the region. We will announce that venue prior to the meeting this month in Washington. The date of the sixth round will be subject to agreement between all the parties to the bilaterals and ourselves.... I have a short statement on the recent Patriot mission. First, we would like to express our appreciation to the Israeli Government, especially the Defense Ministry, for the superb cooperation it gave to our team. Secondly, the US Government would have preferred to pursue the Patriot missile question through diplomatic channels. Third, as I said last week and the Secretary repeated this morning, those who leaked intelligence reports owe both the US Government and the Israeli Government an apology. Fourth, our team found no evidence that Israel had transferred a Patriot missile or Patriot missile technology. We plan no further action on this question with Israel and consider the matter closed. Fifth, as far as we are concerned, based on the results of this mission, the Israeli Government has a clean bill of health on the Patriot issue. . . . (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Transition to Democracy In South Africa

Cohen Source: Herman J. Cohen, Assistant Secretary for African Affairs Description: Testimony before the Subcommittee on Africa of the House Foreign Affairs Committee, Washington, DC Date: Mar, 31 19923/31/92 Category: Speeches, Testimony, Statements Region: Subsaharan Africa Country: South Africa Subject: Democratization, Regional/Civil Unrest [TEXT] It is a pleasure to appear before this subcommittee to report on the transition to democracy in South Africa now that the events of recent weeks have confirmed the irreversibility of the process. President De Klerk's mandate to negotiate has been strengthened, and the negotiations are solidly on track. Transitional non-racial government may come as early as the latter part of this year. Mr. Chairman, I would like to review a few recent events for the subcommittee to outline how we have gotten this far. As you know, the Convention for a Democratic South Africa, called CODESA, held its first meeting December 20-21 in Johannesburg. These were the first actual negotiations among the various political groups in South Africa; everything before that had been "talks about talks." CODESA was possible, in part, because the ANC's [African National Congress] General Congress held in Durban last July gave the leadership a mandate to pursue negotiations with the government and the National Party. It was also possible because many other groups, including the Inkatha Freedom Party, chose to join in the process. On the government side, President De Klerk's mandate to pursue reforms came earlier, from the National Party's victory in the 1989 general election. However, over the course of the last year, the National Party lost three consecutive by-elections to the opposition Conservative Party, which opposes participation in CODESA. While two of the by-election defeats came in constituencies with traditionally strong conservative support, the third, in the university town of Potchefstroom, reversed a substantial National Party majority. These results come amidst growing concern about persistent violence among blacks, increasing militancy and terrorist actions by right-wing whites, and economic stagnation and rampant crime that knows no racial barriers. A widely held perception that the mandate for reform was slipping led De Klerk to call for an "up-or-down" referendum on the CODESA negotiations among white voters. As you know, he won a resounding 69% of the vote on March 17. Equally impressive, the voter turnout topped 85%, by far the largest ever in a South African election. While the Administration attached great importance to a favorable "yes" vote in the referendum, we were careful to avoid letting charges of foreign interference become an issue in the referendum. Our public statements stressed continued negotiations at CODESA and that the referendum was an internal matter for South Africa. We did, however, express our concern that a "no" vote might lead to renewed international isolation and internal discord. We urged the ANC and others to recognize that, however repugnant a "whites only" referendum might be, a solid "yes" vote was clearly in their interest. In the event, the ANC adopted a highly responsible approach. To emphasize the benefits of growing acceptance in the international community resulting from negotiations, we announced a number of programs to underscore our concern with the economic well-being of South Africa. By coincidence, on the day the referendum was announced, the President's determination that South Africa had made "significant progress" in eliminating apartheid, thus allowing the Export-Import Bank [Eximbank] to support US exports to the South African Government, was made public. At the same time, we reminded white-owned private businesses in South Africa that they could qualify for Eximbank support for imports from the United States provided they met our fair labor standards. During the campaign, the Department of State informed the Trade and Development Program (TDP) that South Africa should be considered a "friendly country" for the purposes of initiating activities in South Africa pursuant to the Foreign Assistance Act. The Overseas Private Investment Corporation (OPIC) announced that it would send a team to South Africa in May to explore the investment climate with the South African Government and other parties engaged in the CODESA process. USAID [US Agency for International Development] announced a $30-million housing project for victims of apartheid, part of the doubling of US assistance levels to South Africa announced by President Bush when he terminated CAAA [Comprehensive Anti-Apartheid Act] sanctions last July. Now that De Klerk's hand has been strengthened, we believe that there will be added impetus for CODESA to move quickly. Last week, the government tabled its proposals for interim government at the CODESA working group responsible for the issue. While the ANC's initial public reaction was mixed, we are confident that negotiations will be fruitful. Clearly, the government proposals are an opening bid and subject to discussion. It is important to note that, throughout the referendum campaign, the CODESA working groups continued to meet. The second plenary session of CODESA is scheduled for May 15 and 16. We believe that this session could come to agreement on interim or transitional arrangements to oversee preparations for elections. The next step is likely to be agreement on the election, by all South Africans on a one-man, one-vote basis, of an interim parliamentary body which will be empowered to draft the new constitution while, at the same time, acting as the national legislature. This election could come before the end of the year or most certainly early in 1993. Obviously, the final step will be the election under the new constitution of a fully democratic, non-racial government. Very important differences remain to be resolved before this or any of the preceding steps can be taken, but there are many points of similarity among the various proposals currently on the table. While tough negotiations will follow--and it is only appropriate that such a momentous step come from serious negotiations-- we believe that there is a will in South Africa to make this transition work. It can no longer be doubted that the vast majority of all South Africans support negotiations. The Administration has long held the view that the process of reform is irreversible; we hope that others will see it this way, too. Late last year, several members of the House and Senate, including yourself, Mr. Chairman, and other members of this committee, wrote to President Bush proposing a "South Africa Democracy Aid Initiative." My staff and I are involved in ongoing consultations within the Administration and with Congress regarding how we can best be supportive of both the transition process and the non-racial democracy which we are convinced will emerge from it. Let me state, for the record, that we share your concern that the international community support South Africa in this crucial period. We believe that action cannot wait. The economic underpinnings that will be essential to the success of democracy must be built now, and we and other international parties, public and private, must be involved. In spite of our generally positive assessment of political developments in South Africa, I would be remiss if I did not mention a calamity which threatens the promising developments in South Africa as well as those that mark much of the Southern Africa region. Southern Africa, this year, has been the victim of a terrible drought. The region, as a whole, will need to import over 9 million tons of grain. South Africa, which normally exports to its neighbors, will import about half of this amount at a cost of over $1 billion. While South Africa will be able to fund these imports on a commercial basis, they will come at the expense of stimulating economic growth and addressing the tremendous backlog of black socioeconomic needs. Costs for food imports elsewhere in the region will hit even harder, and the problem of getting food assistance to where it is needed and through an overworked transport network will be considerable. It is unfortunate that, in a region undergoing such profound political change, nature appears intent on undercutting so many promising trends. The United States will do all it can to meet this challenge. In addition to the work being done in Washington to identify aid resources, we have begun consultations with South Africa and others in the region on how to deal with this unexpected crisis. An additional benefit of the changes in South Africa and elsewhere in the region is evidence that the governments of the region are prepared increasingly to work together to address their common problems. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Elections in Ethiopia

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement, Washington, DC Date: Mar, 30 19923/30/92 Category: Speeches, Testimony, Statements Region: Subsaharan Africa Country: Ethiopia Subject: Democratization, Regional/Civil Unrest [TEXT] The United States is committed to the welfare and economic development of the Ethiopian people and considers a peaceful transition to democratic government essential to development and human well-being. We are concerned by reports of violence in various parts of the country. Violence for the purpose of influencing political behavior--whether by the government or armed members of political fronts--is inconsistent with the goals and principles of the Ethiopian National Charter and with progress toward genuine democracy. The United States, therefore, applauds the decision of the Ethiopian Representative Council to arrange for all armed groups to be encamped during the election process for district and regional representatives and calls on all armed groups and the national military to comply with its letter and spirit. Appropriate observers are prepared to monitor the encampment of armed groups to ensure no side takes unilateral military or political advantage of the process. We also encourage all political forces to compete peacefully in the upcoming elections. We welcome the assurance of the transitional government that it will permit free and open political competition and dialogue. We will help in any way we can to ensure that the political competition and elections are carried out openly and fairly. Foreign embassies, governments, and other interested non-governmental organizations are willing to observe the electoral process with monitors and endeavor to provide technical assistance. The United States believes that open and fair district and regional elections will significantly strengthen Ethiopia's chances for successful economic and political development, which will, in turn, inspire donor confidence and support. If, however, the elections are not carried out fairly by the transitional government, we believe Ethiopia's road to democracy and eco- nomic progress will be much more difficult. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Pursuing US Objectives In Asia and the Pacific

Solomon Source: Richard H. Solomon, Assistant Secretary for East Asian and Pacific Affairs Description: Statement before the Senate Foreign Relations Committee, Washington, DC Date: Mar, 31 19923/31/92 Category: Speeches, Testimony, Statements Region: East Asia, Southeast Asia Country: Japan, North Korea, South Korea, Vietnam, Laos, Cambodia, Thailand, Burma Subject: Trade/Economics, Regional/Civil Unrest, United Nations, Democratization, POW/MIA Issues, Nuclear Nonproliferation, Arms Control [TEXT] Mr. Chairman, members of the committee, I am pleased to have this opportunity to discuss my recent trip to several East Asian countries and the range of issues which I pursued related to advancing American interests in the region. During my trip earlier this month [March], I visited Thailand, Vietnam, Cambodia, Laos, the Republic of Korea, Japan, and Hong Kong. As this committee will be holding a separate hearing on Hong Kong later this week, I will not address issues related to that portion of my travels here today. Let me say a few words about the broader context of those travels. My trip took place in the aftermath of the President's visit to the Asia-Pacific region earlier this year. My consultations reflected many of the challenges and objectives President Bush emphasized on his trip: realizing a just peace in Cambodia and attaining the fullest possible accounting of POW/MIA's [prisoners of war/missing in action] from the Vietnam war era so that we can begin a new era in our relations with the nations of Indochina; meeting the challenge of nuclear proliferation on the Korean Peninsula; and forging a global partnership with Japan by enhancing our foreign policy cooperation and attaining more balanced and equitable economic relations.
Indochina
Indochina was a central focus of my mission. My visit to Vietnam, Laos, and Cambodia marked the first time that an Assistant Secretary of State has visited all three countries in the same trip since the end of the Vietnam war; and it was the first to Cambodia since Phonm Penh fell to the Khmer Rouge. As President Bush said in Singapore last January, the United States seeks to improve its relations with Vietnam, Laos, and Cambodia and help integrate all three countries into the dynamic East Asian region and the larger international economic and political system. I went to Indochina to advance this process of reconciliation between the United States and these three states; to help create conditions in which we could begin to build as the President said in his Singapore lecture, "lasting ties of interest and affection."
Vietnam
As I have testified here previously, in April 1991, we presented to the Vietnamese a normalization plan sometimes referred to as the "road map." This policy was designed to allow the United States to pursue--in parallel-- the two primary policy objectives for Indochina that we have maintained over the past 12 years: attaining the fullest possible accounting for our POW/MIAS; and a negotiated peace settlement in Cambodia which will result in the withdrawal of all Vietnamese forces, prevention of a return to power of the genocidal Khmer Rouge, and free elections for the formulation of a new Cambodian government. Our policy framework is a step-by-step process whereby the United States and Vietnam would take a series of reciprocal measures designed to build trust and confidence. It would lead to normalization of our economic and political relations as the Cambodia peace accords are implemented and as POW/MIA accounting advances. It left Hanoi with no doubt as to where we stand and under what circumstances we would be prepared to move ahead. I would note that in the months since the Paris accords were signed last October, Vietnam has, to varying degrees, addressed many of the concerns embodied in our policy, including POW/MIA accounting and other humanitarian issues. At the signing of the Cambodia peace agreement in Paris last October, Secretary Baker announced that, in view of the cooperation from Vietnam and Cambodia on the UN settlement effort as well as certain progress on the POW/MIA issue, the United States was taking steps to launch this normalization process. The initial actions in this process included: -- Changing the embargo rules to permit US-organized group travel to Vietnam; -- Lifting the 25-mile travel limit for Vietnamese diplomats assigned to the United Nations; -- Beginning talks with Vietnamese officials in New York about the issues and modalities surrounding the normalization process; -- Establishing a US mission in Cambodia; -- Stating publicly our concerns about genocide in Cambodia and our determination to prevent its recurrence; and -- Lifting the trade embargo against Cambodia as soon as implementation of the peace agreement began. At the same time, the United States has sustained our efforts to address Vietnam's humanitarian needs, especially in the health and public services sectors. Vice Foreign Minister Le Mai and I held the first round of normalization talks in New York last November, and Vietnam's Permanent Representative to the UN, Ambassador Trinh Xuan Lang, met with my deputy Ken Quinn in January to review various technical issues that we agreed would be addressed in a US-SRV [Soviet Republic of Vietnam] working group. Last September, and again in late January, Gen. John Vessey, the President's special emissary to Hanoi for POW/MIA affairs, traveled to Hanoi and met with Vietnamese leaders. During these visits, he obtained important new Vietnamese commitments on our POW/MIA accounting, as well as some specific Vietnamese actions to implement those understandings. General Vessey's important work--in conjunction with the signing of the UN settlement agreement for Cambodia--helped set the stage for us to begin the normalization process. However, on his most recent visit at the end of January, the General was told that there was some reluctance in Hanoi to move ahead as rapidly as we proposed to achieve our POW/MIA objectives. General Vessey underscored to Vietnamese leaders our intent to adhere to our policy objectives, emphasizing that we were prepared to move either rapidly or slowly toward normalization with Vietnam: The pace and scope of the process--as we have consistently maintained for years--will depend on the speed of our progress in POW/MIA accounting. At the same time, Hanoi indicated a strong desire to discuss the full range of our cooperation on humanitarian issues, including US efforts to meet Vietnam's humanitarian needs. In sum, there appeared to be a real danger in late January that the process was gridlocked. Fortunately, subsequent developments have been more favorable to progress. On March 4-5, I led a delegation to Hanoi to discuss humanitarian issues of concern to the United States and Vietnam. Traveling with me were Mr. Alan Ptak, the new Deputy Assistant Secretary of Defense for POW/MIA Affairs, Mr. George Laudato, the Deputy Assistant Administrator of USAID [the US Agency for International Development] for Asia, and Mrs. Ann Mills Griffiths, the Executive Director of the National League of Families. Brig. Gen. Thomas Needham, Commander, Joint Task Force-Full Accounting, joined us in the region after having presented our plans for an accelerated POW/MIA effort to his Vietnamese counterparts the previous week. In my discussions with the Vietnamese, we reached an important new level of understanding on how both sides can improve our humanitarian cooperation, particularly on POW/MIA accounting. The Vietnamese agreed to a five-point program to accelerate their cooperation with us on POW/MIA investigations, undertaking to do the following: -- Allow us greater access to their central records, archives, and museums and to individuals with information on POW/MIA issues; -- Implement a mechanism for short-notice "live sighting" investigations; -- Begin a 2-year plan for accelerated joint investigations in Vietnam, to include five such investigation cycles over the next 10 months, focusing on the 135 remaining high-priority discrepancy cases; -- Continue to work on trilateral cooperation with Lao and Cambodian authorities; and -- Reaffirm Vietnam's intention to search for and rapidly repatriate remains of Americans still unaccounted for and to hold technical exchanges in order that we understand clearly why remains we believe they might have access to are not available--if that is indeed the case. If all five agreements are sincerely implemented, they should significantly advance us to our goal of attaining the "fullest possible accounting" within a reasonable period of time. Vietnam signaled its intent to deliver on this program in several ways. First, it agreed to the first short-notice investigation of a live-sighting report on March 5, the day I completed my talks in Hanoi. With only 1 hour's notice to Vietnam of the destination, a helicopter lifted off from Hanoi that day with Vietnamese and US experts on board and flew to a remote part of Thanh Hoa Province, where they were able to conduct a thorough investigation. US personnel were permitted to conduct spontaneous interviews with local villagers of their own choosing and were permitted to move about the area freely. After thorough investigation, our experts concluded that the report that live Americans were seen in this particular area in 1986 was not credible. Also on the day I departed Hanoi, a Vietnamese delegation traveled to Phnom Penh to participate in the first trilateral talks with US and Cambodian officials; this followed the US-SRV-Lao trilateral talks held in Vientiane [Laos] last December. We thus have established a mechanism for pursuing the fullest possible accounting for Americans missing in the border areas between these countries. As I left Vietnam, the 16th in a series of joint investigations was taking place in Vietnam. Results from this activity, as well as the day-to-day cooperation our POW/MIA office receives in Vietnam, will help confirm whether Vietnam continues to implement the steps we reached understandings on in Hanoi. The initial assessments of the 16th iteration are encouraging. General Needham is in Hanoi today to arrange the 17th joint investigation, which begins next month. Finally, a few days after I left Hanoi, Vietnam informed us that they had recovered three sets of remains believed to be of American servicemen. We have repatriated them and are examining the remains to determine whether they are indeed American. In Hanoi, we also discussed US efforts to address Vietnam's humanitarian needs. As you know, Mr. Chairman, since 1987, the United States has urged American non-governmental organizations (NGOs) to donate humanitarian assistance to Vietnam under an initiative headed by General Vessey. In 1990, we announced that Treasury Department licensing regulations for humanitarian donations would be streamlined; in 1991, we made the first direct donation of US aid, providing $1.3 million for prosthetics assistance in Vietnam. This past January, we provided our first donation of disaster relief for Vietnam, giving $25,000 for typhoon relief. In Hanoi, I told our hosts the United States is prepared to take additional steps to address Vietnam's humanitarian needs. I outlined a humanitarian assistance package for 1992 that will include additional funds for prosthetics assistance, aid for displaced children, excess medical equipment made available by the Department of Veterans Affairs, Fulbright scholarships, possible additional disaster relief, and use of the Denton amendment program to transport humanitarian assistance donated by NGOs. In addition, Department of Defense medics accompanying our teams doing POW/MIA investigations in Vietnam will now offer medical services to local residents.
Laos
In Laos, my delegation was received at an unprecedentedly high level, meeting for the first time with Prime Minister Khamtai and Minister of Defense Choummali, as well as Foreign Minister Phoun and Vice Minister Soubanh. The Lao Government agreed to expand its already considerable cooperation with us on POW/MIA investigations, including provision of Lao personnel to work with Department of Defense officials assigned to Vientiane for this purpose. They informed us they would soon be turning over two sets of remains, apparently of American servicemen, discovered by local people in Xieng Khoang Province. They also agreed to accept US training of helicopter pilots so that they will eventually be qualified to fly US helicopters for our joint investigative work. Finally, the Lao Government pledged to continue their cooperation with us to counter the narcotics trade, particularly in the enforcement area. I told the Lao the United States is gratified by their cooperation on these important issues and urged continuing efforts. Our relationship has improved significantly over the past several years, and the President announced in November that we will raise the level of our representation to the ambassadorial level for the first time since 1975. The United States has recently established a POW/MIA office in our Embassy in Vientiane, and we look forward to increasingly productive efforts to account for US servicemen missing in Laos. During this visit, I announced our decision to provide 4,000 metric tons [mt] of rice and a $400,000 famine mitigation program in response to recent disasters caused by floods and drought. I also told the Lao that we would be building more schools in remote areas and would send a USAID team this spring to survey prosthetics needs with a view to increasing our assistance in this field.
Cambodia
Achievement of the comprehensive political settlement agreement for Cambodia last October laid the groundwork for regional peace and national reconciliation following decades of war. I traveled to Cambodia to underscore continuing US support for the settlement agreement signed in Paris last year and to assess progress so far in implementing it. Joining my delegation was Deputy Assistant to the President Sichan Siv, himself a survivor of the Khmer Rouge killing fields. We were received by Prince Sihanouk and met with officials of the UN Advance Mission in Cambodia (UNAMIC) and a number of Cambodian leaders representing the state of Cambodia and the non-communist resistance parties on the Supreme National Council (SNC). All the Cambodians we met expressed their strong support for the settlement process and looked forward to the impending arrival the following week of the UN Transitional Authority in Cambodia (UNTAC). I found that UNAMIC has done a good job in carrying out its limited mandate to prepare the country for the arrival of UNTAC, but that implementation of the settlement will depend importantly on a credible, sizeable UN presence- -especially during the difficult transitional period--as demobilization and cantonment of forces is carried out. UNTAC will also have an important role to play in eliciting the cooperation of the Khmer Rouge. To date, we have been disappointed and concerned about credible reports of Khmer Rouge military actions in Kompong Thom and other instances of non-cooperation in contravention of the requirements of settlement implementation. We also urged restraint on the part of the state of Cambodia during our meetings with Hun Sen last week. Everything I witnessed in Cambodia--from the atrocities of the Tuol Sleng genocide museum to the newly built refugee repatriation center at Siem Reap--convinces me it is essential that the United States and other donor countries act quickly to provide funding for this vitally important UN mission. The horrors inflicted on the Cambodian people over the last 2 decades must never be allowed to recur. The UN settlement is Cambodia's last, best--perhaps its only--hope. The visit of SNC [Supreme National Council] member Hun Sen to Washington last week testified to the hopes of all Cambodians that the United States will do its share to make the UN settlement process succeed. The Phnom Penh authorities continue to cooperate with us fully on POW/MIA work. The first full-scale joint recovery and excavation operation was in progress while I was in Cambodia, and US military helicopters were allowed to operate within the country for this purpose. That investigation has uncovered at least four sets of remains of individuals missing since 1970. Mr. Hun Sen and Mr. Chea Sim of the state of Cambodia reaffirmed the willingness of their administration to continue cooperating with us on this important endeavor. In conclusion, I came away from this portion of my trip with the conviction that we have finally laid in place policies, processes, and personnel which will help put the past behind us and move toward a new relationship with all three countries of Indochina. Good faith implementation of these plans by the leaders of Vietnam, Laos, and Cambodia will be key to achieving this goal. The Administration and the American people will now be looking for results. In particular, we will be seeking to account for as many of our missing servicemen from the war as possible. Achievement of that important goal, in the context of continuing progress in Cambodia, will allow us to move toward the objective announced by President Bush and Secretary Baker of reconciliation with all three countries of Indochina. With resolution of these problems, we look forward to the day when progress in all three countries will enable them to join their Southeast Asian neighbors as productive partners in a more prosperous and peaceful international community.
Thailand/Burma
I met with Thai leaders both before and after my trip to Indochina. The Thai were in the midst of an important election campaign; the recent results of which we hope will herald a return to democracy to Thailand. While our support for constitutional rule and democracy as well as bilateral economic issues were matters I pursued with various Thai leaders, we also focused on regional issues of mutual concern: Cambodia, Vietnam, and Burma. Our close cooperation with the Thai Government as a treaty ally and prominent member of the Association of Southeast Asian Nations (ASEAN) has facilitated our efforts to bring peace to Cambodia. The Thai share our interest in adhering to the schedule for elections in Cambodia next year and recognize that our contribution to UNTAC will be crucial to meeting this goal. For their part, the Thai are working closely with the UN High Commissioner for Refugees to assure an orderly and safe repatriation of Cambodian displaced persons and have contributed personnel and funds to road-building and mine-clearing projects in support of the repatriation effort. The Thai are also very interested in the progress of our relations with Hanoi and are working to improve their own relations with Vietnam. I explained to the Thai that I had had a series of constructive meetings with the Vietnamese and that we hoped that implementation of the five-point program discussed in Hanoi would enable us to take correspondingly positive steps. The Thai welcomed this news and shared their impression that the Vietnamese are eager to improve their relations with the outside world. I also discussed our continuing concerns about the deteriorating situation in Burma, which has begun to spill over into Thailand and Bangladesh. Let me add here that we will work with others [to] ameliorate the situation of the Rohingya refugees fleeing Burma for Bangladesh, and that, in this connection, we welcome the forthcoming visit by a representative of the UN Secretary General to Burma and Bangladesh. During my discussions, I noted that the refugee outflux is growing and that narcotics obviously remain a severe problem. I explained that there was considerable interest in the United States in the safety of Burmese refugees in Thailand and suggested that if the Thai do set up a safe area for Burmese students, we believe that appropriate international organizations should have regular access. On bilateral matters, I stated that the US Government views Thailand as a staunch and long-term friend and that we particularly appreciated Thailand's cooperation during the Gulf war. I noted, as well, that we welcomed the passage of the narcotics-related asset forfeiture and conspiracy legislation and that we had made strides in protection of copyrights and patents and hoped to make further progress on our remaining concerns. And I stressed our support for Thai efforts to move ASEAN to become a free trade area.
Korean Peninsula
I also held discussions in Seoul, which, like Bangkok, was consumed by election fever. As was demonstrated by the March 24 National Assembly elections, democracy is sinking ever-deeper roots in South Korea. Most of my discussions, however, centered on the problem of getting Pyongyang [North Korea] to abandon its efforts to acquire a nuclear weapons capability, to take meaningful steps to ease tensions on the peninsula, and to become a responsible international actor on issues such as the proliferation of weapons of mass destruction and their delivery systems. These discussions were part of a deepening pattern of consultations with our Republic of Korea allies with whom we are working closely to resolve the nuclear issue on the Korean Peninsula. Our main concern, and that of the Republic of Korea as well, is related to the international community's suspicion that, despite its agreements with the South and with the IAEA [International Atomic Energy Agency]--agreements that remain to be implemented--the North Koreans have not abandoned their quest for a nuclear weapons capability. Only credible inspection regimes and their full implementation under both the bilateral agreement and the IAEA safeguards agreement will begin to give the international community confidence that the North Koreans are genuinely honoring their commitments and are prepared to move beyond the military confrontation that has polarized the peninsula for more than 4 decades. There are some hopeful signs. In February, the North and South brought into force two bilateral agreements: One is a broad-ranging agreement on reconciliation and non-aggression, and the other a non-nuclear agreement. Subcommittees on military matters, political matters, and economics and exchange have already begun meeting under the reconciliation agreement, and the two sides have formed a joint nuclear control commission, or JNCC, under the non-nuclear agreement. The two sides have publicly committed themselves to work to produce an inspection regime within about 2 months after the first meeting of the JNCC on March 19. They agreed further that inspections would begin within 20 days of agreement on the inspection regime. When completed, that agreement will form the basis for bilateral inspections to verify the non- nuclear agreement. The North has also said it would ratify its IAEA agreement in April, notify the IAEA of its list of relevant facilities in May, and then have IAEA inspections in June. Thus, the Democratic People's Republic of Korea now has before it a golden opportunity to allay suspicions, demonstrate its credibility, and accelerate an opening to the outside world, thereby joining the mainstream of global trends toward reconciliation, reform, and economic development. If Pyongyang acts in good faith, we could see IAEA and bilateral inspections under both regimes by the end of June. Such a development would be a historic step forward in moving toward the stated goal of both Koreas of a secure, de-nuclearized Korean Peninsula. Further, it would give added impetus to the ongoing North-South dialogue, which remains the primary means for resolving Korea's problems and achieving national reconciliation and eventual reunification. Resolving the nuclear issue would also make possible movement toward a significant improvement in US relations with the Democratic People's Republic of Korea. We hope the North will see its interests served by taking advantage of this opportunity. The alternative can only be heightened suspicions, rising tensions, and sustained isolation for the North Koreans. Another area of concern, of course, is North Korea's weapons proliferation activities, especially its trade in missiles with various countries in the Middle East. We have urged North Korea's leaders to refrain from this practice, which is clearly destabilizing to a highly volatile region. We have told them that these unacceptable activities can only worsen their international reputation and further retard any prospects for improved diplomatic and economic relations with the international community. We are working together with other concerned countries to find ways to limit the introduction of destabilizing weapons into areas of concern, especially the Middle East. For the moment, however, we are in a period of what might be called "watchful waiting" to see if Pyongyang will take a new direction in its security policies--especially on the nuclear issue. The North has now made several important commitments on paper, and we expect them to be fulfilled completely in the timeframe Pyongyang has publicly committed itself to. Nothing less can adequately remove the suspicions we share with the rest of the world. Further delays in what is already an unreasonably protracted process would be cause for grave international concern.
Japan
My stop in Tokyo involved consultations on the East Asian aspects of our global partnership and follow-up from the President's trip on a number of trade and financial issues essential to keeping that partnership on a solid economic footing. Our relations with Japan must rest on equitable and mutually advantageous political, security, and economic foundations. That partnership offers unprecedented opportunities for shaping the post-Cold War international system through close coordination of US and Japanese policies to encourage stability, respect for human rights and political pluralism, economic development, and halting the worldwide proliferation of weapons of mass destruction. Since the President's visit, there has been significant progress on a number of Asian fronts which my consultations sought to reinforce: Vietnam: Japan has been very helpful in urging Hanoi to be responsive to our POW/MIA concerns. A recent letter from Japan's Foreign Minister, Michio Watanabe, to his Vietnamese counterpart seems to have facilitated Hanoi's decision to agree to the five-point program I mentioned earlier. And Japan's Vice-Minister for Parliamentary Affairs, Koji Kakizawa, stressed the need for Hanoi's full cooperation in resolving the POW/MIA issue during a visit to Hanoi just last week. We are very appreciative of Japan's efforts. On Cambodia, I debriefed my Japanese counterparts on my assessment of the situation there and discussed the challenges ahead for the UNTAC in successfully implementing the Paris accords. There are indications that Japan will provide generous support for UNTAC. Mrs. Ogata's activities in the UNHCR and Mr. Akashi's as the UN Secretary General's Special Representative to Cambodia underscore Japan's increasingly important leadership role in the UN settlement process. Korea: Close cooperation with Japan has been key to our diplomatic efforts to end the North Korean nuclear threat, and I debriefed my Japanese colleagues on my discussions in Seoul and our assessment of the current situation on the peninsula. In Japan's normalization talks with North Korea and in our limited dialogue with Pyongyang, we both have made clear to North Korea it must meet the concerns of the international community about its nuclear program if it is to develop normal and constructive international dealings. More generally, there have also been close consultations between our two governments on regional issues with global implications, including the Middle East peace process and assistance to the republics of the former Soviet Union. -- Japan has been very supportive on both Middle East and CIS [Commonwealth of Independent States] initiatives. Tokyo is taking an active role in these diplomatic efforts. Of course, much remains to be done on a number of issues of mutual concern. -- Having seen recent progress on People's Republic of China [PRC] participation in the global non-proliferation regime, we must continue to encourage constructive Chinese involvement in such international security activities and to encourage improvements in Chinese human rights practices. -- We must press the Burmese regime to ameliorate the situation of the Rohingya refugees fleeing Burma for Bangladesh and to improve its record on human rights and political activities generally. -- We need to continue our joint efforts in support of democratization and development in Mongolia. A second Mongolia donors' conference is scheduled this spring as a follow-on to the Tokyo conference held last September.
Economic issues
I also followed up on a range of economic issues raised during the President's trip. Press reports notwithstanding, I would like to provide an update on significant progress in trade-related issues over the past 3 months: -- The President's visit to Japan produced market access gains in sectors important to our exporters such as computers, glass, paper, and auto parts. Business leaders who accompanied the President report positive results for their companies and for US business in general. -- Japanese auto-makers agreed to more than double their procurement of US-made parts by 1994. This is consistent with MITI [Ministry of International Trade and Industry]'s business global partnership program, which encourages Japanese firms to import more, source more locally in their overseas operations, and to assist foreign firms entering Japan's market. We want Japanese car-makers to work with US parts suppliers on product development, the same way they work with their Japanese suppliers. US auto-parts-makers tell us they now see changed attitudes and more interest in US products among Japanese car makers. -- On autos, we are giving full support to the efforts of US car-makers to sell in Japan. -- As The Washington Post reported after the President's visit, the US computer industry was "stunned" by how rapidly we negotiated the public sector procurement agreement and the fact that we addressed every major issue raised by the industry to its satisfaction. Our companies are now gearing up to take advantage of new opportunities. -- On paper market access issues, negotiations are continuing to get measures in place which would expand access for US firms to Japan's domestic paper market. We are firmly committed to supporting the efforts of US paper companies to succeed in Japan's market. -- We are addressing the imbalances in trade and investment through the Uruguay Round [of the General Agreement on Tariffs and Trade--GATT], the Structural Impediments Initiative (SII), and market access talks. While our bilateral trade deficit with Japan has fallen from $57 billion in 1987 to $42.3 billion in 1991--and our exports to Japan doubled during that period-- the deficit remains unsustain-ably high and could increase as the US economy strengthens. I must add that Japan's current global account surplus for 1991 of $78 billion--almost double the previous year--indicates that its imbalances are of growing concern to Europe and others in Asia as well. If Japan cannot get these surpluses under control, it will weaken the country's welcome in many parts of the world. -- SII is aimed at addressing the structural features in the US and Japanese economies that block the free flow of goods, services, investments, and balance-of-payments adjustment. Last year we made good progress on reform of Japan's distribution system. This will make US products more widely available to Japanese consumers. In 1992, we are focusing on how the Japanese business environment affects the entry of newcomers. -- In the Uruguay Round, agricultural reform is key, which means tariffication for all commodities from all countries. For Japan, that means rice. I sought to encourage Japan to demonstrate leadership in increasing market access for goods and services as well. Finally, the President and Prime Minister Miyazawa in Tokyo in January pledged to work together to promote growth in the US and Japanese economies, which together account for 40% of world GNP. We look for policies from Japan that will stimulate economic growth through expansion of domestic demand, not through an ever-growing export sector. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

US Policy Toward Hong Kong

Solomon Source: Richard H. Solomon, Assistant Secretary for East Asian and Pacific Affairs Description: Statement before the Subcommittee on East Asian and Pacific Affairs of the Senate Foreign Relations Committee, Washington, DC Date: Apr, 2 19924/2/92 Category: Speeches, Testimony, Statements Region: East Asia Country: Hong Kong, China Subject: Trade/Economics, Democratization [TEXT] Thank you for the opportunity to appear before you today to discuss US policy toward Hong Kong. I have just returned from a visit to Hong Kong during which I had the opportunity to meet with Governor Wilson, members of the Legislative Council, and key business and community leaders. I can tell you that confidence in the territory is high and that people there are keenly interested in our deliberations here today. Let me add that as a former resident of the territory and as a [People's Republic of] China (PRC) hand for more than three decades, the future of Hong Kong is a subject of great personal interest. Hong Kong is perhaps the world's most dramatic example of free enterprise; its considerable success testifies to the results that free markets, human energy, and discipline can produce. Hong Kong is now an engine of the remarkable growth transforming the economy of southern China. I would also note that Hong Kong's fate post-1997 will be a measure of China's own reform efforts and of its relationship to the international economic and political system. I will also be pleased to offer some initial comments on Senator [Mitch] McConnell's bill, the US-Hong Kong Policy Act [S. 1731]. We have been examining the implications of 1997 for US-Hong Kong relations, and this bill has helped us sharpen our own thinking on this issue. The Administration supports the goals of this legislation and is pleased that Congress shares our interest in the future of Hong Kong. With modifications, this legislation can make a significant contribution to US efforts to prepare for Hong Kong's reversion to Chinese sovereignty on July 1, 1997. As I will note a bit later, the United States has a very substantial stake in the success of Hong Kong's transition, and US policy has an important role to play in assisting this process.
Renewed Confidence
Five years before its reversion to China, Hong Kong seems to be in a new cycle of growth. It appears to have largely recovered from the blow to its confidence which occurred after the Tiananmen tragedy in June 1989. Signs of prosperity are everywhere. Emigration declined slightly in 1991. Economic growth has risen to 4%. Unemployment remains very low at 2%. Hong Kong's real estate market is up nearly 50% in the past year. Agreement has been reached between the UK and China on a $16-billion project to develop new airport and container facilities in Hong Kong, an infrastructure enhancement plan which promises to boost economic growth for some time to come. Hong Kong has taken steps to formalize its commitment to respect the rights of its residents. Last year, Hong Kong passed a bill of rights and is reviewing and revising its laws to ensure that they fully conform to internationally recognized standards of human rights. For the first time, Hong Kong voters went to the polls last September to elect 18 of the territory's 60 Legislative Council members. These elections were an important step in advancing the democratic process. As a result, the United Democrats, led by Martin Lee, and parties allied with it--all of whom are committed to ensuring rigorous adherence to the letter and the spirit of the 1984 Sino-British Joint Declaration--now hold 17 of the 18 directly elected seats.
Sino-UK Joint Declaration
In 1984, China and the UK settled the future status of Hong Kong and detailed the basic policies of the PRC regarding Hong Kong in the Joint Declaration, a formal international agreement. China will resume the exercise of sovereignty over Hong Kong, which will be governed as a Special Administrative Region of China until, at least, the year 2047. The Chinese Government will be responsible for Hong Kong's foreign affairs and defense, just as the UK Government has those responsibilities now. Under the agreement, Hong Kong will enjoy a high degree of autonomy in all other matters. The Special Administrative Region will have its own government and legislature composed of local residents. The fundamental rights and freedoms of its residents are to be ensured by law, and independent courts will enforce these laws. China's socialist system will not be imposed in Hong Kong. Hong Kong will continue to participate after 1997 in international agreements and organizations which are open to non- states, such as the GATT [General Agreement on Tariffs and Trade] and APEC [Asia-Pacific Economic Cooperation]. The United States is not a party to the Joint Declaration, nor are we in any sense a guarantor. The United States has no special standing in regard to the agreement. Ordinarily in international law, states do not take formal positions on bilateral agreements to which they are not a party. However, the United States strongly supports the Sino-UK Joint Declaration and its objectives. We believe that the Joint Declaration provides the basis for maintaining Hong Kong's separate--and increasingly democratized-- political system and private enterprise economy for, at least, the next 50 years. Our interest over the next few years is that the transition from UK to Chinese sovereignty be smooth, that Hong Kong's current prosperity and favorable human rights situation continue, that democratization advance, and that the US relationship with Hong Kong be preserved and strengthened. Before 1997, it is primarily incumbent on the PRC and the UK Governments to take the necessary steps to preserve Hong Kong's essential character; after 1997, that task will be China's alone. Obviously, how China exercises its sovereignty over Hong Kong will affect American attitudes toward China.
Hong Kong-PRC Economic Relations
China has substantial interests and compelling incentives to respect its obligations and seek to preserve the conditions that have allowed Hong Kong to prosper. China's stake in Hong Kong's success is considerable. -- China has a clear and growing economic stake in Hong Kong's continued prosperity: the PRC is the largest foreign investor in Hong Kong, and Hong Kong is the largest source of foreign investment in China and an important economic and financial entrepot to the outside world. -- The economic integration of South China with Hong Kong has been key to the remarkable success of the Special Economic Zones adjacent to Hong Kong and the Pearl River delta, which has made South China an engine of Chinese economic growth. -- China views its success in Hong Kong as something that may have a bearing on its future relations with Taiwan. The symbiotic economic relationship between southern China and Hong Kong grew out of China's policies of modernization and opening to the outside in 1979. These trends accelerated dramatically after the 1984 Joint Declaration. Lured by investment opportunities, Hong Kong businesses spread into China, relocating factories processing goods for export. Today, more than 20,000 Hong Kong companies employ some 3 million PRC workers in these plants. Many more workers depend indirectly on these enterprises for their livelihood. Foreign investment, much of it from Hong Kong, has generated economic development and wealth in China. This has led Chinese companies to invest in Hong Kong, strengthening ties between the two economies. Chinese- owned firms participate in infrastructure projects; invest in the property market and stock exchange; and operate taxi fleets, hotels, and restaurants. China has very substantial interests in Hong Kong's banking sector. Chinese provincial and municipal traders and construction and manufacturing units have also set up companies in Hong Kong. These interests offer China compelling incentives not to tamper with Hong Kong's economic system. After 1997, the world will continue to engage in economic relations with China through Hong Kong. By that time, mainland firms will have had more than 18 years of on-the-job training in how to do business the Hong Kong way. They will use Hong Kong as a base to increase their trade, investment, and financial interchange with the rest of the world just as foreign firms now use Hong Kong as a bridge to China. Deng Xiaoping's [senior Chinese leader] January visit to Guangdong Province and particularly to Shenzhen, the Special Economic Zone on the Sino-Hong Kong Border, was symbolic of South China's success and the importance attached to it for China's future. Subsequent to Deng's visit, China's Politburo publicly issued an endorsement of Deng's policies of economic openness and reform which, it stated, should be followed for the next 100 years. These developments should re-enforce the positive trends which have created an integrated and rapidly growing market-oriented economy in southern China. Continued prosperity of this economy, which also involves investments from the United States, South Korea, and Taiwan, offers perhaps the best guarantee that Hong Kong will remain a financial, manufacturing, and communications center.
Hong Kong's Political Future
In its last years under UK rule, Hong Kong is developing its own unique political identity. Since the signing of the Joint Declaration, a process of democratization has begun in Hong Kong and brought the partial realization of China's stated intention that the Hong Kong people themselves will rule the territory after 1997. China's commitment in the Joint Declaration to a high degree of autonomy for Hong Kong offers hope for continuation of this process after 1997. As I noted in my departure statement during my visit to Hong Kong last month, a fully successful transition must safeguard human rights, even as a basis for continued economic prosperity. Therefore, we view with some concern China's criticism of Hong Kong's Bill of Rights. In our view, this legislation ensures that the Hong Kong Government, and the Hong Kong Special Administrative Region, which is to follow it, has in place a systematic process to protect human rights. In this regard, we would also note with concern China's media attacks on Hong Kong's democratically elected Legislative Council members and its appointment of 44 "Hong Kong advisers," both of which suggest unease with the democratic process that bears watching. I would also note that, since 1984, some of the activities of the New China News Agency, Beijing's de facto representative office in Hong Kong, have periodically fueled controversy that has affected confidence. We believe that it is in China's best interests to respect the expressed will of the people of Hong Kong and to refrain from any action which would call into question the future protection of internationally recognized human rights and fundamental freedoms in Hong Kong. In the next few years, the trends of economic symbiosis and growth in political awareness will emerge more clearly. What will be visible is a Hong Kong more highly integrated with China but no less integrated with the rest of the world, a Hong Kong which still functions as an open society with an independent legal system and where civil liberties continue to be respected. That is what the Joint Declaration intends, and that is what the people of Hong Kong expect.
US-Hong Kong Relations
The United States has significant interests in Hong Kong which warrant concern for the success of the 1997 transition to Chinese rule. Our close attention is in keeping with the admiration and respect which Hong Kong's residents have won over the years by creating one of the most vibrant and productive societies on earth. Our economic stake in Hong Kong's future is substantial. The United States has more than $7 billion in investments in Hong Kong. Over 900 US firms have offices, and over 21,000 Americans reside there. The United States is Hong Kong's largest market. Hong Kong is our 14th largest trading partner. In 1991, US exports to Hong Kong amounted to $8.1 billion, and US imports were worth $9.3 billion. Put another way, each Hong Kong resident bought a staggering $1,300 worth of US products last year. American business has a great deal to contribute to Hong Kong's future. US companies are competing for contracts in the project to develop the new airport and container facilities in Hong Kong. The United States also has a deep interest in protecting human rights in Hong Kong, as we do throughout the world. Because Hong Kong residents have long enjoyed respect for their basic human rights, this aspect of the transition merits the special attention of the United States and the world.
US Policy Toward Hong Kong
We are not here today to discuss MFN [most-favored-nation status] for China, but I would be remiss if I did not point out that this is the single most important US trade policy measure affecting Hong Kong. In view of the increasingly close economic integration of Hong Kong and southern China, the United States cannot impose prohibitive tariffs on Chinese goods and imagine that Hong Kong would escape the inevitable serious economic consequences. Tens of thousands of Hong Kong workers would lose their jobs, and business confidence would sustain tremendous damage. Such a step would be inconsistent with Congress' concern for Hong Kong. That concern has, before today, manifested itself in congressional passage, with Administration support, of provisions in the immigration act of 1990, which were specifically directed at Hong Kong. These measures ensured that Hong Kong would not be amalgamated into China's immigration quota in 1997. The provisions assisted in creating an immigration "safety net" for Hong Kong by allowing most immigrant visa recipients to delay decisions on leaving Hong Kong until as late as 2002. These provisions have started to make a small but noticeable contribution to giving talented Hong Kong residents the confidence to stay in the territory. Many of Hong Kong's talented residents have been educated in the United States, more than 55,000, in fact. Currently, 12,000 Hong Kong residents are enrolled in American universities. In recognition of these increasing cultural ties, the US Information Agency is helping establish a Center for Hong Kong-US Educational Exchanges at the Chinese University of Hong Kong. We are also working hard to establish a Fulbright program for Hong Kong residents to come to the United States for academic studies, as Americans have gone to Hong Kong for years. This would add yet another dimension to the flourishing existing network of public and private exchanges. The Administration has also reviewed US export control regulations with a view toward facilitating export of high-technology goods to Hong Kong. Our desire is to meet the needs of Hong Kong's increasingly advanced economy for high-technology goods and make to sure that American companies are competitive in the Hong Kong market. Once we have fulfilled procedural requirements, we hope to announce new regulations taking positive steps in this area. We have also begun the process of negotiating agreements with the Hong Kong Government, which we expect to extend beyond 1997. At present, from civil aviation to extradition, almost every US agreement which relates to Hong Kong is actually a US-UK agreement applied to Hong Kong. Under international legal principles, such agreements will lapse with the change of sovereignty in 1997, absent any specific arrangement otherwise with the new sovereign. By building a new framework of agreements in advance of reversion--a framework more specifically adapted to Hong Kong's circumstances --to replace existing US-UK agreements, the United States is lending practical support to the Joint Declaration's goal of preserving Hong Kong's position as a leading center of international commerce and finance.
McConnell Bill
It is in this context that we support the goal of Senator McConnell's bill of revising US law to ensure that US legal requirements enable the United States to continue to interact with Hong Kong after it becomes an special administrative region of the PRC. In the Sino-UK Joint Declaration, and [in] its own Basic Law for Hong Kong, China has enunciated a policy of "one country, two systems" that it will follow with respect to Hong Kong. However, if left unchanged, our own law might force us to operate on a "one country, one system" basis, to the disadvantage of Hong Kong after 1997. The extensive commercial, cultural, transportation, communication, and other relations that US citizens and companies now maintain with Hong Kong and its people are possible because, for most purposes, Hong Kong is treated as a part of the United Kingdom under US law. In a few important areas, notably the rights and obligations accorded under the GATT and related agreements, Hong Kong participates and receives favorable treatment (e.g., most-favored-nation- tariff rates) in its own right. Finally, for a few purposes--notably immigration and textile quotas--US law now treats Hong Kong as a separate territory. The result of this treatment is that Hong Kong receives most of the advantages under US law of being part of the United Kingdom, with a few advantageous modifications that give effect to the territory's economic autonomy and cultural distinctiveness from the United Kingdom. Most important, Hong Kong is subject to none of the US domestic legal constraints that limit our commercial, cultural, and other relations with the PRC. Statutes now in force set forth mandatory rules that apply to China by name, or to "states," "countries," or similar terms. These statutes, which include the Jackson-Vanik provisions and the current China sanctions legislation, could require the imposition on Hong Kong of restrictions and disabilities that would be inconsistent with our desire to respect Hong Kong's promised autonomy from the PRC. We, therefore, would welcome a bill that establishes clearly the authority of the US Government to treat Hong Kong, where appropriate, as a non- sovereign entity which is distinct from the PRC for purposes of US domestic law. Such a bill would be in full keeping with our intent as a major partner of Hong Kong to assist the United Kingdom and China in achieving the goals of the Joint Declaration. On the question of reports, we recognize Congress' legitimate interest in developments in Hong Kong as the transition progresses. Indeed, it is our intention to closely monitor all aspects of the transition process. However, we believe any report would best focus on US interests in Hong Kong and changes which result from the reversion to Chinese sovereignty that may affect our interests. Let me point out that there are many possible changes resulting from Hong Kong's reversion to the PRC of concern to US interests which go beyond the scope of the 1984 Joint Declaration. We assume that Congress would want us to report on such matters. Bill S. 1731 embodies many of the goals and concepts which we share with Congress and provides an excellent basis on which to develop a bill the Administration can support. We have carefully reviewed it and are prepared to comment on specific points which may require revision in order to accomplish the bill's intent. We hope to have the chance to work with you and your staff to address the Administration's particular concerns in S. 1731 and to create a bill that achieves the goals which Congress and the Administration share. (###)
Dispatch, Vol 3, No 14, April 6, 1992 Title:

Suriname Strengthens Civilian Authority

Tutwiler Source: State Department Spokesman Margaret Tutwiler Description: Statement released by the Office of the Assistant Secretary/Spokesman, Washington, DC Date: Apr, 1 19924/1/92 Category: Speeches, Testimony, Statements Region: South America Country: Suriname Subject: Democratization [TEXT] Our Embassy in Paramaribo reports that on March 26 the National Assembly of Suriname unanimously approved a series of constitutional changes that remove from the armed forces the political powers that were used to rationalize the coup d'etat that it staged in December 1990. We congratulate the Surinamese Government on this historic event which constitutes an important step toward consolidation of democratic, civilian rule. In this regard, we commend the statement made on the occasion by President Venetiaan, who said: "We do not want a military organization which is going to play a role in politics, in industry, or in labor unions. As has been demonstrated repeatedly in the past, there are always those who cannot withstand the temptation to use force of arms in ways not intended by the people of Suriname." The United States strongly supports President Venetiaan's Government and its continued effort to consolidate and strengthen democratic institutions and promote economic reform.(###)