US Department of State Dispatch,
Vol 3, No 21, May 25, 1992
Title: US Policy Toward Iraq and the Role of the CCC
Program, 1989-90
Eagleburger
Source: Lawrence S. Eagleburger, Deputy Secretary of
State
Description: Statement before the House Committee on Banking,
Finance, and Urban Affairs, Washington, DC
Date: May, 21 19925/21/92
Category: Speeches, Testimony, Statements
Region: MidEast/North Africa
Country: Iraq
Subject: Trade/Economics, Development/Relief Aid
[TEXT]
Mr. Chairman and members of the committee, I plan this morning to do my
best to set the record straight on the US Government's policy toward Iraq
during the latter half of the 1980s and in 1990 and to place in context the
role of the Commodity Credit Corporation (CCC) program. I intend to make
clear that the Administration followed a prudent policy toward Iraq at the
time-including the management of the CCC program-even though we, and
other governments, were ultimately unable to restrain Saddam Hussein.
In explaining US policy, I also plan to address many of the factual and legal
misstatements currently being put forth by members of this committee.
Quite frankly, the selective disclosure, out of context, of classified
documents has led-knowingly or otherwise-to distortions of the record, half
truths, and outright falsehoods, all combined into spurious conspiracy
theories and charges of a "coverup." For those interested in the truth, let
me make the following 10 points:
First, neither the Agriculture Department's investigation of the Commodity
Credit Corporation program, nor the US Attorney's investigation of BNL
[Banca Nazionale del Lavoro]-Atlanta has, to date, established diversion to
third countries of commodities sold to Iraq or Iraqi misuse of the CCC
program to purchase military weapons.
Second, we have found no indication that the State Department had, in
November 1989, or has, today, specific evidence that such diversions
occurred.
Third, neither the criminal indictment handed down in Atlanta in February
1991 nor the May 1992 plea agreement of a US exporter to Iraq contain
evidence of or allegations that CCC-guaranteed commodities for Iraq were
diverted to other countries or used for military purposes.
Fourth, approximately 90% of the $5 billion in credit guarantees extended to
Iraq between 1983 and 1990 for the purchase of US agricultural exports was
provided prior to FY 1990 and received broad support among Members of
Congress and by American farmers and commodity groups.
Fifth, CCC extended only one tranche of $500 million in credit guarantees to
Iraq in FY 1990. Of this $500 million, over 20% of it did not become
effective because of the Gulf war. Moreover, the remaining $392 million
represents an official liability of the Government of Iraq. UN Security
Council Resolution 687 provides that Iraq's repudiation of its foreign debts
is null and void and demands that Iraq adhere to all of its obligations. The
Administration intends to assert claims against Iraq for any amounts that
the US Government is required to pay on CCC guarantees.
Sixth, shortly after the US Attorney's office in Atlanta initiated its
investigation of Banca Nazionale del Lavoro, Agriculture reached an
agreement with BNL that BNL would not participate in the CCC program for
FY 1990. Accordingly, BNL was not assigned any of the $392 million in CCC
credit guarantees extended for agricultural exports to Iraq in FY 1990 and
will not receive 1 cent in US taxpayer money for the payment of claims
against those guarantees.
Seventh, during the period that the CCC extended the $392 million in credit
guarantees, Iraq actually made hard currency payments of approximately
$847 million. Thus, despite concerns about Iraq's creditworthiness, there
was a net reduction in CCC's
exposure with regard to Iraq of about $455 million.
Eighth, the October 13, 1989, memorandum, to which members of this
committee have repeatedly referred in making certain charges, merely
speculates about allegations on Iraq's use of CCC guarantees. Most of the
allegations in that memorandum have not, to date, been established.
Ninth, the suggestion that the Administration has sought to "cover up" its
policy toward Iraq is simply not true. Few US Government policies have
been so carefully and so extensively examined by the Congress and by the
media as this one. To this committee alone, the State Department has
provided over 4,000 pages of documents at a cost of over $100,000 in
employee hours. Other agencies have provided large quantities of documents
as well.
Finally, the State Department has been prepared to turn over additional
documents. However, in light of the knowing and unauthorized disclosure of
classified materials by members of this committee, the Administration
determined last week, in accordance with its obligations under Executive
Order 12356, not to permit further release of documents until it receives
appropriate assurances from this committee regarding the storage and
protection of such materials. Failing such assurances from the chairman,
the Administration is prepared to make available appropriate documents to
the Speaker of the House or to members or committees that he might
designate.
I will now turn to a discussion of US policy toward Iraq, the role of the CCC
program, and the specific questions posed by this committee.
US Policy Toward Iraq
During Iraq's 8-year conflict with Iran, there was broad bipartisan
consensus in this country that an Iraqi defeat at the hands of an extremist
Iran would be disastrous for our interests in the region. Many of our allies,
as well as the Gulf states themselves, shared this view. Although US policy
on the war was neutral, there was a subtle leaning toward Iraq in public
statements as well as in selected other actions but without any provision of
weapons or weapons systems to the Iraqi Government.
With the end of the Iran-Iraq war in the summer of 1988 and by the time
President Bush took office, Iraq had emerged as the preeminent military
power in the Persian Gulf. The Administration promptly undertook an
extensive review of US policy in that region, including US policy toward
Iraq. The key issue was whether US interests in the Persian Gulf remained
vital in view of the changed strategic environment there and, if so, whether
the existing investment of American power and diplomatic influence in the
region reflected that importance. We concluded that access to Persian Gulf
oil and the security of key friendly states in the area were, in fact, vital to
US national security and that we were committed to defending those
interests, hopefully with the support and participation of our friends in the
region, Western allies, and Japan.
With regard to Iraq, the Administration recognized the difficulty of
developing a clearcut policy. On the one hand, it appeared that Iraq had made
a conscious decision to moderate its behavior since we had normalized
relations in 1984. Iraq had, for example, reduced its support for terrorist
groups and had, in fact, expelled the Abu Nidal Organization from its soil.
Moreover, Iraq possessed significant oil reserves, was a major oil producer,
and was increasing its supply of oil to this country. Post-war Iraq also
appeared seriously interested in economic reconstruction and in expanding
commercial ties with the West.
On the other hand, we fully recognized that there were still important
issues that stood in the way of close relations. These included Iraq's human
rights abuses, its chemical weapons program, our suspicions that Iraq might
be developing biological and nuclear weapons, Iraq's efforts to build long-
range missiles, and its involvement in Lebanon. Still, Iraqi member- ship in
the Arab Cooperation Council, alongside close American friends such as
Egypt and Jordan, appeared to offer the prospect of moderating Iraqi
behavior. We also hoped that Iraq could play a helpful role-or at least not
play an unhelpful role-in the Middle East peace process.
Recognizing these competing concerns, the Administration considered three
major options in dealing with a post-war Iraq.
First, we could expand our relations and try to embrace the Iraqis;
Second, we could maintain our slow and steady course, seeking to probe,
test, and encourage the Iraqis while being wary of their intentions; or
Third, we could seek to isolate the Iraqis by punishing them for behavior we
did not condone.
Given the unpredictability of Saddam's behavior and the uncertainty about
his regional aspirations, we rejected the first option of expanding relations
rapidly. We also recognized that we could not effectively isolate Iraq by
acting unilaterally and that there would be no support from either our
European allies or our friends in the Arab world for confrontation with Iraq.
The third option, therefore, offered us little leverage over Iraqi behavior
while potentially undercutting our broader interests in the Persian Gulf. We
thus determined that these broader interests-including continued access to
the region's oil, stability of friendly area states, and deterrence of Soviet
intervention and influence-required a policy that sought, if possible, to
engage Iraq and to offer the Iraqis a mix of incentives and disincentives but
without any illusions.
In adopting this policy, we decided to make clear to the Iraqi leadership that
any use of chemical or biological weapons or violations of IAEA
[International Atomic Energy Agency] nuclear safeguards would lead to
economic and political sanctions for which we would seek the broadest
possible support from our allies and friends. We also agreed that Iraq's
human rights record and its meddling in internal affairs of others would
continue to weigh heavily on our policy. At the same time, we would
encourage Iraq to play a constructive role in the peace process, and we
agreed to support the efforts of American companies to participate in Iraq's
economic reconstruction and in the development of its energy sector.
In short, the Administration concluded that the evolution of normal
relations with Iraq-something that would require more constructive Iraqi
behavior in a number of areas-was in the US national interest. Toward this
end, we determined that it was worth trying to build on our successful
diplomatic cooperation with Iraq during its war with Iran and attempting to
develop a modest economic relationship. However, our policy also included
maintaining a capable military presence nearby, providing arms and other
support to friendly states in the region, and expanding our dialogue with the
Soviet Union.
For a period of time, we saw some movement by Iraq in the right direction
on several matters. For example, Kurds were allowed to farm again, and
they received compensation for seized property; Iraq agreed to pay personal
injury claims relating to the crew of the USS Stark; FAA [Federal Aviation
Administration] advice on airport security was welcomed by Baghdad
airport; a first-ever DEA [Drug Enforcement Administration] visit to Iraq led
to agreement to cooperate against narcotics trafficking; and we had opened
a new cultural center in Baghdad that was successfully reaching out to
ordinary Iraqis. Moreover, at a time when Iraq was forcing other Western
creditors to accept bilateral debt rescheduling, it continued to repay US-
guaranteed loans.
Soon, however, a number of Iraqi statements and actions demonstrated that
Iraq was not prepared to adopt a more responsible approach to relations
with its neighbors or ourselves. As a result, we began to adjust even our
modest efforts downward. We heavily criticized Iraq's human rights record
before the UN Human Rights Commission and in the State Department's
human rights country report. We also expelled an Iraqi UN diplomat for
involvement in a murder plot. In March 1990, US Customs, working with the
British, successfully interdicted an attempt to smuggle capacitors with
possible missile and nuclear applications into Iraq. We also consulted with
the British about the confiscation of materials for Iraq's development of the
so-called "super gun." And we continued against Iraq a strict policy of
denial for sales of weapons and weapons systems and intensified our
efforts with other countries to tighten existing export controls, focusing on
proliferation concerns.
What little remained of the US-Iraqi relationship came to an abrupt end
with Iraq's brutal invasion and occupation of Kuwait in August 1990. As it
turned out, the fact that the United States had followed a measured policy
toward Iraq rather than having sought unilaterally to isolate the Iraqis
proved to be a critical factor in our ability to assemble a coalition-which
included Arab countries-to expel Saddam from Kuwait and, ultimately, to
devastate his military capabilities.
The CCC Program for Iraq
The Commodity Credit Corporation (CCC) of the Department of Agriculture
had first made available credit guarantees in connection with export sales
to Iraq in 1983, shortly before we resumed diplomatic relations with the
Iraqis in 1984. As Under Secretary [of Agriculture] Crowder will explain in
greater detail, the CCC program is designed to assist US agricultural
exporters and producers by developing foreign markets for US commodities.
It is, in the first instance, an export promotion and market development
program. The CCC guarantee covers the risk of non-payment by a foreign
bank under a letter of credit opened to finance the purchase of US
agricultural exports. Iraq was one of more than 40 countries participating
in this program, which served to provide benefits for over 80 different
types of US agricultural commodities.
In many respects, our trade balance with Iraq during the latter half of the
1980s was governed by the level of US-guaranteed financing available to
Iraq. As US imports of Iraqi oil rapidly expanded toward an estimated $2.5
billion by 1990, the CCC program helped lessen a growing trade deficit with
Iraq. Throughout the period in question and despite its economic
difficulties, Iraq maintained a record of consistently and fully meeting
financial obligations incurred under the CCC program.
Iraq requested $1 billion in CCC credit guarantees for FY 1990. As the
Administration began to consider this request, it learned that the US
Attorney in Atlanta was investigating the Atlanta branch of Banca Nazionale
del Lavoro for allegedly conducting a clandestine "greybook" loan operation
to Iraq. While much of the money involved in BNL's loan operation was not
directly related to the CCC program, approximately $720 million of BNL-
Atlanta's loan portfolio consisted of assigned obligations that were backed
by CCC export credit guarantees. Accordingly, as Under Secretary Crowder
will explain, investigators with Agriculture's Office of the Inspector
General began assisting the US Attorney's investigation in early September
1989.
The Administration took the BNL allegations seriously, even though at the
time no wrongdoing on the part of Iraq had been established. Because of the
allegations, the Administration initially postponed any decision on Iraq's
request for CCC guarantees for FY 1990. Moreover, in Secretary Baker's
October 6 meeting with then Iraqi Foreign Minister Tariq Aziz, the Secretary
raised the BNL issue, emphasizing the importance of Iraqi cooperation with
this investigation, and seeking assurances from the Government of Iraq that
it would assist in the investigation. Aziz gave these assurances, and Iraq
did cooperate when a team from the Department of Agriculture traveled to
Baghdad several months later.
In November 1989, the National Advisory Council on International Monetary
and Financial Policies (NAC) met at a senior level to consider Iraq's CCC
request. As Deputy Secretary [of the Treasury] Robson will describe further,
there was a full exchange on all relevant points regarding the CCC program
for Iraq. The Deputy Secretary of Agriculture specifically reported that the
BNL investigation had only resulted, to date, in allegations of violations. He
further reported that Agriculture's Office of the Inspector General had
stated in writing that there was no evidentiary basis for withholding
approval of new CCC guarantees for Iraq.
In addition to discussion of the BNL investigation, representatives at the
NAC meeting also discussed Iraq's creditworthiness, the importance of Iraq
as an agricultural export market, and the Administration's efforts to
improve the bilateral relationship. I might note as well that at this time
Members of Congress, along with various agricultural trade interests, were
urging the Administration to provide the full amount of credit guarantees
requested by Iraq.
After a careful balancing of the risks and benefits, the NAC supported the
Agriculture Department's recommendation to establish a tiered approach to
the CCC program rather than to grant Iraq's request outright. Under this
approach, Agriculture decided to extend a first tranche of $500 million in
credit guarantees, with additional guarantees for the year to depend on the
results of Agriculture's own administrative review as well as the
investigations by its Office of the Inspector General and the US Attorney in
Atlanta. The Administration indicated to the Iraqis that the CCC program
would be terminated if abuses were discovered.
The Agriculture Department continued to monitor the BNL investigation and
consistently received word from its Office of the Inspector General that
there was no reason to recommend that the CCC program not go forward. At
the same time, however, Agriculture's own administrative review of Iraq's
CCC program indicated a pattern of unexpectedly high prices for certain
commodities. Accordingly, by February 1990, without investigations yet
completed, the Administration deferred a decision on the second tranche of
$500 million of credit guarantees for Iraq.
During this time, the State Department cooperated with the Justice
Department in the Atlanta investigation. This is reflected in
correspondence between the two departments in March 1990, in which the
State Department offered to work with Justice attorneys to develop a plan
to interview Iraqi officials in connection with the BNL investigation.
The State Department also facilitated Agriculture's administrative review
of the CCC program for Iraq. In mid-April 1990, a delegation from
Agriculture, with a representative from the State Department's Office of
the Legal Adviser, traveled to Baghdad for approximately 4 days to meet
with the Iraqis and to review their records regarding CCC-guaranteed
purchases. The officials were granted access to Iraqi records relating to
these purchases. Agriculture issued a report in May on the results of this
visit. The report did, in fact, find
violations by Iraq of CCC program requirements but did not find diversions
of commodities purchased under the program.
After the Agriculture Department had released its report, the
Administration chose not to proceed with the second tranche of CCC credit
guarantees for Iraq. Indeed, the Administration never granted any further
credit guarantees to Iraq beyond those announced in November 1989.
When the United States imposed sanctions against Iraq in August 1990,
there were approximately $1.9 billion in outstanding credit guarantees. Of
course, the major portion of those obligations had accumulated during the
1980s. In that regard, it is worth noting that all sanctions legislation
against Iraq that the Congress had proposed in the first half of 1990, except
for the Inouye-Kasten bill, exempted the CCC program from whatever
sanctions might be imposed.
It should also be noted that, of the $500 million in CCC credit guarantees
authorized for FY 1990, only about $392 million actually became effective
prior to the imposition of sanctions. Moreover, during the same period, Iraq
actually made hard currency payments under the CCC program of
approximately $847 million. Thus, despite concerns about Iraq's
creditworthiness, there was a net reduction in CCC's exposure of about $455
million. In light of the affirmation in UN Security Council Resolution 687 of
Iraq's continued liability for outstanding debts, as well as our own freezing
of Iraqi assets, the Administration intends to assert claims against Iraq for
debts owed to the United States.
The Committee's Questions
Within this context, let me turn to the committee's questions on the FY
1990 CCC program. As noted above, the State Department, acting in
accordance with Administration policy, viewed the CCC program as one of
the positive elements in our effort to develop a constructive bilateral
relationship with Iraq. The State Department believed, in November 1989,
that continuation of CCC-supported trade offered the possibility of
expanding and improving that bilateral relationship. This would, hopefully,
have had the additional benefit of moderating Iraq's conduct in areas of
concern to us, such as human rights. By April 1990, however, the State
Department no longer supported additional CCC credit guarantees for Iraq.
On the issue of creditworthiness, the State Department viewed Iraq's record
of repayment of CCC obligations as excellent, even though there were minor
delays from time to time. Indeed, during the period in question, Iraq
actually made payments to CCC of more than twice the amount it received in
new guarantees.
As for the BNL scandal, that issue, of course, had considerable influence on
the course of events. It contributed to the initial delay in considering Iraq's
request for $1 billion in CCC credit guarantees. It led Secretary Baker to
request of [Iraqi] Foreign Minister Aziz that Iraq cooperate in the
investigation. And it contributed to the decision to apply a tiered approach
to Iraq's CCC request, granting only a first tranche of $500 million while
the investigation proceeded.
Finally, the Administration remained highly critical of Iraq's human rights
record, even though consideration of that record did not specifically affect
the State Department's views on the CCC program.
That is the end of my remarks in response to the questions that you posed.
However, I feel compelled in conclusion to comment on the nature of this
inquiry. As I prepared for this hearing, I could not but reflect on how the
conduct of our government has changed since I began my career with the
State Department more than 30 years ago. We now seem to work in an
environment of distrust rather than trust, of confrontation rather than
cooperation, of accusation rather than fair inquiry. What has been done by
the selective disclosure-out of context-of classified documents, by the
distortions of truth, and by the raising of innuendoes where no facts exist
to support them is to make exceedingly difficult our ability to engage in the
deliberative process necessary to formulate policy. No longer can
responsible officials voice differences of opinion, provide candid advice to
their superiors, or engage in open discussion and debate on an issue without
the constant worry that at some point in the future someone will seek to
condemn and vilify them for having done no more than perform their duties
honestly and to the best of their abilities. I submit that such a situation is
in no one's interest and is a disservice to the good governance of this nation.
(###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: Beginning a New Relationship Between The United
States and Kazakhstan
Bush
Nazarbayev
Source: President Bush, Kazakhstan President
Nazarbayev
Description: Departure remarks, White House, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Development/Relief Aid,
Democratization, Arms Control
[TEXT]
President Bush:
Mr. President, distinguished members of the
Kazakhstan delegation, it's been a great pleasure to welcome you to the
White House on this historic occasion, the first-ever visit of the head of
state of an independent Kazakhstan. I have never been to your country, but
Secretary Baker has, and he has spoken to me about the tremendous
potential of a nation rich in resources, a nation stretching from the steppes
of Russia to the Tien Shan in the south, four times the size of Texas.
Our meeting today marks the beginning of a new relationship, a relationship
made possible by the end of the long era of East-West conflict that we
called the Cold War. With the passing of that bitter conflict, we enter into
a new era of hope for a more democratic and free order in Eastern Europe
and in Central Asia.
Under your leadership, Kazakhstan is pursuing a course true to these aims.
Our meetings today confirmed the many interests that we share. The United
States supports your independence. We believe its security, Kazakhstan's
security, is important for stability in Europe and in Asia. We welcome
President Nazarbayev's commitment that Kazakhstan will join the Non-
Proliferation Treaty as a non-nuclear weapons state and that it will adhere
to the START Treaty [Strategic Arms Reduction Treaty]. We'll continue to
work toward a signing of the new START protocol by Kazakhstan, Ukraine,
Byelarus, Russia, and the United States in the very near future.
I want to take this occasion to underline our pledge to maintain regular,
high-level communication with the Kazakh Government on political and
security issues. That means exploring the possibility of cooperative
programs in nuclear non-proliferation and beginning contacts between the
armed forces of our two nations.
Beyond our common security interest, the United States is committed to
helping Kazakhstan make the transition from the old socialist command
economy to the free market. We continue to aim at a tax treaty between
our nations. Today, we took very positive steps toward increased trade with
the signing of agreements on trade, bilateral investment, and the Overseas
Private Investment Corporation.
The surest way, though, to increase trade remains for American firms to
have the opportunity to compete fairly in Kazakhstan. I am pleased that the
Kazakh Government has, this week, signed a landmark agreement with
Chevron Corporation to open the Tengiz oil fields.
In order to expand trade, I've asked for our able Secretary of Commerce,
Barbara Franklin, to form a business development committee to work with
your government to increase contacts between private Kazakh and American
firms. We will continue to provide humanitarian assistance, including
much-needed food and medical aid. The United States also stands ready
with technical assistance on a range of issues, from food distribution to
speeding the conversion of defense sector industry to civilian economy.
But government assistance is just one part of an outpouring of American
support. As President, I am pleased to see the active efforts on behalf of
private citizens to provide aid to your new nation-[from] volunteer
organizations like Project Hope and Mercy Corps to the city of Waukesha,
Wisconsin, which has sent 40,000 lbs. of food, medical supplies, and
clothing to its Kazakh sister city.
Like all of the former republics of the Soviet empire, Kazakhstan faces
challenges that go beyond the need to build a strong competitive economy.
After more than 70 years of communist rule, Kazakhstan and its
Commonwealth neighbors are engaged in the difficult task of nation-
building. At issue are the first questions of government and society,
respect for the rule of law, the role of political parties [and] of free press
and independent media, the freedom of association, and the freedom of the
individual.
On behalf of all Americans, I pledge the support of the United States of
America as Kazakhstan seeks a future that is peaceful, prosperous, and free.
Once again, it has been a special privilege to welcome you to Washington, to
welcome you to the White House. May God bless your great country.
President Nazarbayev:
Esteemed Mr. President, ladies and
gentlemen, as you already know, the state delegation of the Republic of
Kazakhstan, for the first time in its history, is here at an official invitation
of President Bush. We have just signed the keystone documents that will
regulate the economic relations between the two countries. This is the
trade agreement, the investment and insurance agreement, and the
agreements on the protection of investments.
Very briefly, the essence revolves around trade agreements, because this is
the keystone agreement that will entitle Kazakhstan and the United States
to enter a new level of relations. This agreement will serve as a basis for
Kazakhstan to be getting US financial assistance and encouraging various
financial and export cooperations of the international bank.
The documents, in their turn, obligate us to working toward the status of a
most favored nation in the relations between the two countries and also in
adjusting the existing legislation and some other legal acts in Kazakhstan
so that they meet requirements set by the international community and
GATT [General Agreement on Tariffs and Trade]. This coincides with the
desire of Kazakhstan to strictly observe international norms and to follow
the course approved by the international community.
We people of Kazakhstan also see something different in these documents.
The principles provided for in these documents will serve as a guide for
Kazakhstan on its way toward a market economy. We realize that we've just
made the first step toward this objective. I'd like to indicate that we came
over to the United States to learn, and I'd like to assure you that we'll try to
be good students and learn as much as we can.
We're deeply convinced that developing these relations with foreign nations,
and particularly with the United States, we'll manage to successfully follow
this path. The preparedness for this is in Kazakhstan's commitment to
follow all international acts-and particularly the acts of 1968-and the
obligations that Kazakhstan assumes not to transfer its nuclear weapons
and not to sell them.
Kazakhstan also obligates itself to honor the START Treaty as one of the
participating parties. The efforts that Kazakhstan is making in the
formation of it and mutual assistance with the newly independent states
may also be referred here and also Kazakhstan's efforts to maintain peace
within the entire Commonwealth and within Kazakhstan itself.
Our goal is the building of a democratic society. So I would like to use this
opportunity to express my thanks to Mr. President [Bush] and the entire
American people for their desire to support Kazakhstan in the process of
democratic reforms and its economic cooperation and also for the
hospitality that we were shown on the American soil.
In your speech, I have received all the answers to the questions that I
touched on in the course of our talks today. We are grateful for the trust
that you showed in us, and Kazakhstan will do everything possible to justify
that. We are very sincere in our move when we say that we want to have the
closest and the warmest economic and political relationship with the United
States.
In the course of our negotiations, I extended my invitation for Mr. Bush and
Mrs. Bush to visit Kazakhstan, and this invitation has been accepted. So I
have every reason to believe that our relationship will be a productive and a
successful one. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan Relations: Joint Declaration
Bush
Nazarbayev
Source: President Bush,Kazakhstan President Nursultan
Nazarbayev
Description: Released by the White House, Office of the Press
Secretary, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Democratization,
Nuclear Nonproliferation, Arms Control, International Law
[TEXT]
Joint declaration between the United States and Kazakhstan by President
Bush and Kazakhstan President Nursultan Nazarbayev, released by the White
House, Office of the Press Secretary, Washington, DC, May 19, 1992.
At the conclusion of this important meeting, we-the President of the United
States and the President of the Republic of Kazakhstan-have resolved to
develop friendly, cooperative relations between our countries and peoples
and to work together to strengthen international peace and stability.
Kazakhstan and the United States favor an early ratification and
implementation of the START Treaty [Strategic Arms Reduction] as an
important guarantor of maintaining global stability. Reaffirming its
commitment to peace and security, Kazakhstan shall, at the earliest
possible time, accede to the treaty on the Non-Proliferation of Nuclear
Weapons as a non-nuclear state while preserving the right of control over
the non-use and reductions of the nuclear weapons temporarily deployed on
its territory. Kazakhstan guarantees to carry out the elimination of all
types of nuclear weapons, including strategic offensive arms, within the 7-
year period provided for in the START Treaty. The United States welcomes
these steps and shall take necessary measures to assist Kazakhstan in this
matter. Kazakhstan and the United States agree on the need to establish
effective national control over non-proliferation of the weapons of mass
destruction and associated technologies to third countries.
The United States and Kazakhstan will work to strengthen international
security on the basis of lower and more stable levels of armaments among
all nations. We commit to uphold shared international principles, especially
democracy, respect for borders and territorial integrity, and peaceful
resolution of disputes. Together, we will promote respect for international
law and the principles enshrined in the Helsinki Final Act, the Charter of
Paris, other important documents of the Conference on Security and
Cooperation in Europe, and the UN Charter. The United States welcomes
Kazakhstan's efforts to establish equal and mutually beneficial relations
with Russia and the states of Central Asia as well as with other states in
accordance with these principles. Toward this end, the United States
welcomes Kazakhstan's membership in multilateral institutions like the
United Nations, the Conference on Security and Cooperation in Europe, the
North Atlantic Cooperation Council, the International Monetary Fund, and the
World Bank and its commitment to values and accepted norms of behavior in
the world. We agree that our countries should maintain a regular bilateral
dialogue on questions of peace and stability that are of interest to both
states.
We believe that the basis for the development of a lasting partnership
between our states must be a shared commitment to promote the values of
democracy, free markets, and world peace. In this regard, the United States
supports Kazakhstan's commitment to pursue far-reaching political and
economic reform. The United States welcomes Kazakhstan's desire to build
its independence in full accordance with the principles of a free and
democratic society, including free elections, pluralism and tolerance,
freedom of emigration, the rule of law, and respect for human rights,
including equal rights for all individuals belonging to ethnic or religious
minorities. The US Government, in cooperation with the American private
sector, will make available programs designed to help Kazakhstan establish
the institutions, ideas, and practices that form the foundation of democracy.
Kazakhstan will seek to accelerate its efforts to move toward a market
economy through a plan for macroeconomic stabilization and structural
microeconomic reform that will promote economic recovery, market
development, and growth. This plan will be developed in cooperation with
the International Monetary Fund and other international financial
institutions. The United States will support such a plan and will encourage
others to do so as well. In particular, the United States will provide
Kazakhstan with access to technical assistance programs to assist its
efforts to develop a market economy.
Kazakhstan and the United States will work actively to promote free trade,
investment, and economic cooperation between our countries. The United
States and Kazakhstan have signed three economic agreements that
constitute the basic framework of our economic relationship. They will
promote economic ties between the two states and will further economic
development. We have concluded a trade agreement that will confer most-
favored-nation tariff treatment on Kazakhstan, an OPIC [Overseas Private
Investment Corporation] agreement to make available investment insurance
for American firms operating in Kazakhstan, and a bilateral investment
treaty. We have also agreed to expedite negotiations on a tax treaty and to
develop our cooperation in the area of scientific research and environmental
protection. A critical feature of our cooperation will be an effort by
Kazakhstan to lower barriers to trade and investment to allow greater
access for American and foreign firms, especially in sectors such as oil and
natural gas, mining, agriculture, manufacturing, and food processing.
By agreeing to work jointly to advance these common interests, we have
taken an important step in the development of a strong, lasting friendship
between Kazakhstan and the United States. Through expanded cooperation
between our governments and expanded contacts between our peoples, we
seek to build an enduring relationship that will enhance the freedom and
well-being of our nations and the world.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan Relations: Convention for the
Avoidance Of Double Taxation
Bush
Nazarbayev
Source: President Bush,Kazakhstan President Nursultan
Nazarbayev
Description: Joint statement released by the Office of the Assistant
Secretary/Spokesman, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: International Law
[TEXT]
The United States of America and the Republic of Kazakhstan intend to
conclude a new convention for the avoidance of double taxation of income to
replace the Convention on Matters of Taxation, signed at Washington in 1973
by the United States of America and the Union of Soviet Socialist Republics.
The new convention will establish the tax framework for what both sides
hope will further the expansion of economic, technical, and cultural ties
between the two countries. It will provide certainty to potential investors
about their tax liability on income earned from sources in the other country
and will reduce and, in some cases, eliminate the tax liability at source, so
as to encourage greater investment flows. In addition, it will provide
assurances of non-discriminatory tax treatment, of relief from double
taxation, and for cooperation between the tax officials of the two countries
to resolve potential problems of double taxation. The convention will also
provide for the exchange of tax information between the tax authorities to
help improve compliance with their income tax laws and the provisions of
the treaty. In short, the new convention will greatly formalize the tax
relations between the two countries.
A great deal of progress has already been made toward agreement on the
new income tax convention during meetings held recently in Alma-Ata. The
two delegations are continuing to communicate through correspondence and
will meet again, in Washington, during the week of June 8 for further talks.
It is anticipated that agreement will be reached at that time on the
outstanding issues. It will also be necessary to make appropriate
adjustments in the text to reflect new Kazakh tax legislation expected to be
introduced this summer. It is our common objective to have this new
convention ready for signature in early October of this year.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan Relations: Convention for the
Avoidance Of Double Taxation
Bush
Nazarbayev
Source: President Bush,Kazakhstan President Nursultan
Nazarbayev
Description: Joint statement released by the Office of the Assistant
Secretary/Spokesman, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Democratization,
Nuclear Nonproliferation, Arms Control, International Law
[TEXT]
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: START Ratification
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Nuclear Nonproliferation, Arms Control,
International Law
[TEXT]
On START [the Strategic Arms Reduction Treaty] ratification, we are
satisfied that there are not any remaining differences between us and
Kazakhstan. We are pleased that we have been able to work out these
understandings. As you know, there were departure statements at the White
House yesterday and fact sheets at the White House. The understandings
that we have with Kazakhstan should facilitate agreement with the others.
The Secretary of State believes that we are making good progress.
Hopefully, we will be in a position to put this to bed in Lisbon this weekend.
There are still some important details that have to be wrapped up. Experts
have been working actively on those details since they arrived here this
morning.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: Memorandum of Understanding On
Unrestricted Diplomatic Travel
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 20 19925/20/92
Category: Fact Sheets
Region: Eurasia
Country: Kazakhstan
Subject: State Department, International Law
[TEXT]
Before the dissolution of the USSR, travel by American and Soviet
diplomatic and consular officials was severely restricted. Many areas in the
USSR, including areas in Kazakhstan, were closed to travel by foreign
diplomats. As a reciprocal measure, the United States closed areas of the
United States to travel by Soviet diplomats. Even when diplomats were
traveling to "open" areas, they were required to request permission in
advance.
With the signing of this memorandum of understanding, the United States
and Kazakhstan signify their intention to do away with these travel
restrictions. Diplomats will no longer have to file a request for permission
to travel, and the system of closed areas will be eliminated. Military bases,
sensitive installations, or other facilities normally closed to the public in
all countries, will not, of course, be open to travel by diplomats.
Unimpeded travel is essential if diplomats are to carry out their duties
effectively. The removal of these travel restrictions is an indication of the
desire of both the United States and Kazakhstan to establish a relationship
based on mutual trust and a sense of partnership.
Agreement Regarding Cooperation To Facilitate The Provision of Assistance
Fact sheet released by the Office of the Assistant Secretary/Spokesman,
Washington, DC, May 20, 1992.
This agreement provides certain important legal protections in connection
with the assistance program contemplated by the United States
for Kazakhstan.
In particular, the agreement provides for a series of customary
arrangements, including:
-- Tax and customs exemptions for US personnel and property involved in
the assistance program;
-- Immunity for personnel involved in providing assistance from the
criminal jurisdiction of local courts and from the civil jurisdiction of those
courts for official acts; and
-- Standard procedures needed for inspections and audits under the
assistance program as well as commitments by Kazakhstan to utilize items
for the purposes for which furnished.
It is contemplated that more specific agreements may be negotiated in
connection with the provision of assistance under particular projects, but
this agreement provides the essential foundation and framework for
cooperation between the two countries in this area.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: Agreement on Trade
Relations
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Fact Sheets
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, International Law
[TEXT]
The trade agreement signed by the United States and the Republic of
Kazakhstan provides for reciprocal most-favored-nation (MFN) tariff
treatment to the products of each country. A trade agreement was
originally concluded with the Soviet Union in June 1990 and approved by the
Congress in November 1991. The United States and Kazakhstan recently
reached agreement on technical adjustments to that agreement to reflect
the establishment of an independent Kazakhstan. US congressional
reapproval is not required.
The agreement will permit Kazakhs to export goods to the United States
while receiving non-discriminatory treatment of their goods. The United
States expects that this agreement will create commercial opportunities
for emerging Kazakh enterprises and promote the development of a market-
based economy in Kazakhstan and, at the same time, will lay the groundwork
for enhanced opportunities for US business.
In addition to providing MFN for both parties, the agreement:
-- Provides improved market access and non-discriminatory treatment for
US goods and services in Kazakhstan and also calls for step-by-step
provision of national treatment for US products and services;
-- Facilitates business by allowing free operation of commercial
representations in each country and by permitting companies to engage and
serve as agents and consultants and to conduct market studies; and
-- Offers strong intellectual property rights protection by reaffirming
commitments to the Paris Convention and the Universal Copyright
Convention, obligating adherence to the Berne Convention for the Protection
of Literary and Artistic Works, providing copyright protection for computer
programs and data bases and protection for sound recordings, giving product
and process patent protection for virtually all areas of technology, and
providing comprehensive coverage of trade secrets.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: Bilateral Investment Treaty
Fitzwater
Source: White House Press Secretary Marlin Fitzwater
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Fact Sheets
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, International Law
[TEXT]
The Treaty Between the United States of America and the Republic of
Kazakhstan Concerning the Reciprocal Encouragement and Protection of
Investment (the Bilateral Investment Treaty or BIT) will provide legal
protections and assurances for investors of one country in the territory of
the other country. By entering into this treaty, Kazakhstan is establishing
its commitment to provide many of the prerequisites of an attractive
investment climate for US investors.
Several of the key requirements of the BIT are:
-- Investors of each country receive treatment at least as favorable as that
given to domestic enterprises in similar circumstances ("national
treatment") or that given to other foreign enterprises in similar
circumstances ("most-favored-nation treatment"), whichever is better for
the investor, both on establishing the investment and in post-establishment
operations.
-- Investors are guaranteed the unrestricted transfer, in a freely usable
currency, of all funds related to an investment, including profits, dividends,
and capital.
-- Investors are guaranteed freedom from performance requirements, which
include requirements to export goods produced by the investor and
requirements to purchase goods and services locally.
-- Expropriation can only occur in accordance with international law: in a
non-discriminatory manner; for a public purpose; and upon payment of
prompt, adequate, and effective compensation.
-- Investors have full access to binding international arbitration in cases
of disputes with the host government, without first resorting to the local
court system.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: OPIC Agreement
Fitzwater
Source: White House Press Secretary Marlin Fitzwater
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Development/Relief Aid,
International Law
[TEXT]
The bilateral OPIC agreement signed by the United States and Kazakhstan
will enable the Overseas Private Investment Corporation (OPIC) to provide
investment insurance, project financing, and investor services for US
private investors in Kazakhstan.
Signature of this agreement demonstrates the commitment of the United
States to helping the private sector in Kazakhstan develop and to assisting
US companies seeking to invest there.
As such, it marks an important step in establishing normal commercial
relations with Kazakhstan.
OPIC is a US Government agency that provides assistance to American
investors in over 120 developing countries and emerging market economies
throughout the world.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: US Humanitarian Assistance to
Kazakhstan
Fitzwater
Source: White House Press Secretary Marlin Fitzwater
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Development/Relief Aid
[TEXT]
Operation Provide Hope.
The American humanitarian assistance
deliveries targeted for Kazakhstan during operation Provide Hope I amounted
to 171.5 tons of food and 51.5 tons of medicines and medical supplies.
Under Provide Hope II, NATO will coordinate the movement of about 74 tons
of medical consumables and
500 tons of food.
Although American humanitarian aid is delivered to the cities of Alma- Ata
and Semipalatinsk, the final destination of the aid is often to outlying
cities and regions.
President's Medical Initiative.
Under the auspices of the
initiative, Project Hope to date has delivered $1.9 million of
pharmaceuticals and medical supplies to Alma-Ata and the Aral Sea region.
The Fund for Democracy and Development.
The fund is a not-for-
profit voluntary organization that has received funding from the United
States to facilitate and maximize the transportation of privately donated
humanitarian assistance. The fund has assisted numerous private
organizations in the transportation of donated humanitarian aid.
Private Voluntary Organizations.
Several US private voluntary
organizations have collected food, medicines, and medical supplies for
shipment to the new independent states. Several of these shipments have
been funded by the US Government under the $100 million appropriated for
the transportation of humanitarian assistance. For example:
-- Mercy Corps International. This organization has donated 80,000 lbs. of
nutritious granola cereal for distribution to needy recipients in the Aral Sea
region.
-- Northern California Ecumenical Council, International Humanitarian
Services of San Francisco. This organization has donated 12 tons of
medicines and medical supplies to support the Bobek Children's Charity in
Alma-Ata.
Sister Cities International.
The city of Waukesha, Wisconsin, has
collected about 40,000 lbs. of hospital supplies, pharmaceuticals,
foodstuffs, vitamins, and winter clothing for donation to its sister-city
Kokchetav, Kazakhstan, for the Kokchetav Central Hospital.
Public Policy Training.
The United States will support long-term
sister-city linkages with local and regional governments in Kazakhstan to
train government officials.
Developing Free Markets and Business Relations
Farmer-to-Farmer Program.
This program will provide
opportunities for US experts to give hands-on expertise on Western
agribusiness methods.
Eurasia Foundation.
The Eurasia Foundation will provide a forum
for cultural exchange and learning and provide a mechanism for on-the-
ground expertise in the areas of management and privatization.
American Business Centers.
The United States plans to establish a
regional business center where US business people can come for advice on
local business opportunities, translation services, and meeting facilities,
with the goal of facilitating expanded commercial relations.
Health Care Partnership.
The United States will transfer
American medical knowledge and technology through the establishment of
hospital-to-hospital partnerships.
Coal Mine Safety Project.
Through a US-funded project, the AFL-
CIO will be providing assistance on coal mine safety in the Karaganda Basin.
Financial Sector Technical Assistance.
Treasury will send an
official this summer to discuss placement of a long-term financial adviser
to assist the Kazakh Government.
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan: US Technical Assistance
Programs to Kazakhstan
Fitzwater
Source: White House Press Secretary Marlin Fitzwater
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Science/Technology,
International Law
[TEXT]
SABIT
(Special American Business Intern Training Program,
managed by the Department of Commerce). SABIT is planning to interview
candidates in Alma-Ata this summer for a 3-6 month management training
program in the United States.
IESC
(International Executive Services Corps). IESC is prepared to
send immediately to Kazakhstan volunteer executives to provide a range of
technical assistance. Requests for these could come from the Government
of Kazakhstan, businesses, or local community organizations. Volunteer
executives are normally in place for 3-6 months. In addition, IESC will be
placing a permanent representative in Alma-Ata in 1993.
Loaned Executives Program.
USDA (US Department of Agriculture)
will place US agribusiness executives in Kazakhstan to work in Kazakh
enterprises this summer.
Energy Efficiency Program.
An energy efficiency experts team
visited Kazakhstan in April and proposed an audit of the Alma-Ata District
Heating System. A follow-up team is in Alma- Ata conducting the audit.
Based on the results of this audit, equipment will be installed (in the
August-September time frame) to increase energy efficiency.
International Resident Housing Advisers Program.
The United
States will place a resident housing adviser in Alma-Ata by the end of
August. This adviser will be able to provide expertise to private individuals
and public sector institutions on the development of a private sector
housing market.
Rule of Law.
The United States is in the process of finalizing a
program to bring judges and legal experts from Kazakhstan to the United
States this summer for training and seminars.
Public Policy Training.
A USIA [United States Information Agency]
training program in the United States for the chief of staff to the President
of Kazakhstan is scheduled to begin May 20.
Democratization.
The United States is developing technical
assistance programs focused on civic education, public administration,
political party training, and the development of independent media.
Legal Advisers.
The United States will fund an American Bar
Association technical assistance program to provide legal experts who can
assist Kazakhstan in drafting constitutional and other laws. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: Fact Sheet: Kazakhstan
PA
Source: Office of Public Communication, Bureau of Public
Affairs
Date: May, 19 19925/19/92
Category: Fact Sheets
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, Democratization, History
[TEXT]
Kazakh President Nursultan Nazarbayev made his first official working visit
to Washington, DC, on May 18-20, 1992, and met with President Bush,
Secretary Baker, and a wide array of government and business leaders.
There was discussion on a full range of issues.
US-Kazakhstan Relations
The United States recognized Kazakhstan's independence on Decem-ber 25,
1991, established relations, and opened an embassy there in January 1992-
the first country to do so.
US-Kazakhstan relations focus on the following key issues: the
Commonwealth of Independent States (CIS); the nuclear test ban; US
assistance; trade and investment; accelerating efforts to reach agreement
with Russia to implement the Strategic Arms Reduction Treaty (START)
with the United States; economic reform; environmental problems; the
Russian minority; and Islamic revival.
For FY 1992-93, the Administra-tion has asked Congress to appropriate
$620 million that would continue to provide emergency humanitarian relief
and technical assistance to support democratic reform and promote
economic restructuring in the new republics. About 50% will go to Ukraine,
Armenia, Kazakhstan, and Kyrgyzstan. The Administration also has proposed
establishment of a new private organization, the Eurasia Foundation, to
provide fast-disbursing grants for technical assistance, management
training, and democratic institution-building.
Building Democracy
The Kazakh Parliament declared independence from the former Soviet Union
on December 16, 1991. In the December 1991 presidential elections,
President Nazarbayev ran unopposed and received 98% of the vote.
There are four recognized non-communist political parties and numerous
smaller interest or social groups. The Nevada-Semipalatinsk anti-nuclear
movement played an important role in the recent ban on nuclear tests in the
republic. The Kazakh Communist Party became the Socialist Party, but it
has little influence.
Kazakhstan joined the CIS in December 1991. It became a member of the
Conference on Security and Cooperation in Europe in January 1992, and the
United Nations and the North Atlantic Cooperation Council in March 1992.
Economic Conditions
Kazakhstan has a relatively undeveloped economy. In 1988, Kazakhstan's net
output accounted for 4.3% of total output in the former Soviet Union. About
23% of the population are engaged in agriculture. Major products are wool,
grain, and meat. The northern area of the country produces up to one-third
of all wheat grown in the Commonwealth. The United States recently
launched a farmer-to-farmer assistance program that will provide hands-on
training in US-style farm technology and agricultural cooperatives. It is the
first phase of a 3-year, $30-million program administered by the US Agency
for International Development, under which five teams of volunteers will
work in Kazakhstan, Russia, and Ukraine with farm groups interested in
establishing private agribusiness enterprises.
Kazakhstan was a Soviet industrial center during and after World War II,
when the USSR moved industry east of the Urals to protect it from Nazi
invasion. Mining and quarrying play a major role in Kazakhstan's economy.
Abundant mineral resources-which include mineral oil, oil, natural gas,
metals, gold, and coal-provide the bulk of the republic's limited hard
currency. In 1989, Kazakhstan produced about 19% of total coal output in
the former Soviet Union. Iron ore production was about 10% of the total.
US long-term goals seek to promote self-sustaining economic reforms by
encouraging the participation of US companies in trade and investment. In
April 1991, a US trade negotiating team went to Moscow to work out details
of several trade and investment accords with Kazakhstan. Under the Trade
and Development Program, the United States is considering the development
of a coal mine in the Kenderlyk region and construction of a highway from
Alma-Ata to Krasnovodsk.
Kazakhstan at a Glance
Kazakhstan was first mentioned in Russian records in 1534. The origins of
the Kazakh people are uncertain, but traditional similarities show that they
may have descended from the Mongol Golden Horde.
Kazakhs founded a great nomadic empire under Burunduk Khan and his son
Kasym Khan, who ruled from 1488 to 1518. Later, the empire broke into
smaller groups called khanates. The region was incorporated into the
Russian empire by 1848.
A Kazakh nationalist movement arose in the early 20th century. The Soviet
Army occupied Kazakhstan from 1919 to 1920 before it became a republic in
1921. After 1927, the Soviets forcibly settled the Kazakhs, diluting
nationalistic sentiment by resettling large groups of Russians and
Ukrainians into the region, especially during the 1950s.
Kazakhstan covers about 2.7 million square kilometers (about four times the
size of Texas). Ethnic Kazakhs make up 18% of the population of the capital
(Alma-Ata) and 50% of the surrounding countryside. In 1990, total
population was 16.7 million. Ethnic Kazakhs comprise about 40% of the
country's population; Russians, about 38%. Germans, Ukrainians, Koreans,
and other groups make up the remainder. From 1979-89, the population
grew at an annual rate of 3.5%, while the Russian population decreased by
about 3%. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: Nagorno-Karabakh and Nakhichevan
Fighting
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Eurasia
Country: Armenia, Azerbaijan
Subject: Regional/Civil Unrest
[TEXT]
The United States strongly condemns the recent escalation of the fighting in
Nagorno-Karabakh and Nakhichevan. We are concerned that these military
actions threaten to undermine the prospects for good-faith negotiations to
resolve the conflict and dangerously increase instability throughout the
region.
The US Government will not accept unilateral changes in the status of
Nagorno-Karabakh, Nakhichevan, or any other territory on the basis of
military actions or violence. The only way to achieve a lasting solution to
this conflict is through good-faith negotiations based on CSCE [Conference
on Security and Cooperation in Europe] principles. We call upon all sides to
end the violence, recommit themselves to the CSCE mediation effort, and
take immediate steps to de-escalate the conflict and create an environment
in which good-faith negotiations can begin.
The US Government has repeatedly stated that the quality and character of
its relationship with both Armenia and Azerbaijan will depend on their
demonstrated commitment to CSCE principles, including the peaceful
settlement of disputes. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: US Condemns Bangkok Violence
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: Southeast Asia
Country: Thailand
Subject: Regional/Civil Unrest
[TEXT]
We condemn the violence and loss of life in Bangkok. We are saddened by
these events. As a longtime friend of the Thai people, we have made it clear
that we cannot accept the use of deadly force as a means of resolving the
issues that divide the opposition and the government.
We have met with Thai leaders, including Prime Minister Suchinda, to
condemn the violence and the loss of life and urge strongly that the Thai
Government refrain from the use of deadly force. We have also raised our
concerns with the opposition.
In view of the continuing violence in Bangkok, we have put resumption of
economic and military assistance on hold and suspended all combat
elements of the military exercise Cobra Gold. It is clear that a normal
relationship with the Thai Government under current conditions will be
impossible.
Dispatch, Vol 3, No 21, May 25, 1992
Title: Cuba: Human Rights Trial
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: Caribbean
Country: Cuba
Subject: Human Rights
[TEXT]
The US Government has learned that Cuban human rights activist Yndamiro
Restano will be tried today on the charge of rebellion. Restano is leader of
the dissident Harmony Movement (MAR) and has been held without charge
since December. He faces a term of 12 years in prison. MAR member Maria
Elena Aparicio will be tried with him and faces an 8-year term.
We understand that the Cuban authorities intend to claim that Restano
encouraged civil disobedience and sabotage against the Cuban state. In fact,
Restano has sought only to work with Cuban authorities to promote
peaceful, democratic change. He has never espoused violence and [has] been
guided only by the patriotic concerns of peace and prosperity for his nation
and fellow Cuban citizens. The US Government deplores the exaggerated
nature of the charge against Restano and Aparicio. We call for their
immediate release.
We are also disturbed to learn that Cuba intends to try human rights activist
Sebastian Arcos on the charge of "enemy propaganda," a patently trumped-up
charge, and is seeking a 6-year prison term against him. Arcos is vice
president of the Cuban Committee for Human Rights and has been a tireless
defender of human rights in Cuba. That Cuban authorities call this "enemy
propaganda" reflects an intolerance on the part of the Cuban Government for
the right of its people to aspire to the basic freedoms enjoyed elsewhere
throughout the world.
The cases against Arcos, Restano, and Aparicio are representative of the
inability of the Cuban Government to accede to the aspirations of the Cuban
people for freedom and democratic reform. We call for their immediate
release.
Dispatch, Vol 3, No 21, May 25, 1992
Title: Meeting With Leader of Sudan's National Islamic
Front
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: MidEast/North Africa
Country: Sudan
Subject: Democratization, Narcotics, Regional/Civil Unrest
[TEXT]
Deputy Assistant Secretary for African Affairs Robert Houdek met with
Sudanese National Islamic Front leader Dr. Hassan Al-Turabi on May 20 at Dr.
Turabi's request. The meeting was part of our ongoing dialogue with
prominent Sudanese political leaders. Mr. Houdek expressed our strong
concern regarding Sudan's policy of allowing known terrorists and terrorist
organizations to operate in Sudan. He also raised human rights concerns and
the civil war in southern Sudan.
He assured Dr. Turabi that the United States does not object to Islam or to
groups that make Islam part of their political platform. However, we are
extremely concerned by efforts to promote political objectives outside
Sudan's borders by non-democratic means. With regard to the presence of
terrorists in Sudan, he issued a clear warning that if Sudanese hospitality
is abused by them, Sudan will not escape responsibility.
Mr. Houdek noted our serious concern over Sudan's human rights record,
especially in regard to the government's continuing forcible relocation of
hundreds of thousands of displaced persons in the Khartoum area. He also
urged that the Government of Sudan allow humanitarian relief flights to
resume to all areas of southern Sudan, where the latest government military
offensive has displaced thousands of people.
In regard to the continuing civil war in the south, Mr. Houdek called for the
Sudanese Government to profit by the opportunity at the upcoming talks in
Abuja, Nigeria, and not continue to pursue an unachievable military solution.
Dispatch, Vol 3, No 21, May 25, 1992
Title: Serbia: Suspension of JAT Landing Rights in US
Tutwiler
Source: State Department Spokesman Margaret Tutwiler
Description: Statement, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: E/C Europe
Country: Serbia-Montenegro
Subject: International Law, Development/Relief Aid,
Human Rights
[TEXT]
On May 16, on instruction from Secretary Baker, Ambassador Zimmermann
sought assurances from Serbia that relief convoys would be allowed free
passage into Sarajevo and that the Sarajevo airport would be reopened
immediately for humanitarian flights.
Ambassador Zimmermann informed Serbia that failure to take these steps
would result in immediate termination of JAT landing rights in the United
States. That is the Yugoslav airline.
On May 18, Serbia made clear its response when Serbian forces attacked a
Red Cross relief convoy heading into Sarajevo, destroying desperately
needed humanitarian supplies and killing an ICRC [International Committee
of the Red Cross] delegate. And yesterday, as further evidence of their
intransigence and brutality, Serbian forces took hostage a convoy of women
and children fleeing Sarajevo. We have various reports of that number of
hostages being anywhere from 1,000 individuals to 7,000.
Effective today, we have asked the Department of Transportation to
terminate the authority of the Serbian national carrier, Yugoslav Airlines,
to fly to and from the United States. This means that their three weekly
flights from Belgrade to New York City and on to Chicago will end
immediately.
We are also considering a series of further measures in response to
continued Serbian aggression which we will be discussing with our allies
and friends over the next day or two. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Canada Trade of Enormous Benefit to Both
Economies
Bush
Mulroney
Source: President Bush, Canadian Prime Minister
Mulroney
Description: Opening Remarks at a press conference, Washington, DC
Date: May, 20 19925/20/92
Category: Speeches, Testimony, Statements
Region: North America
Country: Canada, United States
Subject: North America Free Trade, Trade/Economics
[TEXT]
President Bush:
I'm just delighted to have had this visit with
Prime Minister Mulroney of Canada, welcoming him back to the White House.
I think we covered an awful lot of ground in a short time. Just a couple of
observations: I know that many are focusing on our trade issues, in
particular on trade disputes; that's natural. We've got this enormous-this
immense-trade that goes on between our two countries. Our bilateral trade
[has] increased by $30 billion since the inception of the free trade
agreement in 1989 and now stands at a volume of nearly $200 billion.
I believe that this trade is of enormous benefit to the two economies and
demonstrates vividly the value of that free trade agreement, and, because of
the large trade between the United States and Canada, there are bound to be
some bumps in the road. We have existing mechanisms for dispute
settlement. We are using them, including the FTA [free trade agreement]
itself. As a consequence, I can report that we're making progress in
overcoming some of our recent problems. I told the Prime Minister, who
forcefully presented Canada's case, that I would work with our
Administration to see that these disputes receive proper high-level
consideration before they go to some form of action.
I think this will help. But, in any event, we discussed frankly the problems.
We also talked about a wide range of international issues, including the
coming summit, including the G-7 [Group of Seven industrialized nations].
So we had a very good conversation. In the Bush view-our Administration
view-this relationship between Canada and the United States is very, very
important to the people of the United States of America.
Prime Minister Mulroney:
As the President said, we had a very
far-reaching discussion on a lot of subjects. I'd be happy to take whatever
questions are appropriate. But I tried to focus on what our priority problem
is at this point in time, and it's trade. For some time, Canadians have been
troubled and angered by the attitude adopted by some people in Washington
on major trade issues. Rather than move quickly to resolve or prevent
irritants, the tendency was to retaliate against Canadian products by
threatening to impose demonstrably unfair penalties on Canadian imports.
These actions create uncertainty for investors and exporters and undermine
the fundamental intent of the free trade agreement.
The President called me a number of times over the last few weeks,
conscious of some of the difficulties that have arisen in a very complex and
important trading relationship. We agreed at this meeting today to follow
up on it. So we had a very constructive review of these issues.
We both intend to raise the level of commitment to resolve and to reduce
disputes, to give a higher level of attention in order to manage the
relationship and these issues. The President and I are going to work
personally to that end. We both recognize that healthy trade between us is
vital to recovery. We are the United States' best customer by far, and the
United States is ours. We can help each other in terms of economic recovery
by reducing the temperature and getting rid of a lot of these irritants rather
than to allow them to fester and grow to important status.
For example, Canada's merchandise trade surplus was $3.1 billion in the
first quarter, as announced this morning-the largest surplus since the
second quarter of 1990. For the first quarter, Canada's exports to the
United States are up 8.8% from last year. As the President has pointed out,
even in a difficult recessionary period, the growth in trade between Canada
and the United States is up very impressively. That means jobs in the
United States and jobs in Canada. We have to keep that going. It was a very
constructive and helpful meeting, and I thank the President and his advisers
and counselors and cabinet ministers for that. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: America and Asian Security In an Era of
Geoeconomics
Solomon
Source: Richard H. Solomon, Assistant Secretary for East
Asian and Pacific Affairs
Description: Address before the Pacific Rim Forum, San Diego,
California
Date: May, 15 19925/15/92
Category: Speeches, Testimony, Statements
Region: Pacific, East Asia, Southeast Asia
Country: China, Japan, South Korea, North Korea, Cambodia,
Vietnam
Subject: Trade/Economics, ASEAN, Nuclear Nonproliferation,
Arms Control
[TEXT]
We are fortunate to live at a rare and promising moment in history. The
demise of the Cold War is spurring a fundamental transformation of
international relations in ways that hold the possibility of a world of
expanded trade and economic growth and heightened collective efforts to
promote security, respect for human rights, and the spread of democracy.
The questions we now are grappling with are how to promote these positive
trends in the face of significant challenges and how to structure the
economic, political, and security institutions of the post-Cold War world.
Our challenge is to grasp the major trends of our times and shape new
solutions to the unending quest for national security and economic
development.
Let's look at the world we are entering, one shaped by the information
revolution and filled with some intriguing contradictions.
Instantaneous flows of communication and capital are eroding national
boundaries and compressing international dealings in both time and space.
In combination with such transnational problems as environmental
degradation, the global trade in narcotics, and the AIDS [acquired immune
deficiency syndrome] epidemic, these realities require us to transform our
notions of national sovereignty.
As Secretary Baker has argued, the nation-state also is being transformed
"from above" by the supra-national forces of economic integration and the
requirements of coalition politics in an ever more interdependent world and
"from below" by the ethnic, political, and entrepreneurial demands for
greater decentralization of state power.
Old political feuds and ethnic rivalries unfrozen by the end of the Cold War
are being replayed in today's decentralizing political environment but, this
time, with the destructive power of high-tech weaponry.
Today, the elements of national security are being redefined and expanded
beyond classic assessments of the military balance to include factors of
economic vitality, threats to the environment, and refugee flows.
Yet, as we saw in last year's Gulf crisis, military challenges to our security
endure. Regional leaders with great power ambitions or territorial designs
pursue their aims with the high-tech arms that are all too readily available
in a world of proliferating missiles and the technology to make nuclear,
chemical, and biological weapons of mass destruction.
For all this change and challenge, the multilateral institutions required to
manage the emerging world of the 21st century, to give it order and new
rules for mediating conflict, remain to be established or to evolve as
existing international institutions are adapted to new realities.
Amidst the uncertainty and turbulence that characterizes this period of
dramatic transition, however, one fundamental trend is clear: We are
entering the age of geoeconomics, with flows of trade, finance, and
technology shaping the power realities and the politics of a new era. To be
sure, military power remains a significant component of national strength.
But in today's world, technological and commercial capabilities as much as
military strength are the defining elements of national power and influence.
Impact on Asia
The nations of East Asia have been on the cutting edge of these global
transformations. The end of the Cold War produced dramatic shifts in Asia's
international alignments: Sino-Soviet reconciliation; Moscow's
normalization of relations with Seoul; China's burgeoning ties with South
Korea; Mongolia's adoption of a democratic, market-oriented reform
program; Sino-Vietnamese rapprochement; and the disengagement of the
major powers from Indochina.
Yet remnants of the Cold War persist in the divided and heavily armed
Korean peninsula and the lingering Russo-Japanese dispute over Japan's
Northern Territories. Moreover, there is increasing uncertainty about
prospects for Sino-American relations.
The Asia-Pacific region has been the pacesetter in the global trend toward
the ascendancy of economic power. It is stunning to recall that, only 2 or 3
decades ago, East Asia was engulfed in war and great power confrontation,
burdened by grinding poverty, and challenged by insurgent communist
movements. Our trade with the entire region until the late 1960s was less
than that with Latin America.
At the outset of the Cold War, we encouraged defeated former enemies like
Japan and impoverished allies like Korea to pursue economic development
through export-led growth. We provided them ready access to our markets,
even though their own markets were highly protected.
Today, we take the familiar Asian success story for granted: Japan has
become an economic superpower; the four tigers of South Korea, Taiwan,
Hong Kong, and Singapore may soon be joined by a dragon, as southern China
grows at double-digit rates; and Thailand, Malaysia, and Indonesia seem
destined to be tigers in the 21st century.
While national security concerns were an important factor in our Cold War
strategy for the region, we did not act out of economic altruism. Trade is
not a zero-sum game; prosperity has a multiplier effect as growing allies
provide expanding markets. Over the past 4 decades, US exports have grown
by some 4,000%, from $10.3 billion in 1950 to almost $400 billion by 1990.
Our two-way trade across the Pacific last year exceeded $310 billion-
almost 50% greater than our trade with Western Europe. Today, we export
more to Malaysia than to all the republics of the former Soviet Union, more
to Japan than France and Germany combined, [and] more to Singapore than to
Italy.
Our allies and friends in Asia, however, have now become robust
competitors as well as attractive markets. Their success requires them to
assume the responsibilities necessary to sustain and expand the global
trading system that has nurtured their growth, to grant more equal access
to their domestic markets. Yet many of our relationships in the region are
beset with trade tensions as economic issues move center stage. The
asymmetry in the easy access which our Asian trading partners have to our
markets, but with our limited access to theirs, must be remedied.
In a sense, the challenge of the emerging era is far more complex than that
of the Cold War years. Then the enemy was clear, the threat visible and
often ominous. Today, there is no universal "enemy," the threat is diffuse,
less military in character-and often, it is in our own deficiencies.
Security Challenges
What is the impact of the end of the Cold War on regional security in East
Asia? During the Cold War, our forward deployed forces, sustained through
a network of bilateral alliances with Japan, Korea, Australia, Thailand, and
the Philippines, sheltered the region's security and its economic take-off.
For 4 decades, we have been the region's power balancer, its intercessor,
and security guarantor.
Our presence in Asia-as part of the global strategy of containment-masked
historically diverse security concerns throughout the region. Unlike Europe,
the nations of East Asia have never perceived a common security threat, and
a common security structure never developed-despite our efforts to
organize a NATO counterpart in SEATO [South East Asia Treaty Organization],
or Soviet efforts to create a collective security organization on an anti-
China basis. Underneath the Cold War overlay, there was a regional
dimension to our security presence that complemented local concerns in the
Pacific theater.
With the demise of the Cold War, our global policy of containment has
evaporated and is being replaced by regional or subregional defense
strategies. In the Asia-Pacific, what had been a secondary aspect of our
strategic policy is now the primary rationale for our continuing security
engagement: to provide balance, to prevent a strategic "empty space" from
developing, to reassure allies, and to maintain a working presence in case of
regional contingencies.
Our bilateral alliances and defense relations remain the core of Asian
security. We are bolstering our defense partnerships as allies, particularly
Japan and Korea, assume a greater share of the burden of assuring stability
and security.
But in the emerging world I have described, new, ad hoc, multilateral
security efforts are slowly emerging. The Cambodian peace process and
Indonesia's efforts to initiate a forum on the contested islands of the South
China Sea are examples of tailor-made conflict resolution processes that
can enhance regional security.
In the near term, Northeast Asia appears to hold the greatest security
challenges. Generational leadership transitions in China and North Korea
could produce volatile situations or spur domestic political rivals to take
confrontational nationalistic positions. Thus, we see China reasserting
claims to disputed territories in the South and East China Seas. Sino-
Japanese and Japanese-Korean relations are burdened by a difficult past.
The threat of nuclear proliferation in Korea holds the danger of provoking a
regional arms race.
Korea
The most immediate threat to stability in the Asia-Pacific region is that of
nuclear proliferation on the Korean peninsula, where, despite the growing
dialogue between Seoul and Pyongyang, the last military confrontation of
the Cold War persists. Our main concern, and that of the ROK [Republic of
Korea], Japan, Russia, and China-indeed, of the international community-is
that, despite Pyongyang's recent agreements with the South and with the
IAEA [International Atomic Energy Agency], the suspicion persists that the
North Koreans have not abandoned their quest for nuclear weapons. The
acquisition of a nuclear weapons capability by North Korea would be viewed
by the international community as an unacceptable threat to peace.
Recent indications of a North Korean willingness to implement IAEA and
bilateral nuclear controls are hopeful signs that this last remnant of the
Cold War era may be easing. Yet both nuclear inspection agreements remain
only commitments on paper. What is required are credible inspection
regimes and their effective implementation. Only verification of
Pyongyang's assertions of peaceful intent will begin to give the
international community confidence that the North Koreans are genuinely
honoring their commitments, that they are serious about moving away from
military confrontation toward national reconciliation.
Will such inspections in fact occur? Given Pyongyang's past record of
unfulfilled commitments-and 4 decades of mutual mistrust-there is ample
reason for skepticism. Yet times may be changing.
Pyongyang now has before it a golden opportunity to allay suspicions, begin
to establish some credibility, and accelerate an opening to the outside
world. Since 1988, in coordination with our ally South Korea, US policy has
been to encourage the North to move toward reconciliation. As a result of
the important agreements between Seoul and Pyongyang on national
reconciliation and a non-nuclear peninsula reached at the end of last year,
we held our first political-level exchange with a senior official of the DPRK
[Democratic People's Republic of Korea] in New York this past January. We
are encouraged by Pyongyang's recent provision of information to the IAEA
on its nuclear facilities as well as North Korea's efforts to meet some of
our other stated concerns.
Positive North Korean deeds will advance the process of moving beyond the
heavy legacy of the past. When our concerns about Pyongyang's nuclear
activities are satisfactorily addressed, as the IAEA and bilateral inspection
regimes are implemented, the United States is prepared to embark on a
regular, policy-level dialogue and move toward more normal US-DPRK
relations. We believe other countries will respond in similar fashion.
Another example of positive action by North Korea would be DPRK adherence
to the Missile Technology Control Regime (MTCR). Accepting the standards
of the international community for weapons exports will provide far greater
economic benefits to the people of North Korea in normal commercial
relations with the rest of the world than any short-term gains from
exporting weapons of mass destruction.
The process of reconciliation and reunification on the Korean peninsula must
be advanced by the two Koreas themselves. Yet the international
community, particularly those countries with a major stake in stability in
Northeast Asia, have a strong interest in assuring that a non-nuclear
peninsula becomes a reality and that the process of North-South
reconciliation advances. In the international diplomacy surrounding the
Korean nuclear issue, we continue to see the promise of multilateral
cooperation in Northeast Asia.
China: An Uncertain Future
However problematic the situation in Korea may be, an even weightier
uncertainty is the future of China's international role and, with it, the
future of Sino-American relations. In a single, tragic night in June of 1989,
violence at Tiananmen Square shattered 2 decades of efforts to normalize
US-China relations. Ever since, tensions over human rights practices,
nuclear and missile proliferation issues, and a rapidly growing trade deficit
have formed a corrosive mixture that threatens to erode what remains of
the normal US-China relationship that was built up over the 1970s and
1980s.
There is strong sentiment in Congress to punish China by denying the
country unconditional MFN [most-favored-nation] trading status. The
Administration, conversely, is pursuing a policy of applying targeted
sanctions in specific areas of concern but believes that blanket trade
sanctions are counterproductive, as they work against the economic forces
promoting openness and reform. As President Bush has said, no nation has
yet discovered a way to import the world's goods and services while
stopping foreign ideas at the border. Indeed, it was the decade of 10% per
year growth-initiated by Deng Xiaoping in late 1978-that opened China to
the outside world, stimulated new thinking and reform, and eventually led to
the demonstrations at Tiananmen.
In this regard, we are encouraged by Deng Xiaoping's January visit to
Shenzhen, the special economic zone bordering on Hong Kong, and the Chinese
politburo's subsequent endorsement of Deng's renewed support for policies
of economic openness and reform, which, it stated, should be sustained for
the next 100 years. These developments underscore the success of a rapidly
growing market-oriented economy in south China tied to the world economy
and the importance the leadership attaches to it for China's future.
To be sure, China remains repressive, and the prospects for political reform
are uncertain. The question is whether we have the patience and the
political will to remain engaged with China as it undergoes its inevitable
transformation and whether China chooses the path of cooperation. We
should not allow our serious differences over human rights, economic
practices, or China's missile and nuclear exports-which we will continue to
address in appropriate ways-[to] lead to a rupture of normal commercial
relations with 23% of the human race and a renewal of confrontation with
the PRC [People's Republic of China].
The basis for a productive post-Cold War Sino-American strategic
relationship does exist. What China does or does not do internationally can
significantly affect our national interests-on the Korean peninsula, in
Cambodia, in Southwest Asia, and at the United Nations. Nor can we meet
transnational challenges such as narcotics trafficking and environmental
degradation in the absence of some measure of cooperation with Beijing. We
must engage China not only in areas where our interests converge, but also
in those areas where our values and practices diverge.
The alternative is renewed Sino-American confrontation, which would have
destabilizing effects not only on China's modernization and on stability
throughout East Asia but, more broadly, for the post-Cold War international
order we are trying to forge. Before embarking on such a course, all
concerned would be well advised to consider carefully the consequences.
Southeast Asia
In Southeast Asia, the successful negotiation of the Cambodia peace accord-
signed last October in Paris-Vietnam's military disengagement from
Cambodia, and Sino-Vietnamese normalization have substantially eased
regional tensions. Implementation of the UN settlement plan for Cambodia-
still a formidable task-promises to usher in a new era for strife-ridden
Indochina and, with it, the prospect of finally laying to rest America's
burdens from the Vietnam War era.
At present, there is no immediate security threat in Southeast Asia. In this
environment, our defense strategy and military presence are undergoing
significant changes. The combination of the forces of nature and
nationalism have led to the closing of Clark Air Base and a decision by the
Philippine senate that we should completely withdraw all US forces from
Subic Bay Naval Base by the end of this year.
These developments in the Philippines are accelerating a trend in our
security planning toward a more diversified set of defense relationships in
Southeast Asia based on access to local military facilities. In 1990, we
signed an access agreement with Singapore, and we are in the process of
enhancing our defense cooperation with other ASEAN [Association of South
East Asian Nations] friends in support of a restructured and dispersed
forward deployment of our naval and air forces.
The United States does intend to remain engaged in Southeast Asia as a
force for regional stability by enhancing defense cooperation through such
access arrangements, through joint training, exercises, and military
education and assistance programs.
As well, we are prepared to discuss appropriate security issues in the
ASEAN-PMC [post-ministerial conference] forum.
Hot Economies
While Asian security concerns have a diverse, sub-regional character,
burgeoning trans-Pacific and intra-regional trade and investment provide a
major area of shared interest, an adhesive for binding together the hot
economies of the region. But Asia's rapid developers present daunting
challenges for US policy: reinvigorating an open global trading regime,
thwarting economic regionalism and national protectionism, and enhancing
our competitiveness as the world's largest trading nation.
We have a game plan for meeting these challenges. Economics is in
command. The Administration is pressing for open trade on three related
fronts-multilateral, regional, and bilateral-all of which complement and
support each other.
First and foremost is the effort to attain a successful conclusion of the
Uruguay Round of the GATT [General Agreement on Tariffs and Trade]
negotiations. The President, at each stop on his January trip to Asia,
stressed the importance we attach to updating and enhancing the GATT
system along the lines of the Dunkel draft.
A relatively open global trading system is the sine qua non for sustaining
economic growth worldwide and avoiding a fragmentation of the
international economy into regional trade blocs. To counter trends toward
economic Balkanization, the United States is promoting GATT-compatible
free trade arrangements as the component elements of a global free trading
system. These range from the NAFTA [North American Free Trade
Agreement] to the ASEAN Free Trade Area (AFTA), which was recently
adopted by our friends in Southeast Asia. It also includes APEC, the Asia-
Pacific Economic Cooperation initiative-about which I will say more in a
moment. But let me first briefly touch on our bilateral economic challenges.
Japan
Japan remains the keystone of our engagement in East Asia-and the world.
With some 40% of the world's GNP between us, a cooperative US-Japan
partnership can be-and must be-a major factor in shaping the post-Cold War
world. This was the vision embodied in the Tokyo Declaration of global
partnership issued by President Bush and Prime Minister Miyazawa in
January [See Dispatch, Vol. 3, No. 3]. But the political requirements of such
a collaborative relationship demand that we set right the economic
imbalance in our commercial dealings.
US-Japan relations have changed profoundly over the past decade, and we
must rise above bashing and adjust to new realities. Recent emotional
outbursts on both sides of the Pacific betray the profound stakes we both
have in each other and the genuine progress we have achieved in many
aspects of the relationship.
Today's sour public mood, with its tinges of racism and loss of self-
confidence, contrasts sharply with the more complex economic and political
realities of the US-Japan relationship. For example, you would never know
from the press that our exports to Japan have grown by 120% over the past 5
years; that our bilateral trade deficit shrank from $57 billion in 1987 to
$42 billion last year; or that, except for the Gulf states, Japan was the
largest financial contributor to [Operation] Desert Storm.
To be sure, we have much more work to do to resolve our economic tensions.
But, through SII [Structural Impediments Initiative], sectoral market-
opening talks, and macro-economic policy adjustments, we are working to
redress the unsustainable economic imbalance and its structural causes.
The President's visit to Japan produced important market access gains in
sectors important to our exporters, such as computers, glass, paper
products, and auto parts.
For all the recent progress, however, the bilateral trade deficit-still more
than $40-some billion per year-remains unsustainably high. Moreover, it
could well increase in the short run as the US economy strengthens and we
expand our imports and if the Japanese economy enters a period of sluggish
domestic growth.
I must add that Japan's current global account surplus for FY 1991 of $91
billion-almost double that of the previous year-indicates that its
imbalances are of growing concern to Europe and others in Asia as well.
Japan's challenge is to make the transition from a production-biased,
export-oriented economy to one of consumer orientation and domestic-led
growth. Otherwise, it will face increasing opposition in other parts of the
world where it seeks to market its products.
ASEAN
Let me say a word about US-ASEAN relations. The six countries of ASEAN-
the Association of South East Asian Nations-and its 320 million people
together comprise our fifth largest trading partner. The organization is the
focal point of our engagement in Southeast Asia.
We work closely with ASEAN on regional issues such as Cambodia, Burma,
and narcotics as well as to strengthen our growing economic ties with the
region. We strongly support ASEAN's efforts to build a free trade area as an
important component of a global, open trading regime. GATT-compatible
regionalism such as [the] ASEAN Free Trade Area strengthens efforts to
sustain and expand a global free trade regime. Closed, exclusionary
groupings, however, would be very costly for trading partners on both sides
of the Pacific. Such a development would go against the trend toward
trans-Pacific economic interdependence and defies the lessons of history,
geography, and political good sense.
APEC: Cohesion in the Pacific Community
Our objective for the future economic architecture of the Asia-Pacific
region is APEC, the governmental counterpart to the robust private sector
economic ties across the Pacific. APEC was formed less than 3 years ago
but is rapidly becoming the institutional vehicle of our multilateral
economic engagement in the region. Its 15 members together have a GNP of
over $10 trillion and includes the world's most dynamic developers. The
ASEAN economies, for example, grew at an average annual rate of 7% last
year.
APEC is designed as a trans-Pacific forum that can help reduce impediments
to market-oriented growth, promote global and regional trade liberalization,
and stimulate development of the infrastructure-the telecommunications
networks, air and sea transportation capacity-that will encourage greater
regional integration and growth throughout the Pacific Basin. APEC holds
the promise of fostering a true sense of Asia-Pacific community.
Conclusion: The Challenge of Competitiveness
For the United States, East Asia has become the focal region for the
challenge of economic competitiveness. This challenge has two dimensions:
the external-sustaining open markets for our goods and eliminating barriers
in traditional and emerging sectors; and the internal-that of attaining
adequate domestic savings and investment rates, boosting educational
skills, increasing productivity, and commercializing new technologies.
To be sure, the challenges ahead for our relations with Asia are political
and military as well as economic. But if we meet the challenge of economic
competitiveness, our leadership and our security role in the region will be
well-grounded. This is the meaning of the age of geoeconomics. If we get
the economics right-domestically, bilaterally, regionally, and globally-we
will succeed in laying the basis for a stable and secure Pacific community.
The increasingly multidimensional character of security I mentioned earlier
means that the economic factor looms ever larger as an element of
comprehensive security. It also means that overlapping institutions-from
APEC to the US-Japan security alliance to extra-regional groupings such as
the anti-proliferation Missile Technology Control Regime-form the layers of
an emerging new international system.
Our tremendous stake in the most economically dynamic region of the world,
our hope to see the continuing spread of democracy and respect for human
rights, and the enduring importance of our security presence provide
powerful arguments for sustaining America's engagement in East Asia and
the Pacific on all fronts. As a maritime trading power, our goals of
commercial access, freedom of navigation, and forestalling domination of
the region by any hegemon have not changed over the century since the days
of the "Open Door" policy. They are no less compelling today. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: Drug Trafficking in China
Levitsky
Source: Melvyn Levitsky, Assistant Secretary for
International Narcotics Matters
Description: Statement before the Senate Judiciary Committee,
Washington, DC
Date: May, 19 19925/19/92
Category: Speeches, Testimony, Statements
Region: East Asia
Country: China, Hong Kong
Subject: Narcotics
[TEXT]
I am pleased to come before the Judiciary Committee today and testify on
drug trafficking in and through the People's Republic of China [PRC]. This is
a matter of increasing concern to the [State Department] Bureau of
International Narcotics Matters [INM], the Drug Enforcement Administration
(DEA), and all enforcement agencies that are involved in the war on drugs.
This year, we added China to the list of countries considered to be major
producing or transit states based on the volume of reports we have received
about the amount of illicit drugs that pass through Chinese territory. [DEA]
Administrator [Robert] Bonner and I have both been to China in the last year
to see for ourselves what the situation is and how we could best work with
the Chinese authorities.
I believe I can safely say that the Chinese Government shows an increasing
concern over drug trafficking and abuse in China. They have acknowledged
they have a rapidly worsening problem and have taken a series of steps to
address the issue before narco-trafficking and drug abuse grow beyond their
current levels. The Chinese remember their century of struggle against
opium and that only 40 years ago they still faced a massive drug-abuse
problem with an estimated 20 million people addicted to opium.
The committee has asked for an estimate of the volume of narcotics
transiting the PRC and, of that, the amount entering the United States. As
much as we would like to be able to give you a precise number, we are
unable to do so. Since narcotics are an illicit commodity and usually
smuggled in legitimate cargo, it is impossible for us to provide even a
ballpark estimate. What I can say is that, based on data from a variety of
sources, the problem is clearly growing.
For example, our estimate of the potential opium production in Burma is
over 2,300 metric tons (mt) for the current growing season, an increase of
about 100 mt over the previous year's production. While much of that opium
is consumed locally, substantial amounts are turned into heroin products
that leave Burma through China. That may also be the case for opium
produced in Vietnam, although we have even less specific information about
the volume on that particular route. Opium production in Burma is
estimated to be twice what it was just 5 years ago and enough to satisfy a
substantial portion of regional and international demand.
There are indications that opium cultivation in China is once again a
problem. Chinese press reports have identified production in as many as 15
provinces, including Inner Mongolia where the authorities discovered and
eradicated several hectares of poppy last year. Most domestic cultivation is
thought to be relatively small scale and for local consumption. We are
watching this closely. However, heroin trans-shipment through China
remains the focus of our concern.
The southwestern portion of China, especially those parts of Yunnan
Province that border Burma, has become a significant area for the movement
of opiates from the border regions of Laos, Burma, and Thailand-an area
commonly referred to as the Golden Triangle. The long, mountainous
boundary is essentially open to traffickers, many of whom belong to ethnic
groups that live on both sides of the border. This fact, plus the corruption
of local officials, facilitates the movement of narcotics through the region.
I had an opportunity to visit this part of China in July of 1991, one of the
first US officials to do so since 1949. This remote, porous border area is
extremely hard to control. For example, at one point, I saw that only a small
stream, which traffickers could easily cross with narcotics, separated
China from Burma. The bridge on which we stood was guarded on the
Burmese side by a boy who looked about 10 with a rifle that was almost as
tall as he was. At another border crossing, a long line of trucks laden with
everything from teak logs and rice to fish and raw materials lined up for a
random, quick inspection by Chinese customs. Meanwhile, people walked
back and forth with little if any hindrance. The rough terrain, remote
location, and ethnic affinities on both sides of the border give smugglers a
tremendous advantage.
Consequences of Drug Flow
What are the consequences of this flow of drugs into China?
-- There is evidence that traffickers have begun to resort to violence in
order to resist inspection and seizure. The Chinese told me of armed
clashes between police and narcotics traffickers.
-- China is experiencing an alarming increase in addiction. Recent Chinese
media reports of seizures and increased drug-related crime suggest that
heavy drug usage is migrating from border areas to urban areas of interior
provinces.
-- Modern drug addiction leads to another scourge-the incidence of AIDS
arising from the use of injected heroin. This problem, too, is growing. Most
registered AIDS patients are in Yunnan Province, which abuts Burma.
What is the PRC doing to address these problems? Government officials
have taken the following series of steps against the drug threat:
-- Created a national narcotics control commission to coordinate policy
making, enforcement, research, and international cooperation;
-- Held various workshops and conferences throughout the country to
educate the public on the dangers of narcotics;
-- Passed in 1990 a strong drug law with harsh penalties including capital
punishment. There have been public executions for violation of the law.
Throughout southern China, I saw posters in cities and villages depicting
criminals arrested for drug crimes and indicating which of them had been
executed. The Chinese told me they executed over 35 people for drug
trafficking crimes last year.
-- Launched a major public relations campaign called the "People's War on
Drugs" with high profile leadership;
-- Stepped up enforcement efforts with various police agencies handling
more narcotics-related cases and seizures than at any time in the past 40
years. Over 1,950 kgs of heroin were seized in 1991, substantially more
than in past years, and over 2,000 kgs of opium, more than double that
seized in 1990;
-- Made plans to expand and better equip anti-drug task forces to include
intelligence-sharing via computer
and narcotics detection dogs. I should note that the UN International Drug
Control Program (UNDCP) has played an important role in China's law
enforcement upgrade efforts. A project providing vehicles and
communications equipment ended in 1991. A follow-on project is under
design.
-- Held discussions with Burma, Laos, and Thailand on various international
cooperative programs; and
-- Expanded treatment and rehabilitation programs for addicts.
We cannot, however, ignore the existence of corruption in China, which
appears to have flourished in recent years as economic and some political
controls have been relaxed. Common crime has increased tremendously in
both urban and rural areas. It is, therefore, not surprising that criminal
elements as well as ordinary people have become involved in drug
trafficking. Increased narcotics flows have probably led to and been
facilitated by instances of official corruption. Drug traffickers are able to
offer substantial bribes to poorly paid local police, military, customs, and
civilian officials. China has repeatedly launched campaigns against official
corruption, though it has not yet publicized action against any narcotics-
related corruption.
Nonetheless, China's accomplishments are impressive. I believe it
demonstrates the commitment of the central [government] and certain
provincial governments to address the mounting narcotics problem. I
believe the Chinese realize that narcotics are a threat to their national
security. History provides a grim lesson about the threat narcotics can
bring to their country. And today, government officials are determined to
control narcotics abuse in China.
US-Chinese Efforts
The committee has asked what the United States is doing to assist the PRC
in its efforts. One of the main objectives of Administrator Bonner's and my
visits to China last year was to advance our bilateral counter-narcotics
agenda. It had been several years since we had held senior-level narcotics
discussions, and we believed the time might be right to try to overcome
obstacles to bilateral cooperation.
I regret to say the seemingly intractable problem of the "Goldfish" case
continues to be an irritant and barrier to Sino-US narcotics cooperation. In
late 1989, US-Chinese narcotics law enforcement cooperation reached new
levels when Chinese authorities sent a drug trafficker to the United States
to testify for the prosecution in a trial involving heroin trafficking from
China to the United States. This cooperation exceeded Chinese law
enforcement cooperation with other nations before or since and was all the
more notable in that it occurred against a backdrop of general deterioration
in bilateral relations after Tienanmen in June 1989.
Unfortunately, the witness requested political asylum although he has
admitted his participation in smuggling heroin to the United States. His
asylum request has been denied, but his legal appeals are moving slowly
with little prospect that the case will be resolved anytime soon. During our
meetings with the Chinese, we emphasized that this case should not stand
in the way of continued cooperation. The Chinese officials also wanted to
increase cooperation but held fast to the principle that improved
cooperation was not possible until we uphold our agreement to return the
witness to China. The PRC officials, including several top law enforcement
personnel, who went out on a limb in 1988 and 1989 to send this witness to
the United States believe that they have reason to question our commitment
to narcotics cooperation. We have explained that our options are limited by
our constitutional and legal procedures. This difference of views has
negatively affected the tone and level of our narcotics relations, although
limited information sharing has continued.
While I believe local and provincial narcotics officials wish to augment
cooperation with DEA and other international law enforcement agencies, I
suggest the overall Chinese Government attitude toward international
contacts and liaison, particularly in as sensitive an area as police work,
will prevent as close cooperation as with other, more open societies.
An additional impediment to official cooperation is the centralization of
Chinese police liaison with foreign law enforcement agencies. Although
most drug trafficking and abuse is located in the southern provinces, the
government requires that all communications between provincial or local
narcotics police officials and foreigners be channeled through the Beijing
public security bureau headquarters. This requirement reduces the
specificity, pertinence, and timeliness of the information we seek to
exchange.
Nonetheless, there has been US-Chinese cooperation in several different
areas. For example,
-- DEA agents from Hong Kong have visited China several times in recent
months seeking to engage their counterparts in an enforcement dialogue;
-- In April 1991, three PRC customs officials attended an INM-funded DEA
enforcement seminar in Hong Kong;
-- In May 1991, DEA conducted a conference in Beijing on chemicals used to
process drugs;
-- In November 1991, INM sponsored a therapeutic community workshop
with 55 participants;
-- There are ongoing joint research efforts in addiction treatment;
-- Later this year, we hope to hold an enforcement seminar for officials in
a southwestern province.
During his May 7-8 meetings in Beijing, Under Secretary [Arnold] Kanter
discussed enhanced cooperation in counter-narcotics efforts. So our
bilateral efforts, modest though they may be, continue and-we hope-expand
as we attempt to put the "Goldfish" obstacle behind us.
Chinese Initiatives
Contrary to the limits in our bilateral cooperation, the Chinese have been
active internationally with their neighbors in the region.
I noted earlier the Chinese involvement with Burma, Laos, and Thailand, and
the UNDCP. Recently, the Chinese signed a UNDCP-funded crop- and income-
substitution project that will also involve the Burmese. It is a 3-year,
$4.5-million project including agriculture, livestock, education, health,
power, water supply, and law enforcement components. Hong Kong
authorities have provided training to PRC officials in the management of air
and sea ports, narcotics intelligence collection, and how to identify illicit
drugs. The Chinese Government seeks to remain engaged at the international
level by participating in seminars and conferences which share information
and build counter-narcotics cooperation.
Hong Kong and 1997
What are the implications for drug control upon the reversion of Hong Kong
to Chinese sovereignty in 1997? The Chinese have not told us exactly what
type of counter-narcotics relationship they will have with Hong Kong
authorities after 1997. The question is not an easy one to answer, but I
would speculate that, given the strong commitment of both the PRC and Hong
Kong Governments to drug control, there will be no significant change in the
resolve of the unified country. How much impact this resolve will have on
control efforts is difficult to forecast. On our part, we hope to continue our
cooperative counter-narcotics relations, which are excellent, with the
authorities in Hong Kong after 1997. We are working to ensure our bilateral
agreements with Hong Kong will endure through the end of the decade and
beyond.
Just as we have problems in controlling the flow of drugs through our
country and in reducing demand, so do the Chinese. I believe it is in the
interest of the United States to work together with the Chinese on the
projects we now have under way. In order to carry on the fight against
heroin traffickers, it is imperative that we attack every link in the heroin
chain. Our work with the PRC underscores this continuing effort, and we
would welcome the committee's support. (###)
Dispatch, Vol 3, No 21, May 25, 1992
Title: US-Kazakhstan Trade Agreements And Bilateral
Investment Treaty
PA
Source: Office of Public Communication, Bureau of Public
Affairs
Date: May, 25 19925/25/92
Category: Focus on Emerging Democracies
Region: Eurasia
Country: Kazakhstan
Subject: Trade/Economics, International Law
[TEXT]
On May 19, 1992, the United States and Kazakhstan signed a series of
agreements, including a bilateral investment treaty, designed to expand
commercial relations between the two countries.
The Treaty on Reciprocal Encouragement and Protection of Investment
provides specific legal protections for investors, including guarantees for
unrestricted transfer of investment profits, dividends, and capital. It also
exempts investors from requirements to purchase goods and services
locally and allows access to international arbitration in cases of disputes
with the host government.
Other trade agreements provide reciprocal most-favored-nation tariff
treatment and authorize the Overseas Private Investment Corporation to
offer investment insurance to US private investors. A new tax convention,
scheduled to be finalized in the fall, aims to avoid instances of double
taxation and assure non-discriminatory tax treatment.
President Bush also announced the creation of a business development
committee, headed by the Secretary of Commerce, to identify measures to
increase contacts between private Kazakh and American firms.
The US Embassy in Kazakhstan is located in the Seyfullona Building, Alma-
Ata, telephone (7) (3272) 63-13-75, The Charge d'Affaires ad interim is
William H. Courtney. The economic officer is Jackson McDonald. (###)