US DEPARTMENT OF STATE DISPATCH
VOLUME 6 NUMBER 3, JANUARY 16, 1995
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

ARTICLES IN THIS ISSUE:

1.  The U.S.-Japan Partnership In the 21st Century--
President Clinton, Secretary Christopher, Japanese Prime
Minister Murayama, Japanese Deputy Prime Minister and
Foreign Minister Kono

2.  The U.S. and Central and Eastern Europe:  Forging New
Partnerships--President Clinton

3.  Building Peace and Prosperity in the Middle East and
North Africa:  The Role Of a Regional Development Bank--
Secretary Christopher, Summary Conclusions

4.  Building a Pacific Community--Winston Lord



ARTICLE 1

The U.S.-Japan Partnership In the 21st Century
President Clinton, Secretary Christopher, Japanese Prime
Minister Murayama, Japanese Deputy Prime Minister and
Foreign Minister Kono
Opening statements at a news conference, Washington, DC,
January 11, 1995.

President Clinton.  Good afternoon.

I am delighted to welcome Prime Minister Murayama here for
his first official visit.  It comes at a very important time-
-a time when we are beginning to mark the 50th anniversary
of the end of World War II; a time when we must move to
strengthen the vital partnership between our people for the
21st century.

We are starting this year in exactly the right way, working
together as representatives of two great democratic nations,
committed to solving the problems we face together.  We know
that America has no more important bilateral ties than those
with Japan.  In a dramatically changing world, we look to
Japan as an unwavering friend--one devoted, as are we, to
promoting peace and advancing prosperity.

Recently, the vitality of our relationship has been
illustrated again by our cooperation to diffuse the danger
of nuclear weapons on the Korean Peninsula.  Working
together with our South Korean allies, we have confronted
the nuclear threat and stopped it.  The agreement we reached
with North Korea already has frozen their nuclear program in
a way that is verifiable.  North Korea will be giving up
control of nuclear materials that could be used in bombs.
Construction of new and dangerous reactors has stopped.
Ultimately, this program will be dismantled.  All of this is
being done, as I said, with strict outside monitoring and
verification.

Prime Minister Murayama and I talked about our two
countries' roles in implementing the North Korean nuclear
agreement, including some activities each of us will
undertake.  I want to express my appreciation for Japan's
strong support of this agreement, including its willingness
to play a significant financial role.  I reaffirmed my
intention to Prime Minister Murayama that the United States
will also continue to play a leading role in implementing
the agreement.

This year, the United States and Japan will also work
together to develop a comprehensive blueprint for
liberalizing trade among the rapidly growing Asian-Pacific
economies.  We are confident that during its chairmanship of
APEC, Japan will show the leadership necessary to chart the
course and fulfill the goals of the agreements announced in
Indonesia in November.  Free and fair trade in Asia will
deliver more high-paying jobs for American workers.  Those
are exactly the jobs that will give more Americans a chance
to pursue the American dream.

The Prime Minister and I discussed our bilateral economic
relationship.  Under our Framework Agreement, I am pleased
to announce that this week we reached an accord that will
open up Japan's financial services sector to American
businesses.  Over the past four months, we have also forged
agreements to open Japanese Government procurement as well
as Japan's glass and insurance markets to American
companies.  These agreements must, of course, be fully
implemented to ensure that real results are achieved, and
more remains to be done.  But in the last calendar year we
have reached eight separate agreements, for a total of 14
during the two years I have been in office.

Still, Japan's current account surplus is too high, largely
because it is just coming out of a period of recession.  But
further progress must be made, especially in the areas of
autos and auto parts, which make up the bulk of our trade
deficit with Japan.  Negotiations there are set to resume
soon.  I am firmly committed to opening the market in this
and other areas.  We must redouble our efforts to assure
further progress.

Finally, let me say that the Prime Minister and I will
release today the first report detailing the tremendous
achievements that have been made in the range of joint
projects on global issues.  In programs that address such
problems as explosive population growth in AIDS, the
eradication of polio, and the battle against the drug trade,
our common agenda for cooperation is making great strides in
confronting issues that know no national boundaries.

These are just a few of the projects that our nations are
working together on, and they are proof of a relationship
that no one could have dreamed of 50 years ago or perhaps
even 20 years ago.  Today, we have every confidence that the
extraordinary bonds between Japan and the United States will
only grow stronger in the years, the decades, and the new
century to come.


Prime Minister Murayama.  At the beginning of the year
marking the 50th anniversary of the end of World War II,
President Clinton and I confirmed the importance of Japan-
U.S. relations today, which have been built by the people of
Japan and the United States over 50 years.  We agreed to
further develop Japan-U.S. relations toward the future.

I took this opportunity to express my gratitude for the
magnanimous assistance which the United States had provided
Japan after the war.  Both our governments share the view
that it is important for Japan and the United States to
firmly maintain the Japan-U.S. security arrangements.  We
reaffirmed that both our countries would further advance
cooperation for the peace and prosperity of the Asia-Pacific
region.

Japan will cooperate with the United States toward the
success of the APEC meeting in Osaka, to be held this
autumn.  We will also further advance the common agenda
which emphasizes the Asia-Pacific region.

Today, the joint report on the common agenda was submitted.
During this summit meeting, we agreed to add women and
development as new areas under the common agenda.  In my
talks with the President, I trust the importance of
advancing exchanges between the people of our countries and
cited the exchange of students as a specific example.

We also exchanged our views on international issues of
common interest.  The Government of Japan strongly supports
last year's agreed framework between the United States and
North Korea.  I stated that to ensure the success of the
Light-Water Reactor project, which directly relates to the
security and stability of the northeast Asian region,
including Japan, the Government of Japan intends to play a
significant financial role in the LWR, or Light-Water
Reactor project, under an overall project scheme in which
the Republic of Korea is expected to play the central role.

Regarding the economic aspects, since the end of September
last year, discussions have been concluded on the flat glass
and financial sectors, and agreement was reached to resume
the automobiles and auto parts talks.  We commended such
progress and confirmed that we would continue to seriously
engage ourselves in the Japan-U.S. framework talks.

During this pivotal year, I am resolved to make efforts to
advance the Japan-U.S. creative partnership together with
President Clinton, building on today's meetings as a good
starting point.  Furthermore, I look forward to welcoming
President Clinton to Japan as a state guest this autumn.


Remarks at photo opportunity, Washington, DC, January 10,
1995.

Secretary Christopher.  Good afternoon.  It is a great
pleasure for me to welcome Prime Minister Kono for
discussions in advance of the meeting tomorrow between
President Clinton and Prime Minister Murayama. As we
commemorate the 50th anniversary of the end of the Pacific
war, it is very appropriate for us to begin by paying
tribute to the major contribution to world peace and
prosperity that the partnership between the United States
and Japan makes.

Our alliance with Japan remains the foundation of our
overall relationship, and the anchor of America's strategic
engagement in the Pacific region.  The enduring strength of
this alliance reflects our shared commitment to security and
stability in the Asia- Pacific region.

The vital importance of the U.S.-Japan relationship has been
demonstrated time and time again.  Last October, working
together with South Korea, our cooperation produced the U.S.-
D.P.R.K. Agreed Framework, helped to lift the specter of a
nuclear arms race from Northeast Asia, and bolstered a non-
proliferation regime, which is so essential to global
security.

Now Japan and the United States have indispensable roles to
play in implementing the frameworks terms. We appreciate the
very strong contributions Japan and South Korea will make to
the Light-Water Reactor and to establishing the Korean
Energy Development Organization that will oversee a major
portion of the implementation work.

We look forward in the next year or two to working with
Japan on another critical non-proliferation goal, and that
is to ensure the unconditional and indefinite expansion of
the Nuclear Non-Proliferation Treaty.  Short-term extension
or outright failure would certainly threaten the security of
all nations.

The United States and Japan also share great
responsibilities as great trading nations. We cooperated
successfully to conclude the Uruguay Round and will
certainly be looking to Japan in its capacity as the chair
of APEC in 1995 to lead the way in devising a sound
blueprint for implementing the Bogor Declaration, which
calls for open and free trade in the Asia-Pacific region by
the year 2020.

The United States remains intent on placing our economic and
trade relationship with Japan on just as positive a footing
as our very strong security and diplomatic ties.  In recent
months, we have reached very important agreements with Japan
on the U.S.-Japan economic framework--agreements that will
expand access to the Japanese market for American
businesses.  More progress must be made. We must fully
implement the agreements we have reached and reach
agreements in other sectors.  I particularly look forward to
making early progress in the very important automotive
sector, where our negotiators will reopen discussions later
this month.

This year, we also intend to broaden our remarkable
cooperation on what has been called the U.S.-Japan common
agenda.  This very ambitious partnership unites the two
largest economies in the world in a common quest to tackle
daunting problems like the environment, population,
children's health, and AIDS.  We also hope to improve our
mutual understanding by launching a major initiative to
expand opportunities for Americans to study in Japan.  This
is one of Ambassador Mondale's most important projects and
is one that is extremely important for the United States as
well.

These are some of the principal issues I will be discussing
with Foreign Minister and Deputy Prime Minister Kono as we
prepare for the meeting of our leaders tomorrow.  I am sure
that, working together, he and I will be able to enhance and
reinforce what is truly one of the most significant and
productive relationships in the world.  Mr. Minister, I
welcome you here very, very warmly.


Foreign Minister Kono.   I, today, have the opportunity to
talk to Secretary Christopher.  We are expecting the summit
meeting between our two leaders tomorrow.  This year is a
landmark year, marking the 50th year since the end of World
War II.  So it is very significant that the leaders of the
two countries meet at the very beginning of this landmark
year.  For that meeting to be a great success, it also is
very important for the two of us to get together today to
talk.  I have been in the office of Foreign Minister for
more than six months now, and during that time, I have had
four meetings with Secretary Christopher, including this
one.

I am very pleased to note that there have been so many good
results coming out of each meeting, and for this year, also,
I would like to make my own best efforts for bilateral
cooperation in the global interest.

To achieve this end, I would like to discuss with Secretary
Christopher all the issues that we have between us,
including the security, economic, and all other issues.  I
very much look forward to our talks today.  (###)



ARTICLE 2

The U.S. and Central and Eastern Europe:  Forging New
Partnerships
President Clinton
Remarks to Plenary Session of the White House Conference on
Trade and Investment in Central and Eastern Europe,
Cleveland, Ohio, January 13, 1995

Thank you very much.  Mayor White; Congressmen Stokes,
Sawyer, and Brown; distinguished officials here from
Cleveland and Cuyahoga County.  Secretary Brown, thank you
for your kind introduction.  That was an illustration of
Bill Clinton's second law of politics, that introduction--
whenever possible, be introduced by someone you have
appointed to high office.  You always get a good one.

I do want to say here that I believe, in the history of the
Department of Commerce, there has never been a better
Secretary than Ron Brown.  I am grateful to him for his
dedication to the American business community and to the
growth of the American economy and for his commitment to
international outreach.

I thank the Commerce Department and the Business Council for
International Understanding for organizing this conference.
You have assembled an impressive and diverse group--
delegations from Central and Eastern Europe, business
leaders from the United States and Europe, American ethnic
leaders from all around our country, and so many outstanding
state and local officials.  I thank you all for being here.

I have to say I am especially pleased we are meeting in
Cleveland.  Many of the men and women who made this great
city a foundation of America's industrial heartland came to
our shores from Central Europe.  With just a little money,
but with lots of determination and discipline and vision,
they helped build our great nation.  Now their children and
their grandchildren are leaders in Cleveland and in dozens
of other American communities all across our country.
Strong bonds of memory, heritage, and pride link them today
to Europe's emerging democracies.  So it is fitting that we
should be meeting here.

I also chose Cleveland because people here know what it
takes to adapt to the new global economy.  Whether you are
in this great state or in Central Europe's coal and steel
belt, meeting the challenges of change is hard.  But
Cleveland--Cleveland is transforming itself into a center
for international trade.  It is a real model   for economic
growth throughout our country.  Already, Cleveland exports
$5.5 billion worth of goods every year, and that trade
supports 100,000 jobs.

Cleveland was one of the cities to recently win in a highly
competitive effort to secure one of our empowerment zones.
Cleveland was selected because of the remarkable partnership
that has been put together here between the public and
private sectors.  So I am very glad to be here.

I  came to this office with a mission for my country that
involves all the countries represented here today.  I came
because I believed we had to make some changes to keep the
American dream alive in the United States; to restore a
sense of opportunity and possibility to our people in a time
of great and sweeping change; and to give us a clear sense
of purpose at the end of the Cold War, as we move toward the
21st century.

But I also wanted us to move into that new century still the
world's leader for peace and democracy and for freedom and
prosperity.  This conference symbolizes both those
objectives.  We have worked hard in the United States to get
our economy going again, to get our government deficit down,
to invest in our people and the technologies of the future,
and to expand trade for our own benefit.  We have been
fortunate in this country in the last two years in
generating over 5.5 million new jobs, and having a new sense
that we could bring back every important sector of our
economy.  But we know that over the long run, our success
economically in America depends upon our being true to our
values here at home and around the world.

So, I say to you that I came here today because I know that
America must remain engaged in the world.  If we do so,
clearly, we have a historic opportunity to enhance the
security and increase the prosperity of our own people in a
society that we hope will be characterized forevermore by
trade, culture, and learning across national lines rather
than by hatred, fighting, and war.

Many of you in this room are proving that proposition every
day.  The new partnerships that you are forging between
America and Central Europe bring tangible benefits to all
the people involved.  Increased trade and investment
promotes our exports.  It gives our people new skills and
creates good jobs--but not only for us--for our trading
partners as well.  It plays another very important role--it
gives us a dividend by helping the nations with which we
trade, and especially the nations in Central Europe, to
consolidate their hard-won democracy on a foundation of free
enterprise and political freedom.

In all of our countries, we stand at the start of a new era,
an era of breathtaking change and expanding opportunities.
The explosion of trade and technology has produced a new
global economy in which people, ideas, and capital come
together more quickly, more easily, and more creatively than
ever before.  It is literally true that the end of the Cold
War has liberated millions of Europeans and introduced both
free markets and democracy to countries not only there, but
on every continent of the globe.

This promise is also clouded by fear and uncertainty.
Economic uncertainty--the breakdown of the old rules of the
social contract is a problem in every advanced Western
democracy and in wealthy countries in the East, such as
Japan.  Beyond that, and even deeper, is aggression by
malicious states and transnational threats such as
overpopulation and environmental degradation, terrible
ethnic conflicts, and the proliferation of weapons of mass
destruction--all these problems beyond our own borders make
it tempting to many Americans to retrench behind our
borders, to say, look, we've got a lot of possibilities and
we've got more problems than we can handle here at home, so
let's just forget about the rest of the world for a while.
They say we did our job in the Cold War, we spent our money
to keep the world free from communism, and we are tired, and
we've got plenty to do here.

There are many people who believe exactly that in this
country--and in our Congress.  But the very fact of
democracy's triumph over the Cold War, while it has led some
to argue that we ought to confine our focus to challenges
here at home and to say we cannot afford to lead anymore, in
fact, imposes on us new responsibilities and new
opportunities.  I would argue that we cannot benefit the
American people here at home unless we assume those
responsibilities and seize those opportunities.

Those who say we can just walk away have views that are
short-sighted.  We must reach out, not retrench.  I will
continue to work in this new Congress with both the
Republicans and the Democrats to forge a bipartisan
coalition of internationalists who share those same
convictions.  The agreement we reached yesterday with
congressional leaders from both sides of the aisle to help
Mexico restore full confidence in its economy demonstrates
the potential of a coalition committed to America's
interests in the world of tomorrow.  I will do everything in
my power, as I have done for two years now, to keep our
country engaged in the world.  I will not let anyone or
anything divert the United States from this course.  The
whole future of the world and the future of our children
here in the United States depend on our continued
involvement and leadership in the world.

History teaches us, after all, that security and prosperity
here at home require that we maintain a focus abroad.
Remember that after World War I, the United States refused
the leadership role.  We withdrew behind our borders--behind
our big trade barriers.  We left a huge vacuum that was
filled with the forces of hatred and tyranny.  The resulting
struggle in World War II to preserve our freedom cost
millions of lives and required all the energy and resources
we could muster to forestall an awful result.

After the Second World War, a wise generation of Americans
refused to let history repeat itself.  So, in the face of
the communist challenge, they helped shape NATO, the
Marshall Plan, GATT, and the other structures that ensured
50 years of building prosperity and security for America,
Western Europe, and Japan.

Ultimately, the strength of those structures, the force of
democracy, and the heroic determination of people to be free
produced victory in the Cold War.  Now, in the aftermath of
that victory, it is our common responsibility not to
squander the peace.  We must realize the full potential of
that victory.  Now that freedom has been won, all of our
people deserve to reap the tangible rewards of their
sacrifice--people in the United States, and people in
Central Europe.  Now that freedom has been won, our nations
must be determined that it will never be lost again.

The United States is seizing this moment.  History has given
us a gift and the results are there to prove it.  Because of
the agreements we reached with Russia, Belarus, Kazakhstan,
and Ukraine, for the first time since the dawn of the
nuclear age, Americans can go to bed at night knowing that
nuclear weapons from the former Soviet Union are no longer
pointed at our children.

Our patient but hardheaded diplomacy has secured an
agreement with North Korea on nuclear issues that is clearly
and profoundly in our interest.  The critics of that
agreement are wrong.  The deal stops North Korea's nuclear
program in its tracks.  It will roll it back in years to
come.  International inspectors confirm that the program is
frozen, and they will continue to monitor it.  No critic has
come up with an alternative that is not either unfeasible or
foolhardy.

U.S. troops, who maintain their preparedness and their
enormous capacity to stand up for freedom as the finest
fighting force in the world, have stood down Iraq's threat
to the security of the Persian Gulf.  They caused the
military regime in Haiti to step down peacefully--to give
the Haitians a chance at democracy.

We are using our influence constructively to help people
from the Middle East to southern Africa transform their
conflicts into cooperation.  We have used our ability to
lead on issues like GATT and NAFTA, the Asian Pacific
Economic Cooperation Council, and the Summit of the Americas
to help create a new trading system for the next century.

Already, trade is becoming more free and more fair and
producing better jobs for our people and for others around
the world.  In Central Europe, as elsewhere, the United
States has moved aggressively to shape the future.  The
reasons are simple:  Helping Central Europe consolidate
democracy and build strong economies is clearly the best way
to prevent assaults on freedom that, as this century has so
painfully demonstrated, can turn quickly into all-consuming
war.  A healthy and prosperous Central Europe is good for
America.  It will become a huge new market for our goods and
services.

America is also engaged with Central Europe because it is
the right thing to do.  For four-and-a-half decades, we
challenged these nations to cast away the shackles of
communism.  Now that they have done so, surely we have an
obligation to work with them--all of you who are here--to
make sure that your people share with our people the rewards
of freedom that the next century and the new economy can
bring.

Some argue that open government and free markets cannot take
root in some countries, that there are boundaries--that
there necessarily will be boundaries to democracy in Europe.
They would act now in anticipation of those boundaries by
creating an artificial division of the new continent.
Others claim that we simply must not extend the West's
institution of security and prosperity at all--that to do so
would upset a delicate balance of power.  They would confine
the newly free people of Central Europe to a zone of
insecurity and, therefore, of instability.

I believe that both those visions for Europe are too narrow,
too skeptical--perhaps even too cynical.  One year ago this
week, in Brussels, Prague, Kiev, Moscow, and Minsk, I set
forth a vision of a different Europe--a new Europe that
would be an integrated community of secure and increasingly
prosperous democracies; a Europe that, for the first time
since nation-states came into existence on the European
Continent, would not be subject to a dividing line.

With our engagement with the countries of Central Europe and
the former Soviet Union, we can help make that vision a
lasting reality.

Security and Stability

First, Europe must be secure.  The breakup of the Soviet
Union has made the promise of security more real than it has
been for decades.  But reform in Russia and all the states
of the former Soviet Union will not be completed overnight,
in a straight line, or without rocky bumps in the road.  It
will prove rough and unsteady from time to time, as the
tragic events in Chechnya remind us today.  Chechnya is part
of the Russian Federation, and we support the territorial
integrity of Russia, just as we support the territorial
integrity of all its neighbors.  But, the violence must end.
I call again on all the parties to stop spilling blood and
start making peace.  Every day the fighting in Chechnya
continues is a day of wasted lives, wasted resources, and
wasted opportunities.  So, we again encourage every effort
to bring the bloodshed to a lasting end.  We encourage the
proposals put forth by the European Union and the
Organization for Security and Cooperation in Europe.  These
proposals deserve to be heard and embraced.

Some have used this conflict in Chechnya to question
continued American support for reform in Russia.  But that
conflict, terrible though it is, has not changed the nature
of our interest.  We have a tremendous stake in the success
of Russia's efforts to become a stable, democratic nation,
and so do all the countries represented here today.  That is
why the United States will not waiver from our course of
patient, responsible support for Russian reform.  It would
be a terrible mistake to react reflexively to the ups and
downs that Russia is experiencing and was bound to
experience all along and will continue to experience in the
years ahead, indeed, perhaps for decades, as it undergoes a
historic transformation.

If the forces of reform are embattled, we must renew--not
retreat from--our support for them.  So we will continue
again to lead a bipartisan effort here at home and an
international coalition abroad to work with Russia and also
with the other New Independent States of the former Soviet
Union to support reform, to support progress, to support
democracy, and to support freedom.

We are well aware, too, of Central Europe's security
concerns.  We will never condone any state in Europe
threatening the sovereignty of its neighbors again.  That is
why the United States protected Baltic independence by
pressing successfully for the withdrawal of Russian troops.

In this period of great social and  political change, we
want to help countries throughout Central Europe achieve
stability--the stability they need to build strong
democracies and to foster prosperity.  To promote that
stability, the United States established the Partnership for
Peace.  We have taken the lead in preparing for the gradual,
open, and inevitable expansion of NATO.  In just a year, the
Partnership for Peace has become a dynamic forum for
practical military and political cooperation among its
members.  For some countries, the partnership will be the
path to full NATO membership.  For others, the partnership
will be a strong and lasting link to the NATO alliance.

Last month, NATO began to clearly and deliberately map out
the road to enlargement.  Neither NATO nor the United States
can today give a date certain for expansion, nor can we say
today which countries will be the first new members.  But
let me repeat what I have said before:  The questions
concerning NATO expansion are not whether NATO will expand,
not if NATO will expand, but when and how.  When expansion
begins, it will come as no surprise to anyone.  Its
conditions, its timing, and its military implications will
be well and widely known and discussed in advance.

NATO membership is not a right.  We expect those who seek to
join the alliance to prepare themselves through the
Partnership for Peace for the obligations of membership--
they are important.  Countries with repressive political
systems, countries with designs on their neighbors,
countries with militaries unchecked by civilian control, or
with closed economic systems need not apply.

Let me say once again:  Only the 16 members of NATO will
decide on expansion.  But NATO expansion should not be seen
as replacing one division of Europe with another one.  It
should, it can, and I am determined that it will increase
security for all European states--members and non-members
alike.  In parallel with expansion, NATO must develop close,
strong ties with Russia.  The alliance's relationship with
Russia should become more direct, more open, more ambitious,
and more frank.

European security embraces a democratic Russia.  But for
Central Europe to enjoy true security, its nations must
develop not only military ties and security arrangements but
also successful market economies.  If we have learned
anything about the new century toward which we are moving,
it is that national security must be defined in terms that
go far beyond military ideas and concepts.  That is why we
are all here.  From Tallinn to Tirana, people must have good
jobs so that they can provide for their families and feel
the self-confidence necessary to support democracy.  They
must have the tools to adapt to this rapidly changing global
economy.  In short, they must have economic confidence to
believe in a democratic future.

Since the fall of the Berlin Wall, the United States has
played an important role in promoting these goals.  We have
strongly supported Central Europe's integration into the
European Union.  We have taken significant steps to improve
access to our own markets, and we have provided Central
Europe with financial aid, technical support, and debt
relief.  This assistance has been used for a staggering
array of projects--from helping the Czech Republic draft a
modern bankruptcy code, to training commercial bankers in
Slovakia, to advertising and equipping modern and
independent media throughout the region.

But for all our government has done and will continue to do,
the fact remains that only the private sector can mobilize
the vast amounts of capital and the human skills and
technology needed to help complete the transformation of
Central Europe's free markets.

President Walesa put it to me this way last July:  "What
Poland needs," he said, "are more American generals--like
General Electric and General Motors."  That is not a
commercial; I could have advertised the other auto
companies, the other electric companies.  Congressman Stokes
reminded me that Lincoln Electric, here in Cleveland, just
got the Secretary of Commerce's E Award last night.  But the
point is that President Walesa's comment defines national
security for Poland in a broader context and demonstrates an
understanding of what it will take for democracy and freedom
to flourish.

Economic Reform

In just five years, most of the countries in Central Europe
have undertaken many of the difficult reforms necessary to
build credibility with investors and trading partners, to
make themselves attractive to the General Electrics and the
General Motors.  Bold economic   reform works.  Countries
that have pursued it with the greatest conviction have
rebounded most quickly from the recession.  They are among
Europe's fastest-growing economies,  and they are drawing
the most foreign trade and investment.

More trade and investment is good for Central Europe.  But
make no mistake about it, it is also very good for the
United States.  For all of us, it means more jobs, higher
wages, and an opportunity to learn the new skills we need to
succeed in the new global economy.  I say again, it means
more real security.

Consider the benefits of just two  recent American ventures
in Central Europe:  The International Paper Company of New
York bought a major mill in Poland, retrained its work
force, and turned it into a thriving exporter.  It also
acquired a strong presence in the competitive European
market that will generate $30 million in American exports in
support of hundreds of jobs back here at home.

Denver-based U.S. West will soon bring nationwide cellular
phone service to Hungary.  That will give Hungarians, who
now wait an average of 12 years to get a phone, immediate
access to modern communications.  And it will produce $28
million in United States exports and will support hundreds
of jobs here in the United States.  I have to say--sort of
off the record--that we will also soon make the Hungarians
as frayed around the edges and overbusy as Americans are
with their cellular phones.  But if they want it, we should
help them have it.

I am very proud that these and literally dozens of other
projects went forward with the help of loans and insurance
and other guarantees from the United States Government.  But
I know what our trade and investment in Central Europe could
do if we all were to make the most of the opportunities that
are there.  Our involvement should be much greater.
American companies and investors are second to none in
identifying good opportunities.  But they will reject a
project if roadblocks to getting it done efficiently and
fairly are too high, especially given the fierce competition
for trade and investment from Latin America and Asia.

Our companies need to be sure that when they make a deal, it
will not be arbitrarily reversed.  They look for full
information and reasonable regulation.  They want clear
commercial tacks and legal codes.  Of course they want
private sector counterparts--the driving force of Central
Europe's economies--with whom they can do business.

One of the most effective roles the United States can play
is to promote continued reform and help businesses do
business, which is, of course, what this conference is all
about.  Our efforts did not begin and will not end here in
Cleveland.  Already we have concluded investment and
taxation treaties with many of the countries represented
here.  The Trade and Development Agency has identified
thousands of business opportunities throughout Central
Europe.  Peace Corps volunteers are teaching business,
banking, and finance skills to new entrepreneurs.  Our
Export-Import Bank is promoting the use of America's
products for major infrastructure products and for bringing
environmental technology and expertise to Central Europe.

Today, I am pleased to announce that the Overseas Private
Investment Corporation has set up two new equity funds that,
together with funds OPIC already supports, should leverage
more than $4 billion in private investment.  Every United
States economic agency is working hard to help American
business, big and small, to take advantage of the
opportunities in Central Europe and around the world.  I
want to say that what I said about Secretary Brown and the
Commerce Department could also be said about the Export-
Import Bank and the Overseas Private Investment Corporation.
It is the strongest economic team the United States has ever
put in the field of international business, and we intend to
see it keep working until we make a success of the ventures
such as the one we are engaged in here today.

All of their teamwork has proved that government can work
for the American people--a proposition very much in doubt in
our country today.  I know how difficult and unsettling this
period of change is for so many people from the countries
represented in this room and here at home, as well.
Sometimes it seems that the more you open your eyes to the
world around you, the more confusing it becomes.  We must
not lose sight of the fact that even greater forces of
history are working for the development of human capacities
and the fulfillment of human dreams than the forces working
to undermine them.

If we use these great positive forces--if we guide them, if
we shape them, if we remain committed to making them work
for us, we can make our people more secure and more
prosperous.  Look at what is happening in Central Europe:
Every day, open societies and open economies are gaining
strength.  Every day, new entrepreneurs and businesses are
spurring growth and are creating jobs in their own countries
and for us back here in America as well.  It is in our
national interest to help them succeed.  We cannot afford to
do otherwise.

Just six years ago, the countries of Central Europe were
still captive nations.  Now, 120 million people have the
freedom to speak their own minds, to create, to build, to
prosper, to dream dreams and try to fulfill them.  This new
freedom is the fruit of Europe's struggle and America's
support.  We owe it to those who brought us this far--more
importantly, we owe it to ourselves and to our children--not
to turn our backs on their historic achievement or this
historic moment.  That is why this Administration will not
retreat.  We will continue to reach out, working together,
trading together, and joining together.  We will fulfill the
great promise of this moment.  Thank you very much.  (###)



ARTICLE 3

Building Peace and Prosperity in the Middle East and North
Africa:  The Role Of a Regional Development Bank
Secretary Christopher, Summary Conclusions


Secretary Christopher
Remarks at a luncheon for an Experts Meeting on the Middle
East Development Bank,Washington, DC, January 10, 1995.
[Introductory remarks deleted.]

We are faced again with a rare challenge in the Middle East.
Extra- ordinary breakthroughs have been made, as we all
know, but they must be sustained and we must find ways to
sustain the momentum toward peace.

Credit and responsibility for the  advances in the peace
process, as usual, of course, remain with the parties.  Only
they can make the fundamental decisions that are necessary.
But the entire international community, represented by all
of you, faces an obligation--indeed, a real imperative--to
provide the parties with the moral, political, and material
support they need to take the risks for peace; the support
they need to overcome the momentous challenges that they all
face.

Over the past four years, we have worked together in pursuit
of the goal of a comprehensive peace in a new era of
prosperity in the Middle East, and as I look around this
room, I see so many faces who have joined together in that
tremendous pursuit of a comprehensive peace.

In 1991 at Madrid, many of the nations assembled here today
joined together to launch the process of bilateral
negotiations which has resulted in the four tracks.  Three
months later in January of 1992, we gathered in Moscow to
launch the multilateral peace process.  Then in October of
1993, we met right here in this building, indeed, right here
in this room at the Donors Conference to pledge our
financial support to bring the Israeli-PLO Declaration of
Principles--to bring that great Declaration to life.

Just 10 weeks ago, business leaders and political leaders
from all the countries in the region and in North Africa
gathered at the Casablanca Summit.  At that meeting we gave
a strong signal to the world that the Middle East and North
Africa are open for business.  With the vision and
leadership of King Hassan, we took very significant steps to
undergird the peace process with a prospect for prosperity.

I think the lesson from all this is clear:  When the
international community works together, we can accomplish a
great deal, but we must work together to support the parties
and to help them translate the gains they have made at the
negotiating table into concrete changes on the ground.

All of us here know that while peace may be symbolized by a
historic handshake, it must be built on more than a
handshake.  Our mission is to transform that handshake into
a peace between people, a peace that fundamentally lifts
their lives.

Governments can sign treaties and they can remove
impediments, but only people can build a peace that will
endure and only the private sector can bring the prosperity
that is so essential and upon which peace ultimately
depends.

Working together, we have started to lay the foundations for
greater regional prosperity.  The boycott is being
dismantled.  When the final remnants are removed--and, of
course, the sooner the better--I feel that the region will
once again become economically whole.

The multilateral peace process has enabled our diplomats and
our technical experts from both within and without the
region to seek solutions to common problems such as water
and the environment.  Under the leadership of the European
Union, the working group has mapped out dozens of projects
that extend cooperation across the entire region.

Most immediately, the spirit and principles of the
Casablanca Declaration have given new force to regional
economic integration, private investment, and a development
of regional economic institutions.

I strongly believe that the creation of a Regional
Development Bank is a natural extension of the spirit of
Casablanca.  It lies within the circle of the region's peace-
makers.  The origin of it comes from the peace-makers.  It
was Egypt, Jordan, Israel, and the Palestinians that came
together and jointly proposed creation of a Regional
Development Bank.

President Clinton announced his support for the bank last
October.  He urged United States officials--many of them in
this room--to undertake the consultations necessary with the
interested parties.  Now the idea of the bank needs to gain
the support of other key nations who have had a long-
standing interest and important stakes in the Middle East.

Existing institutions, we believe, are unlikely to meet the
necessary conditions for growth and prosperity in the Middle
East.  The new bank would compliment and not duplicate the
work of the World Bank, the IMF, and other institutions.

The United States sees a three-fold mission for the Bank.
First, we believe it would promote necessary regional
integration.  The long conflict in that region has distorted
development and left the area economically very much
fragmented.  We feel that sustained growth will require a
regional infrastructure for such important items as
transportation, water, and power.

Second, the new bank would act as an important catalyst for
private investment.  The economic potential of the Middle
East, as with the rest of the world, fundamentally relies on
private sector-led growth, and the bank can help to
stimulate that.

Third, the new bank would provide a forum for a regional
dialogue of great importance.  It would assist in the
development of other new financial institutions, provide
information about investment opportunities in the Middle
East and North Africa, and provide strong, sound advice
about trade and investment opportunities.

Let me conclude by saying that I believe that the meeting
today should produce a general agreement on the next steps
for regional economic integration and cooperation.  I hope
you will find enough common ground here today to set in
motion a process for reaching a broad consensus on a Middle
East Development Bank and then outline the steps necessary
to make it a reality.  Indeed, I am hopeful that you can
make enough progress here to assure that the concept of a
regional bank can be announced with some finality at the
Amman Summit.

I believe that the time for studies has passed.  The time to
move forward to the creation of a regional bank is
definitely here.  At a time when extremists are using terror
and violence to try to kill the chances for peace in the
Middle East, I believe we must show we are committed to the
courageous vision of those who have stepped forward and have
taken risks for peace.

We must make it absolutely clear that we have a stake in the
success of the peace-makers.  The United States will
continue to do all in its power to assist those who are
willing to take risks for peace, and I urge you to take a
positive attitude toward the creation of the new bank
because I think it can send a powerful signal that peace and
prosperity go together in the Middle East, a signal that
will inspire those in the Middle East to take additional
risks for peace.

Thank you again for being here, and for committing this time
and this travel to join us in the pursuit of a comprehensive
peace and taking what I believe will be another very
important step in that direction.

Thank you very much, and I hope you will enjoy your luncheon
with us today.



Summary Conclusions
Text of Summary Conclusions by the Chair, Meeting of
Experts, Washington, DC, January 10-11, 1995.

--We have had in-depth, wide-ranging discussions, with a
common purpose of demonstrating strong support for the peace
process and economic development in the Middle East and
North Africa.

--Participants emphasized that we are responding to a new
political reality in the Middle East and agreed that
economic growth and stability are essential underpinnings of
peace.

--In this regard, we noted the importance of translating
agreements among leaders into tangible peace dividends for
the people of the region.

--We were impressed by the clarity of vision and strength of
commitment expressed jointly by Egypt, Israel, Jordan, and
the PLO in putting forward this historic common proposal for
the creation of a new regional development bank.

--Their proposal illustrates new realities of the Middle
East.  These parties in the region have risen to the
challenge posed by the international community to develop
their own institutional proposals to support their strategy
for moving from conflict to partnership.

--Our efforts are an outgrowth of the Casablanca Economic
Summit, hosted under the auspices of King Hassan II, who has
demonstrated extraordinary vision in advancing the cause of
peace in the region.

--We noted with appreciation the valuable ongoing efforts of
the Regional Economic Development Working Group under the
chairmanship of the European Union.

--There was broad support for the economic goals being
pursued by the region as it strives to create a new Middle
East.  These fell into three main categories:

--Building transborder infrastructure projects;

--Invigorating the private sector and stimulating private
capital flows; and

--Enhancing regional economic policy dialogue, reform,
liberalization, and integration.

--We heard wide support for the need for a new financing
mechanism and had considerable discussion of various
options, with particular attention to the regional proposal
for creating a new bank for economic cooperation and
development.

--In discussion of financing mechanisms, the following
characteristics were suggested as essential to the concept.

--It should be one part of a coherent strategy for
partnership and cooperation among regional and extra-
regional parties.

--It should not be a carbon copy of existing regional
development banks, but instead should be a multifaceted
institution tailored to the unique needs and opportunities
of the region.  It should improve the efficiency of the
present financial system servicing the region.

--Contributing to its unique nature would be a focus on
projects to promote regional integration and its role as a
catalyst for private sector investment.

--It must have a sound financial structure and mandate that
would enable it, inter alia, to command strong support from
international capital markets.

--It should emphasize co-financing with existing
institutions and the private sector.

--Funds should be lent only at  market rates.  However, it
could administer voluntary trust funds that could offer
concessional rates for special activities.

--It should cooperate closely with the IMF, World Bank and
other regional institutions, whose role would remain
essential in the region.

--Members obviously will subscribe to core principles:
peaceful relations with neighbors in accord with the Madrid
process, and commitment to regional economic development and
cooperation.  They would also eschew direct and indirect
economic boycotts.

--A number of regional and non-regional delegations
supported the proposal of the four core parties.  Other
delegations expressed views in favor of exploring other
options.

--We were also encouraged by the emphasis which parties of
the Middle East and North Africa place on enhancing regional
dialogue, reform, and integration.  There was wide support
on the need for a forum for regional economic cooperation.

--In light of the discussion, we agreed on an intensive work
program.  To facilitate this process, Egypt, Israel, Jordan
and the PLO have produced a paper outlining their vision.

--A Task Force will develop detailed proposals for new
institutional arrangements that will meet three principal
criteria:


1.  Provide new financing mechanisms for the region;
2.  Foster enhanced regional policy cooperation; and
3.  Be responsive to regional proposals.

--In particular, the Task Force will produce detailed
recommendations on the proposal for a regional development
bank for the Middle East and North Africa, as well as any
other broadly supported specific proposals.  The chair
believes that the various options raised are complementary
and not mutually exclusive.

--Regarding the proposal for a bank, the Task Force will
consider its mandate, membership, eligibility for borrowing,
relationship to other financial and policy institutions,
operational functions, capital requirements, governance, and
interim arrangements.

--Regarding the proposal for an economic cooperation
institution, the Task Force will consider its functions,
scope of work, institutional structure, and governance.

--The Task Force will produce these recommendations for a
political-level decision on creating new institutional
arrangements for the region by the Amman Economic Summit
scheduled for October 30-November 1, 1995.

--The participants welcomed the offer of the United States
to host the first Task Force meeting on March 8-9 in
Washington.

--Meetings will take place approximately monthly thereafter,
with opportunities to meet in the region and around other
multilateral financial settings.

--A range of consultations may take place in advance of the
March Task Force meeting.  (###)



ARTICLE 4

Building a Pacific Community
Winston Lord, Assistant Secretary for East Asian and Pacific
Affairs
Statement before the Commonwealth Club, San Francisco,
California, January 12, 1995

Considering that recent speakers here have included Dan
Quayle, with his legendary Murphy Brown speech, the
incomparable Ambassador Shirley Temple Black, and the
controversial Vladimir Zhirinovsky, my appearance today
augurs the Chinese New Year--namely, the Year of the Boar.

Mr. President, let me thank you and the Commonwealth Club of
California for your invitation and for your gracious welcome
to one of America's pre-eminent forums.

I am very pleased to be back here in San Francisco, a city
that prides itself as America's Pacific gateway.  A century-
and-a-half ago, Richard Henry Dana called this city "the
sole emporium of a new world, the awakening Pacific."  What
better place than California--a state with enduring
economic, political, and ancestral ties to the region, a
state that cherishes the diversity of its own citizens--to
evoke America's place in the Pacific Community.

Skeptics ask, is there a Pacific Community?  The honest
answer is, not yet.  But will one emerge over time?
Clearly, building such a community will take persistence and
patience.  We cannot force its definition; nor should we
forfeit our differences.  We will not see--and we do not
seek--the cohesion of the smaller, more homogeneous Europe.
The diversity of the Asia-Pacific region is a reality we
recognize and respect.  Its distinctions will be a major
source for the region's future dynamism.

Nevertheless, the contours of commonality are surfacing in
the Pacific.  Trade is linking economies, telecommunications
are transcending borders, and transportation is shrinking
distances.  The nations of the Asia-Pacific region trade
more intensively among themselves than those of Europe.
Business people are spurring regional integration.
Diplomats are strengthening regional institutions.

These realities lend substance to President Clinton's vision
of a Pacific Community of shared prosperity, security, and
freedom.

Given the huge canvas of Asian-Pacific issues and the limits
of time, I must paint in broad brush strokes the policies of
this Administration.

January 1993

When the Clinton Administration took office in January 1993,
it was the first to confront head-on the post-Cold War world
with all its advantages and ambiguities.  On this uncharted
terrain the great promise of the Pacific clearly stood out.

You need no reminder of this region's importance or
prospects.  It is home to the fastest growing economies, the
most lucrative for American exports and jobs.  Our trade
across the Pacific is more than half again as large as that
across the Atlantic.  U.S. exports account for 21/2 million
American jobs.  The potential is awesome--to take just one
example, the huge Asian infrastructure projects looming
ahead for the rest of this decade are roughly equivalent to
building 15 Santa Monica freeways every day.

In a region where the major powers intersect, we have
abiding security interests.  While we have fought three wars
there in the past 50 years, relations among the strongest
powers are more stable today than they have been in this
century.  The uplifting movement toward freedom around the
globe runs strong in Asia, boosted by satellites, cellular
phones, and fax machines, and by the universal principle
that people do not live by rice alone.  Here at home, our
population has been shifting toward the Pacific.  It is
enriched by the influx of Asian-Americans and the
contributions they make of good old Confucian--not to
mention American--values:  education, hard work, and family.

But while the great potential of the Pacific has been clear
to far-sighted Californians and Americans since the days of
Richard Henry Dana, only in recent years has the United
States attempted to define its Pacific identity, role, and
interests.  In so doing, we face three conceptual
challenges.

First, our national identity still rests heavily on our
legacy of Eurocentrism.  This central orientation was
heightened during the Cold War, shaped by our traditional
immigration patterns, security links, and trade flows.

In 1993, this Administration adjusted the national focus,
bringing home to the American people the stakes in the Asia-
Pacific region and signaling to our regional partners that
we would intensify our engagement.  That July, the
President's first overseas trip was to Tokyo and Seoul where
he projected his vision of a Pacific Community.  That
November, the President elevated the leading regional
economic organization, APEC, in Seattle by convening the
first summit ever held of Asia-Pacific leaders.  By
maintaining our forward military presence, promoting
American exports, and increasing cabinet-level visits, we
reinforced our profile and prospects in the Pacific.

The second conceptual challenge is defining the American
role in the new world.  What is the proper mix of unilateral
and multilateral efforts?  American leadership in the Asia-
Pacific region, as elsewhere, remains indispensable, but we
are increasingly compelled to build a broader consensus as
well.  By definition, the construction of a Pacific
Community is a collective undertaking; no one nation--not
the United States, not China, not Japan, not any other
Pacific power--should be the sole architect, contractor, or
proprietor.

Third, there is the challenge of determining the hierarchy
of American interests.  We have traditionally promoted
security, prosperity, and freedom in our foreign policy, but
the Cold War mandated clear priorities.  Then, when the
Secretary of the Treasury or Commerce came to the President
with a trade problem with an ally, the Secretaries of State
and Defense, the NSC Advisor, and the Chairman of the Joint
Chiefs would emphasize the imperatives of the era:  We
needed partners against the Soviet Union, and commercial
disputes had to be managed in that context.  Then, when we
dealt with unsavory regimes we accentuated their anti-
communist posture and trod lightly on their human rights
performance.

Now those days are over.  To be sure--as the North Korean
situation reminds us--security remains central,  but
economic interests are ascendant and the spread of freedom
enhances both.  In the post-Cold War environment, our
fundamental interests remain, but we have a more difficult
task in assigning their priorities.

Our response to this conceptual challenge is to advance all
our enduring interests at once, where possible, in turn,
when necessary.  We pursue multiple objectives:  creating
American jobs and freeing political prisoners; gaining
military access while gainsaying the caning of an American
teenager and the censoring of an American professor;
reconciling our bold economic vision with bold demonstrators
for freedom; resolving the issue of our missing-in-action
and healing the wounds of war; addressing the threat of
population explosion and the excesses of population
regimentation; controlling heroin; and encouraging human
rights.

In some instances, we must make exacting short-term trade-
offs, but that is not always the case, and over the long
run, I am convinced that our goals of security, prosperity,
and liberty are mutually reinforcing.

Thus, with a new style of leadership and a new balancing of
goals, this Administration set out to move the Asia-Pacific
region higher on our international agenda.

This journey involves not only cooperation, but engaging the
countries of the region on stubborn issues of concern to us.
The confluence of events last spring demonstrated that this
was an arduous task.  Our trade negotiations with Japan
broke down, the MFN debate on China broke out, the nuclear
talks with North Korea broke off, and the decibels were high
in our human rights debates.

What I said then, I hereby repeat.  I felt about our
policies in Asia the way that Mark Twain felt about Wagner's
music:  It's not as bad as it sounds!  Many of these
problems had been festering for years and needed time to
resolve.

Moreover, we were making quiet progress on various other
fronts:

--  Building economic cooperation through APEC;
--  Nurturing new security dialogues;
--  Moving ahead with Vietnam;
--  Sustaining Cambodia's democratic struggle;
--  Shoring up our relations with Australia; and
--  Elevating our contacts with New Zealand.

Today, we have regained momentum in both the reality and the
perception of our Asia-Pacific policy.  Successes built
incrementally over time have converged.  We have reached
significant trade agreements with Japan.  We have pursued
comprehensive engagement with China, while strengthening our
ties with Taiwan.  We have achieved a critical Korean
nuclear accord.  We have conducted a more modulated dialogue
on human rights with the nations of the region.  Last
November, the President's and Secretary Christopher's trips
to Asia helped to forge APEC's Bogor Declaration calling for
free and open trade and investment by the year 2020.  Last
August, the historic first meeting of the ASEAN Regional
Forum engaged China, Russia, and Vietnam--along with 15
other countries--in a new security dialogue that promises to
parallel APEC on the economic side.

At mid-term, how is the Clinton Administration doing in the
Pacific?   Let me render a perfectly objective assessment.
You make up your own report card.  On many issues the only
fair grade is incomplete.  We struggle in some areas.  We
face severe tests.  I believe, however, that our overall
record is solid and faithful to the opportunities in this
vast, dynamic region.

Prosperity

In the economic arena, the challenges in January 1993 were,
first, to open up promising, but often protectionist,
markets, particularly Japan and China.  Our second broader
goal was to ensure America's economic place in the Pacific
Community.  In today's global economy, domestic performance
is inextricably tied to full participation in world markets.
Closer economic ties with our Asia-Pacific trading partners
is essential to our--and their--growth.

Both these challenges--removing barriers and strengthening
the Pacific Community's economic ties--will take many years,
but we are determined to press ahead, working on four
levels:  domestic, bilateral, regional, and global.

On the domestic front, clearly we have been getting our own
house in order.  America is back as a responsible manager of
its own economy and a credible leader of the global economy.
Ours is marked by steady, robust growth, with low inflation
and falling unemployment.  The budget deficit has been
slashed, companies are leaner and more competitive, and
export controls have been loosened.  President Clinton and
Secretary Christopher have made commercial diplomacy a top
foreign policy priority.  Never in my many years in
government have I seen talking points for top officials,
including in the State Department, so filled with economic
and business issues.

Bilaterally, we conduct several intensive negotiations.
Through the Japan framework talks we have reached a series
of important sectoral agreements and promoted macro-economic
stimulus in Japan--while admittedly losing the public
relations battle.  Much more remains to be done, and we will
continue our vigorous efforts to open the market.  Japan,
however sporadically, is moving toward a genuine multi-party
system with more competition and consumer votes, and,
therefore, openings for foreign suppliers.  Over time, such
factors should help ease our economic problems.  Still,
Japan's trade surpluses are likely to persist for the
foreseeable future.  Whether our domestic audience will
tolerate this while our multifaceted, incremental approach
produces more concrete results is a critical question.

With China, we have conducted a series of intense economic
negotiations.  There have been some successes, for example,
on textiles.  But overall, progress has been slow, as
Chinese leaders fear to relax their control or open up their
system to foreign competition when the uncertainties of the
economy and succession politics inhibit flexibility.  Two
weeks ago, we were obliged to threaten retaliation because
of egregious pirating of intellectual property rights in
China.  Another urgent issue is China's desire to become a
founding member of the new World Trade Organization.  We
continue to strongly support China's membership, but its
accession must be based on firm commitments to the basic
rules and disciplines of the GATT/WTO system.  As many other
WTO members have stressed, this is an economic question, not
the political one which China purports.

We have formal dialogues with other economies such as Korea,
Thailand, and Taiwan.  We are also engaged in consultations-
-individually and collectively--with all six dynamic ASEAN
economies.  ASEAN, as a whole, is our fourth-largest trading
partner and contributes to multilateral trade liberalization
through its own free trade area.

Bilateral negotiations are often tough, sometimes
acrimonious.  Therefore, we have approached our economic
problems multilaterally as well.

In Seattle, the APEC leaders shaped an economic vision of
the Pacific future.  In Bogor, they made a commitment to
open and free trade by the year 2020, if not sooner.  In
Osaka next November, they should approve a blueprint.
Nothing less than half of the world's GNP and population,
and soon half of its trade, is involved.

The Bogor declaration is a bold political commitment and
economic goal; the benefits for the United States and the
entire Pacific Community will be incalculable.  I believe it
will be a historic achievement and a catalyst for action.
Experience shows, whether in Europe or in Southeast Asia,
that when a target date is fixed, businesses and governments
make anticipatory decisions on investment and trade, and the
pace quickens.

This vision must be buttressed by pragmatic building blocks
to help the private sector.  APEC has already been working
to remove barriers, whether in harmonizing customs and
standards or drafting investment principles.  Thus, we need
both--the vision and muscle of political leaders to
stimulate the bureaucracies, as well as practical measures
to produce immediate progress.

APEC is a global building block, not a regional trading
bloc.  It promotes greater prosperity not only in the area,
but everywhere.  We are now in a phase of competitive
liberalization around the world with America at the hub of
dramatic progress on all three fronts--APEC, the Western
Hemisphere movement toward free trade, and the new World
Trade Organization.  In Seattle, the leaders' vision caught
Europe's attention and spurred the successful conclusion of
the Uruguay Round.  In Bogor, the setting of target dates
spurred the nations of this hemisphere to do likewise three
weeks later at the Miami summit.  Now is unarguably the most
seminal period in international economic history since
Bretton Woods, and I believe the Clinton Administration will
be credited with its decisive leadership.

Our engagement in APEC exemplifies the evolving nature of
that leadership.  When we were the host, we were out front.
When Indonesia was the host, we played a calibrated but
crucial supporting role, helping to forge a consensus.  This
year, we will encourage Japan to sustain the momentum
generated by Presidents Clinton and Soeharto, and to
transform the Bogor commitment into reality.

APEC is a core element of our overall policy toward the Asia-
Pacific.  It is building the networks that are giving
definition to a new Pacific Community, and it helps to
anchor America in the region, not only in economic terms but
also in security and political terms.  Let me now turn to
those issues.

Security

The security challenges we faced in January 1993 included
the persistent Cambodian conflict, the simmering Korean
nuclear problem and the regional fears of a revived Middle
Kingdom, a remilitarized Japan, a resurgent Russia, or a
reduced American presence.

In Cambodia, who would have thought--even two years ago--
that its truly long suffering people would be where they are
today?  Who would have thought that nefarious outside
influences would be eliminated, whether Vietnamese
incursions, Chinese aid, or Thai tolerance of the Khmer
Rouge; that almost 400,000 refugees would return from
Thailand to Cambodia; that the levels of violence would be
dramatically reduced; that despite intimidation and threats,
90% of the population would vote in a free election; that a
victorious coalition of parties who had been fighting each
other would be cooperating against the Khmer Rouge; that the
latter would be suffering large defections and confined to
pockets?

Of course there are huge problems, ranging from poverty to
corruption, from political intrigue to an army in need of
reform.  But the brave Cambodian people have come a very
long way from the "killing fields," thanks, above all, to
their courage, as well as to a remarkably successful United
Nations operation, broad international support, and a steady
American policy.

We and the international community owe it to the Cambodian
people who have survived humanity's most inhuman horrors to
stay the course.  Regional security demands no less.

As recent events have vividly reminded us, the Korean
Peninsula represents the most critical security challenge in
Asia, if not the world.  That Bobby Hall's release took too
long testifies to the legacy of nearly 50 years of
confrontation across the last remaining frontier of the Cold
War.  Without the nuclear framework agreement and its
intense dialogue with North Korea, he might not be free
today.

The nuclear accord itself, of course, will receive intense
scrutiny--as it should--during the coming weeks and months.
We are confident that the more the Congress and the country
examine the agreement, the more they will share our firm
judgment that it fulfills America's goals of promoting
regional stability and curbing nuclear proliferation.

In this accord we address the past, present, and future
nuclear threats posed by North Korea.  The past involves
perhaps one nuclear device.  North Korea has agreed to allow
inspections--including, if necessary, taking samples from
the radioactive waste storage sites, which the IAEA believes
will shed light on how much plutonium North Korea produced
in 1989-91.  Pyongyang steadfastly refused the idea of such
inspections until the last couple of weeks of negotiations.
Granted, clarification of the past is scheduled a few years
later than we would have liked, but these sites are not
going anywhere.  They are under tight surveillance, and
murky history must be clarified before key nuclear
components for lightwater reactors are provided to North
Korea.

We judged that this delay was outweighed by the opportunity
to deal effectively with the present and future.  North
Korea was on the verge of producing large amounts of weapons-
grade plutonium, and, therefore, the capability of building
and selling to others dozens of nuclear weapons every year.
The Agreed Framework obliges North Korea to freeze its
nuclear capacity.  So far it has done so.  It has shut down
its small nuclear reactor.  It has sealed its reprocessing
facility; the spent fuel rods will be safely encased and
eventually shipped out.  It has halted construction on its
two large reactors.  All of this has been verified by IAEA
inspections which continue, along with our surveillance.
North Korea has reversed itself and remains a party to the
Non-Proliferation Treaty.

As for the future, North Korea will dismantle its entire
program, and with outside help, substitute one more
resistant to proliferation.  Moreover, if it faithfully
implements the accord, North Korea will be progressively
integrated into the region and the world, opening up its
system and opening the way toward greater stability in
Northeast Asia.

This agreement is not based on trust.  In addition to
international verification, there are built-in checkpoints
along the path of implementation.  To gain technical or
economic benefits, North Korea must honor reciprocal
obligations.  Specific leverage will ensure that North Korea
derives no advantages that do not also promote regional and
global stability.  Moreover, the major financial costs will
be borne by the international community, not just by the
U.S.

Let me erase one shibboleth right now:  The provision of
fuel oil and lightwater reactors to the North Koreans is not
a reward.  It compensates modestly for energy North Korea
otherwise would be producing with the indigenous nuclear
programs it has agreed to abandon.  Its indigenous
technology was especially dangerous; it produced a great
deal of plutonium and not much energy.  Pyongyang is
forfeiting this program for Western nuclear technology
which, under safeguards, can produce more energy, but not
material for nuclear weapons.  There is nothing in the NPT
that forbids reprocessing under IAEA inspections, and there
is nothing remotely in the NPT that requires destruction of
one's entire nuclear capability.  Thus, North Korea is far
exceeding its NPT obligations and, indeed, our original
objectives.

In short, the Agreed Framework is of major benefit to the
United States, to the region, and to the world.  Countries
everywhere have welcomed it.  The alternatives were dubious
and dangerous.  The accord's critics have a responsibility
to present a better alternative--no one has done so.

Implementing the Framework will require perseverance by all
concerned.  We are working closely with South Korea and
Japan.  As stipulated in the Framework, the South-North
dialogue must be promptly resumed.  We expect contacts
between Seoul and Pyonyang to develop in rough parallel with
steps toward normalization of U.S.-D.P.R.K. relations.  The
future of the peninsula must be shaped by the Korean people
themselves; the Framework can only succeed if there is a
climate of civility and pragmatic cooperation between North
and South.

Even as we deal with near-term crises, we face longer-term
challenges to regional security.  How do we build stable
constructive relations among the major powers--China, Japan,
Russia, and others?  How do we ensure that the United States
continues to play a pre-eminent role in the Pacific?

Virtually every nation in the region wants us to remain
engaged for strategic balance.  In the past two years, we
have reaffirmed our engagement through both words and deeds.
It is in our interest to do so--to maintain stability, to
support our economic interests, and to bolster our
diplomatic position.

Our alliance with Japan remains crucial to our common
defense and to our military presence in Asia.  On the
bilateral front, we have insulated our security ties from
our trade frictions.  As Secretary Christopher said in Tokyo
last year:

We cannot realize the full potential of our relationship
unless we have harmony and strength among all its elements.
We must make our economic and trade links as mutually
beneficial as our political and security bonds.

Still, with the disappearance of the Soviet threat, the post-
Cold War environment, tensions over the commemoration of the
end of World War II, and Japan's political change, we cannot
be complacent about this critical partnership.  During the
coming year, we and the Japanese will systematically examine
security issues and reinforce our alliance.  We will also
demonstrate the breadth of our partnership, from cooperation
on peace-keeping and regional conflicts to joint efforts on
global issues.

With the Chinese, we have followed a policy of comprehensive
engagement, seeking progress on a broad agenda of issues
through high-level visits and working-level negotiations.
Our strategic goal is to help integrate the Middle Kingdom
into the international community, to encourage it to accept
both the benefits and the obligations that come with
interdependence and cooperation.  Meanwhile, we have resumed
a dialogue with China's military leaders to enhance regional
confidence through greater transparency about China's
intentions.

With Russia, our global approach of supporting reform and
integration includes welcoming it into the Pacific
Community.  With Vietnam, while the fullest possible
accounting for our missing-in-action remains our highest
priority, we have important regional security objectives
which improved relations will promote.  We will open up
liaison offices within a few weeks and envision further
progress as Vietnamese cooperation on MIAs continues.

With relatively stable relations among the major nations in
Asia, an unprecedented opportunity exists to build a more
constructive pattern for the coming century.  Thus, the
Administration has explored new multilateral security
dialogues in Asia.  They will supplement, but not supplant,
our alliances and forward military presence which we
rigorously preserve.

Working with ASEAN and other friends, the U.S. has supported
the establishment of the ASEAN Regional Forum (ARF), the
Pacific's first broadly based, consultative body concerned
with security issues.  In contrast to Cold War collective
arrangements, the ARF is an inclusive group not directed
against any country or bloc.  The first historic meeting was
in July 1994, and included the ASEAN countries, the U.S.,
Canada, Japan, Korea, Australia, and New Zealand, as well as
former adversaries China, Russia, and Vietnam.  We believe
the ARF can play an important role in conveying governments'
intentions, easing tensions, promoting transparency,
developing confidence, con- straining arms races, and
cultivating habits of consultation and cooperation on
security issues.

Northeast Asia is both the area where great powers have
clashed historically and the locus of the region's most
urgent security challenges.  Accordingly, there is a strong
need for a sub-regional security dialogue.  In consultations
with others we are laying the groundwork for such a forum
through a series of mixed government/academic conferences on
Northeast Asian Security with Japan, South Korea, China, and
Russia.  North Korea has been invited but has not yet
participated beyond a preparatory meeting.  The other five
countries hope it will now join.

As President Clinton said in Korea:  These dialogues can
ensure that the end of the Cold War does not provide an
opening for regional rivalries, chaos, and arms races.  They
can build a foundation for our shared security well into the
21st century.

Freedom

Finally, there is the goal of freedom.  As we looked at the
Asian landscape in January 1993, we saw that many countries-
-as in the rest of the world-- were moving toward more open
societies and accountable governments.  At the same time,
surely, several key regimes remained caught in a time warp
of repression.

Promoting freedom while balancing other objectives is the
most complex challenge--conceptually and politically--that
we face.  It is a quest in which we get the least
international support.  Our allies endorse human rights and
democracy in principle, but they are often content to hold
our coat and take the business contracts as we take the
political heat.

False prophets claim a contest of values between the United
States, or the West, and an Asian monolith.  They assert
that Asians do not share universal aspirations for
individual rights.  Let them tell that to the Japanese,
Australians, New Zealanders, Filipinos, Thai, Koreans, and
Taiwanese.  Let them tell that to Cambodians crossing
minefields or Mongolians crossing deserts to vote.

I think their electorates and elected leaders would reject
the notion that human rights are uniquely Western, or the
implication that autocracy is intrinsically Asian.  Most
would agree with President Kim of South Korea that, "respect
for human dignity, plural democracy, and free market
economics have firmly taken root as universal values," or
with Burma's opposition leader, Aung San Suu Kyi:  If ideas
and beliefs were denied validity outside the cultural bounds
of their origin, Buddhism would be confined to North India,
Christianity to a narrow tract in the Middle East, and Islam
to Arabia.

What is our message to Asians?  We are not on a crusade.  We
are not trying to impose our form of society or ideals.
Each country must find its own way, consistent with history
and culture.  But international obligations to which
countries have subscribed should be fulfilled.  No
government should violate the core value of human dignity,
as articulated in the Universal Declaration of Human Rights.
Each nation's citizens should have the chance to participate
in the decisions that affect their lives, and the
governments they elect should not be overturned by force.
Many Asians have devoted their lives, and given their lives,
for these values.  Americans are bound to respect them.

Moreover, we appeal to countries' self-interest.  Experience
teaches that sustained economic development is more likely
where government policies are transparent, where courts
provide due process, where uncensored newspapers are free to
expose corruption and to debate economic policy, and where
business people can make independent decisions with free
access to information.  Economic rights granted by
authoritarians can as easily be taken away.  The foundation
of open economies--rights that protect contracts, property,
and patents--must be guaranteed by the rule of law.

The reality of Japan, Hong Kong, South Korea, and Taiwan
tells us that accountable government is the bedrock of
stability and prosperity.  The reality of Burma and North
Korea tells us that repression entrenches poverty.

What is our message to Americans?  The defense of liberty is
not merely an idealistic sojourn.  Enlarging freedom serves
our concrete national designs as well.  The greatest threats
to our security, and to Asia's, have long come from
governments that flout the rule of law at home and reject
the rule of international law abroad.  In 353 wars fought
since 1819, not a single one has been between two
established democracies.*

[* R.J. Rummel, Death by Government, Transaction Publishers,
New Jersey, 1994.]

Any nation that harbors refugees knows that instability
within nations spills across borders.  Because democracy
provides an outlet for airing
dissent and a process for building consensus, it is also a
force for internal peace.  Thailand's Prime Minister Chuan
put it well when he said that "no one asks me about coups
any more since we've been able to make democracy work."

We will continue to champion human and labor rights in Asia
without arrogance or apology.  We will do so where we have
friendly relations--as the President did in Indonesia in his
meeting with President Soeharto.  We will do so where our
interest in stemming the drug trade goes hand-in-hand with
our interest in accountable government--as it does in Burma.
And we will do so where we have an interest in positive
engagement on many critical world issues--as we have in
China.

Beijing is in a self-confident, increasingly nationalistic
mood, which magnifies differences on this issue and many
others.  The Chinese perceive their approach of economic
reform and political repression in sharp, favorable contrast
to the Russian model.  Their economy has boomed in recent
years.  Their diplomacy has snared eager suitors since
Tiananmen Square.

At the same time, Chinese officials face new uncertainty.
They are hesitating between two courses:  going forward with
economic reforms at the risk of hurting entrenched interests
and fueling unemployment, or emphasizing stability at the
risk of stagnation and popular discontent.

China's leaders are also jockeying for position in a
succession period.  No would-be leader wants to look soft on
foreigners or weak on sensitive issues like human rights or
irresolute on sovereignty issues like Tibet, Taiwan, and
Hong Kong.

Yet, China genuinely seeks good relations with the United
States, whom they view as the only "superpower."  They need
us both to ensure economic growth and maintain geostrategic
balance.  Beijing wants to offset the strength of Japan.
And despite the near-term improvement in relations with
Moscow, it continues to fear a resurgent Russian
nationalism.

Against this backdrop we make progress wherever we can.  We
have seen cooperation, or at least parallel policies, in
such areas as the Korean nuclear issue, Cambodia, some trade
areas, drugs, and alien smuggling.  This gives us a broader
context within which to slug away at the more difficult,
sensitive issues like human rights,  non-proliferation, and
other economic problems.

In our China policy--as in a few others--we have made some
course corrections.  Last spring, we concluded that linking
MFN trade status to human rights had exhausted its utility;
that we needed to serve our goals by other means.  That
decision, plus a balanced approach toward Indonesia, plus
our willingness to test the repressive Burmese regime
through results-oriented dialogue, have led some domestic
constituencies to think we are relaxing our dedication to
human  rights.

That is emphatically untrue.  Our goals remain constant.  In
some instances we have shifted our tactics.  While
continuing bilateral approaches, we seek to generate more
multilateral efforts and buttress the efforts of non-
governmental organizations.  While foreign aid is generally
less relevant to the dynamic Asian region than others,
selective assistance for those struggling for democracy in
Cambodia and Mongolia is imperative.

The President remains as committed as ever to the pursuit of
freedom.  No other government comes close to raising human
rights as often and as forcefully as ours.

As for the argument that repression is needed for stability,
consider a Chinese tale of the third century B.C. which told
of a brutal king who suffered disaster by silencing
dissenters.  As the tale relates, stopping up the mouths of
the people is more dangerous than stopping up a river.  When
a river is blocked and then breaks through, many persons are
bound to be injured.  And it is the same with the people.
Therefore, one who desires to control a river will leave an
opening where the water can be drawn off.  And one who
governs the people should do likewise, encouraging them to
speak.

In sum, the fostering of liberty often involves a complex,
controversial balancing act.  On this long journey we can
take heart that--thanks to technology and self-interest and
human nature--history is on the side of freedom.

A final word about some global issues that crowd onto our
agenda toward Asia as they are around the world.  They
transcend boundaries and ideologies and require multilateral
solutions.  With half the world's population and rapid
growth exerting great pressure on resources and
infrastructure, the Asia-Pacific landscape features glaring
examples of problems that clog its economic expansion and
undercut its quality of life--the flow of narcotics and the
flow of refugees, the spread of crime and the spread of
AIDS, the degradation of the environment from coal burning
in Northeast Asia to the ravaging of forests in Southeast
Asia, to the depletion of fish stocks in the South Pacific.
Traffic jams everywhere in the region make California
expressways look like--expressways!

This Administration tackles these problems bilaterally,
regionally, and globally.  We have created common agendas on
these new issues with Japan and other countries, including
soon, we hope, with China.  Regionally, we are pointing to
the relevance of environmental to economic issues in APEC.
Globally, we have launched a series of U.S. initiatives, on
global warming, a comprehensive test ban treaty,
biodiversity, and coral reefs.  We took a leadership role in
the Rio environmental conference and the Cairo population
conference and in a few months will do so at the United
Nations Conference on Women in Beijing.

Conclusion

As we move this year toward the    50th anniversary of the
end of World War II, we will once again honor those who died
fighting for a better world.  America will not forget.
These veterans, and those of the Cold War, made supreme
sacrifices--giving our generation a chance to shape a
brighter future for our children, a future that is richer,
safer, freer.  This vision inspires our journey toward a
Pacific Community.

To fulfill our aspirations, all the countries of the Asia-
Pacific must take part.  We will build on common ground,
patiently laying the foundations, brick by brick, for a
Pacific Community.  We will also enlist the region's rich
diversity, for it is an enduring source of strength.

Broad public and congressional support will be critical for
our journey.  A prosperous, strong, and open Asia-Pacific is
neither a Republican nor a Democratic cause.  While we will
see debate and disagreement the next two years, I am
optimistic that our foreign policy--and our Pacific quest--
will continue to enjoy broad bipartisan support.

In many ways, on both sides of this ocean of opportunity, we
have been building the foundations of a Pacific Community
for two centuries.  The millions of American and Asian
workers who depend on each other tell only part of the
story; there are countless others--the Asians who have
enriched their lives and ours by attending American
universities, the Americans who go abroad to change Asia,
only to find that Asia changes them, and the millions on the
streets of San Francisco and across the land who trace their
ancestry to Asia and enhance America.

We have much to learn from each other.  We have much to gain
from each other in a Pacific Community.  In light of the
region's importance to American prosperity, security, and
freedom, we must.  With your help--as well as your
counterparts across the ocean--we will.  (###)

[END OF DISPATCH VOL 6, NO 3]

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