U.S. DEPARTMENT OF STATE DISPATCH
VOLUME 6, NUMBER 16, APRIL 17, 1995
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

ARTICLES IN THIS ISSUE:
1.  The U.S. and Egypt: Building Prosperity, Peace, and 
Security in the Middle East -- President Clinton, Egyptian 
President Mubarak

2.  The U.S. and the United Kingdom: Shared Values and Common 
Interests -- President Clinton, British Prime Minister Major
3.  U.S. Global Economic Leadership in the Post-Cold War Era 
-- Joan E. Spero

4.  Ensuring Protection and Promotion of U.S. Interests 
Overseas -- Richard M. Moose

5.  The U.S. Government Role in the NIS: From Aid to Trade -- 
James F. Collins

6.  U.S. Policy Toward Guatemala: The Cases of Michael Devine 
and Efrain Bamaca -- Alexander F. Watson

7.  The Future of NATO and Europe's Changing Security 
Landscape -- Richard C. Holbrooke

8.  Africa Programs in the FY 1996 Budget: Protecting Long-
Term U.S. Interests -- George E. Moose

9.  U.S. Policy Toward Sudan -- Edward Brynn

10. Update on Developments in Rwanda and Burundi -- Townsend 
Friedman

11. International Narcotics Control Efforts in the Western 
Hemisphere

12. Integrating Economics and the Environment -- Elinor G. 
Constable

13. The Framework Convention on Climate Change: Expectations 
for Berlin -- Rafe Pomerance


ARTICLE 1:

The U.S. and Egypt: Building Prosperity, Peace, and Security 
in the Middle East

President Clinton, Egyptian President Mubarak

Opening remarks at a White House press conference, 
Washington, DC, April 5, 1995

President Clinton. Good afternoon. Please be seated. As 
always, it is a great pleasure to have President Mubarak back 
at the White House. For 14 years, he has been a valued friend 
and partner to the United States. He was one of the first 
foreign leaders to visit me here after I became President, 
and I began my trip to the Middle East last fall by visiting 
him in Cairo to seek his counsel. Under his wise leadership, 
Egypt has been an ally as well as a source of stability in 
the region and throughout the world.

In the last two years, we have witnessed the dawn of a new 
era in the Middle East. Without President Mubarak's tireless 
efforts on behalf of peace, these landmark achievements would 
not have occurred. Thanks to his persistence, the promise of 
Camp David--where Egypt took its stand against war--has been 
redeemed.

In the months and years ahead, we will continue to look to 
President Mubarak to play a vital role in broadening the 
circle of peace. We are determined to do everything we can 
meanwhile to deepen our own partnership for peace and 
prosperity.

He and his government have already made great strides toward 
reforming and restructuring the Egyptian economy. I got a 
very impressive report on the progress that has been made at 
the luncheon we just concluded. But more is necessary to 
stimulate the economy so that it can provide good jobs and a 
future of hope for the hundreds of thousands of young people 
who enter the Egyptian work force every year.

The United States is committed to helping. Vice President 
Gore just returned from his second visit to Egypt in the last 
six months. On my behalf, he began a dialogue for growth and 
development with President Mubarak that is unprecedented in 
its scope and ambition.

Today, he and I have taken another step forward in this 
partnership by meeting with the new members of our 
Presidents' Council at their first gathering. These top 
American and Egyptian businessmen will advise us  on several 
vital issues--expanding the private sector, building stronger 
commercial ties between our people, and creating better 
conditions to attract U.S. investment to Egypt.

We are also working together to bring more prosperity and 
stability to the entire region--efforts that are essential 
for peace to establish firm roots. We reaffirmed our support 
for greater regional cooperation and development, especially 
the economic initiative that began at the Casablanca summit. 
We also had a good discussion about the need to lift the 
boycott of Israel and ways to accomplish this as soon as 
possible.

Egypt and the United States share a determination to confront 
and to defeat all those who would undermine peace and 
security through the use of terror and weapons of mass 
destruction. President Mubarak told me of Egypt's regional 
proliferation concerns and of its commitment of a strong 
universal non-proliferation treaty and to a Middle East that 
is free of all weapons of mass destruction. The United States 
shares those goals.

To create the confidence and security that will make those 
aims a reality, we must continue to do all we can to bring a 
comprehensive and lasting peace to the Middle East. For the 
same reason, I believe we must ensure that the NPT is as 
strong and as enduring as possible. Indefinite and 
unconditional extension of the NPT is vital to achieving the 
goals that we both share.

When President Mubarak and I first met here two years ago, he 
told me that, together, we could help to make a just and 
comprehensive peace in the Middle East. He was right. We have 
worked side by side to fulfill that vision. Doing so, we have 
deepened the friendship between our two nations. Our goal is 
now within grasp, and America is proud to be Egypt's partner 
on this great mission. Mr. President.

President Mubarak. Thank you. Once again I meet with my good 
friend, President Clinton, in order to pursue our joint 
endeavor for the benefit of our two nations.

We discussed issues of mutual interest in the spirit of 
friendship, candor, and mutual confidence. Our views were 
similar on various issues. Our paramount commitment is to 
strengthen the structure of world peace and security and to 
promote cooperation among nations.

Our two countries are destined to play a pivotal role 
throughout the world and in their regions, respectively. We 
are determined to pursue our mission with vigor and 
determination. We realize that the challenge is awesome, but 
our commitment to our noble goals is firm--quite firm.

President Clinton, together we have worked tirelessly for 
decades to promote peace and security in the Middle East. We 
achieve tangible success year after year, and we remain 
determined to pursue this goal until a just and comprehensive 
peace is reached throughout the area. We should never allow 
enemies of peace to threaten the gains which were made in the 
recent past. We will never hesitate to condemn terrorism and 
all forms of violence. Our aim is to eliminate the sources of 
hatred and conflict.

As we move to cement the structure of peace and security in 
the Middle East, we should do our utmost in order to remove 
all potential threats. Our purpose is to build together a new 
future of hope and a promise for this troubled region. With 
this in mind, I deemed it necessary to propose, in 1990, the 
establishment of a Middle East free of all weapons of mass 
destruction. My objective was and still is to make every Arab 
and Israeli feel more secure and less worried about the 
future and that of his children.

I explained to President Clinton and his able assistants our 
position on the NPT. We remain among the most enthusiastic 
supporters of the treaty. We consider it one of the pillars 
of the stable world order. Hence, we would like to reinforce 
the moral authority of the NPT. By the same token, we have a 
certain concern which emanates from the existence of nuclear 
programs in our region.

Our view is that since peace is spreading throughout the 
region, all the parts are to work together toward the 
elimination of the potential threats, especially the 
spreading of nuclear, chemical, and biological weapons. This 
is the true application of the principle of universality and 
adherence to the NPT. All states of the region should  
realize that it serves in their own interests to accede to 
the treaty. Unless this is done, no one would have control 
over the spread of such lethal weapons in a fragile and 
vulnerable region which has suffered long enough from war and 
devastation.

We propose, for our common good, to achieve that through 
serious but friendly negotiations between Egypt, and perhaps 
other Arab countries, and Israel. It is our sincere hope that 
Israel will approach this issue in a positive and 
constructive spirit. The U.S., under the leadership of 
President Clinton, can help attain this objective.

Our bilateral relations, Mr. President, are excellent. We 
work together in various fields in harmony and mutual trust. 
As we have been partners in peace and security, we are 
establishing a new solid partnership for economic growth and 
development. Thanks to President Clinton and Vice President 
Al Gore, we have developed a new concept for this 
partnership. The idea is to stimulate growth and 
productivity. It is vital to create jobs for our young 
people. We shall do that through promoting trade and 
investment.

We have already begun the implementation of this concept, and 
we are determined to make it a success story. We are 
encouraging the private sector to play a major role in this 
endeavor. As you know, our economy is becoming more and more 
business-friendly. This is a cornerstone of our economic 
reform program. We are fully committed to pursue this reform 
until it bears fruit.

In conclusion, I would like to thank President Clinton for 
his warm reception and hospitality. We are most appreciative 
of the understanding and the cooperation we have been 
receiving from every American. We will leave this great 
country with a renewed assurance of the solidity of the 
friendship and the depth of our cooperation. Thank you, Mr. 
President.  

(###)



ARTICLE 2:

The U.S. and the United Kingdom: Shared Values and Common 
Interests

President Clinton, British Prime Minister Major

Remarks following a White House meeting, Washington, DC, 
April 4, 1995

President Clinton. Good afternoon. Please be seated. I am 
delighted to welcome Prime Minister Major back to the White 
House.

Throughout this century, the United States and the United 
Kingdom have stood together on the great issues that have 
confronted our people. Our common cause has been at the heart 
of our success in two world wars and, of course, in the Cold 
War. In just the last two years, British-American cooperation 
has played an essential role in allowing us to reduce the 
threat of weapons of mass destruction, in promoting peace 
around the world, and, certainly, in expanding free trade.

Today, we have continued working in that tradition. We had 
excellent discussions and covered a broad range of issues. We 
have, as always, found much to agree about.

On security issues, we agreed that the inevitable process of 
NATO expansion must proceed smoothly, gradually, and openly--
without any surprises. This is essential for extending 
stability, democracy, and prosperity throughout Europe. We 
believe that, in parallel with the enlargement of NATO, the 
alliance must develop and maintain close ties with Russia.

We affirmed our shared commitment to a political settlement 
in Bosnia based on the Contact Group plan. The conflict is 
being prolonged because of Bosnian-Serb intransigence. 
Renewed fighting will not end the conflict but only lead to 
more bloodshed and continued stalemate.

The Prime Minister and I also vowed to continue working 
together to contain the Iraqi threat to stability in the 
Persian Gulf region. We are deeply concerned that Saddam 
Hussein could be regaining the ability to build weapons of 
mass destruction. We are determined that Iraq must meet all 
its UN obligations. This is no time to relax sanctions.

The Iraqi people are suffering tremendously under Saddam's 
tyranny, and they do deserve the help of the international 
community. But easing up on a regime that oppresses people 
will not help them. So, while there can be no compromise, the 
United States, the United Kingdom, and Argentina have put 
forward new proposals in the United Nations to get food and 
medicine to the people of Iraq. We hope other nations will 
join these efforts and support our Security Council 
resolution and pressure Saddam Hussein to stop the needless 
suffering of his innocent citizens.

Prime Minister Major told me a great deal about his recent 
trip to the Middle East. We both strongly believe that this 
is a hopeful moment for broadening the circle of peace. The 
United States and Europe must continue to fight the efforts 
to derail the peace process by those who prefer destruction 
to peace. It is clear that for peace to take root in the 
region, more economic assistance is vital. Peace and 
prosperity depend upon one another. I applaud the United 
Kingdom's investment program in the West Bank and Gaza, as 
well as its debt relief measures for Jordan. All of us must 
continue to support those who take risks for peace.

Nowhere is this more true than in Northern Ireland. I salute 
the Prime Minister for the tremendous efforts he is making to 
bring an enduring peace to Northern Ireland. Today, Northern 
Ireland is closer to a just and lasting settlement than at 
any time in a generation--thanks in large measure to the 
vision and courage of John Major.  He and Prime Minister 
Bruton of Ireland together introduced the joint framework, 
which provides a landmark opportunity to move ahead toward a 
political settlement--one that will be backed by both of 
Northern Ireland's communities.

We also agreed that the paramilitaries of both sides must get 
rid of their weapons forever so that violence never returns 
to Northern Ireland. We must also work to increase economic 
opportunity in that area. Their prospects have been blighted 
by bloodshed for too long.

Next month, our White House Conference on Trade and 
Investment in Ireland will help to expand the ties between 
the United States, Northern Ireland, and Ireland's border 
counties. Building those kinds of bonds will help lead to a 
better life for all the people of the region.

The Prime Minister and I discussed some other issues. We 
agreed on the need for an indefinite extension of the Non-
Proliferation Treaty at the review conference that begins 
this month. To further the cause of non-proliferation, the 
Prime Minister joins me in calling for full implementation of 
the Framework Agreement we negotiated with North Korea to end 
that country's nuclear program. We discussed the need to 
adapt our international institutions to the challenges of the 
next century at the G-7 summit in Halifax.

I was particularly impressed by the thinking that the Prime 
Minister has done on this profoundly important issue. The 
United States and the United Kingdom, after all, helped to 
shape those institutions. They have served our interests for 
the last half century. With the extraordinary relationship 
between our two countries as important as ever, I am 
confident we can make the changes necessary and work together 
to advance our shared values and our common interests--to 
promote peace, democracy, and prosperity in the years ahead 
and, of course, in the century ahead.

Finally, let me say, we discussed the ceremonies that will 
mark the 50th anniversary of the end of World War II. Because 
of my prior commitments,  I have asked the Vice President to 
represent me and all Americans in London on May 8 at services 
that will commemorate the great wartime bravery and sacrifice 
of so many Britons. I look forward to seeing Prime Minister 
Major when together we go to Moscow on May 9 to pay our 
respect to the heroism of the Russian people in that 
conflict. Mr. Prime Minister.

Prime Minister Major. Mr. President, thank you very much. We 
have had the opportunity today for a good-humored, 
worthwhile, productive, and very far-reaching series of 
exchanges on a whole range of matters. The President has said 
how much of the agenda we discussed, and I will not reiterate 
what the President said, except to say that in his remarks he 
spoke not just for the United States, but for the United 
Kingdom as well. I share the views he expressed, and I won't 
reiterate them.

We spent some time looking forward at two separate matters 
which I think are of some importance to both our countries 
and of wider importance as well. The first of them the 
President just touched on, and that was the review of the 
Bretton Woods institutions and the United Nations that we 
agreed upon with the other G-7 heads of government at Naples 
last year, and that we should undertake and return to at 
Halifax later this year.

We have given a great deal of discussion to that, and I 
think, for a range of reasons, the time is right to look at a 
fairly comprehensive reform of some of those institutions. We 
exchanged some ideas today on precisely how we might do that 
and agreed that we would exchange further ideas before we 
came to the G-7 summit. I think there is--to rationalize some 
of the financial institutions.

We wish to look particularly, in addition to that, at the 
United Nations where there are a number of overlapping 
functions. I am a very strong supporter of the United 
Nations, and I wish to see the United Nations a successful 
organization for the year 2000. It does seem that, looking at 
it, some of the areas of the UN could well do with updating 
and refreshing--to make sure that they are entirely 
applicable to the problems they will have to face in the late 
1990s and beyond the turn of the century. I hope very much 
that we will be able to get together with some more of our 
ideas and float those in greater detail when we get to the 
Halifax summit later on this year.

We also spent some time looking at the commonality of 
interests that exists between the United Kingdom and the 
United States. There are a huge range of areas where there is 
common interest, and not just those that were discussed--the 
agreements that we have in terms of policy toward Russia, 
Iran, Iraq, the Middle East, Bosnia, and a range of other 
areas.

But beyond that, I think there is a commonality of interest 
in the future security and prosperity of the Central and East 
European states and also with two other matters: First, the 
further extension of free trade, to which I wish to return in 
just a second; and second,with working together and combating 
together some of the problems of instability, extremism, and 
terrorism that we are beginning to see in parts of North 
Africa, parts of the Levant, and parts of the Middle East. We 
also spent some time considering how we might address some of 
those problems in the future.

It was necessarily a discussion that dealt with problems that 
may arise, and dealt in some cases, frankly, with 
generalities. But it was an opportunity to look forward, 
rather than to just discuss the immediate topical problems 
that we face at the moment.

One area of growing importance that we touched on was the 
possibility of seeing how we can build on the Uruguay Round 
agreement of a year or so ago and see how we can move forward 
to deal with much freer trade in financial services, for 
example, removing many of the non-tariff barriers that still 
exist between Western Europe and the United States, and 
seeing how, step by step, we can move forward to a much 
greater element of free trade between North America and the 
Western European nations. That is something that needs to be 
done. I think it is something that is of immense benefit, and 
I found our discussion on that immensely productive, and it 
is one I know that we will both return to in the future.

So, I found the discussion--not just on contemporary matters 
or views--but I found the sharing of ideas about how we deal 
with the development of the transatlantic relationship to 
deal with the problems that are going to arise in the future 
and also the examination of the common transatlantic view on 
many of the international problems of the world to be a very 
worthwhile and a very refreshing discussion, and I am 
delighted we were able to have it. 

(###)



ARTICLE 3:

U.S. Global Economic Leadership in the Post-Cold War Era

Joan E. Spero, Under Secretary for Economic and Agricultural 
Affairs

Address to the Washington Council on International Trade, 
Seattle, Washington, March 27, 1995

I am personally very pleased to be back here in the wonderful 
city of Seattle, the gateway to Asia. It is a special honor 
to have been invited to speak to the Washington Council on 
International Trade--WCIT--one of America's leading state 
trade-policy organizations. I know you best as a key private 
sector advocate of more open trade and investment in the 
Pacific Rim and a major supporter of the Asia- Pacific 
Economic Cooperation--APEC--forum. The WCIT and the Seattle 
business community deserve a great deal of credit for the 
success of the historic 1993 APEC ministerials and Blake 
Island meetings. I am glad to see that strong interest 
continues in the National Center for APEC which was 
established last year to forge a closer public-private sector 
partnership on APEC. The center has been instrumental in 
publicizing APEC's benefits to business, gathering private 
sector views on APEC, making those views known to policy 
makers, and facilitating greater business participation in 
APEC.

Today, I would like to tell you what the Clinton 
Administration is doing for the U.S. economy and business--
particularly in Asia, which as you know is of vital 
importance to the United States.

Challenge of the New Global Economy

First, let me put our economic policy in its larger global 
context. For the last 50 years, the United States has been 
the leader of the world economy. Motivated by national 
economic interests and by the imperatives of the Cold War, 
the U.S. helped create the Bretton Woods system; we advocated 
a vision of open markets both nationally and internationally; 
and we acted as a major source of capital, technology, and 
managerial know-how and an engine of growth to the world.

Now our vision has to a great extent come true. We live in a 
world where free-market economics is the guiding ideology; 
where economies are increasingly interdependent; where 
dynamic growth has spread beyond North America, Europe, and 
Japan; and where we work daily in a variety of international 
economic institutions. Today, international trade represents 
a huge share of U.S. economic activity. In 1960, U.S. foreign 
trade accounted for about 9% of our GDP; now it accounts for 
almost one-quarter. U.S. exports to the world support 8.5 
million U.S. jobs.

It is no news to anyone here today that Asian economies are, 
quite simply, America's major growth markets:

--  The IMF and World Bank predict that one-half of the 
economic expansion of the entire world during the 1990s will 
take place in Asia.

--  U.S. sales to Asia are expanding more rapidly than to any 
other region--by 12.6% in 1994 over 1993.

--  Asia now buys one-third of U.S. exports, compared to only 
23% in 1985.

--  By the year 2000, the market for automobiles in 
Indonesia, the Philippines, Thailand, and Malaysia will equal 
today's market in Canada and Mexico combined.

Although the growth of world trade and investment has created 
great opportunities, greater economic interdependence has 
also spurred protectionism at home. Vulnerable U.S.industries 
and workers often blame international competition for their 
decline. That political reality is reflected in the growing 
debate in the U.S. today between isolationism and 
internationalism. Isolationists argue that, having won the 
Cold War, it is time to take care of ourselves--to fix our 
own problems. One effect is to demand cuts in our foreign aid 
budget, which in reality represents less than 1% of 
government spending. Another effect is increased criticism of 
multilateralism. The United Nations is a favorite target, but 
there also have been charges that the WTO and regional 
arrangements, such as NAFTA, are threats to U.S. sovereignty 
and jobs.

America must promote its own interests--but it cannot do this 
by turning its back on the world. President Clinton has told 
the American people that we must compete, not retreat--that 
our national security in the post-Cold War period depends on 
our economic strength at home and abroad. The President is 
pursuing an aggressive, new economic strategy. That strategy 
is succeeding in strengthening our nation's ability to 
compete in the global marketplace by putting our own economic 
house in order; through efforts to open markets on a 
bilateral, regional, and multilateral basis; and by an 
aggressive export promotion strategy based on a strong 
public-private sector partnership. Let me explain.

Putting Our House in Order

Leadership begins at home. If we are to compete in the 21st 
century, we must solve our own domestic economic problems. 
This has been President Clinton's number-one economic policy 
priority. Two years ago, the President worked with Congress 
to achieve a five-year budget deficit-reduction package of 
$500 billion. In the last 26 months, we have created almost 6 
million new jobs. Last year's GNP growth reached 4%. American 
industry is operating at its highest capacity in 14 years, 
and our inflation and unemployment rates--the so-called 
"misery index"--are the lowest in 22 years. Employment in the 
Federal Government is heading for its lowest level since John 
F. Kennedy was President.

U.S. business has played a major role in the recovery. 
Corporate restructuring and productivity increases have been 
key. Not long ago, the Davos Economic Forum rated us the 
world's most competitive economy, pushing Japan out of its 
long-held first place for the first time since 1955. We are 
once again the world's greatest export machine.

In short, the United States is back--as a competitor and as a 
responsible manager of its own economy. But we cannot stop 
here. In our new legislative environment, we must continue to 
press on with deficit reduction and attack the root causes of 
American domestic anxiety, including the wage stagnation 
which has persisted despite job growth.

Market Access

A second part of the Clinton Administration's strategy is to 
support U.S. competitiveness by making the world an easier 
place for Americans to do business.

The Global Context. Through three administrations, the U.S. 
worked with our trading partners to complete the Uruguay 
Round. The result: a new World Trade Organization, with a 
broader scope, more authority, and a modern set of rules 
covering such issues as intellectual property, services, and 
investment. For the first time, we are addressing agriculture 
in a global context.

Our challenge now is to make the WTO work, finish the job in 
areas such as financial services, and address new issues such 
as the link between trade policy and environment and labor 
standards. At the G-7 summit in Halifax this June, we will 
examine the multilateral trading system, as well as other 
multilateral institutions including the IMF, the World Bank, 
and the regional development banks. For the U.S., the goal is 
to explore how we can reshape international economic 
structures to respond better to today's global realities.

Regional Approaches. The U.S. also is leading the way through 
regional efforts to open markets and create new business 
opportunities for American business. These regional efforts 
complement and strengthen the multilateral trading system 
because they contribute to a worldwide movement toward trade 
liberalization. Let me give you two examples.

Here in our own hemisphere, the President hosted 34 
democratically elected leaders at the Summit of the Americas 
in Miami last December. We had three goals for that meeting: 
to open markets throughout the hemisphere; to strengthen the 
movement to democracy; and to work together to improve the 
quality of life of all the people of the Americas. We agreed 
on 23 initiatives, including a commitment to eliminate 
existing trade and investment barriers and create a "Free 
Trade Area of the Americas" by the year 2005.

In Asia, APEC is the best regional vehicle we have to enhance 
our efforts to open markets and investment regimes. In Bogor, 
Indonesia, last year, President Clinton and the other APEC 
leaders made a historic commitment to achieve free and open 
trade and investment in the region by the year 2020. For 
APEC's industrial members, the goal is 2010.

APEC is now at a crucial crossroads--one that will determine 
APEC's future course and its relevance to the American 
business community. We have the vision and the political 
commitment. Now APEC must prove its value by making concrete 
progress toward creating a predictable trade and investment 
environment in the Asia-Pacific region. If it does not, it 
risks losing its promise--and the support of both the 
business community and the region's leaders.

The Administration is working hard to ensure that APEC lives 
up to its potential. We are doing this by pressing in 1995 
for one, development of a credible action agenda to implement 
APEC's free-trade goals which APEC leaders will bless this 
November in Osaka; and two, early practical benefits to 
business in areas such as customs and standards conformance. 
Progress in these "doing business" issues is a downpayment on 
APEC's longer-term trade liberalization.

We are also working hard to expand the networks of an Asia-
Pacific community through greater economic cooperation. We 
expect a number of U.S. initiatives to get off the ground 
this year, including:

--  Establishment of the APEC Education Foundation and a new, 
permanent APEC Business Advisory Group;

--  The APEC Study Center Telecommunications Network going 
on-line this spring; and

--  Secretary Pena's hosting of the first meeting of APEC 
transportation ministers and industry leaders in Washington 
June 12-13.

These efforts will expand markets for American business and 
allow all APEC members to realize better the economic 
benefits of liberalization. In all of these efforts, the 
government is working hand-in-hand with business. APEC is 
unique in its involvement with business at the political 
level. It is a model for international organizations.

Bilateral Challenges. While working at the global and 
regional level, the U.S. also is continuing to press 
bilaterally for more open markets. The most recent examples 
are the breakthroughs on financial services with Japan under 
the bilateral Framework Agreement and the recent intellectual 
property rights agreement with China. Japanese commitments to 
open its trillion-dollar pension market to foreign fund 
managers, to provide greater opportunities for foreign firms 
in the $500-billion Japanese securities market, and to 
significantly liberalize cross-border transactions--on an MFN 
basis--set the stage for the successful outcome to the 
Uruguay Round financial services negotiations. The U.S.-China 
IPR agreement could lead to China's founding membership in 
the WTO and unprecedented progress in liberalizing the 
world's fastest-growing economy.

National Export Strategy

The final part of President Clinton's economic plan is a new 
National Export Strategy which emphasizes personal advocacy 
by the President, his Cabinet, and other senior officials to 
give American firms a competitive edge abroad.

Our aggressive strategy is paying off. In Asia alone, 
American firms won 34 major contracts during one six-month 
period in 1994--contracts that will generate $5.3 billion in 
new U.S. exports and support more than 100,000 U.S. jobs. 
During the President's trip to the region for the APEC summit 
last November, Secretaries Christopher and Brown witnessed or 
signed deals for American companies worth $400 million in the 
Philippines, more than $250 million in Malaysia, and an 
estimated $40 billion in Indonesia.

America's Desk. This strategy depends on our strong 
partnership with business--a partnership that marks a visible 
departure from the government's past relationship with the 
private sector. Before coming to government, I spent a number 
of years in the private sector, often working--with mixed 
results--to get the U.S. foreign policy machinery to support 
my company's efforts to break into new markets, iron out 
problems, and overcome trade barriers. From that perspective, 
one of the most exciting developments of my service in the 
Clinton Administration has been the unprecedented levels of 
direct support and assistance to U.S. companies abroad.

At the State Department, Secretary Christopher has opened the 
Department's window on the business world. He calls it the 
America Desk. The Secretary regularly seeks out business 
leaders, pinpointing their concerns and putting them high on 
our foreign policy agenda. For example, during a trip to Asia 
in 1993, the Secretary heard a great deal of concern by 
American business representatives about illicit payments. In 
response, the Secretary launched a major initiative to get 
other countries to agree on an international code of practice 
on illicit payments. In May 1994, I am happy to say, the OECD 
asked its member states to take concrete steps to eliminate 
bribery in international business practices.

We are working to make business support a core function of 
the modern Department of State. We are creating a corps of 
diplomats--and a State Department culture--that understands 
the importance of business, how to work with business people, 
and how to play a leadership role in opening new markets for 
our exports. Our embassies now regularly go to bat for U.S. 
firms, helping them to identify opportunities, handle 
problems, and make deals. The positive feedback we are 
getting about our embassies shows that already we are making 
a difference. As Business Week noted in a recent article,

When they're not dealing with emergencies, the main brief of 
U.S. ambassadors in Clinton's new world order is to get the 
order--for whatever U.S. business happens to be in town.

But I will be honest. Companies that find it easy today to 
get action and assistance at an embassy have a more difficult 
time getting our attention in Washington. We are now taking 
steps to make sure that the Secretary's America Desk mandate 
is heard and acted upon at home. We have established the 
Office of the Coordinator for Business Affairs, who reports 
directly to me. His job is to reach out to the business 
community, make sure that we consult businesses as we develop 
policies that affect their interests, assist companies in 
wending their way through the Washington bureaucracy and in 
using our embassies abroad, and expand the Department's and 
the embassies' role as advocate for U.S. business.

This new partnership is a two-way street. We ask that you, 
here in the Northwest, help us find ways to make business 
work even better in Asia. We need your constant input--your 
scoring of how well we are doing in APEC in achieving 
concrete and pragmatic results. And we need your guidance as 
we define and solidify America's new economic leadership role 
in the post-Cold War period--in Asia and in the global 
economy

To conclude: As the world has changed, the nature of American 
leadership has changed. We can no longer shape the world--
alone or with a handful of other great powers. But American 
leadership remains a critical element in the world's 
stability and prosperity. We lead now in different ways--
through multilateral persuasion and cooperation, through 
ground-breaking regional and bilateral initiatives, and by 
the example we set--both corporations and governments--in how 
we respond to new challenges. Today, we face more complex 
tasks in a more complex world. We are prepared to continue to 
lead and to work with you--the business community--to provide 
leadership to this new world. 

(###)



ARTICLE 4:

Ensuring Protection and Promotion Of U.S. Interests Overseas

Richard M. Moose, Under Secretary for Management

Statement before the Subcommittee on Commerce, Justice, and 
State, the Judiciary, and Related Agencies of the Senate 
Appropriations Committee, Washington, DC, April 6, 1995

Mr. Chairman, I welcome the opportunity which you have 
provided for me--and my colleagues from other agencies--to 
discuss before this subcommittee a subject of great 
importance to both the Congress and the executive branch--the 
need to devise a system to ensure a flexible, efficient, and 
stably funded platform for the protection and promotion of 
U.S. interests overseas. Merely by holding this hearing, you 
and the committee are taking a creative initiative which, 
hopefully, will redound to the benefit at the U.S. taxpayer 
and enhance the effectiveness of the U.S. Government's 
essential overseas programs.

While I am congratulating you, let me put in a good word for 
ourselves. It is not often that executive branch agencies sit 
together, put their cards on the table, and commit themselves 
to finding a solution to a problem which has set them at odds 
with one another. It is rarer still for a collection of 
agencies to present themselves before their appropriators to 
say: "We have a problem with one another; let us tell you 
what it is and how we propose to solve it." That is very 
rare. The usual procedure would be for each of these 
Departments to approach you out of earshot of the others and 
attempt to beggar our colleagues. Then at some point, your 
patience exhausted, you would mandate a solution which the 
losers would immediately set about trying to un-do. Today, we 
hope to break with the precedent.

This issue has concerned all of us for years. It is an area 
that the General Accounting Office--GAO--and our own 
Inspector General have repeatedly reviewed. The current 
administrative support system has survived over time--less 
because of its own merits than because of the difficulty in 
reaching a consensus on an alternative. The current system is 
broken. We want to fix it. We do not yet have a final 
position on how we think we should do that, but we will need 
your support if we are to succeed.

The State Department currently carries a large part of the 
overseas financial and administrative burden, but the issue 
is important to all foreign affairs agencies; in fact, to all 
U.S. Government agencies with staffing abroad and not just 
those represented here today. The committee will know from 
its perusal of the recent GAO report the demographics of the 
U.S. overseas presence. The United States has more than 160 
embassies and some 100 consulates, liaison offices, and other 
posts in almost every country in the world. They are staffed 
by about 19,000 full-time American employees from some 200 
organizational units belonging to two dozen executive depart-
ments and agencies. Some agencies have only a handful of 
American employees abroad; some have hundreds; others have 
thousands. Among the 19,000 in our posts abroad are some 
7,000 of State's own people. These numbers do not include 
foreign national employees and contractors, let alone TDY 
personnel who number in the hundreds daily at some posts and 
quite a few of whom are considered "permanent TDYers." 
Resource cuts levied on State impact all agencies because 
they limit our ability to support the people they have 
staffing this nation's diplomatic missions.

It is becoming a cliche to preface a comment with the phrase, 
"With the end of the Cold War." But there's no way around the 
fact that the U.S. Government's priorities overseas are 
shifting dramatically, as the distinction between "domestic" 
and "foreign" policy blurs. These changes are reflected in 
the kinds of people the U.S. Government is putting overseas 
and the places they are going. Creating jobs, for example, 
means opening new markets overseas, leading to new Commerce 
staffing in emerging markets. Fighting crime at home compels 
us to trace its connections abroad and to work with other 
governments on anti-crime initiatives. So the locations and 
levels of FBI, DEA, the Secret Service, and other law 
enforcement agencies' staffing take on new configurations and 
require enhanced coordination between agencies. Nothing 
illustrates the radically altered nature of our overseas 
priorities better than the fact that the Justice Department 
now has more Americans overseas than USIA and that the 
combined total of law enforcement people overseas will 
probably surpass that of USAID by next year, if it has not 
already. The fact that I cannot be certain tells you 
something.

The unpredictability of the international environment puts a 
premium on the U.S. Government's ability to respond quickly 
to shifting priorities with staffing changes; yet, our 
present system inhibits this. On the accounting side, the 
Foreign Affairs Administrative System--FAAS--does not produce 
straightforward audit trail links between a particular 
service and its cost. As a result, the FAAS funding structure 
has become a "lightning rod" for serviced agencies concerned 
about both their overseas costs and the quality and adequacy 
of the services delivered--issues not directly related to 
FAAS's function as a cost-distribution system but a great and 
understandable concern to the serviced agencies.

State's primary concern with FAAS is that we can no longer 
shoulder the personnel and financial burden it places upon 
us. We calculate that we bear about 70% of the costs while 
representing only about 30% of the people. As our budget 
diminishes in real terms, we have been forced to strip as 
much cost as possible out of our overseas structure, where we 
spend about two-thirds of our operating budget. Given the 
changing and expanding nature of administrative demands at 
posts, we must recruit, train, assign, and pay additional 
administrative officers--additional to our own needs. With 
the pressure to cut positions, our core functions are 
squeezed, and we have fewer people devoted to formulating and 
coordinating policy, analyzing developments, negotiating and 
advocating U.S. positions overseas, and assisting Americans 
in trouble. If it were not for the resources made available 
by the retention of application fees for machine-readable 
visas, we would even have to stint on our efforts to preserve 
the security of our borders.

Because of the overall budget climate, we think it is 
imperative that we ensure that we find the most cost-
effective ways to support U.S. Government employees overseas. 
The National Performance Review--NPR--under Vice President 
Gore's leadership, has given all of us in the foreign affairs 
community renewed incentive to match resources and structure 
to the mission--not vice versa.

There are two main avenues for overseas streamlining. Within 
State we are pursuing this goal through the Strategic 
Management Initiative-- SMI. The SMI is, in Secretary 
Christopher's words, our "process for forging a comprehensive 
strategy for change." SMI teams are now developing for the 
Secretary's decision recommendations on the future shape of 
State's overseas presence, including downsizing missions and 
closing some posts. In the last two years, we have closed 17 
posts. As part of NPR, we hope to close at least 15 more by 
the end of FY 1996.

Our posts overseas, including an embassy in nearly every 
capital, constitute one of our great diplomatic strengths. 
Our virtually universal coverage allows us to make our case 
to governments around the world and to protect Americans, 
wherever they may be found, at a moment's notice. No other 
nation in the world has such a capability.

Yet, because it is enormously costly to maintain American 
employees abroad, we clearly need to streamline and reduce 
our overseas costs. We will base more support services in the 
U.S. or at least regionally abroad. Specialized substantive 
expertise can be based regionally and shared, as well.

Another result from SMI will be an end to the assumption that 
all embassies must be full-service operations. We need 
smaller embassies with staffs better trained and equipped, 
serviced by up-to-date technology, electronically linked to 
each other and to Washington agencies, and less reliant on 
costly security systems. This should be as true for our 
largest embassies as well as for our smallest.

And our smallest embassies will be small, indeed: We are 
looking at "micro-embassies"--one- or two-person embassies 
that keep the flag flying and give us daily face-to-face 
contact with foreign officials and the public in the host 
country while avoiding the cost and infrastructure of more 
traditional embassies.

However, I want to emphasize that the changing nature of 
State's own overseas presence--and our own reduced staffing 
levels--will have a direct impact on State's ability and 
willingness to support the administrative needs of other 
agencies overseas. Agencies must factor these new realities 
into their overseas staffing plans.

The second avenue to overseas streamlining is through inter-
agency cooperation in the context of NPR. In January, the 
Vice President instructed State, ACDA, USAID, and USIA to 
establish common administrative services, eliminate 
unnecessary and duplicative practices, and use the private 
sector and competition to cut costs. STATE, USAID, USIA, and 
ACDA have, in fact, consolidated or agreed to consolidate 24 
domestic administrative operations, ranging from printing 
services to computer security. Additional initiatives are 
currently underway which can create significant additional 
consolidation or expansion of consolidation and cooperation 
efforts already in place. We will also look at embarking on 
an effort to greatly increase the compatibility of all 
management information systems, e-mail, Internet, and secure 
messaging.

Also, and finally, in January 1995, the Vice President asked 
the PMC to review the structure of all government agencies 
operating overseas. The PMC will report to him this month on 
specific steps that can be taken to streamline overseas 
operations, reduce the costs of administrative services, and 
make better use of information systems and communications 
technology.

Under the PMC's sponsorship, State, USIA, USAID, Commerce, 
Justice, and all of the other primarily concerned agencies 
are examining the feasibility of cooperative administrative 
support units--CASUs--for our overseas posts. This is the 
effort upon which our hopes are pinned. Under the CASU, one 
or more agencies at a given post would take the lead in 
providing administrative services under the oversight of a 
local "Board of Directors." The study is also reviewing 
financing arrangements for CASU with the object of arriving 
at a system which is simple, transparent--including to the 
Congress--and equitable to all agencies. Applying the CASU 
concept overseas would place oversight of service and funding 
on the level where the activity takes place--the individual 
posts--give all participants a direct sense of ownership, 
make it possible for agencies to calculate how much it really 
costs to have staff at a given post, and reinforce one of our 
great strengths--our embassies and the country teams.

Overseas CASUs would have the following attributes:

-- Strong voice for participating agencies in post 
operations;

-- Transparent cost calculations;

-- Full reimbursement to provider agencies;

-- Built-in incentives for high-quality and low-cost service 
delivery;

-- Flexible choice of products and services; and

-- Encouragement for streamlining and cost savings.

The CASU concept would allow us to put into operation a 
number of modern management practices while building on the 
Secretary's SMI initiative. It would:

-- Push responsibility down to the level where the activity 
takes place, i.e., the post;

-- Give all participants a direct sense of ownership and draw 
on the best of "customer service" concepts;

-- Make it possible for agencies to calculate how much it 
really costs to have staff at a given post; and

-- Build on one of our great strengths--our embassies and the 
country teams.

Many aspects of this scheme remain to be explored, but the 
public interest in an equitable resolution is considerable. 
Absent agreement on a mechanism to fund the CASUs, each 
agency, State included, will be compelled to make its own 
arrangements. Given    the inevitable duplication of effort, 
this cannot be in the public interest. Agencies with only a 
small presence will find themselves particularly hard 
pressed, and the coherence of U.S. Government efforts in any 
given country will inevitably suffer.

Those of us who are working hardest on this problem recognize 
that there is no acceptable alternative to success. 
Inevitably, any equitable solution will entail base 
transfers; and, since almost every single appropriations 
committee has at least one agency in this puzzle, it can only 
be solved with the cooperation of the overall appropriations 
leadership.

Vice President Gore and Secretary Christopher have launched 
us on a plan to move vigorously--in cooperation with NPR and 
other agencies--to position ourselves for the future, to 
produce a diplomatic platform that prepares us to carry out 
U.S. interests well into the next century. We hope that we 
can count on you to join us in that effort.

I thank you for your consideration. I look forward to joining 
my colleagues in answering the committee's questions. 

(###)



ARTICLE 5:

The U.S. Government Role in the NIS: From Aid to Trade

James F. Collins, Senior Coordinator, Office of the Special 
Adviser to the Secretary for the NIS

Statement before the Harvard-Columbia Arden House Conference 
on U.S.-Russian Relations, Harriman, New York, March 17, 1995

A little over three years ago, while serving in Moscow, I 
watched Mikhail Gorbachev sign a document to dissolve the 
former Soviet Union and, with that action, to create a new 
Russia and 11 other independent states. Russia and the other 
New Independent States have undergone dramatic change since 
then, and the Clinton Administration has made support of 
political and economic reform in these societies and their 
integration into the world economy its highest foreign policy 
priority.

At the core of our NIS policy is the belief, as articulated 
by President Clinton in his State of the Union address, that 
"our security depends on our continued world leadership to 
advance the causes of peace and freedom and democracy." In no 
area of the world is American leadership more critical and 
more needed than in the vast territory of Eastern Europe, 
Russia, the Caucasus, and Central Asia. The United States has 
a tremendous stake in the success of the efforts of these new 
states to become stable, democratic nations and market 
economies. At issue is nothing less than whether these new 
countries, which cover one-sixth of the earth's surface, can 
find a place as responsible and cooperative members within 
the community of nations and, thus, ensure that major threats 
to our security never arise again from this part of the 
globe.

It is our firm belief that the NIS will not succeed in this 
endeavor without the success of economic reform and democracy 
in Russia. But it seems equally clear that the fate of all 
these countries is linked. Russian democracy and reform can 
only be assured if democratic, free-market models take root 
elsewhere in the NIS, particularly in Ukraine. From the 
beginning, the U.S. has been in the forefront in promoting 
and enhancing the independence and sovereignty of each of 
these new states. We worked to assure full diplomatic 
representation in all these states and to support their full 
participation in international bodies, such as the UN and 
OSCE. We encouraged them to create new links and patterns of 
cooperation with European institutions. We led, for example, 
in founding the North Atlantic Cooperation Council and then 
the Partnership for Peace. We strengthened the CSCE by 
converting it into the OSCE and giving this body greater 
institutional importance.

In the economic sphere, we have been conscious that the 
viability and independence of these states would depend on 
their ability to develop national economies built on market 
principles. In our efforts to promote economic reform, we 
started with a handicap in the form of an array of Cold War-
era laws that restricted our ability to conduct economic 
relations with these states. With Congress' cooperation, we 
have worked to repeal most legal barriers to trade and 
investment, while at the same time normalizing our economic 
relations by putting in place a network of bilateral trade, 
investment, and tax agreements. That work has largely been 
done.

We have also encouraged the integration of these new states 
into the global trading system. We are actively supporting, 
for example, the accession of Russia and Ukraine to the 
GATT/WTO. Participation in the Western economic fora offers a 
very real incentive for these states to deepen their 
commitment to reform and to adopt accepted rules of economic 
behavior. That is why we have supported Russia's inclusion in 
the G-7 summit at Naples last year, and in Halifax this June.

To further promote reform in these states, the Clinton 
Administration sought and received authorization from 
Congress to undertake a massive assistance effort to the NIS 
region. Since 1991, Congress has made available $4 billion in 
technical and humanitarian assistance for Russia and the 
other NIS. It has provided an additional $1.3 billion in so-
called Nunn-Lugar funds to assist in dismantling nuclear 
weapons in these states. This is a substantial commitment of 
U.S. resources, and launching such an assistance effort of 
this magnitude has not been without problems. Over the past 
two years, we have developed a number of principles to ensure 
that these monies have maximum impact and to integrate the 
program into our broader policy goals. Let me review this 
assistance strategy with you.

First, we condition our assistance, as provided in the 
FREEDOM Support Act, on these states adopting serious 
political and economic reforms. Our intention has been to 
support reformers, and through them reform, at all levels. 
From the beginning, about two-thirds of our NIS assistance 
has gone to entities other than central governments. And the 
FREEDOM Support funds that have gone to central governments 
in the NIS have gone primarily to support the institutional 
programs that directly promote democracy and market reform, 
such as election assistance, the drafting of commercial 
codes, and the setting up of privatization programs. In the 
process of providing this assistance, we have gained 
unprecedented access and influence within Russian society and 
helped to open what had essentially been a closed system, 
isolated from the West.

Second, we seek to marry our assistance with broader 
diplomatic efforts: Nunn-Lugar funding is reducing nuclear 
arsenals and combating the spread of nuclear weapons and 
materials; our technical assistance is fighting international 
crime, narcotics, and terrorism and fostering an environment 
in which our companies can do business; and other programs, 
like Baltic Officer Resettlement, are  helping to normalize 
relations between Russia and the other NIS by persuading 
Russia to withdraw its troops from that region.

Third, we constantly fine-tune the program to assure it 
reflects actual conditions on the ground and the needs of the 
recipients. As market reform has taken hold in Russia and the 
other NIS, we have shifted the emphasis of our programs from 
humanitarian to technical assistance and to new areas, such 
as combating corruption, which host governments have 
identified as priorities. We are also shifting the balance of 
resources from Russia to other reforming countries. In FY 
1995, more than 60% of our assistance will go to the non-
Russian NIS; we expect that figure to climb to more than two-
thirds in FY 1996.

Fourth, we have encouraged private sector linkages since 
trade and investment, not assistance, will be the long-term 
basis of our relationship with Russia and the NIS. Much of 
what we do under our technical assistance programs--whether 
in privatization, banking reform, or commercial law-- helps 
create an environment to support private sector activity. An 
increasing share of our assistance monies are now also being 
directed at funding the more traditional business promotion 
programs operated by Eximbank, OPIC, TDA, and other U.S. 
Government agencies. We are hopeful that these programs will 
provide real opportunities for U.S. business in the region.

We recognize that in this period of transition, when private 
sectors are only just emerging in the NIS, such linkages are 
hard to establish. Therefore, we are using government-to-
government contacts to expand the potential for economic, 
scientific, space, and environmental cooperation. The joint 
commission that Vice President Gore chairs with Russian Prime 
Minister Chernomyrdin is an effective example of what we are 
doing. Through the commission, we are working to move major 
American investment projects forward in Russia, including 
several multi-billion dollar energy deals, to resolve 
pipeline access for our oil joint ventures in the region, and 
to identify opportunities for American business to 
participate in the conversion of Russian defense industries 
to civilian production. Under the aegis of the commission, we 
have fielded several OPIC investment missions and Department 
of Commerce-led trade delegations to Russia. We have 
established similar commissions for Ukraine and Kazakhstan 
and are hopeful that they will prove equally effective in 
using U.S. Government and private sector cooperation to 
promote trade and investment. This is a process that also 
helps in our efforts to open these societies and expose them 
to Western economic and political ideas and behavior.

Finally, we seek to leverage our assistance with efforts of 
the wider international community. U.S. leadership within the 
G-7 and with the international financial institutions has 
been essential to mobilizing multilateral support for reform 
in the NIS. It was at U.S. initiative that the IMF 
established the Systemic Transformation Facility--STF--a new 
IMF lending program designed to provide pre-stabilization 
support in advance of more traditional IMF stand-by programs. 
Most of the NIS have taken advantage of the STF program. 
Russia and Ukraine's assumption of IMF stand-by programs in 
recent weeks is a historic event. Their ability to implement 
the stand-by owes much to the earlier experience with the STF 
program and also to the essential role played by the U.S. 
Government in keeping the international financial 
institutions actively engaged in negotiations with Moscow and 
Kiev.

The IMF agreements are good news, but despite this success 
and the consistent support of the U.S. and our allies, the 
transition of Russia and the other NIS has taken longer and 
proven more fitful than we had first hoped. The leadership 
committed to reform in Russia alone has appeared in peril and 
has then been rescued, not just once but several times over 
the past three years. It is essential that we appreciate that 
reform will not follow a linear path in any of these 
countries. The transition underway has unleashed political 
and social forces--both old and new--that are contending to 
control and influence the process of reform.

Unfortunately, there has been a tendency in the media to 
respond reflexively to these twists and turns, to paint the 
situation and the fate of reform in starkest, black-and-white 
terms. For example, last month when Russia's negotiations 
with the IMF went into recess, press reports talked about a 
break-off in negotiations and the IMF loan being in serious 
jeopardy. A few weeks earlier there was alarm over remarks by 
the then-minister of privatization, who seemed inclined to 
bring some industries back under state control. This was, 
obviously, a real fight over control of resources, the stuff 
of political power struggles. The upshot, however, was the 
removal of that minister and a strengthening of the grip of 
reformers on the process of privatization.

The most recent questions about the future of reform has 
clearly been the situation in Chechnya. Russia has embroiled 
itself in a not very well thought out military effort to 
reign in a breakaway region of the federation. Tragically and 
unnecessarily, the Russian Government has carried out this 
military campaign in such a way as to cause large numbers of 
civilian casualties and hinder humanitarian assistance. As 
seriously, Chechnya has also proved a deeply divisive element 
in Russian political life and has become a serious setback 
for the cause of reform and democratization. But how serious 
a setback it will eventually prove to have been is not yet 
clear. It is not at all certain that the conflict will 
permanently damage Russia's Federal structure, its 
territorial integrity, or its market reform program. 
Paradoxically, Chechnya has produced promising signs of the 
health of Russia's new democracy. There has been open debate 
of the conflict in the Duma. The press has been outspoken in 
its criticism, and there is evidence that parts of the 
government--if not all--have heard criticisms and acted on 
them.

My point is that building a democratic society and a market 
economy has not been smooth, and we can expect further fits 
and starts in the future. But despite reversals, we need to 
appreciate the fundamentally changed context in which 
political and economic events are taking place in the region. 
Looking at Russia, we can begin to appreciate the enormity of 
the changes that country has undergone in only three years.

-- First, and I believe foremost, Russia and the other states 
no longer see themselves isolated from the broader world by 
an ideological conflict.

-- The centralized, command economy is gone. Prices have been 
largely freed. Russia is now bringing its trading system into 
conformity with the GATT/WTO.

-- Where controls remain, such as the energy sector, prices 
are moving toward world levels, and the export quota system, 
which has been the basis of controlling domestic prices, is 
being eliminated.

-- Some 70% of industry has been privatized; virtually all 
small shops and businesses are in private hands.

-- Russia has begun the massive job of creating the legal, 
tax, and administrative structures necessary to regulate and 
sustain a market economy. A new civil code was passed; 
bankruptcy laws are beginning to be enforced.

-- The Central Bank has begun to function to regulate 
monetary policy. The ruble is now the currency only of 
Russia, and it is freely traded for foreign exchange inside 
the country.

-- Foreign investment is welcomed; the U.S. is the largest 
single investor, with some $700 million. There is general 
recognition that Russia has to create a more attractive 
investment climate, and Prime Minister Chernomyrdin has 
established a Foreign Investment Advisory Council.

-- Creating a predictable and stable tax regime will be 
critical for promoting business and investment. President 
Yeltsin acknowledged to President Clinton in September that 
overhauling Russia's tax regime would be a priority in 1995.

-- Russia has, at last, concluded an IMF program and adopted 
a budget that puts it in a very good position to stabilize 
its economy, lower inflation, and strengthen the ruble over 
the course of this year.

-- Russians now have access to a range of Western and other 
consumer goods that were available to only the most senior of 
Communist Party bosses three years ago. Prices are high, but 
many Russians are, for the first time, enjoying the fruits of 
a consumer economy.

There is more good news for the NIS region as a whole. Reform 
is spreading. Kazakhstan and Kyrgyzstan were early leaders in 
Central Asia. Small Moldova has doggedly pursued reform; we 
hosted a visit by Moldova's leading reformer, President 
Snegur, to Washington last month. In recent months, a second 
wave of reformers has arisen in the western NIS: in Ukraine, 
as I have already noted, but also in Belarus, Georgia, and 
Armenia.

Ukraine's new President, Leonid Kuchma, has worked closely 
with the IMF to a prepare a broad reform program to address 
the country's economic crisis. President Kuchma has told us 
that Ukraine has no other alternative but to build a market 
economy, and the Ukrainian people have come to realize that 
they wasted three years by deluding themselves that they 
could avoid tough economic decisions.

The IMF's board will consider Ukraine's program when it meets 
on March 31. The IMF has identified, however, a substantial 
gap in balance-of-payment financing over and above the 
resources that the IFIs can provide and is looking for donor 
countries to fill this gap in 1995. The U.S. is now leading 
an international effort to mobilize substantial external 
support to do this. We will require cooperation from Russia 
and Turkmenistan--Ukraine's principal creditors and suppliers 
of energy--in the form of debt rescheduling. It will also 
require new commitments of support from the G-7. The United 
States announced $100 million in support for Ukraine last 
fall and will be making major new financial commitments of 
support at a World Bank pledging session to be held next week 
in Paris. We are hopeful that resources will be committed at 
this session to allow the fund to approve Ukraine's program 
at the end of the month.

At the opening of the conference, you posed the question to 
keynote speakers: Has Russia--and by extension, the other 
NIS--come of economic age? I would have to give you a 
qualified response. Much has been accomplished in three 
years, particularly in Russia. But, of course, much more has 
to be done. In all these countries, additional steps need to 
be taken to fully make the transition to a market economy.

-- Inflation is still far too high.

-- We still need important legislation to protect investors 
as well as local businessmen. We urge early ratification of 
our bilateral investment treaty in Russia.

-- Most have failed to put an adequate social safety net in 
place, and many of the largest state enterprises still 
require fundamental restructuring.

-- Crime and corruption remains a serious threat. Witness the 
tragedy of the Listev assassination.

But the basic direction of reform is clear, and its 
cumulative impact is building a market economy in Russia and 
in other countries of the NIS. We have only to look to the 
situation just three years ago to grasp the extent of change 
and to find reason for hope in the future.  

(###)



ARTICLE 6:

U.S. Policy Toward Guatemala: The Cases of Michael Devine and 
Efrain Bamaca

Alexander F. Watson, Assistant Secretary for Inter-American 
Affairs

Statement before the Senate Select Committee on Intelligence, 
Washington, DC, April 5, 1995

Mr. Chairman: I welcome this opportunity to appear before you 
and your colleagues on the Senate Select Committee on 
Intelligence to discuss United States policy in Guatemala and 
the killings of Michael Devine and Efrain Bamaca. You are  
doing the right thing to conduct these hearings. It is 
important to get the facts out--to the Congress, to the 
public, and to the families of the victims.

That is precisely the intent of the President and Secretary 
of State Christopher. The President has asked the 
Intelligence Oversight Board--IOB--to conduct a thorough 
review of all aspects of the allegations associated with and 
the policy issues raised by these two cases. The IOB will 
review the facts surrounding these cases and make appropriate 
recommendations. As the Secretary stated before the Congress 
last week, should disciplinary or other such action be 
indicated, it will be taken. The Administration will provide 
the American people with as much information about the review 
as possible. The Secretary has already recommended the 
fullest disclosure possible.

Mr. Chairman, promotion of human rights abroad is a 
fundamental principle guiding the Clinton Administration's 
foreign policy. The responsibility to protect and assist 
American citizens abroad is a particularly compelling 
obligation assigned to the men and women of our foreign 
service. This statement, therefore, deals in large part with 
how the Department and our embassy in Guatemala discharged 
those responsibilities in the two cases at hand. Your staff 
has indicated, however, that an overview of U.S. policy in 
Guatemala--and how it has evolved over time--would be 
helpful. Let me do that before turning to the cases of 
Michael Devine and Efrain Bamaca.

Overview of U.S. Policy in Guatemala

Guatemala is a deeply troubled country. It is sharply divided 
along ethnic and social lines. The peasantry live in acute 
poverty. Decades of authoritarian and, often, extremely 
violent politics have inhibited the growth of democratic 
institutions. Promising political leaders have often been 
assassinated or driven into exile. The security forces have 
long violated human rights with impunity. A virulent left-
wing insurgency practiced a policy of "take no prisoners" and 
assassinated U.S. Ambassador John Gordon Mein in 1968.  In 
recent years, electoral politics have begun to function, but 
these democratic developments remain fragile.

When the Central American crisis erupted in Nicaragua and El 
Salvador in the late 1970s, our relations with Guatemala were 
problematic. The United States had provided substantial 
assistance to Guatemala under the auspices of the Alliance 
for Progress. Promotion of greater respect for human rights 
became a particular concern under the Carter Administration. 
The emphasis on human rights and the conditionality the 
United States placed on military assistance, in particular, 
stimulated a nationalistic backlash among the Guatemalan 
military officer corps, leading it, in 1977, to reject our 
military aid. It would not be restored until FY 1986.

In the late 1970s and early 1980s, the guerrilla insurgency 
acquired much larger dimensions. It was met by an 
increasingly brutal counter-insurgency campaign carried out 
under a succession of military leaders: Laugerud Garcia 
(1974-78); Lucas Garcia (1978-82); and Rios Montt (1982-83). 
Large-scale out-migration of Guatemalans began during this 
period, with some 45,000 taking refuge in Mexico. Several 
hundred thousand Guatemalans who were uprooted by the war 
reside in the United States today; about 100,000 have pending 
asylum claims. There is no generally accepted figure for the 
number of Guatemalans killed during the conflict, but 
estimates range upward from 100,000. Human rights abuses 
throughout this period were pervasive and systemic. They are 
well-documented in the annual human rights reports of the 
Department and in those of non-governmental organizations. It 
was also under Rios Montt that the military formed community-
based civil defense patrols--PACs--and armed the nearly half-
million Indian peasants who were recruited into them. In 
time, two problems associated with the PACs emerged: forced 
recruitment into their ranks and human rights abuses which 
they committed. In 1983, Rios Montt was overthrown by the 
Guatemalan army itself. His Defense Minister, General Mejia, 
was named head of state and moved to hold constituent 
assembly elections the following year.

Following adoption of a new constitution in 1985, Guatemala 
held free and fair elections, won by the Christian Democratic 
candidate, Vinicio Cerezo. During the next eight years--
between 1985 and 1992--the United States provided Guatemala 
about $936 million total aid. About $33 million of that 
amount was military, including financing and training. This 
was a significant amount of total aid but, for purposes of 
comparison, in the same period we gave $2.5 billion to El 
Salvador and $1.175 billion to Honduras. In terms of aid per 
capita, the disproportionality was even more pronounced. El 
Salvador received between four and five times as much total 
aid per capita as Guatemala. The Bush Administration 
suspended military assistance--both financing--FMF and grant 
aid--MAP-- in 1990 after concluding that elements of the 
military were responsible for the murder of American citizen 
Michael Devine. Our total aid in 1993 and 1994 was about $113 
million, of which $148,000 went to IMET programs.

When Cerezo took office in January 1986, a regional 
diplomatic effort spearheaded by Mexico--known as the 
Contadora Process--had been underway for nearly three years. 
It was about to give way to an all-Central American 
initiative--the Esquipulas Process. Both diplomatic efforts 
were aimed at bringing the Central American insurgencies to 
an end through peaceful negotiations and national 
reconciliation. The Esquipulas Process produced a series of 
agreements beginning in 1987 that provided the framework for 
free elections in Nicaragua in 1990 and the resulting 
demobilization of the Nicaraguan "contras." Peace 
negotiations had begun on a separate track in El Salvador in 
1984; they eventually culminated in the historic 1992 
comprehensive accords that ended that conflict.

In Guatemala, President Cerezo  initiated talks with the 
Guatemalan guerrilla umbrella organization--the URNG--in 
1987. Those talks made only limited progress but were 
continued and made more headway under President Serrano, 
elected in 1990. It was during Serrano's term, in the last 
year of the Bush Administration, that the United States 
initiated direct contacts with the URNG to encourage forward 
movement in the peace process. This support for the peace 
process has intensified during the Clinton Administration 
when, at the request of the Guatemalan Government and the 
URNG, the United States joined five other governments to 
constitute a "Group of Friends of the Peace Process."

President Cerezo completed his term and became the first 
civilian elected leader in Guatemala's history to turn power 
over to another civilian elected leader--Jorge Serrano, in 
1991. President Serrano betrayed his oath of office to uphold 
the constitution and attempted to dissolve the Congress and 
Supreme Court on May 25, 1993. In the ensuing 12-day crisis, 
the Clinton Administration worked intensively to get 
democracy back on track. We collaborated closely with the 
Organization of American States, other interested 
governments--including Mexico--and with key sectors of 
Guatemalan society itself to produce a peaceful, 
constitutional outcome. The result was the departure of 
Serrano and the election by the Guatemalan Congress of Ramiro 
De Leon Carpio, the widely respected Human Rights Ombudsman. 
At the conclusion of the crisis it was clear that the 
Guatemalan military had acted responsibly. In particular, the 
military had backed the finding of Guatemala's constitutional 
court that the actions of Serrano and his vice president were 
unconstitutional.

De Leon's selection and the role of the military during the 
crisis gave us considerable hope that Guatemala could move to 
further consolidate its democracy, improve respect for human 
rights, and end its insurgency through negotiations. Nothing 
would have a more dramatic and immediately favorable effect 
on the human rights situation than an end to the internal 
conflict. Our policy has thus placed considerable emphasis on 
that goal.

In January 1994, the government and URNG resumed negotiations 
and agreed to a new framework agreement and timetable for 
concluding the talks. Under the new framework, the talks were 
moderated by the United Nations and the Friends were given a 
supporting role. We appointed a special representative to the 
Friends group to give our own support emphasis and focus.

Under the calendar, the parties laid out a schedule of issues 
to be negotiated and set the end of 1994 as the date for a 
comprehensive agreement. Talks made excellent progress during 
the first half of 1994. Three accords were particularly 
noteworthy. A human rights agreement reached in March 1994 
provided for a UN Human Rights Verification Mission--MINUGUA-
-which has now deployed 313 human rights monitors throughout 
Guatemala. The accord also provides that the Human Rights 
Ombudsman has the responsibility to verify that service in 
the Civil Defense Patrols is voluntary and to determine 
whether PAC members have committed human rights abuses. The 
government declares it will not support these patrols or arm 
new volunteer civil defense committees once peace is 
obtained. Acceptance by Guatemala of this international 
presence was a hopeful sign of its growing desire to abide by 
internationally accepted norms of human rights.

The Guatemalan Government and the URNG also reached accords 
on aid to persons displaced by the war, which is already 
attracting international economic and technical support, and 
for a historical clarification commission. The latter accord 
provoked controversy. The commission will begin to function 
only after a comprehensive agreement is reached. It will have 
the mandate to make a public report on human rights 
violations committed by both sides during the war, but it 
does not have the authority to assign individual 
responsibility, and its findings are not to be used for 
prosecutions.

Partly owing to the adverse reaction to this accord from 
within its own ranks, the URNG suspended talks in June 1994. 
Negotiations did not resume until last October. Progress 
thereafter was slow, but last week in Mexico City, the 
parties signed a fourth agreement concerning the rights of 
Guatemala's indigenous population. The parties are now 
attempting to reach a final peace accord by a new target date 
of August 1995. That is an ambitious goal, especially as 
Guatemala holds presidential elections in November and the De 
Leon transitional presidency is drawing to a close. The 
Clinton Administration believes that the peace talks still 
offer the most concrete hope for ending the last of Central 
America's internal wars and for bringing about a lasting 
improvement in respect for human rights in Guatemala. Last 
year, in a step full of symbolism, we redirected the 
remaining $4.6 million of the military assistance suspended 
in 1990 into a peace fund to support implementation of peace 
accords. In sum, the peace talks are key to Guatemala's 
future and will continue to receive our full support.

That is not to say that our human rights policy in Guatemala 
is limited to support for the peace process. Far from it. 
Read our human rights reports. They are candid and detailed. 
They pull no punches. We believe that they have encouraged 
Guatemalan human rights supporters and that our policy has 
given them some protection and greater space to act. Our 
human rights policy is not confined to advocacy and support 
of cases in which we have a U.S.-citizen interest. We have 
been vocal and active in countless others as well--the cases 
of Myrna Mack, Maritza Urrutia, and Amilcar Mendez--to cite 
just three cases active in recent years.

Our human rights policy also seeks to strengthen Guatemalan 
institutions that have responsibility for protecting and 
improving respect for human rights. Specifically, we have:

-- Supported the Office of the Human Rights Ombudsman to 
improve its ability to gather and analyze information on 
human rights abuses. Grants totaling $2.6 million in the last 
five years have enabled the office to set up regional 
bureaus, install a computer tracking system, and extend 
education programs to indigenous audiences;

-- Launched this year a three-year, $2-million program of 
education, technical assistance, and other support to help 
indigenous and grass-roots non-governmental organizations 
increase participation of the disenfranchised in civil 
society;

-- Worked to improve the administration of justice through a 
$5-million project to increase the judicial system's 
independence and professionalism and to support efforts by 
the Public Ministry and MINUGUA to prepare cases for trial 
under the new Criminal Procedures Code that took effect last 
July;

-- Assisted municipalities to pursue legal reforms through 
the Local Government Outreach Strategy Project;

--  Provided training to civilian investigators in the Public 
Ministry; and

-- Supported the protection of street children by providing 
financial assistance to NGOs and the children's bureau of the 
Human Rights Ombudsman's office.

Let me say that we see no conflict between our participation 
in the peace process and our pursuit of human rights. Indeed, 
we view these efforts as complementary. The first major 
accord in the peace process deals precisely with halting 
violations of human rights. It is only by guaranteeing basic 
human rights and political freedoms that democracy becomes 
fundamental and accessible to all Guatemalans and national 
reconciliation can be assured.

In sum, our human rights policy is comprehensive and 
multifaceted. We seek to protect the rights of individuals 
and pursue with diligence specific cases of abuse. We 
actively support Guatemalan efforts to build the institutions 
of democracy and law which ultimately are the only guarantee 
of human rights. We make clear our commitment to 
constitutional government and free and fair elections. We 
participate in the peace process whose ultimate objective is 
to create the conditions for democratic progress.

Mr. Chairman, hundreds of thousands of American tourists 
visit Guatemala every year--not only Guatemala City and the 
major attractions of Antigua, Lake Atitlan, and 
Chichicastenango. They also visit the Mayan sites of the 
Peten and the less accessible highlands. Protection of 
citizens who encounter problems is an interest to which we 
devote considerable resources--publication of consular 
information sheets and travel advisories and warden systems 
for checking on the welfare of citizens in the event of a 
natural disaster. In Guatemala, we devote the services of one 
consular officer full time to the needs of U.S. citizens. 
Other consular staff lend assistance as required and, on 
occasion, consular welfare cases become the all-consuming 
focus of the entire embassy team. There have been numerous 
instances of such all-out efforts in the last two years in 
particular, as violent crime throughout Guatemala has 
increased. Kidnapings have been a problem in the last year. 
In those cases, we turn to Guatemalan authorities--political, 
police, and sometimes military--for help. Cooperation is 
generally quite good. I make that point because--in fairness 
to the Guatemalan Government and people--it is the truth.

It is not always the case, however. Let me now turn to the 
two cases that bring us here today. These cases date back to 
the early 1990s, but, as they are unresolved, they remain of 
concern to us. In both instances, we worked with two 
courageous American women whose testimony you will hear 
today.

Case of Michael Vernon Devine

U.S. citizen Michael Devine was murdered June 8, 1990, near 
his ranch in Poptun, Guatemala. Given the remote location and 
the absence of any police investigative ability in the area, 
our embassy in Guatemala initially sought investigative 
assistance from the Guatemalan military. The embassy 
concluded in a matter of weeks, however, that the military 
itself was likely involved. Thereafter, and until the senior 
military commanders at the time of Devine's murder were 
replaced, we pressed our interest in resolving the case with 
the civilian government--first under President Cerezo and 
thereafter with Presidents Serrano and De Leon. Our goals 
throughout were to see the killers, intellectual authors, and 
senior officers whom we believed to have covered up the crime 
face punishment and, in doing so, to have civilian control 
over the military effectively exerted.

In December 1990, to drive home our dissatisfaction with the 
lack of real progress toward achieving these goals, the 
Department suspended FMF and MAP expenditures--both committed 
funds in the pipeline and new assistance--to the Guatemalan 
military. It also stopped authorization of the commercial 
sale of defense items to Guatemala's military. We maintained 
a small IMET program totaling $772,000 between 1991 and 1994.

Sheer persistence on the part of former Ambassador Stroock 
and his staff, together with the effective and courageous 
work of a private investigator and a Guatemalan attorney 
hired by Mrs. Devine, resulted in the conviction by a 
military court of five enlisted men for the murder in 
September 1992. The men were given 30-year sentences. Those 
sentences subsequently were  upheld by the Supreme Court of 
Guatemala. The men are now serving those sentences. Following 
continuous pressure by our Charge d'Affaires and the embassy 
after Ambassador Stroock's departure in November 1992, 
Guatemalan army Captain Hugo Contreras also was tried and 
convicted of complicity in the murder in May 1993. He was 
given a 20-year sentence but, in our view, was allowed to 
escape from military custody the very same day. We have 
pressed continually for the Guatemalan military to find and 
reapprehend Contreras. Following her arrival in Guatemala in 
June 1993, our new ambassador, Marilyn McAfee, pressed 
continually for the Guatemalan military to locate and 
reapprehend Contreras. We have not been successful, but 
neither have we abandoned that effort.

We believe that senior officials of the Guatemalan army 
likely ordered the detention and interrogation of Michael 
Devine, possibly in connection with a case of missing army 
rifles. We have absolutely no reason to believe that Devine 
was engaged in any illegal or even improper activity, nor is 
it the case that Devine was a DEA informant, as has been 
alleged in the press. It is virtually certain that the two 
colonels--Garcia Catalan and Portillo--who commanded the base 
from which the five enlisted men operated were conspirators 
in the subsequent coverup. We have conflicting information on 
the role of Colonel Alpirez. The bulk of the information 
suggests that he was involved in a coverup. The embassy 
repeatedly pressed and continues to press the Government of 
Guatemala and senior military officials themselves to obtain 
an honest account from Alpirez and others.

Case of Efrain Bamaca Velasquez

Guatemalan guerrilla Efrain Bamaca Velasquez disappeared on 
March 12, 1992, after a firefight with the Guatemalan army. 
For nearly a year, his American-citizen wife, Jennifer 
Harbury, told us she believed he died in combat. However, a 
former guerrilla, Santiago Cabrera Lopez, testified in 
February 1993 that, while detained by the Guatemalan 
military, he had seen Bamaca alive in military custody at the 
San Marcos military base in March and July 1992. At that 
point, Ms. Harbury contacted our embassy for the first time 
on March 9, 1993, identifying herself as Bamaca's wife and 
seeking our assistance. The embassy responded quickly, 
mobilizing all elements of the embassy team to raise the case 
with their contacts in the Guatemalan Government to seek new 
information. On March 15, our Charge d'Affaires raised the 
case with the Guatemalan Attorney General.

On March 18, embassy officials   contacted the then Human 
Rights Ombudsman, Ramiro De Leon. He told them of inquiries 
about Bamaca the previous year--in 1992--from the URNG and 
the approaches he made as a result to the Guatemalan 
military. The military claimed Bamaca was probably buried in 
an unmarked grave in Retalhuleu, the site of the firefight. 
De Leon had obtained permission to exhume the grave in May 
1992, but the proceeding was halted on the grounds that no 
family members or dental or other identifying records were 
present.

On March 22, 1993, the embassy raised the case with the 
Guatemalan president's top human rights adviser. We also 
raised the case directly, in several channels, with senior 
military and military intelligence officials. From the 
outset, however, and to this day, the Guatemalan military 
maintained that they did not capture Mr. Bamaca.

Ambassador McAfee addressed the subject of clandestine 
prisons--an issue raised by the Bamaca case--with President 
De Leon on July 11. She brought up the same issue, 
specifically referring to the Bamaca case with Minister of 
Defense Enriquez on July 29, and did so again with President 
De Leon on August 2. This pattern of aggressively pressing 
our interest in the Bamaca case continued throughout 1993 and 
to the present. U.S. Government officials met with Ms. 
Harbury frequently and at high levels in Washington and 
Guatemala--a reflection of our extraordinary interest in the 
case. Ambassador McAfee made herself continuously available. 
In Washington, Ms. Harbury met on numerous occasions with 
senior officials in our Bureau of Inter-American Affairs; 
with Assistant Secretary for Democracy, Human Rights, and 
Labor Affairs John Shattuck; with Ambassador Geraldine 
Ferraro; and with National Security Adviser Anthony Lake.

During Ms. Harbury's October-November 1994 hunger strike in 
Guatemala City, Ambassador McAfee visited her frequently and 
a consular officer visited her daily. Concerned for her 
physical safety, they had the embassy's security guard visit 
the central plaza, where she conducted the strike, several 
times a day. Photographs of a visit to her by Ambassador 
McAfee and my senior adviser Richard Nuccio appeared on the 
front pages of most Guatemalan dailies, conveying a graphic 
message of official U.S. protection, support, and concern.

At the same time, we were asking our intelligence services to 
search their files and data bases for all available 
information, to evaluate and re-assess the information 
available--as is often the case, much was from secondary or 
sub-sources--and to collect new intelligence. As additional 
information was acquired, we became more and more persuaded 
that the Guatemalan military had in fact captured Bamaca in 
1992. The Department instructed Ambassador McAfee to meet 
with President De Leon on November 11, 1994. The Ambassador 
told De Leon that, according to information available to the 
USG, Bamaca was captured alive by the military, transferred 
to the San Marcos military base, and that his wounds were not 
life-threatening. She also told him that, as President, he 
had a responsibility to ensure that the investigation 
underway would be vigorously pursued to confirm the facts of 
the case and to take appropriate strong action.

On the same day, Ambassador McAfee met with Jennifer Harbury, 
who had just ended her hunger strike. Ambassador McAfee told 
Ms. Harbury that she had informed President De Leon that we 
had credible information that Bamaca had been captured alive 
by the military and that his wounds were not life-
threatening. The Ambassador also shared with Ms. Harbury our 
candid assessment that there were, unfortunately, no 
indications that Bamaca survived much beyond the first few 
weeks of his captivity. Ms. Harbury understandably wanted to 
know more. We felt that we had a strong obligation to share 
with her our best assessments drawn from intelligence 
sources--once we were confident of them--but could not share 
specific intelligence without putting at risk the people who 
were helping us find out what happened.

As additional information was acquired in the ensuing months, 
the intelligence community became increasingly persuaded that 
Bamaca had in fact been killed while in military custody. On 
several occasions between December 1994 and March 1995, 
Administration officials told Ms. Harbury of our belief that, 
while we lacked conclusive evidence, Bamaca had not survived. 
Ms. Harbury, during the same period, told us of numerous 
instances of people coming to her anonymously with reports 
that Bamaca had  recently been seen alive in military 
custody. The only such report lending itself to verification 
turned out to be bogus. None of the intelligence supported 
Ms. Harbury's hope that Bamaca was still alive and we 
repeatedly conveyed that painful message.

When, in late January of this year, additional intelligence 
was received and evaluated, we instructed Ambassador McAfee 
to approach President De Leon again, urging him to order the 
re-interrogation of senior military officers who might have 
been involved in Bamaca's disappearance. We specifically 
urged that Colonel Alpirez be interrogated again. We did not 
assert to President De Leon any conclusion as to Colonel 
Alpirez' role--the information available was not sufficiently 
definitive--but we were confident that Alpirez must have had 
direct knowledge of what happened to Bamaca and we urged in 
no uncertain terms that he be interrogated again.

Ambassador McAfee made this demarche on February 6. On 
February 8, Department officials informed Ms. Harbury of the 
demarche, telling her as well that "the information available 
to us, while it is not conclusive, suggests your husband was 
killed following his capture." It was the considered view 
within the Administration, however, that we could not 
properly mention Alpirez' name to her because it might 
prejudice the investigation we expected President De Leon to 
undertake and because we could not draw a definitive 
conclusion about Alpirez' role in the Bamaca case. Most 
importantly, it would have put at risk the people who were 
confidentially helping us. When, after a month, Alpirez still 
had not been questioned again, we announced on March 10 the 
suspension of the participation of Guatemalan military 
personnel in IMET programs conducted in the United States for 
the remainder of FY 1995. Our announcement of that suspension 
also contained the considered assessment of the U.S. 
intelligence community that Bamaca had died in Guatemalan 
military custody.

Mr. Chairman, I do not want to leave this subject without 
saying    again how much we sympathize with Mrs. Devine, Ms. 
Harbury--with all those who have lost a family member in 
circumstances such as these. We understand, too, the pain, 
the frustration, and the anger that they feel when we cannot 
answer all the questions that torment them. At the same time, 
we made extraordinary efforts on behalf of Carol Devine and 
Jennifer Harbury--as we did earlier in the cases of Nicholas 
Blake, Griffin Davis, and Sister Dianna Ortiz. We acted in 
good faith throughout, doing our best to help them and to 
share with them as much information as we could.

We have pressed the Guatemalan Government hard on both the 
Devine and Bamaca cases, and we will continue to do so. 
Indeed, on instructions of Secretary Christopher, Ambassador 
McAfee met with President De Leon last night, delivering a 
personal message from the Secretary underscoring the 
importance that we attach to seeing justice achieved in these 
cases. For our part, we are prepared to provide the 
cooperation and assistance of our Federal Bureau of 
Investigation. For its part, we believe Guatemala could do 
much more to find and imprison Captain Contreras. We believe 
Guatemala has yet to conduct the kind of vigorous, credible 
inquiry into the Bamaca case that we have consistently called 
for, and we will stay the course on that issue, too. We will 
continue to protect U.S. citizens' interests in Guatemala to 
the best of our ability. We will speak up and remain active 
in our Guatemalan human rights policy across the board, and 
we will stay engaged in support of the peace process and the 
consolidation of what is still a very fragile, imperfect 
democracy. Enlightened policy demands no less.  

(###)



ARTICLE 7:

The Future of NATO and Europe's Changing Security Landscape

Richard C. Holbrooke, Assistant Secretary for European and 
Canadian Affairs

Statement before the Subcommittee on Airland Forces of the 
Senate Armed Services Committee, Washington, DC, April 5, 
1995

Mr. Chairman, I would like to thank you for the opportunity 
to discuss the future of NATO within the context of Europe's 
changing security landscape. When the Cold War ended--that 
symbolic midnight moment on December 25, 1991, when the 
Soviet flag came down over the Kremlin for the last time--it 
was inevitable that Americans would talk of ending, or 
sharply reducing, their global commitments--of coming home.

A half-century ago, at the end of World War II, the United 
States faced another time of great change, another time of 
enormous opportunity and uncertain peril, another time when 
Americans wanted nothing more than simply to go home. But we 
soon found that freedom's wartime victory was incomplete and 
that the post-war period would require continuous and active 
American engagement to marshal the forces of freedom for a 
new kind of war--a cold war.

Among the challenges that Harry Truman, George Marshall, Dean 
Acheson, and their Democratic colleagues faced was to build a 
new post-war order in cooperation with a new Republican 
Congress. And to the lasting benefit of our nation and the 
world, they met that challenge. They found allies among 
Republicans who recalled the consequences of isolationism 
after World War I--a period that also began with a Democratic 
President facing new Republican majorities in Congress. They 
forged a bipartisan consensus based on the Truman Doctrine, 
the Marshall Plan, the post-war institutions of the West, and 
sustained American leadership.

Now, a half-century later, we have the opportunity--and the 
responsibility--to marshal the forces of freedom for a new 
kind of European peace--one that is just and enduring. We 
have the opportunity--and the obligation--to work with our 
European partners to extend freedom's victory to all of 
Europe.

It is fair, of course, to ask why it is in the national 
interest of the United States to continue to play an active 
role in the restructuring of Europe's security. It is 
tempting to say, at the end of the Cold War, that we will 
leave it to the Europeans themselves to work out a new 
concert of Europe, while we focus on problems at home. 

We must resist this temptation for a simple reason: our own 
narrow self-interest. The context for U.S. relations with 
Europe may have changed, but bedrock American interests in 
Europe endure: 

-- A continent free from domination by any power or 
combination of powers hostile to the United States; 

-- Prosperous partners open to our ideas, our goods, and our 
investments; 

-- A community of shared values, extending across as much of 
Europe as possible, that can facilitate cooperation with the 
United States on a growing range of global issues; 

-- A continent that is not so wracked by strife that it 
drains inordinate resources from the United States or the 
rest of the world. 

These interests require active U.S. engagement in Europe. 
They point to close cooperation with our European partners.

President Clinton's four trips to Europe last year 
underscored an inescapable fact: The United States has become 
a European power, an enduring and essential element of a 
stable balance.

Many thought our presence in Europe would no longer be 
necessary when the Soviet threat ended, but after only a few 
years--and the disastrous results of our early non-
involvement in the Yugoslav tragedy--it is time to recognize 
that Europe cannot maintain stability on its own. An unstable 
Europe would still threaten essential national security 
interests of the United States, and Europe still needs 
American involvement to keep the continent stable. Our 
national security requires continued American participation 
in maintaining European stability and promoting an undivided 
continent.

During the Cold War, Americans played an indispensable role 
in containing ancient conflicts by creating a framework of 
cooperative security across the western half of the continent 
and on its always explosive southeastern Aegean flank. Today, 
American power and presence remain essential to extend these 
habits of cooperation across the entire continent, the 
eastern portion of which seethes still with unresolved 
historic legacies. To paraphrase Winston Churchill, it is 
still necessary for "the New World to redress the imbalances 
of the Old."

Local conflicts, internal political and economic instability, 
and the return of historic grievances have replaced Soviet 
expansionism as the greatest threat to peace in Europe. 
Western Europe and the United States must jointly ensure that 
tolerant democracies become rooted throughout all of Europe 
and that the seething, angry, unresolved legacies of the past 
are contained and solved.

Europe's diversity and historic rivalries remain a 
determining aspect of efforts to maintain stability. 
Maintaining peace in Europe has traditionally depended on a 
complicated set of structures that balanced often-conflicting 
interests. Disappearance of Cold War structures has left 
important parts of Europe without a sense of security 
provided by a credible framework. This sense of insecurity is 
related less to the perception of a new threat than it is to 
the need to generate a climate of confidence in which 
difficult economic and political reforms can be advanced.

In this context, building a new security architecture for 
Europe means providing a framework to build democracy, market 
economies, stable societies, and, ultimately, a stable and 
just peace across the continent. If we are to realize our 
goal of a peaceful, democratic, prosperous, and undivided 
Europe, we must work with our European partners to re-
establish a sense of overall security.

Today, the early euphoria that surrounded the fall of the 
Berlin Wall and the collapse of the Soviet empire has yielded 
to a more sober appreciation of the problems--new and old. 
The tragedy of Bosnia does not diminish the responsibility to 
build a new comprehensive structure of relationships to form 
a new security architecture. On the contrary, Bosnia--the 
greatest collective security failure of the West since the 
1930s--only underscores the urgency of that task.

Any effort to redesign the new security architecture of 
Europe must focus first on Central Europe, the seedbed of 
more turmoil and tragedy in this century than any other area 
on the continent. The two most destructive wars in human 
history began from events on its plains, and the Cold War 
played itself out in its ancient and storied cities, all 
within the last 80 years.

Other historic watersheds also have not treated this area 
well. First the Treaties of Versailles and Trianon, then the 
agreements of Yalta and Potsdam, and, finally, the collapse 
of the Soviet empire--those three benchmark events left 
throughout Central Europe a legacy of unresolved and often 
conflicting historical resentments, ambitions, and most 
dangerous, territorial and ethnic disputes. If any of these 
malignancies spread--as they have already in parts of the 
Balkans and the Transcaucasus--general European stability is 
again at risk.

But if there are great problems, there are also great 
possibilities. For the first time in history, the nations of 
Central Europe have the chance simultaneously to enjoy 
stability, freedom, and independence based on another first: 
the adoption of Western democratic ideals as a common 
foundation for all of Europe. The emotional, but also 
practical, lure of the West can be the strongest unifying 
force Europe has seen in generations, but only if unnecessary 
delay does not squander the opportunity.

The West owes much of its success to the great institutions 
created in the 1940s and 1950s. These structures offer a 
usable foundation for a new era. There is no desire and no 
reason to dismantle these structures. On the contrary, these 
institutions form the basis for a new security architecture. 
Each has its own role to play, and each represents a separate 
pillar of security. The essential challenge is to maintain 
their coherence, extend their influence, and adapt to new 
circumstances without diluting their basic functions.

If those institutions were to remain closed to new members, 
they would become less relevant to the problems of the post-
Cold War world. It would be a tragedy if, through delay or 
indecision, the West helped create conditions that brought 
about the very problems it fears the most. The West must 
expand to Central Europe as fast as possible in fact as well 
as in spirit. Western cooperation cannot be seen as a closed 
undertaking, open only to those who were lucky enough to be 
on the western side of the Iron Curtain.

Such a development would bring a halt to the process of 
European integration, which is vital for peace in Europe. A 
truly integrated security architecture cannot be built by 
extending the largesse of one part of Europe without a 
commensurate growth in the participation and responsibility 
of the other part. Integration must be open and organic. The 
goal must be a functioning community of nations, not a 
development program from the haves to the have-nots. The 
United States is ready to lead in the building of this 
community.

The President's comprehensive strategy to build a new 
interlocking security architecture builds on the success and 
enduring value of these Western institutions and is based 
upon enlargement, integration, and inclusion. Its key 
elements include a gradual, deliberate, and transparent 
process of NATO enlargement, enhancing the Partnership for 
Peace--PFP, strengthening the Organization on Security and 
Cooperation in Europe--OSCE, supporting European integration 
as embodied in the European Union--EU, and developing the 
NATO-Russia relationship. Each of these mutually supportive 
elements is critical to our overall success.

NATO and the Partnership for Peace (PFP)

The central security pillar of the new architecture is a 
venerable organization--NATO. NATO remains the anchor of 
American engagement in Europe and the linchpin of 
transatlantic security. First and foremost, NATO is the most 
successful and capable military alliance in history. When the 
forces of NATO join together, they are highly effective. NATO 
is a unified force for stability in a fragmented, unstable 
world. Its members are the cornerstone of the free world. We 
and our allies cherish peace and freedom, respect human 
rights, and thrive on free enterprise. If one looks for 
nations with political objectives and military forces capable 
of operating successfully with the United States, most are 
members of NATO.

The tried-and-true patterns of military exercises, planning, 
and collaboration with NATO allies allow the United States to 
leverage its resources and relieve the U.S. from the 
unacceptable choice of either having to act alone or do 
nothing when con- fronted with crises. Without continuing 
political and military cooperation in NATO, the U.S. and its 
allies would be hard pressed to build the kind of political 
coalition and conduct the kind of coalition military 
operations that were the key to success of Operation Desert 
Storm.

In short, NATO has always been more than a transitory 
response to a temporary threat. It is a guarantor of European 
democracy and a force for European stability. NATO provides a 
proven structure for managing transatlantic relations. It is 
the accepted vehicle for our involvement in European 
security. These are the reasons why its mission has endured 
and why its benefits are so attractive to Europe's new 
democracies.

Only eight months after the fall of the Berlin Wall, and 17 
months before the end of the Soviet Union, NATO began a 
historic transformation that continues today. New goals for 
the alliance were set forth in NATO's London Summit 
Declaration of July 1990. NATO declared that it no longer 
considered Russia an adversary and announced a new program of 
cooperation with the states of Central and Eastern Europe. 
Just as importantly, NATO called for a restructuring of its 
military forces and a reorientation of its strategy. This 
declaration also established the first ties between NATO and 
the countries of the then-existent Warsaw Treaty 
Organization.

In June 1991, in Copenhagen, NATO foreign ministers issued a 
statement on "Partnership with the Countries of Central and 
Eastern Europe." NATO declared that 

We do not wish to isolate any country, nor to see a new 
division of the Continent. Our objective is to help create a 
Europe whole and free. 

This objective has guided NATO's policies ever since. It 
remains the foundation of NATO's current efforts to extend 
security throughout Europe.

In pursuit of this objective, the forces and missions of 
NATO's integrated military commands have been radically 
restructured. The former concentrations of heavily armored 
forces in the center of Europe have been replaced by more 
lightly armed, mobile, and flexible multinational corps 
better able to respond to a range of possible security 
challenges in a different, less stable world. These forces 
are not directed against any country or group of countries. 
Their purpose is to defend peace in Europe, either on NATO 
territory or--pursuant to a mandate from either the UN or the 
OSCE--in areas of instability or crisis.

The concept of containment has disappeared from NATO's 
strategy. No country, including Russia, is classified as an 
opponent or an enemy. These points were set forth clearly in 
the New Strategic Concept which alliance heads of state and 
government adopted at the Rome summit in November 1991, and 
they have been enshrined in NATO military planning documents 
ever since. The New Strategic Concept made clear that crisis 
management would become an important mission for the alliance 
in addition to its core purpose of collective defense.

At the same Rome summit, alliance leaders created the North 
Atlantic Cooperation Council and invited Russia and the other 
states of the former Soviet Union to join. The NACC, as it is 
known, has proven to be a useful vehicle for political 
contact and consultations. It began in the immediate 
aftermath of the Cold War, when levels of trust were still 
being defined, and has grown progressively more active and 
effective. As the level of trust has increased, NATO has 
redoubled its efforts to cooperate with Russia and other 
states in Central and Eastern Europe, and to build closer, 
institutional links aimed at promoting common approaches to 
common problems.

At the Brussels summit in January 1994, alliance leaders 
added even more substance to NATO's new role through adoption 
of a broad strategy of cooperation with all of Europe. In 
reaffirming the political course set by the London and Rome 
summits and the military redirection enshrined in the 
alliance's new strategic concept, NATO endorsed a series of 
"initiatives designed to contribute to lasting peace, 
stability, and well-being in the whole of Europe, which has 
always been the alliance's fundamental goal." These  
initiatives included the Partnership for Peace, through which 
NATO invited members of the NACC, including  Russia and other 
states, to "join us in new political and military efforts to 
work alongside the alliance." In just one year, the 
innovative PFP has become an integral part of the European 
security scene.

Contrary to a fairly widespread impression, PFP is not a 
single organization; rather, it is a series of individual 
agreements between NATO and, at last count, 25 other 
countries ranging from Poland to Armenia, including Russia. 
Each "partner" country creates an individual program to meet 
its own needs. PFP helps newly democratic states restructure 
and establish democratic control of their military forces; 
develop transparency in defense planning and budgetary 
processes; develop interoperability with alliance forces; 
better understand collective defense planning; and learn new 
forms of military doctrine, environmental control, and 
disaster relief. It provides a framework in which NATO and 
individual partners can cooperate in crisis management, 
peacekeeping, and other activities.

PFP is already having a significant effect on partner 
nations. For example, many partners are organizing most if 
not all of their armed forces around NATO planning concepts. 
Some are submitting their individual partnership programs to 
their parliaments for approval--consolidating legislative 
oversight of military policy for the first time ever in their 
history.

PFP also provides a valuable framework for evaluating the 
ability of each partner to assume the obligations and 
commitments of NATO membership--a testing ground for their 
capabilities. And for those partners that do not become NATO 
members, the PFP will provide a structure for increasingly 
close cooperation with NATO--in itself an important building 
block for European security.

The U.S. and its allies have agreed on a robust program of 
practical cooperation with partner states that builds on 
PFP's early momentum. Thirteen joint exercises with partners 
are planned in 1995, including a SACLANT-sponsored event in 
August at Fort Polk, Louisiana.

No issue has been more important, controversial, or 
misunderstood than that of NATO expansion. NATO heads of 
state and government at the January 1994 summit decided the 
alliance would eventually expand. This decision was 
reaffirmed last June by President Clinton during one of his 
European visits, when he stated that the question was no 
longer whether NATO would expand but how and when.NATO has 
embarked on a two-phase program for 1995. During the first 
part of this year, NATO is determining, through an internal 
discussion, the rationale and process for expanding the new, 
post-Cold War NATO. Then, in the months prior to the December 
1995 ministerial meeting, NATO's views on these two issues--
"why" and "how"--will be presented individually to PFP 
members. This will mark the first time detailed discussions 
on this subject have taken place outside the alliance. Then 
the ministers will meet again in Brussels in December and 
review the results of the discussions with the partners 
before deciding how to proceed.

Several key points should be stressed.

First, NATO expansion must strengthen security in the entire 
region, including nations that are not members.

Second, the rationale and process for NATO's expansion, once 
decided, will be transparent, not secret. All partners will 
have the opportunity to hear exactly the same presentation 
from NATO later this year.

Third, there is no timetable or list of nations that will be 
invited to join NATO. The answers to the critical questions 
of who and when will emerge after completion of this phase of 
the process.

Fourth, each nation will be considered individually, not as 
part of some grouping.

Fifth, the decisions as to who joins NATO and when will be 
made exclusively by the alliance. No outside nation will 
exercise a veto.

Sixth, although criteria for membership have not been 
determined, certain fundamental precepts reflected in the 
original Washington Treaty remain as valid as they were in 
1949; new members must be democratic, have market economies, 
be committed to responsible security policies, and be able to 
contribute to the alliance. As President Clinton has stated, 

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.

Seventh, all members, regardless of size, strength, or 
location should be full members of the alliance, with equal 
rights and obligations.

Eighth, new members will be expected to pay their share of 
NATO's common budgets, be prepared to contribute to alliance 
missions, and have capable military forces to do so.

Ninth, new members will be expected to commit themselves to 
the political aspect of NATO's unity--the commitment to 
building consensus and cooperating in the development of 
alliance policies.

Lastly, it should be remembered that each new NATO member 
constitutes for the United States the most solemn of all 
commitments: a bilateral defense treaty that extends the U.S. 
security umbrella to a new nation. This requires ratification 
by two-thirds of the U.S. Senate, a point that advocates of 
immediate expansion often overlook.

In this context, let me briefly state why this 
Administration, while leading the alliance on the issue of 
NATO expansion, opposes the approach taken by the House of 
Representatives in H.R. 7 and the "NATO Participation Act 
Amendments of 1995," now pending before the Senate.

We believe these bills would result in the opposite effect of 
that intended by many of its sponsors. They could alter the 
steady course we and our allies have set toward expansion and 
could actually slow down the process. The legislation could 
complicate the expansion process by needlessly generating 
disagreements with our allies. It also violates one of the 
fundamental principles guiding the expansion process, i.e., 
that each nation will be considered individually on its own 
merits.

We must be very careful about unilaterally and prematurely 
trying to choose certain countries for NATO membership over 
others or to set specific guarantees. The Washington Treaty 
is not a paper guarantee. New members have to be in a 
position to undertake the solemn obligations and 
responsibilities of membership, just as we will extend our 
solemn commitments to them. Our gradual, deliberate, and 
transparent approach to NATO enlargement is designed to 
ensure that each potential member is judged fairly and 
individually, by the strength of its democratic institutions 
and its capacity to contribute to NATO's goals.

By following this approach, we    give every new democracy a 
powerful incentive to consolidate reform. Arbitrarily locking 
into law advantages for certain countries would discourage 
reformers in countries not named and encourage complacency in 
countries that are. Indeed, the effect of these measures 
before Congress could be to encourage the very instabilities 
and imbalances we seek to avoid. The Senate bill also does 
not acknowledge the key role played by PFP in increasing 
defense cooperation with partner countries and, thus, helping 
to prepare them for eventual NATO membership.

The view shared by this Administration and each of its allies 
is that in the process of expanding NATO, we should not draw 
new lines in Europe but should reach out to all countries 
emerging from communism. We must remember that the decision 
on expansion is not to be made by the United States alone but 
by the allies collectively. The U.S. should not prejudge 
issues that ultimately will be subject to consensus among 
NATO's 16 members and ratified by legislatures in those 
countries.

We also do not believe that "observer status" in the North 
Atlantic Council, as provided in the Senate bill, is 
desirable given the highly sensitive nature of discussions, 
including on the subject of NATO expansion. Both PFP and NACC 
provide ample opportunity for NATO's partners to participate 
in appropriate meetings and other activities.

While we also attach high priority to improving the English-
language skills of partner defense forces, as reflected in 
our FY 1996 International Military Education and Training 
Program--IMET--and Partnership for Peace program requests, we 
oppose the specific IMET earmarks in the bill. As a general 
proposition, we think the bill gives the President 
insufficient flexibility to meet shifting demands. We would 
much prefer a bill that provides what the President "may" do, 
as opposed to what he "shall" do.

Finally, we are concerned about the reporting requirements in 
the bill. They would place the President in the untenable 
position of having to make a public and unilateral evaluation 
of a country's suitability for NATO membership. This could 
generate disagreements with our allies and further complicate 
the expansion process.

We hope that Congress will make the necessary changes in the 
proposed legislation. Congress and the Administration share 
the same goal with respect to NATO expansion. Working 
together, without unnecessary legislative constraints, we 
will reach that goal more quickly.

Fortifying the European pillar of the alliance contributes 
further to European stability and to transatlantic burden-
sharing. It improves our collective capacity to act. It means 
establishing a new premise of collective defense: The United 
States should not be the only NATO member that can protect 
vital common interests outside of Europe.

For these reasons, the United States promoted the concept of 
the Combined Joint Task Force--CJTF. CJTF offers a practical 
vehicle for making NATO assets and capabilities available to 
our European allies, should the alliance as a whole, 
including the U.S., decide not to participate. It is based on 
the notion that Europe's emerging defense identity should be 
separable but not separate from NATO. CJTF can become an 
important vehicle for the United States to develop more 
effective sharing of military burdens with its European 
allies. NATO will still have the right of first refusal to 
deal with crises that do not automatically invoke Article 5 
of the Washington Treaty, but if the alliance as a whole 
chooses not to act, smaller coalitions of willing members can 
draw on NATO assets to deal with such crises. CJTF also 
provides a means to accommodate participation of forces from 
non-NATO allies, including members of the PFP.

NATO expansion cannot occur in a vacuum. If it did, it would 
encourage the very imbalances and instabilities it was 
seeking to avoid. In addition to NATO and PFP, the new 
architecture involves both the EU, other arrangements such as 
the Organization for Security and Cooperation in Europe--
OSCE, and a parallel track developing a pragmatic partnership 
with Russia.

The European Union

For more than 40 years, both Democratic and Republican 
Administrations have supported peaceful European integration. 
The European Union has become a vital partner in trade, 
diplomacy, and security. Close partnership between the United 
States and the European Union is essential to our common 
agenda of democratic renewal. This Administration has 
strongly supported the European Union's efforts at European 
integration.

Although the European Union is usually viewed as a political 
and economic entity, it is an essential pillar of European 
security. The integration of western European nations on the 
basis of democracy and free market economics has virtually 
transcended old territorial disputes, irredentist claims, 
social cleavages, and ethnic grievances that tore apart 
European societies in earlier eras.

Throughout its history, the Union has strengthened the 
democratic impulse of a wider Europe. The extension of the 
Union eastward will be immensely important both politically 
and economically. It will integrate and stabilize the two 
halves of Cold War Europe.

Expansion of NATO and the EU will not proceed at exactly the 
same pace. Their memberships are not and will not be 
identical, but the two organizations are clearly mutually 
supportive. Expansion of both is equally necessary for a 
stable Europe.

The Organization for Security and Cooperation in Europe 
(OSCE)

Both EU and NATO expansion are proceeding within the broad 
context of a new European security architecture. Neither is 
being pursued in isolation. Integration of Central Europe and 
the nations of the former Soviet Union into the OECD, the 
GATT and its successor, the World Trade Organization, and 
such institutions as the Council of Europe all complement and 
support the gradual expansion of NATO and the EU.

But neither NATO nor the EU can be everything to everybody, 
and the other organizations mentioned above are focused on 
narrower issues. This points to the need in the new European 
architectural concept for a larger and looser region-wide 
organization that can deal with a variety of challenges which 
neither NATO nor the EU is suited to address.

Fortunately, the core for such a structure has existed for 
some years--the Conference on Security and Cooperation in 
Europe. Its broad structure of human rights commitments, 
consultations, and efforts at cooperative or preventive 
diplomacy had begun to fill a niche in the new Europe. But it 
was clear by the middle of last year that CSCE, while 
offering intriguing possibilities, was wholly inadequate to 
the opportunities or the challenge. Under the leadership of 
the United States, a significant evolution of this 
organization, including a new name, was started in December 
at the Budapest CSCE summit.

Where NATO and the EU begin with the assumption that their 
members share common goals, the Organization on Security and 
Cooperation in Europe, or OSCE, as it was renamed, presumes 
that many of its participants disagree on how its standards 
are to be implemented. The OSCE takes such disagreement as a 
given and then works to find common ground.

Security in Europe today means solving conflicts--many of 
them centuries old--before they escalate as Bosnia has. This 
is why we have strengthened OSCE mechanisms, are making 
vigorous use of its norms, ensuring full implementation of 
its commitments, and increasing political and material 
support for its conflict prevention activities. At the 
Budapest summit, a comprehensive framework for the future of 
conventional arms control was developed; uniform non-
proliferation principles were established among 52 nations; 
greater political and material support was pledged for 
support for the High Commissioner on National Minorities, the 
Preventive Diplomacy Missions, and the Office for Democratic 
Institutions and Human Rights; and Russia and the OSCE, as a 
whole, agreed to merge negotiating efforts on the difficult 
issue of Nagorno-Karabakh and provide peacekeepers there once 
a political agreement is reached--all important steps on 
OSCE's path to becoming a more meaningful organization with 
greater capabilities, operating without regard to old Cold 
War dividing lines.

These decisions complement our efforts at NATO and the 
efforts of the European Union to pursue cooperative, 
integrated security structures for Europe. But they do not 
make OSCE a substitute for NATO or the EU. In no way can OSCE 
be made superior to NATO. Because the functions, as well as 
the structures of OSCE and NATO are entirely different--and 
shall remain so--OSCE will not become the umbrella 
organization for European security, nor will it oversee the 
work of the NATO alliance. But we must develop new methods to 
identify and deal with future potential Bosnias by addressing 
at an early stage the causes of conflict. The OSCE must prove 
its worth in this area, as the CSCE did in spreading 
democratic values and legitimizing human rights. More must be 
done.

A Pragmatic Policy of Engagement With Russia and the NIS

This brings me to another essential pillar of the new 
security architecture: relations with Russia. If the West is 
to create an enduring and stable security framework for 
Europe, it must solve the most enduring strategic problem of 
Europe and integrate the nations of the former Soviet Union, 
especially Russia, into a stable European security system.

Since his first day in office, President Clinton has pursued 
a pragmatic policy of engagement with Russia and the other 
New Independent States as the best investment we can make in 
our nations's security and prosperity. As Secretary 
Christopher said last week,

Our approach is to cooperate where our interests coincide, 
and to manage our differences constructively and candidly 
where they do not. We support reform because, in the long 
run, its success benefits not only the people of the region 
but the American people as well.

The U.S. objective remains a healthy Russia--a democratic 
Russia pursuing reform, respecting the rights of its 
citizens, and observing international norms. This is why the 
events in Chechnya are so disturbing. Chechnya is a setback 
in the evolution of the Russian Federation into a stable, 
democratic, multi-ethnic state.

But as President Clinton stated in January, as Russia 
undergoes a historic, painful transformation, it would be a 
mistake to react reflexively to each of the ups and downs 
that it is bound to experience, perhaps, for decades to come. 
If the forces of reform are embattled, the United States must 
reinforce, not retreat from, its support for them.

Enhancement of stability in Central Europe is a mutual 
interest of Russia and the United States. NATO, which poses 
no threat to Russian security, seeks a direct and open 
relationship with Russia that both recognizes Russia's 
special position and stature and reinforces the integrity of 
the other New Independent States of the former Soviet Union.

It is in our interest for the NATO-Russia relationship to 
develop in parallel wi