U.S. Department of State Dispatch 
Volume 6, Number 43, October 23, 1995 
Published by the Bureau of Public Affairs 
1. The United States Must Continue To Lead in Bosnia--Secretary 
2.Advancing Security and Prosperity In the United States and Mexico: A 
Common Endeavor--President Clinton, Mexican President Zedillo  
3. Mexico: On the Road To Economic Recovery--President Clinton 
4. The Transatlantic Partnership In the Post-Cold War Era--Deputy 
Secretary Talbott  
5. U.S.-Vietnam Economic Relations--Joan E. Spero  
6. Sanctions on Iran--Peter Tarnoff  
7. Summit of the Americas: First Steps--Richard E. Feinberg 
8. U.S. Policy Toward China: Security And Military Considerations--
Winston Lord 
9. U.S. Announces Major Reform Of Computer Export Controls 
10. Fact Sheet: International Terrorism--American Hostages  
The United States Must Continue To Lead In Bosnia 
Secretary Christopher 
Statement before the House Committee on National Security And on 
International Relations, Washington, DC, October 18, 1995 
Thank you, Mr. Chairman. We are at a critical point in our efforts to 
achieve peace in the former Yugoslavia. As a result of American 
leadership, we have recently made important progress. For the first time 
in four years, we have a real chance to reach a peaceful settlement. 
If we are to succeed, continued American leadership will be essential. 
Our ability to sustain that leadership depends on our working closely 
with the Congress. It equally depends on gaining the support and 
understanding of the American people. That is why I am particularly 
pleased to appear before you and the committee with my colleagues 
Secretary Perry and General Shalikashvili. 
It is important to recall how far we have come in just the last few 
months. As recently as last July, Bosnian Serb forces had overrun two 
UN-declared safe areas, murdering or expelling their inhabitants, and 
defying the international community. 
Then, we faced a stark choice. The international community could either 
take firm steps to fulfill its mission, or it could watch the mission 
collapse. If we had not acted, our NATO allies and other troop 
contributors might have been forced to pull out, leaving behind a 
humanitarian catastrophe. Today, we might be here discussing the need to 
send troops to Bosnia, not to support peace, but to extract peacekeepers 
from a failed mission. 
Under President Clinton's leadership, the situation has been 
fundamentally changed. First, at last July's London conference, we 
convinced our allies to take firm measures, including the use of 
decisive air power, to protect the remaining safe areas. After the 
Bosnian Serbs attacked the Sarajevo marketplace killing 36 people, NATO 
launched a two-week air campaign to make clear that further violations 
would not be tolerated. NATO stands ready to resume that campaign if it 
becomes necessary to do so. 
Second, in August, the President launched a new American diplomatic 
initiative. After weeks of shuttle diplomacy and despite the loss of 
three brave American negotiators, we have taken dramatic steps on the 
path the President laid out. 
In September, the parties agreed to preserve Bosnia-Herzegovina within 
its present borders and with a single international personality. The 
parties agreed to constitutional principles and a federal structure, 
including a presidency, a parliament, and a constitutional court. They 
also committed to free elections and the protection of human rights. 
On October 5, the parties agreed to a Bosnia-wide cease-fire, to be 
followed by proximity peace talks and eventually a peace conference. 
Despite its imperfections, the cease-fire is taking hold. This has 
opened the way for the establishment of a land route to Gorazde, the 
delivery of humanitarian aid in Bosnia, and the restoration of utilities 
to Sarajevo. There has been a remarkable turnaround in the quality of 
life for the people of Sarajevo. The price of food and fuel has 
dramatically declined. Streets are now illuminated by the lights of the 
city, not by the flash of artillery firing from the hills. 
I can now announce that on October 31, the Presidents of Bosnia, 
Croatia, and Serbia will come to Wright-Patterson Air Force Base outside 
of Dayton, Ohio, to start the proximity peace talks. This site provides 
us with the optimum set of facilities for the three delegations, as well 
as the members of the Contact Group. It also affords us the privacy  we 
will need to conduct a successful negotiation. As Secretary of State, 
let me express my gratitude to our Air Force colleagues, upon whom we 
can count to provide the necessary support. 
The parties will have an immensely difficult set of issues to resolve 
concerning territory, elections, constitutional arrangements, and the 
return of refugees. I plan to open these talks, and our negotiating team 
at the site will be led by Amb. Dick Holbrooke. We are determined to 
help the parties overcome the very formidable obstacles they face on the 
way to a peace agreement. 
At the same time, Mr. Chairman, I want to stress that we cannot put the 
cart before the horse. We cannot take it for granted that a settlement 
will be achieved. Before we are ready to implement a settlement, before 
we know precisely what that will require from us, we must first get the 
parties to agree to peace. They still have a considerable distance to 
The United States has a vital interest in sustaining progress toward 
peace in this volatile region of Europe. The American people remember 
that twice in this century we have had to send our soldiers across the 
Atlantic to fight in wars that began in Central Europe. Today, after a 
century of hot and cold war, there is an opportunity to build an 
undivided, integrated Europe at peace. But we must remember that 
Sarajevo was once the spark that ignited an entire continent. We can 
prevent that from happening again. We can help stop this conflict before 
it spreads beyond the borders of the former Yugoslavia, threatening 
progress toward peace and stability across Europe. 
If we want the killing to stop, if we want to end the worst conflict in 
Europe since World War II, then we must follow through on the strategy 
that brought us to this point. Let me say again that this is our best 
chance in four years to achieve peace in the former Yugoslavia. Future 
generations would neither understand nor forgive us if we carelessly 
turned our backs on this opportunity to achieve peace. The United States 
must continue to lead. 
We have this opportunity because America has exerted determined 
leadership on behalf of peace. Had we not been prepared to do so, we 
could not possibly have made it this far. Unless we are willing to 
continue to lead, I seriously doubt if peace can be achieved. 
There will not be a peace settlement in Bosnia unless NATO, and the 
United States in particular, take the lead in its implementation. The 
Bosnian Government has said directly that it will not sign a peace 
agreement without a commitment by the United States and NATO to help 
implement it. The Bosnian Government has good reason to ask for 
international safeguards after years of brutal fighting and dozens of 
broken agreements. Only NATO can provide the robust forces and the 
effective command and control needed to deter or prevent the parties 
from backing away from their commitments. 
If we ask NATO to act in Bosnia, the United States cannot fail to 
contribute troops to the mission. The United States is the bedrock of 
NATO's strength and resolve. We cannot say to our allies: "We have come 
this far together but now you are on your own." That would mean 
abdicating our leadership of the Alliance. It would imperil the future 
of NATO and thus the stability of Europe. 
Of course, the costs and risks of our participation in a NATO mission 
should be shared by our allies. Indeed, our allies--especially France 
and Britain--have already borne the bulk of the casualties among 
international troops in Bosnia. I pay tribute to their valor. But this 
is not a purely European problem that the Europeans can solve on their 
own. In the last few weeks, we have seen once again that if the United 
States does not lead, no nation or group of nations has the strength or 
vision to replace us. 
Some still believe that the best way to implement a lasting peace in 
Bosnia would be to have the international community lift the arms 
embargo and simply walk away. Such a course would prolong the bloodshed 
and jeopardize all the progress we have made in pursuit of peace--just 
at the moment when peace is finally within reach. It would make it 
impossible to put into place the institutions of a single Bosnian state, 
inevitably consigning Bosnia to partition. It would be inconsistent with 
what the Government of Bosnia itself wants. It would subject the Bosnian 
people to another winter    of hiding in cellars and mourning in 
If and when a final peace settlement is reached, Mr. Chairman and 
members, the UN peacekeeping mission in Bosnia will come to an end. At 
that point, and only at that point, a NATO-led international force would 
move in to implement the agreement. This will inevitably be a 
complicated mission, and it will not be risk-free. But let me assure you 
that the President will not put our troops in a situation where there is 
no peace to keep. The implementation force would have a limited mission 
and remain for a limited period of time--approximately one year. 
As my colleagues will discuss in greater detail, the implementation 
force will be run by the NATO command and control structure. There will 
be no "dual key." Some non-NATO countries may also participate. Russia, 
for example, can make an important contribution. We are working with 
Russia to identify an appropriate role consistent with the principles I 
have outlined. 
Military implementation will be accompanied by humanitarian and 
reconstruction efforts, so that peace will endure. The European Union 
will take the lead in reconstruction, but our contribution will also be 
vital. In addition, the international community, working through the 
Organization for Security and Cooperation in Europe, will help organize 
elections in Bosnia to ensure they are free and fair. Let me also 
emphasize, as the President made clear over the weekend, that the United 
States will continue our strong support for the Yugoslav War Crimes 
Tribunal. We will not accept a peace agreement that undermines its 
Mr. Chairman, we are committed to working closely with you on every 
aspect of our involvement in Bosnia. The Congress is asking the right 
questions, and we will continue to answer them. Secretary Perry, General 
Shalikashvili, and I are testifying on the Hill four times this week 
In the end, it is vital that the Administration, the Congress, and most 
important, the American people, find common ground on the need for 
American leadership. We must do so for the sake of our common goal of 
peace in the former Yugoslavia, and our shared commitment to security in 
Advancing Security and Prosperity In the United States and Mexico: A 
Common Endeavor  
President Clinton, Mexican President Zedillo 
Opening remarks at a news conference, Washington, DC, October 10, 1995 
President Clinton. Let me say again how delighted I am to welcome 
President Zedillo to the White House and to take this opportunity to 
say, again--on behalf of the American people--how terribly sorry we are 
for the terrible earthquake in Mexico yesterday. Our thoughts and 
prayers are with the victims and with their families. 
My meeting with President Zedillo marks an extraordinary moment for 
relations between the United States and Mexico. Never has our 
partnership had so much potential. Never has it yielded such clear 
Each of us is uplifted by the strength of the other's economy, as we 
create good, high-paying jobs that benefit both our peoples. Each of us 
is made stronger by the support of the other in our common efforts to 
fight drugs, crime, and pollution. Each of us is enriched by the wealth 
of the other's heritage. We celebrate Hispanic Heritage Month this 
month, and we should honor the Mexican American community that has 
contributed and continues to contribute so very much to the life of the 
United States. 
President Zedillo and I are joined in a common endeavor--to advance the 
security and prosperity of both our nations. The events of the last year 
have demonstrated how crucial it is that we work together. When the peso 
collapsed just 10 months ago, America's deepest interests were affected. 
The crisis threatened 700,000 Americans whose jobs depend on exports to 
Mexico. It raised the specter of severe dislocation along our 2,000-mile 
border and in emerging markets throughout Latin America--and, indeed, 
throughout the entire world. By making tough decisions together, we 
steered through those days of uncertainty and averted far graver 
The United States put together an international package of support to 
stabilize Mexico's economy. And President Zedillo showed tremendous  
vision and courage implementing tough measures that laid the basis for 
To be sure, the road ahead will be difficult. But the Mexican people, 
with President Zedillo's leadership, are determined to hold on to 
reform, courageously accepting today's hardship for the sake of a better 
tomorrow. Already we see the results. When the financial crisis struck 
in 1982, it took seven long years before Mexico could return to 
international capital markets. Under President Zedillo's skillful 
guidance, it took just seven months this time. Interest rates have 
fallen by half. Monthly inflation is down, and the stock market is back 
up to pre-crisis levels. Last Thursday, President Zedillo informed me 
that Mexico would repay $700 million of our financial support ahead of 
The North American Free Trade Agreement--NAFTA--bolstered that recovery 
of confidence. Despite Mexico's economic downturn, American exports to 
Mexico still exceed their levels before NAFTA-- and I want to emphasize 
that. The last time the Mexican economy was in crisis in 1982, there was 
a steep increase in tariffs, and Mexican exports were cut in half. It 
did not happen this time because of NAFTA. Therefore, if the NAFTA 
agreement had not been in place, the recent difficulties would have been 
far, far worse from the U.S. point of view. 
Our overall exports to NAFTA partners have grown by 25% since the 
agreement took effect, supporting about 340,000 good American jobs. 
Mexico is already one of our most important partners in the global fight 
against drugs, and we are determined to do more. Helping Mexico to fight 
crime before it crosses the border is an investment in America's 
security. We will do all we can to strengthen Mexico's ability to detect 
and to deter drug traffickers by providing 12 helicopters, helping 
Mexico obtain radars, intensifying our training to help fight money 
laundering. President Zedillo's major reform of Mexican law enforcement 
will make our cooperation even more effective. 
The United States is a nation of immigrants and a nation of laws. We 
must control our borders even as we work to protect the dignity and 
rights of individuals. Working with Mexico, we have made important 
strides to prevent illegal immigration and to promote public safety. 
By the end of 1996, the United States aims to increase its southwest 
border patrol personnel by 60% above its 1993 levels. The Mexican 
Government has concrete steps to fight border crime, prevent alien 
smuggling, and close illegal gateways to our country. I welcome 
President Zedillo's agreement to begin a pilot repatriation program in 
the San Diego region. Under this program, Mexicans who repeatedly cross 
our border illegally will be voluntarily returned to their hometowns 
instead of to the border area. 
President Zedillo and I also discussed the environment. Thanks to the 
efforts set in motion by NAFTA, our nations are working more closely 
than ever to solve pollution problems, protect public health, and deal 
with our long-term common environmental interests. Together, we are 
helping border communities find ways to improve sanitation and to ensure 
clean drinking water. 
The vitality of these relations between the United States and Mexico 
reflects and reinforces the new spirit of cooperation that, indeed, is 
sweeping our entire hemisphere. As we witnessed at the Summit of the 
Americas in Miami last December, our interests and our values 
increasingly coincide. 
Again, let me say how very much I appreciate the leadership and strength 
that President Zedillo has shown. We know that the core of our long-term 
future with our partnership in the Americas lies in a strong 
relationship and a strong working partnership between the United States 
and Mexico. Mr. President, welcome back. 

President Zedillo. Thank you, Mr. President, ladies and gentlemen: I 
would like to thank President Clinton for his kind words. In the 
conversations that we have held, we carried out a very complete analysis 
of the basic issues--the main issues on our bilateral agenda. 
We have spoken of the relationship of the two economies. Especially we 
have spoken of the results offered by NAFTA and of its enormous 
potential. NAFTA is a reality, and it is yielding impressive results. 
Even in this difficult year, Mexico now purchases nearly four times more 
goods and services from the United States than it did 10 years ago. And 
the United States is exporting to Mexico more than in the years prior to 
NAFTA. Trade between the two countries is in excess of $100 billion a 
We discussed some of the aspects of our bilateral relations, and we were 
pleased to find solutions, in some of the cases. We also hope that very 
soon we will find a modification or amendment to the legislation which 
imposed the tuna embargo. This has been the result of acknowledging the 
great effort that Mexico has carried out in this field. 
We trust that the trade between the two nations will increase again as 
of 1996 when Mexico's economy will begin to recover significantly. The 
recovery in economic growth will prove that the economic program put in 
practice by Mexico and the decisions reached have been the appropriate 
The vigorous economic growth and the creation of more and better jobs 
will be the best response to the migration of Mexicans to the United 
States. We agree that our respective legislation must be respected, as 
well as the dignity and the rights of individuals must be respected. We 
have reached agreements for the orderly repatriation of undocumented 
Mexicans to different entry ports. 
Drug trafficking is our common enemy. It is the most threatening of all 
enemies because it brings corruption--corruption in health, in social 
living, and in institutions. We agree to fight firmly the war against 
drug trafficking in both nations and to severely punish money 
laundering. We have also agreed to intensify the efforts against drug 
Mexico is doing its share in this regard. Just a few days ago, as part 
of a new stronger policy, we put in practice a national drug control 
program. The three basic avenues comprise an important social campaign 
against drug use. It is an unprecedented effort also to eradicate crops 
and to combat the trafficking of prohibited or forbidden drug substances 
and against money laundering. In our conversations we reaffirmed our 
mutual commitment to cooperate with the sovereignty of each nation in an 
unprecedented struggle against drug trafficking. 
We have spoken about our border, and we agreed to work to make it clean 
and safe and to make it an opportunity for productive activities and 
well-being. This is the intention of the Frontera Veinte-Uno or the 
Border 21 program between our nations. 
At important times--at decision-making times--President Clinton has 
shown Mexico friendship and respect. He has shown vision, commitment, 
perseverance, and leadership. Because of all this, Mr. President, as 
Mexicans, we acknowledge your friendship, your commitment, and your 
respect to Mexico. 
In brief--ladies and gentlemen--in sum, this has been an opportunity 
which has allowed us to carry out a very constructive and detailed 
analysis of our bilateral agenda, and, at the same time, it has allowed 
us to assert a new understanding that will ensure what is most 
important--that is, our will to hold a permanent dialogue with mutual 
knowledge and friendship between our peoples. Thank you very much. 
Mexico: On the Road to Economic Recovery   
President Clinton 
Remarks at annual meeting of the International Monetary Fund and World 
Bank, Washington, DC, October 11, 1995 
Mr. Chairman, Mr. Secretaries, Mr. Camdessus, President Wolfensohn, 
governors of the International Monetary Fund and the World Bank Group, 
honored guests: On behalf of the United States, it is an honor to 
welcome you to Washington for your 50th annual meeting. I am especially 
pleased to have the opportunity to speak to this group at a moment when 
you can see the fruits of your labors. 
Ordinarily, accomplishments of great institutions like these come 
slowly. Yet, today, the visit of President Zedillo of Mexico reminds us 
that in only nine months, with the help of the international community, 
Mexico has pulled back from the brink of financial disaster. After one 
of the most severe financial emergencies in the postwar era, Mexico 
again is on the road to stability and growth. The Mexican stock exchange 
has recovered, inflation is stable, interest rates are down, and 
international markets have been reassured. And most impressively, in 
only seven months, Mexico was able to return to private capital markets. 
As you have heard, President Zedillo has announced that Mexico will 
begin repaying its short-term debt with a $700 million installment this 
month-- well ahead of schedule. 
Mexico's success is a tribute first to President Zedillo's leadership, 
his courage, and his government's steadfast commitment to carry through 
tough economic reforms, though they have required great sacrifices from 
the Mexican people. They have borne these sacrifices--the austerity and 
the increased unemployment in the short run--with the hope that they 
will pay off in long-term growth and to better lives that ordinary 
Mexican citizens deserve. That, of course, is the hope of people 
throughout the world--the hope we must address; the hope to which we 
must give reality as we move into the next century. 
The international financial institutions--the IMF, the World Bank, the 
Inter-American Development Bank-- all your swift and decisive support 
for the stabilization package played a vital role in bringing this 
hopeful moment to pass. I particularly want to thank Mr. Camdessus for 
his leadership. The United States also acted decisively. We acted 
decisively for Mexico and for America; helping Mexico help to protect 
one of our biggest export markets and 700,000 jobs that depend upon our 
trade with Mexico. It helped to prevent an economic collapse that could 
have caused serious dislocation along our 2,000-mile border, and had a 
grave impact on our common efforts to limit immigration to legal 
immigration. But, more importantly, it was the right thing to do, 
because the United States and Mexico are neighbors. The truth is, in the 
global economy of the 21st century, we are all neighbors. 
Helping Mexico not only prevented a national crisis, it prevented this 
national crisis from turning into a multi-national catastrophe, by 
arresting the spread of uncertainty throughout the world's emerging 
markets. At that time, which many of you will remember well, every sign 
on exchanges in South America, in Asia, in Europe, registered a looming 
disaster for the developing countries. Those emerging markets support 
more than  3 million American jobs. They are essential to our economy 
and to the well-being of our people, but they are more important for our 
common commitment to a more peaceful, more democratic, more free world. 
In many of the nations embracing free enterprise for the first time, the 
very ideas that underpin market economies were thrown into doubt-- into 
severe doubt--by the Mexican crisis. Open markets, privatization, 
deregulation--these things came under a cloud of suspicion. The decision 
of the countries in the developing world--Central and Eastern Europe, 
the New Independent States of the former Soviet Union, and other 
nations--to embrace these ideas has been one of the great achievements 
of this century. No American leader could allow one setback in one 
nation to undermine this tremendous wave of history. 
But I ask you to remember also that the Mexican crisis put into high 
relief tensions that are less evident in many, many emerging economies 
throughout the world in the new realities of the 21st century. It, 
therefore, provides for us a powerful reminder of why we must continue 
to lead in the face of these extraordinary new challenges and these new 
History will look back on us and judge how well we responded to this 
time of intense economic transformation. It is the most intensive period 
of economic change since the Industrial Revolution. The revolutions in 
communications and technology, the development of non-stop global 
markets, the vast currency flows that are now the tides of international 
business--all these have brought enormous advantages for those who can 
embrace and succeed in the new global economy. 
But these forces have also made all our societies more vulnerable to 
disturbances that once may have seemed distant, but which now directly 
affect the jobs and livelihoods in every nation in the world--from the 
richest to the poorest. The unbridled forces of the global market make 
it more difficult for every nation to sustain the social contract; to 
sustain individual opportunity for all citizens; to keep families 
strong; to keep communities thriving; to keep hope alive. 
The truth is, in this new world there are powerful forces of integration 
and powerful forces of disintegration. As we approach the 21st century, 
we must adapt our thoughts and our actions to this new reality. No 
nation can turn its back, and we will all have to work together if we 
want the promise of the 21st century to outweigh its peril in every 
nation in the globe. 
The trend toward globalization, after all, has far surpassed anything 
the great figures of Bretton Woods could have imagined. Interdependence 
among nations has grown so deep that, literally, it is now meaningless 
to speak of a sharp dividing line between foreign and domestic policy. 
In the United States, when we think of economic policy, we can't divide 
that which is domestic from that which is global. When we think of 
security policy, we know that our efforts to combat terrorism, whether 
it's in the World Trade Center incident or in Oklahoma City, have very 
much in common with our efforts to help our friends around the world to 
deal with a bus blowing up in the Middle East or a vial of sarin gas 
being broken open in a Japanese subway, or in so many other instances 
that all of you can well relate to. 
We simply must adjust the world's financial architecture to these new 
conditions. We must forge a system strong enough, yet flexible enough, 
to make the most of the historic opportunities and the historic 
obligations before us. Billions of people, after all--in Asia, in Latin 
America, in Africa, in Europe, who are turning to democracy and free 
markets, need to see that there can be tangible benefits from their 
decision and a better life after breaking the shackles of the past. 
Today, a child born in Bangkok or Buenos Aires or Johannesburg enjoys 
the possibility of a vastly better life than his or her forebears could 
ever have imagined. But to redeem that promise, we must work to exalt 
the forces of integration and to overcome the forces of disintegration 
that globalization bring. We must see that a future crisis like Mexico's 
does not rob children of the better lives before those lives ever get 
Fifty-one years ago, at another moment of historic change, President 
Roosevelt urged our Congress to approve the Bretton Woods agreements. He 
drew a dark picture of--or a clear picture of stark contrast. The choice 
he said then was--and I quote --"between a world caught again in a 
maelstrom of panic and economic warfare, or a world that will move 
toward unity and widely shared prosperity."  "This point in history," he 
said, "is full of promise and of danger." Today, as we stand on the 
verge of a new century and confront a radically new international 
economy, I say to you that we are at a point of history full of promise 
and of danger. 
To master the challenge before us, we must focus our efforts on 
expanding trade, improving investment and capital flows, and promoting 
sustainable development here. We must do it in the context of our 
devotion to human freedom and democracy. 
In the last 2-1/2 years, our Administration, working together with many 
of you in this room, has taken tremendous strides toward opening world 
markets and promoting global growth.  
First, we tried to become a better international citizen by putting our  
own economic house in order. When I became President, our government 
deficit was $290 billion a year, claiming capital from around the world 
that needed to be properly put to other uses and keeping interest rates 
unnecessarily high. In three years, that deficit has been reduced to 
$160 billion a year, and we are working in good faith to bring our 
budget into balance across the party lines here in America. 
Second, we promoted a higher rate of growth, led by investment and free 
of inflation, with the result that we now have the best combined rates 
of unemployment and inflation in the United States in 25 years. 
Third, we worked with like-minded people throughout the world to advance 
the cause of global trade. We have worked to increase our exports, to 
create high-wage jobs, to improve our own standards of living and those 
of other nations, and to sustain growth. We brought the Uruguay Round 
into force. We made NAFTA a reality. Our trade ambassador, Mr. Kantor, 
has negotiated over 80 other separate bilateral trade agreements to 
expand trade. We are forging agreements with the Asia-Pacific region and 
with the Americas that mean that early in the next century trade will 
flow freely over most of the earth. 
The best way to grow our economies is to expand trade. Our experience 
shows that. In the last three years, there has been a stunning explosion 
in American exports--up 4% in 1993, 10% in 1994, 16% in 1995. At the 
same time, global trade has increased over 12% over the last three 
years, and the United States--as we have sold more-- has been in a 
position to buy even more from other countries all around the world. 
This is not an abstract concept. This makes a difference in the real 
lives of people throughout the entire globe. Opening markets has helped 
to create almost 2 million American jobs here in our own economy. But as 
barriers fall elsewhere, our ability to trade, our ability to purchase 
others' exports, our ability to invest in others' countries have created 
many, many more jobs in other nations around the world. 
We have to do more, of course. We have to maintain our efforts to 
resolve trade disputes and to fight protectionism. I am pleased to say 
that with the establishment of the World Trade Organization, we have 
made real progress toward removing barriers and preventing conflicts. 
Ironically, just when the advantages of expanded trade have become so 
dramatic, we are again hearing the voices of retreat here in our own 
country. There are those who say that America should simply erect a wall 
and live within its own borders economically--and, when it comes to 
foreign policy, we should just go it alone. But, my fellow citizens of 
our shared planet, economic interdependence is a fact of life. The goal 
must be to have it benefit all people, consistent with our shared vision 
for a world of freedom, peace, security, and prosperity--consistent with 
shared values of responsibility and opportunity for all people, of 
stronger families and stronger communities, of nations with sustainable 
levels of economic growth that preserve our common environment. 
That is what is happening all over the world today. I could just give 
you one example that coincides with President Zedillo's visit. We have a 
company called U.S. Filter in Palm Desert, California, with only 50 
workers. But they have jobs because the Mexican city of Cuernavaca is 
buying a water treatment system from their company. We are fostering 
growth, trade, jobs, and sustainable development. We must do more of 
that, and turning away from one another is not the way to achieve that 
Mexico understands this. When the trouble hit earlier this year because 
of NAFTA, Mexico did not turn back and close its markets as it did 
during its 1980s crisis. Back then, it took Mexico almost a decade to 
recover. But because Mexico has stayed on course, it is on the way to 
recovery now. There will be no lost decade for Mexico because of its own 
policies and because of the work done in the international community to 
assist it to recover. This can now be a decade of opportunity springing 
from short-term sacrifice. 
Mexico's troubles and the other recent events have shown that reforms in 
the international financial system have to continue. We don't have this 
all worked out as it needs to be. We should spread the benefits of 
financial integration around the world so that more and more borrowers 
have access to capital markets. We have to devise better ways to prevent 
financial crises and to cope with the crises that inevitably occur. 
People will turn away from free markets if they feel helpless, if they 
feel that they are simply pawns in a global game of winner-take-all, 
rather than partners in a global endeavor that seeks to make it possible 
for all to win. 
Since the peso crisis, we have moved from crisis management to 
institutional reform. At the G-7 Summit in Halifax, we put forward far-
reaching proposals to help the international financial institutions meet 
these new needs. They aim to increase disclosure of nations' financial 
information and identify possible crises early, before they rock the 
world economy. And they include steps to mobilize the international 
community quickly when future crises occur. Next time there is a problem 
like Mexico's, the system will be better prepared. 
I am pleased that over the last few days, the broader membership of the 
IMF has endorsed these proposals, made them more concrete, brought them 
closer to implementation. I thank you for that, and I congratulate you 
for it. 
Fulfilling the hopes of this moment demands that we also renew our 
efforts to help those who still suffer the curse of poverty. Development 
that improves standards of living, strengthens democracy, conserves 
resources, and restrains population growth; development that lifts 
people up and builds societies of citizens and consumers, not victims 
and dependence--these objectives benefit all nations, rich and poor. 
To succeed, we must change the approaches of the past to meet the 
demands of the future. The international financial institutions--the 
multilateral development banks--must continue to sharpen their focus on 
giving all people the chance to make the most of their own lives. That 
means investing in education, in health care, and in other programs that 
attack the roots of poverty. It means responding to the problems that 
were highlighted in such stark and clear relief at the Beijing 
Conference on Women. It means encouraging private sector development. It 
means that our development programs must support democracy, 
accountability, and the rule of law. It means we must have a common 
global commitment to environmental protection and sustainable 
Developing nations must shoulder their own responsibilities--sticking to 
sound economic policies, liberalizing trade practices, creating 
financial markets that work, and, above all, being the primary investor 
in the human capacity of their citizens. Achieving these goals will 
require the banks to continue reforming their own operations and 
striving for greater efficiency. 
Jim Wolfensohn is devoting all of his famous energy to that task. I 
thank him for it and for carrying forward the work of his fine 
predecessor, Lew Preston. I applaud Jim's progress and look forward to 
further accomplishments in the months and years ahead from the World 
Before closing, I would like to say just a few words about the United 
States' commitment to helping the poorest nations of the world help 
themselves through our partnership in the International Development 
Association--IDA. It is simple: The IDA is essential. Its loans provide 
a crucial tool for nations that seek to escape from poverty to sustained 
growth. It serves our fundamental values, as well as our economic 
interests, by lowering trade and investment barriers, supporting private 
sector growth, opening the markets of tomorrow, and giving people a 
chance to succeed. 
A lot of people do not remember this, but the IDA was the brainchild of 
President Eisenhower. He believed deeply that when, as he put it, 
"people despair that their labor will ever decently shelter their 
families or protect them against disease, peace and freedom will be in 
danger--and the seeds of conflict will be sown." 
For decades, Democrats and Republicans shared President Eisenhower's 
sentiments, and they supported IDA. Unfortunately, that is no longer 
always the case. Many in the Congress have forgotten that IDA recipients 
of yesterday--countries like South Korea, Indonesia, Turkey, China, and 
Chile--are today among America's most important trading partners; are 
among America's most important strategic partners working for global 
security. Those who are reminded of this perhaps will be tempted to 
change their position. But I want to say clearly that those who are 
determined to make reckless cuts in the funding of the United States for 
IDA should look at the facts. They should remember the vision of a great 
Republican President, Dwight Eisenhower. 
Today's despair breeds tomorrow's conflicts. Resolving the funding for 
dealing with today's despair will save the world and the United States a 
lot of money and perhaps even precious lives in the future. Restoring 
funding for IDA is one of our Administration's top priorities because it 
is the right thing to do. Of course, it serves our interests, but it is 
the right thing to do.  
Let me assure you, if you believe as I do that balancing our federal 
budget will permit higher levels of growth in the United States and 
throughout the world, then this is a good investment. It is not 
necessary for the United States to walk away from its commitment to 
balance the national budget. Don't let anybody tell you that it is. 
When these two institutions opened for business--the IMF and the World 
Bank--there were 38 nations standing behind them. Even then, John 
Maynard Keynes likened the affair to the Tower of Babel. Well, today, 
there are 179 nations represented here. But even though we are larger in 
number and some of us are larger and more wealthy than others, this 
increase in numbers does not mean that any one of us, including the 
United States, can afford to detach itself from the business at hand and 
hope that others will take up the slack. More than ever, we must all 
participate in the reform of the international economic system, and we 
must all do our part. 
In a world that grows rapidly closer, every one of us is called upon to 
help harness the forces of integration for the benefit of our people and 
to make the forces work for all our communities and for the community of 
nations that is increasingly bound together. Only then can we fulfill 
the potential of the advances in technology and trade and knowledge. 
Only in that way will we defeat the forces of disintegration, extreme 
nationalism and ethnic strife, isolation, and protectionism. I believe 
that the 21st century will be the period of greatest possibility in all 
human history. I hope it will be a period of unparalleled growth, 
achievement, prosperity, and human fulfillment. It certainly has the 
potential to be. 
What these institutions do in the next 20 years will have a large say in 
what the 21st century looks like for all the people of the world. What 
we do individually, as nations and leaders, will have a large say in 
what that world looks like. 
The institutions that we honor today and that you participate in deserve 
and require our support. They also deserve and require our best efforts 
to make constructive changes to meet the new opportunities and the new 
challenges we face. 
We must lay the foundation for prosperity, security, and freedom that 
will benefit all the people of the world well into the next century. 
These next few years are a critical point--a historic turning point. If 
we do our job, the history of the next century will be less bloody 
than the history of the 20th century--and even more filled with 
prosperity, freedom, and common human decency. Thank you very  much.  
The Transatlantic Partnership In the Post-Cold War Era 
Deputy Secretary Talbott 
Remarks at the Bilderberg Dinner, U.S. Department of State, Washington, 
DC, October 5, 1995 
Ladies and Gentlemen: Welcome to the Department of State, and welcome to 
the Benjamin Franklin Room of the diplomatic reception area. Tonight's 
event reinaugurates this splendid hall, which has been closed over the 
past three months for restoration.  
I take inspiration from the chamber's namesake, whose portrait observes 
us benevolently from the far wall over there. He was, after all, a bald 
journalist who made it as a diplomat. 
For another reason, too, Ambassador Franklin, as we like to think of him 
on these premises, is an appropriate spirit to preside over this 
gathering tonight. As this nation's envoy to France and then as the 
negotiator of our post-revolutionary peace with Britain, "Old Ben" might 
be said to have been the founding father of the relationship between 
North America and Western Europe--the partnership that the Bilderberg 
conferences are dedicated to sustaining and strengthening.  
That partnership is essentially sound today. But as in virtually every 
other aspect of international life, the ties that bind together all of 
us in this room are undergoing a transition, a redefinition. With change 
comes a degree of uncertainty and strain, even among old friends and 
close allies.  
Indeed, there is, right now, here on the home front of U.S. foreign 
policy, more than the usual disagreement about America's role in the 
world--hence the struggle between the Clinton Administration and the 
104th Congress over how much we should spend abroad and what to spend it 
on. The Senate has proposed cutting our country's annual contributions 
to international organizations--the United Nations, the World Trade 
Organization, the International Atomic Energy Agency and other 
institutions--by more than $600 million--a whopping 45%. Other 
congressional cuts would force us to close dozens of embassies and 
consulates around the world, including in Europe. The operating budget 
of this Department is in crisis. The continued existence of other 
foreign affairs agencies is under attack. Virtually every foreign policy 
program and diplomatic initiative of the government is at risk. We are, 
to put it starkly, fighting an uphill battle against a congressionally 
mandated abdication of leadership and retreat from the world. 
Some in the Congress are flirting with ideas and proposals that are 
isolationist in their potential consequences if not in their motivation. 
This is, in large measure, because the Cold War  is over. For nearly 
half a century, many Americans defined what we were--and what we were 
willing to pay for and even fight and die for--largely in terms of what 
we were against. For most Americans, the principal objective of American 
foreign policy--and the principal purpose of our diplomatic activity and 
military presence in Europe--could, quite literally, be reduced to a 
two- or three-word slogan: "Contain Communism," or "Deter Soviet 
But in the aftermath of the Cold War, the imperative of American 
international engagement is, if anything, stronger than ever--even if it 
will no longer fit on a bumper sticker. At the heart of President 
Clinton's foreign policy--and much of his domestic policy as well--is a 
recognition that the world is increasingly interdependent and a 
determination to make sure that interdependence works in our favor. That 
means devising new international institutions as well as revitalizing 
some existing ones and expanding others. 
This task is global in scope, but it is an especially compelling 
ingredient in American policy toward Europe. We are the oldest modern 
democracies. We share basic values, legacies, and forms of government. 
Therefore, what we   experience together and what we accomplish together 
set the tone and direction for what happens elsewhere.  
The Cold War itself was a transitory example of the enduring centrality 
of transatlantic relations to international life. The Cold War was a 
worldwide struggle. But it began in Europe, and it ended there. And now   
it is in Europe that all the countries represented here tonight are 
working together to establish the guiding principles of the post-Cold 
War era--not just for our region, but for others as well. 
The challenge is, in large part, economic and commercial. As leading 
economic powers, the United States and the nations of Europe share an 
interest in an open trading system. We must, in the 1990s, apply to the 
elimination of trade barriers the same farsightedness and sense of 
common purpose that we applied in the 1980s to the task of tearing down 
the Berlin Wall and dismantling the Iron Curtain. The fact is, there 
still are barriers to truly free and fair trade, both between Western 
and Central Europe, and also between the European Union and North 
America. That is one reason why, in June, Secretary Christopher proposed 
a Transatlantic Initiative to increase cooperation on trade as well as 
on a whole host of other matters. Since then, a U.S.-EU Senior Level 
Group has been working to craft a practical common agenda that will take 
us into the next century. We expect to see significant steps forward 
announced at  the U.S.-EU Summit in Madrid two months from now. 
That brings me to the question of how we can more effectively concert 
our efforts to advance common political and security interests. Europe 
today provides the most promising and advanced example of integration-- 
dramatized by the very existence of the European Union--while, 
simultaneously, it confronts us in the former Yugoslavia, with the most 
vexing and dangerous example of disintegration. 
In recent months, and particularly in recent weeks and days, that 
situation has become more hopeful. The turning point came at the London 
Conference in late July. That gathering crystallized the resolve to back 
diplomacy with force, and it streamlined the mechanism for doing so. 
Largely as a result, Dick Holbrooke, who was supposed to be with us this 
evening, is, as you all know, otherwise engaged. He has brokered a 
cease-fire agreement among the parties in the Balkans, and today 
President Clinton announced that there will be proximity talks in the 
U.S., followed by an international conference in France. 
The peacemakers have more work to do. Then comes the work of the 
peacekeepers. But it is not too early for us--the United States, Canada, 
and Western Europe--to make sure that institutions of which we are a 
part are able to prevent such conflicts in the future, and to increase 
our capacity to resolve them if they do occur. 
There are many organizations that have vital roles to play, notably the 
OSCE. But as we are now seeing in the Balkans, the two most important 
are, and will continue to be, the EU and NATO. The EU is the foundation 
for future economic growth and prosperity across the continent, while 
NATO is the bulwark of transatlantic security and the linchpin of 
American engagement in Europe. Because these two institutions are so 
crucial to the future of Europe, it is essential that we extend their 
benefits--as well their obligations--to people who were artificially 
excluded from the West during the Cold War. We must look for ways to 
include them, not only for their sakes, but for ours as well. 
We are talking about people who have toppled communist dictatorships, 
liberalized command economies, and begun the long, hard work of building 
stable, secure, independent, democratic, market-oriented, and prosperous 
states, at peace with their own populations and at peace with their 
neighbors. But those reforms are not guaranteed to continue, and they 
are certainly not guaranteed to succeed. All of these countries, whether 
they have gained their freedom for the first time or recovered the 
sovereignty that they lost earlier in the century, face huge 
difficulties. They have to contend with crime and corruption, with 
reform fatigue and entrenched nomenklaturas. We are talking about a 
transition that will take not just years but decades--perhaps a 
generation or more.  
Precisely because the ultimate triumph of the reformers is not assured-- 
precisely because it is so much in our interest that they ultimately 
prevail against the obstacles and in some cases against the odds--we 
must help them, and we must do so with steadiness and patience. Helping 
them means, in essence, buying them time, so that a new generation--
along with new economic and political cultures--can replace the old 
ones. It means providing them with seed capital and fair access to our 
institutions and markets. It also means taking the principle of 
integration that has served the West so well and applying it to the 
relationship between East and West. Here, as in other respects, the 
enterprise that brings all of you together every year can make a 
substantial contribution by helping to articulate our common vision and 
by encouraging--sometimes prodding--our governments to move promptly, 
boldly, and in the right direction.  
In 1954, when David Rockefeller, Otto Wolf, and the other founders of 
this movable feast gathered for the first time at the Bilderberg Hotel 
in Oosterbeck, Holland, there was no EU, only a European Coal and Steel 
Community; the Warsaw Pact did not yet exist; NATO was in only its fifth 
year of existence, and one of the big issues of the day was whether the 
alliance should admit the Federal Republic of Germany. But the idea was 
already there, at Bilderberg, of the West not as a fortress but as an 
organic, growing community that would, over time, reach out to new 
President Clinton updated that idea as a driving objective for the post-
Cold War world when he visited Brussels in January 1994. He said: 
Our generation's stewardship of the Grand Alliance will be judged most 
critically by whether we succeed in integrating the nations of the East 
within the compass of Western security and Western values. For we really 
have been granted an opportunity without precedent: We have the chance 
to recast European security on historic new principles--the pursuit of 
economic and political freedom. 
It is in that spirit and for that reason that the United States supports 
the European Union's commitment to open its doors. Only the EU can offer 
the newly liberalized economies of these newly liberated nations the 
markets they need to continue, and eventually to complete, their 
evolutions. Only EU membership can lock in the essential political, 
economic, and social reforms that these emerging democracies are now 
Now, a few words about NATO--an organization that includes 11 members of 
the EU but that also serves as an  anchor of American and Canadian 
commitment to the continent's security. Next week, the Assistant 
Secretary General of NATO, Gebhardt Von Moltke, accompanied by civilian 
and military experts from Brussels, will visit Hungary, Ukraine, Poland, 
Lithuania, Estonia, Latvia, Belarus, and the Czech Republic. In each of 
those capitals, the NATO team will brief the host government on the 
alliance's decision to take in new members.  
An important part of the rationale for expansion is to bolster 
democratization and stability in the region that used to be the domain 
of the Warsaw Pact. Indeed, that reason for enlarging NATO is already 
proving itself valid. Last week, I met separately in my office--one 
floor below here--with the President of Romania and the Foreign Minister 
of Hungary. Both said that  the prospect of NATO--and EU--membership is 
a major incentive for them to agree as quickly as possible on a treaty 
that will enhance Romania's confidence in the permanence of its border 
with Hungary and guarantee the rights of ethnic Hungarians in Romania as 
well as of Romanians in Hungary. The NATO expansion process is thus 
already helping to innoculate two countries in Central Europe against 
the plague that has been so devastating to their neighbors in the former 
Now, states aspiring to join NATO have to understand the obligations 
that come with the benefits of membership. They must understand that we 
are not going to extend our security guarantees lightly. Nor are we 
going to add to the responsibilities of NATO in any way that compromises 
the security of the current 16 members. Moreover, we must pursue 
alliance expansion in a way that genuinely and comprehensively advances 
integration--that does not, in other words, create a new division in 
Our Administration believes that the policy of expansion will succeed 
not only by bringing in new members, but by doing so in a way that makes 
sure the door stays open--or, to put it differently, that it does not 
slam shut; the first new members must not be the last. In other words, 
we must not, in the way we include some aspiring members, exclude, 
isolate, discourage, and disadvantage others who also legitimately 
aspire to be part of the West. If they end up on the wrong side of a new 
Iron Curtain, NATO expansion will have failed. It will not only have 
failed them, it will have failed us. It is that simple. 
But even by that demanding and cautionary standard, success is, I 
believe, possible. With the imperative of inclusiveness in mind, the 
alliance is well on its way to developing new ways to promote 
cooperation with the armed forces of the non-NATO European states. Under 
the banner of the Partnership for Peace, nations that have been enemies 
in the past are now conducting joint peacekeeping exercises-- Albanians 
and Greeks, Bulgarians and Turks, Hungarians and Romanians. In August, 
soldiers from three allied and 14 Partnership for Peace countries 
trained together at Fort Polk in Louisiana; last weekend, another set of 
exercises began in Vyskov in the Czech Republic; and earlier this week, 
a maritime training maneuver took place off the coast of Denmark. 
As for Russia, in order to ensure that NATO enlargement does, indeed, 
serve the larger cause of post-Cold War integration, the alliance is 
prepared, in parallel with the process of bringing in new members, to 
conduct a dialogue and eventually to develop a more formal relationship, 
with the Russian Federation. That way, all parties will be assured that 
the emergence of the new security order in Europe respects and enhances 
their legitimate interests. 
This goal may sound rather abstract. To many Russians, it sounds either 
naive or sinister and deceptive. Certainly, the prospect of NATO 
expansion is, in the current political atmosphere of the Russian 
Parliament and election season, neuralgic in the extreme. The issue is a 
target for exploitation by President Yeltsin's many critics and 
Part of our strategy is to take the issue out of the realm of theory--
and demagogy--and put it in an immediate, very practical context. We 
have an opportunity to do that right now in the former Yugoslavia--an 
opportunity to make cooperation between NATO and Russia concrete, 
productive, and promising, both for the immediate cause of peace in the 
Balkans and for the long-range one of European security and integration. 
This weekend, Secretary  of Defense Bill Perry, Chairman John 
Shalikashvili, and Russian Defense Minister Pavel Grachev will meet in 
Geneva to discuss how Russia and NATO can cooperate in implementing the 
settlement that will, we all hope, emerge from the current negotiations. 
Of course, any U.S. participation in a peace implementation plan will be 
under NATO command and control. And, Senators Pell and Sarbanes, we are 
committed to full consultations with the Congress as the planning 
So savor this irony: The most dramatic and dangerous example we face of 
post-Cold War disintegration offers a historic opportunity for pan-
European and transatlantic cooperation--and it may yet end up serving as 
a catalyst for post-Cold War integration.  
We are not there yet, but we are a lot closer than we were a couple of 
weeks ago--or even 24 hours ago. We have made that progress in large 
measure because the partnership between the U.S. and Western Europe has 
proved not just durable in the face of the toughest test it has faced in 
decades, but indispensable in passing that test. 
It is too early to celebrate a victory or congratulate ourselves on 
success. There is plenty of hard work ahead. But it is not too early to 
agree on where we want to go and to reaffirm our determination to get 
there together. Thank you.   
U.S.-Vietnam Economic Relations 
Joan E. Spero, Under Secretary for Economic, Business, and Agricultural 
Remarks before the U.S.-Vietnam Forum, Washington, DC, October 5, 1995 
Good morning. Minister Cam, Minister Triet, and distinguished guests: It 
is a pleasure to be here to address the U.S.-Vietnam Forum at this 
important time in U.S.-Vietnam relations.  
In July, President Clinton made a historic decision to normalize 
diplomatic relations with Vietnam and begin a new chapter in the 
relations between our two countries. Three weeks later, Secretary 
Christopher traveled to Vietnam, the first visit by a U.S. Secretary of 
State in more than 20 years. He opened the U.S. embassy in Hanoi and 
held wide-ranging discussions with Vietnamese Government leaders and 
U.S. business executives.  
Our relationship with Vietnam takes another step forward this week with 
the visit to Washington of Foreign Minister Cam and Trade Minister 
Triet. Secretary Christopher had a very productive meeting with 
Ministers Cam and Triet on Tuesday. I, myself, had a good meeting with 
Minister Triet on Monday. The ministers have also met with other senior 
Administration officials this week, including Ambassador Kantor, and 
with congressional leaders. In these meetings, we have deepened the 
dialogue on our expanding political and economic relationships.  
During his trip, Secretary Christopher stressed the breadth of U.S. 
policy interests in Vietnam. He spoke of the primacy of the POW/MIA 
issue for the U.S., our security interests in Southeast Asia, the 
importance of human rights and the rule of law, the need for further 
economic reform in Vietnam, and the prospects for expanding economic 
ties between our two countries. Today, I would like to discuss the 
economic dimension of our relations with Vietnam--Vietnam's recent 
economic performance and the need for further economic reforms, and our 
emerging strategy for expanding economic relations between our two 
Vietnam's Recent Economic Performance 
I accompanied Secretary Christopher on his visit to Vietnam last August 
and took away a lasting impression of a nation eager to transform itself 
away from the command economy. Ho Chi Minh City is alive with the hum of 
human enterprise. Even Hanoi's graceful, tree-lined streets are 
increasingly filled with the hustle and bustle of commerce. Billboards 
advertising Japanese computers spring up from rice paddies. Foreign 
business people crowd Hanoi's congested airport.  
Of course, despite the bustle, Vietnam is still a very poor country, 
with about half its population living below the international poverty 
line. In 1993, its per capita GDP stood at just over $200, less than 
half of China's and only a fraction of its ASEAN neighbors Thailand and 
But a closer look at Vietnam's recent economic performance demonstrates 
how quickly things are changing. Vietnam's economy grew at an average 
rate of 7% from 1989-93, and by over 8% in 1994--one of the world's 
highest economic growth rates. Exports increased during that period by 
almost 30% per year. Inflation fell from almost 400% in 1988 to about 
10% in 1994.  
Since 1992, foreign investors have increasingly turned to Vietnam to 
take advantage of this economic growth and Vietnam's hardworking and 
well- educated labor force. Foreign investment approvals by the 
Vietnamese Government climbed from $600 million in 1990 to $3.8 billion 
in 1994. The 1995 figure is expected to top $6 billion. While actual 
investments are lower than the amount of approvals, there is clearly 
increasing interest in Vietnam by a variety of firms seeking to develop 
the domestic market or to manufacture for export.  
This recent economic dynamism has its roots in the government's 
decision, in the late 1980s, to abandon the central planning system. 
That decision was followed by a series of policy reforms that put into 
place the basic building blocks of a market economy. Vietnam 
decollectivized its agricultural sector, liberalized prices, unified its 
exchange rates, and devalued its currency. It reduced the government's 
fiscal deficit, largely by restricting credit for state-owned 
Today, Vietnam is seeking to integrate itself into the regional and 
world economies. In July, it joined the Association of Southeast Asian 
Nations, a grouping of some of the world's most vibrant economies. 
ASEAN's members--which include Malaysia, Singapore, Thailand, and, now, 
Vietnam--have committed themselves to forming a free trade area by early 
in the next century. Although a potential rival for foreign investment 
and export markets, Vietnam's ASEAN neighbors are becoming increasingly 
important players in Vietnam's economic development. As of mid-1995, 
ASEAN members accounted for over 200 investment projects in Vietnam 
valued at over $2.4 billion, about 16% of total foreign investment. 
Intra-ASEAN trade is likewise expanding rapidly, a trend that will 
accelerate as Vietnam begins to implement its commitments under the 
ASEAN free trade area. 
Economic Hurdles To Overcome  
Chronicling Vietnam's recent economic performance is only half of the 
story. The other half is where Vietnam chooses to go from here and how 
the country chooses to solve its most pressing development problems.  
The second major impression I brought back from Vietnam is that, simply 
put, Vietnam is a very difficult place to do business. This point was 
repeated over and over again by U.S. businessmen and women working in 
Vietnam. Very few Vietnamese officials have a good understanding of 
market economics, and the government's efforts to regulate the economy 
suffer as a result. While the basic building blocks of a market economy 
may be in place, the Vietnamese Government restricts the operations of 
foreign businesses through an array of often non-transparent and 
contradictory regulations on trade and investment activities.  
There is a long list of specific regulations and policies which make 
doing business difficult in Vietnam. That list includes, for example, a 
highly protectionist and bureaucratic trade regime with import quotas 
and strict licensing of firms that trade. There are also broad 
restrictions on the types of foreign investment allowed, including an 
outright prohibition on the operation of commercial and retail 
establishments by foreigners, strict foreign exchange controls, and a 
lack of effective dispute settlement procedures. Weak protection of 
intellectual property rights is also a major concern.  
The cumulative weight of these measures serves as a drag on Vietnam's 
economic growth and development. Vietnam needs to follow its ASEAN 
neighbors to undo these restrictions and embrace more market-oriented, 
outward-looking economic policies. It must liberalize its economy, 
energetically privatize its large state-owned enterprises, and modernize 
its legal and financial systems to develop highly competitive industries 
that combine the best of local entrepreneurship and skills with foreign 
capital and technology.  
Vietnam must also find ways to open political participation and build a 
law-based, civil society. There is a growing recognition that sustained 
economic development is more likely where courts provide due process, 
where newspapers are free to expose corruption, and where business 
people can make decisions with free access to accurate information. In 
fact, our business people in Vietnam told us that legal reform is 
critical to Vietnam's continued economic success. As Secretary 
Christopher noted in his speech in Hanoi in August, the foundation of a 
market economy-- rights that protect contracts, property, and patents--
can only be guaranteed by the rule of law.  
Vietnam needs to make changes in all these areas if it is to realize its 
economic potential. Some of these changes will take time. But in the 
short-term, the key economic factor depressing foreign investment and 
economic growth is the country's weak infrastructure. Vietnam needs 
billions of dollars of investments in roads, railroads, ports, 
telecommunication systems, power plants, and sewer and water systems.  
The economic interests of the U.S. and Vietnam dovetail nearly exactly 
in this area. Vietnam needs capital, technology, and project management 
expertise. U.S. firms are world leaders in infrastructure systems and 
have the expertise, technology, and access to financial markets to be 
major players in helping Vietnam meet its infrastructure needs. 
U.S.-Vietnam Economic Relations 
In fact, since the lifting of the embargo, our trade and commercial ties 
with Vietnam have expanded quickly as U.S. firms have rushed to catch up 
with their Asian and European rivals. For its part, Vietnam has much to 
gain from expanded economic relations with the U.S., including access to 
our goods and financial markets, our excellent products, our world-class 
managerial skills, and our technology.  
Hundreds of U.S. firms have now opened offices or established sales 
presence in Vietnam, including some of the biggest and best-known U.S. 
corporations. They have invested more than $600 million in Vietnam, 
making the U.S. the country's eighth-largest foreign investor. Our 
bilateral trade has also grown steadily over the same period, with U.S. 
exports to Vietnam expected to top $230 million in 1995 and Vietnam's 
exports to the U.S. reaching $50 million. A well-organized American 
Chamber of Commerce is up and running as a voice for U.S. business in 
Vietnam. U.S. firms will clearly play an increasingly important role in 
Vietnam's economic future. 
Emerging U.S. Economic Strategy in Vietnam 
After a 20-year pause, the United States and Vietnam clearly have a lot 
to offer each other. As we make a fresh start on our economic and 
political relations, how should we structure our efforts in order to 
maximize the opportunities available?  
The Vietnamese Government has understandably been very interested in 
U.S. economic policy toward Vietnam. We began exchanging ideas during 
Secretary Christopher's visit and have had more discussions this week 
with Foreign Minister Cam and Trade Minister Triet. We expect to hold 
our first intensive, experts-level discussions on economic issues in 
Hanoi, probably  in November.  
There are three basic elements to our emerging economic strategy with 
First, as Secretary Christopher stated in Hanoi, we will shortly begin 
negotiations with Vietnam on a comprehensive bilateral trade agreement. 
Negotiating a trade agreement is critically important for several 
reasons. In the broadest sense, a trade agreement will lay the basis for 
U.S.- Vietnam economic relations. Once approved by Congress, an 
agreement would pave the way for MFN access to our $6 trillion market. 
In exchange for this access, we will insist that Vietnam open its 
markets in accordance with the principles of the World Trade 
A comprehensive trade agreement will accelerate Vietnam's integration 
into the world market. As I mentioned before, Vietnam's ASEAN neighbors 
are among the most dynamic economies in the world, with annual economic 
growth averaging nearly 6% over the past five years. But Vietnam has so 
far  been unable to keep pace with trade liberalization in ASEAN, 
largely because of its web of outmoded trade and investment 
restrictions. The changes that Vietnam makes during negotiations on a 
trade agreement will pave the way for its full participation in ASEAN's 
economic success.  
Vietnam is also seeking to join the World Trade Organization, and a 
working party on Vietnam's accession is expected to visit Vietnam by the 
end of this year. As we have learned in the case of China, protracted 
negotiations over accession are to no one's liking--not the WTO's, not 
those of prospective traders and investors, and certainly not those of 
the acceeding country. All of the changes we will request from Vietnam 
during trade agreement negotiations will be consistent with WTO 
principles and will accordingly speed its accession to the organization.  
It is important from the outset to understand that an agreement will not 
come quickly or easily. The U.S. and Vietnam have a lot to learn about 
each other's trade regimes and economic systems. We have begun the 
education process this week and will continue in November in Hanoi. The 
negotiations that follow will surely be tough, but the overriding 
importance of normalizing trade relations dictates that we get started 
now. This week, both sides expressed a willingness and desire to get 
down to work.  
The second element of our economic strategy with Vietnam is promotion of 
U.S. exports. From the outset of the Clinton Administration, expanding 
U.S. exports has been a key part of our international economic strategy. 
Vietnam's domestic market of 72 million consumers as well as its huge 
infrastructure development plans translate into exciting opportunities 
for U.S. business.  
We have already taken a number of steps to promote U.S. exports in 
Vietnam. In August, the Department of Commerce designated Vietnam as 
part of its ASEAN "big emerging market," and in September opened a 
commercial section in our embassy in Hanoi.  
Just last week, Agriculture Deputy Secretary Rominger made a successful 
visit to Vietnam to promote the sale of U.S. agricultural products and 
technology and to explore the prospects for scientific and technical 
exchanges. We believe each of these visits, in addition to other visits 
still in the planning stage, will help build commercial links between 
the U.S. and Vietnam.  
The third element in our economic strategy is the steady expansion of 
programs to support U.S. business interested in Vietnam. U.S. financing 
and insurance programs such as OPIC, Exim Bank, TDA, and CCC play key 
roles in helping U.S. firms compete with their foreign rivals and in 
expanding U.S. business opportunities and exports. In his statement 
announcing the normalization of diplomatic relations, President Clinton 
specified that the U.S. would "implement the appropriate United States 
Government programs to develop trade with Vietnam consistent with U.S. 
Since Secretary Christopher returned from Vietnam, we have conducted an 
exhaustive review of all U.S. economic programs and the more than two 
dozen legal and policy issues that govern their operation. Some of these 
issues are difficult, such as Vietnam's emigration record under Jackson-
Vanik, worker rights, which applies to OPIC, and Vietnam's bilateral 
Paris Club arrears. It is clear from our review that we should be able 
to implement some programs soon but that others may require bilateral 
consultations, progress by Vietnam on specific issues, and perhaps 
policy changes.  
We will, of course, put a priority on those programs which most directly 
benefit U.S. business. We have begun the dialogue to explain the legal 
and policy provisions governing the various U.S. program to Foreign 
Minister Cam and Trade Minister Triet this week, and we will shortly 
begin consultations with Congress on how we intend to proceed. Our goal 
is to move steadily ahead with programs to support U.S. business, 
consistent with the President's guidance. 
The Challenge Ahead 
The challenges facing Vietnam are great. Despite its recent strong 
economic performance, integration into the world economy and the 
dismantling of Vietnam's state enterprise sector will entail adjustment 
costs. These tasks will require political will and will depend on the 
opening of Vietnam's political process and the steady development of the 
rule of law. By all accounts, Vietnam's people are dedicated, hard-
working, and driven by a desire to succeed. These qualities will be 
often needed in the years ahead.  
Secretary Christopher said recently that Americans need to think of 
Vietnam as a country, not a war. The U.S. stands ready to begin the 
rebuilding of our economic and political relations. This process is the 
final chapter of an era that began in conflict but is ending in peace, 
growth, and prosperity. My colleagues and I in the Clinton 
Administration look forward to working closely with Ministers Cam and 
Triet to deepen the ties between our nations and peoples. Thank you very 
Sanctions on Iran 
Peter Tarnoff, Under Secretary for Political Affairs 
Statement before the Senate Committee on Banking, Housing and Urban 
Affairs, Washington, DC, October 11, 1995 
On April 30 of this year, President Clinton announced his decision to 
sever all trade and investment ties between the United States and Iran. 
These new sanctions represent American willingness to take actions--even 
those that may hurt competing U.S. interests--to increase the cost to 
Iran of its irresponsible behavior. Iran engages in terrorism, obstructs 
the Arab-Israeli peace process, pursues weapons of mass destruction--
WMD, pursues a threatening military build-up in the Persian Gulf, and 
abuses the human rights of its citizens. These activities, which 
threaten important U.S. interests, should be unacceptable to all members 
of the international community. 
The cut-off in U.S. trade and investment with Iran took effect just four 
months ago. As this committee knows well, economic pressure is not an 
instant remedy, nor a popular cure. There are signs that our embargo is 
already squeezing the Iranian economy, but it is too early to expect 
conclusive results. We must look instead to the pattern of fundamental 
deterioration in Iran's key economic indicators. Our action is 
accelerating the decline. To press this condition further, the 
Administration is committed to working--alone, when necessary, and 
collectively, when possible--to increase the intensity of international 
pressure on Iran. Iran's policies threaten not only America's interest 
but those of our allies in Western Europe and Japan. We are asking them 
to forego the narrow economic benefits of trade with Iran and to 
exercise responsible leadership in the face of Iran's threatening 
behavior. Adding their collective strength to our effort would increase 
significantly the price the Iranian leadership pays for its rogue 
We welcome congressional support for our policy of pressing Iran for 
change. Your voice is a powerful indication of America's unwavering 
resolve to stay the course. 
Initial Economic Impact 
The biggest economic problem faced by Iran today is the government's 
shortage of  hard currency. Without adequate funds, the Iranian 
Government cannot buy the imports necessary to properly sustain Iran's 
industry and maintain its infrastructure. Nor can the government fully 
pay the billions of dollars it owes in foreign debt. Hard-pressed by 
these expenditures, Iran has been forced to reduce imports of industrial 
goods and consumer items. Because of these cutbacks in imports, Iran's 
economy suffers from inflation and recession. 
Our Iran policy is designed to make it even tougher for the Iranian 
Government to obtain hard currency and thereby constrict its ability to 
fund those policies that threaten our interests. While our embargo has 
just begun to take effect, it has already taken a bite out of Iran's 
wallet in three ways.  
First, the rial, Iran's currency, lost one-third of its value following 
President Clinton's announcement of the trade and investment embargo 
against Iran. The strict currency controls that Iran imposed to 
stabilize the rial will lead to slower growth or recession over the 
Second, our embargo forced a temporary drop in Iran's income from crude 
oil sales. Because U.S. oil companies are now prohibited from trading in 
Iranian oil, the government has had to scramble to sell an additional 
400,000 barrels per day. Over the summer, industry reports indicated 
that Iran had difficulty in finding new buyers for about half that 
amount. To handle the remainder, Iran faced the choice of discounting 
the oil in order to unload it, or storing it in the hopes of selling it 
later at a better price. Iran chose to wait. The resulting costs include 
delayed oil revenues, increased tanker chartering costs, and increased 
crude oil storage costs. Although these costs are short-term expenses, 
it is clear that our embargo has cut into Iran's available hard 
currency. Iran's marketing difficulties have eased somewhat lately, in 
part from increased winter demand in Europe. We are continuing our 
diplomatic efforts to limit Iran's oil sales. 
Our embargo has had a third adverse impact. By aggravating Iran's cash 
crunch, we are weakening the government's ability to meet its external 
expenses. Moreover, Iran's financial reputation will only worsen, 
because the government's debt payments are scheduled to double in 1996. 
Key Defensive Block 
Our embargo has exacerbated Iran's difficulty in gaining easy access to 
foreign capital. We need to keep it that way. Before we imposed 
sanctions on our commercial trade, other governments pointed to American 
commerce with Iran as a rationalization for promoting bilateral trade 
and providing financial assistance to Iran. Such assistance, which 
includes new official credits and development aid, gives Iran new 
financial resources. By severing the economic activity between the 
United States and Iran, we increased the political price of such 
dealings with Iran. Since we imposed the embargo, Iran's key trading 
partners have not extended any new official credits. Japan continues to 
postpone the second installment on a multi-million-dollar loan to build 
a hydroelectric dam on Iran's Karun River. And the French Government has 
told us it will not provide the French firm, TOTAL, with official 
support for its investment in the former CONOCO deal. My point is this: 
Even if other governments have not rushed to copy U.S. policy, the steps 
we have taken have encouraged them to limit the scope of their 
commercial relations with Iran. 
Our investment sanctions prohibit American contributions to the 
development of Iran's economy, particularly the petroleum sector. We 
want to make it harder for Iran to exploit these petroleum resources by 
denying it free access to international finance and government aid. That 
was why the President blocked CONOCO, an American company, from working 
with Iran, and that is why it is important for us to convince other 
governments to take similar measures. A straight line links Iran's oil 
income and its ability to sponsor terrorism, build weapons of mass 
destruction, and acquire sophisticated armaments. Any government or 
private company that helps Iran expand its oil reserves must accept that 
it is indirectly contributing to this menace. 
In the months ahead, we will be closely watching the actions of other 
governments. The decision of the French firm, TOTAL, to take up the 
CONOCO deal is extremely regrettable. We strongly urged TOTAL to 
reconsider its decision and advised others to refrain from similar 
Mr. Chairman, it is important to note that we do not underestimate the 
impact of our policy on American business. These steps were necessary to 
strengthen our efforts to pressure Iran to abandon those practices that 
affect our country's national security interests. We believe other 
governments should also act responsibly and take similar steps to deter 
Iran's threatening behavior. The issue of Iran remains at the top of 
this country's diplomatic agenda. The highest-level officials in this 
Administration will continue to press our case on Iran with our 
counterparts from other countries. 
U.S. Leadership 
Iran fears the impact of our efforts to mobilize international pressure. 
These fears caused Tehran to begin a campaign to secure foreign 
investment in the country's petroleum sector. The Iranian Government has 
two objectives for this campaign: to acquire much-needed hard currency 
and to drive a wedge between the United States and our allies. We should 
not let Iran undermine our policy in either way. 
It would be a mistake for us to exaggerate the gap between our policy 
and that of most other industrialized nations toward Iran. In my 
discussions with top officials of the G-7 countries, for example, my 
counterparts express their shared concerns about Iran's pursuit of 
weapons of mass destruction, its support of terrorism, and its continued 
military build-up. Because of these concerns, G-7 countries refuse to 
engage in any nuclear cooperation with Iran, and they prohibit exports 
to the Iranian military of arms or sensitive dual-use technology. In 
fact, a review of our regular consultations with these governments 
reveals much common ground. We have differed only in our view of the 
most effective way to counter this objectionable behavior. 
We do not believe that engagement with Iran, as advocated by some of our 
friends, will alter Iran's objectionable behavior. Despite this 
engagement, Iran's actions have not changed and,   in some areas, have 
become more threatening. That is why we chose to intensify U.S. 
leadership by unilaterally imposing new sanctions. We acted decisively 
and effectively, as we have in the past. We were the first to prohibit 
exports to Iran of weapons and technology. Key friends and allies joined 
us. Now we have taken the lead to cut off the flow of revenues to the 
Iranian Government. We have declared to the world that it is 
unacceptable to provide assistance--whether through credit, aid, trade, 
or investment--to a government that engages in policies that challenge 
our core interests. The question at hand is: How can we most effectively 
convince other governments to join us? 
One proposal calls for the United States to boycott those foreign firms 
that engage in any business activity with Iran. We have carefully 
reviewed this proposal and rejected it for two reasons. We believe a 
full secondary boycott would put at risk the cooperation on Iran policy 
that we share with others--particularly cooperation on critical matters 
such as denying Iran weapons. We also believe that such interference in 
the international marketplace would backfire, hurting American 
businesses and harming the American economy. 
Another proposal--suggested by your new bill--is to impose targeted 
sanctions on foreign companies that provide Iran's petroleum industry 
with equipment or technology. This action would create additional 
disincentives for European trade and investment with Iran. Yet, it could 
also have negative implications for U.S. economic interests by upsetting 
our relations with key allies and foreign industry. 
For example, our partners in GATT, WTO, and NAFTA would argue strongly 
that even a limited secondary boycott violates our obligations under 
these agreements. Their efforts to charge us with creating trade 
barriers could disadvantage U.S. exporters. Moreover, it would be 
difficult to square a U.S. secondary boycott with the free trade 
rhetoric with which we press Arab governments to remove their secondary 
and tertiary boycotts on Israel. The sharply contrasting natures of the 
two governments in question would not shield us from charges of 
inconsistency, which might lessen our ability to persuade other 
countries of our approach on either issue. 
Other concerns we must all address include our ability to 
comprehensively monitor the activities of foreign companies, the likely 
negative reaction of some of our allies, and the impact on U.S. economic 
competitiveness. Most importantly, we would need to assess whether any 
additional action would contribute to our goal of gaining international 
support for pressure on Iran. The most effective means of increasing 
this pressure is through multilateral action. Prior to considering any 
change in the new sanctions, this Administration intends to engage our 
allies further in the pursuit of increasing Iran's economic isolation. 
Through continued consultations and information-sharing, we have 
endeavored to stress the damage to our common interests posed by Iran's 
activities, and argued that the most effective means  of curbing these 
activities is through multilateral pressure. I believe in the coming 
months our extensive, high- level contacts with other governments may 
well succeed in gaining a degree of increased cooperation. In addition 
to our exhortations, continued Iranian intransigence on such issues as 
the Rushdie fatwa may  finally convince European nations of the futility 
of engaging Iran. Iran's poor credit rating also adds an economic 
disincentive to the prospect of new assistance. 
Our current approach of leading by example and working cooperatively 
with allies needs to be given a real chance to work; that will take 
time. Our patience, however, is not endless. If, after a reasonable 
period of time, diplomacy alone proves inadequate in achieving an 
acceptable level of multilateral support for our efforts, we could then 
consider additional approaches. 
A Comprehensive Policy 
I would like to take this opportunity to remind the committee that our 
policy of economic pressure is complemented by our ceaseless efforts to 
convince other governments not to contribute to Iran's pursuit of 
weapons of mass destruction or its military build-up. Our diplomacy has 
affected a remarkable consensus among the 28 countries participating in 
talks for the COCOM successor regime. They agree on the need to prevent 
Iran and other pariah states from acquiring new weapons or military 
capabilities. We are equally vigorous in calling on all states to avoid 
any collaboration with Iran that might lead to a nuclear weapons 
capability. At Halifax, the G-7 leaders voiced their public support for 
this policy. Russian and Chinese cooperation with Iran remains a 
critical concern to us, and we continue our high-level dialogue with 
senior officials in both countries. Our efforts to persuade them to halt 
cooperation that can assist Iran's nuclear or other WMD programs are 
continuing. Ultimately, we hope that both Russia and China will conclude 
that any form of cooperation that even remotely assists Iran's search 
for nuclear weapons is simply too risky and will eventually pose a 
threat first and foremost to their own national security. 
In summary, Mr. Chairman, we believe that our efforts to intensify 
pressure against Iran are making progress, and that the embargo will 
make an important contribution. More is being done, especially to win 
greater support from our friends and allies, above all in the area of 
investment and financial assistance. American leadership has been and 
will continue to be critical to effectively pressing Iran to change its 
behavior. We are grateful for congressional support for our actions, and 
to you, Mr. Chairman, for your efforts to focus attention on this very 
important issue.  
Summit of the Americas: First Steps 
Richard E. Feinberg, Special Assistant to the President For Inter-
American Affairs, National Security Council 
Remarks to the Latin American Studies Association, Washington, DC, 
September 28, 1995 
I am very pleased to once again address LASA. Since the last meetings in 
Atlanta, only 18 months ago, inter-American relations have entered a new 
era--an era of shared agendas, intense communications, monthly 
ministerials, and comprehensive cooperation. The milestone event was the 
Summit of the Americas--the first hemispheric summit since 1967, the 
first of only democratically elected leaders, the first held in the 
United States. The Miami meeting codified the hemispheric convergence 
toward democratic values, economic integration, and social inclusion. 
Building upon this historic convergence, the summit catalyzed the 
emergence of a new inter-American system organized to promote collective 
action across a wide range of common concerns. 
The Spirit of Miami 
Brazilian President Fernando Henrique Cardoso eloquently captured the 
"Spirit of Miami" when he labeled the summit a "momentous historic 
renaissance," the transformation of hemispheric politics from zero-sum 
conflict toward a future of transborder cooperation. 
Quiet, non-violent, and successful, this "good news" story has not 
commanded the evening news. But this new era of hemispheric concordance 
has altered the environment in which all of you work. You are its 
beneficiaries, and you must be its protectors. It falls to you not only 
to interpret it but also to build upon it. It is an era of good feeling, 
but it is more than atmospherics. It is an era of good neighborliness, 
but it is more than a distant respect for others. It is an alliance but 
without an external enemy. 
President Clinton convened the Miami summit to seize the opportunity 
offered by the end of the Cold War to redefine the spirit and the 
substance of hemispheric relations. It was based on the understanding 
that the United States and Latin America had largely transcended the old 
ideological and geopolitical divides and were being drawn together by a 
common set of problems. San Francisco and Santiago, Boston and Buenos 
Aires, share a common discourse--what I referred to in Atlanta as 
"substantive symmetry."  Citizens everywhere want more efficient 
democracies, more competitive economies, quality social services. And 
progress on many of these common concerns would benefit from collective 
The summit gathered together the hemisphere's 34 democratically elected 
leaders. It made clear that democracy is the only legitimate form of 
government in the hemisphere--that the cycle of ballots and bullets, 
democracy and authoritarianism, must end. It endorsed the Bolivarian 
vision of hemispheric integration and set the concrete goal of a free 
trade area of the Americas by 2005. It also called for market-oriented 
economic growth attentive to social equity and sustainable environment. 
The summit's "Partnership for Prosperity" outlined a comprehensive and 
integrated plan of sustainable, democratic development. 
The "Spirit of Miami" continues to infuse hemispheric gatherings. In the 
Rose Garden this spring, President Cardoso clearly and publicly placed 
his influential nation behind the summit's call for a collective 
promotion of democracy. Meeting in Quito earlier this month, the Rio 
Group of Latin American countries reaffirmed "the historical importance" 
of the summit and echoed its calls to fight the new threats to 
hemispheric security: corruption, narcotics, money laundering, and 
international terrorism. Also this month, in a White House meeting with 
Panamanian President Perez Balladares, there occurred one of those 
telling moments. At one point the Vice President remarked, "The Miami 
Summit had a huge impact, did it not?"  Spontaneously and in unison, the 
Panamanian cabinet responded with an affirmative. There was no doubt as 
to the genuineness of their sentiment. 
First Steps Toward Implementation 
In Miami, the summit leaders endorsed 23 initiatives with over 150 
action items. Implementation is proceeding--unevenly but with clear 
momentum-- throughout this broad agenda. The Western Hemisphere is 
experiencing an outburst of follow-up meetings and ministerials. In 
June, the trade and commerce ministers convened; in September, it is the 
turn of the ministers of health; in October, ministers of labor will 
meet in Buenos Aires, and ministers of energy will gather in Washington; 
in November, ministers in charge of tourism and financial regulations 
will hold their separate conferences--and the list goes on. 
American Airlines is not the only beneficiary of these many meetings. 
Their intensity testifies to the deepening involvement of senior 
officials in hemispheric affairs. They point to the creation of a 
complex network of functional relationships across the hemisphere. At 
the close of the Cold War, Latin Americans worried that  the United 
States might ignore them. Today, they struggle to keep apace of the 
stream of new initiatives emanating from the Miami process. 
The trade ministers met in Denver this summer and launched seven working 
groups to lay the foundations for future negotiations toward the FTAA 
2005. The ministers will meet again in March in Cartagena to review 
progress and to launch four more working groups. The topics are wide-
ranging and include health standards, intellectual property rights, 
investment, services, government procurement, subsidies, and competition 
policy. Together, this workplan should produce a comprehensive vision of 
hemispheric economic integration. The OAS is building a first-class 
trade unit to assist these Denver follow-up working groups and to 
promote commercial union. 
The Organization of American States, the Inter-American Development 
Bank, and the UN Commission on Latin America have forged a tripartite 
cooperation committee to pool their resources on behalf of summit 
initiatives. This enhanced coordination among the hemisphere's leading 
multilateral institutions is another fruit of the solidarity sparked by 
the Spirit of Miami. 
The private sector is also engaged. At Denver, over 1,200 business 
executives met in a trade and commerce forum to compare notes with 
ministers on the integration process. They will do so again in March in 
Cartagena. Other national and regional business associations have also 
embraced FTAA 2005. These private sector groupings amount to a permanent 
constituency working to fulfill the promise of Miami. At times, 
political or business cycles in key countries may throw up temporary 
obstacles to the integration process. These periodic ministerials, 
established public-private sector fora, dedicated bureaucracies, and 
business associations will maintain the momentum toward their common 
The summit leaders did not duck the tough political issues. Certainly, 
they reaffirmed the unique legitimacy of electoral democracy and warned 
those who would break faith with this ideal that they would face a 
collective response. The dramatic restoration of democracy in Haiti 
preceded the summit and contributed mightily to its success. Through the 
OAS and the UN, the hemisphere had worked together to return Haiti to 
the community of democracies. At the summit plenary, President Aristide 
offered his profuse gratitude to the assembled leaders. Prolonged 
applause greeted the Haitian leader--a testament to support for 
democracy throughout the hemisphere. 
The summit leaders congratulated themselves on democracy's progress, but 
they were also remarkably frank   in recognizing the many weaknesses   
of their political institutions. Indeed, one of the most spirited 
private discussions among the leaders centered on corruption and the 
threat it poses to democratic legitimacy and economic progress. Since 
Miami, the OAS has been drafting an Inter-American Convention on 
Corruption--perhaps the first of its kind in history. The draft would 
encourage efforts--already underway in many legislatures--to clarify 
conflict of interest standards, proscribe bribery, and create 
independent auditors. 
This open discussion of corruption in international fora marks another 
defeat of those who would misuse the banner of "national sovereignty" to 
hide and protect illicit acts of official impunity. This frank self-
criticism by democratic leaders seizes a banner away from those 
demagogues who might use the corruption charge to attack democracy 
Narco-trafficking is one of the most difficult and contentious issues 
facing the hemisphere today. Here, the summit did not pretend to a 
definitive solution, but the leaders agreed to eschew finger-pointing 
and accepted that narcotics is both a supply-and-demand problem. They 
agreed to work together to formulate a counter-narcotics strategy for 
the 21st century. Since Miami, the hemisphere is attacking the cartels 
where they are most vulnerable--through seizure of financial assets. 
Countries are passing legislation to give authorities the tools they 
need to locate and confiscate illicit financial assets. A tough, 
comprehensive set of measures to combat money laundering will likely be 
endorsed at a November ministerial in Buenos Aires. The summit leaders 
insisted that democracy and prosperity were sustainable only with 
greater social equity and environmental protection. Countries committed 
to a primary school completion rate of 100% by 2010 and to reduce child 
mortality by one-third and maternal mortality by one-half by 2000. 
Countries also agreed to phase out lead in gasoline, reduce greenhouse 
gas emissions, and to launch a "Decade of Discovery" to conserve the 
region's biodiversity. In response, the Pan-American Health Association, 
IDB, World Bank, and USAID are marshaling their resources to achieve the 
summit targets. Chile will convene an experts conference this January to 
assess progress on poverty alleviation, and Bolivia will host a major 
meeting on sustainable development in late 1996. In two weeks, Mrs. 
Clinton will begin a trip to Latin America to advance the summit 
initiatives on health, education, and women's rights. 
The New Architecture 
In preparing the summit, we examined why many lofty goals enunciated at 
previous summits remained on paper. We found that previous summits had 
failed to involve key government agencies whose resources and expertise 
would be critical to implementation . Furthermore, institutional 
structures to manage the follow-up were inadequately identified. Most 
striking was the virtual absence of civil society. 
So the Miami summit devised a new architecture for the inter-American 
system, resting on three pillars. 
The first pillar is governments. Foreign ministries are playing a 
coordinating role, but much of the responsibility lies with ministries 
with specialized expertise, whether in trade, finance, energy, or 
environment. These functional departments are often the driving force in 
that list I mentioned earlier of monthly ministerials. This first pillar 
has recently been fortified with a sub-system of "responsible 
coordinators." Countries with a strong interest in a given summit 
initiative have volunteered to take special responsibility to convene 
meetings, share reports on success stories and "best practices," develop 
workplans with quantitative targets, and to mobilize financial 
resources. Seizing this opportunity to play a leadership role in summit 
implementation, Brazil and Canada have volunteered to be the responsible 
coordinators for democracy and human rights--creating a politically 
potent leadership coalition that will work closely with the OAS. Jamaica 
has volunteered to coordinate for civil society participation, which is 
appropriate in light of the Caribbean's vibrant democracies. Mexico will 
coordinate education, and the United States has volunteered to take the 
lead on finance, counter-narcotics, and energy. Virtually all of the 23 
summit initiatives now have a responsible coordinator. 
The second pillar of this inter-American system is the multilateral 
institutions, especially the IDB and the OAS. I urge you to attend the 
addresses that Cesar Gaviria and Enrique Iglesias will deliver during 
these LASA meetings. Both leaders are bringing new dynamism to the core 
institutions of the inter-American system. Gaviria's inspiring "New 
Vision" proposals, so responsive to the Miami mandates, are already 
becoming reality. The OAS has fresh capacity to analyze and promote 
trade integration. Its Unit for the Promotion of Democracy is already 
monitoring elections. The unit promises to fulfill the summit's mandate 
to foster national dialogues and political reconciliation, in order to 
preserve democracy by pre-empting polarization in member states. 
Overcoming the artificial divisions between economics and politics, the 
IDB is joining forces with the OAS and World Bank to strengthen 
parliaments and judiciaries. The region's strongest development bank is 
also striving to involve civil society in all stages of the project 
cycle--from design to final assessment. The IDB, whose capital the 
Clinton Administration helped increase to $100 billion, is funding many 
other summit initiatives, including infrastructure, micro-enterprise, 
and health and education. 
The third pillar of the new inter-American system is public-private 
sector partnerships. This pillar is especially relevant to LASA members. 
Academics, NGO leaders, and private-sector associations met regularly 
with government officials in the run-up to the summit, and their ideas 
infuse the final summit texts. Summit preparation was a genuinely open 
process of democratic diplomacy. Shortly after the summit, in a letter 
to Vice President Gore, leading environmental groups expressed their 
frank appreciation for that unprecedented degree of access. 
Since Miami, civil society remains active in the summit follow-up. 
National business associations are upholding the torch of trade 
integration with their home governments. Environmental groups will play 
a central role in the consultations leading up to the conference on 
sustainable development in Santa Cruz, Bolivia in late 1996. Academics 
at FLACSO helped organize a conference this August on confidence- and 
security-building measures. But in some other areas, civil society has 
been less active. To remedy this, we have prepared a list of "points of 
contact" for each of the 23 initiatives, with phone and fax numbers, 
available on the Internet. I know that many of you have much to offer. 
Please feed us your good ideas. 
Bumps Along the Road 
The Summit of the Americas did not cover all issues, nor could it 
foresee all future crises, but it gave birth to a spirit that makes it 
easier to survive the inevitable bumps on the road. It produced a shared 
vision worthy of a common defense. Just two weeks after Miami, the 
Mexican currency collapsed. Administration officials, who had been 
deeply involved in the Miami summit, immediately grasped what was at 
stake in Mexico and the threat to vital U.S. interests in Latin America. 
President Clinton acted swiftly and decisively to preempt the spread of 
financial instability to other emerging market democracies--countries 
whose leaders he had just embraced in Miami. In 1982, a run on the 
Mexican peso precipitated a "lost decade" for Latin America; this time, 
U.S. leadership, a firm response by President Zedillo, and international 
cooperation averted financial contagion and minimized the lost of 
production and jobs. 
Border conflict broke out between Peru and Ecuador this winter. There 
was an audible cry of disbelief and dismay: "How could this happen in a 
hemisphere that had just proclaimed as its goal economic integration 
within a decade?" Prompt diplomacy by Brazil, Argentina, Chile, and the 
United States helped halt the fighting and demarcate a DMZ. We are now 
at work on helping the parties resolve the underlying issues. 
The Summit of the Americas has served as a catalyst to tackle other 
hemispheric issues not fully addressed in Miami. The summit implicitly 
redefined hemispheric security in terms of democratic stability, shared 
prosperity, and sustainable development--an approach many of you have 
long advocated. The summit only tangentially addressed traditional 
military matters. But Miami created the trust that would allow the 
hemisphere to address the role of the military in the new hemispheric 
order. Indeed, prior to Miami, initial efforts to raise such sensitive 
subjects were derailed by traditional suspicions. This July, a defense 
ministerial was held in Williamsburg. Both civilian and military 
participants judged it a big success. The ministerial underscored 
democratic authority and military respect for human rights. It gave 
impetus to efforts to enhance mutual confidence so as to avoid conflict 
by miscalculation and to facilitate military downsizing. Secretary of 
Defense William Perry called on the hemisphere to resolve remaining 
border disputes by 2005--to create a security environment consistent 
with the Miami agreements on free trade and integrated capital markets. 
The Challenges Ahead 
The summit was a big step forward,but immense problems remain. The 
hemisphere must still root out those authoritarian tendencies that pose 
an ever-present threat to shallow and fragile democracies. We must 
overcome those vested interests that misuse nationalist slogans to slow 
progress toward integration. Educational systems must be radically 
revamped if the hemisphere is to compete successfully in the global 
economy of the 21st century. But we are fortunate that the summit gives 
us a partnership for collective action, a common platform and new 
instrumentalities with which to meet these challenges head on. 
The summit declarations not only express a hemispheric consensus but are 
also, I believe, fully consistent with the weight of U.S. public 
opinion. But this historic consensus has its detractors here and abroad. 
It is threatened by old and new voices of protectionism, nativism, and 
isolationism. Today, these spoilers wrap themselves in distorted 
versions of fiscal austerity or workers' rights. These dissonant voices 
would deprive the multilateral development banks and USAID of funds 
needed to advance the summit's social agenda. Some Members of Congress 
would impede the ability of the executive branch to negotiate the FTAA 
2005. Where their concerns are legitimate, we must listen. But where the 
consequence--whether intentional or inadvertent--threaten to spoil the 
fruits of the summit, we must resist. Just when Latin America has 
embraced democratic values and open economies, it is ironic that some in 
this country would erect a fortress America. No group has a greater 
stake in preserving and promoting the conceptual and ethical gains of 
the summit of the Americas than LASA members. We welcome your strong 
support and your active participation.  Thank you very much. 
U.S. Policy Toward China: Security And Military Considerations 
Winston Lord, Assistant Secretary for East Asian and Pacific Affairs 
Statement before the Subcommittee on East Asian and Pacific Affairs of 
the Senate Foreign Relations Committee, Washington, DC, October 11, 1995 
I am pleased to have the opportunity to appear before this subcommittee 
today to discuss security issues in U.S.-China relations. 
These are important subjects, and this is an especially opportune time 
to be looking at our relationship with China. Much has been happening. 
Much is being debated. Tomorrow, Senator James Sasser will appear before 
the full Senate Foreign Relations Committee--having finally received 
agrement from the Chinese Government--to seek the committee's approval 
to become our next ambassador to China. The week after next, President 
Clinton will meet with President Jiang Zemin in New York, their third 
such meeting and an important component of our engagement strategy with 
Before I deal with the topic at hand, Mr. Chairman, let me briefly 
address just where we are in our overall relationship with China. In the 
wake of Taiwan President Lee Teng-hui's visit to the U.S in early June, 
China took a number of retaliatory measures that subjected our 
relationship to severe stress. Beijing employed harsh rhetoric about our 
motives and intentions. It suspended our dialogues on security, non-
proliferation, and human rights issues. The Chinese recalled their 
ambassador to the U.S. and delayed granting agrement to Jim Sasser. They 
sought assurances that there would be no more Taiwan leader visits like 
Lee Teng-hui's before agreeing to any movement in relations. 
In the last 2-1/2 months, through mutual efforts, we have made concrete 
strides toward stabilizing the relationship. We have done so by 
reassuring the Chinese about our policy without infringing on our 
principles. Beginning with Secretary Christopher's meeting with Foreign 
Minister Qian Qichen in Brunei on August 1, we have intensified our 
dialogue and relaunched some discussions and visits. The Chinese have 
made some adjustments in their previous posture. 
-- They expelled Harry Wu from China after a rapid trial. 

-- They granted agrement to Jim Sasser and assured us that the Chinese 
ambassador would return to the U.S. soon.-- Despite continuing 
disagreement on the question of future visits by Taiwan leaders to the 
United States, the Chinese have ceased to hold U.S.-P.R.C. relations 
hostage to satisfaction of their demands and have agreed to re-engage on 
a much broader agenda. 
-- They have confirmed forthcoming trips by Secretary of Commerce Brown 
and Assistant Secretary of Defense Nye. 
The committee also will have heard of China's stated intention not to 
implement its contract to sell nuclear reactors to Iran--a welcome step. 
I do not want to exaggerate the progress we have made. We have been 
successful in managing this important but difficult relationship through 
a period of considerable turbulence. That is a meaningful accomplishment 
and something that is viewed as essential throughout East Asia. Still, 
it does not for a moment suggest that we are satisfied with the progress 
we have made on a range of key issues, about which we care deeply. 
Let me turn now to the topic at hand; namely, how we see China and the 
People's Liberation Army as factors in the security environment of East 
Asia and how this affects our policy judgments. First, a few well-known 
but important facts. China is not only the most populous country in the 
world, with 1.2 billion people, but it has the largest standing army. 
Even after a 25% reduction in its armed forces in the late 1980s, it 
still has 3 million men and women in arms. China is a nuclear power, 
and, along with France, the only country in the world still testing 
nuclear weapons, to our regret. China possesses ballistic missiles, 
including ones capable of reaching the United States. It is a permanent 
member of the UN Security Council, with the rights and responsibilities 
that go with membership in that exclusive club. It has major influence 
in regional conflicts, and it is a country with strong territorial 
concerns--for example, the Spratly Islands, Taiwan, and Hong Kong. 
Such facts, plus others I will cite later, make China an extremely 
important and potentially difficult neighbor. How to integrate China 
into the rest of East Asia--not to mention the rest of the world--is a 
challenge that has preoccupied China's neighbors not just recently, but 
for generations. As recently as 25 years ago, China was a revolutionary 
power bent on the subversion of its neighbors. Its size and power make 
its behavior and evolution a source of intense interest to all of the 
countries of East Asia and a focus of their international relations. 
It is not just China's size and potential, but some of its actions that 
have concerned its neighbors. Let me cite several. 
-- China's military budget and strategic plans are largely opaque to the 
rest of the world, developed behind a cloak of secrecy. 
-- China, under the control of civilian leadership, has been embarked on 
a modernization program in recent years aimed at developing a more 
professional army and at upgrading, in particular, its aerial and naval 
-- It has sold technologies related to weapons of mass destruction, as 
well as missile delivery system technology, in sensitive regional hot 
-- China has supported nuclear programs of concern in Pakistan and Iran. 
-- Its extensive claims in the South China Sea have been backed up by 
construction of a military installation on Mischief Reef, less than 150 
miles from the main Philippine Islands. Of course, China has not been 
alone in staking a claim to the area. 
-- As I noted earlier, despite its general support for a Comprehensive 
Test Ban Treaty, China has continued nuclear testing and been slow in 
negotiating a CTBT. 
-- Its two recent military exercises--including missile firings in the 
vicinity of Taiwan--surely did not contribute to the region's sense of 
peace and stability. 
Does this all mean that China is an aggressive power bent on dominating 
or threatening its neighbors, and that the proper response should be one 
of containment, a kind of revival of SEATO? In a word, no. The picture 
is much more complex than these troubling signs. 
It is critically important, as we consider China's position from a 
security perspective, to have a clear view of China's own priorities. 
Its number one priority is economic development, its transformation from 
a poor developing country into a wealthy country. This has been the 
driving idea dominating Chinese politics and Chinese life since the late 
1970s when Deng Xiaoping threw out most of the reigning ideology and 
placed economic development at the top of China's agenda. China's 
foreign policy since then has been a function of this domestic priority. 
Put simply, China's development requires a peaceful international 
environment, and this has been China's goal in the last decade- and-a-
half. What has this meant in practical terms? 
-- It has meant abandoning support of revolutionary movements in 
neighboring countries. Instead, China has pursued a policy aimed at 
developing friendly relations with its neighbors. 
-- It has meant negotiation of border agreements with Russia and 
Kazakstan. It has meant boundary negotiations with India and confidence-
building measures along the Sino-Indian border. It has meant 
establishment of diplomatic ties with South Korea and development of a 
burgeoning commercial relationship with South Korean business, despite 
strong opposition from Pyongyang. It has meant improvement in its 
relations with Vietnam and support for a peace settlement in Cambodia. 
And it has meant extensive trade and investment ties with Taiwan. 
-- It has meant adoption of policies designed to assure foreign business 
people and leaders that China is stable domestically and averse to 
foreign adventure. China needs international capital to fuel an annual 
growth rate exceeding 10%. Business people do not like war and 
instability; China understands this. 
-- It has meant a policy of "opening up to the outside world," after 
years of self-imposed isolation. Though some in China wish to join the 
world exclusively on their own terms, most others have understood that 
extensive foreign interaction requires accepting global rules and 
disciplines. In the trade area, this has led to increasing conformity 
with international practices and membership in international trading and 
financial organizations. In the security area, it has had similar 
consequences. Of course, there is a long way to go in many of these 
areas, but there have been some encouraging signs in recent years. 
-- China has supported the indefinite extension of the nuclear Non- 
Proliferation Treaty. It has accepted increasingly strict parameters for 
sale of missiles, culminating in October 1994 in agreement to refrain 
from selling MTCR-class missiles. China has signed the Chemical Weapons 
Convention, and it has indicated willingness to conclude a Comprehensive 
Test Ban Treaty in 1996. 
-- This past spring, China declared for the first time that it accepted 
the applicability of international law and the Law of the Sea Convention 
to disputes involving the Spratly Islands, although China still lays 
claim to the region's islands and atolls. This statement and China's 
willingness to negotiate with other claimants and pursue joint 
commercial development prior to the resolution of competing territorial 
claims, have eased the tension created by the Mischief Reef installation 
I noted earlier. 
-- China has concerns similar to our own over the dangers of development 
of nuclear weapons by North Korea. China has played a helpful supporting 
role as we have sought to defuse the tensions created by the North 
Korean nuclear program. 
How should the United States react in the face of this complex picture? 
We have shaped policies that we believe reflect a clear-eyed assessment 
of the opportunities and risks posed by China's emergence. Our 
fundamental policy in the security area is one of comprehensive 
engagement, consistent with our overall approach to China. This is a 
common-sense approach that reflects our natural interest. It assumes 
neither Chinese aggressiveness nor Chinese benevolence. It means neither 
acquiescence in what we see as inappropriate actions by China nor 
attempts to isolate the P.R.C. or frustrate its development. Containment 
would be a self-fulfilling prophecy of mutual enmity, and it would not 
be supported by our Asian partners. We seek to act in concert where we 
agree, foster greater consensus where the picture is mixed, and prevent 
or minimize conflict where we disagree. 
In Assistant Secretary Nye's statement, he lays out cogently seven 
important reasons why we engage China on security issues. I commend 
these to you. 
In the security area, the components of our policy include a program   
of military exchanges with China at various levels--a Joint Commission 
on Defense Conversion, dialogues on strategy and transparency, and ship 
visits. Assistant Secretary Nye will talk about these and other elements 
in his statement. It also entails bilateral dialogue with Chinese 
civilian and military leaders on arms control issues, a dialogue the 
P.R.C. has suspended, but which we hope to resume shortly. This dialogue 
is a centerpiece of a long-term effort to help bring China's leadership 
to an understanding of its own self-interest in conforming its 
international arms sale practices to world standards. Another crucial 
component is integration of China into regional security forums and 
discussions. This is an approach we have pursued with success under the 
Clinton Administration in the ASEAN Regional Forum and the Northeast 
Asia Regional Security Dialogue, where we have urged confidence-building 
measures and greater transparency in strategic planning. 
Such policies are designed to reinforce the insight that inspired Deng 
Xiaoping's decision in 1978 to break decisively with the policies of 
isolation and autarky of the Mao years. At its core was recognition of 
the need for China to live at peace with its neighbors, to build up 
commercial relation- ships with its neighbors and the West, and to alter 
China's institutional and ideological landscape to gain the trust and 
cooperation of the international community. 
Mr. Chairman, the question is not whether China will be a major player   
in global as well as regional security affairs, but rather when and how. 
China's rapid economic development, its growing military capabilities, 
and  its historic international role will make it a major power in the 
coming century. The challenge we face is to assure that as China 
develops as a global actor, it does so constructively, as a country 
integrated into international institutions and committed to practices 
enshrined in international law. I believe that the policies we pursue 
should help encourage that evolution. Thank you, Mr. Chairman.   
U.S. Announces Major Reform Of Computer Export Controls 
Statement by President Clinton released by the White House, Office of 
the Press Secretary, Washington, DC, October 6, 1995. 
Today, I am pleased to announce a major reform of our computer export 
controls that will adjust to the global spread of technology while 
preserving our vital national security interests. 
Effective export controls are a critical part of national security, 
especially a strong non-proliferation policy. Our control regulations 
must focus principally on exports that have significant national 
security applications and which are not so widely available in open 
commerce that controls are ineffective. 
When I came into office, virtually all computers more powerful than a 
basic desktop required an export license from the government--even 
though many of these machines could be purchased in electronics stores 
from Hong Kong to Frankfurt, as well as in cities across America. Both 
the U.S. Government and American exporters spent millions of dollars and 
thousands of hours implementing and complying with a tangled web of 
export control regulations. 
Two years ago, to bring our export control system into line with new 
developments in computer technology and the changing nature of the 
threats to our national security, I relieved billions of dollars worth 
of exports from outdated and unnecessary controls   and instructed my 
Administration to thoroughly and periodically review the controls on 
computer exports. The purpose of this review was to determine how 
changes in computer technology and its military applications should 
affect our export control regulations. 
Now, in the wake of a careful re-evaluation by the Department of 
Defense, I have instructed my Administration to update our controls to 
ensure that computers that could have a significant military impact on 
U.S. and allied security interests remain carefully controlled, while 
controls that are unnecessary or ineffective are eliminated. 
Specifically, I have decided to eliminate controls on the export of all 
computers to countries in North America, most of Europe, and parts of 
Asia. For a number of other countries, including many in Latin America 
and Central and Eastern Europe, we will ease but not eliminate computer 
export controls. For the former Soviet Union, China, and a number of 
other countries, we will focus our controls on computers intended for 
military end uses or users, while easing them on the export of computers 
to civilian customers.  Finally, we will continue to deny computer 
technology to terrorist countries around the world. 
This decision will relieve U.S. computer manufacturers of unnecessary 
and ineffective regulations which often have tied their hands while 
foreign competitors won major contracts or built their own systems. It 
will help preserve the strength of the U.S. computer industry, which 
also is key to our national security. It is good for U.S. workers and 
U.S. business. 
This decision will benefit our national security in a number of other 
ways. Trying to regulate the export of computers that are increasingly 
available in markets abroad is a recipe for an ineffective non-
proliferation policy. It imposes serious regulatory burdens without 
improving our national security, and diverts resources from the pursuit 
of other important non-proliferation objectives. 
Today's action will strengthen our non-proliferation policy by targeting 
our export control resources on those areas where they can make a 
difference. It will complement our work in the New Forum--the 
multilateral regime we are forming to control arms and sensitive dual-
use technologies-- where we will work with our partners to encourage 
development of multilateral transparency and controls on computers 
consistent with our national controls. It will reinforce other steps we 
have taken in this Administration to achieve concrete goals--such as the 
indefinite extension of the nuclear   Non-Proliferation Treaty, 
denuclearization of Ukraine, stopping the North Korean nuclear weapons 
program, and a negotiation of a comprehensive test   ban--in our efforts 
to combat proliferation.  
Fact Sheet: International Terrorism--American Hostages 
The U.S. Government will make no concessions to terrorists holding 
official or private U.S. citizens hostage. It will not pay ransom, 
release prisoners, change its policies, or agree to other acts that 
might encourage additional terrorism. At the same time, the United 
States will use every appropriate resource to gain the safe return of 
American citizens who are held hostage by terrorists. Hostage-taking is 
defined under international law (International Convention Against the 
Taking of Hostages, adopted December 17, 1979) as the seizing or 
detaining and threatening to kill, injure, or continue to detain a 
person in order to compel a third party to do or abstain from doing any 
act as an explicit or implicit condition for the release of the seized 
or detained person. 
It is internationally accepted that governments are responsible for the 
safety and welfare of persons within their borders. Aware of both the 
terrorist threat and public safety shortcomings in many parts of the 
world, the United States has developed enhanced physical and personal 
security programs for U.S. personnel and has established cooperative 
arrangements with the U.S. private sector. It also has established 
bilateral counter-terrorism assistance programs and close intelligence 
and law enforcement relationships with many nations to help prevent 
terrorist incidents or to resolve them in a manner that will deny the 
perpetrators benefits from their actions.  
The United States also seeks effective judicial prosecution and 
punishment for terrorists and criminals victimizing the U.S. Government 
or its citizens and will use all legal methods to these ends, including 
extradition. U.S. policy and goals are clear, and the U.S. Government 
actively pursues them alone and in cooperation with other governments. 
The U.S. Government believes that paying ransom or making other 
concessions to terrorists in exchange for the release of hostages 
increases the danger that others will be taken. Its policy therefore 
rejects all demands for ransom, prisoner exchanges, and deals with 
terrorists in exchange for the release of hostages. At the same time, it 
will make every effort, including contact with representatives of the 
captors, to obtain the release of the hostages. 
The United States strongly urges American companies and private citizens 
not to pay ransom. It believes that good security practices, relatively 
modest security expenditures, and continual close cooperation with 
embassy and local authorities can lower the risk to Americans living in 
high-threat environments. 
The U.S. Government is concerned for the welfare of its citizens but 
cannot support requests that host governments violate their own laws or 
abdicate their normal law enforcement responsibilities. On the other 
hand, if the employing organization or company works closely with local 
authorities and follows U.S. policy, U.S. Foreign Service posts can 
actively pursue efforts to bring the incident to a safe conclusion. This 
includes providing reasonable administrative services and, if desired by 
the local authorities and the American organization, full participation 
in strategy sessions. Requests for U.S. Government technical assistance 
or expertise will be considered on a case-by-case basis. The full extent 
of U.S. Government participation must await an analysis of each specific 
set of circumstances. 
If a U.S. private organization or company seeks release of hostages by 
paying ransom or pressuring the host government for political 
concessions, U.S. Foreign Service posts will limit their participation 
to basic administrative services, such as facilitating contacts with 
host government officials.The host government and the U.S. private 
organization or citizen must understand that if they wish to follow a 
hostage resolution path different from that of U.S. Government policy, 
they do so without its approval or cooperation. The U.S. Government 
cannot participate in developing and implementing a ransom strategy. 
However, U.S. Foreign Service posts may maintain a discreet contact with 
the parties to keep abreast of developments. 
Under current U.S. law 18 USC 1203 (Act for the Prevention and 
Punishment of the Crime of Hostage-Taking, enacted October 1984 in 
implementation of the UN Convention on Hostage-Taking), seizure of a 
U.S. national as a hostage anywhere in the world is a crime, as is any 
hostage-taking action in which the U.S. Government is a target or the 
hostage-taker is a U.S. national. Such acts therefore are subject to 
investigation by the Federal Bureau of Investigation and to prosecution 
by U.S. authorities. Actions by private persons or entities that have 
the effect of aiding and abetting the hostage-taking, concealing 
knowledge of it from the authorities, or obstructing its investigation, 
may themselves be in violation of U.S. law. 

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