U.S. Department of State Dispatch 
Volume 6, Number 45, November 6, 1995 
Published by the Bureau of Public Affairs 
 
ARTICLES IN THIS ISSUE: 
 
1. The Last Best Chance for Peace In Bosnia-Herzegovina--President  
Clinton, Secretary Christopher, Deputy Secretary Talbott 
2. Sustaining American Leadership Through NATO--President Clinton 
3. The U.S. and China: Working Together Toward a Stable Relationship-- 
Winston Lord  
4. The Current State of U.S.-Japan Relations--Winston Lord 
 
 
 
ARTICLE 1: 
 
The Last Best Chance for Peace in Bosnia-Herzegovina 
President Clinton, Secretary Christopher, Deputy Secretary Talbott 
 
1a. The Balkan Proximity Peace Talks: A Defining Moment 
Opening Statement by President Clinton at a press conference,  
Washington, DC, October 31, 1995 
 
Good morning. I have just met with Secretary Christopher and our Bosnia  
negotiating team, led by Ambassador Holbrooke.  As you know, they are  
preparing to leave for Dayton, Ohio, in just a few moments.  There, the  
presidents of Bosnia, Croatia, and Serbia will start direct negotiations  
which we hope will lead to a peaceful, lasting settlement in Bosnia. 
 
I want to repeat today what I told President Tudjman and President  
Izetbegovic when we met in New York last week.  We have come to a  
defining moment in Bosnia.  This is the best chance we've had for peace  
since the war began.  It may be the last chance we have for a very long  
time.  Only the parties to this terrible conflict can end it.  The world  
now looks to them to turn the horror of war into the promise of peace. 
 
The United States and our partners--Russia, Germany, France, and the  
United Kingdom--must do everything in our power to support them.  That  
is what I have just instructed Secretary Christopher and our team to do  
in the days ahead in Dayton.  We will succeed only if America continues  
to lead. 
 
Already our military strength through NATO and our diplomatic  
determination have advanced the possibility of peace in Bosnia.  We  
can't stop now.  The responsibilities of leadership are real, but the  
benefits are greater.  We see them all around the world--a reduced  
nuclear threat, democracy in Haiti, peace breaking out in the Middle  
East and in Northern Ireland.  In Bosnia, as elsewhere, when the United  
States leads we can make progress.  If we don't, progress will be much  
more problematic. 
 
Making peace in Bosnia is important to America.  Making peace will end  
the terrible toll of this war--the innocent lives lost, the futures  
destroyed.  For four years, the people of Bosnia have suffered the worst  
atrocities in Europe since World War II-- mass executions, ethnic  
cleansing, concentration camps, rape and terror, starvation and disease.   
We continue to learn more and more even in the present days about the  
slaughters in Srebrenica. 
 
The best way--the only way--to stop these horrors is to make peace.   
Making peace will prevent the war from spreading.  So far, we have been  
able to contain this conflict to the former Yugoslavia.  But the Balkans  
lie at the heart of Europe, next door to several of our key NATO allies  
and to some of the new, fragile European democracies.  If the war there  
reignites, it could spread and spark a much larger conflict--the kind of  
conflict that has drawn Americans into two European wars in this  
century.  We have to end the war in Bosnia and do it now. 
 
Making peace will advance our goal of a peaceful, democratic, and  
undivided Europe--a Europe at peace, with extraordinary benefits to our  
long-term security and prosperity, a Europe at peace, with partners to  
meet the challenges of the new century--challenges that affect us here  
at home, such as terrorism and drug trafficking, organized crime, and  
the spread of weapons of mass destruction.  A peaceful, democratic,  
undivided Europe will be that kind of partner. 
 
In Dayton, our diplomats face a tremendous challenge.  There is no  
guarantee that they will succeed.  America can help the parties  
negotiate a settlement, but we cannot impose a peace.  In recent weeks,  
thanks to our mediation efforts, the parties to the war have made real  
progress.  The parties have put into effect a Bosnia-wide cease-fire.   
They have agreed to the basic principles of a settlement.  Bosnia will  
remain a single state comprised of two entities--but, I repeat, a single  
state.  There must be free elections and democratic institutions of  
government at the national and regional levels. 
 
Now, beyond this, many difficult issues remain to be resolved.  These  
include the internal boundary between the Bosnia-Croat Federation and  
the Serb Republic, the status of Sarajevo, the practical steps that need  
to be taken to separate hostile forces, and the procedures for free  
elections.  Those are just a few of the difficult issues this team will  
have to confront beginning today.  I urge the parties to negotiate  
seriously for the good of their own people.  So much is riding on  
success in Dayton, and the whole world is watching.   
 
If the parties do reach a settlement, NATO must help secure it, and the  
United States, as NATO's leader, must participate in such an effort.   
Again I say, there is no substitute for American leadership.  After so  
many years of violence and bloodshed, a credible international military  
presence in Bosnia is needed to give the parties confidence to live up  
to their own agreements and give them time to begin the long, hard work  
of rebuilding and living together again.  NATO is the one organization  
with the track record and the strength to implement a settlement. 
 
As I have said many times, the United States--the source of NATO's  
military strength--must participate.  If we don't participate in the  
implementation force, our NATO partners, understandably, would  
reconsider their own commitments.  We would undermine American  
leadership of the alliance.  We would weaken the alliance itself.  And  
the hard-won peace in Bosnia could be lost. 
 
American troops would not be deployed--I say this again--would not be  
deployed unless and until the parties reach a peace agreement.  We must  
first have a peace agreement.  That is what I would urge the American  
people and Members of Congress to focus on over the next few days.   
Troops would, if going into Bosnia, operate under NATO command, with  
clear rules of engagement and a clearly defined mission.  They would not  
be asked to keep a peace that cannot be kept, but they would make sure  
we do our part in helping peace hold. 
 
As the peace process moves forward, I will continue to consult closely  
with the Congress.  If a peace agreement is reached, I will request an  
expression of support in Congress for committing United States troops to  
a NATO implementation force.  Our foreign policy works best when we work  
together.  I want the widest possible support for peace. 
 
But it would be premature to request an expression of support now  
because we can't decide many of the details of implementation until an  
agreement is clearly shaped and defined.  Let me stress again: We are  
not there yet; there are still difficult obstacles ahead.  The focus on  
Dayton must be on securing the peace.  Without peace, there will be  
nothing for us to secure. 
 
Earlier this month in New Jersey, I had the privilege of spending time  
with His Holiness Pope John Paul II.  At the end of our meeting, the  
Pope said something to me I would like to repeat.  He said 
 
You know, I am not a young man.  I have lived through most of this  
century.  The 20th century began with a war in Sarajevo.  Mr. President,  
you must not let it end with a war in Sarajevo. 
 
All of us must do our part to hear the Pope's plea.  Our conscience as a  
nation devoted to freedom and tolerance demands it.  Our conscience as a  
nation that wants to end this mindless slaughter demands it.  Our  
enduring interest in the security and stability of Europe demands it.
This is our challenge, and I am determined to do everything I can to see  
that America meets that challenge. 
 
 
1b.  Eyes on Dayton: Bringing Peace to the Heart of Europe 
Statement by Secretary Christopher upon arrival at Wright-Patterson Air  
Force Base, Ohio, November 1, 1995. 
 
Good morning.  Today, the eyes of the world are on Dayton, Ohio.  We  
have come to the heartland of America to try to bring peace to the heart  
of Europe. 
 
On behalf of President Clinton, let me extend my thanks to the people of  
Dayton and the uniformed and civilian personnel of Wright-Patterson Air  
Force Base.  They have come together in just two short weeks to support  
this critical effort.  I know that their hopes and prayers, like those  
of many millions around the world, are with the peacemakers. 
 
I am here, at the instruction of the President, to ensure that the  
United States does everything possible to bring about a successful  
result at this conference.  Later this morning, I will meet with the  
presidents of Bosnia-Herzegovina, Croatia, and Serbia.  And then, this  
afternoon, I will open this historic peace conference. 
 
Today, we are embarking on a process that may be the last best chance  
for peace in Bosnia-Herzegovina.  I hope that, someday, Dayton, Ohio,  
will be remembered as the place where we seized this chance to stop the  
killing and to start building a better future for the people of the  
former Yugoslavia. 
 
 
1c.The Promise of This Moment Must Be Fulfilled 
Statement by Secretary Christopher at the opening of the Balkan  
Proximity Peace Talks, Wright-Patterson Air Force Base, Ohio, November  
1, 1995. 
 
Good afternoon.  President Izetbegovic, President Tudjman, President  
Milosevic, Prime Minister Bildt, Deputy Minister Ivanov, honored  
colleagues: On behalf of President Clinton and the American people, I  
welcome you to the United States for the start of these historic  
proximity peace talks.  My special thanks go to the people of Dayton,  
Ohio, and Wright-Patterson Air Force Base for their magnificent support. 
 
We have an urgent and important purpose today.  We are here to give  
Bosnia-Herzegovina a chance to be a country at peace, not a killing  
field--a place where people can sleep in their homes, walk to work, and  
worship in their churches, mosques, and synagogues without fear of  
violence or death.  We are here to prevent a wider war that would  
undermine the security of Europe at a time when the whole continent  
should finally be at peace. 
 
The talks that begin here today offer the best chance to achieve peace  
since this war began four years ago.  If we fail, the war will resume,  
and future generations will surely hold us accountable for the  
consequences that would follow.  The lights so recently lit in Sarajevo  
would once again be extinguished.  Death and starvation would once again  
spread across the Balkans, threatening to engulf the region and possibly  
Europe itself. 
 
To the three presidents, I say that it is within your power to chart a  
better future for the people of the former Yugoslavia.  The United  
States, the European Union, Russia, and others in the international  
community will help you succeed.  But while the world can and will help  
you make peace, only you can ensure that this process will succeed.  And  
you must begin today.  As President Clinton said yesterday, the "whole  
world is watching." We must persevere until an agreement is reached and  
the promise of this hopeful moment is fulfilled. 
 
There are some who say these talks can only end in failure.  They have  
written off the Balkans as a region cursed by its past to a future of  
endless hatred and retribution.  I have heard those arguments before--in  
the Middle East, where Arabs and Israelis are now ending an armed  
conflict that has lasted 10 times as long as the one in the former  
Yugoslavia.  I have heard the same arguments applied to Northern  
Ireland, where a centuries-old conflict may be nearing resolution.  I  
have heard them applied to South Africa, where former enemies have  
abandoned apartheid to build a multi-ethnic democracy.  I know that  
negotiations can work when people have the courage and patience to make  
them work. 
 
We have reached this moment because the international community took  
firm measures to enforce its mandate in Bosnia-Herzegovina and because,  
for the first time, all sides have agreed to a cease-fire, to  
constitutional principles, and to a common set of institutions for a  
single Bosnian state.  We must all resolve to stay on the path that  
brought us here.  For each of us, the stakes are enormous. 
 
For the people of Bosnia-Herzegovina, whatever their heritage, the  
success of our efforts can mean an end to the killing and the beginning  
of hope for a normal life.  The people of Bosnia deserve a chance to  
live as they once did--in harmony with their neighbors in a country at  
peace. 
 
For the nations at war, the stakes are clear as well.  They have a  
choice between two futures--a future of peace and integration or a  
future of violence, poverty, and isolation from Europe and the world.   
We must always remember:  As this region is engulfed in flames and  
violence, a new Europe is being built around it.  Some of the fastest- 
growing economies in Europe today are found in this region.  The new  
democracies of Central Europe are resolving disputes with their  
neighbors and earning the right to be considered for membership in NATO  
and the European Union. 
 
When the Cold War ended, nobody imagined that once-vibrant cities such  
as Sarajevo, Mostar, and Vukovar would be set so tragically apart from  
Europe by the sight of tanks and the sound of gunfire.  The door to  
Europe and the West is still open to the nations of the region--if you  
end this war peacefully and respect the human rights of your people.   
You alone can choose your destiny. 
 
The United States and the inter- national community also have a vital  
stake in sustaining progress toward peace.  If war in the Balkans is  
reignited, it could spark a wider conflict like those that drew American  
soldiers in huge numbers into two European wars in this century.  If  
this conflict continues--and certainly if it spreads--it would  
jeopardize our efforts to promote stability and security in Europe as a  
whole.  It would threaten the viability of NATO, which has been the  
bedrock of European security for 50 years.  If the conflict continues,  
so would the worst atrocities Europe has seen since World War II.  As  
President Clinton has said, the "only way to stop these horrors is to  
make peace." We must and we will stay engaged to advance our interests  
and to uphold our values. 
 
The United States and its Contact Group partners will make every effort  
to help you reach an agreement that will settle outstanding questions  
over territory, constitutional arrangements, elections, and the return  
of refugees.  We have worked hard to create the right atmosphere for  
progress at this site.  And I know that Ambassador Holbrooke, Prime  
Minister Bildt, and Deputy Minister Ivanov will continue to provide the  
most effective and evenhanded mediation that is possible. 
 
If peace is to endure, we must do more than separate the military  
forces.  For peace to last, several key conditions must be met: 
 
First, Bosnia-Herzegovina must continue as a single state within its  
internationally recognized borders and with a single international  
personality.  The principles to which the parties have agreed provide a  
firm foundation for achieving that goal. 
 
Second, the settlement must take into account the special history and  
significance of Sarajevo and its environs.  Sarajevo was the city where  
the first of this century's two bloody world wars began.  But 10 years  
ago, it was also the city where the world came together to celebrate the  
Olympics--a city of many communities living, working, and prospering  
together in peace.  It must have a chance to become that wonderful city  
again.  It deserves that chance. 
 
Third, any agreement must guarantee that the human rights of all the  
citizens of the region are respected.  This terrible war has uprooted  
people from every ethnic community.  All must be able to return home or  
receive just compensation.  And it is vital that all those who have  
committed atrocities are held accountable.  Full investigation of all  
such charges, regardless of where they occurred, must be undertaken  
swiftly and firmly, and responsibility must be assigned. 
 
Finally, we also believe that these talks must establish a process of  
normalizing the status of Eastern Slavonia, as a part of Croatia and in  
a peaceful manner. 
 
If and when a formal agreement is reached--but only then--the United  
States and its partners, including Russia, will provide military  
personnel to help implement the peace.  NATO is the only organization  
with the resources and capacity to perform this task.  It already has  
begun planning for a robust peace implementation force. 
 
For each nation participating in the implementation force, deploying  
soldiers is a difficult and solemn choice.  The American people and the  
United States Congress are asking serious and appropriate questions  
about U.S. participation in the Implementation Force.  They will watch  
very closely for signs that the parties are finally ready to lay down  
their arms and begin a lasting, stable peace. 
 
The United States will not send troops where there is no peace to keep.   
Before we deploy, the parties must reach a peace agreement.  They must  
be prepared to stick to it.  They must use the time when our troops are  
on the ground to consolidate it.  And the Implementation Force must have  
a clear exit strategy. 
 
The international community is also determined to help the people of the  
region rebuild their institutions, their economies, and their lives.   
The Organization for Security and Cooperation in Europe will help  
organize and supervise elections in Bosnia-Herzegovina-- which ought to  
come at the earliest possible date--to ensure that they are free and  
fair.  Under the leadership of the EU, a major effort to support the  
reconstruction of Bosnia-Herzegovina will be launched.  Lasting security  
will depend on bringing the region's economy back to life. 
 
In other words, once an agreement is signed, a multi-dimensional effort  
will begin, to help ensure its success.  It will be backed by soldiers,  
diplomats, bankers, and engineers; by governments; and by private  
organizations from countries around the world. 
 
We know that Bosnia-Herzegovina will not easily recover from four years  
of ethnic cleansing and destruction.  Nothing we do will erase our  
memory of the violence or bring back its victims.  But if we succeed, we  
can make it possible for the sons and daughters of those who have died  
to live without fear.  If we succeed, we can ensure that the sons and  
daughters of America and Europe do not have to fight again in a larger,  
more terrible war.  If we succeed, we may yet realize our vision of a  
Europe at peace, united, prosperous, and free.  We must rise to the  
challenge.   
 
This will be a long journey.  But it all starts here.  Let us get to  
work, and let us reaffirm our pledge to make it work. 
 
 
1d.  Strengthening American Security Through World Leadership:  Bosnia  
and Beyond 
Remarks by Deputy Secretary Talbott at State Department Town Meeting,  
Washington, DC, November 1, 1995.  
 
On behalf of Secretary Christopher, let me welcome all of you to the  
Dean Acheson Auditorium.  Let me also thank Chic Dambach and Harry  
Blaney of the Coalition for American Leadership Abroad for organizing  
this event.  I like the name of that organization for reasons that I'll  
come to in a moment. 
 
Over the past nine months, I've attended a number of the Town Hall  
Meetings that Foreign Policy Associations and World Affairs Councils  
have sponsored or supported--in Denver, Dayton, New York, Cleveland,  
Wilmington, Milwaukee, and here in Washington.  I have been particularly  
impressed by the ability of these events to bring together diverse  
constituencies: ethnic and religious groups; labor unions and business  
organizations; and civic action groups ranging from the Girl Scouts to  
the Grey Panthers, from the Sierra Club to the Salvation Army.   
 
I urge all of you to expand these grass-roots efforts.  I can't think of  
a better way to increase the quantity and the quality of the American  
people's interest in international affairs.  And I can't think of a more  
important time for meetings like this one--all across America.   
 
I say that because today, 20 blocks from here, up Constitution Avenue,  
there is a historic national debate underway on the floor of the U.S.  
Congress.  Its outcome will effect the future of America's role in the  
world.  The Congress is considering legislation that would slash the  
foreign affairs budget of our government by almost 20% from last year's  
levels, and that's on top of a more than 40% decline in real dollars for  
our foreign affairs budget over the past decade.  
 
The Senate has proposed cutting more than $600 million--a whopping 45%-- 
from our country's annual contributions to international organizations,  
including the United Nations, the World Trade Organization, and the  
International Atomic Energy Agency.  Other proposed Senate cuts would  
slash the State Department's operating budget, forcing us to close  
dozens of embassies and consulates around the world.   
 
Secretary Christopher has expressed his deep concern about the impact of  
such cuts on the ability of this Department to serve you when you travel  
abroad; or to make it easier for American businesses to engage  
competitively and profitably in international trade and investment; or  
to protect our cities against international crime, drug-trafficking, and  
terrorism.   
 
We are also facing the reluctance of some in Congress to ratify START II  
and a raft of other important treaties, as well as a refusal to act on a  
number of important ambassadorial nominations.  Why is all this  
happening? The answer, I'm sorry to say, is that it is fashionable in  
some influential quarters to flirt with ideas that are isolationist in  
their potential consequence, if not in their actual intent.  And why is  
that?  The reason, I believe, is that with the end of the Cold War,  
there's no longer a single, clearly identified, global villain and,  
therefore, no longer a single, simple, bumper-sticker slogan to explain  
America's role in the world.  Instead, the world is more complex and,  
therefore, so is the case for American engagement and leadership.   
 
There's a resurgence of the view that we can no longer afford to bear  
the burden of world leadership--or, to put it differently, that we can  
now afford to go it alone in this new, more complicated world of ours.   
Some legislators have even suggested diverting the money that we now  
spend on foreign aid to the construction of a giant fence along our  
borders.  Ponder the symbolism of that misguided sense of priorities:  
The instinct here is to wall us in and wall the world out; the instinct  
is to build barriers to ensure that what happens elsewhere--far away or  
right next door--does not affect us here in the United States. 
 
This view is anathema to President Clinton and his Administration.  We  
believe that if the United States leads, the world will be a safer place  
for Americans to live, work, travel, and trade.  We believe that we face  
historic opportunities not just to combat threats and enemies from  
abroad but also to build a world that promotes our interests and  
reflects our ideals. 
 
The flip side of that conviction is just as important: If we do not  
provide international leadership, then there is no other country on  
earth that can or will step in and lead in our place as a constructive,  
positive influence.  America is not just another country; we are a  
global power with global interests.  If we do not lead the way in  
promoting freedom, peace, and prosperity on a global scale, no one else  
will.   
 
So the American Congress, and the American people, now face some  
fundamental choices.  At issue is whether we are prepared to do what it  
takes--and that means spending what it takes--to have a foreign policy  
worthy of our aspirations, our opportunities, and our interests as a  
world leader--indeed, as the world leader.    
 
Let me now zero in on a specific region where the choice between  
engagement and isolation, between leadership and retreat, is  
particularly stark--and particularly urgent: that is, in the former  
Yugoslavia.   
 
I want to use the remainder of my remarks to address the question, much  
in debate, of why we must lead both in the negotiation of a Bosnian  
peace settlement and in the implementation of an agreement. 
 
Bosnia matters to everyone here today--and to everyone in this country;  
it matters because Europe matters to America.  This is not the first  
time that we've sent our soldiers and diplomats across the Atlantic in a  
time of crisis, and it probably will not be the last.  Three times  
before in this century, we Americans have joined our European allies in  
pursuit of a common goal--twice in hot wars, once in a cold one.  Each  
time we did so for reasons that reflected not just our generosity and  
our sense of obligation to others but that also reflected a hard-headed,  
forward-looking calculation of our own needs and safety.  That same  
combination of international responsibility and national self-interest  
underlies our involvement in Central Europe and the Balkans today. 
 
We have made significant and promising strides in meeting several  
challenges there.  To cite just one example: The interim accord reached  
on September 13 by the governments of Macedonia and Greece was an  
important step toward reducing suspicions and normalizing relations  
between those two countries.  But that encouraging development--indeed,  
peace throughout the area--is still threatened by the simmering conflict  
in the former Yugoslavia.  If the fighting in Bosnia resumes, it could  
lead to an unraveling of all the progress we've seen and helped bring  
about elsewhere in the region.  It could plunge the entire area into  
war.   
 
That clear and present danger has about it an aspect of deja vu.  The  
worst of the 20th century might be said to have begun with a series of  
bad-news stories datelined Sarajevo more than 80 years ago: the Balkan  
wars of 1912 and 1913, followed by the assassination of Archduke Franz  
Ferdinand in 1914 and all that followed.  Now there is a very real  
danger that we will inadvertently close out the century with gruesome  
symmetry, by permitting a third Balkan war.  Such a conflagration could  
all too easily spread beyond the Balkans.   
 
History and geography have conspired to make Bosnia the most explosive  
powder keg on the continent of Europe.  The Drina River, which flows  
through the now-famous town of Gorazde and along the border between  
Bosnia and Serbia, traces one of the world's most treacherous fault  
lines.  The three communities that live there--Serbs, Croats, and  
Muslims--bear the legacies of two empires, three religions, and many  
cultures.   
 
That means if the warfare among them breaks out anew and then continues  
unabated, it might extend to several points of the compass, drawing in  
other nations to the north, south, and east.  Albania could intervene to  
protect the ethnic Albanians who live in the southern Serbian province  
of Kosovo.  Warfare there could unleash a massive flow of refugees into  
Macedonia, destabilizing that fragile country and, potentially, drawing  
in, on opposite sides, Greece and Turkey--two NATO allies that are also  
regional rivals.  A widening of the war might also see Hungary tempted  
to come to the rescue of ethnic Hungarians in the Vojvodina region of  
northern Serbia.   
 
Bosnia matters outside of Europe as well.  The entire Islamic world,  
from Morocco to Indonesia, is watching to see how events unfold.   
Muslims everywhere are waiting to see whether their co-religionists in  
Bosnia will be accorded the same rights and protections as other  
Europeans.  The answer to that question could have an impact on the  
future of moderate, pro-Western leaders such as Prime Minister Ciller of  
Turkey and Prime Minister Bhutto of Pakistan.  Other less-friendly  
forces in the Middle East and Persian Gulf see the Balkans as a target  
of opportunity.  Iran's repeated offer to send "peacemakers" to Bosnia  
is hardly motivated by altruism.   
 
An ongoing conflict in the Balkans would jeopardize our efforts to  
promote stability and security in Europe as a whole; it would undermine  
our ability to consolidate the gains made possible by the triumph of  
democracy and market economics at the end of the Cold War.  If the  
fighting in Yugoslavia resumes--and if it escalates and spreads--it  
would put increasing strain on relations between the United States and  
Russia.  A third Balkan war will undermine both of our overarching  
objectives in the region.  Those two objectives are, first, to promote  
integration between East and West and, simultaneously, to contain and  
deter the forces of disintegration that have been unleashed by the  
collapse of communism in the East. 
 
A continuation of the war also would threaten the viability, even the  
survival, of the North Atlantic Treaty Organization.  NATO is the anchor  
of American engagement in Europe and the linchpin of transatlantic  
security.  We and most of the people of Europe see NATO as the keystone  
of the architecture of European security.  As such, NATO must be as  
successful in dealing with the new security challenges in Europe as it  
was in its nearly half-century-long mission of deterring Soviet  
aggression.   
 
The alliance can no more ignore the conflagration in the Balkans than an  
architect can ignore a fire raging in one wing of a building on which he  
is working.  The United States is the leader of the alliance; therefore,  
the United States must lead in Bosnia.   Merely hoping that the fire  
there will burn itself out or that someone else will put it out is not  
just wishful thinking--it would be, if it were the basis of policy  
extremely irresponsible and deeply harmful to our interests.   
 
Such an attitude of standing aside and passing the buck would put us in  
triple jeopardy: It would poison our bilateral relations with Britain,  
France, and other European states that have troops on the ground in  
Bosnia; it would discredit both the alliance and our leadership of it;  
and it would undermine the foundation of a peaceful post-Cold War Europe  
in which we have much of our own security and prosperity invested. 
 
Leadership cannot be a sometime thing, and it is not cost-free.  If we  
want to continue to derive the benefits of our unique position--and they  
are legion--we must share with those who follow our lead the costs and  
risks of engagement--and sometimes that means of bold action. 
 
As we ponder those costs and risks, let us also consider those  
associated with inaction, particularly inaction or inadequate action in  
the face of systematic atrocities: mass rape, concentration camps,  
massacres, forced deportation of entire villages.   
 
How many of us, four years ago, had ever heard of Srebrenica? Today, it  
is a household word.  It is not just a place name, it is a synonym for  
man's inhumanity to man.  The Yugoslavs may not have invented the phrase  
"ethnic cleansing," but they have inscribed it into the glossary of this  
century--right there next to "final solution"--as an administrative  
euphemism for genocide.   
 
One of the great strengths of our country's foreign policy is that when  
it is at its best, it is rooted as solidly in American idealism as it is  
in American pragmatism.  The world continues to look to us for  
leadership not just because of our economic and military might but also  
because, despite our initial reluctance to undertake what George  
Washington described as "foreign entanglements," we as a people have at  
crucial moments been willing to do the right thing.   
 
Doing the right thing in the Balkans has been especially difficult.   
There were, for a long time, severe limits on what we--the United States  
and the international community--could do to make peace until the  
parties themselves were prepared to do so.  But there is no question  
what doing the right thing means today, and today is surely a crucial  
moment.  It means using a combination of diplomatic skill and the  
credible threat of force to keep the parties at the negotiating table.   
It means deterring them from returning to the battlefield and to the  
killing fields.  It means, in short, putting an end to genocide and, to  
the maximum extent possible, bringing to justice the perpetrators of  
crimes against humanity.  By the way--this, I believe, is a very  
important point--the unacceptability of "ethnic cleansing" in the  
Balkans, by that or any other name, is not just an issue of  
moralpolitik, it is also an issue of realpolitik.   
 
The concept of ethnic cleansing captures the practical, concrete essence  
of the catastrophe that has befallen that troubled and troublesome  
neighborhood of the global village.  Too many leaders of the former  
Yugoslav republics have tried to define statehood and citizenship and  
international boundaries in terms of ethnic homogeneity-- ethnic purity- 
-and thus have sought to "purify" or cleanse the state of "impure"  
elements.  Hence the dream of Greater Serbia, which is a nightmare for  
all non-Serbs, whether they live in Serbia proper or amidst ethnic Serbs  
in neighboring states.  Equally noxious is the dream of an ethnically  
"pure" Croatia that would deny the legitimate rights of Muslims and  
ethnic Serbs.   
 
I stress this point because there is more at stake here than just the  
Balkans.  If aggressive, exclusionary nationalism triumphs in the former  
Yugoslavia, it would be a disaster not only in that region but ominous  
for the former Soviet empire, where similar dark forces of what might be  
called Balkanization are vying with those of freedom to fill the vacuum  
left by the collapse of communist totalitarianism. 
 
If there is to be a post-Cold War peace in Europe--and not a cold peace  
but a real one--it must be based on the principle of multi-ethnic,  
pluralistic democracy.  Since the United States is one of the first and  
certainly one of the greatest examples of that principle, we have a  
stake in seeing that it ultimately prevails in Europe and elsewhere. 
 
So, ladies and gentlemen, for all these reasons, ending the war in  
Bosnia is unquestionably in the national interest of the United States.   
We have been working toward that objective since the beginning of the  
Administration, but only recently have our efforts shown real promise.   
 
President Clinton has long pressed for the vigorous use of NATO airpower  
as a necessary component of peace-making.  The fall of Srebrenica in  
early July was a turning point.  It galvanized the willingness of the  
international community to do more to protect the UN-designated safe  
areas and punish continuing Serb aggression.  The London conference in  
late July streamlined the mechanism for backing diplomacy with real  
force: no more "dual key," no more pin-prick air-strikes.   
 
Seizing the moment, President Clinton undertook a new diplomatic  
initiative.  First Tony Lake, then Dick Holbrooke worked the diplomatic  
front.  Meanwhile, U.S. and NATO warplanes, no longer grounded by the  
dual key, reinforced more emphatically than before the message that the  
time had come to stop the killing and start talking about the terms for  
a lasting political settlement. 
 
Since then, Dick Holbrooke and his team have made real progress.  They  
have worked in close cooperation with the other members of the Contact  
Group--Britain, France, Germany, and Russia--and with the support of  
other troop-contributing nations.   
 
In early September, the foreign ministers of Croatia, Bosnia, and Serbia  
agreed on a set of basic principles for a political settlement.  Most  
significantly, each of the parties has accepted the continuation of  
Bosnia-Herzegovina as a single, multi-ethnic state within its current,  
internationally recognized borders.  Within that state, the parties have  
agreed that there will be two constituent entities.  They have also  
agreed to work out mechanisms to ensure respect and equality for all the  
citizens of Bosnia. 
 
Today, the negotiations move up to the next level.  Secretary  
Christopher just returned on Monday night from the Middle East--another  
region that American leadership is helping to move from war to peace.   
Five hours from now, he will welcome the Presidents of Bosnia, Croatia,  
and Serbia to Wright-Patterson Air Force Base in Dayton, Ohio.   
Representatives of the other Contact Group countries, along with the  
envoy of the European Union, will be there, too.   
 
Secretary Christopher will present the parties with a draft peace  
agreement as well as with detailed constitutional and territorial  
proposals for a future Bosnian state.  The package includes a  
separation-of-forces agreement, a proposal for national elections, and  
an agreement on the return of refugees.  Obviously, there is still a  
long way to go.   
 
If--and it's still a big "if"--the Dayton talks are successful and the  
three heads of state agree on a peace settlement, then the tough work of  
implementation will begin .  There, too, the United States must lead. 
 
After four years of brutal war, there is, to put it mildly, little trust  
left among the Muslim, Croat, and Serb communities in Bosnia.  It will  
require an armed international presence to give the parties the  
confidence that they need to carry out the settlement.  The mission of  
the international force will include verifying and, if necessary,  
enforcing compliance with the commitments that the parties will have  
undertaken in whatever agreement emerges from the Dayton talks. 
 
There is only one organization that can give the parties the necessary  
assurance to implement a peace, and that is NATO.  That is why President  
Clinton, President Chirac, Prime Minister Major, and other leaders have  
agreed that if the parties choose the path of peace, then the United  
States, France, and the United Kingdom will participate with their  
allies in a NATO-led implementation force--IFOR. 
 
Let me stress, as President Clinton has, that IFOR will be deployed only  
if the parties agree to a real peace.  Let me also note that although  
this will be a NATO-led operation, we are also seeking to find ways for  
other nations that are not members of the alliance to participate as  
well.  Poland, Hungary, the Czech and Slovak Republics, Ukraine,  
Pakistan, and Bangladesh have expressed an interest in contributing.   
 
On Monday of last week, Presidents Clinton and Yeltsin reached a  
landmark agreement: Russian and U.S. forces will participate together in  
the implementation of a Bosnian peace.  Last Friday, Bill Perry and his  
Russian counterpart, Pavel Grachev, hammered out many of the details.   
Russia and the United States will each contribute several thousand  
soldiers to a special operations unit under the command of U.S. Army  
Gen. George Joulwan.  That unit will provide vital engineering,  
reconstruction, road-building, bridge repair, mine-clearing, and heavy- 
lift services.  It represents the most concrete example of U.S.-Russian  
military cooperation in the post-Cold War era.  It is welcome in its own  
right and also as a precedent for the future.    
 
In conclusion, I would like to return to the issue I put before you at  
the outset of these remarks: We are, as I said earlier, now in the midst  
of a historic debate about America's role in the world.  Bosnia is one  
test of where we stand, but there will be many others in the months and  
years to come.   
 
President Clinton is convinced that the United States has the heart, the  
brains, and the muscle to exercise international leadership and to do so  
on behalf of our interests and our values.  But whether the President's  
views win out in the end against those who advocate retreat will depend  
in no small measure on how these questions are debated beyond the floor  
of the Congress and beyond the Washington Beltway.  It will depend on  
how they are addressed in Town Hall Meetings and gatherings such as this  
one across America.  Which is to say, my colleagues from whom you will  
be hearing today and I are all counting on you and the groups  
represented here to make sure that we, as a nation, ask the right  
questions--and that we come up with the right answers. 
 
(###) 
 
 
 
ARTICLE 2: 
 
Sustaining American Leadership Through NATO 
President Clinton 
Remarks at the Harry S Truman Library Institute, Washington, DC, October  
25, 1995 (introductory remarks deleted). 
 
Because of the meetings I have just had at the United Nations and the  
work that we are doing 50 years after its beginning, I thought it might  
be worth sharing with you a few thoughts about Harry Truman's legacy and  
what it means for today and tomorrow. 
 
Every American President, including my two distinguished predecessors  
who spoke here tonight, has followed in Harry Truman's footsteps in  
carrying forward America's leadership in the world.  This tradition of  
sustained American leadership and involvement has been so successful and  
so consistently maintained by Democratic and Republican presidents alike  
that some of us forget what a bold departure it was. 
 
Just before I came here tonight, I was with Prime Minister Rabin at  
another meeting talking about peace in the Middle East.  Harry Truman  
was the first world leader to recognize the State of Israel.  His  
commitment to giving us the capacity to lead and work for peace started  
a single silver thread that runs right through the terrific  
accomplishments of President Carter and all of the things which have  
been done since.  But we forget what a bold departure it was.  The  
Truman Doctrine, the Marshall Plan, the NATO alliance--each was a step  
unlike anything before. 
 
Indeed, NATO, which President Truman rightly considered one of his  
finest achievements, was our very  first peacetime alliance ever.  We   
never had a military alliance in peacetime before NATO.  This decisive  
change grew out of the belief that was shared by General Marshall,  
Senator Vandenberg, Dean Acheson, and so many others that we could never  
again remain apart from the world.  We had, after all, isolated  
ourselves after the First World War, and because of that, we had to  
fight another.  Harry Truman was determined that that would not happen  
again.  He had to face, almost immediately, the chilling prospect of the  
Cold War and to make all of the decisions which set in motion the  
policies which ultimately enabled freedom to prevail in that war. 
 
He had to do it with a nation that was weary from war and weary from  
engagement, where people were longing to just focus on the little  
everyday things of life that mean the most to most of us.  But because  
he did it, we just celebrated 50 years of the United Nations, with no  
more world war, no nuclear device ever dropped again, and now we see the  
movement for peace and freedom and democracy all over the world. 
 
What are we going to do to build on his achievement? What do we have to  
do to secure a peace for the next century? Freedom's new gains, I  
believe, make it possible for us to help build a Europe that is  
democratic, that is peaceful, and that, for the first time since nation  
states appeared on that continent, is undivided. 
 
We can build a Europe committed to freedom, democracy, and prosperity;  
genuinely secure throughout the continent; and aligned with other like- 
minded people throughout the world for the first time ever.  I am  
committed to doing what we can to build that kind of Europe based on  
three principles:  
 
First, to support democracy in Europe's newly free nations.   
 
Second, to work to increase economic vitality in Europe with America and  
other partners through open markets and expanded trade, and to help the  
former communist countries complete their transition to market  
economies--a move that will strengthen democracy there and help block  
the advance of ultranationalism and ethnic hatred. 
 
Finally, we are building a transatlantic community of tomorrow by  
deepening, not withdrawing, from our security cooperation.  Today, with  
the overarching threat of communism gone, the faces of hatred and  
intolerance are still there with different faces--ethnic and religious  
conflicts, organized crime and drug dealing, state-sponsored terrorism,  
and the spread of weapons of mass destruction.  America cannot insulate  
itself from these threats any more than it could insulate itself after  
World War II.  Indeed, we have fewer options to do so because the world  
is becoming a global village. 
 
By joining with our allies and embracing others who share our values, we  
cannot insulate ourselves from these threats, but we can surely create a  
better defense.  NATO's success gives us proof of what we can do when we  
work together.  NATO binds the Western democracies in a common purpose  
with shared values.  I strongly believe that NATO does not depend upon  
an ever-present enemy to maintain its unity or its usefulness.  The  
alliance strengthens all of its members from within and defends them  
from threats without.  If you just compare the stability, the economic  
strength, the harmony in Western Europe today with the conditions that  
existed just a few decades ago--in President Truman's time--you can see  
that.  The alliance has brought former foes together; strengthened  
democracy; and, along with the Marshall Plan, it sheltered fragile  
economies and got them going again.  It gave countries confidence to  
look past their ancient hatreds.  It gave them the safety to sow the  
prosperity they enjoy today. 
 
By establishing NATO, of course, America also did something even more  
important from our point of view.  We established the security that we  
re-quire to flourish and to grow.  Now, we have to build upon President  
Truman's accomplishments.  He said when he announced the Truman  
Doctrine:  
 
The world is not static, the status quo is not sacred.  We have to adapt  
NATO, and I believe we should open NATO's doors to new members. 
 
The end of the Cold War cannot mean the end of NATO, and it cannot mean  
a NATO frozen in the past, because there is no other cornerstone for an  
integrated, secure, and stable Europe for the future. 
 
NATO's success has involved promoting security interests, advancing  
values, and supporting democracy and economic opportunity.  We literally  
have created a community of shared values and shared interests, as well  
as an alliance for the common defense.  Now, the new democracies of  
Central and Eastern Europe and the former Soviet Union want to be a part  
of enlarging the circle of common purpose, and in so doing, increasing  
our own security.  That is why we established the Partnership for Peace- 
-PfP.  In less than two years, we have brought 26 nations into a program  
to create confidence and friendship--former enemies now joining in field  
exercises throughout the year, building bonds together instead of battle  
plans against one another.  This has been good for us and good for  
Europe. 
 
Now those nations in the region that maintain their democracies and  
continue to promote economic reform and behave responsibly should be  
able to become members of NATO.  That will give them the confidence to  
consolidate their freedom, build their economies, and to make us more  
secure. 
 
NATO has completed a study of how it should bring on new members.  We  
intend to move carefully, deliberately, and openly, and share the  
conclusions of that study with all of those who have joined us in the  
PfP.  But we have to move to the next phase in a steady, careful way, to  
consider who the new members should be and when they would be invited to  
join the alliance.  Throughout this, I will engage with the Congress and  
the American people and seek the kind of bipartisan partnership that  
made Harry Truman's important work possible. 
 
Let me emphasize one important point: Bringing new members into this  
alliance will enhance, not undermine, the security of everyone in  
Europe, including Russia, Ukraine, and the other former Soviet  
Republics.  We have assured Russia that NATO is as it has always been--a  
defensive alliance.  Extending the zone of security and democracy in  
Europe can help prevent new conflicts that have been building up, in  
many cases, for centuries.  For Russia and all of her neighbors, this is  
a better path than the alternative. 
 
I also want you to know, as you saw from the laughing photograph with  
President Yeltsin, we are still building a positive relationship with  
Russia.  Those of you familiar with the history of that great country  
know that its heroic effort to become a confident and stable democracy  
is one of the most significant developments of our time. 
 
One of our former colleagues, President Nixon, who is no longer with us,  
wrote me a letter about Russia a month to the day before he died--which  
I still have and re-read from time to time--emphasizing the  
extraordinary historic significance of Russia's courageous reach for  
democracy and liberty. 
 
Russia, too, has a contribution to make in the new Europe, and we have  
offered them a strong alliance with NATO and working through the PfP.   
Let me just tell you, that partnership is going to deepen.  Tomorrow,  
U.S. and Russian armed forces will begin a peacekeeping exercise  
together at Fort Riley, Kansas, under the auspices of the PfP.  We want  
our relationships with them to be daily, comprehensive, and routine.  We  
want to go every step of the way to build confidence and security and a  
democratic Russia.  But we do not think NATO's opening to the east and  
our relationship with Russia are mutually exclusive choices. 
 
I want to emphasize one other thing.  NATO is at work for us right now,  
as we speak, demonstrating in Bosnia how vital it is to securing the  
peace in Europe.  The efforts of our negotiators, the military changes  
on the ground, and NATO's air strikes have brought these parties to the  
negotiating table and to an agreement on the basic principles of a  
settlement and a nationwide cease-fire. 
 
Next week, in a historic meeting, the presidents of Bosnia, Croatia, and  
Serbia will travel to Dayton, Ohio, to resolve the remaining issues.   
The political settlement that is taking shape will preserve Bosnia as a  
single state and provide for a fair territorial com-promise.  It will  
commit the parties to hold free elections, establish democratic  
institutions, and respect human rights. 
 
There are many people who have played a role in bringing this process  
this far.  I want to thank one of them tonight for his extraordinary  
efforts--President Carter.  Thank you so much for what you have done. 
 
I want to say to all of you, there is no guarantee of peace, but it is  
possible--in large measure, because of NATO.  Let me ask you one final  
thing.  If the peace is negotiated, NATO must be prepared to help  
implement the agreement.  There will be no peace without an  
international military presence in Bosnia--a presence that must be  
credible.  NATO is indispensable to this to give the parties the  
reassurance they need to make peace. 
 
The question I have is this: If Harry Truman were President, would he  
expect the United States as the leader of NATO to be a part of the force  
in Bosnia? I think you know what the answer is--the answer is yes.  And  
so must we answer.   
 
My fellow Americans, make no mistake about this--if we are not there,  
many of our partners will reconsider their commitments.  If we are not  
there, America will sacrifice its leadership in NATO.  If we are not  
there, we will be making a sad mistake.  I am determined that we will be  
part of this NATO mission. 
 
I am working with Congress, engaging in an important dialogue.  I met  
not very long ago with a bipartisan group of leaders, and I want to say  
a special word of thanks to Senator Nunn for his remarkable contribution  
to that meeting and for his remarkable contributions to our country,  
which we will all miss when he is gone. 
 
My fellow Americans, if you want four years of bloody conflict to end,  
you have to support the United States being involved with NATO in  
enforcing the peace agreement.  We have not sent troops into battle.  We  
have not taken sides.  We have not been a part of the UNPROFOR mission  
on the ground.  But we must do this if you want your country and NATO to  
be as effective in our time as it was in President Truman's vision and  
in his time.   
 
Let me also say again, if we do not do this, the consequences for our  
country could be grave indeed.  This is the most serious conflict on the  
continent of Europe since World War II.  NATO must help end it.  If we  
fail to secure this peace, how can we achieve an integrated, peaceful,  
and united Europe? If we fail to secure this peace, our success around  
the world and much of our success at home, which has come from American  
leadership, will be weakened.  If we fail to secure this peace, the  
conflict in the former Yugoslavia could spread to other nations and  
involve our sons and daughters in a conflict in Europe. 
 
Let me say in closing that just a few days ago, we were fortunate to  
have a visit in the United States from His Holiness Pope John Paul II.   
I spent about a half an hour with him alone, and he started into the  
most unusual conversation I have ever had with him or, in some ways,  
with any other world leader.  He said, "I want to talk about the world,  
and I want to know what you think." I said, "The world?" He said, "Yes,  
the whole deal." I said, "Well, where shall I start?" He said, "Start in  
Bosnia." So we talked about Bosnia.  Then we went around the world.  At  
the end he said,  
 
You know, I am not a young man.  I have lived through most of this  
century.  The 20th century began with a war in Sarajevo.  Mr. President,  
you must not let it end with a war in Sarajevo.  
 
I ask you to think of this, my fellow Americans, that first war in  
Sarajevo--that was Harry Truman's war.  That is the war that he joined  
even though he was old enough and his eyesight was bad enough for him to  
get out of it.  That is the war where he showed people the kind of  
leadership capacity he had.  Our failures after that war led Franklin  
Roosevelt into another war and led Harry Truman to end that war with a  
set of difficult, painful decisions--including dropping the atomic bomb- 
-and led him to determine that it would never happen again.  That is why  
he did all the things we celebrate tonight.  If he were here he would  
say, "If you really want to honor me, prepare for the future as I did."  
 
(###) 
 
 
 
ARTICLE 3: 
 
The U.S. and China: Working Together Toward a Stable Relationship 
Winston Lord, Assistant Secretary for East Asian and Pacific Affairs 
 
Remarks at a press briefing following President Clinton's meeting with  
Chinese President Jiang Zemin, New York City, October 24, 1995. 
 
I think you have to see this meeting in the context of an overall  
process that is going forward.  In particular, in recent months--since  
August in Brunei when we had some turbulence in our relationship, we've  
been moving forward ever since.  I think today was another significant  
step forward, indeed, as Mike has pointed out.  The presidents will be  
seeing each other again in Osaka. 
 
From the very beginning, both presidents sought to focus on the  
framework for our relationship--the long-term importance of strong ties  
between the two countries not only for our two peoples but also for the  
region and for the world.  President Clinton certainly sketched out at  
the beginning--in the small meeting--his vision of this relationship and  
the potential   for it, but he also recognizes the differences.  His  
feeling is that if we can establish a broad framework and have an honest  
dialogue, we can manage those differences more effectively. 
 
President Jiang Zemin reciprocated--I will let the Chinese essentially  
speak for themselves--but it is clear that he underlined China's strong  
interest in a stable and healthy relationship with the United States as  
we head toward the next century. 
 
As a result of this very productive meeting--and as Mike said, the  
President thought it was the best of  the three they have had so far-- 
it's fair to say not only did they sketch the strategic vision of the  
relationship but they have established some new agenda items.  There was  
particular discussion of fighting international crime, narcotics flows,  
and international drug cartels and cooperating in inter-national law  
enforcement.  There was also agreement to pursue high-level dialogue on  
the environment, sustainable development, and energy. 
 
Other dialogues also will be pursued on strategic and regional issues,  
and we are working, therefore, to broaden the agenda even further.   
Meanwhile, we are also in the process of resuming more traditional  
dialogues which are also very important, and we expect to make progress  
on those as well. 
 
In this regard, the two presidents had a considered discussion on  
economic issues and the need to open up China's market, on China's  
interest in acceding to the WTO, and on the need to enforce intellectual  
property rights.  The President expressed our well-known concerns on  
human rights generally and the need for dialogue in that area, and we  
have, of course, referred to specific cases, as well as the issue of  
Tibet. 
 
In the discussion on non-proliferation, the President noted that most of  
the major powers--the nuclear powers--are in favor of a zero-yield  
comprehensive test ban treaty.  I would note that that was a significant  
outcome of the President's meeting with Mr. Yeltsin yesterday.  The two  
sides agreed to pursue that issue.  The Chinese reaffirmed their  
intention to sign a comprehensive test ban treaty in 1996.  Their view  
on the zero-yield, in effect, is that it seems to be on a similar track  
as their own, but they want to study the issue further, so that was a  
favorable discussion as well. 
 
Finally, they agreed that it's important to stay in touch.  Face-to-face  
meetings are the most useful, but the two sides are going to explore  
whether or not more direct telephone or other communications can also be  
set up.    
 
(###) 
 
 
 
ARTICLE 4: 
 
The Current State of U.S.-Japan Relations 
Winston Lord, Assistant Secretary for East Asian and Pacific Affairs 
 
Statement before the Subcommittee on Asia and the Pacific of the House  
International Relations Committee, Washington, DC, October 25, 1995. 
 
Mr. Chairman, members of the committee: Thank you for inviting me here  
today to share with you views on the current state of the U.S.-Japan  
relationship and where it is going.  This is an extremely important and  
timely topic.  Our relationship with Japan has been called our most  
important bilateral relationship, and this has not changed. 
 
The United States' and Japan's interests are predominantly congruent,  
and I believe they will continue to be so in the years to come.  The  
United States and Japan share an interest in global peace and security  
and are cooperating around the world to this end.  Our diplomatic  
coordination is close and fruitful.  Our agenda on global issues is  
broad and growing. 
 
The United States-Japan alliance, based on the Treaty of Mutual  
Cooperation and Security, is essential to the defense of both countries.   
It is a central element of the United States' policy of forward  
deployment and contributes directly to security and prosperity  
throughout the Asia-Pacific region.  The U.S.-Japan defense relationship  
is key to the United States' presence and continuing influence in the  
western Pacific and Asia.  It is warmly welcomed by the countries of the  
region. 
 
The United States and Japan, as enormous economic actors, share a  
responsibility for the well-being of the world economy.  Our governments  
are in frequent contact on questions of global economic management, and  
they cooperate closely on the maintenance and nurturing of the  
international economic institutions, including the IMF, the World Bank,  
and the World Trade Organization. 
 
Naturally, we also have some differences with Japan.  In a relationship  
as large and active as ours, such differences, particularly on trade,  
arise.  We have had success under the Framework for Economic Partnership  
and elsewhere in negotiating agreements that resolved about 20 sectoral  
and structural trade issues.  Both countries must continue to address  
and resolve trade issues constructively as they arise so that these  
issues do not hamper the rich commerce and overall ties between the  
United States and Japan. 
 
The United States and Japan have common values as well as interests.  We  
share a commitment to the principles of freedom, democracy, and the  
promotion and protection of human rights and the rule of law, both at  
home and in our relations with other countries.  It is the vision of a  
world based on these principles that lies at the center of the excellent  
relations between our two nations. 
 
Let me first comment briefly about conditions in Japan. 
 
Domestic Political Developments 
 
First, a word about political developments: Prime Minister Murayama's  
three-party coalition government has been in office since June 1994.   
Many Japanese initially viewed the coalition with skepticism because its  
two principal partners--the conservative Liberal Democratic Party and  
the Socialist Party--had been bitter ideological rivals during much of  
the postwar period.  But despite occasional setbacks--including a  
poorer-than-expected showing in the July 1995 Upper House election--the  
coalition has proved resilient. 
 
In September, the Liberal Democratic Party elected Ryutaro Hashimoto,  
the Minister of International Trade and Industry, to a two-year term as  
party president.  Mr. Hashimoto was subsequently appointed Deputy Prime  
Minister.  He also retained his portfolio as Minister of International  
Trade and Industry. 
 
The political opposition is dominated by the New Frontier Party, an  
amalgamation of several opposition parties and groups that was created  
in December 1994.  This party fared well in the July 1995 Upper House  
election, but its representation in the Diet is still considerably  
smaller than that of the ruling coalition. 
 
In December 1994, the Diet enacted several electoral reform measures  
that could have a profound impact on Japanese domestic politics.  The  
new system, among other elements, establishes a combination of single- 
seat and proportional constituencies and will shift seats from over- 
represented rural areas to urban centers.  Whether the reforms will lead  
to more frequent alternation of administrations between competing  
political parties remains to be seen. 
 
We anticipate that Japanese political parties and coalitions will  
continue to undergo realignment for several years, until the  
consequences of the new electoral system work themselves out.  In  
nationwide local elections held this past April, voters rejected  
mainstream gubernatorial candidates in Tokyo and Osaka, reflecting  
growing unpredictability in domestic politics.  Elections in the  
important Lower House of the Diet must be held no later than July 1997-- 
four years after the last election--but many observers speculate that  
they will be held sometime during the first several months of 1996. 
 
Political realignment has, of course, affected the decision-making  
process  in Japan, including on issues of critical interest to the  
United States.  However, we have no reason to expect change in Japan's  
basic policy of strong support for the U.S.-Japan strategic alliance and  
U.S.-Japan cooperation in general.  Today, all political parties, except  
for the minor Japan Communist Party, pursue close ties with the United  
States and endorse the Treaty of Mutual Cooperation and Security. 
 
Domestic Economic Situation 
 
Japan's economy seems headed next year for a modest rebound following  
four years of its most serious economic downturn since World War II.   
After achieving one of the highest economic growth rates in the world  
during the 1970s and most of the 1980s, the economy slowed starkly in  
the early 1990s.  Plummeting stock and real estate prices marked the end  
of the "bubble economy" of the late 1980s.  Real economic growth in 1994  
was 0.5%, following a contraction of approximately 0.2% in 1993.   
Private economic analysts project growth in 1995 to be just under 1%.   
For the past four years, the U.S. economy has grown faster than Japan's. 
 
Inflation in Japan remained below 1.0% throughout 1994.  Unemployment  
rose to a seven-year high, and considerable hidden unemployment belies  
the official rate placed at 3.2% in August 1995.  Japanese domestic  
demand has been weak.  In the wake of the collapse of the "bubble  
economy," many firms have substantial over-capacity, which has  
suppressed private investment.  Although industrial production was off  
by 4.5% in 1993, it rose by nearly 1% in 1994.  
 
In an effort to stimulate growth, Japanese monetary authorities have  
reduced official interest rates to historic lows--0.5% in October 1995-- 
and the government has enacted a series of fiscal stimulus packages.   
The latest and largest package, approved September 20, included about  
$140 billion in additional government spending and lending.  These steps  
appear to be having an impact.  Private forecasters expect GDP growth to  
be around 2% in 1996 as a result of the stimulus packages.  The outlook  
beyond that is not clear. 
 
One factor that could affect economic growth is the financial sector  
where banks continue to struggle with record-level bad loans.  The  
government has responded to runs on some financial institutions in the  
past few months and is now in the process of formulating a comprehensive  
plan to address these problems. 
 
Japan's economic slowdown has contributed to its current account surplus  
of $129 billion--2.8% of GDP--in 1994, down $2 billion from 1993.  As  
Japan's economy resumes growth over the next several years, its current  
account surplus is projected to decrease to less than $120 billion in  
1995 and to approximately $90 billion in 1996--less than 2% of GDP. 
 
The Japanese Government's regulation of a substantial number of business  
sectors contributes to slow economic growth and to Japan's current  
account surplus.  Many Japanese economic and business leaders have  
joined outsiders in calling for rapid deregulation.  The government's  
five-year deregulation plan announced in March 1995 was judged by both  
domestic and foreign experts to be weak and lacking a comprehensive view  
of the kind of deregulation necessary to make the Japanese economy more  
open to competition.  This plan is being reviewed with changes to be  
announced in March 1996.  We are suggesting improvements in a number of  
specific areas. 
 
Though Japan faces challenges in deregulating and stimulating its  
economy, its economic fundamentals remain strong.  It has a large  
reservoir of industrial and technical leadership, a well-educated and  
industrious work force, and high savings and investment rates.  Japan's  
long-term economic prospects remain good. 
 
Japan is a very central economic partner for the United States.  We are  
hopeful that Japan will enjoy more rapid economic growth in 1996 and  
that, with growth, U.S. exports of goods and services to Japan will  
rise.  In short, Japan is in a period of political change and is  
grappling with economic problems that are not trivial.  However, we  
expect U.S.-Japan ties to remain strong.   
 
Japanese institutions do respond to the views of the electorate when the  
views are strongly held.  The Japanese continue to support close  
relations and cooperation between the United States and Japan, but the  
reservoir of goodwill is not something which we can take for granted.   
It needs to be nurtured, lest it dwindle. 
 
Security Situation 
 
Assistant Secretary Nye will address the security aspects of the U.S.- 
Japan relationship in some detail, so I will be brief here.  However, I  
want to emphasize one point: The U.S.-Japan strategic alliance, based on  
the Treaty of Mutual Cooperation and Security, is the key to continuing  
U.S. influence in East Asia.  Let there be no doubt: In this period of  
rapid change in East Asia, our alliance contributes directly to the  
security and economic well-being of the American people.  The presence  
of 47,000 U.S. military personnel in Japan, combined with the personnel  
aboard Seventh Fleet ships--home-ported in Japan--allow us to contribute  
to the maintenance of stability in the region; forestall regional arms  
competition, including nuclear arms; and exercise influence over the  
course of events.  The U.S.-Japan security relationship underpins a  
strong diplomatic partnership, allowing us both to better manage our  
relations with other Asian countries and, indeed, the world. 
 
A year ago, we set out purposefully to conduct an intensive security  
dialogue with Japan.  Our mutual goal has been to re-examine and  
reaffirm the rationale and goals of our alliance in this 50th  
anniversary year of the end of World War II.  Assistant Secretary Nye  
and I and our deputies conducted a series of meetings which led to a  
first-ever meeting in New York on September 27 where Secretary  
Christopher and Secretary Perry met with their Japanese counterparts-- 
Foreign Minister Kono and Minister of State for Defense Eto.  They  
reaffirmed that our alliance is the critical factor for maintaining  
peace and stability in the Asia-Pacific region.  Both sides welcomed the  
signing of the Special Measures Agreement which allows for the  
continuation, with some improvements, of host nation cost-sharing  
programs for the next five years.  Japanese direct financial support for  
U.S. forces amounts to almost $5 billion annually, or about 70% of the  
cost.  This is more than that provided by any other ally.  In fact, it  
is more than the amount provided by all other allies combined.  It is  
less expensive for us to maintain forces in Japan than here at home. 
 
This year-long security dialogue in which we have re-examined the basis  
of our alliance and charted a new course for the future--one guided by  
common interests and a renewed commitment to a balanced partnership-- 
will culminate with the November summit meeting in Japan. 
 
Because the U.S.-Japan alliance is so important, not only to our two  
countries but to the entire region, the recent incident in Okinawa is  
all the more deplorable.  The rape of an Okinawan schoolgirl--allegedly  
by three U.S. servicemen who have been indicted--is heinous under any  
circumstances.  The President, Ambassador Mondale, Secretary  
Christopher, and Secretary Perry have expressed their deep personal  
regret and shock.  This criminal act of a few individuals has provoked  
an outcry from the Japanese public.  Some politicians and editorialists  
have questioned elements of the Status of Forces Agreement and the  
social costs associated with the presence of U.S. forces in Japan.  The  
U.S. Government has pledged its cooperation with Japanese authorities to  
see that justice is done in this case, and to take steps to prevent the  
recurrence of any such incident. 
 
I am happy to report that, in Tokyo earlier today, Ambassador Mondale,  
U.S. Forces Japan Commander--Lieutenant General Meyers--and Japanese  
Foreign Minister Kono agreed on improvements in the implementation of  
criminal jurisdiction procedures under the bilateral Status of Forces  
Agreement.  Under this decision, the U.S. has agreed to give sympathetic  
consideration to Japanese requests for transfer of custody of criminal  
suspects prior to indictment in specific cases of murder or rape. 
 
Diplomatic and Other Cooperation With Japan 
 
The U.S. and Japan share a broad range of other vital interests:  
regional stability, promotion of political and economic freedoms,  
protection of human rights and democratic institutions, free passage of  
goods and services, strengthening of the non-proliferation regime, and  
peaceful settlement of regional disagreements. 
 
This abiding community of interests existed during the Cold War and  
continues today--a time of extremely rapid modernization throughout much  
of East Asia.  Despite modernization and economic growth, the pattern of  
domestic change and international integration is extremely uneven in the  
region.  Japan is our essential partner in promoting common interests  
and values, not just in Asia but around the world.  We coordinate  
closely on Asian regional problems--the North Korean nuclear issue, the  
peace process in Cambodia, the ASEAN Regional Forum and other regional  
security fora, as well as on regional economic issues. 
 
Let me highlight briefly those areas where joint U.S.-Japan diplomacy  
has been particularly successful and then suggest how the U.S.-Japan  
diplomatic relationship might develop in the near future. 
 
Japan has played a new, important, and growing role in United Nations  
peacekeeping missions by contributing funds and personnel in Cambodia  
and Mozambique.  It also participated in international efforts to  
provide humanitarian assistance to Rwandan refugees.  Japan has recently  
indicated that it will send a contingent of peacekeepers to the Golan  
Heights.  We expect that it will continue a policy of measured  
participation in international peacekeeping.  Japan's heightened profile  
in international peacekeeping strengthens its long-standing bid for a  
permanent seat on the UN Security Council, which we support. 
 
This September, Prime Minister Murayama visited several nations in the  
Middle East where he discussed with the region's leaders Japan's role in  
the peace process.  He indicated that Japan will continue to extend  
economic assistance to Syria, Palestine, and Jordan and will seek to  
strengthen economic ties with Israel.  We welcome Japan's participation  
in the peace process and expect that it will continue to have a  
significant role. 
 
Japan has joined or supported other U.S. diplomatic initiatives.  Japan,  
along with the Republic of Korea, has been a central partner in our  
nuclear negotiations with North Korea and will make a major contribution  
to programs designed to eliminate the North Korean nuclear threat and  
reduce tensions on the Korean Peninsula.  We also have engaged in  
positive dialogue about Japan's participation in the reconstruction of  
Bosnia.  The Japanese have indicated a willingness to assist in such  
efforts.  They have announced that once the parties fully reconcile,  
Japan will open an embassy in Zagreb to coordinate its rehabilitation  
efforts in the former Yugoslavia. 
 
An extraordinary if somewhat unheralded example of successful  
cooperation with Japan is the "Common Agenda," which we launched in July  
1993 as part of our Framework Agreement in order to jointly address  
difficult long-term global problems.  We are cooperating on a very broad  
agenda, including global health and population, the environment, and  
science and technology.  In two short years, this enormously successful  
bilateral partnership has grown to encompass 20 different initiatives. 
 
Among the many highlights, we are collaborating on one of the most  
successful public health initiatives ever undertaken--a massive  
immunization program that has virtually eradicated polio in the western  
Pacific and aims to wipe out the disease worldwide by the year 2000.  We  
have worked together closely on population and HIV/AIDS programs with  
concrete results in countries such as Bangladesh, Kenya, the  
Philippines, and Indonesia.  We also have established an extensive and  
formal Environmental Policy Dialogue under the Common Agenda through  
which we seek to harmonize our approaches on critical global issues such  
as climate change, biodiversity, and hazardous waste. 
 
Last year, we broadened our cooperation and joined efforts in countering  
the production and trade of narcotics.  This year, we began the Women in  
Development initiative which focuses on enhancing girls' education and  
will also include assistance in financing and services for women's  
micro-enterprises in developing countries.  These many success stories  
may not attract headlines, but they provide an excellent vehicle for the  
U.S. and Japan--as two economic superpowers--to pool resources and set  
the pace in finding solutions to common global problems. 
 
We will continue to consult and collaborate closely on a full range of  
regional and global matters in the future. 
 
U.S.-Japan Economic Relationship 
 
The U.S.-Japan economic relationship is deep and multifaceted.  Japan is  
our largest overseas export market; our largest supplier of imports; and  
an important source of investment, technology, and profits for U.S.  
firms.  However, significant imbalances continue to characterize our  
economic relations with Japan.  Owing in part to structural features of  
its economy, Japan continues to have a large global current account  
surplus and a large current account surplus with the United States. 
 
U.S. exports to Japan amounted to $53.5 billion in 1994 and reached  
$36.4 billion in the first seven months of this year.  Yet there remain  
many impediments to Japan's market.  These include concentration in some  
industries, the pattern of inter-corporate relationships in the various  
keiretsu, and intrusive government regulations in many industries.  The  
statistics suggest the extent of the problems: Japan's imports of  
manufactured goods as a percent of GDP were only 2.9 in 1994 as compared  
to 7.9 for the U.S. and 10-22 for other G-7 nations.  U.S. and other  
foreign firms continue to encounter serious difficulties exporting to  
and investing in Japan. 
 
The U.S. is committed to opening Japan's markets more fully and to  
ensuring that competitive foreign goods have fair access.  We believe it  
is in Japan's interest to admit more foreign products and to give its  
consumers the opportunity to purchase goods based on quality and price.   
The United States has urged Japan to correct its persistent global  
current account surplus, to remove impediments to the Japanese market,  
and to remove regulations which hinder domestic and foreign businesses.   
This is not only in our interest, it is in  Japan's interest as well as  
the health of the global economy. 
 
During the past two years, the United States has pursued its economic  
goals with Japan through the Framework for Economic Partnership, which  
the two governments established in July 1993.  Under the framework, we  
have made progress in resolving a variety of sectoral, structural, and  
macroeconomic issues.  In June in Halifax, President Clinton and Prime  
Minister Murayama extended the framework agreement and renewed their  
commitment to work together on remaining issues. 
 
During the Clinton Administration, the U.S. and Japan have signed more  
than 16 trade agreements, most of them under the framework, plus four  
under the Uruguay Round.  U.S. and Japanese negotiators concluded  
results-oriented agreements on flat glass in January, on financial  
services in February, on investment in July, and on autos and auto parts  
in August.  Earlier, we concluded agreements on government procurement,  
cellular phones, intellectual property rights, construction, and various  
agricultural products, including apples. 
 
Negotiations and agreements over the years have had concrete results.   
In the past decade, Japanese imports from the United States have more  
than doubled.  The portion of manufactured goods in our exports to Japan  
has steadily increased and now approaches two-thirds.  Japan is the  
United States' largest foreign market for commercial aircraft and  
agricultural products.  Despite such progress, much, of course, remains  
to be done.  We will continue to highlight the urgency of further  
opening Japan's market. 
 
One important task is monitoring implementation of our trade agreements  
to ensure that the framework's goal of substantially increased access  
and sales of competitive foreign goods and services is realized.  The  
Administration and the private sector are working hard to see that all  
agreements are fully and vigorously implemented.  We plan to continue to  
identify quickly any problems in implementation and move to resolve  
them. 
 
Even as we address bilateral issues, we continue to work with Japan in  
APEC to build a Pacific Community.  Together we will be striving to  
ensure that the November leaders meeting in Osaka builds on the  
successes of Blake Island and Bogor and makes real progress toward trade  
liberalization in the Asia-Pacific region.  Any effort in Osaka to  
weaken the commitment to comprehensive trade liberalization made by all  
APEC leaders last year in Bogor will be widely viewed as a step backward  
for APEC. 
 
As might be expected in a trade relationship as large as that between  
the U.S. and Japan, there are a few issues on the horizon that have the  
potential to grow into disputes if we do not act to resolve them.  Our  
hope and our challenge is to address these issues in a constructive  
manner that will ultimately benefit the U.S., Japan, and the world  
trading system.  Our two nations must deal openly and directly on these  
problems. 
 
Our approach from the outset of this Administration has been to insulate  
security and other positive elements of the relationship from trade  
frictions.  We do this not as a favor to Japan but because it is in our  
interest to do so.  We also recognize that the unresolved issues, if  
allowed to fester, over time could erode domestic support for other  
elements of the partnership.  That is why we have made such serious  
efforts to address our economic differences even as we have worked  
successfully to strengthen the other areas of our relationship.  Our  
relationship with Japan rests on solid ground.  But as recent events  
have illustrated, we must constantly nurture our ties and seek to  
mitigate problems.  Ambassador Mondale, characteristically, put it well:  
No matter what problem confronts the world, it will be easier to resolve  
if the United States and Japan work together. 
 
The President's Visit to Japan 
 
The President will travel to Japan in November--to Osaka for APEC and to  
Tokyo for a state visit and a summit meeting with the Prime Minister.   
The preparations for the visit have included a thorough review of the  
extent of our interests and the scope of our cooperation with Japan.   
The United States and Japan have a very strong relationship of enormous  
benefit to both nations, the region, and the world.  The President's  
visit provides an opportunity to make clear to Americans and Japanese  
alike that: 
 
-- The U.S.-Japan strategic alliance is fundamental to our mutual  
security and to stability and prosperity in the Asia-Pacific region. 
 
-- U.S.-Japan cooperation on diplomatic issues ranging from nuclear arms  
to Asian security to global peacekeeping make the world a safer place. 
 
-- The two countries' cooperation on newer global issues such as those  
under the Common Agenda promote the welfare of other countries and at  
the same time strengthen our bilateral relationship. 
 
-- We have made progress in resolving trade and other economic issues  
with Japan, and it is in our mutual interest and that of the global  
economy to carry this process forward. 
 
The President's visit to Japan, therefore, comes at a very important  
juncture.  Together our two countries have traveled an enormous distance  
in the past half century.  Building on that solid record and recognizing  
the global implications of our bilateral ties, we will strive to bolster  
one of the world's most productive partnerships.   
 
(###) 
 
 
END OF DISPATCH VOL 6, NO 45

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