U.S. Department of State
Dispatch Volume 7, Number 25, June 17, 1996
Bureau of Public Affairs



ARTICLES IN THIS ISSUES:
1.  The Critical Line Between Peace and Prosperity in the Middle East - 
Secretary Christopher
2.  The Russian Elections and U.S. Policy - Deputy Secretary Talbott
3.  Entering the 21st Century: Challenges Confronting America's 
Military. - Anthony Lake.
4.  The MFN Decision and U.S.-China Relations - Winston Lord
5.  U.S.-China Relationship - Charlene Barshefsky
6.  U.S. Interests in and Policy Toward Afghanistan - Robin L. Raphel
7.  What's in Print: Foreign Relations of the U.S.



Article 1:


The Critical Link Between Peace And Prosperity in the Middle East 
Secretary Christopher
Remarks to the Council on Foreign Relations Conference on Investing in 
the Future: The Middle East and North Africa in the Next Century.
New York City, June 14, 1996  

It is a  great  pleasure to be here for this important conference. Under 
Les Gelb's leadership, the Council on Foreign Relations has continued to 
do great work--including its enormously constructive role in the Middle 
East Economic Summits. Today's gathering marks another milestone in that 
process, and I want to express my appreciation to Les, to Henry Siegman, 
and to the entire council for their outstanding efforts.

Looking at this audience, I am struck by the fact that an event like 
this would have been unthinkable just 31/2 years ago when I became 
Secretary of State. You are, indeed, pioneers of peace--entrepreneurs 
and executives from the United States, Israel, and across the Arab 
world, now preparing for your third economic summit this November in 
Cairo. Starting in Casablanca in 1994 and continuing last year in Amman, 
the relationships you have developed and the projects you have launched 
have shattered taboos that stood for half a century. You have 
established an unprecedented web of contacts and cooperation. You are 
helping to lay the essential foundation upon which a more prosperous, 
stable, and peaceful Middle East can be built.

Today, I want to talk to you about the critical link between peace and 
prosperity in the Middle East. Neither can be fully secured without the 
other. Both must be pursued if we are to help lift the region beyond its 
legacy of conflict. 

At the core of all our efforts, of course, has been the historic process 
of Arab-Israeli peacemaking. The quest for peace in the region began 
more than 20 years ago, and American leadership has been critical to 
each of its successes: the disengagement agreements after the 1973 war; 
the peace treaty between Egypt and Israel; the 1991 Madrid Peace 
Conference; and the remarkable achievements of the past three years.

Our vital national interests and unique leadership role confer upon the 
United States a special responsibility to ensure that these tremendous 
strides toward peace are preserved. Peace will strengthen the security 
of Israel and our key Arab partners. Peace will enhance regional 
stability and our access to the Gulf's vital oil supplies. Peace will 
also allow us and our friends to focus on the common dangers that 
threaten us all--from rogue states like Iraq and Iran to violent 
extremism and terror. 

At this time of transition in Israel, as we await the formation of a new 
government, it is worth taking a few minutes to remind ourselves just 
how much the peace process has accomplished since 1993--and how great a 
stake we have in continued progress.

First, Israel and the Palestinians have reached a series of landmark 
agreements. Palestinians now govern themselves throughout Gaza and most 
cities of the West Bank. Israeli soldiers no longer face the burden of 
patrolling those streets. Where once there was an intifada, Israeli and 
Palestinian security forces now cooperate to root out the terrorist 
infrastructure of Hamas and Islamic Jihad. The Palestinian National 
Council voted overwhelm- ingly this spring to remove from its charter 
those egregious clauses denying Israel's right to exist. 

Second, Israel's 1993 agreement with the Palestinians helped make 
possible the peace treaty with Jordan one year later. Today, Israel and 
Jordan are establishing cooperative relations across the full range of 
political, economic, and security issues. Tens of thousands of Israeli 
and Jordanian tourists have visited each others' countries. Later this 
month, Jordan will host a reunion of  200 Arab and Israeli teenagers--
participants in a program called Seeds of Peace dedicated to building a 
warm peace. And I will never forget King Hussein's moving eulogy at 
Prime Minister Rabin's funeral. The King's presence and his eloquence on 
such a sad day profoundly reflected how much the region has changed. 

Third, the progress achieved in the peace process has helped spur 
unprecedented movement in Israel's relations with the broader Arab 
world. Diplomatic offices have been exchanged with Morocco, Tunisia, and 
Mauritania, and trade offices with Qatar and Oman. The secondary 
economic boycott has all but withered away. With the exception of Iraq, 
Libya, and Sudan, every Arab League member has participated in some 
aspect of the peace process--from the multilateral negotiations on 
issues like water, refugees, and arms control to the economic summits in 
Casablanca and Amman. 

Perhaps no single event better captured this extraordinary 
transformation than the Summit of Peace- makers held three months ago in 
Sharm el-Sheikh. Virtually overnight, President Clinton and President 
Mubarak brought together 29 world leaders, including 14 from the Arab 
world. They gathered not to celebrate a breakthrough in the peace 
process, but to stand shoulder-to-shoulder with Israel to defend the 
process against a wave of terrorism. 

These are truly historic achievements. They have advanced the vital 
interests of Israel, its Arab partners, as well as the United States. 
They have come about with the help of a consistent American approach to 
the Middle East that has been guided by a set of core principles. Above 
all, these include our unshakable commitment to Israel's security and to 
a strong U.S.-Israeli partnership--and our determination to work with 
Israel and its Arab neighbors to achieve our common goals of peace and 
security. We know that there can be no real peace without security, and 
there can be no real security without peace.

That is why we will work with Israel and the Palestinians to help them 
implement the agreements they have reached and to resolve outstanding 
issues. We will help to strengthen Israel's peace treaties with Egypt 
and Jordan. We will continue to work toward a comprehensive peace 
through a resumption of negotiations between Israel and Syria and 
between Israel and Lebanon. And we will strive to help deepen and 
broaden relations between Israel and the wider Arab world. 

In each of these areas, the United States will work closely with 
Israel's new government, led by Prime Minister-elect Netanyahu. The 
recent elections once again underscored the vibrance and strength of 
Israel's democracy. The United States enjoyed a strong and productive 
relationship with the governments of Prime Minis- ters Rabin and Peres--
statesmen of extraordinary vision and courage. Now we hope to build an 
equally strong and productive relationship with the new Israeli Prime 
Minister and his team. 

President Clinton and I have been in close touch with Mr. Netanyahu 
since the elections, and we look forward to welcoming him to Washington 
soon after he forms his government. We will be consulting closely with 
him and with our Arab partners on how best to sustain the peace process. 

In this regard, we welcome Prime Minister Netanyahu's commitment to 
continue the peace process. We are urging our Arab friends not to 
prejudge the new government in Israel. Now, during this period of 
transition, it is essential to avoid actions or statements that close 
doors and risk polarizing the situation and raising tensions. It is 
critical that we remain focused on preserving the achievements of the 
past three years and maintaining the momentum necessary to make new 
gains.

It is also critical that we maintain our commitment to building the 
economic foundations necessary for a lasting peace. Growing opportunity 
can ease the conflicts and hatreds that have held back the Middle East 
for half a century. Rising prosperity can help the Middle East move 
forward into a new millennium of reconciliation, cooperation, and full 
integration with the global economy.

This commitment to a prosperous peace is consistent with President 
Clinton's strategic judgment that America's economic and political 
interests are intertwined around the world. Opening markets and 
expanding trade and investment abroad not only creates jobs at home, but 
also strengthens our political relationships and advances our strategic 
interests at the same time. As a former Secretary of State, Cordell 
Hull, said over half a century ago, "When goods move, soldiers don't." 
That is precisely the principle behind the Middle East Economic Summit 
process.

Our commitment to this process reflects our conviction that while it may 
take politicians and diplomats to make peace, it takes workers and 
businesses to build peace. Building peace means inaugurating the new bus 
service between Israel and Jordan--and regular flights between Ben 
Gurion Airport and Amman. Building peace means the regional airport at 
Aqaba to bring tourists to the spot where Jordan and Israel meet astride 
the mountains and deserts along the Red Sea. Building peace means a new 
power plant on the shores of the Mediterranean in Gaza. And building 
peace means the Amoco pipeline--the "peace pipeline"--that will supply 
Egyptian natural gas to Israel. 

These projects embody the vision that first brought many of us together 
in Casablanca nearly two years ago. Then, last October in Amman, we 
agreed to establish a set of regional institutions to promote the 
regions economic development and integration: 

The Middle East Development Bank will support key private sector 
projects and focus on the region's critical infrastructure needs. We 
hope to open the offices of the bank at the Cairo Economic Summit this 
fall. 

The Middle East-Mediterranean Travel and Tourism Association will open 
the region's wonders to the   world and spur economic growth. The 
Regional Business Council will become a vital forum for exchanging 
business information, developing investment opportunities, and building 
a world-class business environment. 

As you have been discussing at this conference, we will build on these 
achievements at the Cairo Summit. The summit will focus government and 
business leaders on the essential steps that must be taken in key areas 
such as deregulation, privatization, and other economic reforms. And it 
will emphasize the role of small and medium enterprises in the region. 
Most important, the Cairo Summit will bring together hundreds of 
business people from across the region and around the world to generate 
business deals and projects. The summit will once again dramatize the 
economic benefits of peace--and the immense potential for economic 
cooperation across the Middle East.

But to fulfill that potential, governments should remove the economic 
obstacles that stand in the way of growth and opportunity. Governments 
should take steps to overcome the legacy of excessive government 
regulation and inefficient public investment if they want to attract 
local and foreign capital back to the region. They should tear down 
tariff and non-tariff barriers if they want to encour- age trade, 
especially among the countries of the region. And they should reform 
capital markets, update tax systems, and ensure fair business practices 
if they want to compete in the global economy of the 21st century. 

Some encouraging reforms are taking root. Liberalization has spurred 
growth and attracted foreign investment to Tunisia and Morocco. Jordan's 
new investment code is helping to attract foreign capital--much of which 
is being invested in that country's spectacular tourism boom. Now Egypt 
is privatizing companies, reforming banking laws, opening up business 
loans, and streamlining customs procedures to facilitate trade. We are 
working with Egypt to support these and other reforms through the 
partnership led by President Mubarak and Vice President Gore.

Israel, too, has a new opportunity   to deepen the already far-reaching 
economic reforms that it has undertaken in recent years. We welcome 
Prime Minister-elect Netanyahu's commitment to intensify essential 
reforms, such as privatization and deregulation. This course will help 
sustain the remarkable economic growth and inward investment that Israel 
has enjoyed since the peace process began to produce results. As the 
economies of the region become more open and integrated, economic growth 
in Israel can present opportunities to Israel's Arab neighbors-- 
especially the Palestinians. Israel's new government can seize the 
initiative by finding ways to expand trade with Jordan and increase 
economic interaction with the West Bank and Gaza. The United States is 
prepared to help by providing free trade privileges to the Palestinians 
similar to those that Israel enjoys. The Clinton Administration is 
working with Congress to secure this authority.

The political and economic futures  of the Middle East are inextricably 
linked. The success of the peace process over the last three years has 
been the essential condition for creating the region's new economic 
opportunities. The readiness of business, in turn, to seize these 
opportunities has helped to strengthen the process by demonstrating the 
potential of peace to lift the lives of both Arabs and Israelis. Today, 
the challenge we face is clear: We must ensure that our efforts on both 
the diplomatic and economic fronts are sustained--and that our shared 
goal of peace and prosperity continues to be advanced.

Ours is an uncommon enterprise with a common purpose. We ask leaders and 
peoples to take risks for peace. We ask companies and entrepreneurs to 
take risks for profit--in the name of peace. We ask governments to 
encourage business to take those risks by reforming and deregulating 
their economies. And we ask the whole world to join us. Thank you very 
much. 

(###)




Article 2:


The Russian Elections and U.S. Policy
Deputy Secretary Talbott
Address to the Council on Foreign Relations, New York City, June 7, 1996

It is good to be back at a council dinner. I have attended a lot of them 
over the years--and never, I might add, just for the cuisine. This 
institution means a lot to me. For 15 years,  the Harold Pratt House was 
my home-away-from-home here in New York and a place where I went for 
fellowship and education. But the real reason I am here this evening is 
because Les Gelb told me to come, and I learned long ago--back in the 
early 1970s--that you can't go too far wrong doing what Les tells you 
to. After all, that's why you're here, right? 

In addition to his being a friend and mentor, I might add that Les has 
done great things with the council, notably, including organizing this 
conference. Your topic is: "Does the United States still need to be the 
world's leader?"  The answer, of course, is a resounding, unambiguous 
"yes."  

But the very fact that the question even arises is significant and a 
little unsettling. With the end of the Cold War, the old isolationist 
instinct has, once again, begun twitching in the American body politic, 
especially in Congress. The best antidote is activism like the 
council's, particularly when it reaches out into the country through 
events like this. 

So, thanks for the chance to join you. I want to talk about Russia. For 
much of this century, that country has been a focus of our national 
attention and of our national security policy. 

For most of our lives, Russia was our global rival. It was a police 
state with a monolithic political system and a command economy, an armed 
camp, the metropole of an empire, the warden of Stalin's "prison of 
nations," the headquarters of an alliance hostile to the West. In those 
days, U.S. and Soviet leaders met regularly--but only to discuss a 
fairly limited range of issues, particularly arms control. 

But since the end of the Cold War in the late 1980s, and since the 
collapse of the Soviet Union on Christmas Day 1991, a new Russia has 
been emerging. With it has come the opportunity to pursue a much broader 
policy of engagement. Over the past five years, the United States has 
supported democratic change and free markets, and we have encouraged 
Russia's increasingly close and beneficial association with the 
community of democratic nations. We have extended economic assistance, 
both bilaterally and through the IMF,  enabling Russia to beat back the 
threat of hyperinflation and to build fundamental market institutions. 
We have worked patiently and persistently with the Russian Government to 
cooperate where possible and to manage our differences where necessary.

This policy of engagement has already made every American more secure. 
The START I Treaty will enable us to cut our nuclear arsenals by 9,000 
warheads, and the START II Treaty,  which was ratified by the Senate in 
January and which President Yeltsin has vowed to get ratified in the 
Duma later this year, will cut another 5,000. We have also worked with 
the Russians and three of its neighbors-- Ukraine, Belarus, and 
Kazakstan--to make sure that the breakup of the U.S.S.R. does not lead 
to the proliferation of nuclear-weapons states. Meanwhile, Russia has 
withdrawn its soldiers from Germany, the former Warsaw Pact countries of 
Central Europe, and the Baltic states. In Bosnia, our soldiers, American 
and Russian, now serve side-by-side in support of the Dayton peace 
accords.

Let me now turn to the situation  inside Russia, which has changed 
dramatically over the past decade. Nine days from now--a week from 
Sunday--the Russian people will, for the first time in the 1,000-year 
history of their state, vote by free ballot for their national leader. 
Millions of Russians will line up at 96,000 polling places, from one end 
of the the Eurasian landmass to the other--from Kaliningrad on the 
Baltic to Vladivostok on the Pacific,  6,000 miles and 11 time zones 
away. 

There will be 11 names on the ballot. Boris Yeltsin's will be on the 
list, of course. So will the name of Gennadi Zyuganov, the Chairman of 
the Presidium of the Communist Party of the Russian Federation, and 
Vladimir Zhirinovsky, the leader of the ludicrously misnamed Liberal 
Democratic Party. 

But there will be others as well, such as millionaire eye surgeon 
Svyatoslav Fyodorov, retired Gen. Alexander Lebed, and liberal economist 
Grigoriy Yavlinskiy, who spoke to the council in 1992. Unless one of 
those candidates receives more than 50%, the top two will face each 
other in a run-off three or four weeks later. 

So we are in for a suspenseful several weeks. Each of these 11 
candidates advocates a different path for Russia in the next century. 
America has an intense interest in the path the winner chooses. 

But the U.S. should not let the importance of what is about to happen 
inside Russia obscure the importance of what has already happened. A 
watershed has occurred in that country over the past decade. For the 
previous 1,000 years, the leadership of Russia was decided through 
dynastic succession, palace intrigue, revolution, civil war, 
assassination, mass terror, concentration camps, and what Marxist-
Leninists called  'the dictatorship of the proletariat.' Now, whatever 
the imperfections of the new system, at least the Russian people have a 
chance to choose their leaders at the ballot box.

What's more, Russia has been changing in ways that limit the power of 
the top man in the Kremlin, whoever he is and whatever his intentions. 
Over the last five years, authority has become more diffuse and 
decentralized. Regional leaders have much more say than was the case in 
Soviet times, when they or their predecessors were little more than the 
Kremlin's provincial proconsuls. This can be good news or bad news for 
reform. There are now oases of economic and political liberalization, 
and there are also, in other parts of the country, bastions of reaction, 
where old-style communist bosses have maintained their fiefdoms as theme 
parks of Soviet inefficiency. 

My point is, the battle between the old and new is being played out in 
numerous ways, on every level, throughout the land. Now, 60% of the 
economy is in private hands. The long food lines that were a hallmark of 
daily life in Soviet times when I was first there as a journalist are 
largely gone. Churches, synagogues, and mosques are open; so are 
borders. In short, Russians are more free to vote, own, buy, sell, 
travel, and worship than ever before in their history. 

But these changes have not come smoothly or easily. They have brought 
dislocation, anxiety and, for many,   outright hardship. Unemployment-- 
virtually unknown and certainly unacknowledged in Soviet times--is now a 
fact of life. That is a consequence, among other things, of inefficient 
factories being closed. For many, prices have risen faster than 
salaries, so the buying power of take-home pay is down. People worry 
about the holes in the social safety net. They worry about the huge rise 
in crime and corruption, which have reached epidemic proportions and 
constitute a major threat to public confidence in government. The very 
word 'reform,' which is so basic to the vocabulary of our policy 
ofsupport for Russia, has, for many Russians, become a synonym for 
hardship and insecurity. This is especially true of those over 50--
people who are having trouble making a go of it now that the rules of 
the game have changed so drastically from what they knew most of their 
lives. 

Then there is the grueling, gruesome war in Chechnya, which is still an 
open wound. It had already claimed some 30,000 lives before the cease-
fire agreement of two weeks ago. The damage is already vast and deep, 
and it reaches far beyond Chechnya itself. The conflict, while it was 
raging, exposed to the world, and to the Russian people themselves, the 
often indiscriminate and brutal methods of the Russian military.

It is against this backdrop of change and upheaval that Zhirinovsky's 
ultranationalists and Zyuganov's communists did so well in the 
parliamentary elections of 1993 and 1995. They have benefited from a 
combination of nostalgia for the past, pain in the present, and fear of 
the future.

Those factors will be very much in play when Russians go to the polls a 
week from Sunday. Many of them will be asking themselves a version of 
the question Ronald Reagan made famous  in our own presidential election 
campaign of 1980: "Are we better off today than we were five or even 20 
years ago? Are we on the right course for the future? Who should lead us 
for the next five years?"  

How the Russian people answer those questions is up to them and to no 
one else. That is why President Clinton has assiduously avoided getting 
into the dubious business of endorsing a candidate or a party. The U.S. 
does not have a vote in the Russian election, nor does it have a crystal 
ball about its outcome. But it does have an interest in the policies 
that the victor will pursue. 

It mattered deeply to the United States that, for most of this century, 
Russia was a communist dictatorship that repressed and abused its own 
citizens, and it was an expansionist empire that behaved aggressively 
toward us, our allies, and its neighbors. And it will matter deeply to 
the United States in the 21st century what course Russia's leaders take. 

As President Clinton put it in Moscow: "All elections involve choices 
and have consequences." That notably includes consequences for Russia's 
relations with the rest of the world. And this certainly applies to any 
Russian leader who would attempt to reconstitute the U.S.S.R., 
renationalize the economy, or abandon the democratic process.

Why, then, given all the uncertainties associated with Russian politics, 
are we so adamant--and confident--in our support for democracy and 
elections in Russia? Let me try to answer that question by conjuring up 
one of my favorite quotations from the Soviet past. Vyacheslav Molotov, 
Stalin's poker-faced, iron-pants foreign minister, once famously said 
that the trouble with democratic elections is that you never know for 
absolute certain who's actually going to win. He offered that 
penetrating insight as a reason for never holding genuine elections, 
since they are anathema to totalitarianism.

The U.S. attitude, is of course, quite different. We are not afraid of 
democracy--in Russia or anywhere else. Americans, of all people, should 
have faith in democracy over the long haul. Some argue that it would 
better to have no election at all than one where the wrong candidate 
wins. We should not fall prey to such short-sighted pessimism. Nor 
should we buy another insinuation, which is that some nations are 
somehow genetically or historically doomed to make bad choices forever. 

The past 10 years have been a decade of democratization, including in 
parts of the world long since written off by politicians and political 
scientists alike. All around the globe, on every continent, people who 
acquired the opportunity to vote did so with courage, with enthusiasm, 
and in great numbers--proving the pessimists and the predeterminists 
wrong. Now it is Russia's chance and Russia's choice. 

We believe that freedom of speech and the enfranchisement of Russian 
citizens will, if sustained, help move Russia toward the rule of law and 
the consolidation of civil society. We also believe, as President 
Clinton has said repeatedly, that democracies are more likely to be 
reliable partners in trade and diplomacy--and more likely to pursue 
foreign and defense policies that are compatible with American 
interests.

If Russia stays on that course, we will continue to offer our support 
and our cooperation. If it turns off that path, no matter who is in the 
Kremlin, we will take the necessary steps to defend our security. And we 
will remain alert if Russia is changing course in ways that require us 
to adjust our policy. The job of our government is to be ready for any 
outcome. As Secretary Christopher put it in his speech to the North 
Atlantic Council just this past Monday: 

     Whatever Russia's future holds in store, our interests will remain 
the same: to keep our people safe and to consolidate the gains for peace 
and freedom made possible by the Cold War's end.

The first test of what kind of new Russia is emerging will be the 
fairness of Sunday's voting and of the second round if there needs to be 
one. Thereafter, we will keep our eyes peeled for other signs such as 
whether Russia continues to permit a free, vigorous, and critical press; 
whether it honors the sovereignty, independence, and  territorial 
integrity of its neighbors; whether it continues to meet the terms of 
the financial help it is receiving from the International Monetary Fund 
and other world bodies; and whether it continues to honor its 
international treaties and commitments.

What is required on our part--especially when Russia is undergoing and 
generating a good deal of turbulence--is American consistency and 
American steadiness. The Russians must know, as clearly as possible, 
what we will support, what we will oppose, what we will stand for, and 
what we will stand against. 

So, to conclude, there is no question that the Russians have a 
momentuous choice to make in nine days. But let us be sure to keep the 
election, important as it is, in perspective: It is only one choice in a 
long succession of tough choices the Russians will face for many years 
to come. 

At each step along the way in Russia's development, including the one 
that will occur a week from Sunday, let us keep in balance three 
considerations: 

-- An appreciation of how far Russia has come; 
-- A realistic appraisal of how far it has to go; and 
-- A recognition of how important it is for us to support progress in 
the right direction. 

If we can do all that, it will improve the chances that future 
presidential elections in Russia will be less suspenseful--for them and 
for us.

(###)



Article 3:

Entering the 21st Century: Challenges Confronting America's Military
Anthony Lake, Assistant to the President For National Security Affairs
Commencement address at National Defense University, Washington, DC, 
June 12, 1996

As future stewards of your nation's security, you understand the 
dramatic changes the world has undergone in just the last few years. 
Superpower confrontation has passed, but the lid has been lifted on 
simmering ethnic and religious conflicts. Before, rogue states could be 
restrained by those who armed and supported them. Now, they are freer to 
gamble on the use of force to achieve revolutions in communication and 
commerce; send information, goods, and dollars around the world in the 
blink of an eye. Yet, the openness that brings us closer together also 
makes us more vulnerable to problems such as terrorism and international 
crime.

I would like to speak today about some of the challenges confronting our 
military in this new security environment. I am honored to do so in this 
setting with you, a group that combines years of operational experience 
with intense intellectual study. On a personal note, let me add that as 
National Security Adviser, I have had the privilege of meeting and 
working with America's military men and women every day and to admire 
their service and their sacrifice. So as I talk with you of challenges 
faced by our military, I want to recognize the extraordinary debt that 
we as a nation owe to them and to the families who support them.

Over the past three years, as I have worked with the military in facing 
the demands of this new era, I have often been struck by three 
fundamental questions. I have discussed them many times with Secretary 
Perry and General Shalikashvili, and I am sure they have been on your 
minds as well: How do we maintain efficiency and effectiveness as we 
manage the post-Cold War drawdown of our forces? How do we preserve the 
strength and readiness to fight and win our nation's wars as we conduct 
increasingly diverse peacekeeping and humanitarian missions? And how do 
we attract and retain an all-volunteer force of high standards that is 
reflective of rapid social change in America?

Today, we know the answer to the drawdown question. Since 1989, we have 
reduced our force by one-third. We have cut our defense budget by some 
40% in real terms from its Cold War high. Some 700,000 men and women 
have traded in their uniforms and returned to civilian life. But this 
time, unlike previous drawdowns, we did it right. 

We recall the stories about the drawdown of the 1970s, when sailors on 
ships waited months for parts to fix broken equipment; when planes 
became 'hangar queens,' pillaged for repairs; when the Chief of Staff of 
the Army declared that America had a "hollow army." Many of you were 
there. Today, our leaders have learned the lessons of earlier times. 
They know that we can't cut size at the expense of strength, personnel 
at the expense of morale, or force at the expense of readiness. In 1994, 
when Iraq menaced Kuwait, tensions rose in Korea, and trouble in Haiti 
boiled over, we showed that our military was up to the task--and more. 
In my view, Secretary Perry, General Shalikashvili, their immediate 
predecessors, and our whole military leadership have received far too 
little credit for one of the greatest management successes in history.

But now that our force posture is right, and our readiness is as high as 
ever, we need to focus on how we employ our armed forces. More than any 
other institution in the world, when America's military is asked to do 
something, it delivers. It is hard to convey how much it means to 
policymakers to have an instrument like that at our disposal. It 
provides a great sense of security and confidence. But it also carries a 
great responsibility. We must not misuse this extraordinary institution. 
When we use military force, we must do so unflinchingly. But we must 
never ask our military to do things it can't or shouldn't do. The 
President has no more solemn responsibility than to decide when to put 
our armed forces in harm's way. He knows that, and so do all of us who 
are privileged to serve him.

In recent years, our military has responded to an unprecedented number 
and range of contingencies--nearly 40 since the Gulf war. Many of these 
operations have involved nontraditional tasks--distributing food, 
resettling refugees, and providing medical assistance. All Americans are 
proud of our men and women in uniform for doing this work so well. But 
the fact remains that we depend on them first and foremost to fight and 
win America's wars. This highlights the second question I raised: How do 
we guard our military's unparalleled fighting ability, when, 
increasingly, we call on it for operations other than war?

In addressing this question, let me briefly review how we approach the 
decision to commit our armed forces. Our nation uses force for one 
purpose alone--to protect and promote American interests. I believe 
these interests can be divided into three categories. 

The first involves matters of overriding importance to our national 
security and survival--such as a direct attack on our soil, our people, 
or our allies. We will do whatever it takes to defend these vital 
interests, including the use of decisive military force--with others 
where we can and alone when we must. From our swift response when Iraq 
moved forces toward Kuwait to our 37,000 troops in Korea, we have shown 
our unshakable resolve.  Vital interests are the raison d'etre of our 
military force--and will be so long as nations exist and human nature is 
unchanged.

More and more often, however, we face situations that do not threaten 
our nation's vital interests--yet do still affect our interests and the 
character of the world in which we live. It might be a conflict, such as 
Bosnia, that produces terrible suffering and jeopardizes stability in a 
region of vital importance to our nation. Or it might be a brutal coup, 
like the one in Haiti, that endangers  democracy in our hemisphere and 
prompts thousands of desperate refugees to seek sanctuary on our shores. 

This second kind of case is more  difficult to address, because our 
interests, though important, are less immediate, and the threats may be 
less clear. That is why before we use force, we must make a careful 
assessment: Can the use of our military forces advance American 
interests? Do they have a reasonable chance of success? Are the 
interests at stake commensurate with the costs and risks?  Have other 
means been tried and failed to achieve our objectives? Before we send 
our troops into situations where our interests are less than vital, they 
need a clear and achievable mission, the means to prevail, and a 
strategy for withdrawal that is based on the military mission's goals.

In both Haiti and Bosnia, we met those standards, and our troops have 
performed superbly. Contrast these operations with Vietnam or Lebanon, 
where clear and achievable military missions were not defined soon 
enough--or ever. In Vietnam, our society blamed our soldiers for a 
defeat that was not theirs. Because we neglected to ask the right 
questions, the men and women of our armed forces paid a terrible price--
both in Vietnam and when they came home. We must never put them in that 
position again--never.

There is also a third category for using not force but the unique 
capabilities of our forces. This category involves primarily 
humanitarian interests. Generally, the military is not the best tool to 
address such concerns. But sometimes a humanitarian crisis--such as 
Somalia or Rwanda--may swamp the ability of relief organizations to    
respond. Sometimes only our military has the capability to kick-start 
longer term disaster response before handing the operation back to the 
relief community.

In considering such cases, we should always keep in mind that the force 
of our example bolsters our leadership in the world and enhances our 
ability to achieve our interests. When millions of human lives are at 
risk, the world's most powerful nation cannot simply sit on the 
sidelines. The American people would not allow it--and that is to their 
credit.

None of this means America should become the world's policeman. We 
cannot answer every 911 around the globe. But when we have weighed the 
risks and costs against our interests, and when we can make a 
difference, we have a responsibility to act.

Over the last three years, I believe our military has risen to these new 
challenges with extraordinary professionalism and skill--whether 
restoring democracy to Haiti or stopping the slaughter and safeguarding 
the peace in Bosnia on one hand, or saving hundreds of thousands of 
Somalis from starvation or delivering nearly 15,000 tons of food, 
medicine, and supplies to Rwanda's refugees on the other. 

But performing peacekeeping and humanitarian missions while preserving 
warfighting capabilities is more than a conceptual challenge. It is also 
a challenge to mindset and culture. Is it possible to maintain the ethos 
of the warrior in servicemen and women who are serving on missions of 
peace?

The answer was made clear to      me last Christmas, when I visited our 
troops in Haiti with General Shalikashvili. I will never forget how I 
felt as he addressed those young Americans. He told them they were tough 
troops, trained to do tough work. "But today," he said, "is Christmas. 
Take a step back. Look at what you've done. You've saved the lives of 
thousands of people. Your mothers would be proud." I could see those 
soldiers look a little embarrassed at the praise, but they also seemed 
very proud as the General's words sunk in. They were  every bit the 
world's best-trained, best-equipped, best-prepared soldiers that we 
count on them to be. And, yet, they were also agents of hope for a 
nation in need--in the best tradition of our people. That moment 
captured unequivocally for me that, yes, we can do both. 

It seems to me there are four basic points to keep in mind. 

The first is that power matters, even in operations other than war. Our 
military's successes in Haiti and Bosnia came because they established a 
secure environment in each through the exercise and example of their 
military power and prowess.

The second point is that our goals in operations other than war must be 
practical and limited. We cannot deceive ourselves into thinking that 
the very presence of our troops will conjure democracy into existence or 
flip the switch on to prosperity. At best, we can only give others a 
chance to rebuild their lives themselves. By restricting our engagement 
to the time and tasks necessary to complete our military mission, we 
underscore that the core purpose of our military is to fight wars--not 
to build nations.

The third point to bear in mind is that peacekeeping and humanitarian 
missions can also provide valuable experience for when the 'big ones' 
come along. They catalyze innovation--such as the joint planning among 
our services that was at the heart of our success in Haiti, or the 
provision of near real-time intelligence to our field commanders in 
Bosnia. They can break new ground in our cooperation with other nations-
-such as our historic partnership with Russia in Bosnia--as well as with 
UN agencies, non-governmental organizations, and the media. And they can 
help our troops to keep their skills sharp--though, of course, not all 
warfighting skills are put to use in these operations. That is why we 
must continue to devise new ways for our units to keep their edge, such 
as rotating troops out of Bosnia for essential training in Hungary.

Finally, I believe our men and women in uniform are rightfully proud of 
what they are doing on these missions and that from that pride comes 
power. They show the world an America that is strong enough to be 
caring, generous, and humane and that reinforces our nation's ability to 
lead the global march for peace and freedom. So we are starting to find 
ways to balance the equation successfully. 

I want to underscore that in peacekeeping and humanitarian operations, 
just as in combat, the President retains and will never relinquish 
command authority over American forces. But from the Revolutionary War 
to Korea to Desert Storm, the occasional, temporary placement of our 
forces under the operational control of foreign commanders has been part 
of our nation's security structure--and must remain so.

Some have proposed that in order to deal with these greater numbers of 
operations other than war, we should dedicate some of our forces to 
peacekeeping operations only. There are others who suggest that our 
servicemen and women be allowed to decide the extent of their 
participation in such missions. My own view on both issues is, no. As I 
said earlier, we use force for one reason only: to protect and promote 
our nation's interests. In order to maintain a disciplined fighting 
force, where morale is high and unity is strong, peacekeeping and 
humanitarian operations must be a common responsibility--no less than 
deterring conflicts or winning wars. And I'll tell you now, as I thought 
on Christmas Day--not only can our troops do both, they are. Anyone who 
has any doubts should ask both Saddam Hussein and the Haitian people.

But to keep our troops the best they can be, we must address the final 
challenge I posed at the outset:  attracting and retaining an all-
volunteer force of high standards and technical skill that is reflective 
of American society. 

Part of why our military has been so successful is that it seeks to 
employ the best talents that America has to offer, regardless of gender 
or race. Indeed, I think we can safely say that our military is the most 
merit-based major institution in American society. Not only does it 
demand high quality at the outset, it encourages its members to become 
even better--and provides opportunities to do so. Our armed forces set 
an example for American society in giving those who take responsibility 
and work hard a chance to make the most of their own lives.

Almost five decades ago, the integration of our armed forces not only 
strengthened our combat readiness, it helped spur our nation to fight 
racism at home. Today, because the public still sees itself when it 
looks to our troops, it expects the military to keep pace with--and even 
to be a model for--the standards that govern the rest of society on 
issues from equal opportunity to sexual harassment.

Our military continues to work hard to improve opportunities for women 
and minorities. Last month, I attended the graduation of nearly 1,000 
new sailors at the Great Lakes Naval Training Center, and I was very 
proud, as I looked out at them, to see that--in this particular class--
more than one-third were women.

In the 1970s and 1980s, I was a skeptic about an all-volunteer American 
military, primarily because of the concern that there could develop a 
gap between the military and the rest of our society. Today, after three 
years' experience, I can see that, quite simply, I was wrong.

I have discussed some of the challenges our military is meeting for 
America, but there is also a challenge America must meet for our 
military. Our servicemen and women put their lives on the line for our 
country. They must have the resources they need to do their jobs. This 
demands constant reassessment, as we have done--increasing the defense 
budget when we recognized funding shortfalls, seeking additional 
appropriations for unexpected contingencies, and making sure, as we 
approach our 4-year strategy review, that our strategy is backed by 
sufficient resources.

But important as technology and weaponry are, we must always remember 
that the core of our military strength is the faces behind the force. 
For me, they are the rangers I met who had just come home after a 
terrible--and, too many forget, heroic--firefight in Mogadishu. They 
spoke first of their willingness to serve anywhere, at any time. Or the 
troops I have visited in Haiti, who took such pride in what they had 
done for the people of Haiti. Or the members of Charlie Rock Company at 
Outpost Lima in Bosnia, setting up camp on a muddy hill to help preserve 
a hard-won peace--a peace won in large part through the strength and 
skill of our Air Force pilots and Navy aviators. 

We are all proud of these and the other men and women of America's armed 
forces. The President and I are grateful that you, the Class of '96, 
will be among those who lead them, work with them, and support them as 
we enter the 21st century. I believe that with your wisdom, vision, and 
leadership, our military and our nation will remain the most powerful, 
successful, and admired the world has ever known.

Congratulations on your graduation, and best wishes to you all.

(###)



Article 4:

The MFN Decision and U.S.-China Relations
Winston Lord, Assistant Secretary for East Asian And Pacific Affairs
Statement before the Subcommittee on Trade of the House Ways and Means 
Committee, Washington, DC, June 11, 1996

Thank you very much for the opportunity to testify before this committee 
on the extension of China's most-favored-nation--MFN--trading status. 
This issue is of critical importance to our relationship with a country 
that is fast becoming a major regional and global power. It has great 
significance for our national interests. I would like to use my time 
this morning to put the MFN decision into the broader context of overall 
U.S.-China relations.

Since we normalized relations with China in 1979, every U.S 
administration--Democratic and Republican--has extended China's MFN 
trading status. This Administration supports the continuation of that 
well-established policy.

As President Clinton said when he confirmed his commitment to this 
policy two weeks ago: "MFN renewal  is not a referendum on all China's 
policies." It does not constitute an endorsement of any specific action 
or behavior. The decisions of President Carter, President Reagan, and 
President Bush to extend MFN did not indicate their approval of Chinese 
repression or behavior. Their decisions were based on a balanced 
assessment of U.S. interests and the best means of pursuing those 
interests. The same considerations apply today. Unfortunately, a number 
of myths and misunderstandings have muddled our discussions on China's 
MFN status.

First of all, the term "most favored nation," in itself, contributes to 
the confusion. Contrary to the way it sounds, MFN does not provide any 
preferential or special treatment and is clearly not a reward for good 
behavior. Rather, it is the normal commercial foundation upon which our 
relations with all but a handful of our international trading partners 
rest. It is also the basis of multilateral consensus and support for a 
free and open global economic system.

As Congressman Bereuter recently noted, we have not withdrawn Nigeria's 
MFN status because its current regime has executed poets and other 
political dissidents. Products from Syria and the Sudan receive MFN 
treatment, despite their governments' support for international 
terrorism.

The extension of this status in these cases, of course, does not mean 
that we do not consider human rights abuses, support for terrorism, or 
IPR piracy to be serious problems. However, MFN withdrawal is clearly 
not the best way to deal with such issues. In each case, we have more 
appropriate and more effective foreign policy tools at our disposal.

This is also true in our relations with China. Relying on the 
instruments already available, we have tailored our responses to China's 
behavior for maximum effectiveness. These instruments provide both 
positive and negative inducements for Beijing to address our concerns.

-- On Taiwan, our response to Beijing's missile exercises in the Strait 
this March was clear. Our deployment of naval forces to the region was 
meant to avert any dangerous miscalculations and signaled to all our 
friends our intention to maintain our presence in the region. We have 
emphasized to both sides of the Strait the importance of avoiding 
provocative actions, and we continue to strongly urge both sides to 
resume the cross-Strait dialogue.

-- On non-proliferation, we have demonstrated our determination to 
enforce U.S. law. In 1994, as a result of the sanctions we had imposed 
following China's sales of missile equipment to Pakistan, China agreed 
not to export ground-to-ground MTCR-class missiles and reaffirmed its 
commitments to abide by the MTCR Guidelines and Annex.

More recently, this firm stance was critical to our ability to obtain 
China's commitment that it "will not provide assistance to unsafeguarded 
nuclear facilities" in third countries, including Pakistan. This is a 
new and significant public commitment by China. It goes beyond earlier 
Chinese commitments by accepting responsibility not only to control 
nuclear items specifically listed on the international trigger lists, 
but also dual-use items, including ring magnets and other forms of 
assistance to unsafeguarded nuclear facilities. It is an important step 
forward.

-- On IPR enforcement and other trade issues, we have left no doubt 
about the serious consequences of failure to remedy chronic problems and 
comply with international and bilateral commitments. At the same time, 
we have worked hard to provide constructive advice and support for 
China's efforts to integrate its economy into the world trading system.

-- With respect to human rights, this Administration has kept faith with 
our principles by placing a high priority on human rights issues in the 
conduct of our relationship with China. We have engaged China 
bilaterally to raise our concerns, we have taken appropriate 
multilateral actions, and we have kept the focus on what China needs to 
do to adhere to international human rights standards. Our relationship 
with China covers a broad array of issues and interests which we must 
weigh. But we will ensure that Beijing is aware that its behavior on 
human rights is of great concern and will continue to be a priority for 
us.

At the same time, Chinese society is opening up, and its increasing 
integration into the international community will be a long-term 
process. The creation of an increasing network of economic, educational, 
cultural, technical, and legal ties between Chinese citizens and the 
outside world will help foster a positive climate in China for human 
rights. We are pursuing both governmental and non-governmental dialogue 
with China on issues related to the rule of law. Over time, this 
engagement, too, will have a significant effect.

A second myth that exists in some quarters is that whenever there are 
difficulties in our relationship with China, it must be due to U.S. 
miscues. Clearly, the U.S. is not responsible for political insecurities 
that lead Beijing to imprison dissidents. Clearly, our policy did not 
cause Beijing to launch missiles into the Taiwan Strait, to export 
dangerous technologies, or to fail to open markets and enforce 
intellectual property rights.

The reality is that, no matter how wise and steady our course, we will 
continue to encounter problems as well as opportunities in our bilateral 
relations with China. Moreover, during this period, we are dealing with 
a complex, difficult and prickly partner whose power is growing, whose 
leadership is in transition, and whose government is turning 
increasingly to  a nationalism that is conditioned by thousands of years 
of experience as the dominant "Middle Kingdom" and more than a century 
of humiliation by foreigners. Against this backdrop, any administration, 
any policy would encounter tensions. It is inevitable that two great 
nations--with different histories, cultures, and stages of development--
will have differences.

A third myth is that America should respond to our differences with 
China by seeking to control or contain it. Such a policy would be 
misguided and, in the end, unsuccessful. It would constitute a self-
fulfilling prophesy of turning China into an enemy. It would require a 
major shift in our economic, military, and diplomatic resources. We and 
the global community would risk much if China were to become weak, 
isolated, and unstable. Who could seriously contend that China, in such 
circumstances, would be more likely to respond positively to our 
concerns in such areas as regional security, arms control, trade, and 
human rights? As Secretary Christopher said recently: "A more secure 
China is likely to be more open to reform and a better neighbor."

In practical terms, a containment policy would require the support and 
cooperation of Europe, Russia, Japan, Korea, and others in the region. 
Whatever the degree of their concern about China's growing power, no 
country would be willing to join in efforts to contain the P.R.C. And if 
we attempted to pursue such a policy alone, we would not only lose our 
ability to influence China in ways that promote our interests, we would 
also lose the benefits of cooperation on trade and other commercial 
issues; on North Korea; non-proliferation; UN Security Council actions 
and other international security issues; and on global issues like the 
environment, narcotics trafficking, and international crime. We would 
also severely strain our relations with our many friends and allies in 
Asia and elsewhere and could potentially destabilize the entire region.

A fourth myth, suggested by some of those who advocate containment, is 
that the only alternative is appeasement. Consistent with the approach 
of five previous administrations of both political parties, this 
Administration's policy of pursuing U.S. interests through engagement 
with China in no way implies acquiescence in Chinese actions that clash 
with U.S. interests or international norms. As I explained earlier, 
engagement allows us to tailor our responses to the specific 
circumstances in each area where we have differences with China. It 
makes it possible for us to apply a wide range of inducements and 
pressures on issues where we wish to encourage China to adjust its 
course. Engagement means being firm whenever necessary and cooperative 
whenever possible.

Where China does not comply with its international commitments or with 
internationally recognized standards of behavior, we are prepared to use 
all the instruments at our disposal, including those provided for in 
existing domestic legislation, that may be required to promote progress. 
Our willingness to take a firm stance when necessary is required to 
protect our interests, maintain domestic support for engagement, and 
engender respect in Beijing. It is an important component of building a 
stable, productive, and mutually beneficial long-term relationship.

At the same time, engagement allows us to continue to enjoy the 
substantial benefits of a constructive and cooperative bilateral 
relationship with China. In the midst of the inevitable frictions and 
media attention, let us not lose sight of these positive elements.

The benefits of engagement with China are not limited, as is sometimes 
implied, to the economic and commercial sphere. China, in its own self- 
interest, has cooperated with us in managing dangerous North Korean 
behavior. It has cut off aid to the Khmer Rouge and supported the 
elected government in Cambodia. Though sometimes exerting its influence, 
China has not vetoed United Nations actions of critical importance to 
the international community. It has cooperated with us in such areas as 
narcotics trafficking and alien smuggling.

Despite serious continuing problems, China has come a long way in the 
last decade on non-proliferation and arms control issues. It has joined 
the Non-Proliferation Treaty--NPT--and the Chemical Weapons Convention 
and has supported rapid conclusion of the comprehensive test ban treaty. 
In 1994, after we had imposed sanctions related to Chinese sales of 
missile equipment to Pakistan, China agreed not to export ground-to-
ground MTCR-class missiles. More recently, we have obtained China's 
commitment not to assist any unsafeguarded nuclear facilities.

On the economic side, despite some substantial disputes, China has been 
our fastest-growing export market in recent years. Last year alone, our 
exports increased by more than one-fourth, supporting nearly 170,000 
American jobs. Based on sales in the first quarter of this year, we may 
do nearly as well this year--creating another 35,000 or more new jobs.

With one of the world's highest economic growth rates, China offers 
enormous commercial opportunities for U.S. business. To take just one 
example, by the year 2000, China is expected to invest over $150 billion 
in electric power production and distribution, transportation, 
telecommunications, and other major commercial and infrastructure 
projects. If allowed to compete on a level playing field, U.S. companies 
can expect to win a significant portion of the related international 
contracts. But if our producers are handicapped in this key market, 
European, Japanese, and other international competitors are ready and 
able to take their place.

Commercial concerns, of course, are only one of our foreign policy 
interests. But we must be very sure of the effectiveness of our proposed 
actions before we put at risk the livelihoods of so many American 
citizens.

Given the stakes involved, the extension of China's MFN status is a 
precondition of engagement--both where we seek changes in Chinese 
behavior and where our interests and policies coincide. An examination 
of the negative consequences of MFN withdrawal for U.S. interests offers 
a compelling case for our policy approach.

On the one hand, MFN withdrawal would not accomplish our goals.

-- It would not promote China's adherence to non-proliferation 
standards. Rather, it would strengthen hardliners and provide a strong 
incentive to compensate for lost revenues from legitimate trade with 
exports of dangerous and destabilizing technologies and equipment.

-- It would not open China's markets and foster respect for commercial 
laws and trade disciplines. Rather, it would bolster the claims of 
nationalists that China cannot rely on its international partners and 
must remain separate, self-reliant, and unbound by international norms 
and standards of behavior.

-- It would not help to protect the rights and freedoms of Chinese 
citizens or ease repression in Tibet. Rather, it would restrict access 
to the outside world and reduce the impact of international values on 
Chinese society and politics.

-- It would not enhance the security and stability of Taiwan and Hong 
Kong. It would deal severe blows to their economic interests and 
stability, while raising tensions and diminishing the chances for a 
peaceful cross-Strait relationship and a smooth transition to Chinese 
sovereignty over Hong Kong.

On the other hand, MFN withdrawal would inflict great damage on a range 
of important U.S. interests.

-- It would deny tens of thousands of jobs to American workers--jobs 
that would quickly move to the economies of our international 
competitors.

-- It would set back the process of openness and reform in China, doing 
the greatest harm to those whom we most wish to support and encourage 
there.

-- It would strain our relations with our partners in Asia and 
elsewhere.

-- It would severely hamper our ability to work constructively with one 
of the world's most powerful nations on the broad range of U.S. foreign 
policy interests.

This Administration will not downplay or ignore our problems with 
China's policies or behavior. We support unconditional MFN extension not 
as a favor for China, but because it is good for America. The stakes are 
high--for us and for China, for stability and prosperity in Asia and the 
world. We must manage our differences with China in a way that promotes 
our interests. China, in turn, must make its own efforts on behalf of a 
relationship that will be central to both countries' welfare in the 21st 
century.

Mr. Chairman, in the last two weeks, President Clinton and Secretary 
Christopher have set forth our comprehensive policy toward China. In 
this context, they have reaffirmed their strong conviction that U.S. 
national interests require the unconditional extension of China's MFN 
status. This judgment is consistent with the policies of previous 
administrations and with the advice of political leaders and foreign 
policy experts of both parties. As President Clinton has noted, a vote 
for MFN renewal is a vote for American interests. I look forward to 
working with you and with the rest of the Congress to build the 
political consensus that is required for us to steer a steady course 
during this difficult period in U.S.-China relations.

(###) 



Article 5:

U.S.-China Relationship
Charlene Barshefsky, U.S. Trade Representative
Statement before the Subcommittee on Trade of the House Ways And Means 
Committee, Washington, DC, June 12, 1996

Mr. Chairman, it is a pleasure to appear before the subcommittee today 
to discuss the U.S.-China relationship and the question of intellectual 
property rights enforcement. 

It is an understatement to say that the U.S.-China relationship is 
complex and multifaceted. America has a range of issues with China that 
go far beyond trade. We have a deep and abiding interest in human 
rights, and we are critical when basic international norms are not met. 
We have continuing concerns in areas ranging from non- proliferation to 
environmental protection. And increasingly, trade plays a central role 
in our relationship. Make no mistake about it: Americans have a 
commercial stake in China. At least 160,000 Americans owe their jobs to 
U.S. exports to China. Just as we should not make apologies for China, 
we should not apologize for our economic interest in China. 

China is the world's fastest-growing major economy, with annual growth 
rates of more than 10% for each of the past four years, and average 
growth rates of greater than 7% for each of the past 14 years. Already 
possessing the world's largest population, by early in the next century, 
China may have the world's largest economy. 
 
On May 31, the President sent to Congress the formal waiver recommending 
extension of unconditional MFN to China for another year. The United 
States' interests in China are best promoted if we maintain MFN as the 
foundation for our trade relationship. 
 
Mr. Chairman, we will never achieve China's full integration into the 
international community by building walls that divide us. The most 
repressive periods in modern Chinese history did not occur in times of 
open exchange, they occurred in times of isolation. President Clinton 
believes we must remain engaged with China. But let me be clear about 
what we mean by engagement. President Clinton came to office with the 
strong view that engagement with China does not mean ignoring our 
differences. It means we actively engage China to resolve our 
differences and it means protecting our interests when consultations are 
not fruitful. 

When the President decided to delink human rights and MFN two years ago, 
he said that we were prepared to use a whole array of legislative and 
administrative methods to address specific issues with China. With 
respect to trade, as the President has repeatedly said, we welcome 
foreign products but insist that our products be treated fairly 
overseas. When other countries do not live up to their obligations, we 
will take action. More than three years ago, the President affirmed that 
"We must enforce our trade laws and our trade agreements with all the 
tools and energy at our disposal." We have used all of the tools at our 
disposal to open China's market. One area of immediate difficulty, of 
course, is China's lack of satisfactory implementation of the 1995 
Intellectual Property Rights Enforcement Agreement. 

Mr. Chairman, as you are well aware, last month the United States 
announced the publication of a $3-billion preliminary retaliation list 
targeting Chinese exports to the United States. This action set in 
motion a 30-day clock before final action occurs. Last week, the 
U.S.Trade Representative held public hearings on the retaliation list, 
and we appreciated the range of comments from individuals and companies 
that we received. Currently, we are preparing a final list with a value 
of    approximately $2 billion--a figure commensurate with the damage 
inflicted on U.S. industries. Barring satisfactory implementation of the 
IPR Enforcement Agreement by China, the final list will go into effect 
on June 17. 

We do not take the move toward  retaliation lightly. China has taken 
certain actions to improve IPR protection, particularly in the retail 
sector. Over the past year, China has carried out more than 4,000 raids 
and destroyed approximately 2 million pirated CDs, and hundreds of 
thousands of pirated books, audio cassettes, and trademarks. Some IPR 
court cases involving foreign rightholders have also been resolved 
successfully over the past year. 

China has also established a nationwide IPR enforcement structure as 
required under the agreement--a system of more than 30 provincial and 
municipal level task forces comprised of enforcement agencies and the 
police. The system--designed to target piracy, levy stiff fines, and 
remand infringers for criminal prosecution--is working   in some 
localities. In Shanghai, for example, officials have made IPR protection 
a priority and have taken effective action to clean up the city's 
markets. Clearly, where Chinese officials have demonstrated resolve, 
they have shown that piracy can be brought under control. 

Despite these measures, China has not enforced key areas of the 
agreement, including halting piracy at its source. As a result, 
important American industries and broader American and international 
interests are getting hurt. Last year, China exported approximately 50 
million pirated CDs, CD-ROMs, VCDs, and LDs to the world. Today, in Hong 
Kong and elsewhere, $10,000 software packages can be purchased for as 
little as $5. Pirate versions of Microsoft's Windows 95 were on sale in 
China before it was officially introduced. Motion pictures are often 
pirated and available on VCD disks before they are released in the 
United States. 
 
The affect of this activity on the U.S. economy is clear. U.S. copyright 
industries alone represent more than 5% of the U.S. work force--roughly 
equal to the U.S. auto industry--and are growing three times as fast as 
the rest of the economy. The copyright industries contribute more than 
$350 billion a year to the U.S. economy, accounting for more than 6% of 
GDP. The U.S. computer software industry alone maintains a 75% market 
share worldwide and created almost 60,000 jobs last year. When China 
pirates American products, it denies the ideas, the enterprise, and the 
jobs of these American companies and the workers they represent. 

China must take four key actions to remedy the current IPR situation and 
implement the IPR Agreement.

First, it must take action against the factories involved in the 
production of pirate CDs and CD-ROMs. We have an aggressive strategy 
with China to ensure--to the best of our ability--that all CD factories 
in China are producing legitimate CDs, LDs, CD-ROMs, and Video CDs. The 
IPR Agreement that we have in place with China calls for the clean-up of 
all factories producing pirated products. We have targeted the worst 
offenders and have asked the Chinese to close down these factories 
immediately. In addition, we are working with the Chinese Government to 
ensure that the remaining factories are cleaned up or closed down. The 
point is that we need to see a comprehensive system in place to 
crackdown on piracy in China. 
 
Second, it must intensify enforcement in areas of China where piracy 
continues to be rampant, such as Guangdong Province. While China has 
raided retail establishments extensively, regions such as Guangdong 
continue to engage in rampant piracy. Manufacturers and distributors 
have remained untouched. Major pirates have not been punished, and 
prosecutors remain reluctant to tackle copyright infringement cases. 
Penalties are rarely sufficient to deter piracy. For pirates, they are 
now simply a part of the cost of doing business. 

Third, it must take effective action to protect intellectual property at 
China's borders, particularly seizures of bulk cargo shipments. Exports 
of pirated products--mainly from Southern China through Hong Kong--
result in huge losses for U.S. companies in third country markets. 
China's Customs Service has conducted more than 1,000 seizures--but 
mainly against foot traffic at the border. China has yet to target cargo 
shipments, the primary export method for pirated CDs. 
 
Finally, permit market access for U.S. computer software, sound 
recording, and motion picture products and companies. China has not yet 
fulfilled any of the major elements of the market access commitments 
that it undertook in the IPR Enforcement Agreement. Although China has 
entered into some revenue-sharing arrangements, U.S. filmmakers still 
face de facto quotas in China' markets. China has yet to issue 
regulations allowing the establishment of joint ventures for production 
of audiovisual products, including the signing and promotion of local 
artists, as well as other market access steps. 

Actions in these areas, all required by last year's agreement, will 
establish the foundation for bringing the rampant piracy under control. 
China knows exactly what it must do to get back on the compliance track. 
The issue now is for China to take concrete and verifiable action to 
reduce piracy at its source and at its borders. 
 
Let me make two final points on this issue. First, the United States has 
gone the extra mile to help solve this problem. Since the signing of the 
agreement last year, we have sent eight delegations to China and its 
provinces and conducted more than 30 senior- level meetings. At the 
request of the Chinese Government, we have a team in China this week for 
consultations. The United Sates has also provided technical assistance 
in support of this effort. Key U.S. law enforcement agencies have 
provided assistance to the Chinese, including the Department of Justice, 
the FBI, the Customs Service, the Patent and Trademark Office, the U.S 
Information Agency, and the U.S.Trade Representative. Additionally, the 
U.S. private sector has hosted literally dozens of training seminars 
throughout China. In fact, our companies have gone so far as to donate 
computer equipment and software to the Chinese Customs Service. 
 
Second, the IPR issue has significance beyond bilateral relations 
between the United States and China. As the world's fastest-growing 
market, whether China enforces its trade obligations matters to 
everyone. We are not the only nation for which the protection of 
intellectual property rights is important, and this is well known to 
China. We have not asked China to do anything more than what other Asian 
nations are already doing--indeed, what China has already agreed to do. 
The vitality and success of the global trading system depends on 
everyone living up to their obligations. 
 
We urge China to take the concrete actions necessary to demonstrate its 
firm commitment to the agreement and ensure its implementation. There is 
time for this to happen before sanctions go into effect. We are prepared 
to work with the Chinese toward that end. But it is decisive action 
against piracy that China must now take. 

Mr. Chairman, the U.S.-China relationship is as important as any 
bilateral relationship in the world. But the opportunities in our 
relationship with China must run in both directions. For China, the 
potential of the U.S. market is matched by a tangible reality. Roughly 
one-third of China's exports go to the United States, including tens of 
billions of dollars worth of electronic machinery, textiles, footwear, 
and an ever-increasing volume of higher value-added products. In 
addition, Chinese companies, as with all foreign companies, are allowed 
to establish freely in the United States. No one restricts their right 
to do business with American customers. 
 
For the United States, it is certainly true that China offers unmatched 
potential. Unfortunately, while progress has been made, for the United 
States, the potential of the China market remains unfulfilled in many 
respects. While the United States accepts one-third of China's exports, 
China accounts for less than 2% of U.S. exports and maintains highly 
restrictive import policies. China must further open its markets. The 
first step is to ensure compliance with commitments already made. 
 
We have an opportunity to bridge important gaps in our relationship, so 
that benefits travel in both directions. To make this potential a 
reality, the United States stands ready to do its share. Renewing MFN, 
along with a broader engagement strategy, is critical to building a 
long-term, stable relationship with China. But China, too, must bear its 
share. It must respect international norms, open its markets, and 
fulfill the commitments it makes. Mutual prosperity depends on this.

(###)



Article 6:

U.S. Interests in and Policy Toward Afghanistan
Robin L. Raphel, Assistant Secretary for South Asian Affairs
Statement before the Subcommittee on Near Eastern and South Asian 
Affairs Of the Senate Foreign Relations Committee, Washington, DC, June 
6, 1996 

Mr. Chairman and members of the subcommittee: I am pleased to have this 
opportunity to review U.S. interests in Afghanistan and our policy 
toward that beleaguered country. I would also like to discuss the Afghan 
peace process, which the United States has actively supported for 
several years. 

I appreciate your interest and willingness to focus on this troubled 
area. I have recently made a visit to the region that included Pakistan, 
Afghanistan, Central Asia, and Russia. The focus of my discussions was 
Afghanistan.

The interests of the United States in Afghanistan remain largely as they 
have been since the fall of the communists in 1992. They are threefold.

First, regional stability. The ongoing conflict among the Afghan 
factions is both a source and result of regional rivalries. The civil 
strife is particularly tragic, given the role of the Afghan peoples 
struggle in ending the Cold War. The conflict in Afghanistan prevents 
the new Central Asian states from establishing trade and oil and gas 
outlets to the south; it provides another venue for Indo-Pakistani 
competition; it feeds Iranian fears of being surrounded by unfriendly 
regimes; and, finally, it promotes a dangerous fragmentation of 
Afghanistan.

The stability of this region is important to the United States: We wish 
to see countries with governments that provide basic services and that 
protect the rights of their citizenry; where economies can flourish and 
foreign investment and assistance are welcomed and help improve the 
standards of living.

Seventeen years of relentless fighting have all but destroyed 
Afghanistan--its economy, its infra- structure, its institutions, and 
its social systems. The Afghan people are war-weary; they want an end to 
the fighting and a return to normalcy. We seek a negotiated peace in 
Afghanistan that would end its role as a battleground. We support the 
aspirations of the Afghan people for a broadly accepted, inclusive 
government that can be held accountable by the people of Afghanistan to 
move the country toward a future of hope.

Second, terrorism and narcotics. In the absence of a functioning central 
government in Kabul, these problems cannot be addressed effectively. The 
proliferation of militant training camps and increased narcotics 
production and trafficking can only be reversed by cooperation between 
those both inside and outside Afghanistan. Afghanistan has become a 
conduit for drugs, crime, and terrorism that can undermine Pakistan and 
the neighboring Central Asian states and have an impact beyond to Europe 
and Russia. We intend to maintain an international focus on these 
problems.

Americans recall the support the United States gave to the Afghan 
freedom fighters who sought to liberate their country from Soviet 
occupation. Many non-Afghans also took up the struggle and were trained 
in camps on Afghan soil. Unfortunately, these camps also came to be used 
for terrorist training. Several terrorist incidents in the Middle East 
and elsewhere have been linked to individuals trained in Afghan camps. 
Ramzi Ahmed Yousef, who has been indicted as a major figure in the World 
Trade Center bombing, has such a link to Afghanistan. 

Afghanistan is the second-largest producer of opium in the world after 
Burma. Afghanistan's opium production has tripled since 1990, with its 
share of illicit worldwide production increasing from 13% of the total 
in 1990 to 32% in 1995. Opium poppy cultivation is relatively easy and 
very lucrative. In Afghanistan's shattered economy, other means must be 
found to provide farmers with a decent living. Opium processed into 
heroin finds its way into Pakistan, Central Asia, Russia, Europe, and 
the U.S.

The United States currently provides a modest amount of funds for drug 
control and rural rehabilitation projects, crop substitution, and 
counter-narcotics activities, mostly through the United Nations Drug 
Control Program--FY 1995, $715,000; FY 1996, minimum of $200,000.

Third, humanitarian concerns. The human suffering in Afghanistan must be 
addressed if the country is to rebuild and rejoin the world community. 
Currently, Afghanistan ranks 173rd of 175 countries on the United 
Nations human development index. When stability is restored, the more 
than 2 million Afghan refugees who live outside the country and the more 
than a half-million internally displaced persons can return home. 
Stability and security will also allow the redevelopment of the Afghan 
economy and reconstruction of the country's infrastructure.

Since 1989, the United States has provided $700 million in assistance to 
Afghanistan, largely for the care and feeding of refugees and more 
recently for repatriation efforts. In 1995, over $40 million went for 
refugee care and repatriation. This assistance has been largely funneled 
through UN organizations and private voluntary organizations. 
Additionally, the United States has responded with urgently needed 
emergency assistance for the residents of Kabul for the past two 
winters, providing nearly $1.5 million of food, winter clothing, 
blankets, medical supplies, and shelter materials. Recently, we provided 
$50,000 for emergency relief in the wake of the recent flooding disaster 
in the country. These funds went to the International Federation of the 
Red Cross which, along with UN agencies, led the effort to help the 
Afghan people after the floods.

Another legacy of the 1980s was the placing of over 10 million landmines 
in the Afghan countryside and cities, making Afghanistan one of the most 
heavily mined countries in the world. Thousands of innocent victims, 
including children, continue to be injured and maimed by these hidden 
terrors. Com- pounding this tragedy, the warring factions continue to 
place mines. The U.S. contribution to the efforts to locate and 
eliminate these mines has been modest, but important. In 1995, the 
United States provided over $4 million for the training and operation of 
demining dog teams, demining equipment, and other UN demining efforts. 
While USAID funding for demining has been eliminated, we earnestly hope 
more funding will be available from other sources.

The common thread of all our interests in Afghanistan is the need to 
restore stability. This has been the overall goal of U.S. policy. For 
the past several years, the United States has worked hard to promote a 
peace process in Afghanistan that would enable a functioning central 
government to emerge, order to be restored, and reconstruction to begin. 
We have fully supported the UN Special Mission on Afghanistan, believing 
that the United Nations is best placed to broker a negotiated peace.

In February, as President of the UN Security Council, Ambassador 
Madeleine Albright called for the international community to pay more 
attention to Afghanistan and focused concern on the humanitarian 
disaster that has taken place there. Then in April, the UN Security 
Council held an open debate on Afghanistan, the first in over six years. 
The nations making statements that day clearly placed the responsibility 
for halting the violence on the warring Afghan factions themselves.

The United Nations will do all it can to facilitate the peace process, 
but, ultimately, it is up to the factions and their outside supporters 
to agree to a peace. The world community urged these factions to 
consider the welfare of their country and their people and bring an 
immediate end to the fighting.

My recent discussions in the region bolstered my view that many 
countries want a tangible peace in Afghanistan achieved as soon as 
possible. We have been discussing with many nations the effects of 
outside interference on Afghanistan and how the continued supply of 
arms, materiel, and funds to the warring factions has only perpetuated 
the fighting and made the factions more resistant to negotiations. The 
United States has repeatedly urged   an end to outside interference in 
Afghanistan. We believe that countries in the region should recognize 
that Afghanistan's stability is in their interest. Instability breeds 
concern among all the neighbors.

At the United Nations, there are ongoing discussions on how to promote 
an Afghan peace, such as an arms embargo and an international 
conference. The United States wishes to explore these ideas further with 
other concerned countries.

We remain convinced that the only solution to this impasse is a 
negotiated settlement that leads to a representative, broadly supported, 
central government. Steps along the way must include a cease-fire, a 
neutral security force, demilitarizing Kabul, agreement on an interim 
governing arrangement, and planning for a permanent form of government.

Recently, UN Special Envoy Ambassador Mestiri resigned from his post. We 
greatly appreciated Ambassador Mestiri's dedication and efforts under 
very difficult circumstances during these past two years. The UN is 
currently in the process of choosing a successor. We hope that the next 
envoy will have Ambassador Mestiri's foreign policy expertise and 
international stature. The new envoy should be able to work closely with 
the parties to the Afghan civil war and the countries affected by the 
instability in Afghanistan.

We support a vigorous UN peace effort aimed at reconciling the factions 
and persuading them to agree to a negotiated settlement. We are 
concerned, however, that the factional leaders are not putting the 
interests of their country or their fellow countrymen above their self 
interest. They are often inflexible and seemingly immune to pressure. 
These leaders must be made to understand that the Afghan people do not 
want a continuous state of war in their country. The United States 
supports the aspirations of the Afghan people to establish a 
representative government which will be responsive to their needs.
 The U.S. does not favor one faction over another nor does it give any 
group or individual support. We believe that the Afghan people have the 
right to a government of their own choosing, free from outside 
interference. For this to be achieved, all must see that there can be no 
sustainable settlement based on the notion that there will be a winner -
-and, therefore, losers. Everyone must have a stake in a negotiated 
settlement or everyone will continue to lose. We hope that real progress 
toward a lasting peace can begin soon. 

(###)



Article 7:

What's in Print
Foreign Relations Of the United States

The recently released volumes of the Foreign Relations series continue 
the Department of State's expanded coverage of the documentary history 
of the Vietnam war.

The volumes--Foreign Relations of the United States, 1964-1968, Volume 
II, Vietnam, January-June 1965; and Foreign Relations of the United 
States, 1964-1968, Volume III, Vietnam, June-December 1965 are extensive 
and intensive, each documenting six months of policy deliberation and 
decisions. They are the most comprehensive collection of documents 
covering the tumultuous events of 1965, surpassing the Pentagon Papers, 
which were made public during the war amid much  controversy.

Researchers relied heavily on the records of President Lyndon B. Johnson 
and his aides. Records from the Departments of State and Defense and the 
Central Intelligence Agency, as well as papers of key officials such as 
Gen. William Westmoreland, Averell Harriman, Gen. Maxwell Taylor, and 
others were examined and selected.

The Office of the Historian has prepared summaries of the volumes. For 
further information, contact David S. Patterson, General Editor of the 
Foreign Relations Series, at (202) 663-1127; fax (202) 663-1289.

Copies of the volumes (Volume II--GPO Stock No. 044-000-02405-5, and 
Volume III--GPO Stock No. 044-000-02406-3) may be purchased for $37 each 
postpaid ($46.25 each for foreign orders). VISA, MasterCard, and 
personal checks are accepted. Order from:


U.S. Government Printing Office
Superintendent of Documents 
P.O. Box 371954
Pittsburgh, PA 15250-7954

To order by phone, call (202) 512-1800; to fax your order, call (202) 
512-2250.

(###)
[END DISPATCH VOL 7, NUMBER 25]
(###)

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