U.S. Department of State
Dispatch Volume 7, Supplement No. 2, June 1996
Bureau of Public Affairs

            Group of Seven (G-7)1996 Economic Summit
                           Lyon, France
                         June 26-30, 1996



ARTICLES IN THIS ISSUE:

1. Fighting Terrorism: Top Priority on G-7 Agenda--President Clinton, 
French President Chirac
2. Declaration on Terrorism
3. The G-7 Summit: International Issues--Secretary Christopher, Treasury 
Secretary Rubin
4. Lyon Summit Communique: Making A Success of Globalization for the 
Benefit of All
5. The G-7 Summit: Achieving Key Objectives--President Clinton
6. Lyon Summit Chairman's Statement: Toward Greater Security and 
Stability in a More Cooperative World


ARTICLE 1

Fighting Terrorism: Top Priority on G-7 Agenda
President Clinton, French President Chirac
Opening statements at a news conference, Lyon, France, June 27, 1996

President Chirac. Ladies and gentlemen, this press point is, in fact, to 
explain to you that we changed our agenda at the G-7. We were united in 
condemning the dreadful bombing that has taken place and the fact that 
the United States and Saudi Arabia have fallen victim to this appalling 
event.

We expressed our deepest sympathy to the president of the United States 
and the people of the United States as well, and we decided to place 
terrorism on our agenda as the very first point for discussion and to 
prepare a communique in order to fight this scourge. This is a 
communique which you will be receiving at the close of this pre-press 
conference so that you can see the top priority that we assign to 
fighting terrorism.

We have also agreed to convene a ministerial conference in about three 
week's time, which will be attended by the ministers of  foreign affairs 
and ministers responsible for security at the level of the eight 
countries meeting here. This is all designed to identify the steps which 
will bolster our fight against terrorism.


President Clinton. I want to thank President Chirac and my other G-7   
colleagues for their very powerful statements and their expressions of 
sympathy to the victims and their families. 

We have once again stood united against terrorism. We understand that an 
attack on one of us is an attack on all of us, and that none of us is 
invulnerable. Attacks of terror can occur anywhere, whether in a Paris 
metro station or in Manchester or the subway in Tokyo or the World Trade 
Center or the Oklahoma City Federal Building. This latest act of outrage 
reminds us of one of the great burdens of the modern world.

As we become more open, as our borders become freer to cross, as we   
can move information and money and people and material across national 
boundaries more quickly, we all become more vulnerable to terrorists, to 
the organized forces of destruction, to those who live to kill for 
ethnic or racial or religious reasons, especially. And I want to 
emphasize that I am convinced that the G-7 leaders are every bit as 
determined as I am to take stronger action.

In the next day or two we will be discussing, as I said earlier, 40 
specific actions we can take to try to protect our borders, to try to 
stop the legal weapons trade, to try to stop the money laundering and 
illegal currency transactions, to try to protect the witnesses and 
others who support our efforts to crack terrorists and their operations. 
And then President Chirac, in suggesting this ministerial, has given us 
the chance to  try to come up with even more specific steps that will 
involve, we hope, even more people rallying to our cause.

This is a very sad day for the United States. I have been very moved by 
the deep and genuine expressions of condolence by the president of 
France and the other leaders here. But I have been even more moved by 
the determination that they have shared with me in common to take 
stronger stands against terrorism, to prevail and not to give in. That 
is the message we want to go out to the world tonight. 

(###)



ARTICLE 2

Declaration on Terrorism
Statement released at the G-7 Economic Summit, Lyon, France, June 27, 
1996.

In the aftermath of the cowardly attack on Dhahran, which took the lives 
of a large number of American citizens and injured hundreds of innocent 
people, we, the member countries of the G-7, condemn this barbarous and 
unjustifiable act and express our wholehearted solidarity with the 
United States and Saudi Arabia in their terrible ordeal. We pay tribute 
to the memory of the victims and convey our deepest sympathy to their 
families, as well as to the American and Saudi peoples. We also condemn 
other recent terrorist outrages.

These tragedies strengthen us in our conviction that terrorism is a 
major challenge to all our societies and states today. We reaffirm our 
absolute condemnation of terrorism in all its forms and manifestations, 
regardless of its perpetrators or motives. Terrorism is a heinous crime, 
and there must be no excuse or exception in bringing its perpetrators to 
justice.

We proclaim our common resolve to unite our efforts and our 
determination to fight terrorism by all legal means. In keeping with the 
guidelines for action adopted by the Eight in Ottawa, we strongly urge 
all states to deny all support to terrorists. We rededicate ourselves 
and invite others to associate with our efforts in order to thwart the 
activities of terrorists and their supporters, including fund-raising, 
the planning of terrorist acts, procurement of weapons, calling for 
violence, and incitements to commit terrorist acts. Special attention 
should be paid to the threat of utilization of nuclear, biological, and 
chemical materials, as well as toxic substances, for terrorist purposes.

We consider the fight against terrorism to be our absolute priority, and 
reiterate the necessity for all states to adhere to the relevant 
international conventions. When implemented, many of the recommendations 
the Eight will be considering tomorrow to deal with crime will better 
equip our law enforcement authorities to work together to combat 
terrorism. And we are resolved to do more: to examine and implement, in 
cooperation with all states, all measures liable to strengthen the 
capacity of the international community to defeat terrorism. To that 
end, we have decided that a ministerial meeting to consider and 
recommend further actions will be held in Paris, as early as the month 
of July.  

(###)



ARTICLE 3

The G-7 Summit: International Issues
Secretary Christopher, Treasury Secretary Rubin
Remarks prior to press briefing, Lyon, France, June 28, 1996

Secretary Christopher. Good afternoon. Since taking office, President 
Clinton has focused the summits on developing concrete strategies to 
address the most pressing concerns of both the American people and the 
international community at large.

At Tokyo, as you will recall, the President galvanized support for the   
completion of the Uruguay Round, and he mobilized a major western 
economic package for Russia. At Naples, the leaders adopted the 
President's proposal for a far-ranging review and reform of the 
principal international institutions in order to try to ready them to 
meet the challenges of the next century. At Halifax last year, following 
the President's now-successful efforts to end the Mexican financial 
crisis, the summit took important steps to improve the international 
community's ability to respond to that kind of crisis in the future. 
Very important steps have been taken along that line.

Coming to the summit here in Lyon this year, the President identified 
two priority areas that he wanted to focus attention on:  First, 
securing the peace in Bosnia, and second, combating international crime 
and terrorism. We expect the leaders to adopt concrete plans of action 
in both of these areas.

In Bosnia, we have already made considerable strides in implementing the 
Dayton Agreement. I want to commend the efforts of IFOR and the High 
Representative, Carl Bildt, in this regard. The guns have fallen silent 
in Bosnia. The opposing military forces have been separated and they are 
now demobilizing. The parties have agreed, only a few days ago, to far-
reaching conventional arms reductions. Virtually all the prisoners-of-
war have been released after a major effort on our part. And foreign 
forces have now departed from Bosnia.

Work has begun on the Gorazde Road, which is so important symbolically 
and substantively. The long-term project of reconstruction is under way. 
Freedom of movement, far from perfect, nevertheless has been 
substantially improved with thousands of people crossing the inter-
boundary lines every day.

We all recognize, of course, that this is a multi-year commitment on the 
civilian side and much more needs to be done. Here at Lyon, we expect 
the leaders will adopt a concrete plan of action to strengthen 
implementation in several areas, particularly relating to elections and 
economic reconstruction.

On elections, as you know, the head of the OSCE has now officially 
confirmed elections will take place as scheduled under the Dayton 
Agreement on September 14. Elections are vital to put in place the key 
political institutions called for in Dayton, including a national 
presidency, a national legislature, and national courts. These 
institutions are essential if we are going to achieve the Dayton goal of 
a multi-ethnic society  and if we are to continue the work on 
reconstruction, which is so essential. Our action plan will lay out 
specific steps that the international community will take to make the 
elections a success.

On economic reconstruction, the leaders will lay out an agenda to make 
sure that peace produces real benefits in the lives of ordinary 
civilians--ordinary citizens  of Bosnia. This will include new steps to 
ensure adequate funding and the construction of priority reconstruction 
projects.

The leaders will also review various aspects of Dayton compliance. One 
of the most important of these, of course, is compliance with the orders 
of the War Crimes Tribunal. I want to stress that the Dayton Agreement 
now flatly prohibits indicted war criminals from participating in the 
elections. The President will be working with his fellow leaders here to 
make clear that indicted war criminals such as Mr. Karadzic must be 
removed from power, removed from influence, be out of the country, and 
in the hands of the War Crimes Tribunal.

Terrorism, international crime--to move to the second subject--are also  
priority issues for President Clinton, President Chirac, and the other 
leaders. Last night, at the urging of both President Clinton and 
President Chirac, the leaders adopted a statement declaring the fight 
against terrorism to be an absolute priority for all of them. The 
program that the leaders will adopt during the next two days represents 
a very important  series of steps in addressing what is obviously one of 
the most important problems facing the world today.

Since the beginning of our Administration, President Clinton has put 
these concerns about terrorism and international crime at the very top 
of his agenda. Last year at the 50th UN General Assembly, the President 
called on all nations to adopt effective, coordinated strategies to 
fight these transnational issues such as terrorism, crime, narcotics, 
arms trafficking, and nuclear smuggling--issues that have a very close 
interactive relation to each other--I am sorry to say.

In Ottawa last December, the P-8 agreed to a declaration against 
terrorism, calling on all nations to ratify the 11 international 
antiterrorism agreements, and to do so by the year 2000. Experts from 
the P-8 have developed a package of 40 recommendations on international 
crime and terrorism that the leaders will review and will endorse later 
today or later at the summit.

These recommendations, of course, are not the end of the effort. As you 
know, last night, the leaders asked the ministers to meet within the 
next month to consider further actions.

This is the message that will go forth from Lyon: The international 
community is united and determined to prevail in the fight against 
terrorism. We must not rest until this fight against this most serious 
threat to our security and well-being has been won.

The significance of our decision is strengthened here by the presence of 
Russia in our discussions both of global and regional security issues. 
The elections held two weeks ago in Russia represent  a milestone on the 
continued path of political and economic reform in that country. 
Russia's participation here--with the arrival this afternoon of Prime 
Minister Chernomyrdin and Foreign Minister Primakov--are further signs 
that Russia is integrating itself into the international community and 
contributing to international stability and security.

We look forward to a similarly successful second round of elections in 
Russia. We will continue to urge the leaders of Russia and the people of 
Russia to strengthen and consolidate reforms as they move into their 
future. Thank you very much.


Secretary Rubin. Thank you. Let me,  if I may, add a few words with 
respect to the economic agenda of this summit and where we may be going-
-going forward.

The President came to the summit committed to advancing the 
international economic agenda that he began advancing, as Secretary 
Christopher said, at the Tokyo Summit--the first summit of his 
Administration--focusing on promoting sustainable growth and financial 
stability in the world economy, strengthening our capacity to deal with 
new challenges to the international financial system, supporting 
development and reform in the developing and transitional world, opening 
markets, building multilateral trading systems, and supporting the 
transition in Russia and the former Soviet Union.

We have reached agreement in Lyon on quite a number of measures that 
continue to advance this process that began with the President in Tokyo, 
and then led to Naples and Halifax.

First, the leaders reaffirmed their commitment to macroeconomic policies 
and structural reforms to promote sustainable growth and job creation. 
And in this context let me say--because I suspect you will probably ask 
me anyway--that the leaders welcomed the broad movements in exchange 
rates in the major currencies since April of 1995 and instructed their 
finance ministers to continue to cooperate on economic and foreign 
exchange matters.

Second, the leaders welcomed the progress achieved in implementing the 
Halifax initiatives, which were designed to strengthen the financial 
system, including the establishment earlier of a strong early warning 
system through the disclosure requirements promulgated by the IMF, and 
the agreement on a new, $50-billion supplementary facility for the IMF 
done around the concept of the general agreements to borrow.

One of the key outcomes, in my view at least, of our discussions in Lyon 
was to continue our emphasis on remaining at the frontier of 
globalization and innovation in the financial markets. Toward this end, 
the communique outlined new priorities with respect to enhancing 
regulatory cooperation to safeguard the financial system, including 
stronger risk management and transparency in innovative markets in the 
major financial centers; making operative with specific steps the 
agreement previously reached to cooperate in regulating the 
international financial organizations that operate across global 
borders; and establishing standards for financial institutions in 
emerging markets--a very important issue going forward.

They also called for review of the implications of electronic money--
Internet and the like--and the identification of ways to make sure that 
the benefits of these developments are realized, and at the same time, 
ways to avoid the problems that are implicit in these developments.

Third, the leaders reaffirmed a results-oriented partnership for 
development which emphasizes the importance of sound economic policies 
and good governance in the developing world, more effective assistance 
by the multilateral development institutions focused particularly on 
poverty alleviation, and in putting into place the underpinnings for 
private sector development and continued support from the developed 
countries.

The finance ministers, who have had a number of meetings during this 
two-day period, will be talking about this development agenda over 
dinner this evening with the managing director of the IMF, the president 
of the World Bank, and the director general of the WTO. The leaders will 
meet with those three plus the secretary general of the United Nations 
tomorrow to discuss those and other subjects.

Fourth, the most important thing--with respect to the development 
agenda--the leaders agreed on a comprehensive approach for alleviating 
the debt burden of the poorest nations, so those nations, if they agree 
to sound reform policies, will be able to manage their debt burden and 
succeed economically. This approach includes a substantial commitment 
from the World Bank, which we expect will total the order of $2 billion 
from their own resources for debt alleviation, and contribution by the 
IMF through a continuing, enhanced structural adjustment facility, 
referred to as the ESAF, financed primarily by its own resources.

This approach also calls for increased debt reduction by the creditors 
of the Paris Club. We believe that debt reduction, debt relief for the 
poorest countries is the most efficient way of making a contribution to 
their reform and development.


All of these measures are vital achievements in the ongoing process of 
dealing with the global economy and the global financial markets. There 
is an enormous amount of work to do, but, if you look back over the past 
3-1/2 years, I believe without question that there have been tremendous 
achievements that will greatly contribute to all of our economies and 
our national security in the years ahead, including very much to those 
of the United States.

Let me conclude by complimenting our French hosts--my colleague, Jean 
Arthuis, in particular--for their effective leadership in various 
meetings at this summit. 

(###)



ARTICLE 4

Lyon Summit Communique: Making a Success of Globalization For the 
Benefit of All
Text of communique issued at Lyon, France, June 28, 1996.

Preamble

1. We, the Heads of State and Government of seven major industrialized 
democracies and the President of the European Commission, have met in 
Lyon for our 22nd annual Summit. Our discussions have taken place within 
the framework of a reflection on benefits and challenges posed by 
increasing economic globalization.

2. Economic growth and progress in today's interdependent world is bound 
up with the process of globalization. Globalization provides great 
opportunities for the future, not only for our countries, but for all 
others too. Its many positive aspects include an unprecedented expansion 
of investment and trade; the opening up to international trade of the 
world's most populous regions and opportunities for more developing 
countries to improve their standards of living; the increasingly rapid 
dissemination of information, technological innovation and the 
proliferation of skilled jobs. These characteristics of globalization 
have led to a considerable expansion of wealth and prosperity in the 
world. Hence, we are convinced that the process of globalization is a 
source of hope for the future. History shows that rising living 
standards depend crucially on reaping the gains from trade, 
international investment and technical progress.

3. Globalization also poses challenges to societies and economies. Its 
benefits will not materialize unless countries adjust to increased 
competition. In the poorer countries, it may accentuate inequality and 
certain parts of the world could become marginalized. The adjustment 
needed is, however, imposing rapid and sometimes painful restructuring, 
whose effects, in some of our countries, can temporarily exacerbate the 
employment situation. Globalization of the financial markets can 
generate new risks of instability, which requires all countries to 
pursue sound economic policies and structural reform.

4. Our countries have made a decisive contribution to the progress of 
liberalization and globalization. We must do our best to ensure that 
this process fully responds to the hopes it has aroused and that 
globalization serves the interest of people, their jobs and their 
quality of life. The potential benefits of the process for people must 
be translated into real opportunities in our own societies and in the 
poorer countries of the world. In an increasingly interdependent world 
we must all recognize that we have an interest in spreading the benefits 
of economic growth as widely as possible and in diminishing the risk 
either of excluding individuals or groups in our own economies or of 
excluding certain countries or regions from the benefits of 
globalization.

5. This requires increased international cooperation. The adaptation of 
our international institutional structures; liberalization of markets, 
fair rules and their extension to new players; the capacity to respond 
to crises of varying scale and nature, as well as a readiness to support 
the efforts of those countries striving to escape from the miseries of 
economic underdevelopment will be necessary for future progress. We call 
upon other countries with the financial capacity and a stake in the 
international trade and monetary system to join us in these efforts so 
as to share the responsibilities and the burdens fairly among ourselves 
and with others. We will thus be able to make a success of globalization 
for the benefit of all.

I. Strengthening Economic and Monetary Cooperation

6. Growing international economic interdependence unquestionably
holds out new opportunities for the entire global community. At the same 
time, it adds to our collective responsibilities and the need for more 
effective cooperation among our countries to face new challenges.

7. Since we met in Halifax, economic developments have been on the whole 
positive and disparities of economic performance among us have been 
narrowing. Canada and the United States continue to enjoy sustained 
noninflationary growth. In Japan, the recovery is gathering strength. 
Some European countries, admittedly, experienced a slowdown, but 
economic fundamentals are improving and we are confident that growth 
will pick up in the second half of the year.

Looking ahead, the economic fundamentals remain sound and well
oriented: inflation has settled at a low level, the interest rates have 
come down substantially, reaching historically low levels in some of our 
countries and external and internal imbalances have been substantially 
reduced. However, we recognize that some difficulties still lie ahead: 
public deficits and debt remain too large and national savings too low, 
unemployment is still unacceptably high in many countries and despite 
all the progress already achieved in the area of structural reforms, our 
economies are not yet as resilient and adaptable to changes as they 
should be.

Outside the G-7 sphere, economic prospects also look very encouraging. 
Emerging economies are experiencing robust growth. Sound macroeconomic 
policies and progress toward market-based institutions have contributed 
to improving economic performance in many developing countries and 
countries in transition.

8. In this context, our economic policies will continue to be directed 
at sustaining noninflationary growth. This is a vital prerequisite to 
the creation of jobs and bringing down unemployment. While recognizing 
that our individual circumstances may vary, we share a common commitment 
to a medium-term economic strategy: credible fiscal consolidation 
programs, successful anti-inflationary policies and as a consequence low 
interest rates, and strengthened structural reform. These should 
contribute to investment, growth and job creation. Such policies will 
contribute to reducing external imbalances, thereby promoting 
international monetary stability and maintaining the conditions for 
harmonious growth in global trade and business.

9. Sound economic policies are the most important foundation for 
preventing exchange rate misalignment that may heighten uncertainty in 
the global economy and be detrimental to trade and growth. We welcome 
the broad movements in the major currencies since April 1995. These are 
positive and promising developments, and have helped to improve the 
conditions for sustained growth across the G-7. We endorse the views of 
our Ministers of Finance on international monetary stability. We request 
our Ministers of Finance to continue to cooperate closely on economic 
policy and in the exchange markets. In this connection, we attach 
importance to the implementation of improved practical measures to deal  
with risks relating to the operation of the global financial markets and 
we request our Ministers to report to the next Summit on this issue.

10. The globalization of the financial markets has contributed to the 
creation of a more complex financial environment. Better prudential 
regulation and supervision in the financial markets are
essential elements in preserving the stability of the international 
monetary and financial system. In this respect, we welcome the progress 
on the strengthening of capital standards, including the recent 
agreement on capital adequacy standards for banks' exposure to market 
risk, improved disclosure and enhanced surveillance.

11. Cooperation among regulatory and supervisory authorities should 
continue to adapt to financial innovations, and to the growth in cross-
border capital movements and internationally active financial 
institutions. We welcome the work accomplished by the international 
bodies concerned with banking and securities regulation. Over the year 
ahead, we should seek to make maximum progress on the following 
objectives:

-- enhancing cooperation among the authorities responsible for the 
supervision of internationally-active financial institutions, 
importantly by clarifying their roles and responsibilities;
-- encouraging stronger risk management and improved transparency in
the markets and connected activities, especially in the innovative 
markets;
-- encouraging the adoption of strong prudential standards in emerging 
economies and increasing cooperation with their supervisory authorities; 
international financial institutions and bodies should increase their 
efforts to promote effective supervisory structures in these economies. 
We ask our Finance Ministers in consultation with the relevant 
institutions to report back on this issue at our next meeting;
-- studying the implications of the recent technological advances which 
make possible the creation of sophisticated methods for retail 
electronic payments and how to ensure their benefits are fully realized.

12. The increased integration of global capital markets, the changes in 
magnitude and composition of financial flows, and the increased 
diversity and number of creditors and borrowers present new 
opportunities and new challenges. That is why, in order to promote 
monetary stability, we proposed last year in Halifax a number of 
measures for the international financial system, notably the 
International Monetary Fund, to strengthen the ability to deal 
effectively with these challenges.

We welcome the work accomplished since the Halifax Summit toward the 
implementation of these proposals. The surveillance capacities of the 
IMF have been enhanced, standards for the provision of economic and 
financial information to the markets have been established and an 
emergency financing mechanism has been created. We welcome the G-10 
report on resolving the liquidity crises of sovereign borrowers. This 
report emphasizes the importance of market discipline, and calls for the 
enhancement of current procedures for handling international financial 
emergencies, in order to minimize the need for official support in the 
future.

13. Together with the international community as a whole, we undertake 
to ensure that the IMF has the resources needed to perform its tasks in 
the service of international monetary stability:

-- we welcome the agreement reached on a framework for doubling the 
resources currently available to the IMF under the General Arrangements 
to Borrow in order to respond to financial emergencies. These 
arrangements will include a broader group of countries with the capacity 
to support the international monetary system. We welcome this sharing of 
monetary responsibilities, thereby adapting our cooperation to  new 
economic circumstances;

-- the IMF should remain an institution based on quotas providing the 
resources necessary to accomplish its traditional tasks. Any quotas 
increase should take into account the changes in the economic and 
financial weight of its members. Given the prospective evolution of the 
Fund's liquidity, we request that the 11th quota review be completed as 
soon as possible.

14. Lastly, the IMF should continue to reflect on the role of Special 
Drawing Rights within the international monetary system. We continue to 
hope for progress on proposals that would permit all Member countries to 
participate on an equitable basis in the SDR system. We invite the IMF 
Member States to pursue their dialogue in order to settle this issue.

15. As we recognized last year, international financial fraud is a 
growing problem for our financial systems. In order to strengthen the 
fight against this phenomenon, we will continue to look for ways of 
facilitating, as much as possible, the exchange of information on cases 
involving serious financial crime and regulatory abuse between law 
enforcement agencies and regulatory bodies, in accordance with our own 
domestic legal systems and other basic principles. We intend to maintain 
our dialogue to review progress and developments in this field.

16. Finally, globalization is creating new challenges in the field of 
tax policy. Tax schemes aimed at attracting financial and other 
geographically mobile activities can create harmful tax competition 
between States, carrying risks of distorting trade and investment and 
could lead to the erosion of national tax bases. We strongly urge the 
OECD to vigorously pursue its work in this field, aimed at establishing 
a multilateral approach under which countries could operate individually 
and collectively to limit the extent of these practices. We will follow 
closely the progress on work by the OECD, which is due to produce a 
report by 1998. We will also follow closely the OECD's continuation of 
its important work on transfer pricing, where we warmly endorse the 
significant progress that the OECD has already achieved.

17. In order to face the challenges of economic and fiscal impact of 
aging populations, we remain committed to ensuring sustainability of our 
social security system.

II. Promoting Strong and Mutually Beneficial Growth of Trade and 
Investment

18. Expanding trade and investment has led to marked increases in global 
wealth and prosperity and should continue to play this role in the 
future. Growth in trade and investment will be sustainable and therefore 
most beneficial to all if conducted within a strong multilateral 
framework of rules.

19. We give high priority to achieving a multilateral agreement on 
investment in the OECD that provides high standards of investment 
protection and liberalization, with effective dispute settlement. We 
look forward to the successful completion of these negotiations by   
June 1997.

20. We place a high priority on an efficient, dynamic, respected and 
open multilateral system. We reaffirm the central role of the WTO and 
the preeminence of multilateral rules, which should serve as the 
framework for regional initiative. We reaffirm our commitment to working 
to strengthen the confidence in and credibility of the multilateral 
trading system by avoiding taking trade and investment measures that 
would be in contradiction with WTO rules and OECD codes, and by using 
and complying with any applicable provisions for consultation and 
dispute settlement when differences arise. We emphasize that bilateral 
or regional free trade agreements should be trade liberalizing and 
should cover substantially all trade.

We will continue to monitor the strict implementation of commitments and 
precise compliance with timetables agreed at the end of the Uruguay 
Round. In accordance with the rules of the World Trade Organization and 
on the basis of significant liberalization commitments, we support the 
accession of new members to the WTO.

21. We recognize the importance of the integration of developing 
countries  in the global trading system as an essential element of 
sustainable growth  and development. We have agreed on ways to help 
developing countries, especially the least developed, to benefit more 
fully from the results of the Uruguay Round.

22. Together with our partners we will work for the success of the first 
ministerial conference of the WTO in December 1996. We will ensure full  
and effective implementation of the Uruguay Round results according to 
the agreed timetables. We are resolved to complete all ongoing 
negotiations in the service sector and to relaunch talks in Singapore on 
financial services so as to reach significant, balanced and non-
discriminatory liberalization commitments by December 1997.

We strongly support the conclusion of a mutually beneficial Information 
Technology Agreement.

23. Global liberalization of trade and  a high level of environmental 
protection should be mutually supportive. It will be important, for 
example, to ensure that WTO rules and multilateral environmental 
agreements and ecolabelling programs are complementary. The Singapore 
Ministerial Conference of  the WTO will be an important opportunity to 
demonstrate the ability and willingness to integrate environmental 
protection and thus sustainable development concerns into the 
multilateral trading system. We welcome the ongoing work launched at 
Marrakech and look to the Singapore Ministerial Conference to make 
substantive recommendations for action.

24. In addition to pursuing full implementation of the Uruguay Round 
agreement, we invite the WTO Ministerial Conference to broaden its 
agenda to include topics of special importance for trade and investment 
liberalization, by:

-- beginning an examination of trade and investment in the WTO and work 
toward a consensus which might include the possibility of negotiations;
-- discussing the interaction between trade and competition policy with 
a view to determining how to proceed;
-- exploring possible new industrial tariff initiatives in sectors to be 
agreed by consensus.

We also recognize that there is a will to address the question of the 
relationship between trade and internationally recognized core labour 
standards.

We also believe that there is more to be done in areas where other 
obstacles still seriously impede freer access to markets, in particular:

-- by encouraging more convergence between national standards and
international norms, by further regulatory reform and by mutual 
recognition of procedures for testing and for certification;
-- by enhancing the disciplines of and expanding the number of countries 
subscribing to the Agreement on Government Procurement and, in 
furtherance of this goal, by developing an interim arrangement on 
transparency, openness and due process in government procurement 
practices;
--  by effectively enforcing and further developing intellectual 
property disciplines.

25. In order to facilitate the free flow   of trade, we will initiate an 
effort to further standardize and simplify customs procedures among our 
countries. Uniform documentation and electronic transmission standards 
would reduce costs for business and government, complement efforts in 
the WTO by eliminating barriers to trade and development, and so promote 
growth.

26. Lastly, we are resolved to combat corruption in international 
business transactions, which is detrimental to transparency and fairness 
and imposes heavy economic and political costs. In keeping with the 
commitment of OECD Ministers to criminalize such bribery in an effective 
and coordinated manner, we urge that the OECD further examine the 
modalities and appropriate international instruments to facilitate 
criminalization and consider proposals for action in 1997.

27. Looking ahead beyond the Singapore Ministerial Conference and
recognizing that our next meeting will take place on the eve of the 50th 
anniversary of the founding of the multilateral trading system, we are 
committed to working together with our partners to give sustained 
impetus to trade liberalization.

III. Enhancing Our Approach to Employment Problems

28. The development of a more global economy and advances in information 
technology are engines of economic growth and prosperity. But they also 
may be seen by some as a source of dislocation and insecurity. Our 
challenge is to ensure that our economies can adapt so that all our 
citizens can benefit from the opportunities created by the new global 
economy. We must achieve both economic growth and a widely shared 
prosperity. The reduction of unemployment and the creation of quality 
jobs are urgent priorities. We recognize the crucial role of the private 
sector for achieving these goals.

29. We seek to enhance the effectiveness of policies aimed at 
stimulating growth and jobs. This requires action in  a wide range of 
structural policies, within a framework of sound macroeconomic policies. 
We welcome the conclusions reached by the Ministerial Conference  on 
Employment in Lille, and we have agreed to pursue the following 
policies:

-- we reaffirm our belief that investment in people is as vital as 
investment  in capital. We will therefore pay special attention to a 
sound basic education, skill formation and training, which is a
lifelong undertaking, and to improving the transition from school to 
work;
-- we are determined to prevent and fight against social exclusion. We 
must define ways to reinforce people's employability throughout their 
working lives by facilitating the transition from one job to another;
-- we pledge to carry out practical reforms, consistent with the 
specific situation in each of our countries, aimed at achieving a high 
level of employment and widely-shared prosperity: these include tax and 
social system reforms to ensure that "work pays," particularly for the 
least well-off; lowering social security charges which place a burden on 
low-skilled jobs, in countries with high indirect labour costs; and 
improving public employment agencies;
-- in order to foster entrepreneurship we will modernize our regulatory 
frameworks where needed in the markets for goods and services, to 
enhance our economies' ability to respond to rapid change and to 
encourage job creation; we welcome the work on regulatory reform by the 
OECD and  look forward to its conclusions;
-- we will facilitate the dissemination, notably in the direction of 
small and medium-sized businesses, of new technologies, which are 
creating plentiful, quality jobs.

30. We thank the ILO and the OECD for the quality of their contributions 
to the Lille conference. We very much hope that these two organizations 
will continue their work especially on the interaction between 
macroeconomic policies and structural reforms, as well as on "best 
practice" in the fields of technology, innovation and investment in 
human capital in the best-performing businesses, and policies to enlarge 
employment opportunities for the most vulnerable workers of society.

31. We welcome the proposed meeting in Japan to reflect in greater depth 
on employment issues.

IV. Implementing a New Global Partnership for Development: An Ambition 
for the 21st Century

32. Thanks to sound domestic economic policies and to an increasingly 
global economy, many developing countries  are experiencing robust 
growth, assisted by their expanding involvement in international trade 
and capital inflows. But there is a growing divide between these 
countries and those, mainly low income countries, which are currently 
unable to benefit from these opportunities and are falling further 
behind.

33. We need therefore to define a new global partnership between 
developing countries, developed countries and multilateral institutions. 
This will involve a fresh look at development policies including 
development aid, its content and the bilateral and multilateral 
instruments through which it is provided.

34. This new partnership should set its sights on enabling all 
developing countries, whatever their stage of development, to share and 
participate in the benefits of globalization. To that end, it should 
take the achievement of sustainable development as its fundamental 
objective. Goals should include the reduction of poverty and social 
inequities, the respect of internationally recognized labour standards, 
protection of children, a strengthened civil society, protection of the 
environment, improved health and education.

35. We want the partnership to achieve concrete results. We emphasize 
the usefulness of indicators capable of measuring progress toward 
development objectives in specific countries in areas such as extreme 
poverty, infant, child and maternal mortality, and primary education. 
Other essential aspects of development must also be considered, 
including a number of non-measurable qualitative factors. We welcome the 
ongoing work of the OECD on this subject.

36. The new development partnership should be mutually beneficial and 
based on a spirit of solidarity and burden-sharing among all  those 
involved:

-- the developing countries have a fundamental responsibility for 
promoting their own development. This means conducting sound and 
consistent economic and social policies, promoting a political and legal 
environment conducive to the development of the private sector, and 
encouraging domestic and foreign investment. Democracy, human rights and 
good governance are indispensable components of development. It is up to 
these countries to give priority to funding social and economic 
development programs and to avoid unproductive expenditures, in 
particular excessive military spending, without prejudice to their right 
to self-defence. It is in their interest to commit themselves actively 
to the multilateral system and to promote regional cooperation;
-- the developed countries must support the efforts of the developing 
countries in a spirit of common purpose and efficiency. Their growth and 
market-opening policies also benefit developing countries. In 
implementing these policies, they should seek to create an environment 
which encourages trade and private financial flows in the developing 
countries direction. Bilateral agreements for investment protection and 
generalized preference measures contribute to this objective. We renew 
our commitment to secure substantial flows of official aid and to 
improve the quality of this aid. The whole international community 
should be mobilized in this effort, and new donors should assume growing 
responsibility, so that the burden is more equally shared;
-- the multilateral development institutions, cooperating among each 
other and with bilateral donors, play an important role in promoting 
development and encouraging the developing countries to reduce poverty, 
to implement sound economic policies and to improve capacity. They must 
be provided with sufficient and appropriate financial resources for this 
purpose. Their strength depends on the active participation of all 
members. Efforts by the multilateral institutions to discourage 
unproductive expenditures in developing countries should be pursued and 
supported by donor countries in their own bilateral aid and credits.

37. Within the framework of this new partnership, the priority must be 
to implement more effectively-targeted policies, with four  
complementary objectives:

-- external financial support should take into full account the 
differentiation between countries in transition, emerging economies and 
the poorest countries. Sub-Saharan Africa continues to face unusually 
severe challenges. We will concentrate resources on those countries that 
need them most and that can use them effectively, reflecting the fact 
that their policy program is credible and that their Government is fully 
committed to implement it. Grants and concessional financing should be 
directed primarily to meet the financial requirements of the poorest 
countries which have no or limited access to the international capital 
markets, once they can demonstrate their commitment to create the 
conditions to use them effectively;
-- giving more explicit priority to sustainable development and the 
alleviation of poverty. This should mean adequate ODA funding of 
essential sectors such as health and education, basic infrastructures, 
clean water schemes, environmental conservation, microenterprises, 
agricultural research and small-scale agriculture, with for example the 
help of IFAD;
-- we should support the establishment of a dynamic and competitive 
private sector in developing countries based on small and medium scale 
enterprises. ODA can play a catalytic role in creating the conditions in 
which such a private sector can flourish;
-- lastly, further integrating the Least and Less Developed Countries 
into the global economy, using the full range of policy instruments 
having an impact on development. Within the multilateral environment 
which has emerged from the Uruguay Round agreement, this should be an 
essential objective. We will support the LLDC's efforts to achieve such 
integration, for example, by responding favourably to requests for 
technical assistance in the fields of investment, privatisation and 
export diversification, and encouraging international organisations and 
programs to do likewise. We will implement the provisions of the 
Marrakech Decision on Measures in Favour of Least Developed Countries. 
In this context we will examine what each of us could do to improve 
their access to our markets and we encourage others to do the same, 
including other developing countries.

V. Enhancing the Effectiveness Of Multilateral Institutions for the 
Benefit of Development

38. To be effective in supporting this global partnership for 
development, the multilateral institutions must pursue their efforts to 
adapt and reform. We welcome the widespread support for institutional 
reform that has arisen in the past year and we are determined to help 
increase this momentum.

39. In Halifax a year ago, we called for reforms of the international 
financial institutions in order to improve coordination, reduce overlap, 
and increase their effectiveness. Reform efforts have intensified over 
the past year. The re-form of the Development Committee  has made it 
possible for Ministers from developed and developing countries to 
consider issues together and provide guidance to the institutions. The 
World Bank and the IMF are cooperating more closely with tangible 
results, for example in their joint studies on debt and public spending. 
Collaboration among the heads of the multilateral development banks has 
been intensified. Operational and administrative reforms are underway 
and attention must be directed to effective implementation.

We commend the work undertaken by the Multilateral Development Banks to 
make procurement processes more transparent. We encourage efforts by all 
the multilateral institutions to support reforms that will help to 
promote good governance and to reduce corrupt commercial practices.

A sustained effort is needed in reforming the development banks to
achieve better results on the ground, while reducing costs further. We 
endorse the recommendations of the Development Committee Task Force for 
closer cooperation between banks at all levels.

40. In Halifax, we committed ourselves to encourage the broadening and 
deepening of the reform process underway in the United Nations system. 
We believe that our initiatives have significantly contributed to an 
increasing awareness of necessary changes in the system as a 
prerequisite for improved efficiency, with a view to tangible benefits 
for recipients of the various development activities.

We particularly appreciate the outcome of the 9th session of UNCTAD
at Midrand where we succeeded, together with all our partners, to pave 
the way for a thorough reform which  can also be regarded as an 
important point of reference for the reform of the UN economic and 
social sector. We also deem significant the recent decision to
strengthen the coordinating role of ECOSOC. We welcome the UN regional 
economic commissions initiatives to examine their activities, adjust 
priorities, restructure programs and reorganize their staff to increase 
efficiency and cost effectiveness.

We will work with other members to make rapid progress in the reform of 
the UN in order to rationalize and strengthen its role in development.

41. The United Nations plays a crucial role in the organization of 
international cooperation in favour of sustainable development, and in 
fostering consensus around development objectives and policies.

The UN's priority areas are, notably: reduction of poverty, employment, 
housing, the provision of essential services, and especially those 
relating to health and education, the advancement of women and 
protection of children,  and humanitarian assistance in general.

The UN also has a fundamental role to play in promoting democracy, human 
rights and the rule of law, protection of the environment, emergency 
relief and post-conflict stabilization, and technical assistance to 
enable the poorest countries to participate in international trade and 
investment.

42. In order to be more effective in the field of development, the UN 
must clarify its role and comparative advantages. It must enhance the 
efficiency of its Secretariat and operational framework, make them more 
coherent and ensure genuine coordination at all levels. Proposals to 
that effect should focus on existing structures and build on ideas which 
have emerged in various discussions on UN reform.

43. Reform could center upon the following main points:

-- the three Secretariat departments responsible for development should 
be merged under the authority of a single Under Secretary-General;
-- the Under Secretary-General should notably serve as Executive 
Secretary of ECOSOC in order to enhance the Council's policy formulation 
and coordinating role;
-- the Secretary-General, assisted by the Under Secretary-General and 
supported by the Head of the UN Office of Internal Oversight Services, 
in cooperation with the heads of agencies, should urgently review the 
roles and mandates of specialized agencies and commissions involved in 
development with a view to eliminating overlap and improving 
effectiveness. This review should include an examination of the case for 
merging their development functions. The Secretary-General should make 
recommendations in this sense and pursue their implementation through 
the Administrative Committee on Coordination and ECOSOC;
-- upon being appointed, the Under Secretary-General should support the 
process by conducting a review of existing UN development funds and 
programs in close consultation with the heads of relevant individual 
bodies. Where a strong case for rationalization can be made, funds and 
programs should be merged into the UNDP, which would thus be enhanced;
-- the Under Secretary-General should also carry forward the 
rationalization of UN's economic analysis and reporting in consultation 
with other organizations involved in economic analysis such as the IMF, 
the World Bank and the OECD, with a view to eliminating duplication;
-- UN field premises and administrative systems in the field should be 
further consolidated and the timetable for approval of UNDP, UNFPA and 
UNICEF country programs should be harmonized;
-- savings resulting from improved cost effectiveness should be 
reinvested in development programs. The Secretary-General should study 
ways of implementing this goal.

44. UNCTAD IX was a major milestone in the renewal of UNCTAD. In close 
partnership with the other member States, we succeeded in reforming 
UNCTAD's intergovernmental machinery and in refocusing its work on a 
small number of priorities to promote development through trade and 
investment with the aim of facilitating the integration of developing 
countries in the international trade system. We are committed to the 
implementation of these reforms. The LLDC's will be the major 
beneficiaries of this action. We also welcome the WTO and the renewed 
UNCTAD initiative to enhance mutual cooperation with each other, with 
due regard to their respective mandates.

45. We urge greater cooperation between UN agencies, the international 
financial institutions and the WTO:

-- regular meetings between the United Nations Secretary-General, the 
IMF Managing Director, the World Bank President and the WTO Director 
General, and at other levels, would assure the coordinated and concerted 
action of these institutions. This closer cooperation must take into 
account the necessity for each institution to concentrate on areas of 
comparative advantage and to avoid unnecessary duplication;
-- UNDP, other UN agencies, the World Bank, the IMF, the WTO and 
regional development banks could work together, in full cooperation with 
the host country, in the preparation of country strategy reports 
submitted to their respective governing bodies. Regular meetings of 
donors in each country should be organized to facilitate the exchange of 
information and the shaping of programs according to the comparative 
advantages of each institution. Bilateral donors should be involved in 
this process. The resident United Nations coordinator or the World Bank 
or regional development bank representative could organize these 
meetings at regular intervals. Such meetings will help coordinate and
rationalize the work of donors while reducing costs;
-- the non-military aspects of peace operations (including such tasks as 
democratization, police training, institution building, and delivery of 
humanitarian assistance) should be addressed through a comprehensive 
approach. In this regard, we encourage a closer cooperation between the 
United Nations, the International Financial Institutions and the 
relevant regional organizations, in order to facilitate the transition 
between the emergency intervention phase and the rehabilitation phase. 
Consultation among multilateral and bilateral donors in post-conflict 
countries should also be reinforced.

VI. Providing the Necessary Multilateral Support for Development

46. The replenishment of the concessional resources of the multilateral 
financial institutions must be completed. In this context, we stress the 
importance of sharing this burden equitably, we welcome the emergence of 
new donors and we encourage other countries to participate.

47. We welcome the fact that all donors have agreed to contribute to 
IDA-XI and the activation of the Interim Trust Fund. This agreement will 
enable the Association to lend up to USD 22 billion over three years. 
This is a major success. It is important that all donors ensure the 
success of IDA-XI by fully respecting their commitments on time.

48. We also welcome the replenishment of the resources of the African 
Development Fund, whose work is of vital importance for this continent, 
recognizing the reforms already made by the management of the Bank. 
Timely replenishment of the Asian Development Fund is also important.

49. We are committed to a continuing Enhanced Structural Adjustment
Facility (ESAF) as the centerpiece of the International Monetary Fund 
support for the poorest countries, and we welcome the proposals of the 
Managing Director of the IMF for greater concessionality in ESAF lending 
for a limited number of poor and highly indebted countries, as the IMF's 
contribution to putting them in a sustainable position. We will examine 
constructively and positively the options for financing the needed 
subsidies, using primarily resources held by the IMF, without excluding 
bilateral contributions. If needed, the IMF should consider optimizing 
its reserves management in order to facilitate the financing of ESAF. 
This will enable the IMF to hold out to the poorest countries the 
prospect of macroeconomic stability and structural reforms aimed at 
growth.

50. We welcome progress achieved in the alleviation of the debt problems 
and the active implementation, by the Paris Club, of the Naples terms. 
However, for some heavily indebted poor countries, we acknowledge the 
need for additional action, in particular to reduce debts owing to 
multilateral institutions and other bilateral creditors that are not 
members of the Paris Club. Following the proposals developed by the 
Bretton Woods Institutions, we look forward to a concrete solution being 
agreed by next Autumn at the latest on the following basis:

-- the solution should provide an exit  for unsustainable debt and be 
based on a case by case approach adapted to the specific situation of 
each country concerned, once it has shown its commitment to pursuing its 
economic adjustment;
-- the continuation of ESAF will provide the basis for a reduction in 
the burden of the debt to the IMF for these countries;
-- we welcome the proposal by World Bank management to commit $500 mil-
lion to this initiative and substantial amounts for future years. We 
will support and work together for an overall World Bank contribution of 
the order of $2 billion for this initiative. We look to the World Bank 
together with the Regional Development Banks to develop practical 
funding mechanisms for treating debt owed to these institutions;
-- as concerns bilateral credits, we are committed to work, in 
conjunction with a maximum possible contribution by the World Bank and 
the IMF, to achieve financial viability and debt sustainability for all 
these countries which undertake the necessary adjustment efforts. We 
acknowledge Official Development Aid debt cancellation already given by 
some creditor countries. We urge the Paris Club creditor countries, 
where they deem appropriate, on a case by case basis, to go beyond the 
Naples terms for these countries. These efforts would include, on a 
voluntary basis, debt conversion schemes up to 20% instead of currently 
10% of the stock of debts, and increased debt alleviation. In parallel, 
and on the basis of the same assessment, all other bilateral creditors 
are encouraged to make their own contributions to these countries in 
terms comparable.

VII. Toward Successful Integration Of Countries in Transition Into the 
Global Economy

51. The end of the Cold War has given a decisive impetus to 
globalization by offering former socialist economies the
opportunity to assume their rightful place in the world economy.

52. We welcome the good economic results achieved by many countries
in transition which have undertaken macroeconomic stabilization and 
structural reform. Many countries, especially in Central Europe, have 
pursued resolute stabilization and structural reform programs and have 
achieved robust growth last year. Other countries which have not yet 
embraced reform fully lagged behind. Most of the countries of the former 
Soviet Union started reforms later than Central Europe, but many of them 
are poised to begin growing this year. We encourage all countries in 
transition to pursue their economic reforms in order to achieve or 
consolidate these gains. The EBRD plays an important role in supporting 
these reforms and we welcome the agreement to increase its capital.

53. We support Ukraine's efforts to continue with political and economic 
reforms and to further integrate into the world economy. In this respect 
we welcome the latest agreement with the IMF and encourage Ukraine to 
fully implement the agreed reform program.

We welcome the Moscow Summit declaration relating to Ukraine and
the commitment of President Kuchma to close reactor no. 1 at Chernobyl 
by the end of 1996, in the framework of the program to close the whole 
plant by the year 2000. We reaffirm our commitment to full 
implementation of the Memorandum concluded with Ukraine, through close 
cooperation with this country and the international financial 
institutions. In this regard, we welcome the financial decisions already 
taken by the international community, and we stress that all parties 
concerned must respect the agreed agenda of  the comprehensive program.

54. We support Russia's ongoing political reform and its commitment
to democracy. Economic and political reforms are mutually reinforcing 
and position Russia to play a more significant role in the global 
economy. We welcome the agreement between the Russian authorities and 
the IMF on an EFF. This agreement testifies to Russia's continued 
commitment to financial stabilization and economic reforms. Russia's 
economic success and its integration in the world economy depend on full 
implementation of its commitment. Crucial for economic recovery is now 
private investment which requires a reliable economic, legal and 
administrative environment.

We welcome the historical agreement between Russia and the Paris Club on 
a comprehensive medium-term rescheduling of Russia's external debt, 
which will enable this country to exit from the
rescheduling cycle. This agreement   will enable discussions to take 
place between Russia and the members of the Paris Club to see  whether 
conditions could be agreed for Russia's participation as a creditor.


* * *
Next Summit

55.  We have accepted the invitation of the President of the United 
States to meet in Denver next year. 

(###)



ARTICLE 5

The G-7 Summit: Achieving Key Objectives
President Clinton
Opening statement at a press conference, Lyon, France, June 29, 1996

Ladies and gentlemen, this  summit made real progress in the three areas 
that we came here to address: the fight against terrorism and crime, 
strengthening the peace in Bosnia, and advancing our common agenda for 
economic growth. 

I thank the leaders for sharing our outrage at the cowardly attack in 
Saudi Arabia and for agreeing to intensify the fight against terrorism. 
We resolved to take a range of concrete steps that will extend the 
efforts we are making at home. These steps will help us to achieve four 
key objectives.

First, terrorists and criminals must have nowhere to hide. For example, 
we must cooperate to speed up extradition and prosecution of those who 
practice terror and then leave the country in which they commit their 
acts. 

Second, we must drive out the resources terrorists use to fund their 
violence. 

Third, we must do a better job of defending our national borders to keep 
the terrorists, the criminals, and the illegal weapons out. 

Finally, we must stop terrorists from misusing the high-tech 
communications that we all rely on for commerce and 
cooperation.

Even more can be done. That's why we directed our senior officials to 
meet as soon as possible to recommend additional measures. 

As to the bombing in Dhahran, we will do everything in our power to 
discover who was responsible, to pursue them, and to punish them. We 
must also make sure we have taken all reasonable steps to protect our 
own people. To that end, I am announcing today that Gen. Wayne Downing, 
former Commander in Chief, U.S. Special Operations Command, will lead a 
full assessment of the facts surrounding the bomb attack in Dhahran. 
General Downing will also evaluate all policies and measures at other 
facilities in the entire central command, which include the Persian  
Gulf and the Middle East regions. He will recommend any further steps 
necessary to prevent similar attacks, and he will submit his report to 
the Secretary of Defense within 45 days. 

But let me be clear. Just as no enemy could drive us from the field in 
World War II and the Cold War, we will not be driven from the frontiers 
of our fight against terrorism today. 

We devoted a good deal of time to our work in Bosnia. We shouldn't 
forget that since our last meeting in Halifax, we've helped achieve 
something many thought was impossible--Bosnia has moved from the horror 
of war into the hope of peace. 

Here we lay the groundwork for more progress in the next six months. We 
committed ourselves to full support for the elections in September and 
accelerating the civilian reconstruction that is now underway. Even as 
we support these efforts, we're also making it clear to the parties in 
Bosnia that they must live up  to their obligations under the Dayton 
Accords, spelling out what steps they must take to prepare for the 
election and to move the reconstruction along. 

Today, I'm also proud to announce three new American initiatives to help 
that peace take root. 

First, we will devote $15 million to train demobilized soldiers to clear 
the estimated 3 million landmines still in Bosnia. Until that happens, 
no child will be able to walk in safety and life cannot return to 
normal. 

Second, we're establishing an international commission on the missing in 
the former Yugoslavia to be chaired by former Secretary of State Cy 
Vance. This group will work to resolve the almost 12,000 cases of 
missing persons, to reduce the anguish of their families, and lessen the 
tension between the parties. 

Third, we will contribute $5 million to the work of the Bosnian Women's 
Initiative. After a past in which so many men were killed in the 
fighting, Bosnia's future may depend more than ever upon its women. We 
will provide training and loans to help women find jobs and create 
businesses so they can support their families and get their nation going 
again. 

I want to recognize and thank our ambassador to Austria, Swanee Hunt, 
for helping to create this initiative. Women are meeting today in Bosnia 
on this issue. Muslim, Croatian, and Serbian women are meeting in Bosnia 
today in a multi-ethnic cooperative determination to regenerate the 
capacity of the Bosnian economy through the efforts of its women. This 
has real potential to make a difference. 

Let me just note that the environment of this summit was very different 
from the first one I attended in Tokyo in 1993. Then we were not in a 
strong position to lead, and our partners kept telling me that we had to 
get our house in order. And, frankly, they were right. 

When I took office, our budget deficit was at an all-time high, 
unemployment was more than 7%, and we had the slowest job growth since 
the Great Depression. But since that time, we have cut our budget 
deficit in half and our economy has reduced unemployment to 5.6% and 
produced 9.7 million new jobs. Inflation is near a 30-year low, interest 
rates are down, and business investment is up by 30%. Our country is now 
the number one exporter and the most competitive nation on earth, again. 
 
So here I was pleased--and I know the American people will be--to see 
that our partners recognize this and  asked for our suggestions about 
what we could do together to promote more economic growth around the 
globe, to generate jobs out of that economic growth, and to make those 
jobs good jobs so that people would have the tools to make the most of 
their lives and to build strong families. 

Finally, there was a lot of very serious conversation about how we can 
grow the economy and sustain our environment. We resolved to work harder 
on that in the year ahead and to make that a central focus of our 
meeting next year in Denver. 
 
We know we have to work on these problems together. That's the last 
point I want to drive home to the American people. We know that when we 
do cooperate, we can make a positive difference for our own people in 
maintaining our leadership in the world and meeting our challenges and 
protecting our values. I found that this summit was very helpful in all 
those regards. 

(###)



ARTICLE 6

Lyon Summit Chairman's Statement: Toward Greater Security and Stability 
In a More Cooperative World

Following is the text of a statement issued after the G-7 Economic 
Summit, Lyon, France, June 29, 1996.

We, the Participants in the Lyon Summit, discussed the opportunities and 
challenges facing us as we near the 21st century.

We agreed that we now have tremendous opportunities to make the most of 
this historic moment to achieve security and stability around the globe, 
although we still need to cope with the many challenges which require a 
wide range   of international cooperation at both regional and global 
levels. We discussed how we could build a better international system to 
secure security and stability. We recognized that we must first work to 
reduce tensions and resolve conflicts. We also concurred that enduring 
security and stability is possible only when it is founded on the basic 
requirements of respect for human rights, establishment of democratic 
institutions and individual citizen's security, and realization of 
sustainable  development and economic prosperity. In an increasingly  
inter-dependent and interactive world with rapid globalization in 
progress, we renewed our determination to work together amongst us and 
in partnership with leaders of other countries to make the most  of the 
opportunities and to meet the challenges.

I. Global Issues

Major issues need to be treated at a global level. All countries are 
liable to benefit from more security provided by  a strengthened United 
Nations Organization and by progress made in the field of non-
proliferation, arms control and disarmament as well as by an efficient 
struggle against terrorism and transnational organized crime. All 
countries benefit from the enhancement of democracy and fundamental 
freedoms throughout the world. Protection of  environment, nuclear 
safety and new types of epidemics are common challenges that must be 
properly handled. All countries are  interested in seizing the 
opportunities provided by the information technologies. In this regard, 
we are committed to cooperate actively among ourselves and with other 
partners to deal with these global issues in a spirit of efficacy and 
solidarity.

1. United Nations. We reaffirm our commitment to the Charter of the 
United Nations(UN). As many Heads of State and Government noted in the 
special  commemorative meeting of the UN General Assembly on the 
occasion of  the 50th anniversary of the entry into force of the 
Charter, the UN is called upon to play an increasing role as the 21st 
century approaches. We continue to regard the United Nations as the 
cornerstone of an international system whose success or failure is 
increasingly significant for human security, including development 
within countries and partnership among countries. We are committed to 
achieving early and practical results in the renewal of the UN so that, 
for both individuals and countries, it can more readily and effectively 
respond to the demands placed on it, and more clearly demonstrate its 
importance to the search for solutions to our globally shared problems.

In order to enable the United Nations to fully meet its challenges, we 
are convinced of the need to make progress towards revitalizing, 
strengthening and reforming the UN system. We undertake to intensify our 
role in the work of the high level and working groups set up by the 
General Assembly for this purpose in order to help ensure the balanced, 
timely and effective outcome of their efforts.

We will work with other Members throughout the UN system to  accomplish 
this goal.

Conscious of the risks that the present financial crisis poses to the 
United Nations' ability to function, we are resolved to promote in 
parallel and as soon as possible a long-term solution based on the 
adoption of a more equitable scale of contributions, on scrupulous 
respect by Member States for their financial obligations, and on the 
payment of arrears.

The United Nations is and must remain the body primarily responsible for 
international peace and security in accordance with the mission assigned 
to it in the Organization's Charter. It is important to develop its 
ability to act more quickly and effectively to address threats to 
international peace and security. It is essential, also, that Member 
States shoulder in full the responsibilities incumbent on them within 
the UN framework.

We emphasize the importance of promoting conditions conducive to
peace as the surest means to prevent conflict. We support development of 
more flexible instruments for peace, including  mediation by elder 
statesmen and United Nations representatives. We are encouraged by the 
notable successes of current peacekeeping missions in Haiti (UNMIH) and 
Bosnia (IFOR). We note the central responsibility that the parties 
themselves bear for the ending of  conflict and the re-establishment of 
peace and stability. We favour strengthening the United Nations' 
capacity for rapid deployment by further developing the stand-by 
arrangements initiative and the rapidly deployable headquarters team,  
as well as other efforts to enhance the Secretariat's ability to deploy 
new peacekeeping operations quickly and manage existing ones 
effectively. We applaud the efforts of the international community to 
assist countries devastated by conflict as they rebuild their societies: 
these measures are making a decisive contribution to the establishment 
of lasting peace. We welcome the contribution made, in accordance with 
the UN Charter, by regional organizations and arrangements to  
international stability, and the development of their cooperation with 
the United Nations.

2. Human rights, democratic processes and humanitarian emergencies. We 
restate our firm commitment to the universality of all human rights and 
fundamental freedoms, the promotion and protection of which are a 
legitimate concern of the international community. We condemn all forms 
of discrimination and intolerance, including aggressive nationalism and 
the mistreatment of persons belonging to minorities.

With that in mind, we commit ourselves to ensuring that this 
understanding continues to guide our policies. We also reaffirm our 
support for the High Commissioner for Human Rights as coordinator of 
human rights within the United Nations system and commend his 
contribution in the fields of early warning, conflict prevention and 
peace-building. We will take care to ensure that women as well as men 
benefit fully and equally from the recognition of human rights and 
fundamental freedoms, which were reiterated on the occasion of the 
Beijing Conference, and that the rights of children be respected.

We support fully the efforts of the International Tribunals aimed at the 
prosecution and trial of persons indicted for serious violations of 
human rights in the Former Yugoslavia and in Rwanda and commit ourselves 
to making available to the Tribunals adequate resources for the 
fulfillment of their mandates. At the same time, we deeply deplore any 
non-cooperation with the Tribunals, in particular the failure to arrest 
and surrender indicted persons, and we urge all parties to fulfill their 
commitment to cooperate.

All over the world, we actively support the process of democratization, 
which is an essential guarantee of respect for human rights. We will 
provide assistance in the organization of free and impartial elections 
and in strengthening democratic institutions and standards. 
International assistance, including from Non-Governmental Organizations, 
for democratic development should also contribute to the strengthening 
of free media, support for the rule of law, accountable public 
institutions (including police training) and a broader civil society.

Humanitarian emergencies, which are frequently the outcome of political 
crises, are a matter of special concern to us. We commend in particular 
work of the ICRC, UNHCR, WFP, UNICEF and others in this field. We are 
firmly determined to continue to provide assistance to populations in 
need, and we call for the coordination and rationalization of efforts in 
order to provide assistance more effectively.

3. Non-proliferation, arms control and disarmament. We affirm our 
undertaking to conclude a Comprehensive Test Ban Treaty (CTBT) so as to 
enable its signature by the outset of the 51st session of the General 
Assembly of the United Nations, this coming September. We call upon all 
the members of the Conference on Disarmament to agree that the CTBT must 
prohibit any nuclear weapon test explosion or any other nuclear 
explosion. Pending the entry into force  of the CTBT, the Nuclear Weapon 
States should exercise utmost restraint.

Such a treaty, in our view, will be a major step in the accomplishment 
of a priority goal for the international community in the field of 
disarmament and non-proliferation and the implementation of the 
obligations contained in Article VI of the Non-Proliferation Treaty 
(NPT). We reaffirm our commitment to the objectives set out in the 
document on Principles and Objectives for Nuclear Non-Proliferation and 
Disarmament adopted on 11 May 1995 at the conclusion of the NPT Review 
and Extension Conference. We are determined to contribute to the 
effectiveness of the strengthened NPT review process before the next 
Review Conference in 2000, the first preparatory committee for which 
will meet in 1997.

In the same spirit, we take note of the signature by the Southeast Asian 
States in December 1995, in Bangkok, of the Treaty establishing a 
nuclear weapon free zone in Southeast Asia, and welcome the signature by 
China, France, Russia, the United Kingdom and the United States of the 
protocols to the Treaty of Rarotonga establishing a nuclear weapon free 
zone in the South-Pacific as well as the signature on April 11, by 
Member States of the Organization for African Unity, of the Treaty of 
Pelindaba establishing a nuclear weapon free zone in Africa, and of its 
relevant Protocols by the United States, France, the United Kingdom and 
China. The establishment of these new nuclear weapon free zones and the 
cooperation of Nuclear Weapon States in supporting the relevant 
protocols helps realize the objective of creating additional such zones 
by the NPT Review Conference in 2000.

We further underline the importance that we attach to the early start of 
negotiations, based on the agreed mandate within the Conference on 
Disarmament, on a treaty to ban the production of fissile material for 
nuclear weapons or other explosive devices. We look forward to the early 
entry into force of the START II Treaty. We regard the ABM Treaty as a 
cornerstone of strategic stability.

We reiterate the importance we attach to the entry into force of the 
Convention on Chemical Weapons. We will continue to work hard to 
implement the Convention on Prohibition of Biological and Toxin Weapons, 
including the establishment of an effective verification mechanism. We 
also expect the early entry into force of the Treaty on Open Skies, 
which represents an unprecedented confidence-building measure from 
Vancouver to Vladivostok.

We are increasingly concerned with the proliferation of conventional 
weapons and the thousands of resulting deaths and injuries, especially 
to civilians and particularly children. We welcome the outcome of the 
Review Conference on the 1980 Conventional Weapons Convention. We are 
pleased that this first Review Conference reached consensus on a new 
laser weapons protocol as well as a strengthened protocol on mines, 
booby-traps and other devices. We call upon all States to spare no 
effort in securing a global ban on the scourge represented by the 
proliferation and the indiscriminate use of anti-personnel landmines and 
welcome the moratoria and bans already adopted by a number of countries 
on the production, use and export of these weapons, unilateral 
reductions in stockpiles as well as initiatives to address this urgent 
problem.

We assert the importance of reinforcing international support for 
landmine detection and removal efforts and for assistance to victims.

We again call upon all countries to support the continuing operation of 
the United Nations Register of Conventional Arms which represents an 
important mechanism for promoting transparency and building confidence 
among countries, at a global and regional level, and note that Article 
26 of the UN Charter calls for "the least diversion for armaments of the 
world's human and economic resources". Regional organizations can help 
promote transparency and confidence-building measures that reduce 
excessive stockpiling of conventional weapons. We welcome with 
satisfaction the arrangement launched at Wassenaar in December 1995 to 
promote transparency and greater responsibility in transfers of 
conventional arms and dual-use goods and technologies and will cooperate 
on its prompt and full implementation. We welcome the results of the 
first Review Conference of the Treaty on Conventional armed Forces in 
Europe (CFE). The States Parties on that occasion renewed their 
commitment to ensure the integrity of the treaty and to fulfill all of 
its obligations. They committed themselves to launch a process of 
adaptation of the treaty in order to preserve its viability in the 
future. We salute the cooperative resolution of the CFE flank issue.

4. Nuclear safety and security. We welcome with satisfaction the 
substantial progress made in the field of nuclear safety and security at 
the Moscow Summit in April of this year.

We have taken an important step toward enhancing international 
cooperation so that the use of nuclear energy is conducted all over the 
world consistently with fundamental principles of nuclear safety. We 
reaffirm our commitment, made in Moscow, to the highest internationally 
recognized nuclear safety level. In this regard, we underline that 
nuclear safety has to prevail over all other considerations. We reaffirm 
our commitment to all the principles laid down in the Convention on 
Nuclear Safety and we urge all countries to ratify this Convention, as 
soon as possible, and to participate in the peer review mechanisms. We 
stress the necessity of further progress in the establishment of 
relevant domestic legislation and in the enhancement of the 
international regime of nuclear liability as well as in the preparation 
of an international convention on the safety of radioactive waste 
management. We remain committed to assisting countries in transition in 
developing efficient and fully safety-oriented energy policies.

We welcome the adoption of the program for preventing and combating
illicit trafficking in nuclear materials, and strongly urge other States 
to associate themselves with this plan following the example of Ukraine. 
We reaffirm the need to strengthen measures to ensure nuclear material 
accounting, control and physical protection. We also acknowledge the 
need to identify appropriate strategies for the management of fissile 
material no longer required for defense purposes. The latter will be 
discussed on the occasion of a meeting of experts which will take place 
in Paris in October this year. We support the efforts of the Nuclear 
Weapon States to ensure that sensitive nuclear material (separated 
plutonium and highly enriched uranium) designated as not intended for 
use for meeting defense requirements be placed under IAEA safeguards.

In order to ensure rapid and efficient follow-up of the decisions 
regarding non-proliferation issues adopted at the Moscow Summit, we have 
taken the following initiatives:

-- on our behalf, France will undertake demarches in order to encourage 
more countries to adopt the "Programme for preventing and combatting 
illicit trafficking in nuclear material";

-- a meeting dedicated to the implementation of this Programme, with the 
participation of agencies and ministries involved in the prevention and 
fight against illicit trafficking will be held as soon as possible.

We call upon all States to contribute to the efficient and effective 
implementation of measures for the strengthened safeguards system 
proposed by the "Program 93+2" for which a model protocol is being 
further elaborated by the open-ended committee of the AIEA-Board of 
Governors. This program is making an essential contribution to tighter 
regulation of nuclear non-proliferation. This program will help avoid a 
repeat of any situation where a country under full-scope safeguards 
could carry out undeclared nuclear activities.

5. Environment. Protecting the environment is crucial in promoting 
sustainable development. In view of the threats such as global warming, 
desertification, deforestation, depleting resources and threatened 
species, and unsustainable urban development, we place top priority on 
integrating environmental protection more completely into all of our 
policies. We are exploring the possibility of supplementing our national 
income accounts to better measure resources, such as forests, minerals 
and fish, and the economic value of air, water and soil quality. We 
welcome the great potential of the environment protection industry which 
can have positive effects on long term economic growth and employment.

1997 will be a pivotal year for the environment. We renew our commitment 
to all agreements reached at Rio, and pledge to work for a successful 
outcome of the 1997 special session of the United Nations General 
Assembly which would lead to their better implementation. We commit 
ourselves to strong action and anticipate in 1997:

-- a successful outcome of the Conference of the Parties to the Climate 
Change Convention;

-- agreement on actions to promote sustainable management of forests, 
including appropriate implementing arrangements or instruments;

-- the negotiation of a global, legally binding instrument on particular 
persistent organic pollutants (POPs);

-- the speedy implementation of the Convention on Biological Diversity 
and the Convention on Desertification.

It is important to ensure adherence to environmental agreements. 
International crime in areas such as illegal trade in CFCs, endangered 
species and hazardous waste is of particular concern. We will assess 
compliance with international environmental agreements and consider 
options for enhancing compliance.

We want to see greater effectiveness on the part of the international 
institutions responsible for the environment and sustainable 
development. In particular, we want to see the political role of the 
Commission on Sustainable Development (CSD) confirmed among UN 
institutions: the CSD should serve as a high-level political forum, 
working with the UN's economic agencies and the Bretton Woods financial 
institutions, invested with the task of promoting the implementation of 
Agenda 21 at the global, regional and national level, of identifying 
emerging issues and gaps in it, and ensuring a common understanding of 
the concept of sustainable development.

We need a more precise distribution of roles between the CSD and UNEP. 
UNEP should be clearly confirmed in its catalytic role as the 
environment voice of the UN, responsible for environmental policy 
development and scientific analysis and monitoring assessment. We 
support present efforts to restructure UNEP and its governing bodies.

People should be the focus of our policies. Human health is sometimes 
being jeopardized by the deterioration of the environment. Where there 
are threats of serious or irreversible damage, we endorse measures based 
on sound science and the precautionary principle.

6. The information society. We welcome the Chair's conclusion of the 
Information Society and Development Conference in Midrand (South Africa) 
which represents an important step to ensuring that all countries 
benefit from technological change.

Information and communication technologies and services offer a 
significant contribution towards the promotion of sustainable 
development in all countries. They have important potential to meet 
basic human needs, develop human resources, promote economic growth, 
encourage participatory democracy and a free media. They should promote 
cultural and linguistic diversity, as well as dynamic competition.

We look forward to a rapid conclusion to the negotiations being 
conducted in the relevant multilateral fora. We encourage full 
cooperation among countries, existing international and
non-governmental organizations for the promotion of projects 
demonstrating their use of information and communication technology. We 
are committed to fostering partnership between the public and the 
private sector.

We call for a cooperative approach which will promote universal access 
to such technologies. We stress the importance of an adequate protection 
of intellectual property rights. We are prepared to reflect on ethical 
and criminal issues raised by worldwide communication networks. We will 
support public and private efforts to increase the use of information 
and communication technologies for  and encourage international 
organizations to assess the appropriate role which they can play.

7. The "human frontier science program." We applaud the results of the 
"Human Frontier Science Program" since its launch in Venice in 1987, and 
we await with interest the outcome of the intergovernmental Conference 
on further progress on this subject in Autumn 1996.

8. Infectious diseases. Infectious diseases such as HIV/AIDS, malaria, 
cholera, ebola, and antibiotic resistant strains of tuberculosis and 
pneumonia pose an unacceptable threat to people of all nations, 
disproportionately affecting the populations of the poorest nations. We 
endorse the creation and implementation of mechanisms to aid in the 
prevention, detection, surveillance and response to the emergence and 
re-emergence of communicable diseases. We reiterate our call for the 
extension of all forms of cooperation in the realms of research, 
prevention, accessible and affordable health care services and 
diagnostics in the treatment and control of these diseases.

We draw attention to the measures already undertaken in each of our 
countries to encourage the scientific community in its search for 
remedies to these diseases. We pledge to pursue this effort at the 
national level, while at the same time promoting international 
cooperation among research teams in this field.

Moreover, we will continue to extend various kinds of assistance 
programs, in particular for the benefit of the countries hardest hit by 
HIV/AIDS and other infectious diseases. We also encourage cooperation 
among those of us who jointly conduct cooperative projects with Africa, 
Southeast Asia, Latin America and the Caribbean by transferring our 
expertise in regard to surveillance, prevention, research, diagnosis, 
and treatment of these diseases. We will continue to work to ensure the 
availability of safe and effective treatments for these all-too-often 
fatal diseases.

We strongly support the efforts of the World Health Organization  (WHO) 
to combat emerging and re-emerging infectious diseases, as well as the 
joint United-Nations Program on AIDS (UNAIDS) to coordinate 
international efforts to stem the global HIV/AIDS epidemic.
 
9. Drugs. Drugs represent a serious threat for our younger generations' 
future, our citizens' health and the integrity of our societies. We are 
determined to intensify our efforts in order to fight against any kind 
of drug trafficking and all forms of criminality in connection with it, 
including money laundering. We therefore urge all States to fully comply 
with their obligations under international conventions dealing with 
drugs abuse and illicit traffic in psychotropic substances, and are 
ready to strengthen our cooperation with all countries involved in this 
fight against drugs. We fully support the efforts exerted by the United 
Nations and we expect from the special session of the General Assembly 
dealing with this problem that it should help us to give more coherence 
and efficiency to the whole set of actions aiming at freeing the world 
from this scourge.

10. Transnational organized crime. In Halifax we asked an experts group 
to review how to counter the rapid development of transnational 
organized crime, which is one of our main concerns. While not entirely 
new, this phenomenon threatens the nations, industrialized and 
developing countries.

Therefore we commit ourselves to:

-- mobilize our full resources and influence to combat  this danger.

-- support and enhance existing institutions that deal with 
transnational organized crime, including the United Nations, Interpol, 
and World Customs Organization.

-- encourage all States to adhere to and fully implement existing 
conventions, treaties and arrangements dealing with transnational 
organized crime.

-- resist the enormous threat posed by narcotic traffickers, by 
implementing the UN conventions against drugs, and intensifying efforts 
to put traffickers behind bars and prevent them from laundering their 
money.

-- share information and expertise to detect, investigate and prosecute 
criminals.

-- increase operational cooperation among relevant agencies.

-- deny the use of our territories to transnational organized crime.

-- take all possible steps, particularly extradition, to bring fugitives 
to justice.

-- provide the broadest possible mutual legal assistance.

-- deprive criminals of their illicit profits by adopting appropriate 
legislation and implementing recommendations of the Financial Action 
Task Force (FATF).

-- adopt the necessary legislative and regulatory measures to combat 
corruption.

Consequently, with a view to achieving these goals:

-- we welcome the work of the Senior Experts Group on Transnational 
Organized Crime.
-- we endorse the 40 recommendations they have prepared.
-- we commend these recommendations to all States.
-- we ask the Senior Experts Group to ensure the active follow-up of the 
implementation of these recommendations and to report on their progress 
and developments in this field to the next Summit.

* * *

II. Regional Situations

1. We note with satisfaction the important contributions to peace, 
stability and prosperity which regional and inter-regional organizations 
and fora have made in all the regions of the world and firmly encourage 
them to pursue their task while respecting the integrity and the 
sovereignty of their Member States. We will continue supporting all 
efforts of these organizations and all inter-regional initiatives aimed 
at developing and reinforcing cooperation between the different regions 
of the world in the  areas of political, economic and cultural matters.

In this connection, we take note of the OSCE's work on a common security 
model for further consideration at the Lisbon Summit and of continuing 
efforts to resolve peacefully disputes within the CIS. We welcome the 
intensification of intra-regional cooperation, particularly in Europe 
between the European Union and the States of Central and Eastern Europe, 
in the Americas within the Organization of American States and in the 
Asia-Pacific region through the move toward enlargement of ASEAN and 
within the ASEAN Regional Forum. We also commend recent initiatives 
aimed at renewing the transatlantic relationship between the EU and 
North America and at developing relations between EU and Russia, as well 
as the first Asian-European Meeting (ASEM) held in Bangkok this year. We 
welcome the development of the new partnership between EU and 
Mediterranean countries in the political, economic and human dimension 
fields.

2. We actively support the process of economic and political transition 
under way for over five years in Central and Eastern Europe. We welcome 
the progress accomplished by these countries toward the establishment of 
the rule of law and the establishment of a market economy. We welcome 
the prospect of enlargement of the EU to Central European countries and 
the Baltic States and encourage these and other States to take full 
advantage of the possibilities of integration offered to them. We 
support the efforts to develop good neighborly relations and we 
encourage the different initiatives that support stability in 
Southeastern Europe.
 
3. We welcome the enormous achievements attained in the Middle East 
peace process over the past several years. These include landmark 
agreements between Israel and the Palestinians, a peace treaty between 
Jordan and Israel, serious negotiations between Israel and Syria, and 
greater ties between Israel and her Arab neighbors. We also welcome 
increased economic cooperation in the region and trust that the Arab 
League will soon terminate its boycott of Israel. We are strongly 
committed to the full implementation of all agreements reached, and we 
will continue to provide our full support to those who take risks for 
peace.

The conclusion, on 28 September 1995, of the interim Israeli-Palestinian 
agreement on the Gaza Strip and West bank, as provided for in the 1993 
Declaration of Principles, was a fundamental step forward in the Middle 
East Peace Process. We welcome the opening, on 5 May 1996, of the 
negotiations on permanent status. We look forward to the resumption of 
these negotiations.

We welcome the election of a Palestinian Council, and of its Executive 
Authority. We urge the Palestinian authority, under its Head, Mr. Yassir 
Arafat, to promote the development of democratic institutions, the rule 
of law, transparency of public administration and respect for human 
rights.

We welcome all donors' efforts including the meeting in Paris on 9 
January of the Conference on Economic Assistance which reaffirmed the 
international community's support for the Palestinian economy, and urge 
donors to fulfill pledges made. We recognize the importance of economic 
growth and prosperity to underpinning peace and note the need for 
increased regional economic cooperation and development. We welcome 
steps toward facilitating economic activities in the West Bank and Gaza. 
We welcome the steps taken by the Government of Israel to ease the 
closure in the West Bank and Gaza. Recognizing that Israel has 
legitimate security needs, we look forward to the complete lifting of 
the closure. We acknowledge the important contribution of multilateral 
negotiations in all their aspects to the peace process. We also welcome 
the establishment of economic institutions and facilities which have 
grown out of the multilateral working groups.

We take note of the significant deepening and broadening of peace 
between the Israeli and Jordanian peoples and the importance of helping 
to extend the material benefits of peace.

The Sharm el-Sheikh Summit, 13 March 1996, gave all the leaders of the 
world the opportunity to reaffirm their condemnation of terrorism and 
their desire to pursue a comprehensive peace, to support regional 
stability and to fight terrorism, whatever the motive and whoever the 
perpetrators. We urge the international community to continue to uphold 
the logic of the "peace-makers ". We believe that terrorist threats will 
also be curbed by the elimination of isolation and poverty, especially 
in the Palestinian territories, by the progressive restoration of 
confidence and by the successful outcome of the peace negotiations.

We note the preeminence of the theme of security in Israel's recent 
election campaign. We are convinced that the security of all people of 
the region can eventually be achieved only through
comprehensive, equitable and lasting peace.
 
The resumption of negotiations between Syria and Israel, at the end
of December 1995, formed part of a peace dynamic which must be 
preserved. We are working to create a climate which will facilitate the 
resumption of the negotiations. We urge all the parties to resume their 
bilateral negotiations as soon as possible. We also invite Syria and 
Lebanon to join the on-going multilateral negotiations.

We urge all parties to adhere to the 26 April 1996 Understanding which 
restored calm along the Lebanese-Israeli border. We call upon the 
Consultative Group that will be assisting in the reconstruction needs of 
Lebanon to accelerate its work.

At a time when the Middle East Peace Process requires a renewed impetus, 
we urge all the parties to fulfill their obligations, including 
agreements already signed, and to continue their efforts in favour of a 
comprehensive peace on the basis of the Madrid process, the principle of 
land for peace and other principles enshrined in the relevant United 
Nations Security Council resolutions.

As we did last year, we call upon the Government of Iran to play a 
constructive role in regional and world affairs, and to desist from 
material and political support for extremist groups that are
seeking to destroy the peace process in the Middle East and to 
destabilize the region. We further call upon the Iranian Government to 
reject terrorism and notably to desist from endorsing the
continued threats to the life of Mr. Salman Rushdie and other people 
associated with his work. We call on all States to avoid any 
collaboration with Iran which might contribute to the acquisition of a 
nuclear weapons capability.

We reaffirm our determination to enforce full implementation of all UN 
Security Council resolutions concerning Iraq and Libya only full 
compliance with which could result in the lifting of all sanctions. We 
welcome the conclusion of the Memorandum of Understanding between the 
Government of Iraq and the Secretariat of the UN on the implementation 
of Security Council resolution 986.

4. We urge the Democratic People's Republic of Korea (DPRK) to develop 
the dialogue and cooperation with the Republic of Korea (ROK), this 
being the only means of achieving permanent peace on the Korean 
Peninsula and ensuring a more stable and more secure future for the 
Korean People. In this context, we support the initiatives taken with a 
view to initiating a process aimed at achieving a permanent peace 
agreement on the Korean Peninsula to replace the current Armistice 
Agreement, including the proposal of the US and the Republic of Korea on 
16 April 1996 to convene a four-part meeting. We welcome the efforts 
being made within the "Agreed Framework" of 21 October 1994, in re-
orienting the DPRK nuclear program in order to comply with its 
obligations under the Non-Proliferation Treaty. We call upon the DPRK to 
meet in full its  commitments under its safe-guards agreement with the 
IAEA and to make full disclosure of the facts concerning the history of 
its nuclear program. We call on the international community to join us 
in providing political and financial support for the Korean Peninsula 
Energy Development Organization (KEDO).


Halifax Summit Follow-up
Review of UN reforms in the economic and social fields

1. At the Halifax Summit, we decided to promote and deepen the United 
Nations reform process in the economic and social field. In order to 
strengthen the United Nations and make it more effective in carrying out 
Charter objectives, the CommuniquŽ­ set out a number of objectives, 
which we have worked actively to achieve in cooperation with the whole 
membership of the UN organizations. In this regard, we acknowledge with 
satisfaction that the principle of reform of UN economic and social 
institutions is now widely supported in all parts of the world, 
recognizing also that savings achieved through greater efficiency should 
be reinvested in appropriate programs.
 
2. The reform process is only just beginning but concrete results are 
already visible, notably where the impact of globalization of the world 
economy and budget constraints were felt most strongly. The following 
provides a non-comprehensive summary of achievements since the Halifax 
Summit. At the present time, no organs, specialized agencies, Funds or 
Programmes can claim to be bypassed by the reform process which is just 
as perceptible on  the fringes of the system as at its core.
3. We will continue and reinforce our efforts to improve the functioning 
of the UN in the economic and social fields and its impact on 
development. We will continue to work in partnership with other members 
to complete processes underway, including Agenda for Development, and 
initiate further processes as required. In addition, the effective 
implementation of results achieved to date will be a priority.


Achievements
System Wide

Negotiations on UN revitalization and strengthening in the economic and 
social fields reflect the general reform agenda. The recent agreement on 
the revision of resolution 48/162 is a welcome stage in the reform 
process and is a good omen for the finalization of the Agenda for 
Development. Numerous elements of progress can be identified.

ECOSOC's important policy coordination role is recognized, and its work 
will be facilitated by a more active bureau. ECOSOC's substantive 
session will be shortened and measures will be taken to improve its 
preparation. Short periodic sessions close to the timing of the Bretton 
Woods Institutions Provisional Committee and Development Committee 
meetings will be held to improve high level debate and coordination.

The mandates, compositions, functions and working methods of all the 
functional commissions of ECOSOC, the Committee for Programme and 
Coordination (CPC), the Committee for Development Planning (CDP) and the 
regional commissions are to be reviewed with a view to improving their 
effectiveness. The World Food Council has been discontinued and its 
functions absorbed by the World Food Programme and the Food and 
Agriculture Organization. The joint meetings of the Administrative 
Committee on Coordination and Committee for Programme and Coordination 
were deemed of limited value and will be discontinued. The discussions 
on the funding of operational activities will be transferred to the 
governing bodies of the Funds and Programmes concerned (UNDP, UNICEF, 
UNFPA, WFP).

The Secretary-General has set up an Efficiency Board chaired by the 
Under-Secretary-General for Administration, to advise him on the 
implementation of his programme to promote greater efficiency.

The Office of Internal Oversight Services has identified areas of 
overlap and duplication and made it possible to achieve substantial 
savings. Its capacity has been increased. The Office is currently 
seeking to extend its work to the Funds and Programmes.

At the initiative of the Secretary-General and under the direction of 
the Coordinator of Development Activities, three interagency task forces 
were set up, to work in the framework of the Administrative Coordinating 
Committee (ACC). These task forces will deal with the following themes: 
1) creation of an environment suited to sustainable development (steered 
by the World Bank); 2) growth of job creation (steered by the ILO); 3) 
provision of basic social services (steered by the UNFPA).

Budgeting

UN institutions have adopted budgets with a zero, or in some cases 
negative, growth rate in real terms. Maximizing the use of increasingly 
scarce resources, they ensured continuation of their development 
programmes (new activities are funded by reallocations). Agreement is 
now taking shape among most of these institutions on reducing overheads 
and improving the presentation of their budgets.

-- United Nations--for the biennium 1996-97 a budget of  US$ 2,608 
million was adopted, which is significantly less than the final approved 
expenditures for 1994-95 and represents negative nominal growth. 
Expenditure and personnel reductions are envisaged.

-- FAO--the programme-budget for the 1996-97 biennium has undergone 
considerable change (savings were made amounting to US$ 57 million) in 
order to make the organization more efficient while reducing operating 
costs. Savings were made, for the most part, thanks to efficiency gains 
and in non-technical units programmes.

-- WHO--its budget increase is modest (2.5 %), well below the demands of 
its Secretariat (14%).

--  ILO--in anticipation of the cuts announced for the 1996-97 biennium, 
additional savings (US$ 21 million) were made; the budget will be made 
more transparent.

-- IFAD--1996 is the third consecutive year of budget cuts in nominal 
and real terms and this has led the Organization to review its missions 
and internal operation.

-- WFP--streamlining efforts are continuing (closure of 20 national 
offices that are no longer needed).

-- UNDP--the 1996-97 biennium budget is down 11% in real terms compared 
to 1994-95; reductions in overhead costs are designed to protect its 
programmes. Decision procedures for programmes have been made more 
efficient.

Humanitarian Relief

A Memorandum of Understanding (MOU) has been signed between the WFP and 
the UNHCR in order to coordinate their action programmes. Similar 
agreements were signed between UNICEF and the UNHCR and are under 
negotiation between UNICEF and the WFP. As requested at the 1995 ECOSOC 
substantive session, the DHA will submit a report at the next ECOSOC 
session on the capacities and performance of relevant UN emergency 
humanitarian relief agencies in order to improve their coordination.

UNCTAD

The outcome of UNCTAD IX lays a solid foundation for the reform of 
UNCTAD. UNCTAD's work was reorganized around key priorities (trade-
investment and development issues--those in which UNCTAD has a 
comparative advantage over other international organizations). Its work 
programme focuses on assistance to the poorest countries to promote 
their integration into the world trading system, in addition to WTO 
action. A significant priority effort in the direction of the Least 
Developed Countries has been agreed. The intergovernmental machinery was 
scaled down and improved (a single annual session of the Trade and 
Development Council; the number of commissions was cut to three; 
specialization of experts groups; cutting to 55 the total number of 
meeting days). All this builds on improvements plans presented earlier 
by UNCTAD's Secretary-General that will reduce the number of Secretariat 
divisions from 9 to 4 and improve cooperation and coordination with the 
WTO.

UNCTAD IX clarified UNCTAD's complementarity to WTO. Both organizations 
have agreed to improve their mutual coordination and cooperation (joint 
half-yearly meetings, improved working relations at all levels) so as to 
facilitate their work in the trade and development fields. Moreover, 
UNCTAD and UNIDO signed a joint communiqu­ intended to promote mutual 
cooperation on the basis of their existing mandates (yearly joint 
meetings, complementarity between programmes).

Specialized Agencies

-- FAO--a review the Organization's priorities is underway, following 
approval of a reduced budget for the 1996/97 biennium.
-- UNESCO--a strategy document was adopted to reorient over the next 6 
years the programmes of the organization. An ad hoc working group was 
set up to assess operation of the General Conference.
-- WHO--the Executive Board decided to review the WHO mandate; related 
reforms (e.g. revision of the organizational chart, efficient human 
resources management) are planned.
-- UNIDO--budget cuts and personnel reductions are underway. Staff has 
reduced by 17% since Halifax (50% since 1993). Several management levels 
have been abolished, the number of divisions cut from 8 to 6 and 
improved coordination was set up between departments. A recent external 
audit advocated further reforms (additional reductions in administrative 
personnel, better targeting of interventions, scaling-down of 
administrative procedures, abolition of certain social benefits, etc.). 
Moreover, UNIDO is close to an agreement intended to promote its 
cooperation with WTO.

Funds and Programmes

-- UNICEF--the organization has completed its work on revising its 
mandate and is moving to adapt its administration.
-- WFP--on 1 January 1996, the former governing body Committee on Food 
Aid Policies and Programmes--CFA) was transformed into a downsized 
efficient Executive Board. The WFP launched a revision of its action 
programmes, in order to put an end to overlaps with other institutions.
-- UNEP--UNEP is now revising its governing structure, with a view to 
ensuring greater political oversight.
-- UNDP--the pivotal role ascribed to the UNDP in development 
operational activities within the United Nations system became a reality 
(e.g. the December 1995 agreement between the UNDP and the World Bank 
implementing joint development activities; the Special Initiative for 
Africa steered by the UNDP). The Executive Board reformed UNDP working 
methods with a view to improving effectiveness.

Regional Economic Commissions

There are active review and prioritization exercises underway. ECOSOC 
will review the Regional Commissions with a view to improving their 
effectiveness.

-- ESCAP--an external audit is in process to assess the impact of budget 
cuts on current programming. A revision of all work programmes and of 
the Commission's structure  is planned in 1996.
-- ECA--the Executive Secretary plans to carry out an in-depth 
restructuring of the Commission which includes a 10-20% cut in posts and 
a radical change of the priorities of the action programme.
-- ECLAC--the Commission has set up an intergovernmental committee to 
set clear priorities and determine strategic
directions.
-- ECE--a full review of the operation of the Commission and a rigorous 
choice of priority activities are in progress.

Agenda for Development

Part one (background and objectives) has been largely agreed. 
Negotiations on Part two (ways and means) and Part three (institutional 
adaptation) are in progress. 

(###)

[END DISPATCH VOLUME 7, SUPPLEMENT NO. 2]

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