U.S DEPARTMENT OF STATE DISPATCH

VOLUME 6, NUMBER 10, MARCH 6, 1995

PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

ARTICLES IN THIS ISSUE:

1.  The Vital Tradition of American Leadership in the World--President

Clinton

2.  The United States and Canada: Reaffirming the Partnership--President

Clinton

3.  Fact Sheets:  Canada

--U.S.-Canada Trade

--U.S.-Canada Environmental Issues

--NAFTA: Key Provisions and Supplemental Agreements

--U.S.-Canada Air Services Agreement

--Global Environmental Issues

4.  Country Profile:  Canada

5.  Maintaining the Instruments Of America's Global Leadership--

Secretary Christopher

6.  U.S. Interests and Russian Reform--Deputy Secretary Talbott

7.  American Eagle or Ostrich? The Case for The United States in the

United Nations--Deputy Secretary Talbott

8.  Department Statements

--Suspending Arms Sales to Ecuador and Peru

--President Clinton Applauds Ecuador-Peru Peace Declaration

--Mexico To Take Action To Curb Violence Along U.S. Border

9.  What's in Print--Foreign Relations Of the United States

ARTICLE 1:

The Vital Tradition of American Leadership in the World

President Clinton

Remarks to the Nixon Center for Peace and Freedom Policy Conference,

Washington, DC, March 1, 1995 [introductory remarks deleted]

I am honored to be here tonight. Just a month before he passed away,

President Nixon wrote me the last letter I received from him about his

last trip to Russia. I told some people at the time that it was the best

piece of foreign policy writing I had received, which angered my staff

but happened to be the truth. And, as with all of our correspondence and

conversations, I was struck by the rigor of his analysis, the energy of

his convictions, and the wisdom of the practical suggestions that he

made to me.

But more than the specifics of the letter, which basically argued for

the imperative of the United States continuing to support political and

economic reform in Russia, I was moved by the letter's larger message--a

message that ran throughout Richard Nixon's entire public life and all

of his prolific writings. President Nixon believed deeply that the

United States simply could not be strong at home unless we were strong

and prepared to lead abroad. And that made a big impression on me.

When I was running for President in 1992, even though there was this

little sticker up on the wall of my campaign headquarters that said,

"It's the economy, stupid," I always said in every speech that we had to

have two objectives: We had to restore the American dream for all of our

people, but we also had to make sure that we move into the next century

still the strongest nation in the world and the world's greatest force

for peace and freedom and democracy.

Tonight, I want to talk about the vital tradition of American leadership

and our responsibilities--those which Henry Kissinger mentioned and

those which President Nixon recognized so well. Our mission especially I

want to discuss--to reduce the threat of nuclear weapons.

Today, if we are going to be strong at home and lead abroad, we have to

overcome what we all recognize, I think, is a dangerous and growing

temptation here in our own land to focus solely on the problems we face

here in America. I have tried to do it for the last two years. I look

forward to working with this new Republican-led Congress in the next

two, but not solely.

There is a struggle now going on between those of us who want to carry

on the tradition of American leadership and those who would advocate a

new form of American isolationism--a struggle which cuts curiously

across both party and ideological lines. If we are going to continue to

improve the security and prosperity of all our people, then the

tradition of American leadership must prevail.

We live in a moment of hope. We all know that. The implosion of

communism and the explosion of the global economy have brought new

freedoms to countries on every continent. Free markets are on the rise.

Democracy is ascendant. The slogan says, "after victory."  Today, more

than ever before, people across the globe do have the opportunity to

reach their God-given potential. And because they do, Americans have new

opportunities to reach theirs as well.

At the same time, the post-Cold War world has revealed a whole web of

problems that defy quick or painless solutions--aggression of rogue

states, transnational threats like overpopulation and environmental

degradation, terrible ethnic conflicts, and economic dislocation. But at

the heart of all these complex challenges, I believe, lies an age-old

battle for power over human lives--the battle between the forces of

freedom and tyranny, tolerance and repression, hope and fear. The same

idea that was under attack by fascism and then by communism remains

under attack today in different ways all across the world--the idea of

the open society of free people.

American leadership is necessary for the tide of history to keep running

our way and for our children to have the future they deserve. Yet, there

are some who would choose escapism over engagement. The new

isolationists oppose our efforts to expand free trade through GATT or

NAFTA, through APEC and the Summit of the Americas. They reject our

conviction that democracy must be nurtured with investment and support--

a conviction that we are acting on from the former Soviet Union to South

Africa. And some of them, being hypocritical, say that we must trumpet

the rhetoric of American strength. At the same time, they argue against

the resources we need to bring stability to the Persian Gulf or to

restore democracy to Haiti, or to control the spread of drugs and

organized crime around the world, or even to meet our most elemental

obligations to the United Nations and its peacekeeping work.

The new isolationists--both on the left and the right--would radically

revise the fundamentals of our foreign policy that have earned

bipartisan support since the end of World War II. They would eliminate

any meaningful role for the United Nations which has achieved, for all

of its problems, real progress around the world, from the Middle East to

Africa. They would deny resources to our peacekeepers and even to our

troops, and, instead, squander them on Star Wars. They would refuse aid

to the fledgling democracies and to all those fighting poverty and

environmental problems that can literally destroy hopes for a more

democratic, more prosperous, more safe world.

The new isolationists are wrong. They would have us face the future

alone. Their approach would weaken this country, and we must not let the

ripple of isolationism that has been generated build into a tidal wave.

If we withdraw from the world today, mark my words, we will have to

contend with the consequences of our neglect tomorrow and tomorrow and

tomorrow. This is a moment of decision for all of us without regard to

our party, our background, or our accent. This is a moment of decision.

The extraordinary trend toward democracy and free markets is not

inevitable, and as we have seen recently, it will not proceed easily in

an even, uninterrupted course. This is hard work, and at the very time

when more and more countries than ever before are working to establish

or shore up their own freedom in their fragile democracies, they look to

us for support. At this time, the new isolationists must not be allowed

to pull America out of the game after just a few hours of debate because

there is a modest price attached to our leadership.

We now know, as President Nixon recognized, that there must also be

limits to America's involvement in the world's problems--limits imposed

by clear-headed evaluation of our fundamental interests. We cannot be

the world's policemen; we cannot become involved in every problem we

really care about. But the choice we make must be rooted in the

conviction that America cannot walk away from its interests or its

responsibilities.

That is why, from our first day in office, this Administration has

chosen to reach out, not retreat. From our efforts to open markets for

America to support democracy around the world, to reduce the threat

posed by devastating weapons and terrorists, to maintaining the most

effective fighting force in the world, we have worked to seize the

opportunities and meet the obligations of this moment.

None of this could have happened without a coalition of realists--people

in both Houses of  Congress and, importantly, people from both parties;

people from coast to coast in our towns and cities and communities who

know that the wealth and well-being of the United States depends upon

our leadership abroad. Even the early leaders of our republic who went

to great pains to avoid involvement in great power conflicts recognized

not only the potential benefits, but the absolute necessity of engaging

with the world.

Before Abraham Lincoln was elected President, our farmers were selling

their crops overseas. We had dispatched the trade mission all the way to

Japan trying to open new markets--some problems don't go away--and our

Navy had already sailed every ocean. By the dawn of this century, our

growing political and economic power already imposed a special duty on

America to lead--a duty that was crystallized in our involvement in

World War I. But after that war, we and the other great powers abandoned

our responsibilities, and the forces of tyranny and hatred filled the

vacuum, as is well-known.

After the Second World War, our wise leaders did not repeat that

mistake. With the dawn of the nuclear age and the Cold War, and with the

economies of Europe and Japan in shambles, President Truman persuaded an

uncertain and weary nation, yearning to shift its energies from the

front lines to the home front, to lead the world again.

A remarkable generation of Americans created and sustained alliances and

institutions--the Marshall Plan, NATO, the United Nations, the World

Bank, the IMF--the things that brought a half century of security and

prosperity to America, to Europe, to Japan, and to other countries all

around the world. Those efforts and the special resolve and military

strength of our own nation held tyranny in check until the power of

democracy, the failures of communism, and the heroic determination of

people to be free consigned the Cold War to history. Those successes

would not have been possible without a strong, bipartisan commitment to

America's leadership.

Senator Arthur Vandenburg's call to unite our official voice at the

water's edge joined Republicans to Truman's doctrine. His impact was all

the more powerful for his own past as an isolationist, but as Vandenburg

himself said, Pearl Harbor ended isolationism for any realist.

Today, it is Vandenburg's spirit that should drive our foreign policy

and our politics. The practical determination of Senators Nunn and Lugar

to help Russia reduce its nuclear arsenal safely and securely; the

support from Speaker Gingrich and Leader Gephardt, from Chairman

Livingston and Representative Obey for aid to Russia and the New

Independent States; the work of Senators Hatfield, Leahy, and McConnell,

and Chairman Gilman, and Representative Hamilton for peace in the Middle

East; the efforts of Senator Warner to restructure our intelligence--all

these provide strong evidence of the continuing benefits and vitality of

leadership with bipartisanship.  If we continue to lead abroad and work

together at home, we can take advantage of these turbulent times. But if

we retreat, we risk squandering all these opportunities and abandoning

our obligations which others have entrusted to us and paid a very dear

price to bring to us in this moment in history.

I know that the choice to go forward in a lot of these areas is not easy

in democracies at this time. Many of the decisions that America's

leaders have to make are not popular when they are made, but imagine the

alternative. Imagine, for example, the tariffs and barriers that would

still cripple the world trading system for years into the future if

internationalists coming together across party lines had not passed GATT

and NAFTA. Imagine what the Persian Gulf region would look like today if

the United States had not stepped up with its allies to stop Iraqi

aggression. Imagine the ongoing reign of terror and the flood of

refugees at our borders had we not helped to give democracy a second

chance in Haiti. Imagine the chaos that might have ensued if we had not

moved to help stabilize Mexico's economy. In each case, there was

substantial and sometimes overwhelming majority opinion against what

needed to be done at the moment. But because we did it, the world has a

better chance at peace and freedom.

But above all, now I ask you to imagine the dangers that our children

and grandchildren--even after the Cold War is over--can still face if we

do not do everything we can to reduce the threat of nuclear arms, to

curb the terrible chemical and biological weapons spreading around the

world, to counter the terrorists and criminals who would put these

weapons into the service of evil. As Arthur Vandenburg asked at   the

dawn of the nuclear age, after a German V-1 attack had left London in

flames and its people in fear, "How can there be isolation when men can

devise weapons like that?"

President Nixon understood the wisdom of those words. His life spanned

an era of stunning increases in humankind's destructive capacity--from

the biplane to ballistic missiles, from mustard gas to mushroom clouds.

He knew that the atomic age could never be won, but could be lost. On

any list of his foreign policy accomplishments, the giant steps he took

toward reducing the nuclear threat must stand among his greatest

achievement. As President, I have acted on that same imperative.

Over the past two years, the United States has made real progress in

lifting the threat of nuclear weapons. Now, in 1995, we face a year of

particular decision in this era--a year in which the United States will

pursue the most ambitious agenda to dismantle and fight the spread of

weapons of mass destruction since the atom was split.

We know that ours is an enormously complex and difficult challenge.

There is no single policy, no silver bullet, that will prevent or

reverse the spread of weapons of mass destruction, but we have no more

important task. Arms control makes us not only safer, it makes us

stronger. It is a source of strength. It is one of the most effective

insurance policies we can write for the future of our children.

Our Administration has focused on two distinct but closely connected

areas--decreasing and dismantling existing weapons and preventing

nations or groups from acquiring weapons of mass destruction and the

means to deliver them. We have made progress on both fronts.

As the result of an agreement President Yeltsin and I reached, for the

first time in a generation Russian missiles are not pointed at our

cities or our citizens. We have greatly reduced the lingering fear of an

accidental nuclear launch. We put into force the START I Treaty with

Russia that will eliminate from both our countries delivery systems that

carry more than 9,000 nuclear warheads--each with the capacity to

incinerate a city the size of Atlanta.

START I--negotiated by two Republican Administrations and put into force

by this Democratic Administration--is the first treaty that requires the

nuclear powers actually to reduce their strategic arsenal. Both our

countries are dismantling the weapons as fast as we can, and, thanks to

a far-reaching verification system, including on-site inspections which

began in Russia and the United States today, each of us knows exactly

what the other is doing. And, again, through the far-sighted program

devised by Senators Nunn and Lugar, we are helping Russia and the other

New Independent States to eliminate nuclear forces in transport and

safeguard and destroy nuclear weapons and material.

Ironically, some of the changes that have allowed us to reduce the

world's stockpile of nuclear weapons have made our non-proliferation

efforts harder. The breakup of the Soviet Union left nuclear materials

dispersed throughout the New Independent States. The potential for theft

of nuclear materials, therefore, increased. We face the prospect of

organized criminals entering the nuclear smuggling business. Add to this

volatile mix the fact that a lump of plutonium the size of a soda can is

enough to build a bomb, and the urgency of the effort to stop the spread

of nuclear materials should be clear to all of us.

That is why from our first day in office, we have launched an

aggressive, coordinated campaign against international terrorism and

nuclear smuggling. We are cooperating closely with our allies, working

with Russia and the other New Independent States, improving security at

nuclear facilities, and strengthening multilateral export controls.

One striking example of our success is Operation Sapphire, the airlift

of nearly 600 kilograms of highly enriched uranium--enough to make

dozens of bombs from Kazakhstan to the United States for disposal. We

have also secured agreements with Russia to reduce the uranium and

plutonium available for nuclear weapons, and we're seeking a global

treaty banning the production of fissile material for nuclear weapons.

Our patient, determined diplomacy also succeeded in convincing Belarus,

Kazakhstan, and Ukraine to sign the Non-Proliferation Treaty and give up

the nuclear weapons left on their territory when the Soviet Union

dissolved. One of our Administration's top priorities was to assure that

these new countries would become non-nuclear nations, and now we are

also achieving that goal.

Because of these efforts, four potential suppliers of ballistic

missiles--Russia, Ukraine, China, and South Africa--have all agreed to

control the transfer of these missiles and related technology. Pulling

back from the nuclear precipice has allowed us to cut U.S. defense

expenditures for strategic weapons by almost two-thirds, a savings of

about $20 billion a year--savings which can be shifted to vital needs

such as boosting the readiness of our armed forces, reducing the

deficit, and putting more police on our own streets. By spending

millions to keep or take weapons out of the hands of our potential

adversaries, we are saving billions in arms costs and putting it to

better use.

Now, in this year of decision, our ambition for the future must be even

more ambitious. If our people are to know real lasting security, we have

to redouble our arms control, non-proliferation, and anti-terrorism

efforts. We have to do everything we can to avoid living with the 21st-

century version of fallout shelters and duck-and-cover exercises to

prevent another World Trade Center tragedy.

In just four days, we mark the 25th anniversary of the Non-Proliferation

Treaty. Nothing is more important to prevent the spread of nuclear

weapons than extending the treaty indefinitely and unconditionally. And

that is why I have asked the Vice President to lead our delegation to

the NPT conference this April and to work as hard as we can to make sure

we succeed in getting that indefinite extension.

The NPT is the principal reason why scores of nations do not now possess

nuclear weapons; why the doomsayers were wrong. One hundred and seventy-

two nations have made NPT the most widely subscribed arms limitation

treaty in history for one overriding reason; it is in their self-

interest to do so. Non-nuclear weapons states that sign on to the treaty

pledge never to acquire them. Nuclear weapons states vow not to help

others obtain nuclear weapons, to facilitate the peaceful uses of atomic

energy, and to pursue nuclear arms control and disarmament--commitments

I strongly reaffirm, along with our determination to attain universal

membership in the treaty.

Failure to extend NPT indefinitely could open the door to a world of

nuclear trouble. Pariah nations with rigid ideologies and expansionist

ambitions would have an easier time acquiring terrible weapons, and

countries that have chosen to forego the nuclear option would then

rethink their position; they would certainly be tempted to reconsider

that decision.

To further demonstrate our commitment to the goals of the treaty, today

I have ordered that 200 tons of fissile material, enough for thousands

of nuclear weapons, be permanently withdrawn from the United States

nuclear stockpile--two hundred tons of fissile material that will never

again be used to build a nuclear weapon.

A second key goal of ours is ratifying START II. Once in effect, that

treaty will eliminate delivery systems from Russian and American

arsenals that carry more than 5,000 weapons. The major reductions under

START I, together with START II, will enable us to reduce by two-thirds

the number of strategic warheads deployed at the height of the Cold War.

At my urging, the Senate has already begun hearings on START II, and I

am encouraged by the interest of the senators from both parties in

seeking quick action. I commend the Senate for the action taken so far,

and I urge again the approval of the treaty as soon as possible.

President Yeltsin and I have already instructed our experts to begin

considering the possibility after START II is ratified for additional

reductions and limitations on remaining nuclear forces. We have a chance

to further lift the nuclear cloud, and we dare not miss it.

To stop the development of new generations of nuclear weapons, we must

also quickly complete negotiations on a comprehensive test ban treaty.

Last month, I extended a nuclear testing moratorium that I put into

effect when I took office, and we revised our negotiating position to

speed the conclusion of the treaty while reaffirming our determination

to maintain a safe and reliable nuclear stockpile.

We will also continue to work with our allies to fully implement the

agreement we reached with North Korea--first to freeze, then to

dismantle its nuclear program, all under international monitoring. The

critics of this agreement, I believe, are wrong. The deal does stop

North Korea's nuclear program, and it does commit Pyongyang to roll it

back in the years to come. I have not heard another alternative proposal

that isn't either unworkable or foolhardy, nor one that our allies in

the Republics of Korea and Japan--the nation's most directly affected--

would fail to support.

If North Korea fulfills its commitment, the Korean Peninsula and the

entire world will clearly be less threatened and more secure. The NPT,

START II, the comprehensive test ban treaty, the North Korean Agreed

Framework: They top our agenda for the year ahead. There are other

critical tasks we also face if we want to make every American more

secure, including winning Senate ratification of the Chemical Weapons

Convention, negotiating legally binding measures to strengthen the

Biological and Toxin Weapons Convention, clarifying the ABM Treaty so as

to secure its viability while permitting highly effective defenses

against theater missile attacks, continuing to support regional arms

control efforts in the Middle East and elsewhere, and pushing for the

ratification of conventional weapons which, among other things, would

help us to reduce the suffering caused by the tens of millions of anti-

personnel mines which are plaguing millions of people all across this

world.

My friends, this is a full and challenging agenda. There are many

obstacles ahead. We cannot achieve it if we give in to a new

isolationism, but I believe we can do no less than make every effort to

complete it.

Tonight, let us remember what President Nixon told the joint session of

Congress when he returned from his historic trip to Moscow in 1972. He

said:

We have begun to check the wasteful and dangerous spiral of nuclear

arms. Let us seize the moment so that our children and the world's

children can live free of the fears and free of the hatreds that have

been the lot of mankind through the centuries.

Now it is within our power to realize the dream that Richard Nixon

described over 20 years ago. We cannot let history record that our

generation of Americans refused to rise to this challenge; that we

withdrew from the world and abandoned our responsibilities when we knew

better than to do it; that we lacked the energy, the vision, and the

will to carry this struggle forward--the age-old struggle between hope

and fear.

So let us find inspiration in the great tradition of Harry Truman and

Arthur Vandenburg--a tradition that builds bridges of cooperation, not

walls of isolation; that opens the arms of Americans to change instead

of throwing up our hands in despair; that casts aside partisanship and

brings together Republicans and Democrats for the good of the American

people and the world. That is the tradition that made the most of this

land, won the great battles of this century against tyranny, and secured

our freedom and our prosperity.

Above all, let's not forget that these efforts begin and end with the

American people. Every time we reduce the threat that has hung over our

heads since the dawn of the nuclear age,      we help to ensure that--

from the far stretches of the Aleutians to the tip of the Florida Keys--

the American people are more secure. That is our most serious task and

our most solemn obligation.

The challenge of this moment is matched only by its possibility. So let

us do our duty.   (###)

ARTICLE 2:

The United States and Canada:  Reaffirming the Partnership

President Clinton

Remarks to the Canadian Parliament, Ottawa, Canada, February 23, 1995

Mr. Prime Minister and Mrs. Chretien, Mr. Speaker of the Senate, Mr.

Speaker of the House of Commons, honorable senators and members of the

House of Commons, distinguished members of the diplomatic corps, ladies

and gentlemen:

I have pondered for some time the differences between the Canadian

political system and the American one, and when the Prime Minister

pointed out the unanimous resolution you passed yesterday, I realized

that, in one respect, clearly, you are superior. We do not control the

weather in Washington, DC, and I am grateful that you do. I also thank

the Prime Minister for his history lesson. I have never believed in the

iron laws of history so much as I do now.

I thank the Prime Minister and all of you for welcoming me to this

magnificent capital city. The Prime Minister first came to this chamber

to represent the people of Canada when President Kennedy was in the

White House. I resent that because when President Kennedy was in the

White House, I was in junior high school--and now the Prime Minister has

less gray hair than I do. He does, in spite of the fact that since that

time he has occupied nearly every seat in his nation's cabinet. The

first time I met him, I wondered why this guy could not hold down a job.

I can tell you this: We in the United States know that his service to

this nation over so many years has earned him the gratitude and the

respect of the Canadian people. It has also earned him the gratitude and

the respect of the people of the United States.

I know it is traditional for American presidents, when they address this

body, to speak of their affection for their ties to the Canadian people.

On behalf of the United States, let me stay with that tradition and say,

l'amitie solide. But let me say to you that it is a big part of our

life. I remember so well, more than a decade ago, when Hillary and I,

with our then very young daughter, came to Canada to celebrate the new

year. We started in Montreal and drove to Chateau Montebello. Along the

way, we drove around Ottawa, and we watched all those wonderful people

skating along the canal. I come from a southern State. I could not

imagine that anybody could ever get on skates and stand on any body of

water for very long. I could see that always--Hillary has had in the

back of her mind all this long time how much she would like to be

skating along this canal. I think, tomorrow, Mrs. Chretien is going to

give her her wish, and we are looking forward to that.

My wife has visited Toronto, and we had a wonderful, wonderful family

vacation in Western Canada--in Victoria and Vancouver back in 1990--one

of the best times that all of us have ever had together anywhere. We are

deeply indebted to your culture. Our daughter's name was inspired by

Canadian songwriter Joni Mitchell's wonderful song, Chelsea Morning.

All of you know that in the spring of 1993, the first time I left the

United States as President, I came to Vancouver for the summit with

President Yeltsin. Both of us, at that time, were under a significant

amount of stress as we tried to reaffirm our relationship and solidify

democracy in Russia. I can say, without any equivocation, that the

reception we received from the people of Canada, as well as from the

government and the Prime Minister, made it very, very easy for us to

have a successful meeting. For that we are very grateful.

I come here today to reaffirm the ties that bind the United States and

Canada, in a new age of great promise and challenge--a time of rapid

change, when both opportunity and uncertainty live side by side in my

country and in yours; a time when people are being lifted up by new

possibilities and held down by old demons all across the world. I came

here because I believe our nations together must seize the opportunities

and meet the challenges of this new age. We must--I say again--do this

together.

From the oil from Alberta that fires factories in the United States to

the silicon chips from California that power your computers, we are

living proof of the value of partnerships and cooperation. Technologies

produced in your nation save lives in our hospitals, while food from our

farms line your supermarkets.

Our horizons have broadened because we in the United States have

listened  to the CBC. Our culture is much richer because of the

contributions of writers like Robertson Davies--whom Hillary had the

pleasure of meeting last week after reading him for years--and Margaret

Atwood, and because of the wonderful photography of Josef Karsh, whose

famous picture of Churchill I just saw. He took some pictures of Hillary

and me that are not so distinguished, but I love them anyway. As a

musician, I have

to thank you especially for Oscar Peterson, a man I consider to be the

greatest jazz pianist.

Ours is the world's most remarkable relationship--the Prime Minister

said--whether we like it or not. I can tell you that, on most days, I

like it very, very, much.

We have to strengthen that relationship. We have to strengthen it for

our own benefit through trade and commerce and travel. We have to

strengthen it because it is our job to help spread the benefits of

democracy, freedom, prosperity, and peace beyond our shores. We are

neighbors by the grace of nature. We are allies and friends by choice.

There are those in both our nations who say we can no longer afford to--

and perhaps we no longer even need to--exercise our leadership in the

world. When so many of our people are having their own problems, it is

easy to listen to that assertion. But it is wrong.

We are two nations blessed with great resources and great histories, and

we have great responsibilities. We were built, after all, by men and

women who fled the tyranny and intolerance of the old world for the new.

We are the nations of pioneers--people who were armed with the

confidence they needed to strike out on their own and to have the

talents that God gave them shape their dreams in a new and different

land.

Culture and tradition, to be sure, distinguish us from one another in

many ways that we are still learning about every day. But we share core

values, and that is more important--a devotion to hard work, an ardent

belief in democracy, a commitment to giving each and every citizen the

right to live up to his or her God-given potential, and an understanding

of what we owe to the world for the gifts we have been given.

These common values have nourished a partnership that has become a model

for new democracies all around this world. They can look at us and see

just how much stronger the bonds between nations can be when their

governments answer the citizens' desires for freedom and democracy and

enterprise, and when they work together to build each other up instead

of working overtime to tear each other down.

Of course, we have our differences. Some of them are complex enough to

tear your hair out over. But we have approached them directly and in

good faith--as true friends must. We in the United States come more and

more every day to respect and understand that we can learn from what is

different about your nation and its many people.

Canada has shown the world how to balance freedom with compassion and

tradition with innovation in your efforts to provide health care to all

your citizens; to treat your senior citizens with the dignity and

respect they deserve; and to take on tough issues such as the move afoot

to outlaw automatic weapons designed for killing, not hunting. I might

say--since you applauded so--you are doing it in a nation of people who

respect the right to hunt and understand the difference between law and

order and sportsmanship.

Those of us who have traveled here especially appreciate the reverence

you have shown for the bounty of God's nature--from the Laurentians to

the Rockies. In a world darkened by ethnic conflicts that literally tear

nations apart, Canada has stood for all of us as a model of how people

of different cultures can live and work together in peace, prosperity,

and respect.

The United States, as many of my predecessors have said, enjoys its

excellent relationship with a strong and united Canada, but we

recognize--just as the Prime Minister said to us a moment ago, with

regard to your relationships--that your political future is, of course,

entirely for you to decide. That is what a democracy is all about.

Now I will tell you something about our political system. You want to

know why my State of the Union address took so long? It was because I

evenly divided the things that would make the Democrats clap and the

Republicans clap. We doubled the length of the speech in common

enthusiasm.

I ask you--all of you--to remember that we do look to you, and to

remember what our great President of the postwar era, Harry Truman, said

when he came here in 1947. "Canada's eminent position today," he said,

is a tribute to the patience, tolerance, and strength of character of

her people. Canada's notable achievement of national unity and progress

through accommodation, moderation, and forbearance can be studied with

profit by sister nations.

These words ring every bit as true today as they did then.

For generations, our countries have joined together in efforts to make

the world more secure and more prosperous. We have reached out together

to defend our values and our interests--in World War I, on the beaches

of Normandy, and in Korea. Together, we helped to summon the United

Nations into existence. Together, we stood fast against communist

tyranny and prevailed in the Cold War. Together, we stood shoulder to

shoulder against aggression in the Gulf War. Now our nations have

stepped forward to help Haiti emerge from repression and to restore its

democracy. I thank the Prime Minister for what he said about that. When

it was not popular anywhere in the world to worry about poor,

beleaguered, abandoned Haiti, Canada was truly a friend of Haiti.

In one international forum after another, we stand side by side to shape

a safer and better world. Whether it is at the World Population

Conference, pushing together for an indefinite extension of NPT, or in

any number of ways--we are working together.

We know that for Canada, this history of action is a matter of deep

tradition and personal conviction. The tradition runs from Lester

Pearson to Jean Chretien. It says we must be engaged in the affairs of

the world. You have always shown the wisdom of reaching out instead of

retreating, of rising to new responsibilities instead   of retrenching.

Your tradition of engagement continues to this day, and, believe you me,

it earns respect all around the world from people of all races,  ethnic

groups, and political systems.

In places such as Cyprus and the Sinai, Canadian troops have played an

invaluable role in preventing more violence in those critical hot spots.

Today, your 2,000 peacekeepers in the former Yugoslavia are courageously

fulfilling their mission in the midst of one of the most intractable,

difficult situations in our lifetime.

For a half century, the United States has shared your philosophy of

action and consistent exercise of leadership abroad. I am determined,

notwithstanding all the cross-currents in our country, that we shall

preserve that commitment. These times may be turbulent, but we have a

historic opportunity to increase security and prosperity for our own

people and for people all around the world. I want you to know that I

intend to do everything in my power to keep our country constructively

involved in the problems that we must face if we are going to guarantee

that our children will live in a peaceful, sane, and free world.

Imagine what the Persian Gulf would look like today if we had not risen

to the challenge of Iraqi aggression. Imagine what tariffs and barriers

would plague the world trading system if we had not worked so hard

together over such a long period of time, from the end of World War II

to the events the Prime Minister described--to NAFTA, to GATT, to the

Asia-Pacific cooperation, to the Summit of Americas that was held in

Miami in December. Imagine how different it would have been. Imagine how

much worse the horrible tragedy in Rwanda would have been if we had not

been there to provide essential help in those refugee camps to keep

people alive.

We cannot let anyone or anything break this great tradition of our

nations. In our partnership, we will find the key to protecting our

people and increasing their prosperity and the power to reach beyond our

shores in the name of democracy and freedom--not only because it is

right, but because it is in our interest to do so.

Just before we came down here, the Prime Minister and I agreed again

that if we are going to meet these new challenges in the 21st century,

we must adapt the institutions that helped us to win the Cold War so

they can serve us as well in the 21st century. We have to do that. Some

have evolved with the changing world. Some have, clearly, already

discarded their old missions and assumed new roles. But we have also

seen that the end of the East-West  conflict, the advent of 24-hour

financial markets, sudden environmental disasters, the rise of

international terrorism, the resurgence of ancient ethnic hatreds--all

these things have placed new demands on these institutions that the

statesmen of 50 years ago simply did not imagine. The 21st century will

leave behind those who sit back and think that these problems will be

solved automatically. We simply have to face these challenges and ask

ourselves what we have to change and how are we going to do it.

For example, to meet the security needs of the future, we must work

together to see that NATO--the most successful military alliance in all

of history--adapts to this new era. That means that we must make certain

that the inevitable process of NATO expansion proceeds smoothly,

gradually, and openly. There should be no surprises to anyone about what

we are about. We will work so that the conditions, the timing, and the

military implications of NATO expansion will be widely known and clearly

understood in advance.

To parallel the enlargement of NATO, we have to develop close,  strong

ties with Russia. I have worked hard for that, and so has the Prime

Minister. We must continue working together at the United Nations, where

our nations have, together, taken the lead in efforts to reform our

peace-keeping operations--to control the costs, to improve information

gathering, and to make sure we have the right kind of command and

control system before the young people who put on our uniforms are put

in harm's way.

We also must continue to work at reforming the international economic

institutions. We already have made great strides in reshaping the new

global economy with the passage of GATT, which is the most comprehensive

trade agreement in history. But the work is only beginning. At the

upcoming G-7 summit in Halifax, which we are very much looking forward

to, we will be working to ensure that our international trading

institutions advance the cause of trade liberalization in ways that

produce   tangible gains for the people of the countries involved.

We also have to re-examine the institutions that were created at the

time of Bretton Woods--the IMF and the World Bank--to make sure that

they are going to be able to master the new and increasingly complex

generation of transnational problems that face us-- problems such as

explosive population growth and environmental degradation and problems

such as those we have been facing together in Mexico and throughout

Latin America during the recent financial crisis. Real progress in these

areas will depend, not only on our willingness to be involved, but our

willingness to lead as partners. Together, Canada and the United States

are striving to seize all the advantages the new global economy has to

offer. Trade produces high-wage jobs; we know that--the kinds of jobs

that give our people the opportunity to care for their families, to

educate their children, and to leave the next generation better off than

they were; a dream that has been called into question in many advanced

economies in the last few years.

The success of NAFTA, which is generating new jobs and creating new

markets from Monterrey to Medicine Hat is the proof. Now, as the Prime

Minister has said so well, we in NAFTA are on our way to becoming the

"Four Amigos." That phrase will go down in history; I wish I had thought

of it. We will soon start our consultations with Chile for accession in

NAFTA; it will be a very good partner. The addition of that thriving

economy will only continue to increase the benefits for all of us.

I want to take another moment here to thank Canada for its recent

support during the financial crisis in Mexico. You understood what we

had on the line--that more than Mexico was involved; that jobs, trade,

futures, and our support for democracy and stability throughout Latin

America were at issue. You understood it, and we are grateful. Because

we stood shoulder to shoulder, we have a chance to preserve this

remarkable explosion of democracy that we saw at the Summit of the

Americas, and we should continue to do that.

I want to say a word, if I might, about the environment. As we expand

trade, we have to remember: We must defend that which we have inherited

and enhance it if we can. The natural riches of this continent we share

are staggering. We have cooperated to such great effect on our continent

in the past: Our air quality agreement is solving the acid rain problem;

the Great Lakes are on the road to recovery; and the eagles have

returned to Lake Erie. Now we have to build on those accomplishments.

With the NAFTA Environmental Commission located in Montreal, your

country will play a key role in ensuring that we protect the

extraordinary bounty that has been given us for our children and

grandchildren. NAFTA is only one of several fronts on which we can work

together to both increase our prosperity and protect our environment: We

must do both.

Our nations are building on the progress of last year's Summit of the

Americas, as well. It will create a free trade area embracing the entire

hemisphere. Across the Pacific, as the Prime Minister said, we paved the

way for new markets and for free trade among the dynamic economies in

the Asia-Pacific area. That was a very important thing for us to do

because they are growing very fast, and we did not want this world to

break up into geographical trading blocks in ways that would shrink the

potential of the people of Canada and the United States for decades to

come.

These efforts will only enhance what is now the greatest trading

relationship--yours and ours. Every day, people, ideas, and goods stream

across our border. Bilateral trade now is more than $1 billion Canadian

every day--I learned to say that--and about $270 billion U.S. last year-

-by far the worlds largest bilateral relationship.

Our trade with each other has become an essential pillar in the

architecture of our economies. Today, 4.5 million Americans have jobs

that involve trade between our two countries. Those are the concrete

benefits of our partnership. Between 1988 and 1994, trade between our

nations rose about 60%. Last year alone, it increased by 15%.

But the statistics do not give the human reality behind the flourishing

exchange of goods and ideas. Our trade is creating real jobs for real

people. In Boscawen, New Hampshire, for example, a small company called

Secure Care Products produces monitoring systems for patients in nursing

homes.

Recently, Secure Care began exporting its products to Canada. Sales

there are already growing fast, and the company expects them to triple

this year. So Secure Care is hiring people like Susan Southwick, the

granddaughter of Quebeckers, the mother of two, and now the company's

26th employee. Giving Susan and her husband a shot at the dream which

Canadians and American share--that is what this partnership is all

about.

Much further away from you, in Greensboro, North Carolina, another small

company called Createc Forestry Systems is showing how our trade helps

people turn their hopes into realities. It was founded by a man named

Albert Jenks in his family's kitchen. Createc makes hand-held computers

that track lumber mill inventories. Those computers help managers better

assess their needs so fewer trees are cut unnecessarily. A few years

ago, Createc began to export to Canada, and now those sales accounts

have risen to nearly 20% of their total business. That means a more

secure future for the company, for Mr. Jenks, and for his son, Patrick,

who works with his father in the family business. That shows how our

trade can increase our prosperity and protect the environment as well.

Your companies are thriving in our markets, bringing tangible benefits

to Canadians. Whether it is repairing the engines of some of the U.S.

Air Force's largest planes, manufacturing software to manage our natural

resources, or building some of the Olympic Village for Atlanta's 1996

games, Canadian firms are a strong presence in the United States. Their

successes there help your people turn their hopes into facts and their

dreams into reality.

The example of our biggest industry shows another side of this remark-

able story. Working together, U.S. and Canadian companies have

integrated North America's auto industry and staged one of the most

remarkable comebacks in the history of the Industrial Revolution. We

have drawn on each other's strengths, and, today, our companies work so

closely that we no  longer speak of U.S. or Canadian in these vehicles,

but of North American content--whether it is a Chrysler minivan made in

Windsor or a Chrysler jeep made in Detroit. I think that was the

ambassador from Michigan--I mean from the United States clapping down

there.

Productivity and employment have risen to such a point that when I

visited Detroit last fall, the biggest complaint I heard in a state that

was given up as lost economically a decade ago--the biggest complaint I

heard from the auto workers was that they were working too much

overtime. Now, where I come from, that is known as a high-class problem.

The auto industry now provides more than 1 million jobs in our

countries.

To reinforce our commitment to NAFTA and to dramatically expand an

important market, tomorrow, the United States and Canada will sign an

agreement to open the skies between our nations. This agreement, which

allows for a dramatic expansion of U.S. and Canadian service to each

other's nations, will create thousands of new jobs and billions of

dollars of economic activities in our cities--yours and mine. We have

reached a fair solution that will make life easier for travelers on both

sides of the border, that will profit both Canadian and U.S. airline

carriers, and that will increase the mutual travel and interconnection

of our people. That we have done so amicably provides yet another model

of how neighboring nations can settle their differences. Friendship,

engagement--Canada and the United States have shown the best there is in

partnerships between nations; all the great potential that awaits all

the free people of this earth if they can join in common cause. We are,

as the monument at the St. Lawrence Seaway declares, two nations whose

frontiers are the frontiers of friendship, whose ways are the ways of

freedom, whose works are the works of peace.

Every day, we see the enormous benefits this partnership gives to us in

jobs, in prosperity, and in the great creative energy that our

interchanges bring. But we have seen only the beginning. For the Susan

Southwicks who want a chance to build better lives and the companies

such as Createc that are trying to build solid businesses that will

last, this partnership of ours holds a great promise with horizons as

vast as our great continent.

Together, we have turned our energies toward improving the world around

us for nearly a century. Today, more than ever, let us reaffirm and

renew that great tradition. Let us engage and confront the great

challenges of the end of this century and the beginning of the next. We

must sustain our efforts. We must enhance our efforts. We must maintain

our partnership. We must make it stronger. This is our task and our

mission. Together, we will be equal to it. The border separates our

people, but there are no boundaries to our common dreams.  (###)

ARTICLE 3:

Fact Sheets:  Canada

U.S.-CANADA TRADE

Canada and the United States share the world's largest bilateral trading

relationship, with each serving as the largest market for the others'

goods. Total U.S.-Canada goods and services trade was estimated at $270

billion in 1994 and should reach $300 billion in 1995. Canada sent 84%

of its 1994 exports to the U.S. It buys twice as much from the U.S. as

does Japan, and its trade accounts for 17% of U.S. exports. The

estimated merchandise trade deficit with Canada for 1994 was $14

billion.

The two countries trade many of the same kinds of products, which

reflects the close integration of the two economies. This is

particularly seen in two-way autos and auto parts trade, which accounts

for about one-third of bilateral merchandise trade. Other major Canadian

exports to the U.S. include resource-based products--lumber, paper, and

energy--and high-tech goods. Manufactured goods, such as electronics,

plastics, and steel, make up most of U.S. exports to Canada.

Over the years, the two countries have worked to deepen and expand this

successful trade relationship. Bilateral efforts began 30 years ago with

the 1965 Auto Pact that allowed for duty-free trade for most autos and

auto parts. Free trade was broadened considerably by the U.S.-Canada

Free Trade Agreement (CFTA), which came into effect in 1989. The CFTA

eliminated many trade barriers and provided for consultative management

of trade disputes. CFTA gains were broadened by the signing of the North

American Free Trade Agreement (NAFTA), which added new areas of economic

activity--additional service sectors and investment--and a new country--

Mexico. With the establishment of the CFTA and NAFTA, trade has grown

rapidly, with growth averaging more than 7% annually for each of the

last 5 years.

Foreign direct investment (FDI) has increased along with trade flows.

U.S. FDI in Canada reached $68.4 billion in 1992, a 7% increase since

the FTA became effective. Canadian FDI in the United States was $38.9

billion, a 29% increase during the same period.

U.S.-CANADA ENVIRONMENTAL ISSUES

The United States and Canada have one of the world's oldest and most

effective partnerships for environmental protection and preservation.

Cooperation on measures related to air, water, and flood control in

shared watersheds spans a border of more than 5,000 miles and involves

17 U.S. states, eight Canadian provinces and the Yukon territory, many

eco-regions, and three oceans.

The environmental relationship dates from the 1909 Boundary Waters

Treaty, which was set up to ensure cooperation on water uses, levels,

and flows, and to protect water quality in the Great Lakes and other

boundary waters. It put in place an enduring pattern of joint efforts to

conserve and protect the environment.

International Joint Commission

Established by the 1909 treaty, the U.S.-Canada International Joint

Commission (IJC) is a small, binational organization which has

contributed to the governments' efforts to restore and clean up boundary

waters. Under the 1909 treaty, it has issued numerous recommendations to

protect water quality. It carries out multi-year monitoring duties on

the Great Lakes and the St. Croix, Rainy, and Red Rivers. In addition,

it responds to joint requests from the governments for studies and

advisory activities.

The Great Lakes

The Great Lakes are on the road to recovery from past pollution. Both

countries' adoption of a more coordinated ecosystem approach for the

protection of the Great Lakes contributed to this progress. Such

protection efforts included a U.S. investment of more than $8 billion in

municipal wastewater treatment around the lakes in the 1970s and 1980s

and major changes in industrial and agricultural practices. The results

have been dramatic. For example, pollution discharges nearly killed Lake

Erie in the 1960s, but now  eagles have returned to the Lake Erie basin,

and its fisheries are a great boon to recreation and tourism.

Air Quality Agreement

In 1991, the IJC assumed a new responsibility--assisting the governments

with public comment on the Air Quality Agreement, which was signed that

year after a decade of debate. This agreement, also called the "Acid

Rain" agreement, includes important measures to improve air quality. The

two countries are working toward reducing sulfur dioxide and nitrous

oxide emissions in Canada and the United States. Under the U.S. Clean

Air Act, the United States will continue its aggressive programs to

address the problem of ground-level ozone known as smog and its effects

on health. The United States is reviewing its ozone standard with a view

toward formal revision in 1997.

Future Challenges

The challenge today is to continue close cooperation within separate

national frameworks. Canada's National Round Table on Economics and the

Environment, Model Forests Program, and federal and provincial linkages

represent innovative opportunities for cooperation. The U.S. Great Lakes

Initiative will set new goals for water quality. The U.S. Clean Air Act

and U.S. Toxics Release Inventory are comprehensive tools that enable

the U.S. to engage in important common efforts with Canada.

Following the President's visit to Ottawa in February 1995, the two

countries will sign an agreement on national parks and undertake

cooperation on regional ground-level ozone concentrations affecting

citizens in both countries. On-going cooperation will continue to

improve air and water quality, reduce and eliminate certain toxic

discharges, maintain hazardous materials emergency preparedness and

response capability, and address pollution prevention and waste

management. Other cooperative efforts include sharing "planet earth"

data obtained from joint ventures in space, devising approaches to

climate change via "sister forests" and other environmentally

sustainable North American programs, and joint efforts to protect

wildlife and critical habitats.

Broader International And Global Agenda

Both nations support the North American Commission for Environmental

Cooperation, consult regularly on G-7 environmental issues, work

together to make cost-effective progress in response to UN sustainable

development challenges, and develop new environmental protection

approaches and technologies.

NAFTA: KEY PROVISIONS AND SUPPLEMENTAL AGREEMENTS

Overview

U.S. leadership in the next century will depend on its ability to

compete in the global marketplace. The North American Free Trade

Agreement (NAFTA) created the world's largest market: 380 million people

producing nearly $8 trillion of goods and services. NAFTA expands export

markets in Mexico and Canada for U.S. goods and services, boosts

economic growth, creates jobs, strengthens cooperation with our

neighbors on labor standards and the environment, and enables us to

better compete against Europe and Asia. It builds on the 1989 U.S.-

Canada Free Trade Agreement (FTA) and enhances free trade in goods and

services between the United States, Canada, and Mexico by eliminating

import restrictions--such as tariffs, quotas, and licenses--and

restrictions on foreign ownership and investment.

Key Provisions

Tariffs. NAFTA eliminates all tariffs on U.S., Mexican, and Canadian

goods by 2008. Many were removed immediately, and others will be phased

out over 5, 10, and 15 years.

Customs. NAFTA expands and improves on procedures in the U.S.-Canada FTA

and provides for uniform regulations to ensure consistent

interpretation, application, and administration of the rules of origin.

Quotas. NAFTA eliminates import and export quotas unless consistent with

rules of the World Trade Organization (WTO--successor organization to

the General Agreement on Tariffs and Trade) or explicitly mentioned in

the agreement.

National Treatment. NAFTA reaffirms WTO principles preventing

discrimination against imported goods.

Standards. NAFTA prohibits use of product standards as a trade barrier

but preserves each country's right to establish and enforce its own

product standards, particularly those designed to promote health and

safety and to protect human, animal, and plant life and the environment.

Government Procurement. NAFTA opens new procurement markets in Mexico,

particularly the petrochemical, heavy electrical, and pharmaceutical

areas.

Safeguards. NAFTA partners can impose a safeguard action during the

transition period if increased imports constitute a "substantial cause

or threat" of "serious injury" to a domestic industry. This follows WTO

practice.

Agriculture. NAFTA eliminates immediately or phases out tariffs on

agricultural goods. It converts most quotas and other quantitative

restrictions to tariff rate quotas, which allow a certain quantity of a

product to enter duty-free. These tariff rate quotas will apply to U.S.

exports of corn, dry beans, powdered milk, poultry, malted barley,

animal fats, potatoes, and eggs. For some products--such as wheat,

grapes, tobacco, other dairy products, and day-old chicks--quotas and

other quantitative restrictions will be converted to tariffs, which then

will be phased out. U.S. standards regarding food imports will be

maintained. Special agricultural safeguards for certain import-sensitive

products will be available to limit the impact of sudden import surges.

Energy. NAFTA lifts investment restrictions on most of the basic

petrochemicals industry and on most electricity-generating facilities.

It eliminates or phases out tariffs on oil and gas field equipment and

on coal.

Autos. NAFTA provides for the immediate reduction of Mexican duties on

vehicle imports and a timetable for their elimination. It eliminates

Mexican quotas on new auto imports. It also removes tariffs on certain

automotive parts and phases out others. It reduces the Mexican domestic-

content requirement to zero over 10 years and reduces Mexico's trade-

balancing requirement. Most U.S.-Canada auto trade was already duty-free

under the 1965 U.S.-Canada Auto Pact, which was incorporated into the

FTA.

Textiles and Apparel. NAFTA eliminated some tariffs immediately and

phases out others over a 10-year period. It removes quotas on imports

from Mexico that qualify under the rules of origin.

Financial Services. NAFTA allows investment by U.S. and Canadian firms

in the Mexican banking market. It provides for the elimination of all

restrictions on such investment by January 2000. U.S. and Canadian

insurance firms with existing joint ventures in Mexico may increase

their ownership to 100%. The agreement also permits U.S. insurance

companies to issue reinsurance policies and establish subsidiaries in

Mexico. It allows U.S and Canadian companies to invest in the brokerage

industry in Mexico.

Transportation. NAFTA eliminates, over a five-year period, restrictions

on access by U.S. and Canadian trucking companies to Mexico. It gives

charter and bus tour operators full access to the Mexican market. It

allows U.S. and Canadian investment in Mexican bus and truck companies,

in international cargo subsidiaries, and in Mexican port facilities. The

agreement does not alter U.S. safety standards.

Telecommunications. NAFTA eliminates duties and non-tariff barriers on

most Mexican imports of telecommunications equipment, including private

branch exchanges, cellular systems, satellite transmission, earth

station equipment, and fiber optic transmission systems. It also

eliminates restrictions on foreign investment in voice mail and other

value-added and information services. North American firms will have

access to and use of public telecommunications  networks and services.

Investment. NAFTA provides for member state investors to receive the

more favorable of national or MFN treatment in setting up operations or

acquiring firms. It phases out most performance requirements over 10

years and states that NAFTA partners may not impose new ones. The

agreement guarantees the free transfer of capital and profits and that

investors will be compensated at the fair market value of the investment

in cases of expropriation.

Intellectual Property. NAFTA protects North American producers in two

new areas: computer programs and compilations of individually protected

material. It establishes a minimum 50-year term for the protection of

sound recordings and motion pictures. The agreement requires companies

to register both service marks and trademarks. It prohibits compulsory

licensing or mandatory linking of trademarks. It provides protection for

independently created industrial designs and for trade secrets and

proprietary information.

Environment. NAFTA maintains existing federal and sub-federal standards.

It allows a country to prohibit entry of goods that do not meet its

standards. The agreement states that parties, including states, may

enact tougher standards, and it permits each country to impose

environmental requirements on foreign investment.

Implementation. The Free Trade Commission ensures that NAFTA is

implemented properly. Commission working groups monitor implementation

of the various chapters of the agreement.

Rules of Origin. Rules of origin define goods eligible for NAFTA

treatment and prevent "free riding" by third countries. Only goods

produced in North America qualify for NAFTA treatment. Goods containing

imported components qualify if they are transformed enough to result in

a tariff classification change. In some cases, goods also must have a

specified percentage of North American content. There is a special rule

of origin for textiles and apparel.

Dispute Settlement. NAFTA extends the dispute settlement provisions of

the U.S.-Canada FTA to Mexico while providing new safeguards to ensure

fairness. It establishes the  North American Free Trade Commission and a

Secretariat to administer the panel review system. The mechanism for

resolution is as follows:

-- Notification and consultation between parties;

-- If no resolution, referral to the commission;

-- If necessary, referral to a panel of private sector experts; and

-- Resolution or retaliation.

If the defending party does not comply with the panel ruling, the other

party may suspend equivalent trade benefits until the dispute is

resolved.

Supplemental Agreements

The three parties also have concluded supplemental agreements on the

environment, on labor, and on import surges.

Environment. The NAFTA supplemental agreement on environmental

cooperation creates the Commission on Environmental Cooperation. The

commission is located in Montreal, Canada, and its activities include:

-- Providing expertise to dispute settlement panels in cases where one

party has failed to enforce its laws affecting a sector involving traded

goods and services;

-- Considering the environmental implications of processing and

production methods; and

-- Promoting greater public access to information about hazardous

substances.

Labor. The NAFTA supplemental agreement on labor creates the Commission

on Labor Cooperation, which promotes labor principles, laws, and

standards and their effective application and enforcement. The supple-

mental agreement provides that each country will promote public

awareness of its laws as well as ensure compliance.

These agreements provide for the use of fines and trade sanctions as a

last resort if a party believes that another is demonstrating a

persistent pattern of failure to enforce labor or environmental laws.

Import Surges. The NAFTA supplemental agreement on import surges allows

parties to impose trade restrictions if increased imports cause or

threaten serious injury to a domestic industry.

Additional Activities

Border Cleanup. The United States and Mexico have established the Border

Environment Cooperation Commission (BECC) and the North American

Development Bank (NADBank). These innovative institutions help

coordinate and finance environmental infrastructure projects, including

those focusing on water pollution along the U.S.-Mexico border.

Anti-dumping and Countervailing Duties Working Groups. The three

countries established these working groups to build on the results of

the Uruguay Round and seek solutions that reduce the possibility of

disputes concerning the issues of subsidies, dumping, and the operation

of trade remedy laws regarding such

practices.

U.S.-CANADA AIR SERVICES AGREEMENT

Growing economic interdependence among nations--the "globalization" of

the world economy--rapidly has expanded demand for international air

services and challenged governments to rethink approaches to regulating

this vital sector of the economy. Nowhere was the need for new thinking

more important than in the U.S.-Canada bilateral aviation market--the

world's largest air passenger market. The United States and Canada have

just completed a new air transport agreement, thereby demonstrating a

commitment to cooperation and economic progress in this key area.

Breakthrough Agreement

The new U.S.-Canada transborder aviation agreement, which was signed

during the President's visit to Ottawa in February 1995, dramatically

improves air services for consumers on both sides of the border. It

replaces a highly restrictive regime with a liberal agreement which will

allow significantly increased integration of the two countries' domestic

air transportation networks. This result is consistent with the open

border which traditionally has symbolized the excellent relationship

that the two countries enjoy.

Based on the same fundamental open-market principles as NAFTA, this new

aviation agreement will contribute to economic expansion in both

countries as it is implemented over a three-year, phase-in period.

By modernizing the critical infrastructure pillar which air transport

represents, the new agreement not only reinforces, but also expands the

benefits of NAFTA by allowing for a fuller realization of its potential.

U.S. International Air Transportation Policy

The new air transport agreement also represents a milestone in the

Administration's efforts to promote freer trade and clearly meets the

objectives outlined in the Clinton Administration's international

aviation policy statement of 1994. The new agreement will provide the

aviation industry with the opportunities it needs to meet new demands

and compete effectively in this market. It will provide consumers and

shippers with more and better service options and contribute to:

-- Expanding the international aviation market;

-- Increasing service opportunities for airlines;

-- Raising productivity and skilled job opportunities within the

aviation industry; and

-- Promoting aerospace exports.

The World's Largest Bilateral Market

The U.S.-Canada aviation market is the largest bilateral market in the

world in terms of passenger movements, even though it has, until now,

been severely constrained by one of the most restrictive aviation

regimes. Despite the constraints of an outdated agreement--which has not

allowed direct service between the two capitals and which had prevented

one-third of the top 50 city-to-city markets from having any direct

service--13 million people still traveled across the border on

commercial flights in 1993. This cross-border movement generated more

than $2.5 billion in direct revenues and many times this amount in

indirect benefits to the travel and tourism industries in both

countries.

It is difficult to estimate precisely this agreement's potential

economic impact due to the scale and scope of liberalization. Comparison

with the growth achieved in other aviation relationships, though, offers

some indication of its magnitude. Since 1978, for example, U.S.-Canada

air travel has grown by less than 4% annually, while other U.S. aviation

markets have grown several times faster.

Air cargo carriers and the businesses which rely on specialized, time-

sensitive air deliveries also will see immediate benefits from the

agreement. Severely hampered by the former agreement's limitations on

aircraft size and package weight and dimensions and by constraints on

routes and frequencies, all-cargo carriers now will be freed of many

restrictions immediately and largely deregulated within 12 months.

Key Elements of New Agreement

-- This agreement substantially frees this huge aviation market from the

governmental regulation which has hindered its growth in the past and

permits introduction of the passenger and cargo services demanded by the

U.S. and Canada's expanding economic ties.

-- Canadian airlines will have immediate open access to all points in

the U.S.

-- U.S. carriers will achieve open access to Canada after a short,

three-year transitional phase.

-- The markets for all-cargo and charter services will be largely

liberalized.

-- Numerous U.S. cities will receive new and better service.

-- This air agreement is an essential complement to the NAFTA and

the U.S.-Canada Free Trade Agreement.

GLOBAL ENVIRONMENTAL ISSUES

The environmental challenges confronting the world today are greater

than at any time in recent history. Threats to the global environment--

such as climate change, stratospheric ozone depletion, and the loss of

biological diversity and forests--affect all nations, regardless of

their level of development. As a result, the environment is increasingly

important to U.S. foreign policy. The United States accords high

priority to addressing global environmental problems and pursues wide-

ranging actions to protect the environment and promote sustainable

development.

Global Climate Change

The possibility that human activities may cause climate change is one of

the most serious international environmental concerns. The United States

has been a leader in the effort to respond to this threat. Negotiations

on a Framework Convention on Climate Change, which began near

Washington, DC, in early 1991, culminated in an agreement that received

more than 150 signatures at the UN Conference on Environment and

Development (UNCED) in Rio de Janeiro in June 1992; the convention

entered into force on March 21, 1994.

The climate change convention began an effective process for confronting

this global issue. Industrialized countries are developing specific

action plans to limit their emissions of greenhouse gases and enhance

forests and other greenhouse gas "sinks," or absorption areas. Other

countries are to take similar actions in the future.

President Clinton announced in April 1993 that the U.S. intends to

return its greenhouse gas emissions to their 1990 levels by the year

2000. In October 1993, the President presented the national Climate

Change Action Plan, containing nearly 50 domestic measures designed to

meet the U.S. commitment.

The United States made its national submission under the climate change

convention in September 1994. The U.S. Climate Action Report details

U.S. actions in all areas to address the threat of global climate

change. It includes a U.S. Initiative on Joint Implementation to promote

cooperation between countries on projects that will reduce or sequester

greenhouse gas emissions. In early February 1995, the first seven

projects for inclusion in the initiative were announced. Partner

countries include Belize, Costa Rica, Czech Republic, Honduras, and

Russia. It is hoped that these programs and others like them will serve

as a model for an international joint implementation regime.

During fiscal years 1993 and 1994, the United States provided $25

million in financial support and technical assistance to developing

countries and countries in transition to market economies for studies to

help establish analytical foundations to address the threat of climate

change. Eligible studies included inventories of greenhouse gas

emissions, vulnerability studies, and analyses of options to address

vulnerabilities and reduce greenhouse gas emissions. The United States

works with more than 50 countries on such studies.

The U.S. urges that a discussion on "next steps" for the post-2000 era

be part of the February 1995 preparatory session for the First

Conference of Parties to the Framework Convention on Climate Change as

well as part of the conference itself, which is to be held in Berlin,

Germany, March 27-April 7, 1995.

Protection of the Ozone Layer

The depletion of the ozone layer continues to be another serious

problem. The U.S. has led efforts to address this threat to the

atmosphere, beginning with a decision in 1978 to ban the use of

chlorofluorocarbons (CFCs) in non-essential aerosols. Because protection

of the ozone layer is possible only if all countries participate, the

U.S. urged the conclusion of an agreement to restrict the use of CFCs

and other ozone-depleting substances.

This effort has led to a succession of landmark international agreements

since 1985 designed to protect the ozone layer, including the 1985

Vienna Convention and the 1987 Montreal Protocol. Based on an amendment

under which countries will completely phase out the production of CFCs

and most other ozone-depleting substances by the end of 1996, the U.S.

has met its commitments to phase out halons by the end of 1994 and

continues toward meeting phase-out targets for CFCs and allied

substances by January 1, 1996.

UN Conference on Environment And Development

The June 1992 UNCED was a landmark event in addressing the global

environment. Unlike other environmental conferences, UNCED focused on

sustainable development--economic growth that takes into account

environmental concerns. UNCED resulted in adoption of three key

documents:

-- Agenda 21--an action program to guide national and international

environmental and development efforts into the 21st century;

-- The Rio Declaration--a statement of principles regarding the

environment and development;  and

-- A statement of principles for the conservation and sustainable use of

forests worldwide.

Based on UNCED recommendation, the United Nations established a new

Commission on Sustainable Development (CSD) to monitor implementation of

Agenda 21 recommendations. The U.S. strongly sup- ports the CSD as a

primary international body for promoting sustainable development

worldwide. The CSD will convene its next annual meeting in April 1995 to

follow up on the Rio Conference.

The United States works domestically to implement the recommendations

made at the Rio Conference. On June 14, 1993, President Clinton

announced the formation of the President's Council on Sustainable

Development (PCSD) to develop specific policy recommendations for a

national strategy on sustainable development that can be implemented by

the public and private sectors. The PCSD represents a groundbreaking

commitment to explore and develop policies that encourage economic

growth, job creation, and effective use of natural resources.

In addition to the treaties on biodiversity and climate change, UNCED

also endorsed a convention to combat desertification, particularly in

Africa. Negotiation of this new treaty was completed in Paris, France,

on June 18, 1994.

Conservation of Biological Diversity

The United States is party to a large number of bilateral and

multilateral agreements designed to protect endangered species and

ensure wildlife conservation. One of the most important is the

Convention on International Trade in Endangered Species of Wild Fauna

and Flora (CITES), by which the 122 CITES signatories monitor and

control international trade in wild species. CITES was crucial in

efforts by the U.S. and other countries to protect the African elephant

by banning trade in elephant ivory, and it is now involved in efforts to

protect the rhinoceros and tiger. The Ninth CITES Conference of Parties

was held in Fort Lauderdale, Florida, on November 7-18, 1994.

While CITES has been effective in protecting species that are threatened

as a direct result of international trade, the main cause of species

loss is habitat destruction. The U.S. seeks to address this issue

through a variety of means, such as increased funding for forest

conservation programs, the establishment of protected areas under the

World Heritage Convention and other agreements, and the Ramsar Treaty on

International Wetlands. The U.S. Agency for International Development

provides more than $160 million annually in assistance for tropical

forestry and biological diversity programs.

On June 4, 1993, the U.S. signed the UN Convention on Biological

Diversity, which establishes a framework for countries to work together

to protect the earth's species. The treaty is now before the U.S. Senate

for ratification. The United States believes that the convention

presents a unique opportunity for nations not only to conserve the

world's biological diversity, but also to realize economic benefits from

the conservation and sustainable use of its genetic resources.

Population and Environment

During the 1990s, world population growth will be greater than ever,

with annual increases between 90 and 100 million. Unaddressed, global

population will almost certainly double and could triple before the end

of the next century. The implications of such growth for global

economic, political, social, and environmental security are profound.

The third UN International Conference on Population and Development

convened in Cairo, Egypt, September 5-13, 1994. The Cairo conference

provided a once-in-a-decade opportunity to marshal resources behind a

comprehensive global effort   to stem rapid population growth. The U.S.

worked with its international partners to develop comprehensive

programs, which include addressing the unmet need and demand for family

planning and reproductive health services; developing strategies for

improving women's health needs and improving child survival; improving

the social, economic, and political status of women; and mobilizing

institutional and financial resources to meet these goals. All these

initiatives influence population growth and are most effective when

pursued together ; efforts in this regard will continue.

Financing Environmental Protection

The U.S. supports effective use of resources and institutions to promote

sustainable development and environmental protection. It long has been a

leader among bilateral donors in supporting environmental programs

abroad and ensuring that environmental considerations are taken into

account in assistance programs. The U.S. foreign assistance budget

emphasizes sustainable development, including programs for reducing

natural resource degradation, reducing greenhouse gas emissions, and

supporting biological diversity.

Multilateral institutions remain essential to efforts to promote

economic reforms and development in a rapidly changing world; they also

are important instruments to promote sustainable development and

environmental protection. The United States helps ensure that the

multilateral development banks take environmental considerations into

account in all lending programs. The U.S. also strongly supported

creation of the Global Environmental Facility, which helps fund projects

that provide global environmental benefits, such as those related to

climate change and the loss of biodiversity.

Marine Conservation and Pollution

The world's oceans are threatened by human activities such as

unsustainable resource use and pollution. The United States long has

played an active role in ocean conservation programs, from the efforts

in the early 1980s to protect whales to a UN-sponsored moratorium in

1992 on the destructive practice of driftnet fishing. Work also is

underway to ensure that fishing practices by tuna and shrimp fleets

minimize impacts on populations of dolphins and sea turtles.

The United States is a leading proponent of two major international

agreements to address  marine pollution: the Convention for the

Prevention of Pollution from Ships, which regulates discharges of

harmful substances during the normal operation of ships at sea and the

London Convention, which bans the ocean disposal of a number of wastes

and lists others that may be disposed of only with special care.

Because pollution from land-based sources represents the most serious

threat to the marine environment, the United States promotes efforts to

address this concern. Delegates to UNCED adopted a U.S. proposal calling

for an Inter-governmental Conference on the Protection of the Marine

Environment from Land-based Activities. This important conference will

be hosted by the United States in Washington, DC, from October 23 to

November 5, 1995. (###)

[BOX]

Climate Action Report

Copies of the U.S. Climate Action Report may be obtained from the

Superintendent of Documents, U.S. Government Printing Office at a cost

of $14.  The GPO stock number is 004-000-02416-1.  Call (202) 512-1800

for further ordering information.

The report also is available on-line through:

--  GPOâs Federal Bulletin Board Service (in Environment under Global

Issues) by dialing (202) 512-1387; or

-- The Internet (under Publications and Major Reports) at gopher

dosfan.lib.uic.edu.

(###)

ARTICLE 4:

Country Profile:  Canada

Official Name:  Canada

Geography

Area: 9.9 million sq. km. (3.8 million

sq. mi.); second-largest country in the world.

Cities: Capital--Ottawa pop. 833,000. Other major cities--Toronto 3.5

million, Montreal 2.9 million, Vancouver 1.4 million.

Terrain: Mostly plains with mountains in the west and lowlands in the

southeast.

Climate: Temperate to arctic.

People

Nationality: Noun and adjective--Canadian(s).

Population (1994 est.): 29 million.

Annual growth rate: 1.5%.

Ethnic groups: British 28%, French 23%, other European 15%,

Asian/Arab/African 6%, indigenous Indian and Eskimo 1.5%, mixed

background 26%.

Religions: Roman Catholic 46%, Protestant 41%.

Languages: English, French.

Education: Literacy--99% of population aged 15 and over have at least a

ninth grade education.

Health: Infant mortality rate--7/1,000. Life expectancy--75 yrs. male,

82 yrs. female.

Work force (13.8 million, 1992): Trade--18%. Manufacturing--15%.

Transportation and communications--8%. Finance--7%. Public

administration--7%. Construction--6%. Agriculture--4%. Forestry and

mining--2%. Other services--33%.

Government

Type: Confederation with parliamentary democracy.

Independence: July 1, 1867.

Constitution: The amended British North America Act of 1867 patriated to

Canada on April 17, 1982, Charter of Rights and Freedoms, and unwritten

custom.

Branches: Executive--Queen Elizabeth II (head of state, represented by a

governor general), prime minister (head of government), cabinet.

Legislative--bicameral parliament (104-member Senate, 295-member House

of Commons). Judicial--Supreme Court.

Political parties: Progressive Conservative Party, Liberal Party, New

Democratic Party, Reform Party, Bloc Quebecois.

Subdivisions: 10 provinces, 2 territories.

Suffrage: Universal at 18.

Flag: A red maple leaf on a white background flanked by vertical red

bands.

Economy

GDP (1994): $550 billion.

Annual growth rate: 6.8%

Per capita GDP (1994 est.): $19,000.

Natural resources: Petroleum and natural gas, hydroelectric power,

metals and minerals, fish, forests, wildlife.

Agriculture: Products--wheat, livestock and meat, feed grains, oilseeds,

dairy products, tobacco, fruits, vegetables.

Industry: Types--motor vehicles and parts, machinery and equipment,

aircraft and components, other diversified manufacturing, fish and

forest products, processed and unprocessed minerals.

Trade (1994 est.): Exports--$146 billion: motor vehicles and parts,

lumber, wood-pulp and newsprint, crude and fabricated metals, natural

gas, crude petroleum, wheat. Partners--U.S. 84%, EU 5%, Japan 4%.

Imports--$135 billion: motor vehicles and parts, industrial machinery,

crude petroleum, chemicals, agricultural machinery. Partners--U.S. 74%,

EU 5%, Japan 4%.

Exchange rate: U.S.$1=C$0.73.

Principal Government Officials

Prime Minister--Jean Chretien

Minister of Foreign Affairs--Andre Ouellet

Ambassador to the U.S.--Raymond Chretien

Ambassador to the UN--vacant  (###)

ARTICLE 5:

Maintaining the Instruments Of America's Global Leadership

Secretary Christopher

Statement before the Subcommittee on Commerce, Justice, and State of the

Senate Appropriations Committee, Washington, DC, March 1, 1995

Good morning. I am pleased to appear before this subcommittee. I am here

to give you an overview of our proposed fiscal 1996 budget and to

highlight the objectives that it supports--in particular, those which

fall under this subcommittee's jurisdiction.

The American people justifiably expect that their government will do

what is necessary to protect our nation's interests in the world. At the

same time, the American people rightly demand that we apply the most

rigorous standards to federal spending. We have been tough-minded in

putting together an austere budget.

The international affairs budget represents only 1.3% of total federal

spending. It has absorbed substantial real cuts in the last several

years and is now 45% lower in real terms than it was in 1984. Despite

the extraordinary challenges we face, our 1996 spending request is

essentially what we are spending in the current fiscal year. Indeed, the

resources we are requesting are the rock-bottom minimum that we need to

advance our nation's vital interests.

Last November's elections, Mr. Chairman, certainly changed a great many

things. But they were not a license to lose sight of our global

interests or to walk away from our commitments in the world. Approving

this budget will be a test of our willingness to devote the necessary

resources to protect the security and prosperity of the American people.

It will be a stern test of our commitment to lead.

Our foreign policy strategy is driven by four principles:

First, the imperative of American leadership in the world;

Second, the need to maintain effective relations with the world's most

powerful nations;

Third, the importance of adapting and building institutions that will

promote economic and security cooperation; and

Fourth, the need to continue to support democracy and human rights.

In my oral testimony today, I would like to devote particular emphasis

to the first--the imperative of American leadership.

The end of the Soviet empire removed the central threat to American

security, but it did not eliminate in any way our vital stake in

international engagement. I think a clear-eyed assessment of our

interests makes it plain that American leadership remains essential.

The spread of open societies and open markets gives us an unprecedented

opportunity to advance our interests. But we must not be complacent.

Aggression, intolerance, and tyranny still challenge the march of

democracy and threaten our interests in many regions of the world. And

problems such as nuclear proliferation, terrorism, and environmental

degradation pose growing dangers to our nation.

As we address both these opportunities and threats, we must set strict

priorities that are consistent with our interests. But we also know that

we cannot assure our security and prosperity by building a wall around

our nation or by abandoning the instruments of global leadership.

Today, America faces a series of choices: between engagement and

retreat; between the concrete benefits of integration and the illusion

of isolation; between sharing burdens and responsibilities with others

and shirking them altogether. We are the nation that spent trillions of

dollars to defend the free world during the four decades of the Cold

War. It would be a historic mistake if we now refused to spend a

fraction of that sum to consolidate the remarkable gains we have made.

Of course, there is room to differ on specific issues--on the best ways

to make peace-keeping more effective, for example, or the best possible

targeting of our assistance programs. But, nevertheless, I believe that

the wholesale rejection of all the instruments of our engagement would

undermine America's ability to lead.

Those who say they are for a strong America have a responsibility to

help keep America strong. We simply cannot have it both ways. We cannot

be the world's most powerful nation if we do not marshal the resources

to stand by our commitments. We cannot lead if we do not have all the

tools of leadership at our disposal. Preventive diplomacy is often the

first line of defense. Those who would undermine our diplomatic capacity

threaten our national interest at a vital stage in the process when

peaceful solutions are still possible.

To maintain our leadership, we must always be ready to back our

diplomacy with credible threats of force. Yet no American believes that

our soldiers should have to take all the risks or that our taxpayers

should have to pay all the bills. That is why leveraging our power

through institutions such as the United Nations is a sensible bargain

that the American people support.

There is no question that the UN can be and should be more effective. We

are committed to the reform and reinvention of the UN system. Some

progress is being made, and we will press for more. But some people seem

to argue that we should back away from the UN entirely. That, in my

judgment, would be a terrible mistake.

In the last two years, we have developed clear peace-keeping guidelines

designed to ensure that tough questions are answered before new missions

are approved and that tough measures are taken to ensure that money is

not wasted. And we are improving our consultation with Congress at every

step. As a result, there have been fewer new missions and better

management of existing ones. And the UN has established an inspector

general, who is aggressively working on oversight questions.

But two weeks ago, the House of Representatives passed legislation--the

so-called National Security Revitalization Act--which would end,

intentionally or not, over four decades of U.S. support for UN peace-

keeping. That would violate a solemn treaty commitment--something we as

a great nation should not do. If our NATO allies and Japan were to adopt

similar policies, UN peace-keeping would end overnight. We would lose a

tool that every American President since Harry Truman has used to

advance American interests. And the United States would be left with an

unacceptable choice whenever an emergency arose--a choice between acting

alone and doing nothing.

In connection with our second principle--the importance of constructive

relations with the world's most powerful nations--let me take a moment

to discuss our relations with Russia.

There is little doubt that the conflict in Chechnya has clearly been one

of the most serious crises for reform in Russia since the Soviet Union

collapsed. We have been deeply concerned about the use of excessive and

indiscriminate force in Chechnya and the corrosive implications that has

for Russia's future as a democratic, multi-ethnic state. We have

emphasized strongly to the Russian Government that the fighting must end

and that a process of reconciliation must begin. And we strongly support

the call of the Chairman-in-Office of the OSCE for a continuous OSCE

presence in Chechnya.

But the tragedy of Chechnya has not altered our interest in helping

Russian reformers build a nation finally at peace with itself and its

neighbors. Our assistance to Russia is important precisely because it

advances that interest. It supports the dismantlement and safe transport

of nuclear weapons and the development of a private economy in Russia.

It backs solemn commitments we made to encourage Russian troops to leave

the Baltic states.

It is important to recognize that most assistance is distributed not

through the government but through private groups, in areas outside

Moscow. Cutting aid now would hurt the friends of democracy in Russia--

the very people who have been most critical of the Chechnya operation.

At the same time, let me stress that the pace and substance of Russia's

dealings with the United States and with institutions such as NATO and

the G-7 will depend in large measure on the pace and direction of

Russia's transformation. To the extent the Russian Government upholds

international norms in its internal and external policies, the cause of

Russia's integration is bound to advance. But further violence in

Chechnya will only set back that cause.

With respect to our third guiding principle--adapting and revitalizing

institutions of security and economic cooperation--we are requesting

funds in this budget for our assessed contributions to more than 50

international bodies. This includes the UN, NATO, and the Organization

of American States--bodies that promote peace, democracy, and economic

development around the world.

Our budget request also supports our fourth principle--our commitment to

democracy and human rights. That commitment is based on a sober

assessment of our interest in a world where the rule of law protects not

just political rights but international stability and the essential

elements of free market economies. In this respect, our budget includes

funds to enable the United States Information Agency to continue to

foster American ideals and international understanding in an

interdependent world.

To give you a sense of my priorities for 1995, let me mention five areas

that offer particularly significant opportunities this year.

First, we must sustain the momentum we have generated through the GATT,

APEC, and the Summit of the Americas--a momentum toward the open trading

system that is vital to American exports and American jobs. At the same

time, it is essential that American companies and workers be in a

position to take advantage of the opportunities that an open trading

system provides. That is why I sit behind what I call the America Desk

at the State Department and why I am determined to keep economic and

commercial diplomacy at the core of the Department's work.

I think we really have changed the culture of the State Department in

this respect. I am pleased to see several CEOs quoted in national

publications saying they have never seen our Department and our

embassies more supportive of American business around the world. Seldom

a week goes by that I don't get a letter to that effect.

In a second area of opportunity, we are taking concrete steps to build a

new security architecture in Europe. Our focus is on maintaining strong

relations with Western Europe, consolidating democracy in Central Europe

and the former Soviet Union, and engaging Russia in promoting European

security.  With American leadership, we and our allies have begun a

steady and open process that will lead to NATO expansion.

The third area of opportunity is advancing comprehensive peace in the

Middle East. We stand at a decisive moment in the peace process. The

President and I are determined to do all we can to sustain the momentum.

Next week, I will be traveling to the region once again to consult with

key parties about how best to move the negotiations forward. I do not

want to underestimate the challenges we face. But neither can we

underestimate the opportunities to work for a lasting peace.

The fourth area of emphasis is to intensify our efforts to stop the

spread of weapons of mass destruction and their means of delivery. Our

global and regional strategies for 1995 comprise what I am quite

confident is the most ambitious non-proliferation effort in history,

beginning with the indefinite and unconditional extension of the Non-

Proliferation Treaty. Our 1996 budget supports the Arms Control and

Disarmament Agency, including funds for implementing the Chemical

Weapons Convention.

As a fifth area of opportunity, we plan to implement a comprehensive

strategy to combat international terrorists, criminals, and drug

traffickers. And, as the President has announced, we will be proposing

legislation to combat alien smuggling and illegal immigration. The

President has also transmitted our proposed Omnibus Counterterrorism Act

of 1995, which will give the executive branch new tools to improve

prevention, investigation, and prosecution of terrorism.

Beyond these five key areas, I want to stress that we will continue to

address many other issues important to our nation's interests, such as

promoting stability and democracy in Asia, Africa, and Latin America.

And we will ensure that global challenges such as environmental

degradation and rapid population growth have an important place on our

foreign policy agenda.

Our nation's ability to achieve all these objectives, Mr. Chairman,

depends on the dedicated men and women who serve our nation's foreign

affairs agencies. At 266 diplomatic posts overseas, these men and women

help our companies open markets and create American jobs. They protect

their fellow citizens abroad. They help keep our borders secure and keep

drugs off our streets. They even, on occasion, provide assistance to

congressional delegations.

I know that every member of this Congress is committed to America's

defense readiness. I believe that we must maintain the same level of

diplomatic readiness as one of the most effective ways to avoid having

to call upon our armed forces. Our foreign affairs personnel must be

equipped to fight for America's interests. They must have access to

modern information technology. They must work in facilities that help,

not hinder, their productivity.

As we seek to meet these challenges, we have a continuing obligation to

make our operations as efficient as possible. As you know, Vice

President Gore has been heading up a major effort to reinvent

government. I have taken the strong position that the foreign affairs

agencies are far from exempt from that process. Each of the foreign

affairs agencies is proceeding vigorously with streamlining efforts. I

also support the Vice President's decision that each of these agencies--

ACDA, AID, and USIA--has a distinct mission that can best be performed

if they remain distinct agencies.

At the State Department, we have been involved in the National

Performance Review process since the outset. Let me tick off some of the

things we have done in the last two years. We have closed 17 posts

overseas. We have 1,100 fewer people at State than when I arrived. We

have abolished 20% of our deputy assistant secretary positions. We have

absorbed a 26% increase in passport workload with no increase in staff.

We have reduced total senior officer positions to the point where we

will meet congressional targets ahead of schedule. We have reduced

overseas allowances and eliminated cash awards for senior officers.

After four years of essentially flat budgets, this year's request of

$2.6 billion for State Department operations represents a significant

decrease in real terms.

Pushing for greater efficiency and higher productivity in the management

of our foreign affairs is a personal commitment of mine. I am working

hard on a strategic plan to change the way we do business.

We have a lot of work to do in the next few years. Here are some of the

areas I've targeted.

-- We will streamline our overseas missions.

-- We will close 15 more posts.

-- I want to push decision-making and responsibility downward by a

further reduction in mid-level managers.

-- We need to significantly cut back on administrative overhead. I want

to expand the use of teams to better coordinate policy development at

the Department and among different agencies in Washington.

-- And I want to better focus our reporting and analysis to be sure we

are not duplicating what other agencies do and what we can get on the

open market.

But, Mr. Chairman, I would be neglecting my responsibility as Secretary

if I did not tell this subcommittee that some of the recent budget

cutbacks have taken a toll on our readiness. Because we have not had

adequate funding for language training, 50% of our language-designated

positions are filled by people who have not reached the targeted

proficiency levels. Almost 75% of the telephone systems serving our

overseas posts are outdated--so outdated that when we needed repairs in

our vital 24-hour operations center, the AT&T repairman had to consult

with Bell Labs on how to service the antiquated equipment. Almost 80% of

our automated data processing equipment is obsolete--our computer system

is so old that we can't get maintenance contracts any longer, and we

can't locate spare parts.

That is why our FY 1996 request supports a modest $32.8 million Capital

Investment Fund. This will be used to upgrade information systems,

replace overseas telephone systems, and purchase a classified mainframe

computer. It will improve our efficiency and productivity, reduce our

maintenance costs on antiquated equipment, and help us continue to do

more with less.

Mr. Chairman, since my first week in office, I have consulted closely

with both parties in Congress on every important issue on our agenda. I

commit myself to continue to do so. I am committed to do all I can to

sustain the bipartisan foreign policy that is America's tradition and

strength. And I am committed to make our operations cost-effective and

efficient, so that we can devote more of our resources to the domestic

challenges the American people demand we meet. I look forward to

continuing to work with you and with members on both sides of the aisle

to provide American leadership to build a more peaceful, free, and

prosperous world. (###)

ARTICLE 6:

U.S. Interests and Russian Reform

Deputy Secretary Talbott

Excerpts of remarks before the Arms Control Association, Washington, DC,

February 23, 1995

We are, indeed, looking ahead with resolve--but also with realism--to

several big tests coming up soon.  Secretary Christopher has called the

global and regional arms control challenges we face in 1995 "the most

ambitious non-proliferation agenda in history." It includes no fewer

than 13 key initiatives.

--  We're working toward a Comprehensive Test Ban Treaty, a convention

cutting off the production of fissile material, and, of course, the

indefinite extension of the Non-Proliferation Treaty. I know that Tom

Graham spoke to many of you on this last subject at the ACA annual

luncheon two months ago.

--  We're pushing for START II ratification in both the U.S. Senate and

the Russian Parliament; we're intensifying our effort to use the Nunn-

Lugar program--one of the most important and positive pieces of

legislation of the post-Cold War era--to dismantle and destroy nuclear

weapons and provide peaceful alternative professional outlets for the

skills and expertise of nuclear weapons scientists in the former Soviet

Union; and we're working to complete the ABM treaty talks on the

demarcation between theater and strategic missile defenses.

--  We're seeking Senate ratification of the Chemical and Toxic Weapons

Convention and also ratification of the Convention on Conventional

Weapons, with its restrictions on the use of landmines; we're

negotiating legally binding measures that will ensure compliance with

the Biological Weapons Convention; and we're developing a new

international exports control regime to succeed COCOM.

--  We're committed to blocking Iraq and Iran's attempts to develop a

nuclear weapons capability; to implementing the Agreed Framework with

North Korea; and we're trying to head off a destabilizing competition in

nuclear weapons and ballistic missiles between India and Pakistan.

In short, we're going all-out to take full advantage of the historic

opportunities presented by the end of the Cold War and the collapse of

the Soviet Union.

Our success will depend, in large measure, on the political context in

which we pursue that ambitious arms control agenda.  There are many

factors that will determine that context, but the single-most important

is what happens in the former Soviet Union. Quite simply and starkly, if

the 12 New Independent States that used to make up the U.S.S.R. evolve

in the direction of stability, democracy, market economics, and

integration with the rest of the world, then arms control and non-

proliferation will be more likely to succeed--globally as well as

regionally. If, however, that vast area slips back into the past or

veers off into any of a number of dangerous and ugly possibilities for

the future, the worthy enterprises to which the ACA is so deeply

devoted--and to which it so consistently and significantly contributes--

will suffer.

There is plenty of reason for concern about what will happen in the

former Soviet Union during the months and years ahead, and I will speak

to that point in a moment. But we should maintain some sense of

perspective; we should balance our apprehensions about the future with

appreciation of what has been accomplished to date.

Let me, in this connection, recall our discussion the last time we met.

It was 26 months ago, in December of 1992, at the ACA annual luncheon. I

was in my final days at Time magazine, worrying only about how Professor

Keeny would grade my columns--an easier course than the one in which I'm

now enrolled. In my remarks to you then, I stressed three concerns about

future developments in the New Independent States.

First, I warned of "the possibility that there could end up being three

or four nuclear-weapons states where before there was one." I sketched a

few nightmare scenarios--one involving instability and conflict both

within and between adjacent nuclear weapons states in the NIS and

another featuring a nuclear arms buildup involving not only the New

Independent States themselves but, in the future, other European powers

as well.

Second, I argued that the fate of Ukraine was key to stability in

Central Europe--that if Ukraine could develop as an independent,

sovereign nation, secure in its current borders, with normal, peaceful

relations with its neighbors, then the entire region would have a better

chance for peace and prosperity.

Third, I argued that it would be a blunder of historic proportions to

abandon our support for Russian reform. I argued that President-elect

Clinton needed to follow through on the Bush Administration's promises

of economic assistance, and that, whenever possible, he needed to

cooperate with--rather than browbeat--the Russian reformers.

Looking back at these points two years later, I'm struck not by what a

splendid crystal ball I had--the points I was making were pretty much

self-evident; rather, I'm struck by how far we've come in the right

direction on all three fronts.

Thanks in large part to President Clinton's leadership, issue number

one--the danger that the Soviet Union would give way to four nuclear

weapons states in the NIS--is well on its way to being resolved. In

Budapest two months ago, at the ceremony for START I's entry into force,

we saw Ukraine, Belarus, and Kazakhstan accede to the Non-Proliferation

Treaty as non-nuclear weapons states.  After persistent efforts on our

part, these nations have also joined wholeheartedly in innovative Nunn-

Lugar initiatives, such as Operation Sapphire, which airlifted nearly

600 kilograms of highly enriched uranium from Kazakhstan to secure

storage in the United States.

We've also seen encouraging progress on issue number two--the

independence of Ukraine. In October, after a year-and-a-half of patient

encouragement by President Clinton, Vice President Gore, Secretary

Christopher, and other Administration officials, the Ukrainians took the

courageous step of launching genuine, broad-gauge economic reform. The

benefits of that policy will help cement the bonds of nationhood;

Ukrainians from Donetsk to Simferopol to Lviv now share a common stake

in reform and a common interest in strengthening the sovereignty and

unity of the Ukrainian state.

Russia has done its own part to encourage the chances that Ukraine will

survive and, ultimately, prosper.  Moscow has reaffirmed its acceptance

of current borders and kept a prudent distance from ethnic separatist

movements in the Crimea and elsewhere.  The Russian and Ukrainian

Governments have worked cooperatively to manage a number of difficult

issues, such as START I implementation, and the status of the Black Sea

Fleet.

Good Russian-Ukrainian relations have helped to facilitate Russia's

relations with the other nations of Central Europe. On August 31 of last

year--after years of patient but firm diplomacy by Presidents Bush and

Clinton--Russian troops withdrew from Germany and the Baltics. To the

south, Russia is committed to withdraw its 14th army from Moldova by

1997, in accordance with the agreement that those two governments

reached last October. The door is now open for Russia to build

effective, mutually beneficial economic ties to all of these nations.

That brings me to the third and final issue I flagged in December 1992--

the doubts we all felt then about the fate of internal reforms in Russia

and concern over what, if anything, the United States could do to

influence events there. Only three days before I spoke to you, Boris

Yeltsin had named as his Prime Minister Victor Chernomyrdin, a baron of

the oil and gas sector, to replace Yegor Gaidar, the Russian

Government's most visible champion of economic reform.  Chernomyrdin was

widely presumed to be a throwback to the Soviet managerial mentality,

wedded to the command economy, and to authoritarian methods. Meanwhile,

Foreign Minister Kozyrev had just observed April Fool's Day in December

by delivering a speech in Stockholm that proclaimed "the resumption of

the Cold War" and Moscow's intention to launch "a campaign of bringing

the 15 republics together again." Having thus gotten his audience's

attention, Kozyrev said he was just kidding--but not entirely: He was

warning that forces precisely so disposed were alive and well and

growing stronger in Russia.

In retrospect, of course, that cluster of scary moments two years and

two months ago was merely the calm before the storm--repeated storms, in

fact.  In the spring of 1993, President Yeltsin was locked in a

confrontation with the Soviet-era parliament and fought to win a

national referendum on his leadership; in September 1993, he suspended

the parliament; in October, he ordered troops to attack the White House

after supporters of mutinous deputies took to the streets with automatic

weapons and rocket-propelled grenades.  Two months later, Vladimir

Zhirinovsky, ultranationalists, unreconstructed communists, and other

opponents of reform made sweeping gains through the ballot box.

At each of those critical, worrisome junctures, many commentators--in

both Russia and the West--believed that reform was mortally wounded,

perhaps even dead. With the benefit of some hindsight, we can now see

that the interim verdict should have been more qualified: Reform was

down but not out--threatened, yes; defeated, no.  Incidentally--or,

perhaps, I should say, not incidentally--one reason that reform survived

was that Prime Minister Chernomyrdin did not live up to his ominous

billing; he established himself as an effective proponent of economic

reform and a key figure in U.S.-Russian cooperation, largely through the

extraordinary working relationship he has developed with Vice President

Gore.

Now, in Chechnya, there is a new crisis for reform in Russia--the most

serious to date. On Wednesday, Defense Minister Grachev said that "there

should be no more cease-fire talks" with the Chechens, and the fighting

on the outskirts of Groznyy continues. We are now hearing reports that

there already have been as many as 25,000 civilian casualties in Groznyy

alone and that some 300,000-400,000 people have been displaced from

their homes by the fighting.

But Chechnya is more than an on-going tragedy and outrage in a remote

corner of the North Caucasus.  Chechnya is, literally and figuratively,

broadcasting to the world an image that conjures up the worst memories

of Russia's past and clouds the best visions of her future. People all

over the globe, including a great many Russians, are now asking: How can

Russia develop as a multi-ethnic democratic state while its central

government is waging an all-out war against tens of thousands of its own

people? And how will Russia continue on a course of economic reform

while its human and financial resources are being squandered on an ill-

conceived military operation against one of its own cities?

Disturbing as these questions are, they are not new. From the day that

the hammer and sickle came down over the Kremlin and the Russian

tricolor went up in its place, we--and most Russians, too--have been

asking ourselves where Russia is going. What kind of state it will be in

the next century? Chechnya has sharpened the debate over what might be

called the existential question about Russia--about its very nature,

past, present, and future. But Chechnya did not begin that debate, nor

will its resolution answer the fundamental questions.

There are plenty of voices--some quavering and some strident--arguing,

in effect, that the debate is over; they are saying, in effect, "We told

you so."  They believe that Chechnya confirms, decisively and

conclusively, the worst about Russia; that it proves Russia is a country

doomed--for reasons of geography, political culture, and history--to an

authoritarian, if not totalitarian, domestic order, and to aggressive,

imperialistic international behavior.

Our view is different. We don't believe in historical or geographical

determinism. History and geography are hugely important factors, of

course, in any state's identity and destiny.

But we should beware of stereotypes about national character,

particularly ones that would--if they become the basis of policy--

consign whole peoples to dictatorship on the perverse theory that that

is the kind of government they deserve, or the political system encoded

in their genes. That's the lesson that Nelson Mandela, F.W. de Klerk,

and the people of South Africa have taught the world: Nations can turn

back from a disastrous course, alter their destinies, and transform

their identities--and they are especially likely to do so in the age of

global interdependence and the communications revolution.

That is not, however, an argument for determinism of a utopian sort.

There is nothing automatic or guaranteed about happy endings, either in

history or in our increasingly interdependent but still highly uncertain

future. We do not--we cannot--know for sure what kind of state Russia

will be in the 21st century. What we do know is that there is a titanic

struggle going on between forces of reform and those of regression,

between the new and the old, and between various visions of the new,

some hardly more savory than the old. The outcome of this struggle is

anything but foreordained, and it is precisely because we cannot bet on

a predetermined outcome that we have invested in measures intended to

affect the course of events in a way that is consistent with our

interests and values. President Clinton underscored this premise of our

policy when he visited Moscow just over a year ago. In a town meeting at

Ostankino television studio, broadcast throughout Russia and around the

world, he asked the Russian people: "How will you define your role in

the world as a great power? Will you define it in yesterday's terms, or

tomorrow's?"

These were not merely rhetorical questions.  The President did not imply

that he knew the answer. He made quite clear that it is up to the

Russian people themselves to find their own answer. But he also made

clear that he--and all of us--have our own hopes about what answers will

eventually emerge, and that our nation's relationship with Russia will,

ultimately, depend on the choices that the Russian people make.

In order to get a sense of the very different possibilities for Russia's

future, it's important to keep in mind the many transformations that are

now taking place in Russian villages and cities all across that vast

land. Many of the most visible of these changes are thoroughly bad news.

I'm thinking of the emergence of increasingly sophisticated organized

criminal syndicates or ultranationalistic, often anti-democratic

political groups. But there are also a lot of reformers among the 150

million people who live across the 11 time zones of Russia.

We have seen President Yeltsin and his advisers in the Kremlin take a

giant step backward in Chechnya. But at the same time, an active, highly

critical press is accurately reporting what is going on throughout the

crisis and playing a vital role in shaping public opinion. Those opposed

to Kremlin policy are speaking out freely, and often angrily, on Russian

television, and they are traveling abroad to encourage international

criticism of their government's behavior. The Russian Parliament is

vigorously and openly debating what has happened and what is to be done.

Regional leaders such as Presidents Boris Nemtsov of Nizhny-Novgorod and

Mikhail Nikolayev of Sakha are voicing their disapproval of the

Kremlin's handling of Chechnya as well.

A majority of Russians and of Russian leaders now accept the idea that

political combat should be waged on the floor of the parliament, in the

press, and on the hustings, rather than on the streets or underground.

That doesn't mean that we will always welcome the results of Russian

domestic politics. But it is, I would contend, a net positive that real

politics is emerging as the basis of the system that governs the largest

country on earth.

For President Yeltsin, Chechnya has been a personal and political

debacle.  The brutality and ineptitude of the military campaign has

shrunk his political base and reduced his approval in Russia to an all-

time low. And it has jeopardized his international support as well.

The main question now is what lessons will he and the rest of the

Russian leadership learn from Chechnya? Will they uphold the rule of law

and human rights, or will they try to give priority to "order" and

"security" in a fashion that ends up undermining both, as it did so

spectacularly and fatally during the Soviet period of Russian history?

Will they embrace the obligations that come with membership in the

international community, or will they choose the path of self-enforced

isolation, and economic and political backwardness?

The most recent indications of President Yeltsin's own thinking--from

his speech last Thursday to the Russian parliament--are mixed. While he

took the opportunity to reiterate his commitment to democratic reform,

he stopped short of calling for a peaceful political settlement in

Chechnya--in our judgment, the only genuine resolution to this crisis

that is consistent with democratic principles.

As I've already said, one way to look at what is happening in Russia

today is as a struggle between the forces of reform and reaction,

between the old and the new. Another way is as a struggle between the

forces of integration and disintegration.  Chechnya obviously represents

disintegration. Moreover, it stands as a warning for the future: If the

central Russian Government attempts to enforce unity with brute

strength--if it insists on imposing integration on people who feel

disenfranchised or oppressed--the result will likely be more

disintegration, more violence, more instability, and more insecurity for

Russia itself and also for her neighbors.

Our own policy in this regard is clear: We support the sovereignty and

territorial integrity of a democratic Russian Federation within its

current borders. We want to see Russia develop as a strong, prosperous

state in the 21st century, but we have also made clear that we think

that will happen only if Russia continues to develop a pluralistic

political system, a constitutional order, and federal structures that

permit all the peoples of Russia to identify themselves as citizens of a

multi-ethnic state rather than as subjects of Moscow.

Integration is also a goal of Russian foreign policy. The Yeltsin-

Chernomyrdin-Kozyrev government has, to its credit, placed a high

premium on participating in and benefiting from the various

organizations that make up the international order. These include GATT,

the European Union, the G-7, the ASEAN Regional Forum, and, perhaps most

important, the newly emerging arrangements that will define a post-Cold

War security order for an undivided Europe: the OSCE, the Partnership

for Peace, and, in due course, some sort of relationship between Russia

and NATO.

Since integration serves the goal of Russian reform, it serves American

national interest as well. Indeed, it is the hallmark of the Clinton

Administration's foreign policy to strengthen existing international

structures and build new ones that will serve the interrelated

objectives of open markets and open societies--of global peace and

prosperity. We want Russia to be as much a part of those structures as

possible and as soon as possible.

At the same time, the pace, tone, and content of Russia's dealings with

the outside world will depend, in large measure, on the pace, tone, and

direction of Russia's ongoing internal transformation. Continued

integration with the West will enhance Russia's security and expand its

access to capital. But it also carries with it an obligation to the

political norms and market practices that undergird the strength of the

industrialized democracies. The way in which Russia defines statehood

internally will be a major factor in how quickly and fully Russia

achieves its laudable goal of membership in the community of democratic

nations.

That, too, is part of the lesson of Chechnya: When the Russian

Government violates international norms in its handling of an internal

crisis, as it has unquestionably and egregiously done in Chechnya, the

cause of external as well as internal integration suffers.

That said, however, what we should not do is to treat each and every

disagreement we have with the Russians as some sort of final, "High-

Noon" showdown that puts the entire relationship, including support for

reform, on the line. Obviously, our aid will be calibrated to be sure

that it does what it is intended to do: namely, support reform.  But

threatening to pull the plug on our reform assistance programs is a card

we can play exactly once. Having done it, we won't be able to do it--or

even plausibly threaten to do it--again.

The key point here, however, is that support for economic and political

reform in Russia is in our own national interests--even, and I'd say

especially, when there are tensions in the overall, government-to-

government relationship.  Just as the Nunn-Lugar program and START II

are defense by other means, so, too, are our assistance programs an

investment in a safer future. Encouraging the growth of democracy and

economic freedom in Russia remains the best and least- expensive

investment we can make in our own security and in the security of all

the peoples of Europe. Reformers have, indeed, come under fire in recent

months, but that seems to us to be all the more reason to step up our

efforts to help them. As President Clinton said in Cleveland last month,

"if the forces of reform are embattled, we must renew, not retreat from,

our support for them."

In conclusion, let me say that I appreciate your allowing me to wander

so far afield from those subjects that are of most intense and immediate

interest to your organization--from those subjects, in other words, that

Stan Resor and I used to talk about on the park bench on the New Haven

Green. But I hope you agree that there is the tightest possible

connection between arms control on the one hand and the future of

Russian politics and foreign policy on the other, and that connection is

more than just because the latter provides a context for the former.

It's also because one of the principles that served us so well during

the arms control negotiations of the Cold War will also serve us well

now that the Cold War is over and now that we have a much broader,

deeper, more complicated agenda in our dealings with the former Soviet

Union. That principle is steadiness; it's consistency, continuity, and

determination; it's keeping our eye on the big picture and the long-term

objective.

Many of you here tonight preached, and practiced, that principle when

the issue was how to work with the Soviet Union on virtually the only

issue on which we had a common interest, which was diminishing the

danger that we'd blow each other up. That same principle of steadiness

is crucial now that we have a chance to work with Russia, Ukraine, and

the other New Independent States of the former Soviet Union on the less

apocalyptic--but no less difficult and no less important--task of

building a more peaceful, prosperous, and integrated world. . . . (###)

ARTICLE 7:

American Eagle or Ostrich? The Case for The United States in the United

Nations

Deputy Secretary Talbott

Remarks to the Denver World Affairs Council, Denver, Colorado, February

28, 1995

Thank you both for that kind introduction and for inviting me to Denver

today. I've been a frequent visitor to Colorado over the years--not just

for purposes of risking life and limb on the slopes of Vail, Snowmass,

and Telluride, but also because for nearly 15 years the Aspen Institute

provided me with an opportunity each August to spend a week in some of

the loveliest country on earth thinking and talking with colleagues and

mentors about the U.S. role in the world.

That is my topic this afternoon. More specifically, I would like to talk

about the need for vigorous American engagement and leadership in the

world. More specifically still, I'd like to talk to you about the United

States in the United Nations, why we're in it, and what's in it for us.

I chose this topic precisely because it is controversial; I chose it

because the UN, and America's leadership of it, are under attack from a

number of quarters--and because it's important that the debate take

place not just inside the Washington beltway, or on the floor of the

U.S. Congress, but in the country as a whole.

Let me start with the general issue of international engagement. I know

that I don't need to lecture this audience on how U.S. foreign policy

can affect every community in every state of the union. Denver companies

are doing record amounts of business overseas and are actively pursuing

opportunities to expand further--in industries ranging from mining to

telecommunications to agricultural processing to environmental

technology.

Back in Washington, we were pleased to hear when the Colorado House of

Representatives unanimously supported NAFTA. One of the follow-ups to

NAFTA will take place here in Denver on June 30, when U.S. Trade

Representative Mickey Kantor will host a hemispheric trade ministers'

meeting, followed by a commercial forum co-hosted by Commerce Secretary

Ron Brown.

These international ventures--the quest to create good jobs at home by

developing markets abroad--are an important aspect of one of the central

themes of the era and of the world in which we live: namely, global

interdependence. That's a somewhat fancy, slightly suspect term because

it smacks of what Clare Booth Luce dubbed, a half century ago,

"globaloney."  But the phenomenon is real; to a steadily increasing

extent, what happens beyond our borders affects us here in the United

States--sometimes for better, sometimes for worse. For instance, the

lives of our children and grandchildren will be dramatically influenced

by our efforts to ensure sustainable population growth, combat threats

to the global environment, and win the struggle against drug

traffickers. These last three challenges are the focus of my friend and

colleague Tim Wirth's work since he came to the State Department as

Under Secretary for Global Affairs.

With interdependence among nations comes the need for global cooperation

among them. The consolidation of a liberal international trading order

and the opening of markets for American trade and investment are more

important than ever. But there's much more at stake here beyond

economics and commerce. We can't free our own neighborhoods from drug-

related crime unless we work closely with countries where drugs are

produced. We can't track down terrorists, such as Carlos the Jackal or

World Trade Center bombing suspect Ramzi Ahmed Yousef--both of whom are

now in custody--without help from the police of other countries. And we

can't keep nuclear weapons from falling into the hands of dictators and

terrorists through our own vigilance alone.  All this should be obvious,

but not everyone seems to get it.

Today, as there was in the aftermath of other great struggles earlier in

our nation's history, there is a temptation to draw back into ourselves,

to turn our attention and our resources to fixing our own problems, and

let other countries take care of themselves. This is particularly

evident in Congress, where there are those, in each party, who counsel

us to duck--not deal with--the international challenges that we face.

This sentiment echoes that of the narrow-visioned naysayers of the

1920s, who rejected the League of Nations, embraced protectionism,

downplayed the rise of Mussolini, Hitler, and Stalin; who opposed help

to the victims of aggression and inadvertently endangered our security--

chanting all the while the crowd-pleasing mantra of "America first."

Arguments that would turn the American eagle into an ostrich have always

had a certain appeal, in part, because we're separated by vast oceans

from both Europe and Asia, because we've long been at peace with our

immediate neighbors on this continent, and because our Founding Fathers'

advice to avoid foreign entanglements still rings in our ears.

But the leaders of the great coalition that triumphed in the Second

World War learned several, if not all, of the lessons from the aftermath

of the First. Instead of humiliating and impoverishing their defeated

enemies, the victors of World War II helped rebuild Japan and Germany.

Through the Marshall Plan, GATT, and the international financial

institutions born at Bretton Woods, the diplomats who were present at

the creation of the post-World War world established the basis for a

community of Western democracies and for an increasingly interdependent

and prosperous global economy. And they created a mechanism to further

the cause of enduring peace through the UN Charter--a document inspired

by American ideals and largely written by American statesmen.

It's natural that internationalism is more likely to be popular when

there is a clear-cut enemy, such as Soviet communism. During the Cold

War, much of what we were for was dictated by what we were against.  The

imperative of containing communism permeated our policies. We formed

alliances to defend against Soviet expansion; we doled out assistance to

maintain our influence against encroachments; and we strove to counter

the Soviets in every forum, including the United Nations.

With the end of the Cold War, we face historic opportunities, not just

to combat threats and enemies, but also to help build a world that is

ordered according to our interests and values.

Nonetheless, with the collapse of the Soviet Union and the Warsaw Pact,

it's natural that the old isolationist instinct would twitch again in

the American body politic. It's twitching now. It's twitching in calls

for us to reject free trade agreements, or to have nothing to do with

any foreign conflict, or in the fantasy that we can build multi-billion-

dollar space-based shields that will keep us safe from any military

attack.

The argument against isolationism and in favor of internationalism is

simple; its rooted in our history and in our national interest: As this

century has amply demonstrated, our freedom, security, and prosperity

cannot be ensured without the active help of other free peoples, all of

whom are looking to us for leadership.

Now, the ultimate guarantor of our security remains our capacity and

willingness to act forcefully and unilaterally when our interests are

threatened. Our military must remain modern, mobile, ready, and strong,

and--as President Clinton pledged in his State of the Union address--it

will. But we must also preserve the option of acting through NATO and

other coalitions. That brings me to the United Nations.

As our President who was in office when the Cold War ended, President

Bush observed that the United Nations was "emerging as a central

instrument for the prevention and resolution of conflicts and the

preservation of peace."  Former President Reagan called for "a standing

UN force, an army of conscience--equipped and prepared to carve out

humanitarian sanctuaries through force if necessary."

That was yesterday. Today, some of the loudest voices in our national

debate propound something quite different. The UN is "the longtime

nemesis of millions of Americans," says one leader on Capitol Hill. It

is "a totally incompetent instrument anyplace that matters," says

another.

A bill, the so-called National Security Revitalization Act, has been

passed by the House--and is now making its way through the Senate. It's

part of the so-called Contract with America. It is designed not to

reform UN peace-keeping but to kill it. If enacted into law, this

proposal would be a blunder--a giant step backward--of truly historic

proportions.

Under the guise of being a Contract with America, it would abrogate the

United States' half-century-old contract with the international

community--the contract that Harry Truman signed, that the U.S. Senate

ratified, and that every President since has reaffirmed.

The National Security Revitalization Act would be an out-and-out

repudiation of our treaty obligations under the UN Charter. It would

cancel our entire UN peace-keeping payment. Other nations--Japan and our

NATO allies--would surely follow by withholding their own funds, and UN

peace-keeping would end virtually overnight.

This would cause massive disruptions and quite possibly mean the

resumption of a number of conflicts. I can think of few quicker ways to

undermine global stability than to yank UN peacekeepers out of Cyprus,

Lebanon, Kashmir, and the border between Kuwait and Iraq. Furthermore,

if America reneges on its commitments under the UN Charter, it would

undermine our ability to argue that other nations should meet their

obligations under international law. This would particularly impair our

ability to maintain sanctions against rogue states such as Libya, Iraq,

and Serbia.

Those are negative arguments--bad things that would happen if we pulled

the plug at the UN. Here's the positive one for strengthening the UN

through U.S. leadership: Peace-keeping, itself, is a vitally important

enterprise in which we must remain engaged. It has the capacity, under

the right circumstances, to separate our adversaries, maintain cease-

fires, speed the delivery of humanitarian relief, enable refugees to

return home, demobilize combatants, and create conditions under which

free elections may be held. In so doing, it can nurture new democracies,

lower the global tide of refugees and the huge cost of rescuing and

sustaining them, reduce the likelihood of unwelcome interventions by

regional powers, and prevent small wars from growing into larger

conflicts which would be far more costly in lives and treasure.

Speaking of cost, let me emphasize this point: peace-keeping--and UN

peace-keeping in particular--is a good investment for the United States.

The per capita price to Americans, for the entire UN system--from blue

helmets for peacekeepers to polio vaccines for babies--is less than $7

per year. That is about the price of a ticket to our nation's most

popular movie which, by the way, currently is a film called "Dumb and

Dumber."

Our own country's direct participation in UN peace operations is modest.

As of January 1, 1995, the U.S. ranked 26th among nations in the number

of troops participating in peace-keeping operations around the world--

behind not only Canada and Poland, but also Ghana and Zambia. All this

said, obviously, we do not look to the UN to defend America's vital

interests. That we're prepared to do on a moment's notice by ourselves

if necessary.

We know that UN peace-keeping cannot be effective where the swift and

decisive application of military force is required. But in many

circumstances, acting through the UN will enable us to influence events

without assuming the full burden of costs and risks. Let me mention a

few of those operations.

--  On the tense border between India and Pakistan, UN troops monitor a

cease-fire between two regional rivals presumed to have nuclear weapons.

--  In El Salvador, where America spent more than $1 billion in economic

and military aid during the 1980s, the UN brokered an end to the civil

war, disarmed and reintegrated the rebel forces into society, monitored

human rights and elections, and oversaw the creation of a new civilian

police.

--  In Cambodia, where I was a few weeks ago, the UN has succeeded in

clearing mines, repatriating refugees, and organizing elections, thus

making an astonishing transition to democracy possible.

One of the myths that has gained currency in recent months is that the

United States is running around the world doing the bidding of the UN,

regardless of, if not contrary to, its own interests and priorities.

Many would argue that the reverse is closer to the truth. Under the UN

Charter, it is the Security Council that has responsibility for

authorizing responses to lawless international behavior, including

threats to peace. As a permanent member of the Council, with veto

powers, we have enormous influence over what it decides.

Frequently, a Council resolution will lend international backing to

causes we support and make it easier to bring others aboard for military

operations or sanctions enforcement--thereby allowing us to share in the

costs and the risks assumed in defense of our interests. For instance,

the UN Security Council played a key role in bringing together the

multinational coalition for Operation Desert Storm in Kuwait, and the

Council performed a similar service for Operation Uphold Democracy in

Haiti. As Secretary Christopher puts it, were there no United Nations,

"it would leave us with an unacceptable option each time an emergency

arose: a choice between acting alone or doing nothing."

Now there is a small minority of Americans who will always mistrust the

UN because they fear it will evolve into a world government--that it

represents globaloney run amuck--which is nonsense; or they are upset

that it's so full of foreigners, which, I guess, probably can't be

helped.

Far more serious are concerns about the effectiveness of UN operations,

decision-making, and management.

Here, some of the critics have several valid points: The United Nations

does not always offer the perfect response.  But, then again, neither

does NATO, nor does unilateral action, nor does unilateral inaction. The

right cure for the ills of UN peace-keeping is not to call for the

services of Dr. Kevorkian, which is what the Contract with America

prescribes, but rather to administer sound treatment--to work to make

this tool as useful and efficient as possible--and that is exactly what

the Clinton Administration is doing.

At our insistence, the UN Security Council is now more disciplined about

when and under what circumstances to begin a peace mission. Today, the

tough questions are asked before such a mission is started or renewed.

We are ensuring that UN operations have clear and realistic objectives,

that peacekeepers are properly equipped, that money is not wasted, and

that an endpoint to each UN mission can be identified. This policy has

resulted in fewer and smaller new operations and better management of

existing ones.

Some opponents of UN peace-keeping feel that the United States is

somehow being played for a sucker; that we are turned to constantly for

help by those who are unwilling to pay their own way or to take their

own fair share of risks. This perception is not new. In the years

immediately following World War II, similar emotions prompted opposition

to American participation in NATO and to the Marshall Plan. When

President Roosevelt devised Lend Lease to save a Great Britain that was

under daily bombardment by Nazi planes, the predictable complaints were

heard: We can't afford it; the British already owe us money; this is

Europe's battle, not our own.

Such feelings are understandable, and sometimes play well at home. But

in each instance, when we have come to the aid of others, we have also

acted in our own interest. That was true of Lend Lease; it was true of

the costly, but necessary, steps we took to contain communist expansion;

it is true of our participation in, and support for, UN peace-keeping

and enforcement of UN resolutions against Libya and Iraq. America is not

just another country; we are a global power with global interests--and

if we do not lead, we cannot expect that others will. Our position in

the world may, to some, be grounds for complaint, but to most Americans,

it is grounds for pride and a sense of security.

The Administration is committed to taking full advantage of the

opportunities and to confronting squarely the dangers that we face with

the end of the Cold War. We have a responsibility in our own time, as

our predecessors did in theirs, to build a world not without conflict,

but in which conflict is contained; a world, not without repression, but

in which the sway of freedom is enlarged; a world not without lawless

behavior, but in which the law-abiding are progressively more secure.

We have the responsibility to lead in building such a world for three

reasons: first, because of the strength and global appeal of our

democratic values and institutions; second, because of the strength of

our economy, which depends on global peace and stability --on open

societies and open markets; and third, because of the strength of our

military power. In short, we have the heart, the brains, and the muscle

to lead in a world that often looks to us for all three.  (###)

ARTICLE 8:

Department Statements

Suspending Arms Sales To Ecuador and Peru

Statement by Department Deputy Assistant Secretary/Spokesman Christine

Shelly, Washington, DC, February 10, 1995.

In response to the continuing conflict on the border between Ecuador and

Peru, the U.S. Government has suspended deliveries of defense articles

through the U.S. Foreign Military Sales program as well as new

International Military Education and Training assignments to those two

countries.

In addition, the Department of State has suspended all previously issued

licenses and approvals authorizing the export or other transfer of

defense articles or defense services to Peru or Ecuador. It is also the

policy of the U.S. Government to deny all applications for licenses and

other approvals to export or otherwise transfer defense articles or

services to Peru or Ecuador. How- ever, exceptions to this policy may be

made with regard to certain U.S. Munitions List Category XIII(b)(1)

items for banking and financial institutions.

We understand that the other Rio guarantor countries--Argentina, Brazil,

and Chile--are taking similar measures.

President Clinton Applauds Ecuador-Peru Peace Declaration

Statement by White House Press Secretary Michael McCurry, Washington,

DC, February 17, 1995.

The President welcomes the peace declaration signed early today in

Brasilia by Ecuador and Peru. The agreement brings to an end the

hostilities which caused tragic loss of life and marred the principle of

peaceful resolution of disputes that is a hallmark of our hemisphere.

The declaration was signed in the presence of the negotiators of the

four guarantor nations--Argentina, Brazil, Chile, and the United States-

-who worked tirelessly to broker the accord.

The President wrote to President Duran of Ecuador and President Fujimori

of Peru on February 2 to urge an immediate cease-fire. Secretary

Christopher and other senior Administration officials worked intensively

with the two warring parties to bridge their differences.

We are working with the other guarantors to organize and deploy as soon

as possible an observer mission.  In addition, the guarantors have

issued a statement in Brasilia calling on resolution of the border

dispute which sparked these hostilities. The United States and the other

guarantor countries are prepared to offer their good offices to assist

Ecuador and Peru in finding a durable solution to their remaining

problems.

Mexico To Take Action To Curb Violence Along U.S. Border

Statement by Department Deputy Assistant Secretary/Spokesman Christine

Shelly, Washington, DC, February 16, 1995.

Yesterday, delegations from the U.S. and Mexico issued a joint

communique in which Mexico states that it will take several concrete

actions to curb violence and crime along the border in California,

Texas, Arizona, and New Mexico.

The commitments were made during discussions on a broad range of

migration issues at the first working group meeting of the Binational

Commission held since the inauguration of President Zedillo. The meeting

took place February 13 and 14 in Mexico.

In the communique, Mexico states that it will:

-- Strengthen and expand Grupo Beta, a successful law enforcement effort

that has effectively curtailed  criminal trafficking in migrants as a

result of its efforts to prevent violence against them. The Mexican

Govern- ment will bolster the current efforts of Grupo Beta in San Diego

and Nogales and expand its operations to two other border cities.

-- Deploy sufficient personnel and equipment to ensure the safe

operation of border bridges and crossings, particularly in San Diego,

Nogales,

El Paso, and Laredo. This effort will address the serious problem of

lane and port runners that has arisen in reaction to strengthened U.S.

border enforce- ment.

-- Take immediate action to close the remaining access to the Nogales

flood tunnels.

--  Work with the U.S. to delineate procedures for interior repatriation

within Mexico of certain illegal aliens.

INS Commissioner Doris Meissner said "These actions by Mexico represent

significant progress in our efforts to ensure a border that is safe and

functional."

The U.S. informed Mexico of the Clinton Administration's commitment to

control and prevent illegal migration and facilitate and support legal

migration. The President's FY 1996 budget proposal to bolster border

enforcement and return of criminal and other deportable aliens was also

discussed. The U.S. also informed Mexico on the Immigration and

Naturalization Service's efforts to facilitate naturalization and

improve border crossing card issuance procedures.

Both delegations committed to continued strengthening of border liaison

mechanisms, including plans for Mexico to convene a regional conference

addressing migration patterns in North and Central America, and joint

research to better understand the Mexican-U.S. migration phenomenon.

(###)

ARTICLE 9:

What's in Print

Foreign Relations Of the United States

The Department of State has recently released additional volumes in the

Foreign Relations of the United States  series. They are a microfiche

supple- ment to Foreign Relations, 1958-1960, Volumes XVII (Indonesia)

and XVIII (Japan; Korea); and Foreign Relations, 1961-1963, Volume

XXIII, Southeast Asia.

Microfiche Supplement To Foreign Relations 1958-1960

The supplement includes approximately 1,310 pages of documentation on

Indonesia, 540 pages on Japan, and 1,310 pages on Korea. It supplements

the documentation of U.S. relations with these countries printed in

Volumes XVII and XVIII.

The efforts of President Dwight D. Eisenhower's Administration to deal

with the potential communist threat to Indonesia, the modernization and

rationalization of the Republic of Korea's defense forces, and security

and trade issues with Japan are recorded. The supplement is designed to

be used in conjunction with the print volumes, providing more detail and

information.

This latest supplement is part of the official record in the Foreign

Relations series about the East Asian region during the 1958-1960

period. In addition, supplements have been published concerning Vietnam;

South and Southeast Asia; and the East Asia-Pacific region, Cambodia,

and Laos. Volume XIX on China is scheduled to be published later this

year.

A printed guide with a preface that describes the methodology used to

select documents and to evaluate the results of their declassification

review is contained.

This microfiche supplement (GPO Stock No. 044-000-02420-9) may be

purchased for $23 postpaid ($28.75 for foreign orders).

Foreign Relations, 1961-1963, Volume XXIII, Southeast Asia

This volume documents U.S. policy deliberations and decisions concerning

Southeast Asia beyond Vietnam and Laos. It contains a regional

compilation of documents that focus on the role of the Southeast Asia

Treaty Organization (SEATO) and bilateral compilations on U.S. relations

with Burma, Cambodia, Indonesia, Malaysia, the Philippines, and

Thailand.

The wars in South Vietnam and Laos encouraged the Government of Thailand

to seek additional security commitments from the United States. The most

public confirmation of these assurances was the March 1962 joint

communique of then Secretary of State Dean Rusk and Foreign Minister

Thanat Khoman. Private assurances were given as well, and in mid-1962,

the U.S. dispatched troops to Thailand both as a signal to the North

Vietnamese and their allies in Laos and as an overt assurance to

Thailand. The conflict in South Vietnam caused friction between Prince

Sihanouk of Cambodia and the United States. U.S. relations with Burma

were not as directly tied to the conflicts in Laos and South Vietnam as

was U.S. policy toward SEATO.

U.S. objectives in Southeast Asia were complicated further by opposition

by the Philippines and Indonesia to the creation of the Federation of

Malaysia. U.S. relations with Australia also were influenced by these

events.

The documents in this volume were drawn from the Departments of State

and Defense, the White House, the Central Intelligence Agency, and from

papers of key participants.

This volume (GPO Stock No. 044-000-02389-0) may be purchased for $46

postpaid ($57.50 for foreign orders).

Both items may be purchased using VISA, MasterCard, or personal check

from:

U.S. Government Printing Office

Superintendent of Documents

P.O. Box 371954

Pittsburgh, PA 15250-7954

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

512-2250.

For further information, contact the Office of the Historian, Chief of

the Asia and Americas Division, Edward C. Keefer at (202) 663-1131 or

fax (202) 663-1289.

(###)

[END OF DISPATCH VOL 6, NO 10]

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