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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