Press Briefing by Assistant Secretary of State for the Western Hemisphere Tom Shannon on the President's Bilateral Meetings

Sheraton Mar del Plata

Mar del Plata, Argentina

1:15 P.M. (Local)

ASSISTANT SECRETARY SHANNON: Thank you very much.

I'm battling a cold right now, so please forgive me if I start coughing, or something.

The President had an opportunity to speak to the White House press corps and discuss in some detail what happened in some of the meetings. I don't know if any of you here, present, had a chance to see that, whether or not you need me to kind of run briefly through the events, or whether or not you just want to go to questions.

Q: Please, could you read through --

ASSISTANT SECRETARY SHANNON: Effectively, this morning the President met with the CAFTA leaders -- the Presidents of the Central American countries and the Dominican Republic. President Maduro of Honduras was not present in the meeting. Largely because of recent flooding and damage that had been done in Honduras, he believed he needed to stay in Honduras to oversee recovery efforts. But Honduras did have a representative present.

He then met with the Argentine President, Mr. Kirchner, and members of President Kirchner's government, and then had an opportunity to meet with leaders of four Andean countries, Colombia, Peru, Bolivia and Ecuador.

In the meeting with the CAFTA leaders, this is the first time the Presidents have had an opportunity to meet with President Bush since the ratification of CAFTA, so it was an important opportunity for us to look at how we take CAFTA, implement it in January and begin to make sure that the Central American countries are best placed to get as much advantage as they can from the Free Trade Agreement with the Central American countries and the Dominican Republic. And obviously, it also gave us an opportunity to talk with the Central Americans a bit about their own reconstruction and recovery efforts in the aftermath of both the hurricanes and tropical storms that have battered Central America. And the Central Americans, for their part, wanted to talk a bit about immigration issues.

In the meeting with President Kirchner, as the President noted in his statement following that meeting, it was, from our point of view, a very good discussion with a very good interlocutor on not only the bilateral relationship, but also on larger regional issues. And again, this is the third time the President has met with President Kirchner. He's spoken with him a variety of times by phone. They're both leaders who believe that it's important to speak clearly and directly, and from my own experience, this makes for very, very useful conversation, and I believe that the conversation with President Kirchner was a useful conversation.

And finally, with the Andean leaders, again, we're in the process of negotiating a free trade agreement with three of the Andean countries, Colombia, Peru, and Ecuador. Bolivia is acting as an observer in those talks, and the conversations between the Presidents focused largely on how we can move the ---- what work we can do in the region to consolidate democratic institutions and deepen the capacity of both political society and civil society in the Andean countries to manage the internal political dynamics of the Andean countries, and then also, more broadly, about the war on terrorism's link to the war on drugs.

Why don't I just stop there and take any questions you might have.

Q: Does the U.S. regard Hugo Chavez's political rhetoric as just leftist bluster, or is he taken seriously?

ASSISTANT SECRETARY SHANNON: You know, from my own point of view, I'm not sure I would describe what President Chavez says as rhetoric. President Chavez obviously believes in what he says, and I believe he is committed to what he says. From our point of view, what's striking about some of what he says is that it offers a vision of Venezuela, of the region, of the Americas, that is distinct from the vision that has been expressed through a variety of summits of the Americas. And as you're aware, starting NATO Quebec City, the summits have been able to fashion a consensus around democracy, free markets, and economic integration, and in the follow-up in Monterrey and in the follow-up here, the focus of leaders has been on looking for ways to take that commitment to democracy, free markets and economic integration and make it real, and find a way to make sure that democracy delivers the benefits, the economic and social benefits, to the peoples of the Americas.

And from our point of view, and I think it's a view that's widely shared around the hemisphere, the leaders have done a pretty good job in creating an ambitious agenda and trying to find both the resources and the tools to meet that agenda. But again, what's striking about the summit process is that there really has been a common agenda and unity of purpose, and the agenda laid out by the leaders is so ambitious that the only way we're going to achieve it successfully is if the hemisphere is united in that pursuit. And the degree to which there is division in the Americas, the degree to which there are people who want to opt out of that common consensus, it lessons the chances of successfully achieving the kind of agenda that we have identified.

Q: Can you flesh out a little bit the conflict over the IMF, what Mr. Kirchner said to the President and what his response was on that issue?

ASSISTANT SECRETARY SHANNON: Well, as you know, Argentina has -- I'm sorry, the question was on the IMF and whether or not I could flesh out a little bit President Kirchner's complaint about the IMF, and in particular, what happened in the conversation and what we had to say. I think it's best to go to the Argentines to find out how they feel about the IMF. But as both President Kirchner and the President noted in his comments, Argentina has been working hard to negotiate a series of agreements over time with the IMF, and President Kirchner is of the opinion that Argentina has been very successful in reenergizing its economy, creating economic growth levels that are good for Argentine society, and in meeting his debt requirements to the IMF. And he is of the opinion that as Argentina has moved forward successfully in this regard, that multilateral development banks and the IMF, in particular, should be a less intrusive partner in terms of creating conditionalities for additional IMF assistance.

As the President noted in his remarks, several years ago when President Kirchner first met with President Bush and had just been elected and was dealing with the IMF, we made a conscious decision that Argentina needed to succeed in its economic recovery effort, and that international financial institutions needed to find a way to work with Argentina to create a basis for Argentine success. And as the President noted, we were happy to be able to support Argentina in its negotiations with the IMF.

The point the President made to President Kirchner is that he has been successful; he's got the kind of economic growth levels that are significant, and he now has a very strong hand when it comes to taking his case back to the IMF. Because, ultimately, what are multilateral development banks about? What are international financial institutions about? They're about getting countries back on their feet. They're about giving countries the means and the resources necessary to pay their bills and to meet their other expenses. And Argentina has been pretty successful at that.

Q: Did the President offer any help in that regard?

ASSISTANT SECRETARY SHANNON: Well, the point the President made is that Argentina is its own best help. Argentina really doesn't need our help in this regard, because it has the success story that it needs to take into these kinds of negotiations. I mean, obviously, we want Argentina to continue to be successful; we're committed to that kind of success because a stable, democratic, prosperous Argentina is an important anchor in a region that faces a lot of troubles at this point.

Q: When the President said that he had a stronger case to make, is that -- is he suggesting that the IMF might loosen its involvement, or its regulations?

ASSISTANT SECRETARY SHANNON: No, I think he's just making the point that, as I noted earlier, international financial institutions are about getting countries back on their feet and putting them in a position where they can be successful, and Argentina has shown that it does that.

Q: -- he hasn't taken any stand on what he thinks -- how he thinks the IMF should respond to --

ASSISTANT SECRETARY SHANNON: No, he's made clear that ultimately, this is an issue between Argentina and the IMF. But again, Kirchner is in a strong position to make his case, and more broadly, we want Argentina to be successful.

Q: Can I ask sort of two questions that are kind of related? One is, what is your opening proposal on the free trade area of the Americas -- what is your proposal to get that discussion moving forward? And also, can you give us a little bit more of a readout of the meeting with the Andean leaders, and is that kind of a model that you're really more aggressively pursuing -- in other words, sort of regional trade agreements -- while you're waiting for the FTAA to come together?

ASSISTANT SECRETARY SHANNON: By opening proposal, what do you mean? Here in Mar del Plata? Okay. The negotiations in terms of the summit declaration are still ongoing, and so I'm really not in a position to be able to talk about that. I can say, however, that it's become clear as the negotiations have moved forward that there is significant support within the region for economic integration and for a free trade area of the Americas. But there's also a recognition, as I noted earlier, that what has slowed the FTA talks down are agriculture subsidy issues that are really being addressed within the Doha Round, and that while we think it's important to maintain our commitment to free trade in the region and acknowledge that that free trade is taking place at several different levels -- global, regional, and bilaterally -- that ultimately addressing the agricultural subsidy issue within the WTO, within the Doha Round, is going to create potentials and possibilities in the FTA talks that will be significant.

Q: -- and the Andean agreement?

ASSISTANT SECRETARY SHANNON: Oh, I'm sorry, the Andeans. We've done several -- we've done a regional agreement in NAFTA 10 years ago. We did the Chile agreement; we did a regional agreement with CAFTA. So this is one of several tracks of our free trade agenda that we're pursuing. We think we've been pursuing them fairly successfully. The two that are still outstanding, still being negotiated, are Panama and, as I mentioned, the Andean FTA. And those talks are ongoing. And it was evident from the conversation in the meeting today that everybody recognizes how important a free trade agreement would be with the Andean countries, especially as we look towards December 2006, when the Andean Trade Preference and Drug Eradication Act expires, and the degree to which all of our countries can come to terms before that happens.

Q: The Mexican President has suggested that 29 of the 34 countries might move forward on the FTAA without the rest, and you just mentioned that having countries opt out of consensus agreements might lesson their success. So if that, indeed, occurs, how would you guys view that? Would that be a partial success, or a success --

ASSISTANT SECRETARY SHANNON: I'm sorry, I didn't hear the Mexican President's comments. What did he say?

Q: The Mexican President, Vicente Fox, said that 29 of the 34 countries are in favor of moving forward on negotiations with the FTAA, and the rest of them would be left behind, the ones who don't want to be a part of it. Would you all see that as a partial victory on this?

ASSISTANT SECRETARY SHANNON: His comments must be in reference not to the FTA, but in reference to the declaration, itself, are they not?

Q: No, they're in reference to the FTAA.

ASSISTANT SECRETARY SHANNON: I haven't seen the comments. But obviously, as you move forward in negotiations, a country can opt out whenever it wants to. I mean, although we call it free trade area of the Americas, and our goal is to have an economically integrated hemisphere stretching from Canada to the tip of Chile and Argentina, obviously, to the degree to which there is any country in the region that decides it cannot join FTAA, that's going to be their sovereign decision and there's really not much we or anybody else can do about it.

I do think it's important, however, that the President of Mexico is prepared -- and the Mexican government is prepared to speak clearly about its commitment to free trade, because I think it highlights what I indicated earlier, that we do have a larger commitment and a consensus toward free trade in the region.

Q: How do you reconcile this enthusiasm you described for these regional free trade agreements with Chavez's growing popularity --

ASSISTANT SECRETARY SHANNON: These are big issues -- he asked how I can reconcile the enthusiasm for free trade agreements in the region with what is perceived as Chavez's popularity in some segments of Latin American society. And I guess I would -- it's a very good question and the answer is sociological, it's political, it's -- but I think what I would say very quickly is that the issues we're trying to tackle in the summit process and, more broadly, in the region, are really big issues, they're really important issues. And as we are successful in creating a democratic hemisphere, as we are successful, as we have been, in creating a hemisphere that is committed to democratic government, what we found is that social -- all political, economic and social debate, and social conflict and confrontation, get channeled through democratic institutions. And in many ways, what we're seeing in the emergence of -- in some countries to sectors of society that are resistant to what we consider to be a larger positive vision for the hemisphere in terms of free trade, you're seeing an expression of people coming into democratic systems and being able to express themselves in a significant way.

And that's important. Because these debates are important, and ultimately, the decisions that are going to be made are going to affect societies in their entirety. And therefore, we welcome this kind of debate, because ultimately, we think that what the leaders of the hemisphere have sketched out over time in the summit process is an agenda that is positive, and it's an agenda that, if implemented properly, will work.

Q: Two questions. Is there any talk of a fifth summit somewhere? Is the summit process going to continue? And the second question, back to Kirchner -- in his second intervention, he described the conversation with President Bush as, clear, sincere and raw -- cruda -- suggesting that this was probably heated conversations about something. Can you go back to that a little bit? Why did he use the word,"cruda," to describe a conversation with the President?

ASSISTANT SECRETARY SHANNON: On the first part of the question, there's a continuity in the summit process, and typically, over time and at the end of each summit, a new host has been identified. This is going to be one of the issues that the leaders address in this summit. The next host has not been identified yet, but we certainly expect that the summit process will continue. And especially given the number of elections that are going to be taking place in the region over the next two years, we're looking -- depending on who you're counting, over the next two years we could have anywhere from 11 to 16 elections, and we're going to have a whole new group of democratically elected leaders in a couple of years. And from our point of view, it makes a lot of sense to find ways to, as you move this summit process forward, find ways to bring the new leaders into that process.

In regard to use of the word "cruda," I'm afraid I can't. You'll have to ask President Kirchner why he used the word "cruda." I mean, I thought it was an excellent conversation. These are two leaders who know each other well, who have a reputation for speaking directly to the point, and that creates, I think, kind of a clarity of conversation, a clarity of dialogue that is really important to have, especially among two countries that have so many values in common and which have been part of a larger kind of a hemisphere project. So I'm afraid the most I can say is that I thought it was a really good meeting.

Q: How would you describe the constituency across Latin America that is drawn to Chavez? That is, would you regard that constituency as important in a political sense, or as a marginal sector of the population that isn't too influential?

ASSISTANT SECRETARY SHANNON: The question was how I would describe Chavez'S constituency; whether it was an important constituency, or whether it was marginal.

Listen, I'm not quite sure who Chavez'S constituency is. I mean, it's obvious that he has a constituency in Venezuela, because they voted for him. In the rest of the hemisphere, it's not clear what that consistency -- what that constituency consists of. I would just note that the kinds of demonstrations that we're going to see here in Mar del Plata are not unusual around these kinds of larger international gatherings. If you look back at the Quebec City Summit of the Americas, which is, today, considered a very important summit, where leaders did agree on kind of a common commitment and a common agenda around democracy, free markets and economic integration, there was enormous demonstrations in the streets.

So all I can say is that we need to have a process in which people can express themselves, and play a role in their larger societies' efforts to come to terms with the big social and political and economic problems they face. And it's good that people have an opportunity to express themselves.

Q: The Quebec City demonstrations were before the war in Iraq. Is it your judgment that the war in Iraq has not kind of changed the terms of the debate and given Chavez an opportunity to enlarge his constituency?

ASSISTANT SECRETARY SHANNON: Well, again, I'm not quite sure what the constituency is. He, obviously, opposes a lot of our foreign policy initiatives -- the war on terror being one of them. However, I think you're going to see that the kinds of demonstrations held here in Mar del Plata, at least as described by the leaders, are going to be quite different from what took place at Quebec City. So I'm afraid I can't answer the question better than that.

Q: Are you expecting anything absolutely concrete to come out of this meeting that would move the ball forward in any way on trade, or the trade issues, or anything? Or is it just going to be a lot of --

ASSISTANT SECRETARY SHANNON: It's important to understand that this is not a meeting about trade. This is not a meeting about trade. This is a meeting about leaders from the democratic states in the Americas getting together to discuss common problems, common values, and try to construct common responses that, as I noted before, kind of deliver the goods to the people.

And trade is just one aspect of it. And it would be a mistake to focus -- to narrow the focus too dramatically to trade. Trade is obviously important, but democratic values are important, finding ways to support democratic institutions are important, looking for ways to increase the capacity and capability of democratic institutions, whether they be the formal institutions of government, or whether they be the social institutions of political parties and civil society.

The great thing about the summit dialogue, the great thing about the opportunity for the leaders to get together is that they really can talk about the wide range of issues and problems that are faced. And so in that regard, we have to be careful that we not kind of get -- have the focus narrowed too dramatically, number one; and number two, that in the Americas, leaders have been able to move a larger social agenda forward incrementally in a way that really has had an impact. It's had a -- if you look at what's going on at the macro level in the region, it's pretty impressive in terms of economic growth, in terms of reduction in inflation, in terms of managing the fiscal deficit.

The big challenge the region faces is in the micro area, where you really are providing -- or translating economic growth into economic opportunity and into jobs so that people can have the resources necessary to have control of their own destiny. And in order for that to happen, countries have to do -- make really tough internal domestic decisions about rule of law, about conflict and dispute resolution, about addressing corruption, creating the right kind of investment climate, addressing kind of rigid labor market regimes. And these are all tough issues.

And so as we work through these summits and identify the steps that governments can take, we're ultimately going to be measured on the success of those steps and the degree to which our involvement and the kind of resources we can bring to bear have a positive impact.

Q: Two questions. Does President Bush plan to speak this afternoon or this evening at the summit meetings? And two, when you see demonstrations like here in Argentina, and presumably the ones that we'll see later on in the trip, do you acknowledge the difference between anti-Bushism and anti-Americanism?

ASSISTANT SECRETARY SHANNON: The plenary sessions are set up in such a way that they try to promote a dialogue among leaders, as opposed to just having leaders kind of give speeches to each other. So I fully anticipate that the President will be speaking. However, ultimately, he's going to decide when he speaks and on what topic. But really what we're -- what we hope to get here is a fairly fluid dialogue between leaders.

As for distinctions, as you noted in terms of the demonstrators, I'm really not sure how to answer that question. I'm not sure what the distinction is. It's important to understand that Mr. Bush is the President of the United States. He's the democratically-elected representative of the people of the United States. So I guess I would leave my response at that.

Q: Yes, back to Argentina. You were saying the President is happy about the growth process Argentina is going through, but that growth process is happening because Argentina went in default for tens of billions of dollars of foreign debt, and tens of thousands of small private investors did not recover their money. So there is a moral cause -- is the President endorsing the choices of Argentina in not repaying its sovereign debt?

ASSISTANT SECRETARY SHANNON: My understanding is that Argentina engaged in a negotiation with -- on both public and private debt issues. I'm not sure the -- I think it would be a stretch to indicate from the President's words that he was talking about the issue that you just raised. I think it's -- what he's trying to do is that, countries that find themselves in the kind of economic straits that Argentina found itself, with its economy devastated, its social fabric frayed, and its political system at risk, that these countries have to find ways to establish a political, an economic, and a social balance again that protects democratic institutions and creates a basis for economic growth.

And I think what the President was saying is that Argentina has been able to do that. All these things come at a cost, and I think what's important to note, though, is that Argentina did not walk away from these responsibilities, they engaged them in a context of a negotiated solution.

Q: Would the President prefer 100 percent repayment happen --

ASSISTANT SECRETARY SHANNON: They did not talk in that level of detail on either public or private negotiations.

Okay, great. Thank you all very much.

END 1:48 P.M. (Local)