Press Briefing by Jack Pritchard, Special Assistant to the President and Senior Director for Asian Affairs, N.S.C.; Stanley Roth, Assistant Secretary for East Asian and Pacific Affairs, Department of State; Gene Sperling, Assistant to the President for Economic Policy and Director of the National Economic Council; Jake Siewert, White House Press Secretary

National Stadium

Bandar Seri Begawan, Brunei Darussalam

7:00 P.M. (L)

MR. SIEWERT: We'll begin today -- we'll try to do this a little bit like we did yesterday. We'll begin with a briefing on the bilateral with Prime Minister Mori. Jack Pritchard, from the NSC, will be on hand to give you a readout of that. And then Stan Roth, who is the Assistant Secretary for East Asian Pacific Affairs at the State Department, will give you a run through of the bilateral with Jiang Zemin of China. And then they'll both be available for your questions.

Mr. Sperling will be in after that to give you a rundown on the APEC meetings today. And then I'll be available for any follow-up questions. So we'll start with Jack.

MR. PRITCHARD: Good evening. Let me go through, if I can, just a few things about the bilateral with Prime Minister Mori. It started a little bit late because the two leaders coming out of lunch walked together over to the Polo Club, and stopped to take a few pictures, a few comments, and then came over.

They were discussing in just a general way on the way over the U.S. election situation there, continued that discussion for a minute or two, just in a somewhat light-hearted manner, before they sat down to get on to business.

The meeting itself went about 30 minutes, starting at 2:30 p.m. and ending at 3:00 p.m. The primary focus of the discussion between the two leaders was our North Korea policy, what currently is occurring both in the Japan-North Korea relations in talks, negotiations, and what's currently under consideration for the U.S.-North Korea relations.

The Prime Minister and the President both focused on the close cooperation that has occurred particularly strongly since the initiative of the Perry process; both commented that it had served us, both of our interests, very well, to include the South Koreans. Talked a little bit about the specific issues of interest to each of them -- the Prime Minister detailed the things that were of concern to him, and likewise, the President indicated those that we're looking at and discussed those also that were of common interest.

They touched very briefly on a couple of other issues, but the main focus for probably at least 20, 25 minutes of the meeting was on North Korea policy. Rather than get into the details of that, let me stop and answer a few questions, see what's on your mind.

Q: Did they talk about a trip to North Korea and does Japan continue to have reservations about the speed at which the process is going?

MR. PRITCHARD: One, the President indicated to Prime Minister Mori, as he did with President Kim yesterday, that he has not made a decision on the trip to North Korea. Prime Minister Mori, on the other hand, indicated that he saw somewhat of a balance in terms of the U.S.-North Korea relationship, South Korea-North Korea discussions, and Japan and North Korea in terms of the pace and the content of what's being done. Some will go faster; others will not. But he expressed no concern about that at all.

Q: Anything on whaling? Did they discuss that?

MR. PRITCHARD: Yes, the President brought it up, expressed his concern, his continued concern, indicated to Prime Minister Mori our desire to work with them to resolve that issue that is of importance to the United States and others -- very briefly.

Q: And did the Prime Minister offer anything, say anything about it?

MR. PRITCHARD: He acknowledged what the President was talking about, but they did not get into specifics of what could actually be done to resolve the issue.

Q: Did the Japanese indicate that they had any expectation that the issues of the abductees or the Red Army people might be resolved any time soon?

MR. PRITCHARD: I think the Prime Minister expressed his view that this is one -- two issues that are very important to the Japanese people, for which we also share concern in, and that he expected that would be a continuing dialogue with North Korea.

Q: Did you say that he expressed that there was a balance or an imbalance?

MR. PRITCHARD: No, a balance. The meaning -- what he meant was at some point in time the U.S.-North Korea relationship appeared to be moving at a faster pace; others -- at other times, the North-South relationship was in that mode; and on occasion, the Japanese have experienced some positive movement with the North Koreans.

Q: On the way in, did the President tell the Prime Minister that sanctions were still very much under consideration?

MR. PRITCHARD: No, we did not talk about sanctions. He brought up his concerns and desires to resolve the issue that was our concern and others in the world.

Q: Jack, on North Korea, at any point did the President raise the possibility that Japan might be asked to make some kind of contributions, as it did in the KEDO case, for getting North Korea to restrain missile exports and development?

MR. PRITCHARD: No, the President did not go into the details of the dialogue that's going on with our dialogue with North Korea, nor did he raise anything along those lines, as it was with the agreed framework, no.

Any other questions? I'll turn it over to --

Q: Was there any discussion of Mr. Mori's political future at all?

MR. PRITCHARD: No, there was not. And again, the two of them walked together, and as they talked about the U.S. election, whether or not they discussed that or not I just can't tell you, until they got into the room, and at that point, that was not a subject of discussion.

Q: How would you summarize the conversation about the U.S. election? Was the Prime Minister -- did the President give any insights? How would you describe that conversation?

MR. PRITCHARD: No, I think it's one of a little bit of curiosity. Kind of in a light-hearted moment, the Prime Minister indicated that the whole world looks to the United States in the democratic process, but it sure would be much easier if you had a simpler system so we could understand it a lot better and a lot faster. It was I think the kind of conversation you and I would have about what's going on.

Q: Did the President indicate any desire to have a simpler understanding of the Japanese political process? (Laughter.)

MR. PRITCHARD: No, but that would have been a good talking point. (Laughter.)

Yes, one more, please.

Q: -- about the whaling issue and whether there was any discussion of how to resolve that?

MR. PRITCHARD: No, that -- we began first and focused on the North Korea issue, and as I said, that took up a good deal of the discussion. But the President wanted to make sure before we closed out the meeting that he brought up whales. Quite frankly, the Sultan was waiting, and the two leaders in their nice blue shirts got up and went in for the picture.

Q: They didn't really talk about it?

MR. PRITCHARD: They did not go into it in depth on it.

ASSISTANT SECRETARY ROTH: Good evening. The two Presidents met for approximately 30 minutes tonight for what I would describe as a cordial and thoughtful session. A fair amount of the time was given over to assessing the general state of the relationship, and President Clinton spoke first at President Jiang's request.

He emphasized that in his judgment the relationship was stronger now, after eight years, than it has been at the beginning of his first term. He indicated that he thought we were better equipped because of the relationship between the two Presidents and between the two countries to deal with problems. But he made it very clear that there still were problems and differences that would have to be addressed but that he thought we're better equipped to deal with them because of the progress that had been made in the relationship.

Interestingly, several minutes later, President Jiang made basically the identical point in his own words, giving the same assessment that he thought there had been significant progress in the relationship and that the two Presidents -- meetings going back to Blake Island in 1993, had had a large role in that outcome.

While this meeting was brief, a number of issues were touched upon. The President raised a nonproliferation issue concerning missiles. There was some progress made, but I'm not going to detail it. We'll have more to say in the days to come, so that's not an issue that I can discuss in detail tonight.

President Clinton emphasized the point that he remains committed to seeing China accede to the WTO as soon as possible, but he made it clear that he was going to follow U.S. law and that he had to make the required certification after China had reached the agreements that it had to do multilaterally and so, in effect, indicated that the decision or the pace was up to China, although the President indicated that he would certainly like to be able to make that certification and finish this in his term. But he was going to follow out the process.

The President also discussed briefly North Korea. It was not a detailed discussion, but he referenced a trip that Secretary Albright had made to North Korea, described it as a very good trip; said he hoped that -- indicated the trip had given us an opportunity to address missiles in some depth, but that many details remained to be resolved. And as Mr. Pritchard indicated in his discussion of the Mori meeting, the President gave the same message, that he was weighing the decision about whether or not to go to North Korea and the merits and that he had not yet made a decision.

The President turned the conversation to Taiwan and reiterated the three pillars of U.S. policy: that we remain committed a to a one China policy; that we believe in peaceful resolution of this issue; and that we believe the way to address the difference is to resolve them are through cross-straits dialogue.

It was, again, not a detailed discussion. And when he spoke, President Jiang reaffirmed the importance that China attaches to the one China policy, as well as seeking reunification. No new ground, I would say, broken in the discussion would be the best characterization on the Taiwan peace.

Finally, the President, in the context that I mentioned earlier, indicated that there certainly were differences that would continue and have to be dealt with in the future; talked about some of the aspects of the human rights situation; referenced Tibet, political and religious freedom. And in that context, the President indicated that it would be helpful if the human rights dialogue could be resumed, and so that we could try to channel our discussion and make progress in a useful way.

And, interestingly, President Jiang responded by saying that he agreed, that he thought that dialogue would be a useful way to go. And it was, I would say, describe it as an agreement in principle rather than a specific agreement, that the dialogue was going to be resumed at a specific date. This is something that we will follow up when the Ambassador returns to Beijing.

So those were really, I believe, the highlights of the meeting. Again, a lot of discussion about the progress that had been made. And since the next administration should pursue -- "build upon the foundation," I think, was the phrase that was used, that have been left behind during the past eight years. Similar sentiments were expressed by each President, but that was about the extent of the political discussion.

Q: Was the human rights dialogue suspended after the Belgrade bombing, or when? And did the Belgrade bombing come up in any context?

ASSISTANT SECRETARY ROTH: The bombing did not come up in any context. The dialogue has been suspended related to Geneva, the Human Rights Commission.

Q: What was the date of that?

Q: Yes, when?

ASSISTANT SECRETARY ROTH: Oh, I think that's in April, April or May.

Q: Of this year?

ASSISTANT SECRETARY ROTH: A year ago. I would have to check the date for you. It's been suspended for quite some time.

Q: And what was the issue?

ASSISTANT SECRETARY ROTH: U.S. support for a human rights resolution in Geneva at the Human Rights Commission, U.N. Human Rights Commission.

Q: Stan, you've had a number of delegations that have gone to Beijing, trying to get clarity on China's adherence to the missile control technology regime and particularly the annexes to this, how they define it, what kind of missile equipment they might or might not export. Was there discussion of this within the missile portion of the dialogue?

ASSISTANT SECRETARY ROTH: The discussion was much more general in nature. As you know, we've recently had expert talks and those were referenced, and those are still being pursued, and as I said, we'll have more to say on that. But there were not detailed discussion at all in this meeting about that.

Q: By "more to say," do you suspect that there will be a resolution of this issue within this administration?

ASSISTANT SECRETARY ROTH: I stand by what I said.

Q: Was there an attempt by the President to nudge Mr. Jiang to launch, to take a first step on a cross-strait, resuming a cross-straits dialogue?

ASSISTANT SECRETARY ROTH: What the President reemphasized was what he's always stated in these meetings, that he thinks it's very important that the dialogue get started -- restarted, actually, since it had at one point operated -- but wasn't done in terms of specific suggestion about who was first, but he emphasized the importance of dialogue and the importance of peaceful resolution.

Q: Presumably this is the last meeting between the two, and you say there is no cross-straits dialogue, Taiwan tensions are as difficult as ever. Since '93 the trade deficit has more than tripled; human rights progress is hard to identify. In what way is the U.S.-China relationship actually stronger now than it was in '93?

ASSISTANT SECRETARY ROTH: Well, I think that, first of all, that if you look at -- we've been talking about the strategic dialogue, you'll see that there are many areas of the world where we are cooperating reasonably well, and for example, on the Korean Peninsula, we've been making considerable progress including in the four-party talks; earlier years of the administration on Cambodia, which China has had some role there in terms of the U.N. activities; that we've made a lot of progress on nonproliferation areas, despite the fact that we still have remaining issues -- that shouldn't hide the fact that China is considerably more integrated into a number of international regimes than it had been previously.

If you think about it, at one point China was an avowed proliferator; now China is an avowed nonproliferator. And it's a question of improving that performance, rather than changing their world view or their concept. We've had, certainly, the economic relationship in terms of the trading relationship is strong. And while the deficit has increased, certainly the amount of American exports and the number of American jobs related to those exports has increased. And, of course, we had the PNTR agreement, which if finalized, if China takes the last remaining steps and if it goes into effect, should over time further strengthen the trading relationship and level the playing field. So I think there have been lots of areas in which there have been very real progress.

Q: Did the President's Vietnam trip come up at all?

ASSISTANT SECRETARY ROTH: No.

Okay, thank you.

MR. SIEWERT: While we're waiting for Mr. Sperling, let me read a joint statement that the President is issuing on a -- Gene can answer questions on this, I'll just read the statement to give a sense that this is coming, so you can prepare the hardest possible questions for the late arriving NEC Director. This will be issued today jointly by President Bill Clinton and Prime Minister Goh.

"President Bill Clinton of the United States of America and Prime Minister Goh of Singapore have agreed to start negotiations on a bilateral free trade agreement. The U.S. and Singapore are both firm supporters of the Asia Pacific Economic Cooperation, APEC, and are committed to APEC's Bogor goals of free and open trade and investment by 2010 for industrialized economies and 2020 for developing economies.

"The U.S. and Singapore reaffirm their strong commitment to the multilateral trading system and the launch of a new round in 2001. The FTA will be modeled after the U.S.-Jordan Free Trade Agreement. We have directed Ambassador Charlene Barshefsky and Minister George Yeo to endeavor to conclude negotiations before the end of the year."

Gene will be available to answer questions on that and we'll put out paper on that shortly after this briefing.

In addition, a couple of you asked me run through some of the themes of the President's speech tomorrow at Hanoi National University. That is a speech addressing both current political leaders in Vietnam, but also the next generation of leadership, much like the speech the President gave in China to university students there. I expect that to be focused very firmly on the new chapter that we have developed, that we are developing in U.S.-Vietnamese relationship.

The President will talk at some length about the history of our relationship, but, more importantly, about the future and where he sees that relationship going. There will obviously be discussion about the challenges inherent in globalization, what Vietnam and the United States can do to embrace globalization and ensure that it doesn't undermine national identity and cultural heritage in both countries.

The President will also talk about the cooperation that the United States has received from Vietnam on the fullest possible accounting for MIAs, and urge Vietnam and the United States to continue to do everything they can to account for the missing there.

He will also talk about the importance of accelerating cooperation on scientific endeavors, on fighting disease. We will have some -- may have some news for you on those fronts, relatively minor order, but some steps we are taking to increase cooperation on science, particularly regarding some of the efforts to help Vietnam better control the flooding that wreaked so much havoc this year, and also on combatting infectious disease, like AIDS and others.

While Gene is not here, I will take some questions on other topics if there are any.

Q: Was this free trade -- this movement towards free trade agreed to on the golf course last night?

MR. SEIWERT: It was discussed there. But I think there was actually some discussion before hand about the prospect of doing this. Frankly, the U.S.-Jordan Free Trade Agreement has generated a great deal of interest in some of our major and not so major trading partners around the world. And there has been a lot of interest along the level of feelers, I guess, in trying to conclude something comparable. And the President and Prime Minister Goh discussed this and their staffs discussed this before yesterday. But it was something that was discussed in a little bit more detail, I guess, last night while the two were enjoying themselves on the golf course.

Q: Jake, would you give us an update on if the President has expressed any thoughts about the latest maneuvering in the presidential race back home?

MR. SIEWERT: I don't imagine that we will be providing running commentary on the developments there. It's virtually impossible for 24-hour news networks to provide a full commentary on all the developments and I don't think we're going to be in any position to do that. Obviously, the President is following developments there pretty closely when he has time. He is as interested as all of you are in what happens there, if not more so.

The President has addressed this a couple of times today. He is focused on the work he is doing here and he is focused on making sure that this trip to Vietnam is the best possible trip it can be. So I don't think the White House can serve much useful function in commenting on the ups and downs of this and I don't think there is much secret how the President would like this all to end up, but he doesn't really need to let you know that. You have known for a long time that he thought the Vice President should prevail in this race. And he has been pretty careful not to get terribly involved in this and I think we will try to leave it that way.

Q: Jake, was he aware of the Vice President's proffer today before hand in any way?

MR. SIEWERT: I think he knew something along this line was coming. But we didn't give him a detailed briefing; we told him afterwards what the Vice President said and he learned about it in detail the same time the rest of us did.

Q: Did he think it's a fair offer?

MR. SIEWERT: I'm not going to provide his analysis of what's going on day to day; there are just too many developments to keep track of for us. We're focused on the work we have to do here and the work we have to do in Vietnam. And he is focused on trying to maintain some semblance of order as we conduct our business here and at home.

Q: Jake, on the Vietnam trip, American officials have said in the past that the Vietnamese have been quite helpful of late trying to recover remains of the missing. Do you have any figures on what's the missing count now, and any figures on, any estimates on remains that could be recovered? Or do we think we're sort of reaching the end of the line on recovering remains?

MR. SIEWERT: Let me see if I can get -- there is some reference -- there are some specific figures in the speech, but since this speech is not in final form, I'll try to get you the best possible numbers we have.

We have provided a great deal of documentation to the Vietnamese to help locate -- over 350,000, 400,000 pages of documents that can help them in their efforts to find both Vietnamese and American soldiers who are missing in action. And we're prepared to provide more documentation that could help now the search for some of those who are missing. But in terms of actual recoveries, I think we're going to try to prepare a briefing in Vietnam on the status of that, that will be more detailed, and the President may have some final numbers for you tomorrow.

Q: Jake, does the President believe that his opposition to the war as a youth been a facilitating factor in being able to bridge the divide between the two countries?

MR. SIEWERT: I've never heard him actually address that directly. I know he was asked this question the other day. This is not a visit that's really about the President's past or about -- this is a visit that is designed to mark a new chapter in our relationship with the Vietnamese. Obviously, the war divided Americans, divided Vietnam in a lot of ways. But we're not here to reflect upon the history at any great length, or to highlight some of the divisions. And, if anything, this is meant to heal those divisions and point the way towards a new future.

I think many of you have noted in the stories I've seen that 60 percent of Vietnamese have been born since the war, and for most of them that's a very distant memory. I don't think the President has any intention of spending a lot of time thinking too much about his own personal past here. He's focused on what we can do to build a better future between the United States and Vietnam.

Q: Did Mrs. Clinton share President Clinton's opposition to the war?

MR. SIEWERT: I have no idea. You can put that to her or to her staff. I've never seen any reporting on that.

Q: Jake, do you know why the President signed that "bring them home alive" legislation last week on Vietnam? Does he or the administration believe that there are MIAs, alive MIAs out there, that we would need to promise citizenship to Vietnamese that might help bring them back?

MR. SIEWERT: I think he believes that we should leave no stone unturned in the search for MIAs. He did address this question directly in an interview he conducted the other day with the Associated Press and he said that he had -- there's no reason to think right now, that there is no evidence right now that there are any living MIAs. But we follow every lead and try to leave no stone unturned as we try to search and find any such people. So he feels -- I don't know the particulars of that legislation, but I assume it's designed to help encourage that search for MIAs.

Mr. Sperling is here, so I will let him run through the APEC proceedings of today and the FTA negotiations.

MR. SPERLING: Make me look taller, tanner.

We are very pleased with the outcome of the Leaders' Declaration in APEC today. We thought it was a reaffirmation of the importance of APEC and the process of global interdependence and trade liberalization. We were particularly pleased in paragraph 21, I believe -- I'm sorry, 23 -- that we were able to get in the Leaders' Declaration a clear statement endorsing the launch of a new WTO round in 2001.

As you know, we had not achieved that at the trade ministerial level. But I believe the fact that at the leader level there was commitment to do that was a clear expression of political will from the leaders of this diverse group of countries in the post-Seattle era to come forward with a new launch of a WTO round.

Secondly, we were pleased with very much the focus on the new economy and information technology. This was very much an info-tech APEC. There was considerable focus not only on, as discussed yesterday, the elements of the new economy or growth and interdependence, new economy, looking for standardization in testing, the commitment to a moratorium on custom duties over the Internet until the next launch of a new round on software piracy. All of these things were put in an action agenda, going forward.

And I think it also shows APEC's relevance in beginning to deal and look forward not only to the existing trade disputes and issues of our time, but to the new dilemmas and issues, particularly in the e-commerce area, where there are fundamental disputes even over what should be regulated under services or goods scenario.

Also, paragraph 21, was the first time in an APEC leaders' document that we had a mention or an affirmation of the importance of dealing with AIDS. And I think this is important because, as you know, President Clinton has put a pretty strong focus in these international forums -- in the G-8 -- in focusing on development as being very much an element of putting a human face on the global economy. So the focus that AIDS will be very much on the agenda next year, that there is a commitment to tripling the number of people who are on the Internet, from 200 million to 600 million by 2005. President Clinton called for quadrupling, in his speech yesterday, but these are all very much part of that focus.

When the President spoke today, he put his focus very much on that development agenda, as well. In the morning, the President commented on the four areas that he encouraged the leaders to take forward. The focus on information technology and the importance of diffusion, both for equity reasons in terms of the digital divide, but also in terms of the productivity growth that we in the United States have experienced because of the diffusion of the Internet and information technology throughout our economy. Secondly, the importance on basic education, health care and AIDS.

Third, expanding trade, but doing so with a human face. He talked about the importance of debt relief, the importance of staying with commitment to open trade and not pulling back and not taking lightly the fact that globalization, more open markets, is a force for poverty reduction, but that it needs to be done in combination with other measures.

And, fourth, the importance of good governance, fighting corruption, being able to handle the safety nets and regulations that were all part of the issues, either in the creation of the financial crisis or in how it was dealt with.

I thought probably the most interesting discussion today, and it's very relevant to our announcement, was the afternoon discussion on how APEC can best make progress going forward in meeting the BOGOR goals of trade liberalization among advanced countries by 2010 and developing countries by 2020 and making progress toward an effective launch of a new round.

The discussion was very relevant to the announcement that we're making today that Prime Minister Goh and President Clinton's commitment to start negotiating a free trade agreement between Singapore and the United States based on the Jordan model, which was comprehensive, open, but also did include labor and environment as areas that could have dispute resolution in them.

The discussion that was had in the afternoon very much focused on, I think, what may be one of the most interesting and hottest issues in the globalization issue, which is whether or not the free trade agreements or regional trade agreements are building blocks or stumbling blocks in the multilateral process. And Prime Minister Goh made a very powerful case for why he felt that they had the capacity to be building blocks.

And he referred very much -- not to add a new acronym to our lives -- but he did talk about CRFTAs, which he called cross-regional free trade agreements. And what he was referring to was he felt that the most destabilizing potential in the world economy in terms of trade was the potential for trade to divide up in three regional blocks between an expanded NAFTA and expanded Europe and expanded Asia block; and that his belief that cross-regional free trade agreements between a Singapore and the United States or Mexico and Europe promoted open markets, but did so without creating the sense of regionalism.

He talked about -- and several people talked about -- what would be the standards that one would judge whether these would be trade diverting or whether they would be trade promoting. And I think the standards people felt expressed were that it needed to be comprehensive, it couldn't just be cherry-picking the products. It had to be at least as good as the WTO and BOGOR Goals. If it was less, it would be undercutting and it needed to be open. It needed to be something that would be something that would be open to any other country that wanted to join. And in doing that, it could essentially lift the bar, as opposed to in a multilateral process where, by necessity often, the agreement has to focus on the lowest common denominator that can reach agreement on.

President Zedillo also spoke on this issue and also said that while he had been a supporter of the individual action plans under APEC, that the discipline of these free trade agreements he also thought could be building blocks. Helen Clark of New Zealand also expressed this.

The fact that three of the leaders most known for being open market advocates were advocating this as a way of promoting multilateral trade in a building block way was certainly a novel discussion. I think from the United States' perspective, the President believed that this agreement with Singapore was one that could be a building block.

But I think it's also fair to say that this is a constructive experiment to make progress right now, and that one needs to look closely and keep as their goal that what is best for global growth is multilateral trade, because that is what allows each country to do what they have the best comparative advantage of; that's what promotes global growth world-wide; that's what can best reduce global poverty.

The morning discussion, to quote Prime Minister Goh again, he said that when it came to globalization everybody was part globalist, part goblin, in which everybody in some sense wanted greater global interdependence but, on the other hand, everybody had their fears.

I think the discussion reflected that, but in different forms. Mr. Mahathir spoke at significant length expressing many concerns about the global process and the need for rather stronger regulation. As one might expect, President Clinton, Zedillo, others, talked again about the need to learn lessons from the Asian financial crisis and ensure that there were appropriate measures taking place, but stressed more the importance of not backing off from the commitment to open markets and global interdependence.

So with that, I'll be happy to take any questions.

Q: Gene, what happened among the leaders that changed the dynamic from what the trade ministers were unable to achieve on calling for a new round of global talks next year?

MR. SPERLING: Well, I think that people probably became affected by the fact that the inability to have 2001 in the trade ministerial was seen as an expression of a lack of political will. And I think that in that light, there was more pressure not only from the United States, but even from Japan and several of the ASEAN countries to go to the people who are resisting and to press a little harder. And that was not locked down, really, until yesterday, and even today. I did not mention this yesterday because I think even today there was some thought that it might be revised today, at today's meeting. But it was not. They did not go back and open up the text.

I think that the sense that 2001 essentially became a test of political will and that the leaders chose to respond to that by putting that specifically in where it failed a couple of days was a positive sign.

Q: What effect do you think that will have on the global atmosphere about to be starting WTO next year?

MR. SPERLING: I think it has a positive impact. I think if one traces back to the months after Seattle there was a lot of question about what would be the progress in trade liberalization. Again, at that point, I don't think many people expected the United States to have, arguably, one of its very best trade opening years, with the bilateral trade agreement with Vietnam, to the historic agreement with China, to the passage of legislation on Caribbean-Africa-Jordan free trade agreement. So, domestically, we have been able to go forward and to make some progress in bringing forward some consensus.

I think what this shows is that people have not given up on making progress, that they want to engage, that they think it is achievable, that they're not saying, "let's start over." They're looking for common ground. I think virtually everybody who spoke talked about the importance of ensuring that, as you set the agenda that it be clear that there would be more advantages for lesser developed countries.

And, as you know, Mike Moore and others talked about the importance of confidence-building measures to show that there was that type of commitment and certainly, as we press for passing the Africa and Caribbean Basin initiatives, we very much saw that not only for the positives between our countries and those countries, but also in terms of doing our part for confidence building, that the advanced countries were willing to take some aggressive steps to ensure that the global trading system was seen as benefitting the least developed countries as well as the developed countries.

So I think it's a reaffirmation of political will, a reaffirmation that people want to get back, keep trying, keep looking for common ground, and our hope that it means there will be a focus on the politically achievable and the pragmatic for a new -- a launch of a new round, as opposed to adding too many things that are too early at this stage that could be obstacles to getting an agreement.

Q: Gene, on the FTC or FSC legislation, you were saying that this only delays sanctions, it doesn't divert them or avert them. Do you have any response to that?

MR. SPERLING: First of all, the FSC legislation that we passed was the result of a remarkable coalition and rare but important bipartisanship on the Hill this year. We believe it is very much WTO consistent. But the important thing to understand is that there is a procedural agreement with the EU, that when we put this forward, whether or not they put forward a list, that they are first going to allow this to go to the WTO for a full panel evaluation and that any form of retaliation will be held off until then.

So I do think that we have made progress in at least in de-escalating, and that while we have a disagreement as to whether our legislation is WTO consistent -- we believe it is -- there is at least an agreement to deescalate, to take the time to let the WTO have a full evaluation. And, I think there will be more chapters to be played out here. But I think the passage of this legislation and that procedural agreement at least provides for some of a cooling-off period and hopefully -- and we're obviously hopeful that in the run-up to the EU summit, that we can make further progress on some of the areas like beef and bananas that have continued to be sore spots in US-EU trade relationship.

Q: Gene, was there much discussion of Rayburn environment and can you tell us a little more about your friend, Prime Minister Mahathir and whether he seemed to be playing a receptive audience in his concerns?

MR. SPERLING: There was not any significant discussion of it. There was more discussion last year, I think is my recollection, on the labor issues. There was a couple of people who mentioned in passing that they felt that those pressing for labor environment issues -- well, there was some mention that labor, environment and agriculture were some of the sensitive issues that were difficult, but there wasn't any full-fledged debate in the room on whether or not labor should be included. I think people know what the different positions are. But that was not a significant focus.

And your question on Mahathir was with the receptivity --

Q: Tell us a little more about what he said and how receptive he was.

MR. SPERLING: I think that the conversation broke down as you might expect. I mean, when I said when Goh said, everybody is a globalist, both a globalist and a goblin at the same time, I think if you looked at the comments, you would see everybody making the points that they had to accept globalization, interdependence, but there was a need to deal with the lessons from the Asian financial crisis. Some people put different emphasis on different parts.

I think the emphasis very much on his comments were very much -- dealt very little with what I think we think are many of the main issues, which have to do with the degree that countries have proper financial institutions, whether they have the type of reserves and transparency in their external and short-term debt, all of those fundamentals that go to the domestic side. Most of his focus was clearly on the threat of outside forces to be destabilizing, a concern about large mergers and the -- which was a little bit of a different emphasis than I had heard before, but more significant on actually mergers, per se, large conglomerates, concern about new domestic industries being able to go up.

Nonetheless, I think he was -- still spoke as one who wanted to see progress on the WTO, wanted to see an agenda that went forward but an agenda that would clearly give confidence to developing countries.

I think in the discussion that went on, I think there were times that people referred positively to a comment or other that he made. Clearly others such as I think the President, Zedillo, Goh, others, without referring specifically that, put a much different slant on their comments and started more with the premise that those who shun the risks of the global economy or those who see all of the down sides as being externally related were less likely to benefit from the potential rewards. It was not a -- there was not a heated debate, but one could certainly sense the different philosophies in the comments.

Q: Did the President do anything directly to sort of intervene to bring around some of the recalcitrant or reluctant -- other leaders on the issue of 2001 and the timetable for the new round. I mean, how did this happen at the very last? How were these holdouts brought on board?

MR. SPERLING: Well, I give some credit to the Chair, to Brunei for -- I think what was interesting was I do believe that there was -- and I couldn't give you the exact detail on this, but I think there was at some point a discussion among some of the Asian countries themselves in which I think those who favored putting the 2001 date were able to prevail.

I mean, there is no secret this is something we have been supporting. But I think it would probably not be correct to in any way suggest that we were kind of acting alone or singly. I think what was most interesting was there was some difference of emphasis among some of the Asian countries themselves and the day before the meeting, I believe around the lunchtime or I guess around the lunchtime, there was a meeting in which there came to be some agreement. Up to that point, the language was quite fluid. After that, it went in and we did not know whether it would be debated again today. It never was. So, clearly, the agreement that was made yesterday was one that stuck.

Q: This was a little bit of a surprise to you, I bet. It kind of occurred outside your interventions?

MR. SPERLING: Well, we knew that when the language went into the trade ministerial, we were aware that we would have another shot at this and that we would push for this. But in the actual -- but I think that what was interesting is that when the consensus came, there was -- it came, it seemed to me, from my understanding, from a meeting among the Asian countries themselves. We were prepared to engage, if necessary, even at the agenda briefing which, as you know, is pretty much just a walkthrough and not usually a substantive area. But if the 2001 was either being taken out -- I mean was either in, but people were trying to take out, or was not in, we were prepared to raise the issue. But, again, there was a meeting among some of the Asian countries, or a lunch, where that decision was made.

Again, Japan and several of the ASEAN countries were supportive of the 2001 and I think perhaps particularly after they saw that that was seen as somewhat of a test of political will, perhaps with the reporting of people in this room of that result.

Q: Were there any particular Asian leaders who spoke very effectively or convincingly to convince the likes of Mahathir to be more flexible on this subject?

MR. SPERLING: Well, again, by the time the meeting happened today, the 2001 was in the --

Q: -- this lunch from yesterday.

MR. SPERLING: I just don't know. I wasn't --

Q: Do you know which countries pushed this the most vigorously? Was it Japan? Was it Singapore?

MR. SPERLING: I think the Chair was supportive. I don't think there is any question that Singapore was supportive. As you know, even in the joint statement between Prime Minister Goh and President Clinton, we mentioned the launch of a new round in 2001. But, again, Japan -- so again, you might be able to get better information talking to the Brunei officials. But by the time we arrived for the agenda setting, it was tentatively in there. We made a decision yesterday not to talk about it explicitly because we thought that there might still be open for discussion, we didn't want to jump the gun. So we were pleased. We were pleased today that it was not raised and stayed in the document.

Q: Gene, is this characterization right then that you are back to get an agreement to get the talks started, but you haven't engaged any of the issues that actually blew the talks up in Seattle? It doesn't sound to me like any of those issues that seem to divide developing and developed nations that were in Seattle have actually been addressed here. So you're just sort of back at the "let's have a meeting"?

MR. SPERLING: I don't know what expression, the proof is in the pudding, et cetera. But I think one is certainly right to think that ultimately one still has to get to the issues that we know there's sensitivity on in agriculture, labor, how broad is it going to be, is it going to include things like investment and competition, which we felt were preliminary states.

I think it is fair to say that many of those issues still have to be engaged. And so I do think has happened is I do think there has been some success in the confidence building. Some of that, I think, has just been by the increased expression both through acts like African CBI, but also through the communication from the advanced countries of an understanding that more needs to be done to provide access to the advanced markets for developing countries.

So I think there has been some confidence-building. But again, I think the phrase I used was I think it was an expression of political will. But in order for there to be a successful launch, that political will is going to have to further be expressed in the sense of people being able to be more flexible or either more creative in looking for the types of common ground that were missing in Seattle.

Seattle was clearly -- the failure in Seattle was largely a lack of political will for people to be more flexible, to be more creative in looking for common ground. So while I agree with you that the tough issues still have to be engaged, the expression of political will in this post-Seattle environment is not insignificant.

Q: During the meeting, was Mahathir still arguing for some sort of controls to be placed on markets to prevent another Asian crisis and, if so, was he getting any support in the room from the others?

MR. SPERLING: I don't think he was so much arguing; I think he was seeking -- I mean, their economy, certainly, has had some positive -- has performed positively in some areas and he certainly was pointing to those positive economic indicators to defend what they've done both on a pay exchange rate, et cetera.

But it was a little more of a policy defense. I am not aware after that of anybody returning to that issue. So maybe it's going back to David's question. But I think everybody was talking about the balance of global markets, everyone was talking about the need for greater confidence. We've learned lessons.

There was some talk about wanting to see more progress from the G-22 on recommendations, on financial architecture came up. But there was not a kind of rallying around his statements by any means. And certainly there were very strong statements by the President, by Prime Minister Goh, by Zedillo.

The Prime Minister -- excuse me, the leader from Thailand was certainly the most thoughtful as he went through, I thought, a very reflective discussion in which, I think, unlike the discussion from Malaysia and others, I thought that he talked very much about the lessons they have learned. And it was much more. And while he talked about the external impacts, the weight of his discussion was more about what they learned in internal policy. And I remember one of the things he said that in returning to economic strength, their goal is not to maximize economic strength if it means a lack of stability, and that their search now is for strength in a stable structure.

And so I thought their comments were much more internally oriented or had a much better mix of the lessons from the Asian financial crisis. But clearly that debate continues. That debate continues and one can see in the comments, a different weighting of emphasis from different leaders.

Thank you.

Someone asked a question -- Kim Dae Jung did raise at the meeting today that he wanted to see North Korea involved at the working group level as a guest in the coming APEC and that he hoped that from there they could follow the process of membership. There is a moratorium on membership in APEC until 2008 but he did make an explicit request for North Korea to be involved in the working groups at lower levels as a guest and the United States' view on that is that we would be supportive of seeing North Korea involved at a working group level.

Thank you.

END 8:05 P.M. (L)