Press Briefing by National Security Advisor Sandy Berger, Deputy Chief of Staff Maria Echaveste, USAID Administrator Brian Atwood, Acting Assistant Secretary of State Peter Romero, Under Secretary of Treasury for International Affairs Tim Geitner and Major General John Maher, Joint Chiefs of Staff

The Briefing Room

9:20 A.M. EST

MR. BERGER: Bright and early on Monday morning, the President will leave for Central America to view firsthand the devastation caused by Hurricane Mitch last October, the most destructive national disaster ever to hit the Western Hemisphere. He's going to advance our effort to aid the region's recovery and reconstruction and to support its continued transition to peace, democracy and open markets. And he's going because our moral responsibility as a neighbor to this region coincides perfectly with our interests as a nation.

The trip will begin in Nicaragua in the town of Posoltega. That's the area, you may recall, where the mudslides washed away entire villages and claimed hundreds of lives during the storm, and was the scene not only of the greatest destruction, but some of our earliest and most intensive relief efforts, distributing everything from plastic sheeting to medicines, to water purification systems, to mosquito nets, to actually rescuing people who were in distress.

The President will speak there with some of the survivors of the mudslides and the devastation. He'll address the people who live in the area, and meet with Nicaraguan President Aleman.

Tuesday we will be in Honduras. The President will arrive at a Honduran military base in Soto Cana, which also has been the base of operations for Joint Task Force Bravo, which has overseen the U.S. military relief effort for the entire region. He will speak to U.S. and Honduran troops, as well as local residents, then go to Tegucigalpa to meet with the Honduran President, Mr. Flores, to discuss the reconstruction effort with the President, local leaders and NGOs.

On Wednesday, we will be in El Salvador, where our focus will be more on the region's transformation, both political and economic. The President will deliver the main speech of the trip to the legislative assembly in San Salvador, and meet with President Calderon.

And the trip then ends in Guatemala. On Wednesday evening, the President will join in a discussion on that country's successful peace process. As you know, after 36 years, peace has come to Guatemala after a civil war which cost roughly 100,000 lives. And he will take part, then, on Thursday, in a regional summit in Antigua, a town in the mountains outside of Guatemala City.

Let me simply emphasize a few points about the trip. First of all, I think it's most important to keep in mind the scale of the devastation that Hurricane Mitch rendered. More than 9,000 people were killed, equal number are still missing. A disaster of this scale in the United States, just to give us a sense of proportionality, would have killed 80,000 people and displaced 25 million.

In some areas, entire crops were lost, which means, of course, that tens of thousands of farmers have lost their livelihood, at least for the near future. A third of the schools in Honduras were either damaged or destroyed. The infrastructure that took decades to build was wiped out in a matter of hours or days.

We need also, I think, to remember the extraordinary progress this region has been making before it was hit by this act of nature. This is a region that has been transformed in the past decade from a period in which searing civil wars claimed tens of thousands of lives in El Salvador and Nicaragua and Guatemala. The countries in the region over the past 10 years have pursued peace, they've pursued reforms that brought democracy and market economies to all the region for the first time since they gained independence in 1820. Accountable governments now focus on basic needs of their people -- education, health care, rule of law -- and there's a new kind of relationship with the United States.

Now, a disaster of this magnitude presents the region with a fundamental choice; it can undo the region's progress, or it can work and the countries of the region can work together to protect and even strengthen that progress. In fact, if the reconstruction is managed correctly, as the leaders seek to do, if the effort is inclusive and transparent, it carves out a new role for local governments and NGOs, if it recognizes that in the long run you have to protect the environment to protect your people. Then, over time, the region could emerge even stronger than before the storm.

That is the intention of the leaders in the region, which they communicated to President Clinton when they were here not so long ago. That is to give the people of Central America a chance to rebuild better and stronger. And we have a clear interest in lending a hand. We obviously want Central America to remain a region of strong, stable democracies, a region not in crisis, not focused on day-to-day survival or dependent on outside assistance, but one that is healthy and growing. We want to sustain a flow of trade and investment that's played a vital role in insulating our economy from the troubles in the global economy elsewhere.

U.S. exports to Central America have more than tripled since 1990 to about $7.5 billion. So we want to keep the region growing. People feel that they can stay and build their future there, rather than increase the pressure to migrate as work diminishes.

Our relief effort has embodied both the scale of the disaster and our stake in the region. It's the largest relief effort directed at any natural disaster in our nation's history, at its height, involved over 5,000 military and civilian personnel on the ground in Central America, unprecedented partnership between our military, our NGOs, AID and people in the governments of the region.

The President has asked Congress for $956 million in emergency supplemental funding for reconstruction in Central America, as well as the Caribbean nations that were damaged by Hurricane Georges. And we need strong bipartisan support so that we can see this through. The trip will focus attention on the steps we need to take in Central America to promote its long-term recovery and development, including debt relief and lowering barriers to trade.

Now, let me add one other element. Today we will be transmitting to Congress and the U.S. Trade Representative's Office will be briefing later today, I think at 1:00 p.m., the administration's proposal for an enhanced Caribbean Basin Initiative program. The bill would authorize the President to provide enhanced temporary trade benefits to Caribbean Basin countries. These enhanced benefits would help the Caribbean-Central American countries recover from the serious damage that I've described. It would also reaffirm our commitment to these countries and encourage them to adopt policies that will facilitate their eventual participation in a broader free trade agreement of the Americas.

The trade benefits under the bill would apply to textile and apparel products assembled from U.S. fabric, textile handicrafts, and all non-textile products that are currently excluded from the CBI program. There's been a disparity, as you know, that's been created by virtue of the benefits for Mexico, and the different degree of benefits in the Caribbean and Central America, which has had a detrimental impact on those countries. For covered textile products, the President would be authorized to eliminate all duties and quantitative restrictions. There will be safeguard provisions in case of import surges, similar to those under NAFTA.

The proposal would provide immediate duty-free and quota-free treatment of textile and apparel products if they are one of three categories: they're assembled in the region of fabric made in the United States from U.S. yarn, cut in the United States; two, they are cut and assembled in the region from U.S. fabric containing U.S. yarn; or three, they are handmade, folklore, hand-loomed articles.

Now, I would note that this is an increase -- the 100 percent duty-free treatment here is an increase from the 50 percent duty-free treatment that was contained in our bill last year, to take account of the quite different economic situation that the region faces now because of the disaster.

For non-textile products, the President would be authorized to cut tariffs to the rate that would be applicable to Mexican goods under NAFTA. The benefits would apply from October 1, '99 through June 30, 2001. Now, to be eligible for these enhanced benefits, the Caribbean countries would have to meet certain eligibility requirements that also exist for current CBI benefits. They include whether they have undertaken WTO obligations on or ahead of schedule, whether they're participating in FTA negotiations and taken other steps necessary for ultimate accession to a free trade area.

It also provides discretionary eligibility criteria, covering issues from narcotics cooperation intellectual property protection, investment corruption, worker rights, environmental protection. The President would continue to examine these criteria to determine the extent to which the countries should continue to have these enhanced benefits.

The CBI report, which will be submitted by the President, includes recommendations concerning the extent to which each beneficiary country should continue to enjoy the enhanced benefits under the bill, and as I say, the President could reexamine that from time to time if the countries were not meeting the eligibility requirements. So this will be a second important initiative with Congress that we would hope to cooperate, work with Congress on as part of the overall effort that we make to try to put this region -- keep this region on the path to peace, democracy and open economies.

Q: They have to buy the fabric in the United States?

MR. BERGER: Correct.

Q: It gets shipped down there, they cut it, shape it, make it, what have you, and then when it comes back it's duty-free and quota-free.

MR. BERGER: That's correct.

Q: What's the value on this, Sandy? What's the value of the NCBI? Since he just spoke about it, if you know about it.

MR. BERGER: Well, let's see if we -- we'll get the answer to that for you.

Q: Mr. Berger, on the Truth Commission in Guatemala, do you expect --

Q: They'll speak in your name, sir?

MS. ECHAVESTE: No.

MR. BERGER: Hardly. (Laughter.)

MS. ECHAVESTE: Right, hardly. I would never presume to speak in Sandy Berger's name. I think that Sandy's given you a -- my name is Maria Echaveste -- has given you a full run-down on the trip so, rather than make any statement, why don't we take questions.

Q: Well, can you start with that idea of what's the value of this in NCBI? What will be the primary countries that benefit? Which will be excluded? Sort of a -- any idea how significant this is?

MS. ECHAVESTE: Well, what's significant --

Q: Where is NBC and CBS?

Q: I don't know.

MS. ECHAVESTE: Do we care?

Q: I don't.

MS. ECHAVESTE: Actually, when the Central American Presidents came in December, this was at the top of their lists. They were very appreciative of the enormous amount of emergency aid that the folks behind me, and their folks, provided. But in terms of the long-term reconstruction needs, having what they called "NAFTA parity" or the Caribbean Basin Initiative was extremely important. The details, I confess, in terms of countries -- we've been talking about it. I can't rattle them off, we'll give you a fact sheet. I think the important thing to stress is, as Sandy said, that our -- last year's initiative was 50 percent. We are accelerating the 100 percent reduction in duties to spur economic growth.

So, as you all know, trade is always a volatile issue, but we hope that the needs of this region will help spur bipartisan support.

Q: Is this NAFTA parity, then, for these countries?

MS. ECHAVESTE: It's a part of it. It's not full. It's not NAFTA. It gets closer.

Peter, do you want to add anything else?

ASSISTANT SECRETARY ROMERO: Only that the benefits of CBI, as it was passed in the early '80s, began to erode as NAFTA kicked in. And this is an attempt to get closer to conditions that exist in NAFTA, not just for textiles, but also the non-textile areas that Sandy enumerated, and to make it more attractive for investors to rethink Central America and the Caribbean in terms of particularly textile investments.

Q: Can you give us a delegation -- official delegation, and how many congressmen and senators are going with him?

MS. ECHAVESTE: At the moment, we're still -- we hope to take three to five members of Congress. But as you know, there's the education Ed-flex bill next week. We have interest from folks like Senator Graham, Senator Dodd, others. We're encouraging Republicans to come with us. But there's a lot of work and this is right when they're in session, Monday through Thursday. So I probably won't know until Saturday or Sunday who is actually coming with us.

Q: How about the administration? The President and the First Lady?

MS. ECHAVESTE: The President, the First Lady, Secretary Richardson, the Secretary of the Army, Luis Caldera, because of the tremendous support we got from the Department of Defense. And we're still finalizing the list.

Q: Can you estimate the amount of money sent so far in relief efforts by all United States agencies and --

MR. ATWOOD: On the relief itself, I'll give you a statistic that I think is interesting. From 1964 through last year, we had spent a total of $297 million on various disasters in Central America. This single disaster, Hurricane Mitch, we've spent $305 million on relief. This includes support for our military colleagues and their contribution to this as well. Sandy mentioned over 5,000 people in the region. This is the largest natural disaster we've ever handled as a government.

Q: So far. Is that still going on or is that a total figure?

MR. ATWOOD: For the most part, we're now moving to a different rehabilitation phase. We still have some military personnel in the region. Obviously, some of our aid missions are still working on aspects of the problem, because we're worried about diseases that occur after as a result of damaged water systems and the like. But for the most part, we're moving into rehabilitation and now reconstruction.

The total amount, if the Congress, as we expect, gives us the entire emergency supplemental, $956 million, is a $1.2-billion expense, but well worth it, given the amount of money that we've put in this region for other purposes in the past.

Q: Is the President going to make any sort of statement about immigration policy during this trip?

MS. ECHAVESTE: That issue is certainly to come up, and probably in each country. As you may know, the administration granted temporary protected status for Honduras and Nicaragua as two countries most damaged by the hurricane, but only granted a state of deportation for those nationals from El Salvador and Guatemala. That stay of deportation expires on Monday. So I suspect that we're going to get a lot of questions.

The stay is not anticipated to be extended because there's no basis for extending it. The countries can't absorb return of illegal immigrants. We are working, however, on a related issue. The Nicara law, which was passed in '97 -- I guess it was that long ago -- which would legalize the status of a couple of hundred thousand Salvadorans and Guatemalans. We're in the process of evaluating regulations. When I say "we" I mean the Department of Justice and the INS -- should be issuing a regulation to set the process and which should help, we hope, legalize the status of many of these people.

Q: Mr. Atwood, you say you're moving into a new phase. Could you speak a little more concretely about what exactly is not completed and what now remains to be done?

MR. ATWOOD: I'd just say that the estimates of the loss in these countries is anywhere from $7 billion to $10 billion. But the loss could be even more serious if we can't get these economies up and running, restore jobs, restore the agriculture sector and the like. This is the most crucial moment, and this is why this is such an emergency. These countries will be in crisis probably for the next few years.

But right now, people are trying to decide whether or not they're going to move to Costa Rica or the United States or whatever, or whether they think they might have a livelihood for themselves in their own country. If we continue to see the infrastructure damage, the roads out, the bridges out, people can't get their crops to market, if we see small businesses destroyed and don't make available to them credits so that they can resume their businesses, basically you're going to see further losses, because they will not realize their potential with respect to economic growth.

That's why it's such an emergency. That's why the United States needs to move fast. We do have some $6 billion worth of commitments from the international community -- the World Bank, the Inter-American Development Bank, and the like. But we can move faster. We can get our resources into the field and get the construction projects moving faster with the supplemental legislation that we've requested on the Hill.

Q: Do you expect that the Truth Commission report of last week would come up for discussion?

MS. ECHAVESTE: It may. Peter, I don't know if you want to add to that. It certainly was a very thorough report.

Q: Can you address the allegations of U.S. involvement over the years?

ASSISTANT SECRETARY ROMERO: It's certainly the topic of the day in Guatemala, and I think that we have been very much a part of the whole reconciliation process, and Brian can talk about how much money we've actually put towards the whole peace plan in Guatemala. Certainly the Historical Clarification Commission itself received a couple of million dollars from the United States.

But more generally, I think that if you read the report -- and I guess all that we've been able to read thus far is the executive summary, it's about 80 pages -- you get a very clear sense for the fact that Guatemalans have taken responsibility for what's happened on their own shoulders. And they characterize it as a politics of exclusion, riddled with all kinds of reprisals and retribution and violence that goes back generations in Guatemala. Certainly, it became a site of the Cold War standoff in our hemisphere. I think that without digging too far back, military assistance to Guatemala was cut in the early '80s and I don't think has been completely restored since then.

There was a liaison relationship between the Central Intelligence Agency and Guatemala intelligence, and essentially we are still waiting for the full report so that we can really wade through it and see what it says.

Q: Mr. Romero, can I follow up on that? Yesterday, the Foreign Minister of Guatemala spoke with us and told us that some Guatemala people are looking to use their judicial system in Guatemala to sue the members of the CIA for this report -- whose names are in this report. He met with you yesterday. He spoke about it with you?

ASSISTANT SECRETARY ROMERO: That issue did not come up, and I have -- this is the first time I'm hearing it.

Q: But the U.S. government will be able to cooperate with these people who are trying to get CIA officials into the courts?

ASSISTANT SECRETARY ROMERO: I can't answer a hypothetical, but I can tell you that we have turned over thousands of pages of information to the Clarification Commission and we'll continue to support their work.

Q: General, what is your area here, may I ask?

MS. ECHAVESTE: Why are you standing here? Is that the question?

GENERAL MAHER: I'm here prepared to address the military's contributions, both in the initial emergency phases during the rehabilitation and now during the restoration. So I can certainly address that.

MS. ECHAVESTE: If anybody has a question for the military --

Q: How many soldiers do we have there?

GENERAL MAHER: During the initial phases of this, as Mr. Berger described, we had over 5,600 of our forces deployed. In the initial phases, our four deployed elements, both in Panama as well as JTF Bravo, were assisted in the emergency efforts and the medical supplies and supplies that had to be delivered. Over 1,000 people saved in this emergency phase, lives saved. Over 35,000 people eventually treated by medical teams, and of course, engineer units, transportation to include aviation type units and service support and communications units were able to participate during this phase of the operation.

Principally, active component, soldiers rising to the need, or troops rising to the need, with some guard reserve support, especially in airlift, and now we're transitioning from those 5,600 troops who supported the effort into a major reserve component, principally driven, exercise program, which has been enhanced to support the affected countries between now and the end of the fiscal year in September. So about -- it goes to about 20,000 guard and reserve forces who will be employed. But on any typical day there will be about 1,200-1,300 in the region, as they rotate to serve.

MS. ECHAVESTE: One of the things that the military has provided in this reconstruction phase, one of the sites we're going to visit is a bridge that the military helped rebuild, a very key bridge in Honduras, and working closely with the Army Corps as well.

Q: I have a question about what kind of potential there is for U.S. companies to actually help with the reconstruction there. Do you have an idea of how big a project that would be and what sort of projects American companies could help with?

MS. ECHAVESTE: Under AID's leadership there was a conference held in December in which we invited not just non-governmental, but the private sector to explain and provide information as to the extent of the damage and the need for assistance. We were, frankly, looking for voluntary contributions, but there is no question that there are opportunities for assisting the growth. So there is a lot of communication in particularly the leveraging of the international resources and finances, and we hope the supplemental -- a good chunk of money is for reconstruction and rebuilding infrastructure.

ASSISTANT SECRETARY ROMERO: If I could just add one thing and that is the President and CEO of OPIC will be accompanying us, and he has announced in a ceremony here just a few weeks ago a $200-million facility for U.S. -- for credits and insurance for U.S. companies interested in investing in Central America.

Q: If you could just be a little bit more specific -- do you have an idea of how big a possible market this could be?

MS. ECHAVESTE: I think you heard Brian talk that depending on which country, the extent of the damage is anywhere between $7 billion to $10 billion. It's a huge -- the best analysis is that these countries could have been set back by several decades in terms of their infrastructure. And it's in our interest not just as a powerful neighbor to the North, but in terms of our economic opportunities, as Sandy said, to help these countries rebuild as quickly as possible. And that's why we work with the international community and our seeking and hope the Congress will pass the emergency supplemental.

Q: You're talking about what -- telecoms, water, what sort of --

MS. ECHAVESTE: Everything. I mean, it's basically about that.

Q: Domestic disaster usually flies through the Congress. What signals are you getting from the Hill as to how likely you are to get this money?

MS. ECHAVESTE: Well, until recently we had some very strong bipartisan interest. There are many ties -- familial, cultural -- with domestic residents to these countries, and so there was -- when the disaster hit, Mrs. Gore went down. She took a bipartisan group. Mrs. Clinton went down; she had members. So we've been working very hard on this, and we hope -- we are a little dismayed that the mark-up today was postponed in the House, but we've not given up and we hope that next week's trip will highlight the need for this disaster.

Q: Do you think you've lost some ground here, on that?

MS. ECHAVESTE: No, as I said, a little dismayed with the delay, but there's a lot of interest, as I said, bipartisan. So we've got to work through all this.

GENERAL MAHER: Could I add one thing, Maria? I'm sorry, could I add one thing?

I testified to support the administration's request last week, and I was very pleased with the response. Congressman Callahan indicated they would move very quickly to this. They've had some discussions about what aspects of this bill are emergency and what are not, they think -- they feel that they need to go down and see this, apparently. And we welcome that, as long as they continue to expedite this. But I think that we're -- this is just a very minor setback, that they didn't mark this up today. I think we're going to see this happen very, very quickly.

Q: How much in the package is for debt relief, and how do you respond to questions by some of the NGO community that there's simply not enough being done? These are some of the most heavily indebted countries in the world.

UNDER SECRETARY GEITNER: Part of what the President did initially is to put together a quite substantial multilateral package for debt relief, which is going to give, for Honduras and Nicaragua, a deferral of $600 million in interest payments coming due in the next two years, which is a quite substantial amount of relief.

And we've also tried to put together a substantial additional package of new finance from the multilateral development banks and other international financial institutions, which will provide $800 million to those two countries over this period of time. That, I think, more than meets the estimated economic needs arising from the disaster, and I think is an exceptional degree of relief provided quite quickly.

Q: Thank you very much.

Q: Thank you.

END 9:52 A.M. EST