Press Briefing by National Security Advisor Steve Hadley

Aboard Air Force One

En route Anchorage, Alaska

2:38 P.M. EST

MR. HADLEY: I don't have a lot to add to what we said in the backgrounder last week. It's important for the President to come to Asia. Our bilateral relations out here are in good shape. We have been able to work through a number of issues with each of these countries.

Quick recap. Japan, we do have an arrangement for reconfiguring our footprint in the country. We've been able to work out the issue of sending a replacement carrier to Japan. We've been able to work through with South Korea, again, the same difficult issue about how to reconfigure our force posture so that it makes less of an impact on South Korean life, but also enhances security on the peninsula.

So we think that the relations with the countries are good - certainly, South Korea, Japan. And in terms of China, obviously, trade issues are a challenge. They did make a move last summer, in terms of making their currency, their exchange rate reflect market factors. We think that there is more that they need to do. President Hu was in New York a couple months ago. He addressed the issue of - said some good things about intellectual property rights, about opening markets to U.S. goods. Again, we think that with respect to all three of those countries, we've worked through some difficult issues and our relations are in pretty good shape - more to do, but our relations are in good shape.

So this is not a trip where the President has to come with a deliverable or initiative. We've got a range of issues. These relations are pretty broad, pretty deep. We've got a range of issues we're talking to them about, and this is an opportunity for the President to sit down, meet with their individual leaders and continue the dialogue on these important issues.

Obviously, we'll talk about security issues, the North Korea issue - North Korea nuclear issue being first and foremost. We have a forum to work that issue, the six-party talks. We think we made some progress in the last round, as you know. They'll want to talk about that. We face, obviously, some new challenges, in terms of avian flu. The President, as you know, thinks it is very important for us to be prepared to deal with the potential that could represent and that the way you have to deal with it is in an international way, and that a number of these countries will be critical to solving that problem. So you [sic] will want to talk about that with the individual leaders.

Energy, of course, continues to be an issue. This is a part of the region of good economic growth, where countries are trying to reconcile the competing objectives of how to grow, how to enhance the prosperity of your people. To do that, you need reliable energy, but you need to do reliable energy in a way that is environmentally responsible and deals with the issue of pollution. So, again, this is an issue that we're going to be talking to these countries about for months and months to come. It's important for the President to sit down with their leaders and have a conversation about it.

Lastly, obviously, the issue of trade. This, again, is a region of countries that believe in free trade, who have benefited from free trade, whose own growth rates reflect their ability to take advantage of increasing openness in trade. And the President, again, will talk about this issue. There is an opportunity to advance the trade agenda, as you know. We advance it on bilateral arrangements, on regional arrangements and global arrangements. And, of course, with the upcoming Doha round next year and the upcoming meeting in Hong Kong, there is an opportunity to advance - enhance trade and increase market access on a global basis. And the President will want to talk to these leaders about the success of that round. And, as you know, it's going to require the United States - we've made a bold proposal, it's going to require the EU and other countries to deal with the issue of tariffs and trade and barriers to trade and trade-distorting subsidies. We need to deal with that issue to see progress, but in order for the EU and the United States to deal with that issue, other countries need to be prepared to come forward and open up access on issues of non-agricultural industrial products and services.

So there's a real opportunity, but it's going to require all countries to take a broad view and to take the steps, the difficult steps that need to be made - and the President will want to emphasize that. In a way, it's a follow-on, in some sense, to the G8 discussion where we talked about the importance of increased aid, about eliminating and getting debt relief, about getting smart development underway in order to advance prosperity and alleviate poverty. But, again, the number one thing you can do to advance prosperity is open up trade. It is a multiple of the kind of economic activity you can get going, in terms of trade, of what you can do with sort of traditional assistance.

So this will be part of the agenda. Again, not a set of meetings for deliverables, in particular, but a series of forums to continue the conversation on these important issues.

And, finally, he will, of course, very much consistent with the agenda he has set out, he'll talk about how the region has changed, his hopes for the region. And, of course, one of the major ways the region has changed over the last generation is the dawning of freedom. And he will celebrate what the Japanese have been able to do since the end of World War II, building a democratic society based on freedom; but a democratic society that reflects the history and culture of Japan. He will celebrate what South Korea has been able to do, to emerge over the last four decades from military dictatorship to a functioning and successful democracy. He will acknowledge, obviously, the changes that China has made, in terms of - in opening up its economy. And he will strike a theme, obviously, that he has many times before, that for China ultimately to realize the full benefit of its people, to have a stable, prosperous country, the kind of increased opening on the economic side will, in his view, have to be paralleled by an opening on the political side - the respect for freedom - freedom of religion, freedom of speech and the rest.

So I think that summarizes what we can expect from the trip.

Q: In Japan, do you think there's going to be closure on the beef issue, the beef - you know, that they're going to allow beef imports from the United States?

MR. HADLEY: They are clearly working through that issue. My understanding - and some of my colleagues will correct me - is that the commission that has been looking at the health aspects of this has reached a decision which would open the door for the return of American beef to Japan. This is not going to get worked out before we get there; it's not going to get worked out while we're there. But we hope in a reasonable time afterwards to see this issue worked through and beef return to the Japanese market. So we think we're making progress, but this is not going to be wrapped up before the trip.

Part of it, you know, this is an issue that needs to be handled in an appropriate administrative way, not highlighted in a political fashion. And the Japanese are working it through.

The other thing I guess I want to say is, particularly with respect to South Korea and Japan, you know, these are our closest - among our closest allies in the region. But these are relationships among equal sovereigns, and this is two leaders - these are leaders of successful democracies, meeting as equals to talk about these issues and it's important that we see it in that way.

Q: So is the President going to discuss incentives for North Korea to give up its nuclear program? Is he going to discuss that with the Chinese and the South Koreans and the other allies?

MR. HADLEY: Well, you know, we've laid out in the last - in what was agreed at the end of the last session of the six-party talks -- a framework for going forward. And it talks in that framework, if you look at it, of things that could follow if a willingness and the carrying out of the undertaking that the North Koreans made in that document - which was to get rid of their nuclear weapons and their nuclear programs. And it makes clear that that will open up an opportunity for economic assistance and increased economic cooperation and gradually, diplomatic process, as well.

So if you look at that document, there are several tracks that go forward. So the framework of how we go forward with North Korea is pretty well laid out. The question that we need to have answered in this coming round -- which will resume after the President's trip, sometime in December - is getting concrete about a process by which in a verifiable way the North Koreans will reveal their nuclear programs and agree to a schedule and a manner for dismantling them. That's really what the focus is going to be. These other elements are part of the arrangements, they're in the prior agreement, but one of the things that will have to happen - not on this trip, but in the next round of negotiations - is to begin to address those issues of how we move to what the North Koreans have undertaken to do to have a peninsula without nuclear weapons and without these nuclear activities.

Q: So what will they talk about regarding North Korea, then? What's there to talk about, among the allies?

MR. HADLEY: Well, one will be where the North Koreans are now. They have made, of course, a variety of statements publicly about some concerns they have and desires they have for a light water reactor. Obviously, the position of the other five parties of the six-party talks are clear, they're set out in the agreement that was reached at the end of the last round - issues of nuclear cooperation and issues - such things, light water reactor, come at an appropriate time. And for us, for the five, that means after there is a declaration and then a dismantlement of their nuclear programs.

So we'll want to continue to have a dialogue on that issue to make sure that we continue to see that issue the same way. And, quite frankly, to talk about how we can work together to encourage the North Koreans to go forward with what they've agreed to. I'd point out that while they've made a variety of statements, there is a document that came out of the last round, it was signed by the North Koreans and they have not said anything that indicates they've walked away from that document. So it's going to be important now for the President and his counterparts to talk about how to implement document, how to move forward with it. And, of course, for us, a central focus of that will be how to turn those good words into a program for verifiably dismantling their nuclear program.

Q: Do you expect to make any progress with China on the trade deficit and on its currency valuation?

MR. HADLEY: We'll have to see. This is going to be an issue - you know, it's a long-standing issue that we've had with China. It's going to be an issue during this trip; it's going to be an issue after this trip. I don't think you're going to see headline breakthroughs. This is the kind of issue that you have to work with these countries on a sustained basis. All three of these countries are sovereign states, they make their own decisions -- they are insistent upon that and we will respect that.

There are some of these issues that you can pursue in public, and some of these issues that it's better to pursue in private. And one of the nice things about a trip like this is it allows the President to have time to sit down with these leaders quietly, one-on-one or in a small group and talk through some of these hard issues.

The point the President will be making on a lot of these things is that these are steps - particularly opening Chinese markets, making their exchange rate reflect market factors, and intellectual property rights - are things that it is in China's interest to do. We talk about intellectual property right from the standpoint of ensuring that U.S. workers and U.S. companies and U.S. patent holders would get the benefit of the investment they have made as a way of encouraging continuing innovation. That's equally important for China for its own purposes. China needs to incentivise innovation and investment among its own population and its own companies and its own entrepreneurs.

So when you talk about intellectual property rights, it's not some favor the Chinese are doing for the United States. It is something China needs to do for its own self if it wants to make the kind of economic progress it wants to do, and if it wants to take the place and play the role in the international economic environment that it wants to play. So one of the things the President will be saying is to explain why these things are priorities and to make it clear that we think it's something the Chinese will want to do in terms of carrying out and meeting the objectives they've set for themselves, in terms of their economic progress and development.

Q: Can I ask about trade? In some of the pre-summit stories out of APEC, there has been talk in some very blunt language about farm subsidies and a warning that if there isn't a breakthrough soon, that the Doha round could collapse. Is that on the American plate, as well? Are we looking to see something like that?

MR. HADLEY: We want to see progress. We think we know what is required to see progress - which, as I said, is movement from the Europeans and from others that parallels the bold proposal the President made to bring down tariffs, bring down barriers, and bring down and ultimately eliminate these trade-distorting subsidies. That is an element of progress. But, similarly, you won't get that progress unless other countries are also willing to make clear they are willing to bring down the tariffs and barriers with respect to manufacturing goods and services.

So it's one of those things that for it to work, everybody is going to have to kick in. This is difficult. These are hard decisions for countries to make. These are issues that the President has pushed, where he will continue to push. There is a big opportunity in Hong Kong; we want to make sure in the Hong Kong meeting in December, we want to make sure that we take the most advantage of that opportunity. But the Doha round, obviously, is something that occurs in 2006; we'd like to have it completed in 2006. If we don't get the progress we want out of Hong Kong, it doesn't mean the ballgame is over by any stretch of the imagination.

But what we would like to, and the President wants to do, is to make it clear to countries that there is a real opportunity in Hong Kong in December, and he's going to encourage the countries to make the tough decisions that will allow us to take the most of that opportunity.

Q: Is time running out?

MR. HADLEY: I wouldn't put it that way. I would say there are opportunities before us. Hong Kong is a big one; certainly, it's not the only one. And it's time, if we're going to get this done, to take advantage of these opportunities. And the President's objective is let's get it done, let's all step up and make the kinds of decisions we have to make, and let's use these opportunities like - Hong Kong. So it's not like the sword of Damocles is going to fall; there will be other opportunities. But let's not miss the opportunities that come before us. Let's take advantage of Hong Kong and try and make some progress, looking towards the successful conclusion of the Doha round in 2006.

Anything else? Okay, thanks.

THE PRESS: Thanks a lot.

END 2:57 P.M. EST