THE WHITE HOUSE

Office of the Press Secretary

(Auckland, New Zealand)

For Immediate Release September 13, 1999

PRESS BRIEFING BY NATIONAL SECURITY ADVISOR SANDY BERGER, NATIONAL ECONOMIC ADVISOR GENE SPERLING, AND PRESS SECRETARY JOE LOCKHART

Sky City Hotel

Auckland, New Zealand

6:25 P.M. (L)

MR. LOCKHART: For those of you who missed the 1:30 a.m. showing, Samuel Berger has rejoined us for a matinee performance. Sandy is going to give you some sense of our views of the summit. Gene will give you some specifics of how the day went. Then they will be available for questions.

MR. BERGER: Good to see you in the daytime. This has truly been a good week for stability and U.S. interests in Asia. Asia at all times faces challenges, as any large, diverse, dynamic region does. But we have good reason to feel that developments over the past week have moved the region in the right direction.

Three key issues warrant particular attention -- Indonesia-East Timor, the Korean Peninsula, U.S.-China relations. The East Timor issues riveted the region's and the world's attention. It was a focus of the leaders here at APEC. This region united, as did the larger world, to act to set the conditions for an international force under U.N. auspices, which we hope will provide security to all the citizens of East Timor. The United States strongly supported the referendum in East Timor and the President worked very actively both before, on his way, and here, to lay the groundwork for what we hope will be a resolution of this issue.

The U.S.-North Korean talks in Berlin this week have increased the potential for reduced tensions in the Korean Peninsula. It is now our understanding and expectation that the North Koreans will refrain from testing any long-range missiles for the duration of our negotiations to improve relations. This is an important initial step for addressing our concerns about North Korea's missile program.

For our part, we are considering a number of measures to ease economic sanctions against North Korea, and expect to make a recommendation to the President in the near future. This is a process that must proceed step by step, but I believe a process that is moving in the right direction. Obviously, all of the people of this region will be safer if we move farther along on this constructive path.

Finally, tensions in the U.S.-China relationship affect this entire region. I can't tell you how many leaders came up to the President today and said that they were pleased that our relationship was back on track. And I believe that, as I've said before, the meeting that President Clinton and President Jiang had earlier, a few days ago, moved the relationship in that direction.

We've reengaged on WTO. We now anticipate moving forward on other vital areas, such as arms control and non-proliferation and holding dialogues on other issues of key concern. The Taiwan issue remains very sensitive, but the steadfastness of our policy, I believe, has been a stabilizing influence in what is otherwise a tense situation. Overall, U.S.-China relations have advanced over the past few weeks.

None of these issues can be resolved in one giant step. Each requires patient work and persistent engagement. But we feel that on balance, on the major issues that threaten stability in this region, this week has witnessed a genuine progress.

Let me now ask Gene Sperling to talk specifically about the APEC meetings and then we can take your questions.

MR. SPERLING: We were very pleased with the outcome of the leaders declaration at APEC. We came here, as we said in the pre-brief, Sandy and I did, before we left, saying that our number one focus for the declaration would be to show a strong critical mass of support for launching a broad, new, world-wide trade round in Seattle this year. Things could not have gone much better in that regard.

The endorsement was strong and clear, not only for the concept of launching a new trade round, but for completing it within three years, for making it broad-based, dealing with agriculture services and industrial tariffs. There were other specifics that we were also very pleased with, particularly that within the text of the leaders statement was the finding that the APEC countries join in supporting the elimination of all agriculture export subsidies. And I think that sends a very strong message and support for agriculture liberalization as we go into the Seattle round.

There also was pleas that they incorporated the findings of the trade ministers within the document. It did not specifically refer to each of these details in the document, but incorporated them. And those include the continued moratorium on e-commerce, which is something we hope to achieve at Seattle as -- some of the early results we'd like to see -- support for more accelerated tariff liberalization and for government procurement transparency. And this we think is very important both in fighting corruption and in building confidence, which is just a very clear set of criteria for bidding for government services. It cleared statements as to how those are determined.

There also was approval of several of the business initiatives that -- implementing several of the business initiatives in terms of aviation, food, natural gas initiatives.

We would have liked to have seen a little more in some areas reflecting the President's view that we need to increasingly put a human face on the global economy. We would have preferred to see a little more specific reference to the child labor convention and to explicitly opening the WTO for more transparency and for allowing the international labor organizations and labor to have more of a say -- labor environment -- in these areas.

On the other hand, there was a very strong sentence in it about the importance of building confidence with the public, including women in business groups and with doing consultation with other international organizations. So while we would have liked to see a little more, we feel that the statement did give an important nod in those areas.

This morning, the discussion was a lengthy discussion on the lessons of the Asian financial crisis. In fact, I think Prime Minister Shipley was expecting that to be perhaps an hour discussion with a break, and that went quite long and it was a very substantive and even at times animated discussion.

And there were some differences expressed concerning the degree of the ability to control capital flows, and certainly Chile and Malaysia spoke in support of their short-term measures that they had done. And there were some larger philosophical issues about whether or not one should take as a given the assumption that there will be these types of large capital flows and seek to manage from there, or whether there are ways to manage them better.

Where there was consensus is that a common denominator both in the problems and the potential solutions did lie in better risk assessment, disclosure, regulation in their banking sectors. And in the end, Prime Minister Shipley pulled together on that and suggested that the leaders ask the finance ministers over the next year to look at the work that is going on. Certainly we ourselves have been very involved in the financial stability forum and others to bring to the ministers -- excuse me -- to bring to the leaders their sense of what are the best approaches being taken for dealing with problems of excessive leverage and capital flows through improvements in the banking regulation assessments.

The last thing I want to say before we take questions is that we certainly were pleased that the meeting between President Jiang and President Clinton has led to the resumption of substantive talks, talks that have gone on over the last two days. There remains a lot of work to do, yet Ambassador Barshefsky feels that there is a positive and constructive tone in the discussions. These talks will continue -- though the delegations are certainly leaving Auckland, the talks will continue, and actually, as we speak, Ambassador Barshefsky is involved in discussions on arranging the when and where of the next meeting.

So with that, I think Sandy and I will take questions.

Q Sandy, this morning the President said that the Indonesian troops could work alongside the peacekeeping force, parallel to them. How does that go along with his statement in the previous couple of days that he accused and condemned the Indonesian military for aiding and abetting the militia violence?

MR. BERGER: Well, this obviously presupposes that the Indonesian military, as reflected by the change of position of the government with respect to a peacekeeping force is now interested in bringing stability to East Timor. I think the logical way in which to do that is to have, at least in the beginning, the Indonesian forces there alongside the peacekeeping forces and some transition taking place over time as we get towards the turnover, the actual affirmation of the independence referendum.

Obviously, if the Indonesian military were not being cooperative and operating for the same objectives as the peacekeeping force, that would be a problem that we would have to deal with very, very strongly.

Q Do you have more details on how many U.S. forces will be involved in this effort and when the peacekeepers are now expected to move in?

MR. BERGER: Well, on the first, we've continued today discussions with the Australians. Let me say this, because I don't have a specific number -- but we're talking here about hundreds, not thousands, of Americans that would be involved, and not necessarily all of those would be based in East Timor. As I indicated, some would be providing airlift, some would be providing logistics and communications, intelligence, perhaps helicopter transport. So some would actually be in East Timor and others would not be based there. But we're talking about a figure in the hundreds.

In terms of when, I don't know the answer to that. As far as I know, Foreign Minister Alatas has not yet arrived in New York -- I think he's on his way to New York -- for the discussions with Secretary General Annan, so that we can finalize arrangements. I've noticed some constructive comments today from various Indonesian sources indicating any forces are welcome, thereby, hopefully, taking away any notion that they would seek to select or choose, or be discriminating with respect to who might participate.

I would hope that this force could move into East Timor in a matter of days. There is a serious humanitarian problem in East Timor. The President just met with Ramos-Horta, as you know the Nobel Prize winner from East Timor, who indicated -- confirming what we believe -- there are roughly 200,000 displaced people inside East Timor, many of them not close to areas in which food distribution is available. There is a United Nations Development Program, UNDP, ship that is moving towards East Timor with supplies.

But there is not only a need to restore stability, but the need to provide humanitarian assistance, and therefore, I think there's a sense of urgency about this.

Q Have you gotten any opposition from members of Congress in your consultations on this?

MR. BERGER: The calls that I've made today I think have been generally positive. I don't want to speak for individual members, but I think that people that I have spoken to today have generally believed the we should be supportive. They, I think, also agree they should be largely overwhelmingly Asian force, but that there is a justification for some American support.

Q I'd like to follow up on Mark's question -- the refuge and displaced persons issue begins to sound very familiar. How are you going to get these hundreds of thousands of East Timorese to go back to their homes if the Indonesians are going to be patrolling side-by-side with international force?

MR. BERGER: Well, these arrangements will have to be worked out in New York. I think the people there -- the army has demonstrated on a number of occasions that it can maintain order in East Timor. I would remind you that on the day of the referendum there was very little violence. When the U.N. delegation went to East Timor in the last two days, there's been a great substantial diminution in the violence.

So I think there's obviously needs to be a political decision made by the authorities and by the Indonesian military and it would be obviously extraordinarily unwise for them not to be pushing in the same direction as a multinational force.

Q The Timorese are going to trust them?

MR. BERGER: I think the East Timorese will have confidence in the international presence that will be there representing a wide variety of mostly Asian nations. I think that is what will restore their confidence.

Q Sandy, another follow-up to that. Who is protecting that U.N. compound now? Are there still a thousand refugees in that compound?

MR. BERGER: I don't know the exact number. There still are a number of refugees on the compound and there are some -- I think some protection there. But I really don't have a very good answer for you. Let me get an answer for you and get back to you.

Q Sandy, what could you do between now and the deployment of the peacekeeping force to ensure that we don't see a repeat of the situation in Kosovo, where the army there launched a massive campaign to sweep the area of people who did not agree with their philosophy?

MR. BERGER: Well, I think the international -- the indignation of the international community has been clearly expressed and manifest over the past three or four days, particularly here, but elsewhere. And I think that it is that fact that led the Indonesian government -- obviously, not only the civil authorities, but the military authorities -- to reverse course and invite in an international force.

And should there be a mass violence in this interim period, then the Indonesian government I think would be subject to the same kind of pressure and isolation that they've been subject to up until now.

Q Why didn't a Vietnam-U.S. -- get off the ground?

MR. BERGER: It is off the ground, it just didn't get signed. In fact, the President had a very interesting conversation with the Prime Minister of Vietnam during the meeting, during which he expressed the view that we should complete this agreement, that he would work to that end. And the President expressed the view that he believed we should do that as well. So I believe that we will complete an agreement, but, you know, setting artificial deadlines is not necessarily the best way to negotiate.

Q Sandy, now that Jakarta has reversed course and is allowing in these peacekeepers, is the U.S. going to be changing its recommendation as to what should be done with the IMF and World Bank money that is being held up?

MR. BERGER: Well, in a sense this relates to John's question. I think that if this goes as President Habibie suggested yesterday, we obviously will change our view with respect to the sanctions we've imposed, and the IMF loans can then be considered on the merits without regard to this particular issue. But I think it's premature to make those decisions until we've actually seen the force deployed. I think last night, when I was in here, I said that the devil was always in the details, and I don't think any of us will rest comfortably until we see this force deployed.

MR. SPERLING: Can I just -- it's also definitely the case that the IMF's concerns predated this, and that those concerns, some of those go to issues that we're seeing in other countries on certain banks and issues where we've been very clear on the need for accountability and audits I think would have to be dealt with. So I think that what Sandy is talking about is necessary, but not sufficient. They still would have to deal with the issues that the IMF had raised with them prior to the East Timor issue.

Q Two questions. In the discussions that the Chinese negotiators had with Barshefsky, did the Chinese agree to hold to the April offer that they made?

MR. SPERLING: I've received this question a couple of times, I think probably David last time. And my answer is -- and Charlene's answer -- are probably going to continue to be boring in some sense, which is we're not going to negotiate in public. And to characterize either the starting point, the middle point, the end point would be to restrict the flexibility that we want Charlene and her counterpart to have in coming to an agreement.

Q One problem, what about in the President's meeting with Jiang as part of APEC? I think Sandy has said that they would be trapped in a room with you. Did China, WTO come up? Did the President and Jiang talk about that as well?

MR. SPERLING: As I learned, you're in a side room and you get to watch on video -- but there's coffee. (Laughter.)

To answer your question, they did have a chance to talk and the President -- President Clinton made very clear, as he did in this meeting, his personal commitment to wanting to get this done. And I think that President Jiang felt that their face-to-face meeting had been very helpful in making very clear to them the United States intentions to work in good faith and getting a commercially viable agreement. So they did have a chance to talk about it and I think that they reaffirmed that they both wanted the talks to continue.

Q Gene, be a little more specific about the sanctions on North Korea, which ones would be used first. And also, there's been talking in Japan today -- or I guess yesterday -- that Japan and the United States might be using the G-7 meeting coming up -- to coordinate some intervention on the yen. Can you comment on that?

MR. BERGER: I'll let Gene talk about intervention on the yen. (Laughter.) You think his answer on the other thing was boring, believe me -- (laughter.) In terms of sanctions on North Korea, what we're looking at basically are the basic commercial trade sanctions that affect ordinary commerce and investment. We're not looking at anything that would affect sensitive items, dual-use items, munitions list items, but basically the sanctions that apply to trade in ordinary goods and services and investment.

MR. SPERLING: Actually, your question reminds me about the third or fourth month of the administration -- Rubin and myself went to a Wall Street Journal lunch, and he was asked about whether the President and the Prime Minister had spoken about possible intervention, and then he asked if his statement could be completely off the record. And everybody at the Journal said okay, it's off the record, and they turned off their recorders. And they all leaned forward, and Bob said, no comment. (Laughter.) And then they spent the rest of the lunch, Bob defending why his "no comment" had to be off the record. (Laughter.) But I'll actually go a little further and say that those rumors were not true, there were never such intentions or plans. In fact, as you know, Secretary Summers is not even here right now.

Q Could you talk about the G-7 meeting, at the upcoming -- not at this meeting, I meant the upcoming G-7 meeting that we're talking about.

MR. SPERLING: I would -- basically no comment, but I would not think that there was anything to those rumors.

Q Could you talk about the incentives that the North Korea agreement sends? Why should they be rewarded for not doing something that they shouldn't have been threatening to do in the first place?

MR. BERGER: Well, I would not characterize it that way, John. (Laughter.) And I'm surprised that you would characterize it, quite honestly. (Laughter.) Let's understand here that North Korea is not bound by any international agreements. It's not a member of the MCTR or any other regime, here. And yet its proceeding with a long-range missile program would be one of the most destabilizing developments for Asia and for the United States.

It would have an immediate effect on Japan, which would feel its own security threatened and might then, therefore, feel it has to develop certain countermeasures to deal with that, which in turn might lead China to feel that it has to respond. So that a North Korean missile test would be I think a very destabilizing event. And that's why we've indicated that if that proceeded it would affect our relations seriously and we would have to take action. I believe the Japanese would take action. I believe the Koreans would take action.

Now, if we're going to embark on a different course, a course which could conceivably lead to a long-term moratorium on a missile program, that suggests the possibility of a different kind of relationship with North Korea. And, obviously, if that's the case, it's appropriate for us to take some steps which would ease some of the sanctions that we have in North Korea.

So this is something if we can in fact gain, ultimately, a moratorium on the North Korean missile program, it's very much in the U.S. strategic interest and in any negotiation, any discussion, obviously the question is what is the reciprocal benefit to the North Koreans, and the reciprocal benefit would be some easing of economic sanctions. But I would say very -- hasten to add that if they tested, obviously we would be going down a different path.

If I could just put this back in a little bit of context, as you know, Dr. Perry, Bill Perry has been working with us over the last eight months looking at North Korea policy and basically has recommended to the President that we, in a sense, offer the North Koreans a larger choice here -- a path that on the one hand ultimately puts further restraints on their nuclear program, beyond the agreed framework, which already does restrain it to some important degree, and restrains their missile program in exchange for which we could envision moving towards a more normal relationship with North Korea. That's the long-term objective. It's one we share with South Korea and with Japan.

I think what's happened this week is a first step in perhaps a constructive direction.

Q -- this promise by North Korea not to test the missile while the talks proceed, what does that imply for how much longer these talks will go on?

MR. BERGER: Well, I think this is a long-term process, obviously. And we ultimately, as I said, would like to see a broader understanding with the North Koreans with respect to their missile program, with respect to their nuclear program and during this period it is our understanding and expectation that they will not test.

Q -- sanctions without legislation --

MR. BERGER: The sanctions we're talking about are ones that are within the authority of the President. We're not talking about sanctions, for example, that flow from legislation, because, for example, of their being listed on the terrorism list. I mean, essentially North Korea would be in the same status as Syria in terms of what we are talking about here.

Q Is there another round of talks scheduled?

MR. BERGER: There's no specific date for another round of talks, but we would hope that these talks would continue.

Q Sandy, on China, did the President ever discuss East Timor issue with Jiang? And then, what's the content of the discussion, if there's one? And were you able to secure the support, or at least vote abstain, when the issue come up in the U.N.?

MR. BERGER: It's a very good question, the answer to which I don't know, because I didn't ask the President that question. I know he did have -- I mean, one of the things that these meetings facilitate are a lot of one-on-one conversations. The President probably had almost a dozen of those during the day, including one with Jiang. And I did not ask him whether Timor came up specifically, although I know that he intended to raise it with him.

Q Gene, regarding Taiwan, did anything happen here at this meeting that leads you to be slightly more optimistic? I mean, you said "remain sensitive." But has the situation regarding Taiwan and Chinese threats there improved in any way?

MR. BERGER: I would not say there's anything specific. I mean, I think that we have now said directly to the Chinese what our position is: that we will stand by the one-China policy, but that we also expect this issue to be resolved peacefully. I think that our position here has a stabilizing effect on the situation, but I continue to believe that this is a situation that involves tension, and one that we're going to have to watch very carefully.

Q Gene, Barshefsky said pretty plainly in her news conference on September 9th that April 8th remained the starting point on WTO. And yet, you seem unwilling to characterize it that way. Does that suggest that there's been backtracking in the interim by the Chinese?

MR. SPERLING: No. What it suggests is that starting with this Saturday, you really had the re-entry of substantive discussions. And it's just easier for us to simply say we're not going to discuss the negotiations than to answer some questions and not others, and create speculation as to why. So it's just -- we think it will just be better for the overall process, now that things have started.

You need to understand that even though there have been some talks before, there really was no substantive discussions, or substantive negotiations, starting until after the two presidents had met. And I think now Sandy and Charlene and I talked about it and simply feel it's better for us at this point not to seek to characterize the negotiations at any point.

Q -- help us to know what were the next steps? I'm talking, if there's another meeting scheduled.

MR. SPERLING: I was just on the phone with Charlene before here. She is in the process of having those discussions right now. I was hoping to be able to give you a specific date, but it's just a matter of there being conversation on the exact logistics and timing.

Q Gene, one more. Anything happen here that will improve the political climate for fast-track back in the U.S., particularly with members of your own party?

MR. SPERLING: I think that we have certainly had discussions in which different trade ministers have shown a receptivity to the President's statement, comments about the need to bring in more groups, involve more people, have more concern of some of the value issues that come up. And in that sense I think that the President is, through his speeches, through his conversations, helping to shape the debate in a way that could help move toward a type of consensus that we would hope to have.

This was a very positive meeting. The degree that within the discussions people recognized that it was an achievement in and of itself, that there had been such a crisis, economic and financial crisis, and that there had not been a turn toward protectionism -- and there was some self-congratulations on that, but it was deserving because that was -- I think everyone recognized that had been critical to the recovery.

The President was very impressed in the discussions, with particularly the conversations this morning from Prime Minister of Thailand and Kim of Korea, the degree of which they were focused on their own internal reforms, and even though they've had remarkable turnarounds in their economies, that they were stressing the need to continue to strengthen particularly the banking systems and dealing with non-performing loans as a way of continuing forward.

And in both theirs and other conversations they stressed that they felt one of the lessons that had been learned was that remaining open and remaining open in terms of capital flows and in terms of trade had been helpful for them in their recoveries.

Thank you.

Q Will you be bungee jumping tomorrow?

MR. LOCKHART: Hey, we've got to save something for tomorrow, Sandy, don't tell them. (Laughter.)

Let me do one other piece of business, and then if you have any questions for me. The President, just before Mr. Berger and Mr. Sperling arrived over here, had about a 20-minute meeting with Dr. Ramos-Horta, the East Timorese opposition leader. In that meeting he stressed his concern for the displaced people and talked about the need for the international community to focus on that problem.

He also repeated what I think you have seen him say publicly about the President in this meeting, in thanking him for his leadership in helping to move this process and helping to convince the Indonesian government to move toward restoring security in East Timor.

Q What did the President tell him?

MR. LOCKHART: I think the President thanked him for his leadership and his ability to mobilize support here, told him that we'd be working in support of the peacekeeping force and we'd be watching very closely to make sure that the words that were articulated by the Indonesian government last night get translated into action on the ground.

Q What are your briefing plans tomorrow, if any, in Queenstown?

MR. LOCKHART: I think somewhere near the 7th hole, if anybody wants to talk to me there's a little spot I'll be glad to -- (laughter.)

Q Which golf course?

MR. LOCKHART: I may have to go to both. (Laughter.)

Q -- playing golf tomorrow, did the President have any other plans?

MR. LOCKHART: I think he's looking forward to seeing some of the surroundings. I wouldn't expect him to descend rapidly 400 or 500 feet within three or four seconds, but besides that, I think he's open to whatever Queenstown offers. (Laughter.)

Q What did Chelsea and Mrs. Rodham do today?

MR. LOCKHART: I don't know.

Q What about skiing? Will Chelsea ski at all?

MR. LOCKHART: I don't know. The President doesn't ski anymore since he hurt his shoulder and with his knee. But I think she does ski, but I don't know what she plans to do tomorrow.

Q So it's a completely down day?

MR. LOCKHART: Well, there's no reason to be depressed about it. (Laughter.) You can take the day off.

Q Well, we have Jake.

MR. LOCKHART: Okay, that works for me. Anything else?

Q Well, it's just it's so out of character for the President to take a down day on a trip like this.

MR. LOCKHART: Well, you know, you go through seven years and you learn a few things. (Laughter.) And we're thinking that scheduling these things in the middle of the trip is something that will accommodate your needs and -- you're not buying any of this.

Q You're thinking of us. (Laughter.)

Q Will he talk in the morning about East Timor --

MR. LOCKHART: If there are developments over night or if there's something worthwhile to say, he may have something to say to you in the morning.

Q Joe, on that explosion that they just showed on Russia, did the President communicate directly with the Russian Prime Minister on that one?

MR. LOCKHART: Well, actually the word of the explosion came while Mr. Berger was actually in conversation with the Prime Minister. So I think they both found out at the same time.

Q Thank you.

MR. LOCKHART: Thank you.

END 7:06 P.M. (L)
ENDS

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