A NATIONAL SECURITY STRATEGYFOR A NEW CENTURY

THE WHITE HOUSE OCTOBER 1998

i

Contents

Preface ... iii

I. Introduction... 1

Challenges and Opportunities... 1

The Imperative of Engagement... 1

Implementing the Strategy... 2

II. Advancing U.S. National Interests... 5

Enhancing Security at Home and Abroad... 6

Threats to U.S. Interests... 6

The Need for Integrated Approaches... 7

Shaping the International Environment... 8

Diplomacy... 8

International Assistance... 8

Arms Control... 9

Nonproliferation Initiatives... 11

Military Activities... 12

International Law EnforcementCooperation… 13

Environmental Initiatives… 13

Responding to Threats and Crises... 14

Transnational Threats… 15

Terrorism… 15

International Crime… 16

Drug Trafficking… 17

Emerging Threats at Home … 19

Managing the Consequences of WMD Incidents … 19

Protecting Critical Infrastructures… 21

Smaller-Scale Contingencies... 21

Major Theater Warfare... 22

Preparing Now for an UncertainFuture... 23

Overarching Capabilities... 24

Quality People… 24

Intelligence, Surveillance andReconnaissance... 24

Space... 25

Missile Defense... 26

National Security EmergencyPreparedness… 26

Overseas Presence and PowerProjection… 26

ii

Promoting Prosperity... 27

Strengthening MacroeconomicCoordination... 27

Enhancing American Competitiveness... 29

Enhancing Access to ForeignMarkets... 29

Promoting an Open TradingSystem… 29

Export Strategy and AdvocacyProgram... 31

Enhanced Export Control... 31

Providing for Energy Security... 32

Promoting Sustainable DevelopmentAbroad... 33

Promoting Democracy... 33

Emerging Democracies... 33

Adherence to Universal Human Rights andDemocratic Principles... 34

Humanitarian Activities... 35

III. Integrated Regional Approaches... 36

Europe and Eurasia... 36

East Asia and the Pacific... 41

The Western Hemisphere... 48

The Middle East, Southwest andSouth Asia... 51

Africa... 54

IV. Conclusions... 59

iii

Preface

As we approach the beginning of the 21st century, theUnited States remains the world’s most powerfulforce for peace, prosperity and the universal valuesof democracy and freedom. Our nation’s challenge—and our responsibility—is to sustain that role byharnessing the forces of global integration for thebenefit of our own people and people around theworld.

These forces of integration offer us an unprece-dented opportunity to build new bonds amongindividuals and nations, to tap the world’s vast humanpotential in support of shared aspirations, and tocreate a brighter future for our children. But they alsopresent new, complex challenges. The same forcesthat bring us closer increase our interdependence,and make us more vulnerable to forces like extremenationalism, terrorism, crime, environmental damageand the complex flows of trade and investment thatknow no borders.

To seize these opportunities, and move against thethreats of this new global era, we are pursuing aforward-looking national security strategy attuned tothe realities of our new era. This report, submitted inaccordance with Section 603 of the Goldwater-Nichols Defense Department Reorganization Act of1986, sets forth that strategy. Its three coreobjectives are:

• To enhance our security.

• To bolster America’s economic prosperity.

• To promote democracy abroad.

Over the past five years, we have been putting thisstrategy in place through a network of institutions andarrangements with distinct missions, but a commonpurpose—to secure and strengthen the gains ofdemocracy and free markets while turning back theirenemies. Through this web of institutions andarrangements, the United States and its partners in

the international community are laying a foundationfor security and prosperity in the 21st century.

This strategy encompasses a wide range ofinitiatives: expanded military alliances like NATO, itsPartnership for Peace, and its partnerships withRussia and Ukraine; promoting free trade through theWorld Trade Organization and the move toward freetrade areas by nations in the Americas andelsewhere around the world; strong arms controlregimes like the Chemical Weapons Convention andthe Comprehensive Nuclear Test Ban Treaty;multinational coalitions combating terrorism,corruption, crime and drug trafficking; and bindinginternational commitments to protect the environmentand safeguard human rights.

The United States must have the tools necessary tocarry out this strategy. We have worked diligentlywithin the parameters of the Balanced BudgetAgreement to preserve and provide for the readinessof our armed forces while meeting priority militarychallenges identified in the 1997 QuadrennialDefense Review (QDR). The QDR struck a carefulbalance between near-term readiness, long-termmodernization and quality of life improvements forour men and women in uniform. It ensured that thehigh readiness levels of our forward-deployed and"first-to-fight" forces would be maintained. Thepriority we attach to maintaining a high-quality forceis reflected in our budget actions. This fiscal year,with Congress’ support for the Bosnia and SouthwestAsia non-offset emergency supplemental funds, wewere able to protect our high payoff readinessaccounts. Next year's Defense Budget increasesfunding for readiness and preserves quality of life formilitary personnel.

Although we have accomplished much on thereadiness front, much more needs to be done. Ourmilitary leadership and I are constantly reevaluatingthe readiness of our forces and addressing problemsin individual readiness areas as they arise. I have

iv

instructed the Office of Management and Budget andthe National Security Council to work with theDepartment of Defense to formulate a multi-year planwith the necessary resources to preserve militaryreadiness, support our troops, and modernize theequipment needed for the next century. I amconfident that our military is—and will continue tobe—capable of carrying out our national strategy andmeeting America's defense commitments around theworld.

We must also renew our commitment to America’sdiplomacy—to ensure that we have the superbdiplomatic representation that our people deserve andour interests demand. Every dollar we devote topreventing conflicts, promoting democracy, andstopping the spread of disease and starvation brings asure return in security and savings. Yet internationalaffairs spending today totals just one percent of thefederal budget—a small fraction of what Americainvested at the start of the Cold War when we choseengagement over isolation. If America is to continueto lead the world by its own example, we mustdemonstrate our own commitment to these prioritytasks. This is also why we must pay our dues to theUnited Nations.

Protecting our citizens and critical infrastructures athome is an essential element of our strategy.Potential adversaries—whether nations, terroristgroups or criminal organizations—will be tempted todisrupt our critical infrastructures, impedegovernment operations, use weapons of massdestruction against civilians, and prey on our citizensoverseas. These challenges demand closecooperation across all levels of government—federal,state and local—and across a wide range ofagencies, including the Departments of Defense andState, the Intelligence Community, law enforcement,emergency services, medical care providers andothers. Protecting our critical infrastructure requiresnew partnerships between government and industry.Forging these new structures will be challenging, but

must be done if we are to ensure our safety at homeand avoid vulnerabilities that those wishing us illmight try to exploit in order to erode our resolve toprotect our interests abroad.

The United States has profound interests at stake inthe health of the global economy. Our futureprosperity depends upon a stable internationalfinancial system and robust global growth. Economicstability and growth are essential for the spread offree markets and their integration into the globaleconomy. The forces necessary for a healthy globaleconomy are also those that deepen democraticliberties: the free flow of ideas and information, openborders and easy travel, the rule of law, fair andeven-handed enforcement, protection for consumers,a skilled and educated work force. If citizens tire ofwaiting for democracy and free markets to deliver abetter life for them, there is a real risk that they willlose confidence in democracy and free markets. Thiswould pose great risks not only for our economicinterests but for our national security.

We are taking a number of steps to help contain thecurrent financial turmoil in Asia and other parts of theworld. We are working with other industrializednations, the International Monetary Fund and theWorld Bank to spur growth, stop the financial crisisfrom spreading, and help the victims of financialturmoil. We have also intensified our efforts to reforminternational trade and financial institutions: building astronger and more accountable global tradingsystem, pressing forward with market-openinginitiatives, advancing the protection of labor and theenvironment and doing more to ensure that tradehelps the lives of ordinary citizens across the globe.

At this moment in history, the United States is calledupon to lead—to organize the forces of freedom andprogress; to channel the unruly energies of the globaleconomy into positive avenues; and to advance ourprosperity, reinforce our democratic ideals andvalues, and enhance our security.

1

I. Introduction

We must judge our national security strategy by itssuccess in meeting the fundamental purposes set outin the preamble to the Constitution:

...provide for the common defence, promote thegeneral Welfare, and secure the Blessings ofLiberty to ourselves and our Posterity,...

Since the founding of the nation, certain requirementshave remained constant. We must protect the livesand personal safety of Americans, both at home andabroad. We must maintain the sovereignty, politicalfreedom and independence of the United States, withits values, institutions and territory intact. And, wemust promote for the well being and prosperity of thenation and its people.

Challenges and Opportunities

The security environment in which we live is dynamicand uncertain, replete with a host of threats andchallenges that have the potential to grow moredeadly, but also offering unprecedented opportunitiesto avert those threats and advance our interests.

Globalization—the process of accelerating economic,technological, cultural and political integration—means that more and more we as a nation areaffected by events beyond our borders. Outlawstates and ethnic conflicts threaten regional stabilityand economic progress in many important areas ofthe world. Weapons of mass destruction (WMD),terrorism, drug trafficking and organized crime areglobal concerns that transcend national borders.Other problems that once seemed quite distant—such as resource depletion, rapid population growth,environmental damage, new infectious diseases anduncontrolled refugee migration—have importantimplications for American security. Our workers andbusinesses will suffer if foreign markets collapse orlock us out, and the highest domestic environmentalstandards will not protect us if we cannot get othersto achieve similar standards. In short, our citizens

have a direct stake in the prosperity and stability ofother nations, in their support for international normsand human rights, in their ability to combat interna-tional crime, in their open markets, and in their effortsto protect the environment.

Yet, this is also a period of great promise. Globaliza-tion is bringing citizens from all continents closertogether, allowing them to share ideas, goods andinformation at the tap of a keyboard. Many nationsaround the world have embraced America’s corevalues of representative governance, free marketeconomics and respect for fundamental human rightsand the rule of law, creating new opportunities topromote peace, prosperity and greater cooperationamong nations. Former adversaries now cooperatewith us. The dynamism of the global economy istransforming commerce, culture, communicationsand global relations, creating new jobs and economicopportunity for millions of Americans.

The Imperative of Engagement

Our strategic approach recognizes that we must leadabroad if we are to be secure at home, but we cannotlead abroad unless we are strong at home. We mustbe prepared and willing to use all appropriateinstruments of national power to influence the actionsof other states and non-state actors. Today'scomplex security environment demands that all ourinstruments of national power be effectivelyintegrated to achieve our security objectives. Wemust have the demonstrated will and capabilities tocontinue to exert global leadership and remain thepreferred security partner for the community of statesthat share our interests. We have seen in the pastthat the international community is often reluctant toact forcefully without American leadership. In manyinstances, the United States is the only nationcapable of providing the necessary leadership andcapabilities for an international response to sharedchallenges. American leadership and engagement

2

in the world are vital for our security, and our nationand the world are safer and more prosperous as aresult.

The alternative to engagement is not withdrawal fromthe world; it is passive submission to powerful forcesof change—all the more ironic at a time when ourcapacity to shape them is as great as it has everbeen. Three-quarters of a century ago, the UnitedStates helped to squander Allied victory in World WarI by embracing isolationism. After World War II, andin the face of a new totalitarian threat, Americaaccepted the challenge to lead. We remainedengaged overseas and worked with our allies tocreate international structures—from the MarshallPlan, the United Nations, NATO and other defensearrangements, to the International Monetary Fundand the World Bank—that enabled us to strengthenour security and prosperity and win the Cold War. Byexerting our leadership abroad we have deterredaggression, fostered the resolution of conflicts,strengthened democracies, opened foreign marketsand tackled global problems such as protecting theenvironment. U.S. leadership has been crucial to thesuccess of negotiations that produced a wide rangeof treaties that have made the world safer and moresecure by limiting, reducing, preventing the spread of,or eliminating weapons of mass destruction and otherdangerous weapons. Without our leadership andengagement, threats would multiply and ouropportunities would narrow.

Underpinning our international leadership is thepower of our democratic ideals and values. Indesigning our strategy, we recognize that the spreadof democracy supports American values andenhances both our security and prosperity.Democratic governments are more likely to cooperatewith each other against common threats, encouragefree trade, and promote sustainable economicdevelopment. They are less likely to wage war orabuse the rights of their people. Hence, the trendtoward democracy and free markets throughout theworld advances American interests. The UnitedStates will support this trend by remaining activelyengaged in the world. This is the strategy to take usinto the next century.

Implementing the Strategy

Our global leadership efforts will continue to beguided by President Clinton's strategic priorities: to

foster regional efforts led by the community ofdemocratic nations to promote peace and prosperityin key regions of the world, to increase cooperation inconfronting new security threats that defy bordersand unilateral solutions, to strengthen the military,diplomatic and law enforcement tools necessary tomeet these challenges and to create more jobs andopportunities for Americans through a more open andcompetitive economic system that also benefitsothers around the world. Our strategy is tempered byrecognition that there are limits to America’sinvolvement in the world. We must be selective inthe use of our capabilities and the choices we makealways must be guided by advancing our objectivesof a more secure, prosperous and free America.

We must always be prepared to act alone when thatis our most advantageous course. But many of oursecurity objectives are best achieved—or can only beachieved—through our alliances and other formalsecurity structures, or as a leader of an ad hoccoalition formed around a specific objective. Durablerelationships with allies and friendly nations are vitalto our security. A central thrust of our strategy is tostrengthen and adapt the security relationships wehave with key nations around the world and createnew relationships and structures when necessary.Examples include NATO enlargement, thePartnership for Peace, the NATO-Russia PermanentJoint Council, the African Crisis Response Initiative,the regional security dialogue in the ASEAN RegionalForum and the hemispheric security initiativesadopted at the Summit of the Americas. At othertimes we harness our diplomatic, economic, militaryand information strengths to shape a favorableinternational environment outside of formalstructures. This approach has borne fruit in areas asdiverse as the elimination of nuclear weapons fromUkraine, Kazakhstan and Belarus, ourcomprehensive assistance package for Russia andother Newly Independent States (NIS), theadvancement of peace in Northern Ireland, andsupport for the transformation of South Africa.

Protecting our citizens and critical infrastructures athome is an intrinsic and essential element of oursecurity strategy. The dividing line between domesticand foreign policy is increasingly blurred. Globaliza-tion enables other states, terrorists, criminals, drugtraffickers and others to challenge the safety of ourcitizens and the security of our borders in new ways.The security challenges wrought by globalizationdemand close cooperation across all levels of

3

government—federal, state and local—and across awide range of agencies, including the Departments ofDefense and State, the Intelligence Community, lawenforcement, emergency services, medical careproviders and others. Protecting our critical infra-structure requires new partnerships between govern-ment and industry. Forging these new structures andrelationships will be challenging, but must be done ifwe are to ensure our safety at home and avoidvulnerabilities that those wishing us ill might try toexploit in order to erode our resolve to protect ourinterests abroad.

Engagement abroad rightly depends on the willing-ness of the American people and the Congress tobear the costs of defending U.S. interests—in dollars,energy and, when there is no alternative, the risk oflosing American lives. We must, therefore, foster thebroad public understanding and bipartisancongressional support necessary to sustain ourinternational engagement, always recognizing thatsome decisions that face popular opposition mustultimately be judged by whether they advance theinterests of the American people in the long run.

5

II. Advancing U.S. National Interests

The goal of the national security strategy is to ensurethe protection of our nation’s fundamental andenduring needs: protect the lives and safety ofAmericans, maintain the sovereignty of the UnitedStates with its values, institutions and territory intact,and promote the prosperity and well-being of thenation and its people. In our vision of the world, theUnited States has close cooperative relations with theworld’s most influential countries and has the ability toinfluence the policies and actions of those who canaffect our national well-being.

We seek to create a stable, peaceful internationalsecurity environment in which our nation, citizens andinterests are not threatened. The United States willnot allow a hostile power to dominate any region ofcritical importance to our interests. We will work toprevent the spread of nuclear, biological andchemical weapons and the materials for producingthem, and to control other potentially destabilizingtechnologies, such as long-range missiles. We willcontinue to ensure that we have effective means forcountering and responding to the threats we cannotdeter or otherwise prevent from arising. This includesprotecting our citizens from terrorism, internationalcrime and drug trafficking.

We seek a world in which democratic values andrespect for human rights and the rule of law areincreasingly accepted. This will be achieved throughbroadening the community of free-marketdemocracies, promoting an international communitythat is willing and able to prevent or respondeffectively to humanitarian problems, andstrengthening international non-governmentalmovements committed to human rights anddemocratization. These efforts help preventhumanitarian disasters, promote reconciliation instates experiencing civil conflict and address migrationand refugee crises.

We seek continued American prosperity throughincreasingly open international trade and sustainablegrowth in the global economy. The health of the

international economy directly affects our security,just as stability enhances the prospects for prosperity.Prosperity ensures that we are able to sustain ourmilitary forces, foreign initiatives and global influence.In turn, our engagement and influence helps ensurethat the world remains stable so the internationaleconomic system can flourish.

We seek a cleaner global environment to protect thehealth and well-being of our citizens. A deterioratingenvironment not only threatens public health, itimpedes economic growth and can generate tensionsthat threaten international stability. To the extent thatother nations believe they must engage in non-sustainable exploitation of natural resources, ourlong-term prosperity and security are at risk.

Since there are always many demands for U.S.action, our national interests must be clear. Theseinterests fall into three categories. The first includesvital interests—those of broad, overriding impor-tance to the survival, safety and vitality of our nation.Among these are the physical security of our territoryand that of our allies, the safety of our citizens, oureconomic well-being and the protection of our criticalinfrastructures. We will do what we must to defendthese interests, including—when necessary—usingour military might unilaterally and decisively.

The second category includes situations in whichimportant national interests are at stake. Theseinterests do not affect our national survival, but theydo affect our national well-being and the character ofthe world in which we live. In such cases, we will useour resources to advance these interests insofar asthe costs and risks are commensurate with theinterests at stake. Our efforts to halt the flow ofrefugees from Haiti and restore democracy in thatstate, our participation in NATO operations in Bosniaand our efforts to protect the global environment arerelevant examples.The third category is humanitarian and otherinterests. In some circumstances our nation may actbecause our values demand it. Examples include

6

responding to natural and manmade disasters orviolations of human rights, supporting democratiza-tion and civil control of the military, assistinghumanitarian demining, and promoting sustainabledevelopment. Often in such cases, the force of ourexample bolsters support for our leadership in theworld. Whenever possible, we seek to averthumanitarian disasters and conflict through diplomacyand cooperation with a wide range of partners,including other governments, international institutionsand non-governmental organizations. This may notonly save lives, but also prevent the drain onresources caused by intervention in crises.

Our strategy is based on three national objectives:enhancing our security, bolstering our economicprosperity and promoting democracy abroad.

Enhancing Security atHome and AbroadOur strategy for enhancing U.S. security recognizesthat we face diverse threats requiring integratedapproaches to defend the nation, shape theinternational environment, respond to crises andprepare for an uncertain future.

Threats to U.S. Interests

The current international security environmentpresents a diverse set of threats to our enduringgoals and hence to our security:

• Regional or State-Centered Threats: A numberof states still have the capabilities and the desireto threaten our vital interests through coercion oraggression. They continue to threaten thesovereignty of their neighbors and internationalaccess to resources. In many cases, thesestates are also actively improving their offensivecapabilities, including efforts to obtain or retainnuclear, biological or chemical weapons and, insome cases, long-range delivery systems. InSouthwest Asia, both Iraq and Iran have thepotential to threaten their neighbors and the freeflow of oil from the region. In East Asia, NorthKorea maintains its forward positioning ofoffensive military capabilities on its border withSouth Korea.

• Transnational threats: Terrorism, internationalcrime, drug trafficking, illicit arms trafficking,uncontrolled refugee migrations andenvironmental damage threaten U.S. interests,citizens and the U.S. homeland itself. Thepossibility of terrorists and other criminals usingWMD—nuclear, biological and chemicalweapons—is of special concern. Threats to thenational information infrastructure, ranging fromcyber-crime to a strategic information attack onthe United States via the global informationnetwork, present a dangerous new threat to ournational security. We must also guard againstthreats to our other critical nationalinfrastructures—such as electrical power andtransportation—which increasingly could take theform of a cyber-attack in addition to physicalattack or sabotage, and could originate fromterrorist or criminal groups as well as hostilestates. International drug trafficking organizationshave become the most powerful and dangerousorganized crime groups the United States hasever confronted due to their sophisticatedproduction, shipment, distribution and financialsystems, and the violence and corruption theypromote everywhere they operate.

• Spread of dangerous technologies: Weaponsof mass destruction pose the greatest potentialthreat to global stability and security. Proliferationof advanced weapons and technologies threatensto provide rogue states, terrorists andinternational crime organizations the means toinflict terrible damage on the United States, itsallies and U.S. citizens and troops abroad. Wemust continue to deter and be prepared tocounter the use or threatened use of WMD,reduce the threat posed by existing arsenals ofsuch weaponry and halt the smuggling of nuclearmaterials. We must identify the technicalinformation, technologies and materials thatcannot be allowed to fall into the hands of thoseseeking to develop and produce WMD. And wemust stop the proliferation ofnon-safeguarded dual-use technologies thatplace these destructive capabilities in the handsof parties hostile to U.S. and global securityinterests.

• Foreign intelligence collection: The threatfrom foreign intelligence services is more diverse,complex and difficult to counter than ever before.

7

This threat is a mix of traditional and non-traditional intelligence adversaries that havetargeted American military, diplomatic,technological and commercial secrets. Someforeign intelligence services are rapidly adoptingnew technologies and innovative methods toobtain such secrets, including attempts to use theglobal information infrastructure to gain access tosensitive information via penetration of computersystems and networks. These new methodscompound the already serious threat posed bytraditional human, technical and signalsintelligence activities.

• Failed states: We can expect that, despiteinternational prevention efforts, some states willbe unable to provide basic governance, servicesand opportunities for their populations, potentiallygenerating internal conflict, humanitarian crisesor regional instability. As governments lose theirability to provide for the welfare of their citizens,mass migration, civil unrest, famine, masskillings, environmental disasters and aggressionagainst neighboring states or ethnic groups canthreaten U.S. interests and citizens.

The Need for IntegratedApproaches

Success in countering these varied threats requiresan integrated approach that brings to bear all thecapabilities and assets needed to achieve oursecurity objectives—particularly in this era whendomestic and foreign policies are increasingly blurred.

To effectively shape the international environmentand respond to the full spectrum of potential threatsand crises, diplomacy, military force, our other foreignpolicy tools and our domestic preparedness effortsmust be closely coordinated. We must retain astrong foreign assistance program and an effectivediplomatic corps if we are to maintain Americanleadership. We must maintain superior military forcesat the level of readiness necessary to effectively deteraggression, conduct a wide range of peacetimeactivities and smaller-scale contingencies, and,preferably in concert with regional friends and allies,win two overlapping major theater wars. The successof all our foreign policy tools is critically dependent ontimely and effective intelligence collection andanalysis capabilities.

International cooperation will be vital for buildingsecurity in the next century because many of thethreats we face cannot be addressed by a singlenation. Globalization of transportation andcommunications has allowed international terroristsand criminals to operate without geographicconstraints, while individual governments and theirlaw enforcement agencies remain limited by nationalboundaries. Unlike terrorists and criminals, govern-ments must respect the sovereignty of other nations.Accordingly, a central thrust of our strategy is toenhance relationships with key nations around theworld to combat transnational threats to commoninterests. We seek to address these threats byincreasing intelligence and law enforcement coopera-tion, denying terrorists safe havens, preventing armstraders from fueling regional conflicts and subvertinginternational embargoes, and cracking down on drugtrafficking, money laundering and international crime.

Building effective coalitions of like-minded nations isnot enough. We are continuing to strengthen andintegrate our own diplomatic, military, intelligence andlaw enforcement capabilities so we can act on ourown when we must as well as more effectively leadthe international community in responding to thesethreats.

Potential enemies, whether nations, terrorist groupsor criminal organizations, are increasingly likely toattack U.S. territory and the American people inunconventional ways. Adversaries will be tempted todisrupt our critical infrastructures, impede continuityof government operations, use weapons of massdestruction against civilians in our cities, attack uswhen we gather at special events and prey on ourcitizens overseas. The United States must act todeter or prevent such attacks and, if attacks occursdespite those efforts, must be prepared to limit thedamage they cause and respond decisively againstthe perpetrators. We will spare no effort to bringattackers to justice, ever adhering to our policy towardterrorists that "You can run, but you cannot hide," andwhere appropriate to defend ourselves by striking atterrorist bases and states that support terrorist acts.

At home, we must have effective capabilities forthwarting and responding to terrorist acts, counteringinternational crime and foreign intelligence collection,and protecting critical national infrastructures. Ourefforts to counter these threats cannot be limitedexclusively to any one agency within the U.S.

8

Government. The threats and their consequencescross agency lines, requiring close cooperationamong Federal agencies, state and local govern-ments, the industries that own and operate criticalnational infrastructures, non-governmentalorganizations and others in the private sector.

Shaping the InternationalEnvironment

The United States has a range of tools at its disposalwith which to shape the international environment inways favorable to U.S. interests and global security.Shaping activities enhance U.S. security by promotingregional security and preventing or reducing the widerange of diverse threats outlined above. Thesemeasures adapt and strengthen alliances andfriendships, maintain U.S. influence in key regionsand encourage adherence to international norms.When signs of potential conflict emerge, or potentialthreats appear, we undertake initiatives to prevent orreduce these threats. Our shaping efforts also aim todiscourage arms races, halt the proliferation ofweapons of mass destruction, reduce tensions incritical regions and combat the spread of internationalcriminal organizations.

Many of our international shaping activities, oftenundertaken with the cooperation of our allies andfriends, also help to prevent threats from arising thatplace at risk American lives and property at home.Examples include countering terrorism, drug andfirearms trafficking, illegal immigration, the spread ofWMD and other threats. Increasingly, shaping thesecurity environment involves a wide range of Federalagencies, some of which in the past have not beenthought of as having such an international role.

Diplomacy

Diplomacy is a vital tool for countering threats to ournational security. The daily business of diplomacyconducted through our missions and representativesaround the world is a irreplaceable shaping activity.These efforts are essential to sustaining our alliances,forcefully articulating U.S. interests, resolving regionaldisputes peacefully, averting humanitariancatastrophe, deterring aggression against the UnitedStates and our friends and allies, creating trade and

investment opportunities for U.S. companies, andprojecting U.S. influence worldwide.

One of the lessons that has been repeatedly drivenhome is the importance of preventive diplomacy indealing with conflict and complex emergencies.Helping prevent nations from failing is far moreeffective than rebuilding them after an internal crisis.Helping people stay in their homes is far morebeneficial than feeding and housing them in refugeecamps. Helping relief agencies and internationalorganizations strengthen the institutions of conflictresolution is far less taxing than healing ethnic andsocial divisions that have already exploded intobloodshed. In short, while crisis management andcrisis resolution are necessary tasks for our foreignpolicy, preventive diplomacy is obviously farpreferable.

Credible military force and the demonstrated will touse it are essential to defend our vital interests andkeep America safe. But force alone cannot solve allour problems. To be most effective, force, diplomacyand our other policy tools must complement andreinforce each other—for there will be manyoccasions and many places where we must rely ondiplomatic shaping activities to protect and advanceour interests.

International Assistance

From the U.S.-led mobilization to rebuild post-warEurope to the more recent creation of exportopportunities across Asia, Latin America and Africa,U.S. foreign assistance has assisted emergingdemocracies, helped expand free markets, slowedthe growth of international crime, contained majorhealth threats, improved protection of theenvironment and natural resources, slowedpopulation growth and defused humanitarian crises.Crises are averted—and U.S. preventive diplomacyactively reinforced—through U.S. sustainabledevelopment programs that promote voluntary familyplanning, basic education, environmental protection,democratic governance and rule of law, and theeconomic empowerment of private citizens.

When combined effectively with other bilateral andmultilateral activities, such as through our cooperativescientific and technological programs, U.S. initiativesreduce the need for costly military and humanitarianinterventions. Where foreign aid succeeds in

9

consolidating free market policies, substantial growthof American exports has frequently followed. Wherecrises have occurred, actions such as the GreaterHorn of Africa Initiative have helped stanch masshuman suffering and created a path out of conflictand dislocation through targeted relief. Other foreignaid programs have worked to help restore elementarysecurity and civic institutions.

Arms Control

Arms control efforts are an essential element of ournational security strategy. Effective arms control isreally defense by other means. We pursue verifiablearms control agreements that support our efforts toprevent the spread and use of weapons of massdestruction, halt the use of conventional weapons thatcause unnecessary suffering, and contribute toregional stability at lower levels of armaments. Byincreasing transparency in the size, structure andoperations of military forces, arms controlagreements and confidence-building measuresreduce incentives and opportunities to initiate anattack, and reduce the mutual suspicions that arisefrom and spur on armaments competition. They helpprovide the assurance of security necessary tostrengthen cooperative relationships and directresources to safer, more productive endeavors.Agreements that preserve our crisis responsecapability shape the global and regional securityenvironments, and simultaneously reinforce ourcommitment to allies and partners. Our arms controlinitiatives are an essential prevention measure forenhancing U.S. and allied security.

Verifiable reductions in strategic offensive arms andthe steady shift toward less destabilizing systemsremain essential to our strategy. Entry into force ofthe START I Treaty in December 1994 charted thecourse for reductions in the deployed strategicnuclear forces of the United States and the FormerSoviet Union (FSU). START I has accomplishedmuch to reduce the risk of nuclear war and strength-en international security. On the third anniversary ofSTART I entry into force, the United States andRussia announced that both were two years ahead ofschedule in meeting the treaty’s mandatedreductions.

Once the START II Treaty enters into force, theUnited States and Russia will each be limited tobetween 3,000-3,500 total deployed strategic nuclear

warheads. START II also will eliminate destabilizingland-based multiple warhead missiles, a truly historicachievement. Russian ratification of START II willopen the door to the next round of strategic armscontrol.

At the Helsinki Summit in March 1997, PresidentsClinton and Yeltsin agreed that once START II entersinto force, our two nations would immediately beginnegotiations on a START III agreement. They agreedto START III guidelines that, if adopted, will cap thenumber of strategic nuclear warheads deployed ineach country at 2,000-2,500 by the end of 2007—reducing both our arsenals by 80 percent from ColdWar heights. They also agreed that START III will,for the first time, require the U.S. and Russia todestroy nuclear warheads, not just the missiles,aircraft and submarines that carry them, and openedthe door to possible reductions in non-strategicnuclear weapons. On September 26, 1997, the U.S.and Russia signed a START II Protocol codifying theagreement at Helsinki to extend the end date forreductions to 2007 and exchanged letters on earlydeactivation by 2003 of those strategic nucleardelivery systems to be eliminated by 2007.

At Helsinki, the two Presidents recognized the Nunn-Lugar Cooperative Threat Reduction (CTR) Programas the vehicle through which the United States wouldfacilitate the deactivation of strategic nuclear deliverysystems in the FSU nations. The CTR Program hasassisted Ukraine, Kazakhstan and Belarus inbecoming non-nuclear weapons states and willcontinue to assist Russia in meeting its STARTobligations. The program has effectively supportedenhanced safety, security, accounting and centralizedcontrol measures for nuclear weapons and fissilematerials in the FSU. CTR is also assisting FSUnations in measures to eliminate and prevent theproliferation of chemical weapons and biologicalweapon-related capabilities. It has supported manyongoing military reductions and reform measures inthe FSU, and has contributed to a climate conducivefor further progress on non-proliferation.

Also at Helsinki, the Presidents reaffirmed theircommitment to the Anti-Ballistic Missile (ABM) Treatyand recognized the need for effective theater missiledefenses in an agreement in principle on demarcationbetween systems to counter strategic ballisticmissiles and those to counter theater ballisticmissiles. On September 26, 1997, the U.S. Secretaryof State and Russian Foreign Minister, along with

10

their counterparts from Belarus, Kazakhstan andUkraine, signed or initialed five agreements relating tothe ABM Treaty. The agreements on demarcationand succession will be provided to the Senate for itsadvice and consent following Russian ratification ofSTART II.

By banning all nuclear test explosions for all time, theComprehensive Test Ban Treaty (CTBT) constrainsthe development of dangerous nuclear weapons,contributes to preventing nuclear proliferation and tothe process of nuclear disarmament, and enhancesthe ability of the United States to monitor suspiciousnuclear activities in other countries through aworldwide sensor network and on-site inspections.Nuclear tests in India and Pakistan in May 1998 makeit more important than ever to move quickly to bringthe CTBT into force and continue establishment ofthe substantial verification mechanisms called for inthe treaty. The President has submitted the treaty,which 150 nations have signed, to the Senate andhas urged the Senate to provide its advice andconsent this year. Prompt U.S. ratification willencourage other states to ratify, enable the UnitedStates to lead the international effort to gain CTBTentry into force and strengthen international normsagainst nuclear testing. Multilateral and regionalarms control efforts also increase U.S. and globalsecurity. We seek to strengthen the BiologicalWeapons Convention (BWC) with a new internationalregime to ensure compliance. At present, we arenegotiating with other BWC member states in aneffort to reach consensus on a protocol to the BWCthat would implement an inspection system to deterand detect cheating. We are also working hard toimplement and enforce the Chemical WeaponsConvention (CWC). The United States Senateunderscored the importance of these efforts with itsApril 24, 1997 decision, by a vote of 74-26, to give itsadvice and consent to ratification of the CWC. Thenext key step is legislation to implement fullcompliance with the commercial declarations andinspections that are required by the CWC.

In Europe, we are pursuing the adaptation of the 1990Conventional Armed Forces in Europe (CFE) Treaty,consistent with the Decision on Certain BasicElements adopted in Vienna on July 23, 1997 by all30 CFE states. Success in this negotiation willensure that this landmark agreement remains acornerstone of European security into the 21st centuryand beyond. We continue to seek Russian, Ukrainianand Belarusian ratification of the 1992 Open Skies

Treaty to increase transparency of military forces inEurasia and North America. We also promote,through international organizations such as theOrganization for Security and Cooperation in Europe(OSCE), implementation of confidence and security-building measures, including the 1994 ViennaDocument, throughout Europe and in specific regionsof tension and instability—even where we are notformal parties to such agreements. The agreementsmandated by the Dayton Accords demonstrate howinnovative regional efforts can strengthen stability andreduce conflicts that could adversely affect U.S.interests abroad.

President Clinton is committed to ending the tragicdamage to innocent civilians due to anti-personnellandmines (APLs). The United States has alreadytaken major steps in the spirit that motivated theOttawa Convention, while ensuring our ability to meetinternational obligations and provide for the safetyand security of our men and women in uniform. OnJune 30, 1998, we met—one year ahead ofschedule—the President's May 1996 commitment todestroy all of our non-self-destructing APLs by 1999,except those we need for Korea and deminingtraining. To expand and strengthen theAdministration policy on APLs that he announced onSeptember 17, 1997, President Clinton signedPresidential Decision Directive 64 in June 1998. Itdirects the Defense Department to end the use of allAPLs, even of self-destructing APLs, outside Koreaby 2003 and to pursue aggressively the objective ofhaving APL alternatives ready for Korea by 2006. Wewill also aggressively pursue alternatives to our mixedanti-tank systems that contain anti-personnelsubmunitions. We have made clear that the UnitedStates will sign the Ottawa Convention by 2006 if wesucceed in identifying and fielding suitablealternatives to our self-destructing APLs and mixedanti-tank systems by then. Furthermore, in 1997 theAdministration submitted for Senate advice andconsent the Amended Landmine Protocol to theConvention on Conventional Weapons, which bansthe unmarked, long-duration APLs that caused theworldwide humanitarian problem. We haveestablished a permanent ban on APL exports and areseeking to universalize an export ban through theConference on Disarmament in Geneva. In 1998 weare spending $80 million on humanitarian deminingprograms, more than double that of the previous year,and through our "Demining 2010" initiative havechallenged the world to increase the effectiveness

11

and efficiency of removing landmines that threatencivilians.

Nonproliferation Initiatives

Nonproliferation initiatives enhance global security bypreventing the spread of WMD, materials forproducing them and means of delivering them. Thatis why the Administration is promoting universaladherence to the international treaty regimes thatprohibit the acquisition of weapons of massdestruction, including the Nuclear Non-ProliferationTreaty (NPT), the CWC and the BWC. The NPT wasan indispensable precondition for the denuclearizationof Ukraine, Kazakhstan, Belarus and South Africa.We also seek to strengthen the International AtomicEnergy Agency (IAEA) safeguards system andachieve a Fissile Material Cutoff Treaty to cap thenuclear materials available for weapons. Acoordinated effort by the intelligence community andlaw enforcement agencies to detect, prevent anddeter illegal trafficking in fissile materials is alsoessential to our counter-proliferation efforts.The Administration also seeks to prevent destabiliz-ing buildups of conventional arms and limit access tosensitive technical information, equipment andtechnologies by strengthening multilateral regimes,including the Wassenaar Arrangement on ExportControls for Conventional Arms and Dual-Use Goodsand Technologies, the Australia Group (for chemicaland biological weapons), the Missile TechnologyControl Regime (MTCR) and the Nuclear SuppliersGroup. We are working to harmonize national exportcontrol policies, increase information sharing, refinecontrol lists and expand cooperation against illicittransfers.

Regional nonproliferation efforts are particularlyimportant in three critical proliferation zones. On theKorean Peninsula, we are implementing the 1994Agreed Framework, which requires full compliance byNorth Korea with nonproliferation obligations. In theMiddle East and Southwest Asia, we encourageregional arms control agreements that address thelegitimate security concerns of all parties andcontinue efforts to thwart and roll back Iran’sdevelopment of weapons of mass destruction andIraq’s efforts to reconstitute its programs. In SouthAsia, we seek to persuade India and Pakistan to bringtheir nuclear and missile programs into conformitywith international nonproliferation standards and tosign and ratify the CTBT.

Through programs such as the Nunn-LugarCooperative Threat Reduction Program and otherinitiatives, we aim to strengthen controls overweapons-usable fissile material and prevent the theftor diversion of WMD and related material andtechnology. We are working to strengthen theConvention on the Physical Protection of NuclearMaterial to increase accountability and protection,which complements our effort to enhance IAEAsafeguards. We are purchasing tons of highlyenriched uranium from dismantled Russian nuclearweapons for conversion into commercial reactor fuel,and working with Russia to redirect former Sovietfacilities and scientists from military to peacefulpurposes.

To expand and improve U.S. efforts aimed atdeterring proliferation of WMD by organized crimegroups and individuals in the NIS and EasternEurope, the Defense Department and FBI are

12

implementing a joint counter proliferation assistanceprogram that provides appropriate training, materialand services to law enforcement agencies in theseareas. The program’s objectives are to assist inestablishing a professional cadre of law enforcementpersonnel in these nations trained to prevent, deterand investigate crimes related to the proliferation anddiversion of WMD or their delivery systems; to assistthese countries in developing laws and regulationsdesigned to prevent the illicit acquisition or traffickingof WMD, and in establishing appropriate enforcementmechanisms; and to build a solid legal andorganization framework that will enable thesegovernments to attack the proliferation problem athome and participate effectively in internationalefforts.

Military Activities

The U.S. military plays an essential role in buildingcoalitions and shaping the international environmentin ways that protect and promote U.S. interests.Through overseas presence and peacetimeengagement activities such as defense cooperation,security assistance, and training and exercises withallies and friends, our armed forces help to deteraggression and coercion, promote regional stability,prevent and reduce conflicts and threats, and serveas role models for militaries in emergingdemocracies. These important efforts engage everycomponent of the Total Force: Active, Reserve,National Guard and civilian.

Deterrence of aggression and coercion on a dailybasis is crucial. Our ability to deter potentialadversaries in peacetime rests on several factors,particularly on our demonstrated will and ability touphold our security commitments when they arechallenged. We have earned this reputation throughboth our declaratory policy, which clearlycommunicates costs to potential adversaries, and ourcredible warfighting capability. This capability isembodied in ready forces and equipment strategicallystationed or deployed forward, in forces in the UnitedStates at the appropriate level of readiness to deployand go into action when needed, in our ability to gaintimely access to critical regions and infrastructureoverseas, and in our demonstrated ability to form andlead effective military coalitions.

Our nuclear deterrent posture is one of the mostvisible and important examples of how U.S. military

capabilities can be used effectively to deteraggression and coercion, as reaffirmed in aPresidential Decision Directive signed by PresidentClinton in November 1997. Nuclear weapons serveas a hedge against an uncertain future, a guaranteeof our security commitments to allies and adisincentive to those who would contemplatedeveloping or otherwise acquiring their own nuclearweapons. Our military planning for the possibleemployment of U.S. nuclear weapons is focused ondeterring a nuclear war rather than attempting to fightand win a protracted nuclear exchange. We continueto emphasize the survivability of the nuclear systemsand infrastructure necessary to endure a preemptiveattack and still respond at overwhelming levels. TheUnited States must continue to maintain a robust triadof strategic forces sufficient to deter any hostileforeign leadership with access to nuclear forces andto convince it that seeking a nuclear advantage wouldbe futile. We must also ensure the continued viabilityof the infrastructure that supports U.S. nuclear forcesand weapons. The Stockpile Stewardship Programwill guarantee the safety and reliability of our nuclearweapons under the Comprehensive Test Ban Treaty.

While our overall deterrence posture—nuclear andconventional—has been effective against mostpotential adversaries, a range of terrorist and criminalorganizations may not be deterred by traditionaldeterrent threats. For these actors to be deterred,they must believe that any type of attack against theUnited States or its citizens will be attributed to themand that we will respond effectively and decisively toprotect our national interests and ensure that justiceis done.

Our military promotes regional stability in numerousways. In Europe, East Asia and Southwest Asia,where the U.S. has clear, vital interests, the Americanmilitary helps assure the security of our allies andfriends. The reinforcement of U.S. forces in the Gulffrom Fall 1997 to Spring 1998 clearly illustrates theimportance of military power in achieving U.S.national security objectives and stabilizing apotentially volatile situation. The U.S. buildup made itclear to Saddam Hussein that he must comply withUN sanctions and cease hindering UNSCOMinspections or face dire consequences. It

13

also denied him the option of moving to threaten hisneighbors, as he had done in past confrontations withthe international community. Saddam’s agreement toopen the so-called "presidential sites" to UNinspection was a significant step toward ensuring thatIraq’s WMD have been eradicated. It would not havebeen achieved without American diplomacy backedby force. Our decision maintain a higher continuousforce level in the Gulf than we had before this mostrecent confrontation with Iraq will help deter Saddamfrom making further provocations and strengthen theresolve of our coalition partners in the Gulf.

We are continuing to adapt and strengthen ouralliances and coalitions to meet the challenges of anevolving security environment. U.S. military forcesprevent and reduce a wide range of potential conflictsin key regions. An example of such an activity is ourdeployment to the Former Yugoslav Republic ofMacedonia to help prevent the spread of violence tothat country. We assist other countries in improvingtheir pertinent military capabilities, includingpeacekeeping and humanitarian response. Withcountries that are neither staunch friends nor knownfoes, military cooperation often serves as a positivemeans of engagement, building security relationshipstoday that will contribute to improved relationstomorrow.

Our armed forces also serve as a role model formilitaries in emerging democracies around the world.Our 200-year history of strong civilian control of themilitary serves as an example to those countries withhistories of non-democratic governments. Throughmilitary-to-military activities and increasing linksbetween the U.S. military and the militaryestablishments of Partnership for Peace nations, forinstance, we are helping to transform militaryinstitutions in Central and Eastern Europe, as well asin the Newly Independent States of the former SovietUnion.

International Law EnforcementCooperation

As threats to our national security from drugtrafficking, terrorism and international crime increase,development of working relations U.S. and foreignlaw enforcement and judicial agencies will play a vitalrole in shaping law enforcement priorities in thosecountries. Law enforcement agencies must continue

to find innovative ways to develop a concerted, globalattack on the spread of international crime.

Overseas law enforcement presence leveragesresources and fosters the establishment of effectiveworking relationships with foreign law enforcementagencies. U.S. investigators and prosecutors drawupon their experience and background to enlist thecooperation of foreign law enforcement officials,keeping crime away from American shores, enablingthe arrest of many U.S. fugitives and solving seriousU.S. crimes. This presence develops substantiveinternational links by creating personal networks oflaw enforcement professionals dedicated to bringinginternational criminals to justice.

In addition, training foreign law enforcement officersis critical to combating international crime. Suchtraining helps create professional law enforcementorganizations and builds citizen confidence in lawenforcement officers, who understand and operateunder the rule of law. Training also builds a commonperspective and understanding of investigativetechniques that helps shape international lawenforcement priorities. The FBI and other federal lawenforcement agencies have provided extensive lawenforcement training at the International LawEnforcement Academy in Budapest, Hungary andelsewhere around the world. This training has provedto be enormously effective in developing professionallaw enforcement and security services in emergingdemocracies.

Environmental Initiatives

Decisions today regarding the environment andnatural resources can affect our security forgenerations. Environmental threats do not heednational borders and can pose long-term dangers toour security and well-being. Natural resourcescarcities can trigger and exacerbate conflict.Environmental threats such as climate change, ozonedepletion and the transnational movement ofhazardous chemicals and waste directly threaten thehealth of U.S. citizens.We have a full diplomatic agenda, working bilaterallyand multilaterally to respond aggressively toenvironmental threats. The Global EnvironmentalFacility (GEF) is an important instrument for thiscooperation. With 161 member nations, the GEF isspecifically focused on reducing cross-borderenvironmental damage. Our Environmental Security

14

Initiative joins U.S. agencies with foreign partners toaddress regional environmental concerns and therebyreduce the risk to U.S. interests abroad. We havealso undertaken development of an environmentalforecasting system to provide U.S. policymakersadvance warning of environmental stress situationswhich have the potential for significant impact on U.S.interests.

At Kyoto in December 1997, the industrialized nationsof the world agreed for the first time to binding limitson greenhouse gases. The agreement is strong andcomprehensive, covering the six greenhouse gaseswhose concentrations are increasing due to humanactivity. It reflects the commitment of the UnitedStates to use the tools of the free market to tacklethis problem. It will enhance growth and create newincentives for the rapid development of technologiesthrough a system of joint implementation andemissions trading. The Kyoto agreement was a vitalturning point, but we still have a lot of hard workahead. We must press for meaningful participationby key developing nations. Multilateral negotiationsare underway and we will pursue bilateral talks withkey developing nations. We will not submit the Kyotoagreement for ratifica-tion until key developingnations have agreed to participate meaningfully inefforts to address global warming.

Additionally, we seek to accomplish the following:

• achieve increased compliance with the MontrealProtocol through domestic and multilateral effortsaimed at curbing illegal trade in ozone depletingsubstances;

• ratify the Law of the Sea Convention, implementthe UN Straddling Stocks Agreement and help topromote sustainable management of fisheriesworldwide;

• implement the Program of Action on population

growth developed at the 1994 Cairo Conference,lead a renewed global effort to address populationproblems and promote international consensus forstabilizing world population growth;

• expand bilateral forest assistance programs andpromote sustainable management of tropicalforests;

• achieve Senate ratification of the Convention toCombat Desertification;

• negotiate an international agreement to bantwelve persistent organic pollutants, includingsuch hazardous chemicals as DDT;

• promote environment-related scientific researchin other countries so they can better identifyenvironmental problems and develop indigenoussolutions for them;

• increase international cooperation in fightingtransboundary environmental crime, includingtrafficking in protected flora and fauna, hazard-ous waste and ozone-depleting chemicals;

• ratify the Biodiversity Convention and take stepsto prevent biodiversity loss, including support foragricultural research to relieve pressures onforests, working with multilateral developmentbanks and others to prevent biodiversity loss inkey regions, and use of the Convention onInternational Trade in Endangered Species toprotect threatened species; and

• continue to work with the Nordic countries andRussia to mitigate nuclear and non-nuclearpollution in the Arctic, and continue to encourageRussia to develop sound management practicesfor nuclear materials and radioactive waste.

Responding to Threats andCrises

Because our shaping efforts alone cannot guaranteethe international security environment we seek, theUnited States must be able to respond at home andabroad to the full spectrum of threats and crises thatmay arise. Our resources are finite, so we must beselective in our responses, focusing on challengesthat most directly affect our interests and engagingwhere we can make the most difference. Ourresponse might be diplomatic, economic, lawenforcement, or military in nature—or, more likely,some combination of the above. We must use themost appropriate tool or combination of tools—actingin alliance or partnership when our interests areshared by others, but unilaterally when compellingnational interests so demand. At home, we mustforge an effective partnership of Federal, state andlocal government agencies, industry and other privatesector organizations.

15

When efforts to deter an adversary—be it a roguenation, terrorist group or criminal organization—occurin the context of a crisis, they become the leadingedge of crisis response. In this sense, deterrencestraddles the line between shaping the internationalenvironment and responding to crises. Deterrence incrisis generally involves signaling the United States’commitment to a particular country or interest byenhancing our warfighting capability in the theater.Forces in or near the theater may be moved closer tothe crisis and other forces rapidly deployed to thearea. The U.S. may also choose to make additionalstatements to communicate the costs of aggressionor coercion to an adversary, and in some cases maychoose to employ U.S. forces to underline themessage and deter further adventurism.

The American people rightfully play a central role inhow the United States wields its power abroad. TheUnited States cannot long sustain a commitmentwithout the support of the public, and closeconsultations with Congress are important in thiseffort. When it is judged in America’s interest tointervene, we must remain clear in purpose andresolute in execution.

Transnational Threats

Today, American diplomats, law enforcementofficials, military personnel, members of theintelligence community and others are increasinglycalled upon to respond to growing transnationalthreats, particularly terrorism, drug trafficking andinternational organized crime.

Terrorism

To meet the growing challenge of terrorism, PresidentClinton signed Presidential Decision Directive 62 inMay 1998. This Directive creates a new and moresystematic approach to fighting the terrorist threat ofthe next century. It reinforces the mission of themany U.S. agencies charged with roles in defeatingterrorism; it also codifies and clarifies their activities inthe wide range of U.S. counter-terrorism programs,including apprehension and prosecution of terrorists,increasing transportation security, and enhancingincident response capabilities. The Directive will helpachieve the President’s goal of ensuring that we meetthe threat of terrorism in the 21st century.

Our policy to counter international terrorists rests onthe following principles: (1) make no concessions toterrorists; (2) bring all pressure to bear on all statesponsors of terrorism; (3) fully exploit all availablelegal mechanisms to punish international terrorists;and (4) help other governments improve theircapabilities to combat terrorism. Following theseprinciples, we seek to uncover and eliminate foreignterrorists and their support networks in our country;eliminate terrorist sanctuaries; and counter state-supported terrorism and subversion of moderateregimes through a comprehensive program ofdiplomatic, law enforcement, economic, military andintelligence activities. We are working to improveaviation security at airports in the United States andworldwide, to ensure better security for all U.S.transportation systems, and to improve protection forour personnel assigned overseas.

Countering terrorism effectively requires day-to-daycoordination within the U.S. Government and closecooperation with other governments and internationalorganizations. Foreign terrorists will not be allowed toenter the United States, and the full force of legalauthorities will be used to remove foreign terroristsfrom the United States and prevent fundraising withinthe United States to support foreign terrorist activity.We have seen positive results from the increasingintegration of intelligence, diplomatic, military and lawenforcement activities among the Departments ofState, Justice, Defense, Treasury, Energy,Transportation, the CIA and other intelligenceagencies. The Administration is working withCongress to increase the ability of these agencies tocombat terrorism through augmented funding andmanpower.

The United States has made concerted efforts todeter and punish terrorists and remains determined toapprehend and bring to justice those who terrorizeAmerican citizens. In January 1998, the UnitedStates signed the International Convention for theSuppression of Terrorist Bombings. The Conventionfills an important gap in international law byexpanding the legal framework for internationalcooperation in the investigation, prosecution andextradition of persons who engage in such bombings.Whenever possible, we use law enforcement anddiplomatic tools to wage the fight against terrorism.But there have been, and will be, times when lawenforcement and diplomatic tools are simply notenough, when our very national security ischallenged, and when we must take extraordinary

16

steps to protect the safety of our citizens. As long asterrorists continue to target American citizens, wereserve the right to act in self defense by striking attheir bases and those who sponsor, assist or activelysupport them. We exercised that right in 1993 withthe attack against Iraqi intelligence headquarters inresponse to Baghdad’s assassination attempt againstformer President Bush. We exercised that right againin August 1998.

On August 7, 1998, 12 Americans and nearly 300Kenyans and Tanzanians lost their lives, and another5,000 were wounded when our embassies in Nairobiand Dar es Salaam were bombed. Soon afterward,our intelligence community acquired convincinginformation from a variety of reliable sources that thenetwork of radical groups affiliated with Osama binLaden, perhaps the preeminent organizer andfinancier of international terrorism in the world today,planned, financed and carried out the bombings. Thegroups associated with bin Laden come from diverseplaces, but share a hatred for democracy, a fanaticalglorification of violence and a horrible distortion oftheir religion to justify the murder of innocents. Theyhave made the United States their adversaryprecisely because of what we stand for and what westand against.

On August 20, 1998, our Armed Forces carried outstrikes against terrorist facilities and infrastructure inAfghanistan. Our forces targeted one of the mostactive terrorist bases in the world. It contained keyelements of the bin Laden network's infrastructureand has served as a training camp for literallythousands of terrorists from around the globe. Ourforces also attacked a factory in Sudan associatedwith the bin Laden network that was involved in theproduction of materials for chemical weapons. Thestrikes were a necessary and proportionate responseto the imminent threat of further terrorist attacksagainst U.S. personnel and facilities. Afghanistanand Sudan had been warned for years to stopharboring and supporting these terrorist groups.Countries that persistently host terrorists have noright to be safe havens.

Placing terrorism at the top of the diplomatic agendahas increased international information sharing andlaw enforcement efforts. At the June 1997 DenverSummit of the Eight, the leaders of Canada, France,Germany, Italy, Japan, Russia, the United Kingdomand the United States reaffirmed their determinationto combat terrorism in all forms, their opposition to

concessions to terrorist demands and their determi-nation to deny hostage-takers any benefits from theiracts. They agreed to intensify diplomatic efforts toensure that by the year 2000 all States have joinedthe international counterterrorism conventionsspecified in the 1996 UN resolution on measures tocounter terrorism. The eight leaders also agreed tostrengthen the capability of hostage negotiationexperts and counterterrorism response units, toexchange information on technologies to detect anddeter the use of weapons of mass destruction interrorist attacks, to develop means to deter terroristattacks on electronic and computer infrastructure, tostrengthen maritime security, to exchange informa-tion on security practices for international specialevents, and to strengthen and expand internationalcooperation and consultation on terrorism.

International Crime

International crime is a serious and potent threat tothe American people at home and abroad. Drugtrafficking, illegal trade in firearms, financial crimes—such as money laundering, counterfeiting, advancedfee and credit card fraud, and income tax evasion—illegal alien smuggling, trafficking in women andchildren, economic espionage, intellectual propertytheft, computer hacking and public corruption are alllinked to international criminal activity and all have adirect impact on the security and prosperity of theAmerican people.

Efforts to combat international crime can have amuch broader impact than simply halting individualcriminal acts. The efficiency of the market placedepends on transparency and effective lawenforcement, which limit distorting factors such asextortion and corruption. A free and efficient marketimplies not only the absence of state control but alsolimits on unlawful activities that impede rationalbusiness decisions and fair competition. Additionally,the integrity and reliability of the international financialsystem will be improved by standardizing laws andregulations governing financial institutions andimproving international law enforcement cooperationin the financial sector.

To address the increasing threat from these diversecriminal activities, we have formulated anInternational Crime Control Strategy that provides aframework for integrating the federal government

17

response to international crime. The strategy’s majorgoals and initiatives are to:

• Extend our crime control efforts beyond U.S.borders by intensifying activities of lawenforcement and diplomatic personnel abroad toprevent criminal acts and prosecute selectcriminal acts committed abroad.

• Protect U.S. borders by enhancing our inspection,detection, monitoring and interdiction efforts,seeking stiffer criminal penalties for smuggling,and targeting law enforcement resources moreeffectively against smugglers.

• Deny safe haven to international criminals bynegotiating new international agreements forevidence sharing and prompt arrest andextradition of fugitives (including nationals of therequested country), implementing strengthenedimmigration laws to prevent criminals fromentering the United States and provide for theirprompt expulsion when appropriate, andpromoting increased cooperation with foreign lawenforcement authorities.

• Counter international financial crime bycombating money laundering and reducingmovement of criminal proceeds, seizing theassets of international criminals, enhancingbilateral and multilateral cooperation againstfinancial crime, and targeting offshore sources ofinternational fraud, counterfeiting, electronicaccess device schemes, income tax evasion andother financial crimes.

• Prevent criminal exploitation of international tradeby interdicting illegal technology exports, prevent-ing unfair and predatory trade practices, protect-ing intellectual property rights, countering indus-trial theft and economic espionage, and enforcingimport restrictions on harmful substances,dangerous organisms and protected species. Infiscal year 1997, the Customs Service seized $59million in goods and $55 million in currency beingtaken out of the country illegally.

• Respond to emerging international crime threatsby disrupting new activities of internationalorganized crime groups, enhancing intelligenceefforts, reducing trafficking in human beings(involuntary servitude, alien smuggling, documentfraud and denial of human rights), crimes against

children, and increasing enforcement effortsagainst high technology and computer-relatedcrime.

• Foster international cooperation and the rule oflaw by establishing international standards, goalsand objectives to combat international crime andby actively encouraging compliance, improvingbilateral cooperation with foreign governmentsand law enforcement authorities, expanding U.S.training and assistance programs in lawenforcement and administration of justice, andstrengthening the rule of law as the foundation fordemocratic government and free markets.

The growing threat to our security from transnationalcrime makes international law enforcement coopera-tion vital. We are negotiating and implementing up-dated extradition and mutual legal assistance treatiesthat reflect the changing nature of international crimeand prevent terrorists and criminals from exploitingnational borders to escape prosecution. Moreover,since the primary motivation of most internationalcriminals is greed, powerful asset seizure, forfeitureand money laundering laws are key tools for takingaction against the financial underpinnings of interna-tional crime. Increasing our enforcement powersthrough bilateral and multilateral agreements andefforts makes it harder for criminals to enjoy their ill-gotten gains.At the Birmingham Summit in May 1998, the leadersof the G-8 adopted a wide range of measures tostrengthen the cooperative efforts againstinternational crime that they launched at their summitin Lyon two years ago. They agreed to increasecooperation on transnational high technology crime,money laundering and financial crime, corruption,environmental crimes, and trafficking in drugs,firearms and women and children. They also agreedto fully support negotiations on a UN Convention onTransnational Organized Crime, which will broadenmany of the efforts underway among the G-8 to therest of the international community.

No area of criminal activity has greater internationalimplications than high technology crime because ofthe global nature of information networks. Computerhackers and other cyber-criminals are not hamperedby international boundaries, since information andtransactions involving funds or property can betransmitted quickly and covertly via telephone andinformation systems. Law enforcement faces difficultchallenges in this area, many of which are impossible

18

to address without international consensus andcooperation. We seek to develop and implement newagreements with other nations to address hightechnology crime, particularly cyber-crime.

We are making a concerted effort at home andabroad to shut down the illicit trade in firearms,ammunition and explosives that fuels the violenceassociated with terrorism, drug trafficking andinternational crime. The President has signedlegislation amending the Arms Export Control Act toexpand our authority to monitor and regulate theactivities of arms brokers and we have intensifiedreviews of applications for licenses to export firearmsfrom the United States to ensure that they are notdiverted to illicit purposes. The Bureau of Alcohol,Tobacco and Firearms (ATF) has tightened up proofof residency requirements for aliens purchasingfirearms from dealers in the United States, and ATFand the Customs Service have intensified theirinterdiction and investigative efforts at U.S. borders.

In the international arena, the United States isworking with its partners in the G-8 and through theUN Crime Commission to expand cooperation oncombating illicit arms trafficking. In November 1997,the United States and its partners in the Organizationof American States (OAS) signed the Inter-AmericanConvention Against the Illicit Manufacturing of andTrafficking in Firearms—the first internationalagreement designed to prevent, combat anderadicate illegal trafficking in firearms, ammunitionand explosives. We are now negotiating aninternational agreement that would globalize the OASconvention. Additionally, the ATF and CustomsService have provided training and assistance toother nations on tracing firearms, combating internalsmuggling and related law enforcement topics.

Drug Trafficking

We have shown that with determined and relentlessefforts, we can make significant progress against thescourge of drug abuse and drug trafficking. In theUnited States, drug use has dropped 49 percentsince 1979. Recent studies show that drug use byour young people is stabilizing, and in somecategories, declining. Overall, cocaine use hasdropped 70 percent since 1985 and the crackepidemic has begun to recede. Today, Americansspend 37 percent less on drugs than a decade ago.

That means over $34 billion reinvested in our society,rather than squandered on drugs.

The aim of the U.S. National Drug Control Strategy isto cut drug availability in the United States by halfover the next 10 years—and reduce theconsequences of drug use and trafficking by 25percent over the same period—through expandedprevention efforts, improved treatment programs,strengthened law enforcement and tougherinterdiction. Our strategy recognizes that, at homeand abroad, prevention, treatment and economicalternatives must be integrated with intelligencecollection, law enforcement and interdiction. Itsultimate success will require concerted efforts by thepublic, all levels of government and the private sectortogether with other governments, private groups andinternational organizations.

Domestically, we seek to educate and enableAmerica’s youth to reject illegal drugs, increase thesafety of America’s citizens by substantially reducingdrug-related crime and violence, reduce health andsocial costs to the public of illegal drug use, andshield America’s air, land and sea frontiers from thedrug threat. Working with Congress and the privatesector, the Administration has launched a majorantidrug youth media campaign and will seek toextend this program through 2002. Withcongressional support and matching dollars from theprivate sector, we will commit to a five-year, $2 billionpublic-private partnership to educate our children toreject drugs.

In concert with our allies abroad, we seek to stopdrug trafficking by reducing cultivation of drug-producing crops, interdicting the flow of drugs at thesource and in transit (particularly in Central and SouthAmerica, the Caribbean, Mexico and Southeast Asia),and stopping drugs from entering our country. TheStrategy includes efforts to strengthen democraticinstitutions and root out corruption in source nations,prosecute major international drug traffickers anddestroy trafficking organizations, prevent moneylaundering and use of commercial air and maritimetransportation for drug smuggling, and eradicateillegal drug crops and encourage alternate cropdevelopment or alternative employment in sourcenations. We seek to achieve a counterdrug alliancein this hemisphere, one that could serve as a modelfor enhanced cooperation in other regions.

19

The United States is aggressively engaginginternational organizations, financial institutions andnon-governmental organizations in counternarcoticscooperation. At the Birmingham Summit in May1998, the leaders of the G-8 endorsed the principle ofshared responsibility for combating drugs, includingcooperative efforts focused on both eradication anddemand reduction. They agreed to reinforcecooperation on reducing demand and curbingtrafficking in drugs and chemical precursors. Theyalso agreed on the need for a global strategy toeradicate illicit drugs. The United States supports theUN International Drug Control Program’s goal ofdramatically reducing coca and opium poppycultivation by 2008 and the program’s efforts tocombat drug production, trafficking and abuse insome of the most remote regions of the world. At theUN General Assembly Special Session on drugtrafficking and abuse in June 1998, President Clintonand other world leaders strengthened existinginternational counterdrug institutions, reconfirmed theglobal partnership against drug abuse and stressedthe need for a coordinated international approach tocombating drug trafficking.

Emerging Threats at Home

Due to our military superiority, potential enemies,whether nations or terrorist groups, may be morelikely in the future to resort to terrorist acts or otherattacks against vulnerable civilian targets in theUnited States instead of conventional militaryoperations. At the same time, easier access tosophisticated technology means that the destructivepower available to terrorists is greater than ever.Adversaries may thus be tempted to useunconventional tools, such as WMD or informationattacks, to threaten our citizens, and critical nationalinfrastructures.

Managing the Consequences of WMDIncidents

Presidential Decision Directive 62, signed in May1998, established an overarching policy andassignment of responsibilities for responding toterrorist acts involving WMD. The Federal Govern-ment will respond rapidly and decisively to anyterrorist incident in the United States, working withstate and local governments to restore order anddeliver emergency assistance. The Department ofJustice, acting through the FBI, has the overall lead inoperational response to a WMD incident. The

Federal Emergency Management Agency (FEMA)supports the FBI in preparing for and responding tothe consequences of a WMD incident.

The Domestic Terrorism Program is integrating thecapabilities and assets of a number of Federalagencies to support the FBI, FEMA and state andlocal governments in consequence management.The program’s goal is to build a capability in 120major U.S. cities for first responders to be able todeal with WMD incidents by 2002. In fiscal year1997, the Defense Department provided training tonearly 1,500 metropolitan emergency responders—firefighters, law enforcement officials and medicalpersonnel—in four cities. In fiscal year 1998, theprogram will reach 31 cities. Eventually, this trainingwill reach all cities via the Internet, video and CDROM.

Under the Domestic Terrorism Program, the DefenseDepartment will maintain military units to serve asaugmentation forces for weapons of mass destructionconsequence management and to help maintainproficiency of local emergency responders throughperiodic training and exercises. The National Guard,with its mission and long tradition of responding tonational emergencies, has an important role to play inthis effort. The President announced in May 1998that the Defense Department will train Army NationalGuard and reserve elements to assist state and localauthorities to manage the consequences of a WMDattack. This training will be given to units inMassachusetts, New York, Pennsylvania, Georgia,Illinois, Texas, Missouri, Colorado, California andWashington.

The Domestic Terrorism Program enlists the supportof other agencies as well. The Department of Energyplans for and provides emergency responder trainingfor nuclear and radiological incidents. TheEnvironmental Protection Agency plans for andprovides emergency responder training for hazardousmaterials and environmental incidents. TheDepartment of Health and Human Services, throughthe Public Health Service and with the support of theDepartment of Veterans Affairs and other Federalagencies, plans and prepares for a national responseto medical emergencies arising from the terrorist useof weapons of mass destruction.

The threat of biological weapons is particularlytroubling. In his May 1998 commencement speech atAnnapolis, the President announced a

20

comprehensive strategy to protect our civilianpopulation from the scourge of biological weapons.There are four critical areas of focus:

• First, if a hostile nation or terrorists releasebacteria or viruses to harm Americans, we mustbe able to identify the pathogens with speed andcertainty. We will upgrade our public health andmedical surveillance systems. Theseimprovements will benefit not only ourpreparedness for a biological weapons attack—they will enhance our ability to respond quicklyand effectively to outbreaks of emerginginfectious diseases.

• Second, our emergency response personnelmust have the training and equipment to do theirjobs right. As described above, we will helpensure that federal, state and local authoritieshave the resources and knowledge they need todeal with a crisis.

• Third, we must have the medicines and vaccinesneeded to treat those who fall sick or preventthose at risk from falling ill because of a biologicalweapons attack. The President will propose thecreation of a civilian stockpile of medicines andvaccines to counter the pathogens most likely tobe in the hands of terrorists or hostile powers.

• Fourth, the revolution in biotechnology offersenormous possibilities for combating biologicalweapons. We will coordinate research anddevelopment efforts to use the advances ingenetic engineering and biotechnology to createthe next generation of medicines, vaccines anddiagnostic tools for use against these weapons.At the same time, we must continue our efforts toprevent biotechnology innovations from beingapplied to development of ever more difficult tocounter biological weapons.

Protecting Critical Infrastructures

Our military power and national economy areincreasingly reliant upon interdependent criticalinfrastructures—the physical and information systemsessential to the operations of the economy andgovernment. They include telecommunications,energy, banking and finance, transportation, watersystems and emergency services. It has long beenthe policy of the United States to assure the continuity

and viability of these critical infrastructures. Butadvances in information technology and competitivepressure to improve efficiency and productivity havecreated new vulnerabilities to both physical andinformation attacks as these infrastructures havebecome increasingly automated and interlinked. If wedo not implement adequate protective measures,attacks on our critical infrastructures and informationsystems by nations, groups or individuals might becapable of significantly harming our military powerand economy.

To enhance our ability to protect these criticalinfrastructures, the President signed PresidentialDecision Directive 63 in May 1998. This directivemakes it U.S. policy to take all necessary measuresto swiftly eliminate any significant vulnerability tophysical or information attacks on our criticalinfrastructures, especially our information systems.We will achieve and maintain the ability to protectthem from intentional acts that would significantlydiminish the abilities of the Federal Government toperform essential national security missions and toensure the general public health and safety. We willprotect the ability of state and local governments tomaintain order and to deliver minimum essentialpublic services. And we will work with the privatesector to ensure the orderly functioning of theeconomy and the delivery of essentialtelecommunications, energy, financial andtransportation services. Any interruption ormanipulation of these critical functions must be brief,infrequent, manageable, isolated and minimallydetrimental to the welfare of the United States.

The National Infrastructure Protection Center (NIPC)integrates relevant federal, state, and local govern-ment entities as well as the private sector, andprovides the national focal point for gatheringinformation on threats to the infrastructures. It servesas a national resource for identifying and assessingthreats, warning about vulnerabilities, and conductingcriminal investigations. The NIPC will also coordinatethe federal government’s response to an incident,including mitigation, investigation and monitoringreconstruction efforts.

Smaller-Scale Contingencies

Smaller-scale contingency operations encompass thefull range of military operations short of major theaterwarfare, including humanitarian assistance, peace

21

operations, enforcing embargoes and no-fly zones,evacuating U.S. citizens, reinforcing key allies, andlimited strikes and intervention. These operations willlikely pose the most frequent challenge for U.S.forces and cumulatively require significantcommitments over time. These operations will alsoput a premium on the ability of the U.S. military towork closely and effectively with other U.S.Government agencies, non-governmentalorganizations, regional and international securityorganizations and coalition partners.

Under certain circumstances the U.S. military mayprovide appropriate and necessary humanitarianassistance. Those circumstances are when a naturalor manmade disaster dwarfs the ability of the normalrelief agencies to respond or the need for relief isurgent, and the military has a unique ability torespond quickly with minimal risk to American lives.In these cases, the United States may intervene whenthe costs and risks are commensurate with thestakes involved and when there is reason to believethat our action can make a real difference. Suchefforts by the United States and the internationalcommunity will be limited in duration, have a clearlydefined end state and be designed to give theaffected country the opportunity to restore its ownbasic services. This policy recognizes that the U.S.military normally is not the best tool for addressinglong-term humanitarian concerns and that, ultimately,responsibility for the fate of a nation rests with its ownpeople.

At times it will be in our national interest to proceed inpartnership with others to preserve, maintain andrestore peace. American participation in peaceoperations takes many forms, such as the NATO-ledcoalition in Bosnia, the American-led UN force inHaiti, the Military Observer Mission Ecuador and Peru(MOMEP), and our participation in the multilateralcoalition operation in the Sinai. The question ofcommand and control in multinational contingencyoperations is particularly critical. Under nocircumstances will the President ever relinquish hisconstitutionally mandated command authority overU.S. forces, but there may be times when it is in ourinterest to place U.S. forces under the temporaryoperational control of a competent allied or UnitedNations commander.

Not only must the U.S. military be prepared tosuccessfully conduct multiple smaller-scalecontingencies worldwide, it must be prepared to do soin the face of challenges such as terrorism,information operations and the threat or use ofweapons of mass destruction. U.S. forces must alsoremain prepared to withdraw from contingencyoperations if needed to deploy to a major theater war.Accordingly, appropriate U.S. forces will be kept at ahigh level of readiness and will be trained, equippedand organized to be multi-mission capable.

22

Major Theater Warfare

Fighting and winning major theater wars is theultimate test of our Total Force—a test at which itmust always succeed. For the foreseeable future, theUnited States, preferably in concert with allies, mustremain able to deter and defeat large-scale, cross-border aggression in two distant theaters inoverlapping time frames. Maintaining such acapability deters opportunism elsewhere while we areheavily committed to deterring or defeatingaggression in one theater, or while conductingmultiple smaller-scale contingencies and engagementactivities in other theaters. It also provides a hedgeagainst the possibility that we might encounter threatslarger or more difficult than we expected. A strategyfor deterring and defeating aggression in two theatersensures we maintain the capability and flexibility tomeet unknown future threats, while continued globalengagement helps preclude such threats fromdeveloping.

Fighting and winning major theater wars entails atleast three particularly challenging requirements.First, we must maintain the ability to rapidly defeatinitial enemy advances short of enemy objectives intwo theaters, in close succession. The United Statesmust maintain this ability to ensure that we can seizethe initiative, minimize territory lost before an invasionis halted and ensure the integrity of our warfightingcoalitions. To meet this challenge, the forces thatwould be first to respond to an act of aggression arekept at full readiness, and the forces that follow themare kept at a level that supports their being ready todeploy and go into action when called for in theoperations plan for the contingency.Second, the United States must plan and prepare tofight and win under conditions where an adversarymay use asymmetric means against us—unconventional approaches that avoid or undermineour strengths while exploiting our vulnerabilities. Thisis of particular importance and a significant challenge.Because of our dominance in the conventionalmilitary arena, adversaries who challenge the UnitedStates are likely to use asymmetric means, such asWMD, information operations or terrorism.

The WMD threat to our forces is receiving the specialattention it deserves. We are enhancing thepreparedness of our Armed Forces to effectivelyconduct sustained operations despite the presence,threat or use of WMD. Such preparedness requiresthe capability to deter, detect, protect against andrespond to the use of WMD when necessary. TheAdministration has significantly increased funding toenhance biological and chemical defense capabilitiesand has begun the vaccination of military personnelagainst the anthrax bacteria, the most fearedbiological weapon threat today. These effortsreinforce our deterrent posture and complement ournonproliferation efforts by reducing the political andmilitary value of WMD and their means of delivery.

We are enhancing our ability to defend against hostileinformation operations, which could in the future takethe form of a full-scale, strategic information attackagainst our critical national infrastructures,government and economy—as well as attacksdirected against our military forces. As othercountries develop their capability to conduct offensiveinformation operations, we must ensure that ournational and defense information infrastructures arewell protected and that we can quickly recognize,defend against and respond decisively to aninformation attack.

Third, our military must also be able to transition tofighting major theater wars from a posture of globalengagement—from substantial levels of peacetimeengagement overseas as well as multiple concurrentsmaller-scale contingencies. Withdrawing from suchoperations would pose significant political andoperational challenges. Ultimately, however, theUnited States must accept a degree of riskassociated with withdrawing from contingencyoperations and engagement activities in order toreduce the greater risk incurred if we failed torespond adequately to major theater wars.

Our priority is to shape effectively the internationalenvironment so as to deter the onset of major theaterwars. Should deterrence fail, however, the UnitedStates will defend itself, its allies and partners with allmeans necessary.

23

Preparing Now for anUncertain Future

We must prepare for an uncertain future even as weaddress today’s security problems. This requires thatwe keep our forces ready for shaping and respondingrequirements in the near term, while at the same timeevolving our unparalleled capabilities to ensure wecan effectively shape and respond in the future.

The 1997 Quadrennial Defense Review (QDR) strucka fine balance between near-term readiness, long-term modernization and quality of life improvementsfor our men and women in uniform. A key element ofthis balance was our decision to increase funding formodernization to protect long-term readiness. In thiscontext we decided to make modest reductions inpersonnel, primarily in support positions, across theforce structure. But in all these decisions we ensuredthat the high readiness levels of our forward-deployedand "first-to-fight" forces were maintained. Whilepreparing for the challenges of the next century, thereadiness of today’s force remains one of our highestpriorities. That is why the Administration, inpartnership with the Congress, will continue to assurewe maintain the best-trained, best-equipped andbest-led military force in the world for the 21st

Century.

Government-wide, we will continue to fosterinnovative approaches, capabilities, technologies andorganizational structures to better protect Americanlives, property and interests at home and abroad. Inour defense efforts, we will continue to explore newapproaches for integrating the Active and Reservecomponents into a Total Force optimum for futuremissions, modernize our forces, ensure the quality ofmilitary personnel, and take prudent steps to positionourselves to effectively counter unlikely but significantfuture threats. We will also continue our rapidlygrowing efforts to integrate and improve the capabilityof Federal, state and local agencies—and our privatesector partners—to protect against and respond totransnational threats at home.

The military challenges of the 21st century, coupledwith the aging of key elements of the U.S. forcestructure, require a fundamental transformation of ourmilitary forces. Although future threats are fluid andunpredictable, U.S. forces are likely to confront avariety of challenges across the spectrum of conflict,including efforts to deny our forces access to critical

regions, urban warfare, information warfare, andattacks from chemical and biological weapons. Tomeet these challenges, we must transform our forcesby exploiting the Revolution in Military Affairs.Improved intelligence collection and assessmentcoupled with modern information processing,navigation and command and control capabilities areat the heart of the transformation of our warfightingcapabilities. Through a carefully planned and focusedmodernization program, we can maintain ourtechnological superiority and replace Cold War-eraequipment with new systems capable of taking fulladvantage of emerging technologies. With theseadvanced systems, the U.S. military will be able torespond rapidly to any contingency, dominate thebattlespace and conduct day-to-day operations muchmore efficiently and effectively.

To support this transformation of our military forces,we will work cooperatively with the Congress to enactlegislation to implement the Defense ReformInitiative, which will free up resources through aRevolution in Business Affairs. This revolutionincludes privatization, acquisition reform andelimination of excess infrastructure through twoadditional base realignment and closure (BRAC)rounds in 2001 and 2005. The Revolution in MilitaryAffairs and the Revolution in Business Affairs areinterlocking revolutions: With both, and only with both,we will ensure that U.S. forces continue to haveunchallenged superiority in the 21st century.

It is critical that we renew our commitment toAmerica’s diplomacy—to ensure we have thediplomatic representation required to support ourglobal interests. This is central to our ability to remainan influential voice on international issues that affectour well-being. We will preserve that influence solong as we retain the diplomatic capabilities, militarywherewithal and economic base to underwrite ourcommitments credibly.

We must continue aggressive efforts to constructappropriate twenty-first century national securityprograms and structures. The Defense Department,State Department and other international affairsagencies are similarly reorganizing to confront the

24

pressing challenges of tomorrow as well as those weface today. Federal, state and local law enforcementand emergency response agencies are enhancingtheir ability to deal with terrorist threats. Governmentand industry are exploring ways to protect criticalnational infrastructures. We will continue lookingacross our government to see if during this time oftransition we are adequately preparing to meet thenational security challenges of the next century.

Without preparing today to face the pressingchallenges of tomorrow, our ability to exert globalleadership and to create international conditionsconducive to achieving our national goals would be indoubt. Thus, we must strive to strike the rightbalance between the near-term readinessrequirements of shaping and responding and thelonger-term transformation requirements associatedwith preparing now for national security challenges inthe twenty-first century.

Overarching Capabilities

Certain capabilities and technologies are critical toprotecting the United States itself and to theworldwide application of U.S. national power forshaping the international environment and respondingto the full spectrum of threats and crises.

Quality People

Quality people—military and civilian—are our mostcritical asset. The quality of our men and women inuniform will be the deciding factor in all future militaryoperations. In order to fully realize the benefits of thetransformation of our military forces, we must ensurethat we remain the most fully prepared and besttrained fighting force in the world. Our people willcontinue to remain the linchpin to successfullyexploiting our military capabilities across thespectrum of conflict. To ensure the quality of ourmilitary personnel, we will continue to place thehighest priority on initiatives and programs thatsupport recruiting, quality of life, and the training andeducation of our men and women in uniform.

We must also have quality civilian personnel in thegovernment agencies that support our nationalsecurity, from our diplomatic corps, to the intelligencecommunity and law enforcement. Effectivelycountering transnational threats requires personnel

with a variety of highly specialized skills that either arenot readily available in the private sector, or are inhigh demand in the private sector. Persons withadvanced training in information technology are aprominent example. Recruiting and retaining qualitypeople with requisite skills is a significant challenge,and we are exploring innovative approaches forensuring that government personnel needs are met.

Intelligence, Surveillance andReconnaissance

Our intelligence, surveillance, and reconnaissance(ISR) capabilities are critical instruments forimplementing our national security strategy. The U.S.intelligence community provides critical support to thefull range of our activities abroad—diplomatic,military, law enforcement, and environmental.Comprehensive collection and analytic capabilitiesare needed to provide warning of threats to U.S.national security, give analytical support to the policyand military communities, provide near-real timeintelligence in times of crisis while retaining globalperspective, identify opportunities for advancing ournational interests, and maintain our informationadvantage in the international arena.

ISR operations must cover a wider range of threatsand policy needs than ever before. We place thehighest priority on preserving and enhancingintelligence capabilities that provide information onstates and groups that pose the most serious threatsto U.S. security. Current intelligence priorities includestates whose policies and actions are hostile to theUnited States; countries or other entities that possessstrategic nuclear forces or control nuclear weapons,other WMD or nuclear fissile materials; transnationalthreats, including terrorism, international crime anddrug trafficking; potential regional conflicts that mightaffect U.S. national security interests; intensifiedcounterintelligence against foreign intelligencecollection inimical to U.S. interests, includingeconomic and industrial espionage; informationwarfare threats; and threats to U.S. forces andcitizens abroad. Intelligence support is also requiredto develop and implement U.S. policies to promotedemocracy abroad, identify threats to our informationand space systems, monitor arms controlagreements, support humanitarian efforts and protectthe environment.

25

Our ISR capabilities include world-wide collection ofnews and media broadcasts, reporting frominformants close to important events abroad, space-based and airborne collection of imagery and signalsintelligence, and integrated, in-depth analysis of allthese sources by highly skilled analysts. Exploitingour tremendous advantage in continuous, non-intrusive, space-based imaging and informationprocessing, the ISR system provides the ability tomonitor treaty compliance, military movements andthe development, testing and deployment of weaponsof mass destruction. Using ISR products to supportdiplomatic and military action contributes to globalsecurity by demonstrating that the United States is aninvaluable ally, or would be a formidable foe.

U.S. intelligence capabilities were reviewed twice byindependent panels in 1998. In the wake of the May1998 Indian nuclear tests, retired Admiral David E.Jeremiah led a panel that examined the IntelligenceCommunity’s ability to detect and monitor foreignnuclear weapons programs. In July 1998, theCommission to Assess the Ballistic Missile Threat tothe United States issued a report on the challengeswe face in attempting to monitor the progress offoreign ballistic missile programs. Both reviewsidentified specific areas of intelligence collection andanalysis that need improvement. The IntelligenceCommunity is taking aggressive action to improve itscapabilities in those areas and we will work closelywith the Congress to address the recommendationsin the two reports.

While our ISR capabilities are increasingly enhancedby and dependent upon advanced technologies, thereremains no substitute for informed, subjective humanjudgment. We must continue to attract and retainenough highly qualified people to provide humanintelligence collection, translation and analysis inthose many emerging areas where there simply is notechnological substitute, and we must forge stronglinks to the private enterprises and public institutionswhose expertise is especially critical. Increasedcooperation among the agencies in the IntelligenceCommunity and the fusion of all intelligencedisciplines provide the most effective collection andanalysis of data on high priority intelligence issues.

We must also be mindful of the continuing need foreffective security and counterintelligence programs.To protect sensitive national security information, wemust be able to effectively counter the collectionefforts of foreign intelligence services through

vigorous counterintelligence efforts, comprehensivesecurity programs and constant evaluation of theintentions and targets of foreign intelligence services.Counterintelligence remains integral to and underliesthe entire intelligence mission, whether the threatcomes from traditional espionage or the theft of ourvital economic information. Countering foreign effortsto gather technological, industrial and commercialinformation requires close cooperation betweengovernment and the private sector. Awareness of thethreat and adherence to prescribed personnel,information and physical security standards andprocedures, based on risk management principles,are critical.

Space

We are committed to maintaining our leadership inspace. Unimpeded access to and use of space isessential for protecting U.S. national security,promoting our prosperity and ensuring our well-beingin countless ways.

Space has emerged in this decade as a new globalinformation utility with extensive political, diplomatic,military and economic implications for the UnitedStates. We are experiencing an ever-increasingmigration of capabilities to space as the world seeks toexploit the explosion in information technology.Telecommunications, telemedicine, internationalfinancial transactions and global entertainment, news,education, weather and navigation all contribute directlyto the strength of our economy—and all are dependentupon space capabilities. Over 500 US companies aredirectly involved in the space industry, with 1996revenues of $77 billion projected to reach $122 billionby 2000.

Our policy is to promote development of the full rangeof space-based capabilities in a manner that protectsour vital security interests. We will deter

26

threats to our interests in space and, if deterrencefails, defeat hostile efforts against U.S. access to anduse of space. We will also maintain the ability tocounter space systems and services that could beused for hostile purposes against our ground, air andnaval forces, our command and control system, orother capabilities critical to our national security. Weare carefully regulating U.S. commercial space-basedremote sensing to ensure that space imagery is notused to the detriment of U.S. security interests. Atthe same time, we will continue efforts to prevent thespread of weapons of mass destruction to space, andcontinue to form global partnerships with other space-faring nations across the spectrum of economic,political, environmental and security issues. Theseefforts require a balanced approach across all typesof U.S. space assets—national security, military, andcommercial. We will remain vigilant to ensure that wedo not compromise our technological superiority whilepromoting partnerships in space.

Missile Defense

We have robust missile defense development anddeployment programs focused on systems to protectdeployed U.S. forces and our friends and alliesagainst theater ballistic missiles armed withconventional weapons or WMD. These systems willcomplement and strengthen our deterrence andnonproliferation efforts by reducing incentives todevelop or use WMD. Significantly, PresidentsClinton and Yeltsin agreed at the Helsinki Summit tomaintain the ABM Treaty as a cornerstone ofstrategic stability, yet adapt it to meet the threatposed by shorter-range missiles—a threat we seek tocounter with U.S. theater missile defense (TMD)systems. The ABM-TMD demarcation agreementsigned in New York on September 26, 1997 helpsclarify the distinction between ABM systems, whichthe ABM Treaty limits, and TMD systems, which theABM Treaty does not limit. The demarcationagreement does not limit any current U.S. core TMDprograms, all of which have been certified by theUnited States as compliant with the ABM Treaty.

Although it remains the view of the intelligencecommunity that it is unlikely that countries other thanRussia, China and perhaps North Korea will deployan ICBM capable of reaching any part of the U.S.before 2010, we are developing, consistent with ourobligations under the ABM Treaty, a limited nationalmissile defense capability that would position the U.S.

to make a decision as early as the year 2000 todeploy within three years a credible national missiledefense system.

National Security EmergencyPreparedness

We will do all we can to deter and prevent destructiveand threatening forces such as terrorism, WMD use,disruption of our critical infrastructures, naturaldisasters and regional or state-centered threats fromendangering our citizens. But if an emergencyoccurs, we must also be prepared to respondeffectively at home and abroad to protect lives andproperty, mobilize the personnel, resources andcapabilities necessary to effectively handle theemergency, and ensure the survival of our institutionsand national infrastructures. National securityemergency preparedness is imperative, andcomprehensive, all-hazard emergency planning byFederal departments, agencies and the militarycontinues to be a crucial national securityrequirement.

Overseas Presence and PowerProjection

Due to our alliance commitments and other vitalinterests overseas, we must have a force structureand deployment posture that enable us to success-fully conduct military operations across the spectrumof conflict, often in theaters distant from the UnitedStates. Maintaining a substantial overseas presencepromotes regional stability by giving form andsubstance to our bilateral and multilateral securitycommitments and helps prevent the development ofpower vacuums and instability. It contributes todeterrence by demonstrating our determination todefend U.S., allied, and friendly interests in criticalregions and better positions the United States torespond rapidly to crises. Equally essential iseffective and efficient global power projection, whichis the key to the flexibility demanded or our forces andultimately provides our national leaders with moreoptions in responding to potential crises and conflicts.Being able to project power allows us to shape, deter,and respond even when we have no permanentpresence or a limited infrastructure in the region.

27

Extensive transportation, logistics and command,control, communications and intelligence (C3I)capabilities are unique U.S. strengths that enhanceour conventional deterrent and helps to shape theinternational environment. Strategic mobility allowsthe United States to be first on the scene withassistance in many national or international crisesand is a key to successful American leadership andengagement. The deployment of US andmultinational forces requires maintaining andensuring access to sufficient fleets of aircraft, ships,vehicles and trains, as well as bases, ports,prepositioned equipment and other infrastructure.The United States must have a robust DefenseTransportation System, including both military assetsand U.S. flag commercial sealift and airlift, to remainactively engaged in world affairs.

Our need for strategic mobility to deploy our forcesoverseas is one of the primary reasons we arecommitted to gaining Senate advice and consent toratification of the Law of the Sea Convention. Needfor this treaty arose from the breakdown of customaryinternational law as more and more nationsunilaterally declared ever larger territorial seas andother claims over the oceans that threatened theglobal access and freedom of navigation that theUnited States must have to protect its vital nationalinterests. In addition to lending the certainty of therule of law to an area critical to our national security,the treaty protects our economic interests andpreserves our leadership in global ocean policy. TheLaw of the Sea Convention thus buttresses thestrategic advantages that the United States gainsfrom being a global power.

Promoting ProsperityThe second core objective of our national securitystrategy is to promote America’s prosperity throughefforts at home and abroad. Our economic andsecurity interests are inextricably linked. Prosperity athome depends on stability in key regions with which wetrade or from which we import critical commodities,such as oil and natural gas. Prosperity also demandsour leadership in international development, financialand trade institutions. In turn, the strength of ourdiplomacy, our ability to maintain an unrivaled militaryand the attractiveness of our values abroad depend inlarge part on the strength of our economy.

Strengthening MacroeconomicCoordination

As national economies become more integratedinternationally, the United States cannot thrive inisolation from developments abroad. Our economichealth is vulnerable to disturbances that originateoutside our borders. As such, cooperation with otherstates and international organizations is vital toprotecting the health of the global economic systemand responding to financial crises.

The recent financial troubles in Asia havedemonstrated that global financial markets dominatedby private capital flows provide both immenseopportunities and great challenges. Developing waysto strengthen the international financial architecture isan urgent and compelling challenge. At theNovember 1997 Asia Pacific Economic CooperationForum (APEC) meeting, President Clinton and theother APEC leaders agreed to hold a series ofmeetings of finance ministers and central bankgovernors to address the Asian financial crisis andinternational financial reform. The meetings began inFebruary 1998 with representatives from 22 countriesand observers from the major international financialinstitutions. The on-going efforts of this group,commonly referred to as the Willard Group or G-22,has helped to identify measures to prevent and bettermanage financial crises and reform the internationalfinancial system.

The ultimate objective of our reform efforts is astable, resilient global financial system that promotesstrong global economic growth providing benefitsbroadly to workers and investors in all countries.International financial institutions, particularly theInternational Monetary Fund (IMF), have a critical roleto play in this effort by promoting greater opennessand transparency, by building strong national financialsystems, and by creating mechanisms so that theprivate sector shares more fully in the responsibilityfor preventing and resolving crises.

Openness and Transparency: For capital to flowfreely and safely to where it can be used mostefficiently to promote growth, high quality informationabout each economy and investment opportunitymust also be freely available. The IMF introduced theSpecial Data Dissemination Standard (SDDS) in 1996to improve the information collection and publicationpractices of countries accessing international capital

28

markets. At present, 45 countries subscribe to theSDDS, but we need to encourage those IMFmembers who do not subscribe but seek access tointernational capital markets—particularly emergingmarket economies—to participate in the SDDS.International financial institutions also have aresponsibility to make their activities open andtransparent as a means of enhancing their credibilityand accountability. The IMF recently has shownleadership in promoting openness and transparency;however, more needs be done in this area.

Financial Sector Reform: The IMF's recent review ofthe Asian crisis experience highlighted the key roleplayed by the domestic financial sector as the flashpoint and transmission mechanism for the crisis andcontagion. Rapid growth and expanding access tointernational capital had run ahead of thedevelopment in countries in trouble of a genuinecredit culture to assess risk and channel investmentefficiently and of an effective financial sectorregulatory and supervisory mechanism. The situationwas further exacerbated by inconsistentmacroeconomic policies, generous explicit andimplicit government guarantees, significant injectionsof public funds to provide liquidity support to weakinstitutions, and to some extent capital controls thatdistorted the composition of capital flows.

Crisis Resolution: Our efforts to reduce the risks ofcrises caused by poor policy or investor decisionsneed to be complemented by measures to equipinvestors, governments and the international financialsystem with the means to deal with those crises thatdo occur. The IMF plays the central role in thesystem by providing conditional internationalassistance to give countries the breathing room tostabilize their economies and restore marketconfidence. Two U.S.-inspired initiatives haveenhanced the IMF's role: the Emergency FinancingMechanism, which provides for rapid agreement toextraordinary financing requests in return for moreintense regular scrutiny, and the SupplementalReserve Facility, which enables the IMF to lend atpremium rates in short-term liquidity crises andimprove borrower incentives. To fulfill its crisisresolution responsibility, the IMF must have adequateresources. We are concerned that IMF liquidity hasfallen to dangerously low levels that could impair theFund's capacity to respond to renewed pressures andmeet normal demands. The Administration is makingan intensive effort to obtain the necessary

Congressional approval to meet our obligations to theIMF.

Recent crises have brought home that in a globalfinancial market we need to find more effectivemechanisms for sharing with the private sector theburden of managing such problems. In a world inwhich trillions of dollars flow through internationalmarkets every day, there is simply not going to beenough official financing to meet the crises that couldtake place. Moreover, official financing should notabsolve private investors from the consequences ofexcessive risk-taking and thus create the "moralhazard" that could plant the seeds of future crises.

Broadening the Financial Reform Agenda: Inrecent years, the IMF has broadened its perspectiveto take account of a wider range of issues necessaryfor economic growth and financial stability. It isseeking to create a more level playing field in whichprivate sector competition can thrive; reduceunproductive government spending, includingexcessive military expenditures and subsidies andguarantees to favored sectors and firms; protect themost vulnerable segments of society from bearing thebrunt of the burden of adjustment; and encouragemore effective participation by labor and the rest ofcivil society in the formulation and implementation ofeconomic policies, including protection of labor rights.

The United States and the other leading industrializednations are also promoting a range of World Bank andregional development bank reforms that the UnitedStates has been urging for a number of years. Keyelements include substantially increasing the share ofresources devoted to basic social programs thatreduce poverty; safeguarding the environment;supporting development of the private sector and openmarkets; promotion of good governance, includingmeasures to fight corruption and improve theadministration of justice; and internal reforms of themultilateral development banks (MDBs) to make themmore efficient. Furthermore, international financialinstitutions such as the IMF and MDBs have played astrong role in recent years in countries and regions ofkey interest to the United States, such as Russia, theMiddle East, Haiti and Bosnia.

Enhancing AmericanCompetitiveness

29

We seek to ensure a business environment in whichthe innovative and competitive efforts of the privatesector can flourish. To this end, we will continue toencourage the development, commercialization anduse of civilian technology. We will invest in a world-class infrastructure for the twenty-first century,including the national information and spaceinfrastructure essential for our knowledge-basedeconomy. We will invest in education and training todevelop a workforce capable of participating in ourrapidly changing economy. And we will continue ourefforts to open foreign markets to U.S. goods andservices.

Enhancing Access to ForeignMarkets

In a world where over 95 percent of the world’sconsumers live outside the United States, we mustexpand our international trade to sustain economicgrowth at home. Our prosperity as a nation in thetwenty-first century will depend upon our ability tocompete effectively in international markets. Therapidly expanding global economy presents enor-mous opportunities for American companies andworkers. Over the next decade the global economy isexpected to grow at three times the rate of the U.S.economy. Growth will be particularly powerful inmany emerging markets. If we do not seize theseopportunities, our competitors surely will. We mustcontinue working hard to secure and enforceagreements that protect intellectual property rightsand enable Americans to compete fairly in foreignmarkets.Trade agreement implementing authority is essentialfor advancing our nation’s economic interests. Con-gress has consistently recognized that the Presidentmust have the authority to break down foreign tradebarriers and create good jobs. Accordingly, theAdministration will work with Congress to fashion anappropriate grant of fast track authority.

The Administration will continue to press our tradingpartners—multilaterally, regionally and bilaterally—toexpand export opportunities for U.S. workers, farmersand companies. We will position ourselves at thecenter of a constellation of trade relationships—suchas the World Trade Organization, APEC, theTransatlantic Marketplace and the Free Trade Area ofthe Americas (FTAA). We will seek to negotiateagreements, especially in sectors where the U.S. ismost competitive—as we did in the Information

Technology Agreement and the World TradeOrganization (WTO) Financial Services andTelecommunications Services Agreements. As welook ahead to the next WTO Ministerial meeting, tobe held in the United States in late 1999, we willaggressively pursue an agenda that addresses U.S.trade objectives. We will also remain vigilant inenforcing the trade agreements reached with ourtrading partners. That is why the U.S. TradeRepresentative and the Department of Commercecreated offices in 1996 dedicated to ensuring foreigngovernments are fully implementing theircommitments under these agreements.

Promoting an Open TradingSystem

The successful conclusion of the Uruguay Round ofnegotiations under the General Agreement on Tariffsand Trade significantly strengthened the world tradingsystem. The U.S. economy is expected to gain over$100 billion per year in GDP once the Uruguay Roundis fully implemented. The Administration remainscommitted to carrying forward the success of theUruguay Round and to the success of the WTO as aforum for openly resolving disputes.

We have completed the Information TechnologyAgreement (ITA) which goes far toward eliminatingtariffs on high technology products and amounts to a

30

global annual tax cut of $5 billion. We look tocomplete the first agreement expanding productscovered by the ITA in 1998. We also concluded alandmark WTO agreement that will dramaticallyliberalize world trade in telecommunications services.Under this agreement, covering over 99 percent ofWTO member telecommunications revenues, adecades old tradition of telecommunicationsmonopolies and closed markets will give way tomarket opening deregulation and competition—principles championed by the United States.

The WTO agenda includes further negotiations toreform agricultural trade, liberalize service sectormarkets, and strengthen protection for intellectualproperty rights. At the May 1998 WTO Ministerial,members agreed to initiate preparations for thesenegotiations and to consider other possiblenegotiating topics, including issues not currentlycovered by WTO rules. These preparatory talks willcontinue over the course of the next year so that thenext round of negotiations can be launched at the1999 WTO ministerial meeting in the United States.

We also have a full agenda of accession negotiationswith countries seeking to join the WTO. As always,the United States is setting high standards foraccession in terms of adherence to the rules andmarket access. Accessions offer an opportunity tohelp ground new economies in the rules-basedtrading system and reinforce their own reformprograms. This is why we will take an active role inthe accession process dealing with the 32 applicantscurrently seeking WTO membership.

Through Organization for Economic Cooperation andDevelopment (OECD) negotiations of a MultilateralAgreement on Investment, we are seeking to establishclear legal standards on expropriation, access tobinding international arbitration for disputes andunrestricted investment-related transfers acrossborders. Also in the OECD, the United States is takingon issues such as corruption and labor practices thatcan distort trade and inhibit U.S. competitiveness. Weseeking to have OECD members outlaw bribery offoreign officials, eliminate the tax deductibility of foreignbribes, and promote greater transparency ingovernment procurement. To date, our efforts onprocurement have been concentrated in the WorldBank and the regional development banks, but ourinitiative to pursue an agreement on transparency inWTO member procurement regimes should make anadditional important contribution. We have also made

important strides on labor issues. The WTO hasendorsed the importance of core labor standardssought by the United States since the EisenhowerAdministration—the right to organize and bargaincollectively, and prohibitions against child labor andforced labor. We will continue pressing for betterintegration of the international core labor standards intothe WTO's work, including through closer WTOinteraction with the International Labor Organization(ILO).

We continue to ensure that liberalization of trade doesnot come at the expense of national security orenvironmental protection. For example, the nationalsecurity, law enforcement and trade policycommunities worked together to make sure that theWTO agreement liberalizing global investment intelecommunications was consistent with U.S. nationalsecurity interests. Moreover, our leadership in theUruguay Round negotiations led to the incorporation ofenvironmental provisions into the WTO agreementsand creation of the Committee on Trade andEnvironment, where governments continue to pursuethe goal of ensuring that trade and environmentpolicies are mutually supportive. In addition, with U.S.leadership, countries participating in the Summit of theAmericas are engaged in sustainable developmentinitiatives to ensure that economic growth does notcome at the cost of environmental protection.

In May 1998, President Clinton presented to the WTOa set of proposals to further U.S. international tradeobjectives:

• First, that the WTO make further efforts toeliminate trade barriers and pursue a more openglobal trading system in order to spur economicgrowth, better jobs, higher incomes, and the freeflow of ideas, information and people.

• Second, that the WTO provide a forum wherebusiness, labor, environmental and consumergroups can provide regular input to help guidefurther evolution of the WTO. The trading systemwe build for the 21st century must ensure thateconomic competition does not threaten thelivelihood, health and safety of ordinary familiesby eroding environmental and consumerprotection or labor standards.

• Third, that a high-level meeting of trade andenvironmental officials be convened to providedirection for WTO environmental efforts, and that

31

the WTO and the International LaborOrganization commit to work together to ensurethat open trade raises the standard of living forworkers and respects core labor standards.

• Fourth, that the WTO open its doors to thescrutiny and participation of the public by takingevery feasible step to bring openness andaccountability to its operations, such as byopening its dispute settlement hearings to thepublic and making the briefs for those hearingspublicly available.

• Fifth, that the nations of the world join the UnitedStates in not imposing any tariffs on electroniccommercial transmissions sent across nationalborders. The revolution in information technologyrepresented by the Internet is the greatest forcefor prosperity in our lifetimes; we cannot allowdiscriminatory barriers to stunt the developmentof this promising new economic opportunity. Anelectronic commerce work program was agreedto at the May 1998 WTO Ministerial. It will bereviewed at the 1999 ministerial meeting.

• Sixth, that all WTO members make governmentpurchases through open and fair bidding andadopt the OECD antibribery convention.Prosperity depends upon government practicesthat are based upon the rule of law rather thanbureaucratic caprice, cronyism or corruption.

• Seventh, that the WTO explore a faster tradenegotiating process and develop an open tradingsystem that can change as fast as the globalmarketplace. Positive steps include annual tariffand subsidy reductions in agriculture, greateropenness and competition in the services sector,further tariff reductions in the industrial sector,and stronger intellectual property protection.

Export Strategy and AdvocacyProgram

The Administration created America’s first nationalexport strategy, reforming the way government workswith the private sector to expand exports. The newTrade Promotion Coordination Committee (TPCC) hasbeen instrumental in improving export promotionefforts, coordinating our export financing, implementinga government-wide advocacy initiative and updating

market information systems and product standardseducation.

The export strategy is working, with the United Statesregaining its position as the world’s largest exporter.While our strong export performance has supportedmillions of new, export-related jobs, we must exportmore in the years ahead if we are to further strengthenour trade balance position and raise living standardswith high-wage jobs. Our objective remains to expandU.S. exports to over $1.2 trillion by the year 2000,which will mean over 2.5 million new American jobsand a total of over 14.6 million jobs supported byexports.

Enhanced Export Control

The United States is a world leader in high technologyexports, including satellites, cellular phones,computers and commercial aircraft. Some of thistechnology has direct or indirect military applications.For that reason, the United States governmentcarefully controls high technology exports through alicensing process involving the Department ofDefense, the Department of State, the CommerceDepartment and other agencies. Changes to U.S.export controls over the last decade have allowedAmerica's most important growth industries tocompete effectively overseas and create good jobs athome while ensuring that proper safeguards are inplace to protect important national security interests.

The cornerstone of our export control policy isprotection of our national security; but imposing thetightest possible restrictions on high technologyexports is not always the best way to protect oursecurity. In an increasingly competitive globaleconomy, the United States retains a monopoly oververy few technologies. As a result, rigid exportcontrols increasingly would not protect our nationalsecurity because the same products can be obtainedreadily from foreign sources. Rigid controls wouldmake U.S. high technology companies less competi-tive globally, thus losing market share and becomingless able to produce the innovative, cutting-edgeproducts for the U.S. military and our allies.

Our current policy—developed in the Reagan andBush Administrations and continued by PresidentClinton—recognizes that we must balance a variety offactors. In the wake of the Cold War, the BushAdministration accelerated the process of moving the

32

licensing of essentially commercial items from theState Department’s Munitions List to the Commerce-administered Commodity Control List in order topromote high technology exports by making licensedecisions more predictable and timely. In 1995, byExecutive Order, President Clinton expanded the rightof the Departments of Defense, State and Energy andthe Arms Control and Disarmament Agency to fullyparticipate in the decision-making process.Previously, these agencies reviewed only certaindual-use applications; as a result of the ExecutiveOrder, they have the right to review every dual-useapplication. If any of these agencies disagree with aproposed export, it can block the license and put theissue into a dispute resolution process that canultimately rise to the President. As a result, reviewsof dual-use licenses are today more thorough andbroadly based than ever before.

While our export controls and the regulations thatimplement them have become easier for Americanexporters to follow, we have also enhanced our abilityto identify, stop and prosecute those who attempt toevade them. For example, in fiscal year 1997 effortsof the Commerce Department's criminal investigatorsled to over $1 million in criminal fines and over $16million in civil penalties. We have significantenforcement weapons to use against those whowould evade our export controls, and we are usingthem vigorously.

Finally, U.S. efforts to stem proliferation cannot beeffective without the cooperation of other countries.To that end, we have strengthened multilateralcooperation through the Nuclear Suppliers Group, theMissile Technology Control Regime, the AustraliaGroup (for the control of chemical and biologicalweapons-related related items), the ChemicalWeapons Convention, and the WassenaarArrangement, which through U.S. leadership isshaping multilateral export controls for the nextcentury. These multilateral efforts enlist the worldcommunity in the battle against the proliferation ofweapons of mass destruction, advanced conventionalweapons and sensitive technologies, while at thesame time producing a level playing field for U.S.business by ensuring that our competitors facecorresponding export controls.

Providing for Energy Security

The United States depends on oil for about 40 percentof its primary energy needs and roughly half of our oilneeds are met with imports. Although we import lessthan 10% of Persian Gulf exports, our allies in Europeand Japan account for about 85% of these exports,thus underscoring the continued strategic importanceof the region. We are undergoing a fundamental shiftaway from reliance on Middle East oil. Venezuela isour number one foreign supplier and Africa supplies15% of our imported oil. Canada, Mexico andVenezuela combined supply more than twice as muchoil to the United States as the Arab OPEC countries.

The Caspian Basin, with potential oil reserves of 160billion barrels, promises to play an increasinglyimportant role in meeting rising world energy demandin coming decades. We have made it a priority to workwith the countries of the region to develop multiplepipeline ventures that will ensure access to the oil. Weare also working on several fronts to enhance thestability and safeguard the independence of thesenations. While these developments are significant, wemust remember that the vast majority of proven oilreserves lie in the Middle East and that the global oilmarket is largely interdependent.

Conservation measures and research leading togreat-er energy efficiency and alternative fuels are acritical element of the U.S. strategy for energysecurity. The U.S. economy has grown roughly 75percent since the first oil shock in 1973. During thattime U.S. oil consumption remained virtually stable,reflecting conservation efforts and increased energyefficiency. Our research must continue to focus ondeveloping highly efficient transportation systems andto shift them to alternative fuels, such as hydrogen,ethanol or methanol from biomass, and others. Thisresearch will also help address concerns aboutclimate change by providing new approaches formeeting guidelines on emission of greenhouse gases.Over the longer term, U.S. dependence on access toforeign oil sources may be increasingly important asdomestic resources are depleted. Although U.S. oilconsumption has been essentially level since 1973, ourreliance on imported oil has increased due to a declinein domestic production. Domestic oil productiondeclined during that period because oil prices were nothigh enough to generate new oil exploration sufficientto sustain production levels from our depleted resourcebase. Conservation and energy researchnotwithstand-ing, the United States will continue tohave a vital interest in ensuring access to foreign oilsources. We must continue to be mindful of the need

33

for regional stability and security in key producing areasto ensure our access to and the free flow of theseresources.

Promoting SustainableDevelopment Abroad

Environmental and natural resource issues canimpede sustainable development efforts and promoteregional instability. Many nations are struggling toprovide jobs, education and other services to theircitizens. The continuing poverty of a quarter of theworld’s people leads to hunger, malnutrition, economicmigration and political unrest. Malaria, AIDS and otherepidemics, including some that can spread throughenvironmental damage, threaten to overwhelm thehealth facilities of developing countries, disruptsocieties and stop economic growth.

Sustainable development improves the prospects fordemocracy in developing countries and expands thedemand for U.S. exports. It alleviates pressure onthe global environment, reduces the attraction of theillegal drug trade and other illicit commerce, andimproves health and economic productivity. U.S.foreign assistance focuses on four key elements ofsustainable development: broad-based economicgrowth, environmental security, population andhealth, and democracy.

We will continue to advocate environmentally soundprivate investment and responsible approaches byinternational lenders. The multilateral developmentbanks are now placing increased emphasis uponsustainable development in their funding decisions,including assisting borrowing countries to bettermanage their economies. The U.S. Initiative on JointImplementation, part of the Administration's ClimateChange Action Plan, encourages U.S. businesses andnon-governmental organizations to apply innovativetechnologies and practices to reduce greenhouse gasemissions and promote sustainable developmentabroad. The initiative, which includes 32 projects in 12countries, has proven effective in transferringtechnology for environmentally sound, sustainabledevelopment. The Global Environmental Facilityprovides a source of financial assistance to thedeveloping world for climate change, biodiversity andoceans initiatives that will benefit all the world’scitizens. Environmental damage in countries of the

NIS and Central and Eastern Europe continues toimpede their ability to emerge asprosperous, independent countries. We are focusingtechnical assistance and encouraging non-governmental environmental groups to provideexpertise to the NIS and Central and Eastern Europeannations that have suffered the most acuteenvironmental crises.

Promoting DemocracyThe third core objective of our national securitystrategy is to promote democracy and human rights.The number of states moving away from repressivegovernance toward democratic and publiclyaccountable institutions is impressive. Since thesuccess of many of those changes is by no meansassured, our strategy must focus on strengthening theircommitment and institutional capacity to implementdemocratic reforms.

Emerging Democracies

We seek international support in helping strengthendemocratic and free market institutions and norms incountries making the transition from closed to opensocieties. This commitment to see freedom andrespect for human rights take hold is not only just, butpragmatic, for strengthened democratic institutionsbenefit the United States and the world.

The United States is helping consolidate democraticand market reforms in Central and Eastern Europeand the NIS. Integrating the Central and EasternEuropean nations into European security andeconomic organizations, such as NATO and the EU,will help lock in and preserve the impressive progressthese nations have made in instituting democratic andmarket-economic reforms. Our intensified interactionwith Ukraine has helped move that country onto thepath of economic reform, which is critical to its long-term stability. In addition, our efforts in Russia, Ukraineand the other NIS facilitate our goal of achievingcontinued reductions in nuclear arms and compliancewith international nonproliferation accords.

Continuing advances in democracy and free markets inour own hemisphere remain a priority, as reflected bythe President’s 1997 trips to Latin America and theCaribbean and the Summit of the Americas in Santiagothis year. In the Asia Pacific region, economic

34

dynamism is increasingly associated with politicalmodernization, democratic evolution and the wideningof the rule of law—and it has global impacts. We areparticularly attentive to states whose entry into thecamp of market democracies may influence the futuredirection of an entire region; South Africa now holdsthat potential with regard to sub-Saharan Africa.

The methods for assisting emerging democracies areas varied as the nations involved. We must continueleading efforts to mobilize international economic andpolitical resources, as we have with Russia, Ukraineand the other NIS. We must take firm action to helpcounter attempts to reverse democracy, as we have inHaiti and Paraguay. We must give democratic nationsthe fullest benefits of integration into foreign markets,which is part of the reason NAFTA and the UruguayRound of GATT ranked so high on our agenda andwhy we are now working to forge the FTAA. We musthelp these nations strengthen the pillars of civil society,supporting administration of justice and rule of lawprograms, assisting the development of democraticcivil-military relations, and training foreign police andsecurity forces to solve crimes and maintain orderwithout violating the basic rights of their citizens. Andwe must seek to improve their market institutions andfight corruption and political discontent by encouraginggood governance practices.

Adherence to Universal HumanRights and Democratic Principles

We must sustain our efforts to press for politicalliberalization and respect for basic human rightsworldwide, including in countries that continue to defydemocratic advances. Working bilaterally andthrough multilateral institutions, the United Statespromotes universal adherence to international humanrights and democratic principles. Our efforts in theUnited Nations and other organizations are helping tomake these principles the governing standards foracceptable international behavior.

We will also continue to work—bilaterally and withmultilateral institutions—to ensure that internationalhuman rights principles protect the most vulnerable ortraditionally oppressed groups in the world—women,children, workers, refugees and persons persecutedon the basis of their religious beliefs or ethnicdescent. To this end, we will seek to strength-en andimprove the UN Human Rights Commission and otherinternational mechanisms that promote human rights

and address violations of international humanitarianlaw, such as the international war crimes tribunals forthe former Yugoslavia and Rwanda.

To focus additional attention on the more vulnerable ortraditionally oppressed people, we seek to spearheadnew international initiatives to combat the sexualexploitation of minors, child labor, homelessnessamong children, violence against women and children,and female genital mutilation. We will continue towork with individual nations, such as Russia andChina, and with international institutions to combatreligious persecution. We are encouraginggovernments to not return people to countries wherethey face persecution. We ask that they provideasylum or offer temporary protection to personsfleeing situations of conflict or generalized humanrights abuses. We seek to ensure that such personsare not returned without due consideration of theirneed for permanent protection.

Violence against women and trafficking in women andgirls is are international problem with nationalimplications. We have seen cases of trafficking in theUnited States for purposes of forced prostitution,sweatshop labor and domestic servitude. The UnitedStates is committed to combating trafficking inwomen and girls with a focus on the areas ofprevention, victim assistance and protection, andenforcement. On March 11, 1998, President Clintondirected a wide range of expanded efforts to combatviolence against women in the United States andaround the world, including efforts to increasenational and international awareness of trafficking inwomen and girls. The President called for continuedefforts to fully implement the 1994 Violence AgainstWomen Act and restore its protection for immigrantvictims of domestic violence in the United States sothat they will not be forced to choose betweendeportation and abuse. He also called upon theSenate to give its advice and consent to ratification tothe Convention on the Elimination of all Forms ofDiscrimination Against Women, which will enhanceour efforts to combat violence against women, reformunfair inheritance and property rights, and strengthenwomen's access to fair employment and economicopportunity.

The United States will continue to speak out againsthuman rights abuses and carry on human rightsdialogues with countries willing to engage usconstructively. Because police and internal securityservices can be a source of human rights violations,

35

we use training and contacts between U.S. lawenforcement and their foreign counterparts to helpaddress these problems. Federal law enforcementagents can serve as role models for investigators incountries where the police have been instruments ofoppression and at the same time reduce internationalcrime and terrorism that affects U.S. interests. Inappropriate circumstances, we must be prepared totake strong measures against human rights violators.These include economic sanctions, as have beenmaintained against Nigeria, Iraq, Burma, North Koreaand Cuba, visa restrictions and restricting sales ofarms and police equipment that may be used tocommit human rights abuses.

Humanitarian Activities

Our efforts to promote democracy and human rightsare complemented by our humanitarian programs,

which are designed to alleviate human suffering, helpestablish democratic regimes that respect humanrights and pursue appropriate strategies for economicdevelopment. These efforts also enable the UnitedStates to help prevent humanitarian disasters with farmore significant resource implications.

We also must seek to promote reconciliation in statesexperiencing civil conflict and to address migration andrefugee crises. To this end, the United States willprovide appropriate financial support and work withother nations and international bodies, such as theInternational Committee of the Red Cross and the UNHigh Commissioner for Refugees. We also will assistefforts to protect the rights of refugees and displacedpersons and to address the economic and social rootcauses of internal displacement and internationalflight. Finally, we will cooperate with other states tocurb illegal immigration into this country.

Private firms and associations are natural allies inactivities and efforts intended to bolster marketeconomies. We have natural partners in labor unions,human rights groups, environmental advocates,chambers of commerce and election monitors inpromoting democracy and respect for human rightsand in providing international humanitarianassistance; thus, we should promote democratizationefforts through private and non-governmental groupsas well as foreign governments.

Supporting the global movement toward democracyrequires a pragmatic, long-term effort focused on bothvalues and institutions. Our goal is a broadening of thecommunity of free-market democracies and strongerinternational non-governmental movements committedto human rights and democratization.

37

lII. Integrated Regional Approaches

Our policies toward different regions reflect our overallstrategy tailored to unique challenges andopportunities.

Europe and EurasiaEuropean stability is vital to our own security. TheUnited States has two strategic goals in Europe. Thefirst is to build a Europe that is truly integrated,democratic, prosperous and at peace. This wouldcomplete the mission the United States launched 50years ago with the Marshall Plan and the NorthAtlantic Treaty Organization (NATO).

Our second goal is to work with our allies andpartners across the Atlantic to meet the globalchallenges no nation can meet alone. This meansworking together to support peace efforts in troubledregions, to counter global threats such as the spreadof weapons of mass destruction and dual-usetechnology, and to build a more open world economyand without barriers to transatlantic trade andinvestment. We will continue to strengthen theOSCE’s role in conflict prevention and crisismanagement and seek closer cooperation with ourEuropean partners in dealing with non-militarysecurity threats through our New TransatlanticAgenda with the European Union (EU).

Enhancing Security

NATO remains the anchor of American engagementin Europe and the linchpin of transatlantic security.As a guarantor of European security and a force forEuropean stability, NATO must play a leading role inpromoting a more integrated and secure Europe,prepared to respond to new challenges. We willmaintain approximately 100,000 military personnel inEurope to fulfill our commitments to NATO, provide avisible deterrent against aggression and coercion,contribute to regional stability, respond to crises,

sustain our vital transatlantic ties and preserve U.S.leadership in NATO.

NATO enlargement is a crucial element of the U.S.and Allied strategy to build an undivided, peacefulEurope. The end of the Cold War changed thenature of the threats to this region, but not the factthat Europe's stability is vital to our own nationalsecurity. The addition of well-qualified democracies,which have demonstrated their commitment to thevalues of freedom and the security of the broaderregion, will help deter potential threats to Europe,deepen the continent's stability, bolster its democraticadvances, erase its artificial divisions, and strengthenan Alliance that has proven its effectiveness bothduring and since the Cold War.

In December 1997, the NATO foreign ministerssigned the three protocols of accession for Poland,Hungary, and the Czech Republic, making them fullmembers of the Alliance subject to ratification by allcurrent and incoming NATO members. On May 21,1998, the President signed the instruments ofratification for the three protocols following a strong,bipartisan 80-19 vote of approval in the U.S. Senate.Poland, Hungary, and the Czech Republic will makethe Alliance stronger while helping to enlargeEurope's zone of democratic stability. They havebeen leaders in Central Europe's dramatictransformation over the past decade and have helpedmake Central Europe the continent's most robustzone of economic growth. They will strengthenNATO through the addition of military resources,strategic depth and the prospect of greater stability inEurope's central region. Our Alliance with them willimprove our ability to protect and advance ourinterests in the transatlantic area and contribute toour security in the years to come.

At the same time, we have vigorously pursued effortsto help other countries that aspire to membershipbecome the best possible candidates. Together withour Allies we are enhancing the Partnership forPeace and continuing political contacts with aspiring

38

states. We are also continuing bilateral programs toadvance this agenda, such as the President’sWarsaw Initiative, which is playing a critical role inhelping the militaries of Central and Eastern Europeand Eurasia become more interoperable with NATO.Building on the increasing links between NATO andthe Partnership for Peace nations, Partners willincreasingly contribute to real-world NATO missions,as many are doing in the NATO-led operation inBosnia.

Some European nations do not desire NATOmembership, but do desire strengthened ties with theAlliance. The Partnership for Peace provides anideal venue for such relationships. It formalizesrelations, provides a mechanism for mutual beneficialinteraction and establishes a sound basis forcombined action should that be desired. For all thesereasons, Partnership for Peace will remain a centraland permanent part of the European securityarchitecture.

NATO also is pursuing several other initiatives toenhance its ability to respond to new challenges anddeepen ties between the Alliance and Partnercountries. NATO has launched the Euro-AtlanticPartnership Council to strengthen political dialogueand practical cooperation with all Partners, andestablished a NATO-Ukraine Charter, which providesa framework for enhanced relations. As a result ofthe 1997 NATO-Russia Founding Act, NATO andRussia developed the Permanent Joint Council toenhance political consultation and practicalcooperation, while retaining NATO's decision-makingauthority. Our shared goal remains constructiveRussian participation in the European securitysystem.

The North Atlantic Treaty Organization will hold itsFiftieth Anniversary summit meeting in Washingtonon April 24-25, 1999. This summit will mark NATO'sextraordinary record of success over the past fiftyyears in protecting the security of the United Statesand our European allies. As agreed at the 1997Madrid summit, we hope to use the upcoming summitmeeting in Washington to welcome the entry ofPoland, Hungary, and the Czech Republic as newmembers of the alliance. Looking to the future, thesummit will advance the common work of NATOallies and partners to build an undivided Europe thatis peaceful, prosperous, and democratic.

As we help build a comprehensive European securityarchitecture, we must continue to focus on regionalsecurity challenges.

Southeastern Europe and the Balkans: There aresignificant security challenges in Southeastern Europe.Instability in this region could threaten theconsolidation of reforms, disrupt commerce andundermine our efforts to bring peace to Bosnia andother parts of the former Yugoslavia.

The United States has an abiding interest in peaceand stability in Bosnia because continued war in thatregion threatens all of Europe’s stability. Implemen-tation of the Dayton Accords is the best hope forcreating a self-sustaining peace in Bosnia. NATO-ledforces are contributing to a secure environment inBosnia and providing essential support for thebroader progress we are making in implementing theDayton Accords. Further progress is necessary,however, to create conditions that will allowimplementation to continue without a large militarypresence. We are committed to full implementationof the Dayton Accords and success in Bosnia. Wesupport the efforts of the International Criminal Tribunalfor the former Yugoslavia and broader efforts topromote justice and reconciliation in Bosnia.

We are deeply concerned about the ongoingbloodshed in Kosovo, which threatens security andstability throughout the Balkan region. We are firmlyconvinced that the problems in Kosovo can best beresolved through a process of open andunconditional dialogue between authorities inBelgrade and the Kosovar Albanian leadership. Weseek a peaceful resolution of the crisis thatguarantees restoration of human and political rightswhich have been systematically denied the KosovarAlbanian population since Belgrade withdrewautonomy in 1989. In support of that objective,NATO is reviewing options for deterring furtherviolence against the civilian population in Kosovo andstabilizing the military situation in the region.

We are redoubling our efforts to advance theintegration of several new democracies inSoutheastern Europe (Bulgaria, Romania, Sloveniaand the Former Yugoslavian Republic of Macedonia)into the European mainstream. More specifically, thePresident's Action Plan for Southeast Europe seeksto promote further democratic, economic, and military

39

reforms in these countries, to encourage greaterregional cooperation, and to advance commoninterests, such as closer contact with NATO, andincreased law enforcement training and exchanges toassist in the fight against organized crime.

Tensions on Cyprus, Greek-Turkish disagreements inthe Aegean and Turkey’s relationship with the EU haveserious implications for regional stability and theevolution of European political and security structures.Our goals are to stabilize the region by reducing long-standing Greek-Turkish tensions and pursuing acomprehensive settlement on Cyprus. A democratic,secular, stable and Western-oriented Turkey is criticalto these efforts and has supported broader U.S. effortsto enhance stability in Bosnia, the NIS and the MiddleEast, as well as to contain Iran and Iraq.

The Baltic States: For over fifty years, the UnitedStates has recognized the sovereignty andindependence of the republics of Estonia, Latvia andLithuania. During this period, we neveracknowledged their forced incorporation into theSoviet Union. The special nature of our relationshipwith the Baltic States is recognized in the Charter ofPartnership signed on January 16, 1998, whichclarifies the principles upon which U.S. relations withthe Baltic states are based and provides a frameworkfor strengthening ties and pursuing common goals.These goals include integration of Latvia, Lithuaniaand Estonia into the transatlantic community anddevelopment of close, cooperative relationshipsamong all the states in Northeastern Europe. TheCharter also establishes mechanisms for high-levelreview and adjustment of this cooperation.

Northern Ireland: After a 30-year winter of sectarianviolence, Northern Ireland has the promise of aspringtime of peace. The agreement that emergedfrom the Northern Ireland peace talks on April 10,1998 opened the way to build a society based onenduring peace, justice and equality. On May 22,1998, the people of Ireland and Northern Irelandseized this opportunity to turn the common tragedy ofNorthern Ireland's past into a shared triumph for thefuture by strongly endorsing the peace accord. In sodoing, they have written a new chapter in the richhistory of their island by creating the best chance forpeace in a generation.

The United States actively promoted this peaceprocess and will continue to stand with those who

seek to build lasting peace and enduring prosperity inIreland and Northern Ireland. They can count on thecontinuing aid, support and encouragement of theUnited States. The task of making the peace endurewill be difficult. Some may seek to undermine thisagreement by returning to violence. Anyone whodoes so, from whatever side and whatever faction,will have no friends in America. We will work closelywith British and Irish law enforcement andintelligence officials to prevent outrages before theyhappen by identifying terrorists and their sources offinancial and material support.

We will continue to work with Northern Ireland’sleaders as they seek to transform the promise of theAccord into a reality—with new democraticinstitutions and new economic opportunities for all ofNorthern Ireland’s people. Working through theInternational Fund for Ireland and the private sector,we will help the people seize the opportunities thatpeace will bring to attract new investment to createnew factories, workplaces and jobs, and establishnew centers of learning to prepare for the 21stCentury.

Newly Independent States (NIS): The United Statesis pursuing a wide range of security objectives in theNIS. We seek to bring Russia, Ukraine and the otherNIS into a new, cooperative European security order,which includes strengthening their participation inNATO Partnership for Peace activities and buildingeffective NATO-Russia and NATO-Ukrainepartnerships. We seek to reduce the threat of nuclearwar and the spread of nuclear weapons and materials,as well as other weapons of mass destruction and theirdelivery systems, especially to outlaw states.

The United States has vital security interests in theevolution of Russia, Ukraine and the other NIS intodemocratic market economies, peacefully andprosperously integrated into the world community. Thegovernmental and financial sectors in this regionappear especially susceptible to penetration byorganized criminal groups, who have the ability tosubvert and destroy these nascent institutions.Further democratic and economic reforms andintegration into the WTO and other internationaleconomic institutions will strengthen the rule of law andrespect for human rights, foster growth by expandingprivate sector activity, and encourage open andcooperative policies toward the global community.

40

Promoting Prosperity

Europe is a key element in America’s globalcommercial engagement. Europe and the UnitedStates produce over half of all global goods andservices. More than 60% of total U.S. investmentabroad is in Europe and fourteen million workers onboth sides of the Atlantic earn their livelihoods directlyfrom transatlantic commerce. As part of the NewTransatlantic Agenda launched at the 1995 U.S.-EUSummit in Madrid, the United States and the EUagreed to take concrete steps to reduce barriers totrade and investment through the creation of an openNew Transatlantic Marketplace. We have concludedMutual Recognition Agreements eliminating redundanttesting and certification requirements covering $50billion in two-way trade. Our governments are alsocooperating closely with the Transatlantic BusinessDialogue, a U.S.-European business partnership, toaddress a wide range of trade barriers.

Building on the New Transatlantic Agenda, the UnitedStates and the EU launched the TransatlanticEconomic Partnership on May 18, 1998. This is amajor new initiative to deepen our economicrelations, reinforce our political ties and reduce tradefrictions that have plagued our bilateral relationship.The first element of the initiative is reducing barriersthat affect manufacturing, agriculture and services.In the manufacturing area we will focus on standardsand technical barriers that American businesses haveidentified as the most significant obstacle toexpanding trade. In the agricultural area we willfocus on regulatory barriers that have inhibited theexpansion of agriculture trade, particularly in thebiotechnology area. In the area of services we willseek to open our markets further and to create newopportunities for the number of service industries thatare so active in the European market.

The second element of the Transatlantic EconomicPartnership is a broader, cooperative approach toaddressing a wide range of trade issues. We agreedto maintain current practices, and will continue notimposing duties on electronic transmissions anddevelop a work program in the WTO for electroniccommerce. We will seek to adopt common positionsand effective strategies for accelerating compliancewith WTO commitments on intellectual property. Wewill seek to promote government procurementopportunities, including promoting compatibility ofelectronic procurement information and government

contracting systems. We will seek innovative ways topromote our shared labor and environmental valuesaround the world. To promote fair competition, wewill seek to enhance the compatibility of ourprocedures with potentially significant reductions incost for American companies.

The United States strongly supports the process ofEuropean integration embodied in the EU. We are alsoencouraging bilateral trade and investment in non-EUcountries and supporting enlargement of the EU. Werecognize that EU nations face significant economicchallenges with nearly 20 million people unemployed,and that economic stagnation has eroded publicsupport for funding outward-looking foreign policiesand greater integration. We are working closely withour European partners to expand employment,promote long-term growth and support the NewTransatlantic Agenda.

By supporting historic market reforms in Central andEastern Europe and in the NIS, we both strengthenour own economy and help new democracies takeroot. Poland, economically troubled as recently as1989, now symbolizes the new dynamism and rapidgrowth that extensive, free-market reforms makepossible. Recent economic turbulence in Russiademonstrates that the transition to a moreprosperous, market-based economy will be a long-term process characterized by promise anddisappointment. In Ukraine, reinvigorating economicreform remains a key challenge to strengtheningnational security and independence. Much remainsto be done throughout the region to assuresustainable economic recoveries and adequate socialprotection.

The United States will continue helping the NISeconomies integrate into international economic andother institutions and develop healthy businessclimates. We will continue to mobilize theinternational community to provide assistance tosupport reform. The United States is working closelywith Russia and Ukraine in priority areas, includingdefense conversion, the environment, trade andinvestment, and scientific and technologicalcooperation. We are also encouraging investment,especially by U.S. companies, in NIS energy resourcesand their export to world markets, thereby expandingand diversifying world energy supplies and promotingprosperity in the NIS.

41

Ultimately, the success of economic and financialreforms in the countries recently emerged fromcommunism will depend more on private investmentthan official aid. One of our priorities, therefore, is tohelp countries stimulate foreign and domesticinvestment. At the Helsinki Summit, PresidentsClinton and Yeltsin defined an ambitious reformagenda covering key tax, energy and commerciallaws crucial for Russia to realize its potential forattracting foreign investment. Further, the Presidentsoutlined steps to accelerate Russian membership oncommercial terms in key economic organizationssuch as the WTO. It is in both Russia’s interest andours that we work with Russian leaders on passageof key economic and commercial legislation. We arecooperating with Russia to facilitate oil and gasexports to and through Russia from neighboringCaspian countries. We also support development ofnew East-West oil and gas export routes across theCaspian Sea and through the Transcaucasus andTurkey.

Ukraine is at an important point in its economictransition—one that will affect its integration withEurope and domestic prosperity. The United Stateshas mobilized the international community’s supportfor Ukrainian economic reform, pushed to improveUkraine’s investment climate, and championed itsintegration into key European, transatlantic andglobal economic institutions. Two other challengesstand out: first, to instill respect for the rule of law sothat a more transparent, level economic playing fieldis established and democratic governance prevails;and, second, to gain international support as it seeksto close down Chernobyl and reform its energysector. The U.S.-Ukraine Binational Commission,chaired by Vice President Gore and PresidentKuchma, serves as a focal point to coordinatebilateral relations and to invigorate Ukrainian reformefforts.

A stable and prosperous Caucasus and Central Asiawill help promote stability and security from theMediterranean to China and facilitate rapid develop-ment and transport to international markets of thelarge Caspian oil and gas resources, with substantialU.S. commercial participation. While the new statesin the region have made progress in their quest forsovereignty and a secure place in the internationalarena, much remains to be done in democratic andeconomic reform and in settling regional conflicts,such as Nagorno-Karabakh and Abkhazia.

Promoting Democracy

Thoroughgoing democratic and economic reforms inthe NIS and Europe’s former communist states are thebest measures to avert conditions which could fosteraggressive nationalism and ethnic hatreds. Already,the prospect of joining or rejoining the Westerndemocratic family has dampened the forces ofnationalism and strengthened the forces of democracyand reform in many countries of the region.

The independence, sovereignty, territorial integrity, anddemocratic and economic reform of the NIS areimportant to American interests. To advance thesegoals, we are utilizing our bilateral relationships, ourleadership of international institutions, and billions ofdollars in private and multilateral resources. But thecircumstances affecting the smaller countries dependin significant measure on the fate of reform in thelargest and most powerful—Russia. The United Stateswill continue vigorously to promote Russian reform andinternational integration, and discourage any reversal inthe progress that has been made. Our economic andpolitical support for the Russian government dependson its commitment to internal reform and a responsibleforeign policy.

East Asia and the PacificPresident Clinton’s vision of a new Pacific communitylinks security interests with economic growth and ourcommitment to democracy and human rights. Wecontinue to build on that vision, cementing America’srole as a stabilizing force in a more integrated AsiaPacific region.

Enhancing Security

Our military presence has been essential tomaintaining the stability that has enabled most nationsin the Asia Pacific region to build thriving economies forthe benefit of all. To deter aggression and secure ourown interests, we will maintain approximately 100,000U.S. military personnel in the region. Our commitmentto maintaining an active military presence in the regionand our treaty alliances with Japan, South Korea,Australia, Thailand and the Philippines serve as thefoundation for America’s continuing security role.

42

We are maintaining healthy relations with theAssociation of Southeast Asian Nations (ASEAN),which now includes Singapore, Malaysia, Thailand,Indonesia, the Philippines, Brunei, Vietnam, Laos andBurma. We are also supporting regional dialogue—such as in the ASEAN Regional Forum (ARF)—onthe full range of common security challenges. Bymeeting on confidence-building measures such assearch and rescue cooperation and peacekeeping, theARF can help enhance regional security andunderstanding.

Japan

The United States and Japan reaffirmed our bilateralsecurity relationship in the April 1996 Joint SecurityDeclaration. The alliance continues to be thecornerstone for achieving common securityobjectives and for maintaining a stable andprosperous environment for the Asia Pacific region aswe enter the twenty-first century. In September1997, both Governments issued the revisedGuidelines for U.S.-Japan Defense Cooperationwhich will result in greater bilateral cooperation inpeacekeeping and humanitarian relief operations, insituations in areas surrounding Japan, and in thedefense of Japan itself. The revised Guidelines, likethe U.S.-Japan security relationship itself, are notdirected against any other country.

In April 1998, in order to support the new Guidelines,both governments agreed to a revised Acquisitionand Cross-Servicing Agreement (ACSA) whichexpands the exchange of provision of supplies andservices to include reciprocal provision of logisticssupport during situations surrounding Japan thathave an important influence on Japan’s peace andsecurity. While the guidelines and its related effortshave specifically focused on regional security, bothcountries have continued to cooperate in theimplementation of the Special Action Committee onOkinawa (SACO) Final report. This effort initiatedplans and measures to realign, consolidate, andreduce U.S. facilities and areas in Okinawa in orderto ease the impact of U.S. Forces’ presence on thepeople of Okinawa. Implementation of SACO willultimately aid in ensuring the maintenance of U.S.operational capabilities and force presence in theAsia-Pacific region.

U.S.-Japan security cooperation extends topromoting regional peace and stability, seeking

universal adherence to the Nuclear Non-ProliferationTreaty, and addressing the dangers posed bytransfers of destabilizing conventional arms andsensitive dual-use goods and technologies. Ourcontinued progress in assisting open trade betweenour countries and our broad-ranging internationalcooperation, exemplified by the Common Agenda,provide a sound basis for our relations into the nextcentury.

Korean Peninsula

Tensions on the Korean Peninsula remain theprincipal threat to peace and stability in East Asia.The Democratic People's Republic of Korea (DPRK)has publicly stated a preference for peacefulreunification, but continues to dedicate a large portionof dwindling resources to enhance the combatcapability of its huge military forces. Renewedconflict has been prevented since 1953 by acombination of the Armistice Agreement, whichbrought an end to open hostilities; the United NationsCommand, which has visibly represented the will ofthe UN Security Council to secure peace; and thephysical presence of U.S. and ROK troops in theCombined Forces Command, which hasdemonstrated the alliance’s resolve.

The inauguration of Kim Dae-jung as President of theRepublic of Korea on February 25, 1998 marked animportant turning point on the Korean Peninsula. Itmarked the triumph of democracy in South Korea andthe first peaceful transition of power from the rulingparty to an opposition party. It was also a remarkabletriumph for President Kim, who had been denied thePresidency in 1971 by voter intimidation and fraud,kidnapped and almost murdered by governmentagents, sentenced to death in 1991, imprisoned forsix years and in exile or under house arrest for overten years. President Kim personifies the victory ofdemocracy over dictatorship in South Korea.

President Kim has set a new course toward peaceand stability on the Korean Peninsula by openingnew channels for dialogue and seeking areas forcooperation between North and South. During theirsummit meeting in June 1998, President Clinton andPresident Kim discussed the situation on the KoreanPeninsula, reaffirming South Korea's role as leadinterlocutor with the North Koreans and theimportance of our strong defense alliance. PresidentClinton expressed strong support for President Kim's

43

vision of engagement and efforts towardreconciliation with the North. The United States isworking to create conditions of stability by maintainingsolidarity with our South Korean ally, emphasizingAmerica’s commitment to shaping a peaceful andprosperous Korean Peninsula and ensuring that anisolated and struggling North Korea does not opt for amilitary solution to its political and economic problems.

Peaceful resolution of the Korean conflict with a non-nuclear, reunified peninsula will enhance stability in theEast Asian region and is clearly in our strategic interest.We are willing to improve bilateral political andeconomic ties with North Korea—consistent with theobjectives of our alliance with the ROK—to draw theNorth into more normal relations with the region andthe rest of the world. Our willingness to improvebilateral relations will continue to be commensuratewith the North’s cooperation in efforts to reducetensions on the peninsula. South Korea has set ashining example for nonproliferation by forswearingnuclear weapons, accepting safeguards, anddeveloping a peaceful nuclear program that bringsbenefits to the region. We are firm that North Koreamust freeze and dismantle its graphite-moderatedreactors and related facilities and fully comply with itsNPT obligations under the Agreed Framework. Wealso seek to cease North Korea's chemical andbiological weapon programs and ballistic missileproliferation activities. The United States, too, mustfulfill its obligations under the Agreed Framework andthe Administration will work with the Congress toensure the success of our efforts to address the NorthKorean nuclear threat. The North must also engage ina productive dialogue with South Korea; continue therecently revived United Nations Command-KoreanPeople's Army General Officer Dialogue talks atPanmunjon; participate constructively in the Four PartyTalks among the United States, China, and North andSouth Korea to reduce tensions and negotiate a peaceagreement; and support our efforts to recover theremains of American servicemen missing since theKorean War.

China

A stable, open, prosperous People's Republic ofChina (PRC) that assumes its responsibilities forbuilding a more peaceful world is clearly andprofoundly in our interests. The prospects for peaceand prosperity in Asia depend heavily on China’s roleas a responsible member of the international

community. China’s integration into the internationalsystem of rules and norms will influence its ownpolitical and economic development, as well as itsrelations with the rest of the world. Our relationshipwith China will in large measure help to determinewhether the 21st century is one of security, peace,and prosperity for the American people. Our successin working with China as a partner in building a stableinternational order depends on establishing aproductive relationship that will build sustaineddomestic support.

Our policy toward China is both principled andpragmatic: expanding our areas of cooperation whiledealing forthrightly with our differences. Seeking toisolate China is clearly unworkable. Even our friendsand allies around the world would not support us; wewould succeed only in isolating ourselves and ourown policy. More importantly, choosing isolation overengagement would not make the world safer. Itwould make it more dangerous. It would underminerather than strengthen our efforts to foster stability inAsia and halt the proliferation of weapons of massdestruction. It would hinder the cause of democracyand human rights in China, set back worldwide effortsto protect the environment, and cut off one of theworld's most important markets.

President Jiang Zemin's visit to the United States inOctober 1997—the first state visit by the President ofChina to the United States in twelve years—markedsignificant progress in the development of U.S.-PRCrelations. President Clinton's reciprocal visit toBeijing in June 1998—the first state visit by anAmerican president to China in this decade—furtherexpanded and strengthened our relations. The twosummits were important milestones toward building aconstructive U.S.-China strategic partnership.

In their 1997 summit, the two Presidents agreed on anumber of steps to strengthen cooperation ininternational affairs: establishing a Washington-Beijing presidential communications link to facilitatedirect contact, regular presidential visits to eachother's capitals, and regular exchanges of visits bycabinet and sub-cabinet officials to consult onpolitical, military, security and arms control issues.They agreed to establish a consultation mechanismto strengthen military maritime safety—which willenable their maritime and air forces to avoidaccidents, misunderstandings or miscalculations—and to hold discussions on humanitarian assistanceand disaster relief. In their June 1998 meeting, they

44

agreed to continue their regular summit meetings andto intensify the bilateral dialogue on security issues.

Arms control and non-proliferation issues were highon the agenda for 1998 summit, which expanded andstrengthened the series of agreements that werereached at the 1997 summit. In Beijing, PresidentsClinton and Jiang announced that the United Statesand China will not target their strategic nuclearweapons at each other. They confirmed theircommon goal to halt the spread of weapons of massdestruction. We welcomed China’s statement that itattaches importance to issues related to the MissileTechnology Control Regime (MTCR) and missilenonproliferation and that it has begun to activelystudy joining the MTCR. Our two nations willcontinue consultations on MTCR issues in 1998.Both sides agreed to further strengthen controls onthe export of dual-use chemicals and relatedproduction equipment and technology to assure theyare not used for production of chemical weapons,and China announced that it has expanded the list ofchemical precursors which it controls. The twoPresidents issued a joint statement calling forstrengthening of the Biological Weapons Conventionand early conclusion of a protocol establishing apractical and effective compliance mechanism andimproving transparency. They issued a jointstatement affirming their commitment to ending theexport and indiscriminate use of anti-personnellandmines and to accelerating global humanitariandemining. We also reached agreement with Chinaon practices for end-use visits on U.S. hightechnology exports to China, which will establish aframework for such exports to China.

China is working with the United States on importantregional security issues. In June 1998, China chaireda meeting of the permanent members of the UNSecurity Council to forge a common strategy formoving India and Pakistan away from a nuclear armsrace. China condemned both countries forconducting nuclear tests and joined us in urging themto conduct no more tests, to sign the ComprehensiveTest Ban Treaty, to avoid deploying or testingmissiles, and to work to resolve their differencesthrough dialogue. At the 1998 summit, PresidentsClinton and Jiang issued a joint statement on theirshared interest in a peaceful and stable South Asiaand agreed to continue to coordinate their efforts tostrengthen peace and stability in that region. On theKorean Peninsula, China has become a force forpeace and stability, helping us to convince North

Korea to freeze its dangerous nuclear program,playing a constructive role in the four-party peacetalks.

The United States and China are working tostrengthen cooperation in the field of lawenforcement and mutual legal assistance, includingefforts to combat international organized crime,narcotics trafficking, alien smuggling, illegalimmigration, counterfeiting and money laundering.We have established a joint liaison group for lawenforcement cooperation and assignedcounternarcotics officers to each other’s embassies in1998.

Our key security objectives for the future include:

• sustaining the strategic dialogue begun bythe recent summits and other high-levelexchanges;

• enhancing stability in the Taiwan Straitthrough peaceful approaches to cross-Straitissues and encouraging dialogue betweenBeijing and Taipei;

• strengthening China’s adherence tointernational nonproliferation norms,particularly in its export controls on ballisticmissile and dual use technologies;

• achieving greater openness andtransparency in China’s military;

• encouraging a constructive PRC role ininternational affairs through activecooperation in ARF, the Asia PacificEconomic Cooperation Forum (APEC) andthe Northeast Asia Security Dialogue; and

• improving law enforcement cooperation withPRC officials through increased liaison andtraining.

Southeast Asia

Our strategic interest in Southeast Asia centers ondeveloping regional and bilateral security andeconomic relationships that assist in conflictprevention and resolution and expand U.S.participation in the region’s economies. U.S. securityobjectives in the region are to maintain our security

45

alliances with Australia, Thailand and the Philippines,to sustain security access arrangements withSingapore and other ASEAN countries, and toencourage the emergence of a strong, cohesiveASEAN capable of enhancing regional stability andprosperity.

Our policy combines two approaches: First,maintaining our increasingly productive relationshipwith ASEAN—especially our security dialogue underthe ARF. Second, pursuing bilateral initiatives withindividual Southeast Asian nations to promotepolitical stability, foster market-oriented economicreforms, and reduce or contain the effects of Asianorganized crime, particularly the flow of heroin fromBurma and other countries in the region.

Promoting Prosperity

A prosperous and open Asia Pacific is key to theeconomic health of the United States. On the eve ofthe recent financial problems in Asia, the 18members of APEC contributed about one-half of totalglobal gross domestic product and exports. Thirtypercent of U.S. exports go to Asia, supportingmillions of U.S. jobs, and we export more to Asia thanEurope. In states like California, Oregon andWashington, exports to Asia account for more thanhalf of each state's total exports. U.S. directinvestments in Asia represent about one-fifth of totalU.S. direct foreign investment.

Our economic objectives in East Asia includerecovery from the recent financial crisis, continuedprogress within APEC toward liberalizing trade andinvestment, increased U.S. exports to Asian countriesthrough market-opening measures and leveling theplaying field for U.S. business, and WTO accessionfor China and Taiwan on satisfactory commercialterms. Opportunities for economic growth abound inAsia and underlie our strong commitment tomultilateral economic cooperation, such as via theannual APEC leaders meetings.

Promoting sustainable development, protecting theenvironment and coping with the global problem ofclimate change are important for ensuring long-termprosperity in the Asia Pacific region. The KyotoAgreement was a major step forward in controllingthe greenhouse gases that are causing climatechange, but its success depends on meaningfulparticipation by key developing nations as well as the

industrialized nations of the world. Rapid economicgrowth in China and India make their participationessential to the global effort to control greenhousegases.

The Asian Financial Crisis

Over the last decade, the global economy hasentered a new era—an era of interdependence andopportunity. Americans have benefited greatly fromthe worldwide increase of trade and capital flows.This development has contributed to steady GNPgrowth, improvements in standards of living, morehigh paying jobs (particularly in export-orientedindustries), and low inflation.

The United States has enormously importanteconomic and national security interests at stake inEast Asia. Prolonged economic distress andfinancial instability will have an adverse effect on U.S.exports to the region, the competitiveness ofAmerican companies, and the well being of Americanworkers. There also is a risk that if the current crisisis left unchecked its effects could spread beyondEast Asia. Simply put, we cannot afford to standback in hopes that the crisis will resolve itself. Whenwe act to help resolve the Asian financial crisis, weact to protect the well-being of the American people.

In the face of this challenge, our primary objective isto help stabilize the current financial situation. Ourstrategy has four key elements: support for economicreforms; working with international financialinstitutions to provide structural and humanitarianassistance; providing bilateral humanitarian aid andcontingency bilateral financial assistance if needed;and urging strong policy actions by Japan and theother major economic powers to promote globalgrowth.

We will continue to support South Korea, Thailandand Indonesia as they implement economic reformsdesigned to foster financial stability and investorconfidence in order to attract the capital flowsrequired to restore economic growth. These reformprograms have at their core restructuring the financialsector, promoting greater transparency in trade andinvestment laws and regulations, and ending policy-directed lending practices. All three nations face adifficult road ahead that will test their political will.The international community can continue to helpameliorate adverse consequences of the crisis, but

46

only resolute action to keep to the agreed policycourse will bring a resumption of sustained growth.

Although the Asian financial crisis is having a cripplingeffect, we believe the underlying fundamentals foreconomic recovery are good and are confident that fulland vigorous implementation of economic reformscombined with the efforts of the internationalcommunity will lead to the restoration of economicgrowth to the countries of the region. U.S. initiatives inAPEC will open new opportunities for economiccooperation and permit U.S. companies to expand theirinvolvement in substantial infrastructure planning andconstruction throughout the region. While our progressin APEC has been gratifying, we will explore options toencourage all Asia Pacific nations to pursue openmarkets.

The United States will continue to work with the IMF,the World Bank, other international financialinstitutions, the governments in East Asia and theprivate sector to help stabilize financial markets,restore investor confidence and achieve much-needed reforms in the troubled East Asianeconomies. Our goal is to help the region recoverquickly and to build a solid, resilient foundation forfuture economic growth in the region.

China

Bringing the PRC more fully into the global tradingsystem is manifestly in our national interest. China isone of the fastest growing markets for our goods andservices. As we look into the next century, ourexports to China will support hundreds of thousandsof jobs across our country. For this reason, we mustcontinue our normal trade treatment for China, asevery President has done since 1980, strengtheninginstead of undermining our economic relationship.

An important part of integrating China into the market-based world economic system is opening China’shighly protected market through lower border barriersand removal of distorting restraints on economicactivity. We have negotiated landmark agreements tocombat piracy of intellectual property and advance theinterests of our creative industries. We have alsonegotiated—and vigorously enforced—agreements ontextile trade. At their 1997 and 1998 summits,President Clinton and President Jiang agreed to takea number of positive measures to expand U.S.-Chinatrade and economic ties. We will continue to press

China to open its markets (in goods, services andagriculture) as it engages in sweeping economicreform.

It is in our interest that China become a member ofthe WTO; however, we have been steadfast inleading the effort to ensure that China’s accession tothe WTO occurs on a commercial basis. Chinamaintains many barriers that must be eliminated, andwe need to ensure that necessary reforms areagreed to before accession occurs. At the 1997summit, the two leaders agreed that China’s fullparticipation in the multilateral trading system is intheir mutual interest. They agreed to intensifynegotiations on market access, including tariffs, non-tariff measures, services, standards and agriculture,and on implementation of WTO principles so thatChina can accede to the WTO on a commercial basisat the earliest possible date. They reiterated theircommitment to this process in their 1998 summit.

China has been a helpful partner in internationalefforts to stabilize the Asian financial crisis. Inresisting the temptation to devalue its currency,China has seen that its own interests lie in preventinganother round of competitive devaluations that wouldhave severely damaged prospects for regionalrecovery. It has also contributed to the rescuepackages for affected economies.

Japan

The Administration continues to make progress onincreasing market access in Asia’s largest economy.Since the beginning of the first Clinton Administration,the United States and Japan have reached 35 tradeagreements designed to open Japanese markets inkey sectors, including autos and auto parts,telecommunications, civil aviation, insurance andglass. The Administration also has intensified effortsto monitor and enforce trade agreements with Japanto ensure that they are fully implemented. TheUnited States also uses multilateral venues, such asWTO dispute settlement and negotiation of newmultilateral agreements, to further open markets andaccomplish our trade objectives with Japan.

During the period from 1993 to 1996, U.S. exports toJapan increased from $47.9 billion to $67.6 billion,and the bilateral trade deficit fell from $59.4 billion to$47.6 billion. The recent economic downturn inJapan, however, has reversed this positive trend with

47

the bilateral trade deficit for the first four months 1998already at $20.8 billion, up 32 percent from the sameperiod in 1996. Sustained global expansion andrecovery in Asia cannot be achieved when thesecond largest economy in the world, accounting formore than half of Asian output, is in recession andhas a weakened financial system.

Japan has a crucial role to play in Asia’s economicrecovery. Japan must generate substantial growth tohelp maintain a growing world economy and absorb agrowing share of imports from emerging markets. Todo this Japan must reform its financial sector,stimulate domestic demand, deregulate its economy,and further open its markets to foreign goods andservices. We look forward to substantial andeffective actions to achieve a domestic demand-ledrecovery, to restore health to the financial sector andto make progress on deregulation and openingmarkets. Strong, immediate, tangible actions by theJapanese Government are vital to make Japan againan engine of growth and to help spur a broadereconomic recovery in Asia, as well as reinvigorate acritical market for U.S. goods and services.

South Korea

At their summit meeting in June 1998, PresidentClinton reaffirmed to President Kim that the UnitedStates will continue its strong support for his efforts toreform the Korean economy, liberalize trade andinvestment, strengthen the banking system andimplement the IMF program. President Clintonreiterated our commitment to provide bilateral financeif needed under appropriate conditions. The twopresidents discussed a number of concrete steps topromote growth in both our countries and exploredways to more fully open our markets and to furtherintegrate the Republic of Korea into the globaleconomy, including new discussions on a bilateralinvestment treaty. They also signed an Open Skiesagreement which permits unrestricted air servicebetween our two countries.

Thailand Thailand, a key U.S. security partner in the region, alsofaces serious economic difficulties. The U.S.government continues to work with Thailand to ease

the strain of the financial crisis. We are taking concretesteps to lessen the financial burden of militaryprograms, including decreasing the scope of militarycontacts such as visits and exercises, and looking forways to reduce the impact of the crisis on securityassistance programs. The Royal Thai armed forceshave earned high marks for their stabilizing influence.

Promoting Democracy

Some have argued that democracy is unsuited for Asiaor at least for some Asian nations—that human rightsare relative and that Western support for internationalhuman rights standards simply mask a form of culturalimperialism. The democratic aspirations andachievements of the Asian peoples prove thesearguments incorrect. We will continue to support thoseaspirations and to promote respect for human rights inall nations. Each nation must find its own form ofdemocracy, and we respect the variety of democraticinstitutions that have emerged in Asia. But there isno cultural justification for tyranny, torture or denial offundamental freedoms. Our strategy includes effortsto:

• pursue a constructive, goal-oriented approach toachieving progress on human rights and rule oflaw issues with China;

• foster a meaningful political dialogue between theruling authorities in Burma and the democraticopposition;

• work with the new government of Indonesia topromote improved respect for human rights,strengthened democratic processes and aninternationally acceptable political solution in EastTimor;

• work with ASEAN to restore democracy toCambodia and encourage greater respect forhuman rights; and

• achieve the fullest possible accounting of missing

U.S. service members, promote greater respectfor human rights in Vietnam, and press for fullVietnamese implementation of the ResettlementOpportunity for Vietnamese Returnees (ROVR)program.

48

The Western HemisphereOur hemisphere enters the twenty-first century with anunprecedented opportunity to secure a future ofstability and prosperity—building on the fact that everynation in the hemisphere except Cuba is democraticand committed to free market economies. The end ofarmed conflict in Central America and otherimprovements in regional security have coincided withremarkable political and economic progress throughoutthe Americas. The people of the Americas are alreadytaking advantage of the vast opportunities beingcreated as emerging markets are connected throughelectronic commerce and as robust democracies allowindividuals to more fully express their preferences.Sub-regional political, economic and securitycooperation in North America, the Caribbean, CentralAmerica, the Andean region and the Southern Conehave contributed positively to peace and prosperitythroughout the hemisphere. Equally important, thepeople of the Americas have reaffirmed theircommitment to combat together the difficult new threatsof narcotics and corruption. U.S. strategy is to securethe benefits of the new climate in the hemisphere whilesafeguarding the United States and our friends againstthese threats.

The 1994 Summit of the Americas in Miami producedhemispheric agreement to negotiate the Free TradeArea of the Americas (FTAA) and agreements onmeasures that included continued economic reformand enhanced cooperation on issues such as theenvironment, counternarcotics, money launderingand corruption. Celebrating the region’s embrace ofdemocracy and free markets, that historic meetingcommitted the United States to a more cooperativerelationship with the hemisphere. U.S. agencieshave used the Miami Summit Action Plan to establishproductive relationships and strengthen cooperationwith their Latin American and Caribbean counterpartsin a host of areas.

Our engagement with the hemisphere reachedunprecedented levels in 1997 and 1998. In May1997, President Clinton traveled to Mexico for asummit meeting with President Zedillo, then heldsummits with Central American leaders in Costa Ricaand Caribbean leaders in Barbados, highlighting theimportance of working with our neighbors to solveproblems of great concern to Americans such asdrugs, immigration and transnational crime. InOctober 1997, in Venezuela, Brazil and Argentina,

the President underscored opportunities forcooperation with vibrant democracies and their fastgrowing markets.

This substantial engagement with the hemisphere atthe beginning of the President’s second termcontinued at the Second Summit of the Americas inSantiago, Chile in April 1998. At the Summit, theleaders of the hemisphere focused on the areasneeded to prepare our citizens for the 21st century:education, democracy, economic integration andpoverty relief.

Enhancing Security

The principal security concerns in the hemisphere aretransnational in nature, such as drug trafficking,organized crime, money laundering, illegalimmigration, and terrorism. In addition, ourhemisphere is leading the way in recognizing thedangers to democracy produced by corruption andrule of law issues. These threats, especially narcotics,produce adverse social effects that undermine thesovereignty, democracy and national security ofnations in the hemisphere.

We are striving to eliminate the scourge of drugtrafficking in our hemisphere. At the Santiago Summit,the assembled leaders launched a MultilateralCounterdrug Alliance to better organize andcoordinate efforts in the hemisphere to stem theproduction and distribution of drugs. The centerpieceof this alliance will be a mechanism to evaluate eachmember country’s progress in achieving their agreedcounternarcotics goals. Summit leaders also agreedto improve cooperation on extraditing andprosecuting individuals charged with narcoticstrafficking and related crimes; strengthen effortsagainst money laundering and forfeiture of assetsused in criminal activity; reinforce international andnational mechanisms to halt illicit traffic and diversionof chemical precursors; enhance national programsfor fostering greater awareness of the dangers ofdrug abuse, preventing illicit drug consumption andproviding treatment, rehabilitation and reintegration;and eliminate illicit crops through national alternativedevelopment programs, eradication and interdiction.

We are also pursuing a number of bilateral andregional counternarcotics initiatives. As part of ourpartnership with Mexico, we are striving to increasecounterdrug and law enforcement cooperation, while in

49

the Caribbean we are intensifying a coordinated efforton counternarcotics and law enforcement. Thereduction in trade barriers resulting from the NorthAmerican Free Trade Agreement (NAFTA) allows moreinspection resources to be directed to thwartingattempts by organized crime to exploit the expandingvolume of trade for increased drug smuggling.

The Santiago Summit addressed other transnationalsecurity concerns as well. Summit leaders called forthe rapid ratification and entry into force of the 1997Inter-American Convention to Combat the IllicitManufacturing of and Trafficking in Firearms,Ammunition Explosives and Related Material. Theyalso agreed to encourage states to accede to theinternational conventions related to terrorism andconvene, under the auspices of the OAS, the SecondSpecialized Inter-American Conference to evaluatethe progress attained and to define future courses ofaction for the prevention, combat and elimination ofterrorism.

We are advancing regional security cooperationthrough bilateral security dialogues, multilateral effortsin the Organization of American States (OAS) andSummit of the Americas on transparency and regionalconfidence and security building measures, exercisesand exchanges with key militaries (principally focusedon peacekeeping), and regular Defense Ministerials.Working with Argentina, Brazil and Chile, the otherthree guarantor nations of the Peru-Ecuador peaceprocess, the United States has brought the partiescloser to a permanent solution to this decades-oldborder dispute, the resolution of which is important toregional stability. The Military Observer Mission,Ecuador-Peru (MOMEP), composed of the fourguarantor nations, successfully separated the warringfactions, created the mutual confidence and securityamong the guarantor nations. The U.S. sponsoredmultilateral military exercise focused on combatingdrug trafficking, supporting disaster relief (particularlyimportant because of the El Nino phenomenon) andparticipation in international peacekeeping. It hasspurred unprecedented exercises among neighboringcountries in Central America and the Southern Cone.Additionally, the Southern Cone has increasinglyshared the burden of international peacekeepingoperations. The Santiago Summit tasked the OAS toexpand topics relating to confidence and securitybuilding measures with the goal of convening aSpecial Conference on Security by the beginning ofthe next decade. Several countries in the regionhave joined our call to promote transparency by

publishing white papers on defense. Our efforts toencourage multilateral cooperation are enhancingconfidence and security within the region and willhelp expand our cooperative efforts to combat thetransnational threats to the Western Hemisphere,particularly in Columbia where social, political andcriminal violence is spilling across borders. We arealso working to ensure successful transfer ofstewardship of the Panama Canal to the Panamanianpeople.

In light of the advances in democratic stabilitythroughout Latin America and mindful of the need forrestraint, the Administration has moved to case-by-case consideration of requests for advancedconventional arms transfers, on par with other areas ofthe world. Such requests will be reviewed in a way thatwill serve our objectives of promoting defensecooperation, restraint in arms acquisition and militarybudgets, and an increased focus on peacekeeping,counternarcotics efforts and disaster relief.

Promoting Prosperity

Economic growth and integration in the Americas willprofoundly affect the prosperity of the United Statesin the 21st century. Latin America has become thefastest growing economic region in the world and ourfastest growing export market. In 1998, our exports toLatin America and the Caribbean are expected toexceed those to the EU.

Building on the vision articulated at Miami in 1994and the groundwork laid by trade ministers over thelast four years, the Santiago Summit launched formalnegotiations to initiate the FTAA by 2005. Thenegotiations will cover a broad range of importantissues, including market access, investment,services, government procurement, disputesettlement, agriculture, intellectual property rights,competition policy, subsidies, anti-dumping andcountervailing duties. A Committee on ElectronicCommerce will explore the implications of electroniccommerce for the design of the FTAA, and aCommittee on Civil Society will provide a formalmechanism for labor, business, consumer,environmental and other non-governmentorganizations to make recommendations on thenegotiations so that all citizens can benefit fromtrade. Governments also will cooperate on promotingcore labor standards recognized by the InternationalLabor Organization.

50

We seek to advance the goal of an integratedhemisphere of free market democracies byconsolidating NAFTA’s gains and obtainingCongressional Fast Track trade agreementimplementing authority. Since the creation of NAFTA,our exports to Mexico have risen significantly while theAgreement helped stabilize Mexico through its worstfinancial crisis in modern history. Considering thatMexico has now become our second-largest exportmarket, it is imperative that its economy remain open tothe United States and NAFTA helps to ensure that.We will continue working with Mexico and interestedprivate parties to continue the mutually beneficial tradewith our largest trading partner and neighbor to thenorth, Canada. We are also committed to delivering onthe President’s promise to negotiate a comprehensivefree trade agreement with Chile because of itsextraordinary economic performance and its active rolein promoting hemispheric economic integration.

While we support the freer flow of goods andinvestment, there is also reason to be sensitive to theconcerns of smaller economies during the period oftransition to the global economy of the 21st century.To address this problem, and in light of the increasedcompetition NAFTA presents to Caribbean trade, wewill seek Congressional approval to provideenhanced trade benefits under the Caribbean BasinInitiative (CBI) to help prepare that region forparticipation in the FTAA. With the assistance ofinstitutions such as OPIC, we will encourage theprivate sector to take the lead in developing smalland medium-sized businesses in the Caribbeanthrough the increased flow of investment capital. Wemust also encourage Caribbean countries andterritories to implement programs to attract foreignand domestic investment.

At the Santiago Summit, the hemisphere's leadersreaffirmed that all citizens must participate in theopportunities and prosperity created by free marketdemocracy. They pledged to ensure access tofinancial services for a significant number of the 50million micro, small and medium size enterprises inthe hemisphere by the year 2000, to work withmultilateral institutions and regional organizations toinvest about $400-500 million over the next threeyears, and to streamline and decentralize propertyregistration and titling procedures and assure accessto justice for the poor. Governments will enhanceparticipation by promoting core labor standardsrecognized by the ILO, strengthening gender equity,working to eliminate exploitative child labor,

negotiating a new Declaration of Principles onFundamental Rights of Workers, and promotingeducation and training for indigenous populations.To improve quality of life, Summit leaders pledged topursue elimination of measles by the year 2000 andreduce the incidence of diseases such as pneumoniaand mumps by the year 2002, to strengthen regionalnetworks of health information such as throughtelemedicine, to give highest priority to reducinginfant malnutrition, and to strengthen cooperation toimplement Santa Cruz Sustainable DevelopmentPlan of Action.

Promoting Democracy

Many Latin American nations have made tremendousadvances in democracy and economic progress overthe last several years. But our ability to sustain thehemispheric agenda depends in part on meeting thechallenges posed by weak democratic institutions,persistently high unemployment and crime rates, andserious income disparities. In some Latin Americancountries, citizens will not fully realize the benefits ofpolitical liberalization and economic growth withoutregulatory, judicial, law enforcement and educationalreforms, as well as increased efforts to integrate allmembers of society into the formal economy.

At the Santiago Summit, the hemisphere's leadersreaffirmed their commitment to strengtheningdemocracy, justice and human rights. They agreedto intensify efforts to promote democratic reforms atthe regional and local level, protect the rights ofmigrant workers and their families, improve thecapabilities and competence of civil and criminaljustice systems, and encourage a strong and activecivil society. They pledged to promptly ratify theInter-American Convention Against Corruption tostrengthen the integrity of governmental institutions.They supported the creation of a Special Rapporteurfor Freedom of Expression as part of the Inter-American Commission for Human Rights. TheRapporteur will help resolve human rights casesinvolving the press and focus international attentionon attacks against the hemisphere’s emerging FourthEstate, as their investigative reporting provokesincreasing threats from drug traffickers and othercriminal elements. Summit leaders also agreed toestablish an Inter-American Justice Studies Center tofacilitate training of personnel, to exchange ofinformation and other forms of technical cooperationto improve judicial systems, to end impunity, combat

51

corruption and provide protection from risingdomestic and international crime, and to create asecure legal environment for trade and investment.

The hemisphere’s leaders agreed at the SantiagoSummit that education is the centerpiece of reformsaimed at making democracy work for all the people ofthe Americas. The Summit Action Plan adopted atSantiago will build on the achievements of the 1994Miami Summit. It will advance numerous cooperativeefforts based on the guiding principles of equity,quality, relevance and efficiency. The SantiagoPlan’s targets are to ensure by the year 2010 primaryeducation for 100% of children and access to qualitysecondary education for at least 75% of youngpeople. The plan also includes solid commitments tofinance schools, textbooks, teacher training,technology for education, to create educationpartnerships between the public and private sectors,to use technology to link schools across nationalboundaries and to increase international exchangesof students.

We are also seeking to strengthen norms for defenseestablishments that are supportive of democracy,transparency, respect for human rights and civiliancontrol in defense matters. Through continuedengagement with regional armed forces, facilitated byour own modest military activities and presence in theregion, we are helping to transform civil-militaryrelations. Through initiatives such as the DefenseMinisterial of the Americas and the Center forHemispheric Defense Studies, we are increasingcivilian expertise in defense affairs and reinforcing thepositive trend in civilian control.

Haiti and Cuba are of special concern to the UnitedStates. The restoration of democracy in Haiti remainsa positive example for the hemisphere. In Haiti wecontinue to support respect for human rights andeconomic growth by a Haitian government capable ofmanaging its own security and paving the way for a fairpresidential election in 2000. Our efforts to train lawenforcement officers in Haiti have transformed thepolice from a despised and feared instrument ofrepression to an accountable public safety agency.We are committed to working with our partners in theregion and in the international community to meet thechallenge of institutionalizing Haiti’s economic andpolitical development. Haiti will benefit from aCaribbean-wide acceleration of growth and investment,

stimulated in part by enhancement of CBI benefits.The United States remains committed to promoting apeaceful transition to democracy in Cuba andforestalling a mass exodus that would endanger thelives of migrants and the security of our borders. Whilemaintaining pressure on the regime to make politicaland economic reforms, we continue to encourage theemergence of a civil society to assist the transition todemocracy when the change comes. In March 1998,President Clinton announced a number of measuresdesigned to build on the success of the Pope’s January1998 visit to Cuba, expand the role of the CatholicChurch and other elements of civil society, andincrease humanitarian assistance. As the Cubanpeople feel greater incentive to take charge of theirown future, they are more likely to stay at home andbuild the informal and formal structures that will maketransition easier. Meanwhile, we remain firmlycommitted to bilateral migration accords that ensuremigration in safe, legal and orderly channels.

The Middle East,Southwest and South AsiaThe May 1998 Indian and Pakistani nuclear testsclearly illustrate that a wide range of events in thisregion can have a significant impact on key U.S.security objectives. Choices made in the Middle East,Southwest and South Asia will determine whetherterrorists operating in and from the region are deniedthe support they need to perpetrate their crimes,whether weapons of mass destruction will imperil theregion and the world, whether the oil and gas fields ofthe Caucasus and Central Asia become reliable energysources, whether the opium harvest in Afghanistan iseliminated, and whether a just and lasting peace canbe established between Israel and the Arab countries.

Enhancing Security

The United States has enduring interests in pursuing ajust, lasting and comprehensive Middle East peace,ensuring the security and well-being of Israel, helpingour Arab friends provide for their security, andmaintaining the free flow of oil at reasonable prices.Our strategy reflects those interests and the uniquecharacteristics of the region as we work to extend therange of peace and stability.

52

The Middle East Peace Process

An historic transformation has taken place in thepolitical landscape of the Middle East: peaceagreements are taking hold, requiring concertedimplementation efforts. The United States—as anarchitect and sponsor of the peace process—has aclear national interest in seeing the process deepenand widen to include all Israel’s neighbors. We willcontinue our steady, determined leadership—standingwith those who take risks for peace, standing againstthose who would destroy it, lending our good officeswhere we can make a difference and helping bring theconcrete benefits of peace to people’s daily lives.Future progress will require movement in the followingareas:

• continued Israeli-Palestinian engagement onremaining issues in the Interim Agreement,and negotiation of permanent status issues;

• resuming Israeli-Syrian and Israeli-Lebanesenegotiations with the objective of achievingpeace treaties; and

• normalization of relations between Arab statesand Israel.

Southwest Asia

In Southwest Asia, the United States remainsfocused on deterring threats to regional stability,countering threats posed by WMD and protecting thesecurity of our regional partners, particularly from Iraqand Iran. We will continue to encourage members ofthe Gulf Cooperation Council (GCC) to work closely oncollective defense and security arrangements, helpindividual GCC states meet their appropriate defenserequirements and maintain our bilateral defenseagreements.

We will maintain an appropriate military presence inSouthwest Asia using a combination of ground, airand naval forces. As a result of the confrontationwith Iraq in late 1997 and early 1998 over to Iraqiinterference with UN inspection teams, we increasedour continuous military presence in the Gulf to backour on-going efforts to bring Iraq into compliance withUN Security Council resolutions. Our forces in theGulf are backed by our ability to rapidly reinforce theregion in time of crisis, which we demonstratedconvincingly in late 1997 and early 1998. We remain

committed to enforcing the no-fly zones over northernand southern Iraq, which are essential for implement-ing the UN resolutions and preventing Saddam fromtaking large scale military action against Kuwait orthe Kurd and Shia minorities in Iraq.

We would like to see Iraq’s reintegration into theinternational community; however, we have madeclear that Iraq must comply with all relevant UNSecurity Council resolutions. Saddam Hussein mustcease the cynical manipulation of UN humanitarianprograms and cooperate with Security CouncilResolution 1153, which authorizes increasedhumanitarian assistance to the people of Iraq. Iraqmust also move from its posture of deny, delay andobscure to a posture of cooperation and compliancewith the UN Security Council resolutions designed torid Iraq of WMD and their delivery systems. Iraqmust also comply with the memorandum ofunderstanding reached with UN Secretary GeneralKofi Annan in February 1998. Our policy is directednot against the people of Iraq but against theaggressive behavior of the government. Until thatbehavior changes, our goal is containing the threatSaddam Hussein poses to Iraq’s neighbors, the freeflow of Gulf oil and broader U.S. interests in theMiddle East.

Our policy toward Iran is aimed at changing thebehavior of the Iranian government in several keyareas, including its efforts to obtain weapons of massdestruction and long-range missiles, its support forterrorism and groups that violently oppose the peaceprocess, its attempts to undermine friendlygovernments in the region, and its development ofoffensive military capabilities that threaten our GCCpartners and the flow of oil.

There are signs of change in Iranian policies. InDecember 1997, Iranian officials welcomed ChairmanArafat to the Islamic Summit in Tehran and said that,although they did not agree with the peace process,they would not seek to impose their views and wouldaccept what the Palestinians could accept. InJanuary 1998, President Khatemi publicly denouncedterrorism and condemned the killing of innocentIsraelis. Iran's record in the war against drugs hasgreatly improved and it has received high marks fromthe UN for its treatment of more than two million Iraqiand Afghan refugees. Iran is participating indiplomatic efforts to bring peace and stability toAfghanistan and is making a welcome effort toimprove relations with its neighbors in the Gulf.

53

We view these developments with interest, both withregard to the possibility of Iran assuming its rightfulplace in the world community and the chance forbetter bilateral ties. We also welcome statements byPresident Khatemi that suggest a possibility ofdialogue with the United States, and are takingconcrete steps in that direction. This month, weimplemented a new, more streamlined procedure forissuing visas to Iranians who travel to the UnitedStates frequently. We also revised our ConsularTravel Warning for Iran so that it better reflectscurrent attitudes in Iran towards American visitors.We have supported cultural and academicexchanges, and facilitated travel to the United Statesby many Iranians.

However, these positive signs must be balancedagainst the reality that Iran’s support for terrorism hasnot yet ceased, serious violations of human rightspersist, its efforts to develop long range missiles,including the 1,300 kilometer-range Shahab-3 it flighttested in July 1998, and its efforts to acquire WMDcontinue. The United States will continue to opposeany country selling or transferring to Iran materialsand technologies that could be used to develop long-range missiles or weapons of mass destruction.Similarly, we oppose Iranian efforts to sponsor terror.

We are ready to explore further ways to build mutualconfidence and avoid misunderstandings with Iran.We will strengthen our cooperation with allies toencourage positive changes in Iranian behavior. If adialogue can be initiated and sustained in a way thataddresses the concerns of both sides, then theUnited States would be willing to develop with theIslamic Republic a road map leading to normalrelations.

South Asia

South Asia has experienced an important expansion ofdemocracy and economic reform. Our strategy isdesigned to help the peoples of that region enjoy thefruits of democracy and greater stability by helpingresolve long-standing conflict and implementingconfidence-building measures. Regional stability andimproved bilateral ties are also important for U.S. eco-nomic interests in a region that contains a fifth of theworld’s population and one of its most importantemerging markets. We seek to establish relationshipswith India and Pakistan that are defined in terms oftheir own individual merits and reflect the full weight

and range of U.S. strategic, political and economicinterests in each country. In addition, we seek to workclosely with regional countries to stem the flow of illegaldrugs from South Asia, most notably from Afghanistan.

The United States has long urged India and Pakistan totake steps to reduce the risk of conflict and to bringtheir nuclear and missile programs into conformity withinternational standards. The Indian and Pakistaninuclear test explosions were unjustified and threatento spark a dangerous nuclear arms race in Asia. Asa result of those tests and in accordance with ourlaws the United States imposed sanctions againstIndia and Pakistan. The sanctions includetermination of assistance except for humanitarianassistance for food or other agricultural commodities;termination of sales of defense articles or services;termination of foreign military financing; denial of non-agricultural credit, credit guarantees or other financialassistance by any agency of the U.S. Government;prohibiting U.S. banks from making any loan orproviding any credit to the governments of India andPakistan except for the purpose of purchasing food orother agricultural commodities; and prohibiting exportof specific goods and technology subject to exportlicensing by the Commerce Department.

India and Pakistan are contributing to a self-defeatingcycle of escalation that does not add to the securityof either country. They have put themselves at oddswith the international community over these nucleartests. In concert with the other permanent membersof the UN Security Council and the G-8 nations, theUnited States has called on both nations to renouncefurther nuclear tests, to sign the Comprehensive TestBan Treaty immediately and without conditions, andto resume their direct dialogue and take decisivesteps to reduce tensions in South Asia. We alsostrongly urge these states to refrain from any actions,such as testing, deployment or weaponization ofballistic missiles, that would further undermineregional and global stability. And we urge them tojoin the clear international consensus in support ofnonproliferation and to join in negotiations in Genevafor a cut off of fissile material production.

Promoting Prosperity

The United States has two principle economicobjectives in the region: to promote regional economiccooperation and development, and to ensureunrestricted flow of oil from the region. We seek to

54

promote regional trade and cooperation on infrastruc-ture through the multilateral track of the peace process,including revitalization of the Middle East and NorthAfrica (MENA) economic summits.

The United States depends on oil for about 40 percentof its primary energy needs and roughly half of our oilneeds are met with imports. Although we import lessthan 10% of Persian Gulf exports, our allies in Europeand Japan account for about 85% of these exports.Previous oil shocks and the Gulf War underscore thestrategic importance of the region and show the impactthat an interruption of oil supplies can have on theworld’s economy. Appropriate responses to eventssuch as Iraq’s invasion of Kuwait can limit the magni-tude of the crisis. Over the longer term, U.S. depen-dence on access to these and other foreign oilsources will remain important as our reserves aredepleted. The United States must remain vigilant toensure unrestricted access to this critical resource.Thus, we will continue to demonstrate U.S. commit-ment and resolve in the Persian Gulf.

Promoting Democracy

We encourage the spread of democratic valuesthroughout the Middle East and Southwest and SouthAsia and will pursue this objective by a constructivedialogue with countries in the region. In Iran, forexample, we hope the nation's leaders will carry outthe people's mandate for a government that respectsand protects the rule of law, both in its internal andexternal affairs. We will promote responsibleindigenous moves toward increasing politicalparticipation and enhancing the quality of governanceand will continue to vigorously challenge manygovernments in the region to improve their humanrights records. Respect for human rights alsorequires rejection of terrorism. If the nations in theregion are to safeguard their own citizens from thethreat of terror, they cannot tolerate acts ofindiscriminate violence against civilians, nor can theyoffer refuge to those who commit such acts.

U.S. policies in the Middle East and Southwest Asiaare not anti-Islamic—an allegation made by someopponents of our efforts to help bring lasting peaceand stability to the region. Islam is the fastest-growing religious faith in the United States. Werespect deeply its moral teachings and its role as asource of inspiration and instruction for hundreds ofmillions of people around the world. U.S. policy in

the region is directed at the actions of governmentsand terrorist groups, not peoples or faiths. Thestandards we would like all the nations in the regionto observe are not merely Western, but universal.

AfricaIn recent years, the United States has supportedsignificant change in Africa with considerablesuccess: multi-party democracies are more commonand elections are more frequent and open, humanrights are more widely respected, the press is morefree, U.S.-Africa trade is expanding, and a pragmaticconsensus on the need for economic reform isemerging. A new, post-colonial generation ofleadership is reaching maturity in Africa, with moredemocratic and pragmatic approaches to solving theircountries’ problems and developing their human andnatural resources.

To further those successes, President Clinton madean unprecedented 12-day trip to Africa in March-April1998. With President Museveni of Uganda, he co-hosted the Entebbe Summit for Peace and Prosperityto advance cooperation on conflict prevention, humanrights and economic integration. The summit wasattended by Prime Minister Meles of Ethiopia,Presidents Moi of Kenya, Mkapa of Tanzania,Bizimungu of Rwanda and Kabila of Congo. Duringthe trip, the President unveiled a number of newprograms to support democracy, prosperity andopportunity, including initiatives on education, rule oflaw, food security, trade and investment, aviation,and conflict resolution. President Clinton directlyaddressed the violent conflicts that have threatenedAfrican democracy and prosperity.

Sustaining our success in Africa will require that weidentify those issues that most directly affect ourinterests and where we can make a differencethrough efficient targeting of our resources. A keychallenge is to engage the remaining autocraticregimes to encourage those countries to follow theexample of other African countries that are success-fully implementing political and economic reforms.

Enhancing Security

Serious transnational security threats emanate frompockets of Africa, including state-sponsored

55

terrorism, narcotics trafficking, international crime,environmental damage and disease. These threatscan only be addressed through effective, sustainedengagement in Africa. We have already madesignificant progress in countering some of thesethreats—investing in efforts to combat environmentaldamage and disease, leading international efforts tohalt the proliferation of land mines and the deminingof Angola, Mozambique, Namibia, Rwanda, Ethiopiaand Eritrea. We continue efforts to reduce the flow ofnarcotics through Africa and to curtail internationalcriminal activity based in Africa. We seek to keepAfrica free of weapons of mass destruction bysupporting South Africa's nuclear disarmament andaccession to the NPT as a non-nuclear weapon state,securing the indefinite and unconditional extension ofthe NPT, and promoting establishment of the AfricanNuclear Weapons Free Zone.

Libya and Sudan continue to pose a threat to regionalstability and the national security and foreign policyinterests of the United States. Our policy towardLibya is designed to block its efforts to obtainweapons of mass destruction and development ofconventional military capabilities that threaten itsneighbors, and to compel Libya to cease its supportfor terrorism and its attempts to undermine othergovernments in the region. The government of Libyahas continued these activities despite calls by theSecurity Council that it demonstrate by concreteactions its renunciation of terrorism. Libya alsocontinues to defy the United Nations by refusing toturn over the two defendants in the terrorist bombingof Pan Am 103. We remain determined that theperpetrators of this act and the attack on UTA 772 bebrought to justice. We have moved to counterSudan’s support for international terrorism andregional destabilization by imposing comprehensivesanctions on the Khartoum regime, continuing topress for the regime’s isolation through the UNSecurity Council, and enhancing the ability ofSudan’s neighbors to resist Khartoum-backedinsurgencies in their countries through our FrontlineStates initiative.

Persistent conflict and continuing political instability insome African countries remain chronic obstacles toAfrica’s development and to U.S. interests there,including unhampered access to oil and other vitalnatural resources. Our efforts to resolve conflictinclude working to fully implement the LusakaAccords in Angola, sustaining the fragile newgovernment in Liberia, supporting the recently

restored democratic government in Sierra Leone andthe Economic Community of West African StatesMonitoring Group (ECOMOG) efforts to ensuresecurity there, and achieving a peaceful, credibletransition to democratic government in Nigeria, theDemocratic Republic of the Congo and Congo-Brazzaville.

To foster regional efforts to promote prosperity,stability and peace in Africa, the United States in1996 launched the African Crisis Response Initiative(ACRI) to work with Africans to enhance theircapacity to conduct effective peacekeeping andhumanitarian operations. We are coordinating withthe French, British, other donor countries and Africangovernments in developing a sustainable plan ofaction. The United States has already trainedbattalions from Uganda, Senegal, Malawi, Mali andGhana, and is planning to train troops in Benin andCote D'Ivoire later this year. We are consultingclosely on ACRI activity with the UN Department ofPeacekeeping Operations, the Organization ofAfrican Unity (OAU) and its Crisis ManagementCenter, and African sub-regional organizationsalready pursuing similar capacity enhancements. Wehope and expect that other African countries will alsoparticipate in the effort in the future, building a well-trained, interoperable, local capacity forpeacekeeping and humanitarian operations in aregion that has been fraught with turbulence andcrisis and all too dependent upon outside assistanceto deal with these problems.

On April 1, 1998, President Clinton announced thatthe United States will be establishing the AfricanCenter for Security Studies (ACSS). The ACSS willbe a regional center modeled after the George C.Marshall Center in Germany, designed inconsultation with African nations and intended topromote the exchange of ideas and informationtailored specifically for African concerns. The goal isfor ACSS to be a source of academic yet practicalinstruction in promoting the skills necessary to makeeffective national security decisions in democraticgovernments, and engage African military and civiliandefense leaders in a substantive dialogue aboutdefense policy planning in democracies.

Promoting Prosperity

A stable, democratic, prosperous Africa will be abetter economic partner, a better partner for security

56

and peace, and a better partner in the fights againstdrug trafficking, crime, terrorism, disease andenvironmental degradation. An economicallydynamic Africa will be possible only when Africa isfully integrated into the global economy. Our aim,therefore, is to assist African nations to implementeconomic reforms, create favorable climates for tradeand investment, and achieve sustainabledevelopment. A majority of sub-Saharan Africa’s 48countries have adopted market-oriented economicand political reforms in the past seven years.

To support this positive trend, the President hasproposed the Partnership for Economic Growth andOpportunity in Africa to support the economictransformation underway in Africa. TheAdministration is working closely with Congress toimplement key elements of this initiative throughrapid passage of the African Growth and OpportunityAct. By significantly broadening market access,spurring growth in Africa and helping the poorestnations eliminate or reduce their bilateral debt, thisbill will better enable us to help African nationsundertake difficult economic reforms and build betterlives for their people through sustainable growth anddevelopment.

Further integrating Africa into the global economy hasobvious political and economic benefits. It will alsodirectly serve U.S. interests by continuing to expandan already important new market for U.S. exports.The more than 700 million people of sub-SaharanAfrica represent one of the world’s largest largelyuntapped markets. Although the United Statesenjoys only a seven percent market share in Africa,already 100,000 American jobs depend on ourexports there. Increasing both the U.S. market shareand the size of the African market will bring tangiblebenefits to U.S. workers and increase prosperity andeconomic opportunity in Africa. To encourage U.S.trade with and investment in Africa, we are pursuingseveral new initiatives and enhancements to thePartnership for Economic Growth and Opportunity,including greater market access, targeted technicalassistance, enhanced bilateral and World Bank debtrelief, and increased bilateral trade ties.

To further our trade objectives in Africa, the Presidentinaugurated the Ron Brown Commercial Center inJohannesburg, South Africa on March 28, 1998. TheCenter, which is operated and funded by theDepartment of Commerce, provides support forAmerican companies looking to enter or expand into

the sub-Saharan African market. It promotes U.S.exports through a range of support programs andfacilitates business contacts and partnershipsbetween African and American businesses. TheCenter also serves as a base for other agencies suchas the Export-Import Bank, the Trade DevelopmentAgency and USTR to expand their assistance tobusiness.

Because safe air travel and secure airports arenecessary for increasing trade, attracting investment,and expanding tourism, the President on April 1,1998 announced the "Safe Skies for Africa" initiative.The goals of this $1.2 million program—funded by theDepartments of State and Transportation—are towork in partnership with Africa to increase thenumber of sub-Saharan African countries that meetICAO standards for aviation safety, improve securityat 8-12 airports in the region within 3 years, andimprove regional air navigation services in Africa byusing modern satellite-based navigation aids andcommunications technology. The initiative focuseson safety assessments and security surveys inselected countries and formulating action planstogether with Africa civil aviation authorities to bringaviation safety and security practices in Africa up toaccepted world standards.

To support the desire of African nations to invest in abetter and healthier future for their children, thePresident on March 24, 1998 announced three newinitiatives to improve educational standards, ensureadequate food and agricultural production, and fightthe deadly infectious diseases that claim the lives oftoo many African children.

• The Education for Development andDemocracy Initiative seeks to boost Africanintegration into the global community byimproving the quality of, and technology for,education in Africa. The initiative is centeredon community resource centers, public-private partnerships, and educating andempowering girls. We plan on spendingapproximately $120 million over two years insupport of this initiative.

• The Africa Food Security Initiative will assistAfrican nations in strengthening agricultureand food security in a number of key areas,including production of healthy andalternative crops, better market efficiencyand distribution of existing crops, increased

57

trade and investment in agriculturalindustries, attacking crop diseases, andincreasing access to agricultural technologysystems to assist with increased cropproduction and distribution. Our pilot budgetfor the first two years of the initiative will be$61 million, which complements USAID’scurrent investments in these efforts.

• The third initiative is combating the infectiousdiseases that claim many young lives. Tohelp combat malaria, we will provide anadditional $1 million grant to provide furtherassistance to the Multilateral Initiative onMalaria. The grant will focus on continuingeducational seminars and will support theRegional Malaria Lab in Mali to reinforce itsposition as a regional center of excellence inAfrica. This effort will complement ourongoing Infectious Disease Initiative forAfrica that focuses on surveillance, response,prevention and building local resistance toinfectious diseases.

Promoting Democracy

In Africa as elsewhere, democracies have provedmore peaceful, stable and reliable partners withwhich we can work and are more likely to pursuesound economic policies. We will continue to work tosustain the important progress Africans haveachieved to date and to broaden the growing circle ofAfrican democracies.

Restoration of democracy and respect for humanrights in Nigeria has long been one of our majorobjectives in Africa. In June 1998, President Clintonreaffirmed to Nigeria’s new leadership the friendshipof the United States for the people of Nigeria andunderscored our desire for improved bilateralrelations in the context of Nigeria taking swift andsignificant steps toward a successful transition to ademocratically elected civilian government thatrespects the human rights of its citizens. The release

of some political prisoners by the Nigeriangovernment is an encouraging sign, but much moreneeds to be done and the United States will continueto press for a credible transition to a democratic,civilian government.

Through President Clinton’s $30 million Great LakesJustice Initiative, the United States will work with boththe people and governments of the DemocraticRepublic of Congo, Rwanda and Burundi to supportjudicial systems which are impartial, credible,effective and inclusive. This initiative seeks tostrengthen judicial bodies, such as relevant Ministriesof Justice and Interior; improve the functioning ofcourt systems, prosecutors, police and prisonsystems; work with national officials on specificproblem areas such as creation of civilian policeforces and legal assistance programs; supporttraining programs for police and judiciary officials;develop improved court administration systems;provide human rights training for military personneland support prosecution of abuses perpetrated bymilitary personnel; demobilize irregular elements ofstanding armies and reintegrate them into societyand programs; and demobilize child soldiers.

In addition, we will work with our allies to find aneffective formula for promoting stability, democracyand respect for human rights in the DemocraticRepublic of Congo so that it and a democratic Nigeriacan become the regional centers for economicgrowth, and democratic empowerment that they canand should be. In order to help post-apartheid SouthAfrica achieve its economic, political, democratic andsecurity goals for all its citizens, we will continue toprovide substantial bilateral assistance, vigorouslypromote U.S. trade and investment, and pursue closecooperation and support for our mutual interests andgoals through the versatile Binational Commissionchaired by the Vice Presidents of each country.

Ultimately, the prosperity and security of Africadepends on extensive political and economic reform,and it is in the U.S. interest to support and promotesuch reforms.

59

IV. Conclusions

Today, on the brink of the twenty-first century, we arebuilding new frameworks, partnerships andinstitutions—and adapting existing ones—to strengthenAmerica’s security and prosperity. We are working toconstruct new cooperative security arrangements, ridthe world of weapons that target whole populations,build a truly global economy, and promote democraticvalues and economic reform. Because diplomatic andmilitary responses alone may not deter threats to ournational security from non-state actors such ascriminals and terrorist groups, we must promoteincreased cooperation among law enforcementofficials and improved methods for dealing withinternational crime and terrorism. Ours is a momentof historic opportunity to create a safer, moreprosperous tomorrow—to make a difference in the livesof our citizens.

This promising state of affairs did not just happen, andthere is no guarantee that it will endure. Thecontemporary era was forged by steadfast Americanleadership over the last half century—through effortssuch as the Marshall Plan, NATO, the United Nationsand the World Bank. The clear dangers of the pastmade the need for national security commitments andexpenditures obvious to the American people. Today,the task of mobilizing public support for nationalsecurity priorities is more complicated. The complexarray of unique dangers, opportunities andresponsibilities outlined in this strategy are not alwaysreadily apparent as we go about our daily lives focusedon immediate concerns. Yet, in a more integrated andinterdependent world, we must remain activelyengaged in world affairs to successfully advance our

national interests. To be secure and prosperous,America must continue to lead.

Our international leadership focuses on PresidentClinton's strategic priorities: to foster regional effortsled by the community of democratic nations topromote peace and prosperity in key regions of theworld, to create more jobs and opportunities forAmericans through a more open and competitivetrading system that also benefits others around theworld, to increase cooperation in confronting newsecurity threats that defy borders and unilateralsolutions, and to strengthen the intelligence, military,diplomatic and law enforcement tools necessary tomeet these challenges. Our international leadershipis ultimately founded upon the power of ourdemocratic ideals and values. The spread ofdemocracy supports American values and enhancesour security and prosperity. The United States willcontinue to support the trend toward democracy andfree markets by remaining actively engaged in theworld.

Our engagement abroad requires the active, sustainedsupport of the American people and the bipartisansupport of the U.S. Congress. This Administrationremains committed to explaining our security interests,objectives and priorities to the nation and seeking thebroadest possible public and congressional support forour security programs and investments. We willcontinue to exercise our leadership in the world in amanner that reflects our national values and protectsthe security of this great nation.