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of SUiiv 



Official Monthly Record of United States Foreign Policy / Volume 88 / Number 2136 

July 1988 



*- (^, ^. 


Budget/8, 28 

Dpparim4*ni of Siate 


Volume 88 / Number 2136 / July 1988 

Cover photo: 

Prime Minister Mulroney and President 


(White Huusf photo by David Johnson) 

The Department of State Bulletin, 
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ie President 

Reflections on U.S. -Soviet 

Our Human Rights Agenda With 

the Soviet Union 

16 Secretary 

Achievements of the INF Treaty 
FY 1989 Foreign Policy Budget 
Interview on "This Week With 
David Brinkley" 

rms Control 

U.S. Arms Control Initiatives 


Visit of Canadian Prime Minister 
(Brian Mulroney. President 
U.S. -Canada Relations 
U.S.-Canada Free Trade 


1 The "Budget Crunch" and the 
Foreign Service (Ronald I. 

<ast Asia 

! Elections in Korea (Gaston J. 

Sigur, Jr.) 
1 FY 1989 Assistance Requests for 

East Asia and the Pacific 

(Gaston J. Sigur, Jr.) 


39 Toward a Stronger International 

Economy (John C. Whitehead) 
41 World Ti-ade Week, 1988 

43 The U.S. and Japan: Partners in 

Global Economic Leadership 

(W. Allen Wallis) 
45 Japan Continues Quotas on Beef, 

Citrus Imports (Clayton 

47 U.S. Foreign Economic Policy, 



50 Update on Europe (Rozanne L. 


51 Visit of Finnish Prime Minister 
53 NATO Nuclear Planning Group 

Meets in Brussels (Final 

Foreign Assistance 

54 FY 1989 Request for Foreign 
Assistance Programs (Alan 

IVIiddle East 

60 Secretary Meets with Israeli 

Foreign Minister (Secretary 

61 U.S. to Extend Protection to 

Neutral Ships in Persian Gulf 
(Frank C. Carlucci III) 

l\/lilitary Affairs 

61 Canadian Acquisition of Nuclear- 
Powered Submarines 
(Department Statement) 


62 Essential Ingredients in the 
Fight Against Terrorism 
(L. Paul Bremer, 111) 

65 High Technology Terrorism 
(L. Paul Bremer, III) 

United Nations 

68 Policies for the Americas in the 

1990s (Richard S. Williamson) 

69 U.S. Supports Security Council 

Resolution on Chemical 

Weapons (Vernon A. Walters, 

Text of Resolution) 
71 FY 1989 Assistance Requests for 

Organizations and Programs 

(Richard S. Williamson) 
73 UN Security Council Resolution 

on Southern Lebanon (Version 

A. Walters) 

Western Hemisphere 

75 Transfer of U.S. Funds to 
Panama (White House 

75 Pan American Day and Week, 
1988 (Proclamation) 


76 Current Actions 

Press Releases 

78 Department of State 
78 USUN 


79 Department of State 

79 Foreign Relations Supplement 


80 Digest of United States Practice 

in Internatioyial Law Released 

81 Current Documents, 1983 

Supplement Released 


■^> ' JULs^ 


eflections on U.S. -Soviet Relations 

President Reagan's remarks before 
•/ World Affairs Council of Western 
yssachitsetts in Springfield on 
^■il 21. 1988^ 

( n delighted to be here with you, and 
jiBcially in the State where America's 
)'i struggle for freedom began. "I'm 
III aware," John Adams wrote in 1776, 

• the toil and blood and treasure that 
rill cost us to support and defend 
^36 States. Yet through all the 

})m, I can see the rays of ravishing 
1 1 and glory." 

Historians have wondered ever 
ii '6 what it was that made men like 
'ims and that outnumbered band of 
,^ mists believe they could overthrow 
:j power of the mightiest empire on 
ij -th. How appropriate it seemed, 
3 ;ars later, when the British band 
: '-ed at Yorktown, The World Turned 
t iide Down. Ti-uly, the predictions of 
: wiser heads in Europe had been 
; van wrong. The boldness, the vision, 
; , yes, the gift for dreaming of a few 
i ners, merchants, and lawyers here 
; ;hese shores had started a revolu- 
: I that today reaches into every 
: ner of the world, a revolution that 

• I fires men's souls with the ravishing 
i it and glory of human freedom. 

As members of the World Affairs 
: incil, as active students of global 
:tics, all of you here today can tes- 
te how unlikely the prospects for 
idem seemed at the start of this 
ade. You can recall democracy on 
defensive in country after country, 
■ unparalleled buildup of nuclear 
:is, hostages in Iran, the Soviet inva- 
n of Afghanistan, predictions of eco- 
nic contraction, and global chaos, 
iging from food and fuel shortages to 
.'ironmental disaster. All of these 
re the unrelenting themes of so much 
A'hat we read and heard in the me- 
■ With the economic recovery of the 
ited States and the democracies, 
vever, much of this talk abated. And 
s economic recovery, anticipated in 
issachusetts in 1981 and 1982 with re- 
ced State and local ta.x rates, was 
, elf rooted in the insight that was at 
j^ heart of the revolution begun here 
|0 centuries ago. Trust the people, let 
jvernment get out of the way, and 
I ve unharnessed the energy and dy- 
imism of free men and women. 

New Candor in the Relationship 

I have come here today to suggest that 
this notion of trusting the power of hu- 
man freedom and letting the people do 
the rest was not just a good basis for 
our economic policy; it proved a solid 
foundation for our foreign policy as 
well. That is what we have given to the 
people, why we have repeated what 
they instinctively knew but what the 
experts had shied away from saying in 
public. We spoke plainly and bluntly. 
We rejected what Jeane Kirkpatrick 
calls moral equivalency. We said free- 
dom was better than totalitarianism. 
We said communism was bad. We said a 
future of nuclear terror was unaccept- 
able. We said we stood for peace, but 
we also stood for freedom. We said we 
held fast to the dream of our Founding 
Fathers — the dream that someday 
every man, woman, and child would live 
in dignity and in freedom. And because 
of this, we said containment was no 
longer enough; that the e.xpansion of 
human freedom was our goal. We spoke 
for democracy, and we said that we 
would work for the day when the peo- 
ple of every nation enjoyed the blessing 
of liberty. 

At first, the experts said this kind 
of candor was dangerous, that it would 
lead to a worsening of Soviet- American 
relations. But far to the contrary, this 
candor made clear to the Soviets the 
resilience and strength of the West; it 
made them understand the lack of illu- 
sions on our part about them or their 
system. By reasserting values and de- 
fining once again what we as a people 
and a nation stood for, we were, of 
course, making a moral and spiritual 
point. And in doing this, we offered 
hope for the future, for democracy; and 
we showed we had retained that gift for 
dreaming that marked this continent 
and our nation at its birth. 

In all this, we were also doing 
something practical. We had learned 
long ago that the Soviets get down to 
serious negotiations only after they are 
convinced that their counterparts are 
determined to stand firm. We knew the 
least indication of weakened resolve on 
our part would lead the Soviets to stop 
the serious bargaining, stall diplomatic 
progress, and attempt to exploit this 
perceived weakness. 

We were candid. We acknowledged 
the depth of our disagreements and 
their fundamental, moral import. In 
this way, we acknowledged that the dif- 
ferences which separated us and the 
Soviets were deeper and wider than 
just missile counts and number of war- 
heads. As I have said before, we do not 
mistrust each other because we are 
armed; we are ai'med because we mis- 
trust each other. And I spoke those 
words to General Secretary Gorbachev 
at our vei-y first meeting in Geneva. 
That was why we resolved to ad- 
• di-ess the full range of the real causes 
of that mistrust and raise the crucial 
moral and political issues directly with 
the Soviets. 

Moral and Political Issues 

In the past, the full weight of the So- 
viet-American relationship all too often 
seemed to rest on one issue — arms con- 
trol, a plank not sturdy enough to bear 
up the whole platform of Soviet-Ameri- 
can relations. We adopted not just a 
one-part agenda of arms control but a 
broader four-part agenda. We talked 
about regional conflicts, especially in 
areas like Afghanistan, Angola, and 
Central America, where Soviet expan- 
sionism was leading to sharp 

We insisted on putting human 
rights on our bilateral agenda, and the 
issue of Soviet noncompliance with the 
Helsinki accords. We also emphasized 
people-to-people exchanges, and we 
challenged the Soviets to tear down the 
artificial barriers that isolate their cit- 
izens from the rest of the world. 

As for the final item on the 
agenda — arms control — even that we 
revised. We said we wanted to go be- 
yond merely establishing new limits 
that would permit even greater 
buildups in nuclear arms. We insisted 
on cutting down, reducing, not just 
controlling, the number of weapons — 
arms reductions, not just arms control. 

And now this approach to the Sovi- 
ets — public candor about their system 
and ours, a full agenda that put the 
real differences between us on the 
table — has borne fruit. Just as we look 
at leading indicators to see how the 
economy is doing, we know the global 
momentum of freedom is the best lead- 
ing indicator of how the United States 

IrPartment of State Bulletin/July 1988 


is doing in the world. When we see a 
freely elected government in the Re- 
public of Korea; battlefield victories for 
the Angolan freedom fighters; China 
opening and liberalizing its economy; 
democracy ascending in Latin America, 
the Phillippines, and on every other 
continent — where these and other indi- 
cators are strong, so too is America 
and so too are our hopes for the future. 

Yet even while freedom is on the 
march, Soviet-American relations have 
taken a dramatic turn into a period of 
realistic engagement. In a month, I will 
meet Mr. Gorbachev in Moscow for our 
fourth summit since 1985. Negotiations 
are underway between our two govern- 
ments on an unparalleled number of is- 
sues. The INF [Intermediate-Range 
Nuclear Forces] Ti-eaty is reality, and 
now the Senate should give its consent 
to ratification. The START [strategic 
arms reduction] treaty is working 
along. And I know that on everyone's 
mind today is this single, startling fact: 
The Soviets have pledged that next 
month they will begin withdrawing 
from Afghanistan. And if anyone had 
predicted just a few years ago that by 
the end of this decade, a treaty would 
be signed eliminating a whole class of 
nuclear weapons, that discussions 
would be moving along toward a 
50% reduction in all strategic nuclear 
arms, and that the Soviets had set a 
date certain for pulling out of 
Afghanistan, that individual would have 
faced more than a little skepticism. But 
that, on the eve of the fourth summit, 
is exactly where we are. 

Let me now summarize for you 
some of the issues that need crucial 
definition as we approach this summit. 
Let us begin with Afghanistan. 

Afshanistan — The Soviet Pledge 
of Withdrawal 

History records few struggles so heroic 
as that of the Afghan people against 
the Soviet invasion. In 8 years, more 
than a million Afghans have been killed; 
more than 5 million have been driven 
into exile. And yet, despite all this suf- 
fering, the Afghan people have fought 
on — a determined patriotic resistance 
force against one of the world's most 
powerful and sophisticated armies. Yes, 
their land has been occupied, but they 
have not been conquered. Now the So- 
viets have said that they have had 
enough. The will for freedom has de- 
feated the will for power as it always 
has and, I believe, always will. 

Let me say here that the next few 
months will be no time for complacency, 
no time to sit back and congratulate 
ourselves. The Soviets have rarely be- 
fore, and not at all in more than three 
decades, left a country once occupied. 
They have often promised to leave, but 
rarely in their history, and then only 
under pressure from the West, have 
they actually done it. Afghanistan was 
a critical, strategic prize for the Sovi- 
ets. The development of air bases near 
Afghanistan's border with Iran and 
Pakistan would have dramatically in- 
creased the Soviet capability to project 
their power to the Strait of Hormuz 
and to threaten our ability to keep open 
that critical passage. We believe that 
they still hope to prop up their dis- 
credited, doomed puppet regime, and 
they still seek to pose a threat to 
neighboring Pakistan, to which we have 
a longstanding defense commitment. 

So we ask: Have the Soviets really 
given up these ambitions? We do not 
know. We cannot know until the drama 
is fully played. We must make clear 
that any spreading of violence on the 
part of the Soviets or their puppets 
could undo the good that the Geneva 
accords promised for East-West 

The Soviets are now pledged to 
withdraw their forces totally from 
Afghanistan by next February 15th at 
the latest. In the meantime, they know 
that as long as they are aiding their 
friends in Kabul, we will continue to 
supply the iiiHJahidhi by whatever 
means necessary. Let me repeat; We 
will continue to support the >ni(jahidin 
for as long as the Soviets support the 
Kabul regime. The Soviets understand 
that this is our position and that we 
would not have entered into this agree- 
ment without it. It is more than a posi- 
tion; this is a hard and fast commitment 
on my part, backed up by a unanimous 
resolution of the U.S. Senate. 

From the start, our policy in 
Afghanistan has, of course, been di- 
rected at restoring that country to an 
independent, nonaligned status in 
which the Afghan people could decide 
their own future and to which their ref- 
ugees could return safely and with 
honor — the same goals as those stated 
in successive UN General Assembly 
resolutions over the years. But these 
are not the only goals of our policy 
there. In a broader sense, our policy is 
intended to nurture what you might call 
more normal relations between East 
and West. Just as a Soviet Union that 

oppresses its own people, that viol 
the Helsinki accords on human rigl 
to which it is a party, that continucui 
suppress free expression and religi^s 
worship and the right to travel — ju a 
such a Soviet Union can never havi 
truly normal relations with the Un 
States and the rest of the free woi- 
neither can a Soviet Union that is 
ways trying to push its way into ot u- 
countries ever have a normal rela- j 
tionship with us. And that is what js 
happened in countries like Angola, ^ic 
aragua, and Ethiopia. The Soviet l^io: 
has helped install or maintain clier re- 
gimes against the will of the peopl 

None of these regimes has brc fhl 
peace or a better life to their peop i < 
Each has brought misery and hare lip 
Each is an outrage to the conscien " 
mankind, and none more so than 

Ethiopia — A Human Catastrophe 
in the Making 

Two years ago, a pitying world be ve 
that at last the hopes of all compa lOr 
ate people had been realized and t t 
the famine in Africa had come to ; 
end. Humanity prayed that it wou 
never again see pictures of childre 
with bloated stomachs or hear sto .^ 
of families dying one by one as th 
walked dozens of miles to reach fe lini 
stations. But now in one country, e 
famine has returned. 

Ethiopia suffers from drought Vei 
and even more, it suffers from ina - 
quate agricultural policies. But ncto 
drought and failed policy has beer 
added a third, even more deadly e ■ 
ment — war. The Ethiopian Army 1 5 
recently suffered major defeats in ,s 
long war with the Eritrean succes 
sionist forces. The combination of 
drought and the dislocations of we is 
the immediate cause of famine in ' at 
part of the country. But the Ethic an 
regime recently ordered all foreig fan 
ine relief workers to leave the affi ted 
northern region. That leads us to le 
horrible conclusion that starvatioi ind 
scorched earth are being consider at 
weapons to defeat the rebellion. 

The subject of Ethiopia has In: 
been on the U.S. -Soviet agenda. I i 
now it is more urgent because of t.s 
tremendous human catastrophe in le 
making. Is the world to know anoier 
holocaust? Is it to see another poUca. 
famine? The Soviets are the princ al 
arms supplier and primary backer o 
the regime in Addis Ababa. They * 

Department of State Bulletin/Jul«|6fi. 


. supplying 250,000 tons of food this 
\ They can stop this disaster before 
ippens. And I appeal to them to 

■ uade the Ethiopian regime, as only 

can, to change its decision and to 
A the famine relief efforts to con- 
i'. And, let me add, I hope, as well, 
the Soviet Union will join us and 
r concerned governments in work- 
t'lward a peaceful, negotiated solu- 
to the civil war. 

Ethiopia, of course — for that mat- 
r 111 every country in which the Sovi- 
I have imposed a regime, the issues 
: iiman rights and regional conflicts 
i;t' into one greater issue: that of 
it intentions, designs, and behavior 
1 at home and across the Earth. 
Several years ago, the French po- 
u al thinker and writer, Jean-Francois 
R el, reported on a conversation that 
a ember of the French Cabinet had 
; a high Soviet official. The Soviet 
lal, in reviewing the history of the 
'-. said, as Revel writes, "We took 
nla, and you did not protest. We 
' I he fact and included it in our 
■s." The Soviet official continued, 
we took Mozambique. Forget it; 
lidii't even know where it is. Then 
jHik Ethiopia, a key move. No re- 

■ .\nd he went on, "Then we took 

' 11 and set up a powerful Soviet base 
e. Aden! On the Arabian Peninsula! 
1 he heart of your supply center! No 
r lonse." And the Soviet official con- 
ed by saying, "So we noted, we can 

■ Aden." 

The years of Western passivity in 
face of Soviet aggression ended, of 
rse, 7 years ago. But the issue here 
ii hat the mentality that produced 
e n analyses, as the Soviet official 
" ed them, has not ended. Until it 
-, the world cannot know true 

aragua — The Stolen Revolution 

T it is a lesson we should apply closer 
' lome, in Nicaragua. A few months 
iie the Soviets launched their inva- 

■ 1 111 Afghanistan, the Soviets also 
hped Sandinista communists in Nic- 

i gua to steal a democratic revolution. 

' ' communists promised democracy 
I human rights, but they, instead, 
M-ised a cruel dictatorship, massively 
itarized, and began a secret war of 
iversion against Nicaragua's peaceful 
The people of Nicaragua took up 

■ ns against the communists, and they 
•1'e fought a valiant struggle. But our 

ngress, instead of giving the Nic- 
iguan resistance the same steady 

support the Afghans have received, has 
repeatedly turned aid on and off Even 
now, while the Soviet bloc pours half a 
billion dollars of arms a year into Nic- 
aragua, Congress has denied the free- 
dom fighters the support they need to 
force the Sandinistas to fulfill their 
democratic promises. I think it is about 
time that Congress learned the lessons 
of Afghanistan. 

America, by supporting freedom 
fighters against brutal dictatorships, is 
helping to advance the values we hold 
most dear: peace, freedom, human 
rights, and, yes, democracy. At the 
same time, we are helping to secure 
our own freedom by I'aising the cost of 
Soviet aggression and by extending the 
battle for freedom to the far frontier. 
Some say the Soviet Union is reap- 
praising its foreign policy these days to 
concentrate on internal reform. Clearly, 
there are signs of change. But if there 
is change, it is because the costs of 
aggression and the real moral differ- 
ence between our systems were 
brought home to it. If we hope to see a 
more fundamental change, we must re- 
main strong and firm. If we fulfill our 
responsibility to set the limits, as well 
as offering constructive cooperation, 
then this could, indeed, turn out to be 
a turning point in the history of East- 
West relations. 

Soviet Opportunity to Build Trust 

By starting now to show real respect 
for human rights and abandoning the 
quest for military solutions to these re- 
gional conflicts, the Soviet Union would 
also be working to build trust and im- 
prove relations between our two coun- 
tries. Regional conflicts and human 
rights are closely intertwined. They are 
issues of moral conscience. They are is- 
sues of international security. Because 
when a government abuses the rights of 
its own people, it is a grim indication of 
its willingness to commit violence 
against others. 

Two of the most basic rights that 
we have called on the Soviets to comply 
with under the Helsinki accords are the 
right to emigrate and the right to 
travel. How can we help but doubt a 
government that mistrusts its own peo- 
ple and holds them against their will? 
And what better way would there be to 
improve understanding between the 
United States and the Soviet Union 
than to permit free and direct contact 
between our two peoples? In the new 
spirit of openness, why doesn't the So- 
viet Government issue passports to its 

citizens? I think this would dramatically 
improve U.S. -Soviet relations. 

Of course, the World Affairs Coun- 
cil here is a major sponsor of USIA's 
[U.S. Information Agency] Interna- 
tional Visitors' Program. I do not have 
to tell you the importance of people-to- 
people exchanges. And I want to thank 
all of you who have provided assistance 
and hospitality to foreign visitors. 

I just left a meeting in the Oval 
Office to come up here, and that meet- 
ing, brought about by Director Wick of 
USIA, was a meeting with an as- 
semblage of media and publishing peo- 
ple from the Soviet Union. That, I 
think, is a first in our relationship. I 
have often reflected in public on how if 
our planet was ever threatened by 
forces from another world, all nations 
and all people would quickly come to- 
gether in unity and brotherhood. 

You here today at the World Af- 
fairs Council understand better than 
most this lesson about how much all of 
us have in common as members of the 
human race. It is governments, after 
all, not people, that put obstacles up 
and cause misunderstandings. When I 
spoke at the United Nations several 
years ago, I mentioned some words of 
Gandhi, spoken shortly after he visited 
Britain in his quest for independence in 
India. "I am not conscious of a single 
experience throughout my 3 months in 
England and Europe," he said, "that 
made me feel that after all East is East 
and West is West. On the contrary, I 
have been convinced more than ever 
that human nature is much the same, 
no matter under what clime it flour- 
ishes and that if you approached people 
with trust and affection, you would 
have tenfold trust and thousandfold af- 
fection returned to you." 

You in the World Affairs Council 
have done much praiseworthy work in 
this area. I am hopeful that American 
foreign policy, based as it has been on 
strength and candor, is opening a way 
to a world where trust and affection 
among peoples is an everyday reality. 
This is my hope as I prepare to leave 
for Moscow. I am grateful for your 
prayers and for your support. 

'Opening comments deleted here; text 
from Weekly Compilation of Presidential 
Documents "of Apr. 25, 1988. ■ 

"Ipartment of State Bulletin/July 1988 


Our Human Rights Agenda 
With the Soviet Union 

President Reagan's address before 
the National Strategy Forum in Chi- 
cago on May Jt, 1988J 

It is a pleasure to be in Chicago and 
an honor to be able to speak to you, 
the members of the National Strategy 

Our agenda for U.S. -Soviet rela- 
tions has four main parts — regional 
conflicts, bilateral exchanges, arms 
reductions, and human rights. I have 
spoken elsewhere at some length 
about the first three. Today I would 
like to take a moment to discuss with 
you the subject of human rights. 

Our Concept of Human Rights 

We Americans, of course, often speak 
about human rights, individual liber- 
ties, and fundamental freedoms. We 
know that the promotion of human 
rights represents a central tenet of our 
foreign policy; we even believe that a 
passionate commitment to human rights 
is one of the special characteristics that 
helps to make America America. It was 
Lincoln himself who said that the Dec- 
laration of Independence granted lib- 
erty not to our nation alone but 
"...gave promise that in due time the 
weights would be lifted from the shoul- 
ders of all men " 

It is important to note that this 
American emphasis on human rights 
represents much more than merely a 
vague respect for human dignity. No, 
part of our heritage as Americans is a 
very specific and definite understanding 
of human rights — a definition of human 
rights that we can assert to challenge 
ourselves and our own institutions and 
that we can hold up as an example for 
all the world. 

Ultimately our view of human 
rights derives from our Judeo-Christian 
heritage and the view that each individ- 
ual life is sacred. It takes more detailed 
form in the works of the French and 
English writers of the 18th century En- 
lightenment. It is the notion that gov- 
ernment should derive its mandate 
from the consent of the governed, this 
consent being expressed in free, con- 
tested, regular elections. And there you 
have a first human right — the right to 
have a voice in government, the right to 

Elected governments would reflect 
the will of the majority, but the En- 
lightenment writers and our own 
Founding Fathers gave the concept of 
human rights still more definite, spe- 
cific form. For they held that each indi- 
vidual has certain rights that are so 
basic, so fundamental to his dignity as 
a human being, that no government — 
however large the majority it repre- 
sents — may violate them. 

Freedom of speech. Freedom of re- 
hgion. Freedom of assembly. Freedom 
of the press. These and other rights 
enshrined in our Constitution and Bill 
of Rights consist in severe limitations 
upon the power of government. They 
are rights — and this is another basic 
point — that every citizen can call upon 
our independent court system to up- 
hold. They proclaim the belief — and 
represent a specific means of enforcing 
the belief — that the individual comes 
first; that the government is the serv- 
ant of the people and not the other way 

Contrast With Soviet System 

That contrasts with those systems of 
government that provide no limit on the 
power of the government over its peo- 
ple. Within the Soviet Union, decision- 
making is tightly concentrated at the 
top. The authority of the Communist 
Party is not determined by a docu- 
ment — a constitution, if you will — but 
by the leadership who determine what 
is right for the people. Rights such as 
free speech, free press, and free assem- 
bly are granted if they are "in accord- 
ance with the interests of the people 
and in order to strengthen and develop 
the socialist system." 

I have, in the past, stressed these 
contrasts between the United States 
and the Soviet Union — the fundamental 
and profound differences between our 
philosophies of government and ways of 
life. And I have always said that our 
negotiations must be undertaken with 
precisely this sort of realism, this sort 
of candor. 

Yet while establishing this context 
is essential and reminding ourselves of 
these basic distinctions always useful, 
today I have something additional in 
mind. For in recent months, the Soviet 
Union has shown a willingness to re- 

spect at least some human rights, lis 
my belief that thei-e is hope for fuiker 
change, hope that in the days ahet'thi 
Soviets will grant further recognit n 
to the fundamental civil and politi( 
rights of all. 

Before discussing our hopes f( th^ 
future, I would like to turn for a r - 
ment to a subject that the Soviets 
themselves often raise. 

Soviet Questions About 

U.S. Economic and Social Right 

The United States may recognize -il 
and pohtical rights, but what of e( 
nomic and social rights? The Sovit 
point out, for example, that the U te( 
States has an unemployment pi'ob n. 
Or they point to the American pn en 
of homelessness. Or to racial disci li- 
nation. It deserves a full response 

To begin with, so-called econc ic 
and social rights belong to an ess( 
tially different category from civil nd 
political rights. The economic and )ci 
conditions in any society are cons itl 
changing — new social groupings c - 
stantly taking shape; new market 
forming as old markets disappear 

Yet there is nothing shifting ou 
civil and political rights, like free( m 
speech or worship; they are const; t 
and immutable, forever basic to tl 
dignity of each human being. The; ire 
fundamental — fundamental to 

Yes, the United States has so al 
and economic shortcomings. Uner loi 
ment, for one. As a free people, v 
have created an economic expansi- 
that over the past 5 years has ere 3(1 
nearly 16 million jobs — but we net tn 
do more. Homelessness is, indeed I 
problem — an agonizing one. To soi$ 
extent, we are bound in dealing \\ h i 
by our very commitment to libert. fn 
while we seek to help the homele^ in 
every way possible, we must avoic it 
all costs coercive solutions. It is t e 
that, as a free people, we spend hi- 
dreds of millions of dollars a year 
through our Federal, State, and iijl 
governments to care for the homess 
As a free people, our churches, s; 
agogues, and a host of volunteer ( 
nizations do much to provide the 
homeless with food, clothing, and led 
cines. And yet there is no denyinjihs 
a problem remains. 1 

Department of State Bulletin/Julv|9£ 


Racial discrimination; our strides 
a free people during just the past 
ee decades have been dramatic. Yet 
problem lingers, and we continue to 
tie bigotry and prejudice. 
The problems, as I said, are seri- 
^ft— no one would seek to deny that. 
^ in freedom, we are constantly con- 
fnting them, criticizing ourselves, 
& king to do better— in full view for 
a to see. 

j let Economic Conditions 

( : consider, if you will, the economic 
(litions of the Soviet Union. I do not 
ill to suggest that the Soviet econ- 
c y has made no progress. But the 
I ited successes of the past arose 
' 1 rely from constant additions to the 
1, or force and the availability of inex- 
[ isive resources. Now that these have 
11, to a great extent, depleted, there 
; lains a gap between the Soviet 
I ion and the West. Indeed, given the 
,,t irmous advances in Western tech- 
:' ogy, the gap is likely to widen. 
1 do not bring this up simply for 
.sake of sounding critical. I mention 
1 lere because in recent months — and 
1 5 is a development of tremendous 
;i nificance — they have begun to men- 
,t 1 it themselves, just like Americans 
I about their problems. Soviet econo- 
; ;ts have published articles about So- 
t shortages — one recent article dealt 
h the inadequacies of Soviet hous- 
, . The Soviet press now carries sto- 
5 about the need for progress. And, 
:ourse, Soviet economic progress is 
' of Mr. Gorbachev's chief aims. 

iman Rights-Economic Growth 

is brings us back to the subject of 
' day — human rights. For I believe 
it the Soviets may be coming to un- 
rstand something of the connection — 
; necessary and inextricable connec- 
n— between human rights and eco- 
mic gi'owth. 

The connection between economic 
aduetivity and certain kinds of free- 
m is obvious. Private plots of land 
.J ike up only 3% of the arable land in 
je Soviet Union but account for a 
arter of the produce. The free flow of 

jl'ormation, to provide another exam- 
i, will clearly prove vital for Soviet 
ience and technology to have hope of 
aching new and higher standards. 
And yet there is a still deeper 

,i|nnection. For it is the individual who 
always the source of economic 

creativity — the inquiring mind that pro- 
duces a technical breakthrough, the 
imagination that conceives of new prod- 
ucts and markets. And in order for the 
individual to create, he must have a 
sense of just that — his own individu- 
ality, his own self-worth. He must 
sense that others respect him — and, 
yes, that his nation respects him. Re- 
spects him enough to permit him his 
own opinions. Respects the relationship 
between the individual and his God 
enough to permit him to worship as he 
chooses. Even respects him enough to 
permit him, if he chooses to do so, to 

The Soviets should recognize basic 
human rights because it is the right 
thing to do. They should recognize hu- 
man rights because they have accepted 
international obligations to do so, par- 
ticularly in the Helsinki Final Act. But 
if they recognize human rights for rea- 
sons of their own — because they seek 
economic growth or because they want 
to enter into a more normal rela- 
tionship with the United States and 
other nations, I want to say [here] and 
now, that is fine by me. 

Over the past 3 years, some 300 
political and religious prisoners have 
been released from labor camps. More 
recently, the incarceration of dissidents 
in mental hospitals and prisons has 
slowed and, in some cases, stopped 
completely. While the press remains 
tightly controlled by the party and 
state, we have seen the publication of 
stories on topics that used to be forbid- 
den — topics like crime, drug addiction, 
corruption, even police brutality. 

These changes are limited, and the 
basic standards contained in the 
Helsinki accords still are not being 
met. But we applaud the changes that 
have taken place — and encourage the 
Soviets to go farther. We recognize that 
changes occur slowly; but that is better 
than no change at all. 

If I may, I would like now to share 
with you a brief summary of the human 
rights agenda that I will be discussing 
in my meetings in Moscow. It has four 

Moscow Summit Agenda 

First, freedom of religion. Despite the 
recent relaxation of some controls on 
the exercise of religion, it is still true 
that churches, synagogues, mosques, or 
other houses of worship may not exist 
without government permission. Many 
have been imprisoned in the past for 

acts of worship. And yet — to quote the 
Universal Declaration of Human 
Rights — "Everyone has the right to 
freedom of thought, conscience and re- 
ligion...." And General Secretary Gor- 
bachev has indicated a willingness to 
consider "a new law" on the freedom of 

Second, freedom of speech. There 
are still many serving long prison sen- 
tences for offenses that involve only the 
spoken or written word. Yet the clear, 
internationally recognized standard as 
defined, once again, in the Universal 
Declaration of Human Rights, is that 
"Everyone has the right to freedom of 
opinion and expression — " Today there 
is more such freedom in the Soviet 
Union than 2 years ago. Many persons 
imprisoned for expressing dissenting 
views have been released from prison. 
This issue can be removed by granting 
full recognition to this basic human 
right. And I know you join me in urg- 
ing the freeing of people imprisoned for 
nothing more than the expression of 
their views. 

Emigration, third, has long repre- 
sented a matter of great concern to us. 
The Universal Declaration states that, 
"Everyone has the right to leave any 
country, including his own, and to re- 
turn to his country." It is true that 
during the past 12 months, the rate of 
people permitted to leave the Soviet 
Union has been significantly higher 
than during the preceding 6 years. It is 
true, as well, that the number of those 
permitted to leave for short trips — of- 
ten family visits — has gone up. We are 
heartened by this progress. Our hope is 
that the Soviets gi-ant all their peoples 
full and complete freedom of movement. 
And one point in particular; the Soviets 
refuse many the right to leave on the 
grounds that they possess secret infor- 
mation — even though they had ended 
their secret work many years before 
and whatever information they had has 
become public or obsolete. I hope such 
cases will be rationally reviewed, and 
the decision will be made to free these 
people and their families. 

This brings me now to the fourth 
and final area I want to discuss — mak- 
ing the progress more permanent. As I 
have said a number of times now, we 
welcome the human rights progress 
that the Soviets have made and believe 
there is good reason to hope for still 
more. Yet it is only being realistic to 
point out that we have seen progress in 
the Soviet Union before. Khrushchev 
loosened things up a bit. The intellec- 
tual and cultural life of the Soviet 
Union underwent a kind of thaw, a kind 
of springtime. 

ppartment of State Bulletin/July 1988 


But it was a springtime followed by 
a winter, for Khrushchev's relaxations 
reversed, and for the nearly three dec- 
ades until our own day, oppression and 
stagnation once again became the de- 
termining characteristics of Soviet life. 
That is why those of us in the West, 
both publicly and in direct conversation 
with the Soviets, must continue to 
make candor and realism the basis of 
our bilateral relationship. My Chief of 
Staff Howard Baker told me recently of 
an old Tennessee saying, "Plain talk — 
easy understood." Exactly. And just as 
previous hopeful moments in Soviet his- 
tory ended all too soon, so, too, 
glas-iiost — today's new candor — will suc- 
ceed if the Soviets take steps to make 
it permanent, to institutionalize it. 

Freedom of religion, freedom of 
speech, freedom to emigrate — and the 
willingness to make new freedoms per- 
manent. These are our hopes; these are 
our prayers for the future of human 
rights in the Soviet Union, in the 
world, in our own country. 

In granting greater liberty, I am 
confident that the Soviets will discover 
that they have made possible economic 
growth. But even more important, this 
recognition of human rights will ad- 
vance the cause of peace. For in the 
words of Andrey Sakharov — a man who 
suffered much under the Soviet system, 
but who has also experienced the bene- 
fits of glasnost — "I am convinced that 
international confidence, mutual under- 
standing, disarmament, and interna- 
tional security are inconceivable 
without an open society with freedom 
of information, freedom of conscience, 
the right to publish, and the right to 
travel and choose the country in which 

one wishes to live Peace, progress, 

and human rights— these three goals 
are insolubly linked." 

Since I have been speaking today 
about the relationship of human rights 
and economic progress, let me say a 
few words about the present situation 
in Poland, a nation with which millions 
of Americans share bonds of kinship. 
We hope and pray that the Polish Gov- 
ernment will hear the voice of the Pol- 
ish people and that economic reform 
and recovery will soon begin. The Pol- 
ish people have long been ready for it. 

Achievements of the INF Treaty 

'Text from Weekly Compilation of 
Presidential Documents of May 9, 1988.1 

Secretary Shultz's staiement before 
the Senate Foreign Relations Commit- 
tee on May 16, 1988A 

This is my third opportunity to testify 
before this committee on behalf of the 
INF [Intermediate-Range Nuclear 
Forces] Treaty. In the 2 months since 
my last appearance here, discussion of 
the treaty has often centered on ques- 
tions of detail, especially some of the 
specifics of the treaty's verification re- 
gime. As part of the technical imple- 
mentation discussions, it became clear 
that it was essential to ensure that the 
Soviets understood and acknowledged 
their obligations under this treaty. In 
some cases, we needed to clarify "ques- 
tions that had arisen about how to im- 
plement those obligations. 

Together, the Senate and the Ad- 
ministration identified nine key imple- 
mentation issues. I am pleased to 
report that, as is recorded in the docu- 
ment agreed to by the treaty parties 
last week in Geneva, we have resolved 
all nine issues to our satisfaction. 

But, as the Senate prepares to be- 
gin debate on this treaty, I hope that 
the focus will not be limited to the de- 
tails we have just been discussing. I 
hope that debate will center on the 
merits of the treaty as a whole. As I 
said in my last appearance, "There is 
one fundamental question you are 
called on to answer as you consider this 
or any other arms control treaty: is it 
in the security interests of the United 


I said then, and I repeat now: this 
treaty is in our security interests. The 
collective security commitment embod- 
ied in the NATO alliance has been fun- 
damental to our national security since 
1949. This treaty removes, forever, a 
Soviet nuclear threat that has con- 
fronted our NATO allies— and, I should 
add, our friends and allies in Asia and 
the Pacific— for over 80 years. This 
treaty strengthens NATO. By doing so. 
It strengthens the security of the 
United States. 

The treaty represents the suc- 
cessful outcome of a strategy whici 
NATO adopted in December 1979. 
alliance was confronted with the tl 
highlighted by the deployment of t 
SS-20, of the growing disparity be 
tween NATO and the Warsaw Pact 
INF missiles. The alliance agreed 
course of action to reduce this disj 
ity: a program of U.S. deployment 
Europe, and an offer of U.S./Sovit 
gotiations to establish a balance at 
lowest possible level. 

We have done better than we 
hope in 1979. We have not just red 
the disparity in INF missiles; we '. 
eliminated it. When President Ret 
proposed the INF zero outcome ir 
1981 — with the unanimous support 
the Senate — our allies agreed this 
would be the best possible way to 
achieve the objectives that NATO 
established in 1979. They reaffirm 
this judgment throughout the 6 yt 
the negotiations. They feel the sai 
way today. 

Only the United States and tl 
viet Union are directly parties to 
treaty. But our allies — who have c 
so much to bring this treaty abou' 
it as their agreement, too. 

When I last testified before y 
described the unanimous endorsei 
this treaty received at the March 
NATO summit. Since then, NATC 
fense ministers met in Brussels fc 
regular session of the Nuclear Pla 
Group. They could not have made 
views about the treaty any cleare 
me quote from their communique: 

The recently concluded INF agn 
ment between the United States and i 
Soviet Union is a milestone in our ef ' 
to achieve a more secure peace at lo\ ' 
levels of arms. The solidarity and de i 
mination of the Alliance members hs 
made the achievement of this long-sl 
NATO arms control objective possib 
look forward to the early entry into 
of this agreement. ' 

When I met with my counter i"!* 
at NATO headquarters in Brusse^last 
Friday, on the way back from Gei^a, 
they made clear that they feel thilam 
way. ' 


id in 

Department of State Bulletin/Julil98k. 


^ ving the Course: 
iloyments and Negotiations 

he defense ministers noted, acliiev- 
;his objective was not easy. We 
111 have gotten nowhere in the nego- 
.iiis had we not taken the necessary 
,-ures to preserve our security. 
rO had the courage of its convic- 
< to go forward with the agreed de- 
ment of U.S. Pershing II and 
•I se missiles, in the face of enormous 
jitieal pressure. These deployments 
•v e absolutely essential to our success 
u'lieva. Ratification of this treaty 
\ indicate our friends, particularly 
le INF basing countries — the 
eral Republic of Germany, Italy, the 
ted Kingdom, Belgium, and the 
Jvherlands — who stood by their com- 
;,T. Tients when the going got tough. 
Deployments were essential. But 
1 • alone could not guarantee a good 
' ty. Translating a strategic concept 
iu'ecise details took firmness, pa- 
:e, and hard work at the negotiat- 
table, to make good on the courage 
1 steadfastness of our allies. Ambas- 
• ir Nitze began the job which Am- 
D iador Glitman, as part of the NST 
1 'lear and space talks] delegation 
.a :ied by Ambassador Kampelman, 
. li r brought to a successful conclusion. 
I oughout, the Congress fully sup- 
p ;ed our efforts, both on the deploy- 
. n it track and in the negotiations, 
I iiding through the Senate observers 
. ip. 

I should have noted at the begin- 
1 ; that I am joined here by Ambas- 
[' * )r Max Kampelman, who is in 
' "ge of our overall nuclear and space 
: s; Ambassador Glitman, who nego- 
?d the INF Ti-eaty and who was 
■» 1 me in Geneva and who negotiated 
- ie nine issues; and Director Burns, 
^ Director of AC DA [Arms Control 
,'lj' Disarmament Agency]. 

i^iievements of INF Treaty 

1' result is the treaty that the Presi- 
] t and Mr Gorbachev signed here in 
V^hington last December. It meets 
'■ criteria we and our allies 

;.-- • Equality of rights and limits; 
Kl • Limits on U.S. and Soviet sys- 

:1S only; 

. • Global limits, with no transfer of 

I threat from Europe to Asia, or vice 

■ sa; 

• No adverse effect on NATO's con- 
ventional defenses; and 

• Effective verification. 

The treaty protects future options 
as NATO moves ahead to maintain a 
credible nuclear deterrent and sustain 
its strategy of fle.xible response. It does 
not affect existing patterns of coopera- 
tion with our allies or future coopera- 
tion in modernization. It sets important 
precedents as we pursue our other 
arms control priorities. In this regard, 
allied leaders at the NATO summit sin- 
gled out asymmetrical reductions and 
the treaty's stringent verification provi- 
sions as particularly important 

Reductions and Verification 

These reflect two of the top objectives 
the President set when he came to of- 
fice. One was to end the era when arms 
control only guided the growth of nu- 
clear weapons and to begin the process 
of negotiating nuclear reductions, just 
as you pointed out in your opening 
statement, Mr. Chairman [Claiborne 
Pell]. The other was to raise the stan- 
dards for verification — among other 
ways, by no longer letting the Soviets 
just say "no" to onsite inspection. 

On these important points, the 
President has succeeded in getting the 
Soviets to deal with our arms control 
agenda. The facts about the INF 
Treaty's reductions are by now well 
known. The Soviets will have to destroy 
missiles capable of carrying some four 
times as many warheads as the de- 
ployed missiles which we will eliminate. 

I might say, Mr. Chairman, while I 
agree with you that the potential reduc- 
tions in strategic arms are militarily of 
immense significance — no doubt more 
than these reductions would be — when- 
ever you take out missiles that carry 
some 2,000 nuclear warheads, well, it's 
something. (Chairman Pell: It helps.) I 
wouldn't minimize it. That's a lot of nu- 
clear wallop. It helps. 

I would like to speak at slightly 
greater length on the other point which 
NATO leaders highlighted — the treaty's 
verification regime. The allies know 
what they are talking about on this 
subject: much of the regime applies di- 
rectly to their territory. Just as the 
INF process has been an alliance effort 
all along, our allies are doing their part 
to bring the verification regime into be- 

ing. They are taking the necessary leg- 
islative and executive steps to ensure 
that we can carry out all actions associ- 
ated with the treaty that occur on allied 
soil. The vote in the German Bundestag 
to put these measures into effect was 

This committee, as well as the 
Armed Services Committee and the Se- 
lect Committee on Intelligence, have 
heard from me and others on the de- 
tails of this regime. It is the most de- 
tailed, the most intrusive, and the most 
effective in the history of arms control. 

We are breaking new ground with 
this treaty. Onsite inspection is a major 
forward step in U.S. /Soviet nuclear 
arms control agreements. We shouldn't 
be surprised if this process is not al- 
ways smooth. It was for this reason 
that we began talking to the Soviets 
before the treaty entered into force 
about how we would actually carry 
out the procedures we and they had 
agreed to. 

When differences surfaced, we 
worked them out. Some of these prob- 
lems were resolved at the working 
level, others required attention from 
more senior people. As I have men- 
tioned, during my meetings with For- 
eign Minister Shevardnadze last week, 
we ironed out the nine key technical 
details related to the onsite inspection 

Of course, to ensure smooth imple- 
mentation of the treaty, we will con- 
tinue to talk to the Soviets on admini- 
strative matters — such as the details of 
living arrangements. Additional tech- 
nical talks, which were previously 
scheduled, will get underway this week 
in Vienna. So this is an ongoing proc- 
ess, to straighten out all these admin- 
istrative details. 

But I can report to you today that, 
as a result of the discussions we just 
concluded in Geneva, we and the Sovi- 
ets agree on the rights and obligations 
established in this treaty. 

There is no such thing as absolute, 
100% verification. But it is our judg- 
ment that this treaty, through its suc- 
cessive layers of procedures, contains 
the measures needed for effective ver- 
ification. Achieving the President's goal 
of an INF zero outcome pays real divi- 
dends for verification. The bottom line 
is that the verification provisions of this 
treaty get the job done. 

iipartment of State Bulletin/July 1988 


other Issues: Futuristics 
and Interpretation 

In the course of Senate consideration of 
the treaty, a question arose which goes 
beyond verification. I refer to the so- 
called futuristics issue. This is the 
question of whether all ground- 
launched cruise and ballistic missiles 
which are weapon-delivery vehicles of 
the ranges covered by this treaty would 
be banned, including those carrying 
"futuristic" weapons. The Administra- 
tion believes that the treaty te.xt — 
viewed in conjunction with the nego- 
tiating record in light of customary in- 
ternational law as reflected in the 
Vienna Convention on the Law of Trea- 
ties — demonstrates that the two parties 
had agreed that such systems are 
banned. After consultation with the 
Senate, we confirmed this fact with a 
formal exchange of diplomatic notes last 
week in Geneva. Ambassador Kam- 
pelman signed the note on our behalf; 
Ambassador Karpov on theirs. 

There is one final question pertain- 
ing to this treaty which I must address. 
That is the wish by some in the Senate 
to attach a condition to the resolution 
of advice and consent to ratification 
which would restrict the President's au- 
thority to interpret treaties. 

I am sure you are all familiar with 
the reasons why we oppose such a con- 
dition. The testimony of Administration 
witnesses within their authorized scope 
is authoritative. We believe that you 
should not allow the INF Treaty to be- 
come entangled in a divisive constitu- 
tional debate but, instead, should 
consider the treaty on its own merits. 


I have described the merits of the 
treaty to you, briefly in my testimony 
today and at greater length in my ear- 
lier appearances. The treaty is the re- 
sult of the President's leadership, but it 
is also a significant bipartisan achieve- 
ment, as well as testimony to the 
strength and purpose of the NATO al- 
liance. It is a good deal for NATO and 
a good deal for the United States. I ask 
the Senate to give the President its 
consent to ratification of this treaty, 
without amendments or conditions. 

FY 1989 Foreign Policy Budget Requer 

'Press release 92. The complete tran- 
script of the hearings will be published by 
the committee and will be available from' 
the Superintendent of Documents, U.S. 
Government Printing Office, Washington, 
D.C. 20402.B 

Secretary Shvltz's statement before 
the Suhroitnnittee on Commerce, Jus- 
tice. State, and Jiidiciart/ of the Senate 
Appropriations Committee on April 28, 

I am pleased to come before the com- 
mittee to discuss our FY [fiscal year] 
1989 budget request. It is an austere 
request that complies with both the let- 
ter and the spirit of the budget summit 
compromise. If this Administration and 
the coming Administration ai'e to do 
the job we must do in today's turbulent, 
complex, and changing world, we will 
need every cent we are asking for — and 
we will need much greater latitude in 
applying those appropriated funds. 

For the sake of our national well- 
being and for the sake of our most 
cherished values, America must remain 
a fully engaged force around the globe 
for peace, prosperity, democracy, and 
human rights. 'This requires well 
thought-out, well-executed policies and 
programs. I'll come back to this a little 
later. Our effective engagement also re- 
quires highly skilled, well-trained per- 
sonnel, deployed to best advantage and 
supported with the infrastructure, 
equipment, and technical resources 
needed to function effectively. Without 
such personnel, policies, and programs, 
we cannot advance our fundamental in- 
terests in an increasingly complex, tur- 
bulent, and changing world. 

The Department of State is essen- 
tially a salaries-and-expenses agency. 
We are our nation's diplomatic presence 
around the world. We don't have large 
programs which we can cut or stretch 
out over a long period in order to cut 
costs. The Department of State — one of 
the oldest and the most essential de- 
partments of our government — is also 
one of the smallest. Our 1989 request is 
for only the most vital resources we 
need. Even if this request is fully ap- 
propriated — and it must be — the funds 
you provide will only minimally support 
the infrastructure that is vital to the 
conduct of this nation's foreign policy. 

At the core of our diplomacy are 
our efforts — both bilateral and multi- 
lateral — to ensure the strength and 
unity of our alliance relations, the effec- 
tive management of East- West issues, 
the peaceful resolution of regional con- 
flicts, and the advancement of our 
broader security and economic 

Our Foreign Policy Agenda 

The Reagan Administration is comi 
ted to a busy and challenging foreig 
policy agenda in 1988. We know thai 
the United States cannot afford the 
luxury of any letup in our leadershi 
The realities of our time also dictate 
that the United States cannot achie 
our interests and objectives alone, 
can we do so with insufficient re- 
sources. Other countries around th' 
world cannot adequately protect thi 
security, ensure their domestic weW 
or protect their democratic institut 
absent the active support of the Ui fed 
States. That is why President Rea; i 
has worked so hard to ensure that r 
European alliance is strong and vit 
and why we have also strengthenec Ur 
security and economic relationships \ 
Asia and elsewhere in the world — i i- 
tionships that will be crucial to glo 1 
prosperity and regional security wi 
into the next century. 

A brief review of just some of :' 
major issues confronting our world 
demonstrates the critical need for 
engaged, active, and effective Amt 'a. 

East-West Relations. The imj - 

tance of worldwide U.S. engageme 
came through loud and clear to the 
President during his recent meetir 
with his counterparts at the NATC 
summit. In Brussels, we and our > 
partners agreed that if we expect t 
advance our interests further with 
East, we must demonstrate our re 
and be prepared to commit the nee 
sary resources, just as we did in o 
pursuit of the INF [Intermediate- 
Range Nuclear Forces] Treaty. Ou 
achievement of that treaty offers ci 
vincing proof that success in advari 
our peaceful objectives depends no 
only on military strength and alliai 
cohesion, but also on the poHtical \ 
to provide the means necessary to 
our objectives. The INF Treaty en 
hances United States and allied se 
curity. We, therefore, trust that th 
Senate will give its early consent t 
ratification of the INF Treaty, sigr 
December by President Reagan an 
General Secretary Gorbachev [Sov 
General Secretary Mikhail S. 

Through strength and stead- 
fastness, the United States and ou 
lies have set in motion a number ol 
other eforts that, with Soviet coop 
tion, would bring major strides to\ 
a safer, more secure, and more hur 



Department of State Bulletin/July 


As you know, I have just returned 
[1 my second trip to Moscow thus far 
.. year. My meetings in Moscow cov- 
ed the gamut of issues that comprise 
5V East-West agenda for the next 
iniit and beyond. We will continue to 
~ut' vigorously human rights issues, 
n 1 as they relate to individual cases 
ai to principles enshrined in the 
Hsinki Final Act and other interna- 
al human rights instruments. 
On regional conflicts, our policy of 
ching diplomatic perseverance with 
ini't for freedom fighters has in- 
ised the odds for negotiated 
I laments. 

• On April 14, we signed the Ge- 

ni i agreement on Afghanistan. After 
s ng years, the courage and determin- 
at n of the Afghan freedom fighters — 
U our steadfast support for their 
"* rts — are paying off Under the 
•cment, the Soviets are committed 

tVnnt-loaded withdrawal of their 
I's within 9 months after the agree- 
it goes into effect on May 15, with 

i)f them leaving within 90 days of 

I late. We expect them to be out by 
.. end of 1988. 

We have made it clear to the Sovi- 
e! that our military assistance to the 
A han resistance will continue, though 
w will show restraint in doing so in 
n jonse to Soviet restraint in provid- 
ii military assistance to the puppet 
p me in Kabul. It is our judgment 

8;, absent the presence of Soviet 
es, the Kabul government will be 
n natch for the mujahidin. 

We welcome the fact that Mr. Cor- 
d ez [UN negotiator Diego Cordovez] 
V work in a personal capacity to 
b ig about a government which re- 
fl ts the will of the Afghan people and 
t msure a rapid, safe return of the 5 
n lion Afghan refugees to their home- 
is 1 Without such a government, 
' ;hanistan's stability cannot be 
- iired. 

• We must continue to support 

• .se fighting for their freedom in Nic- 
a gua, Angola, and Cambodia. 

Meanwhile, we are striving for ad- 
( onal progress in arms control. 

• We will press ahead with the 

:itegic arms reduction talks 
ART). We have made headway on 
Mii-tant issues, but a good deal more 

I'k remains; 

• If the Soviets are prepared to 
tch our efforts, a verifiable agree- 
nt leading to a 50% reduction in 

U.S. and Soviet strategic offensive nu- 
clear weapons will be possible. At the 
same time, we will continue to preserve 
our right to pursue a vigorous Strategic 
Defense Initiative; 

• We will work to improve stability 
in Europe by rectifying the conven- 
tional imbalance; 

• And, we will continue efforts to- 
ward a truly verifiable global ban on 
chemical weapons. 

On bilateral issues, the President 
remains committed to implementing his 
1985 agreement at the Geneva summit 
to exchange consulates in Kiev and 
New York. For the past year, we have 
been concentrating our efforts in 
Moscow on work being done at our ex- 
isting chancery and on planning for our 
new chancery. The resource commit- 
ment required by these Moscow proj- 
ects makes it impractical to proceed at 
this time with our original plans for a 
full-fledged, classified operation in 
Kiev. However, a small post — six people 
at most — without classified facilities 
could be set up quickly in Kiev and 
would be a cost-effective way to open 
up an important area of the Soviet 
Union to us. During my discussions last 
week with Mr. Shevardnadze [Soviet 
Foreign Minister Eduard Shev- 
ardnadze], he accepted in principle lim- 
iting the size of each side's consulate to 
the numbers we have in mind. 

After my visits last week to Kiev 
and Tbilisi, I am more convinced than 
ever that we will be making a mistake 
if we fail to follow through with our 
plans to establish a consulate in Kiev. 
We have no task more important than 
to understand the changes taking place 
in the Soviet Union. We can no more 
claim that our view from Moscow accu- 
rately represents the progress of 
perestroika (restructuring), than a for- 
eigner could claim to understand the 
mood of the American people on the 
basis of Washington gossip. I am mind- 
ful of the legislation relating to Kiev 
and we will be consulting with Con- 
gress as our plans for Kiev evolve to 
ensure that all U.S. interests are fully 
protected. I hope we will have your 

The Middle East. We are engaged 
intensively in an active process to 
achieve a comprehensive peace in the 
Middle East through negotiations. This 
is a time for decisions. The situation on 
the ground does not serve anyone's in- 
terests. Rapid, positive change can oc- 
cur. My discussions with the leadership 

in Israel, Jordan, Syria, and Egypt 
have focused on the need for realism 
and movement in the peace process. 

The initiative we developed, which 
the parties are now considering, is am- 
bitious and compelling. The initiative 
we have put forward meets everyone's 
fundamental concerns and provides for 
serious negotiations. The key elements 
of our proposal are clear: face-to-face, 
bilateral negotiations based on Resolu- 
tions 242 and 338; early negotiations on 
transitional arrangements interlocked 
with final status negotiations beginning 
on a date certain; a pre-agreed, rapid 
timetable; and a properly-structured in- 
ternational conference to launch nego- 
tiations. The conference is specifically 
enjoined from imposing solutions or 
vetoing what has been agreed bilater- 
ally. The United States will not permit 
the conference to become authoritative 
or plenipotentiary, or to exceed its ju- 
risdiction as agreed by the parties di- 
rectly involved. 

The procedural aspects of our ini- 
tiative should not obscure our objec- 
tive — a comprehensive peace. 

• Israeli security can be enhanced. 
A new relationship of peace with its 
Arab neighbors can emerge. Israelis 
can be free from the increasing human 
and moral burdens of occupation — able 
to devote their considerable talents and 
energies to building a better future. 

• The Palestinian people can 
achieve significant control over political 
and economic decisions which directly 
affect their lives. They should partici- 
pate actively in negotiations to deter- 
mine their political future. In this way, 
the Palestinian people can achieve their 
legitimate rights and live lives of dig- 
nity and self-respect. 

• The Arab world can turn a corner 
by resolving this festering conflict. The 
refugee problem can be solved. A sta- 
ble new environment can be created in 
which the human and economic re- 
sources of the Middle East can flourish. 

The commitment of the United 
States is stronger and more determined 
than ever. We are carrying the initia- 
tive forward into a new and more de- 
tailed, operational stage. This is a 
moment of testing for the leaders of the 
Middle East. This is a time for leaders 
everywhere to say "yes": 

• Yes, to a comprehensive peace 
through negotiations based on all the 
provisions and principles of Resolution 

ui ipartment of State Bulletin/July 1988 


• Yes, to security for all parties, 
especially Israel. 

• Yes, to the legitimate rights of 
the Palestinians. 

The Western Hemisphere. In Cen- 
tral America, we must continue our 
strong and determined efforts for de- 
mocracy, development, and security. 
The severe problems in Panama and 
Nicaragua should not obscure the fact 
that our longstanding efforts in the re- 
gion have had impressive results. 

Ten years ago in Centi'al America, 
for example, Costa Rica was the re- 
gion's only civilian-led democracy. To- 
day, the military dictators who ruled 
three of the other four countries are 
gone. These countries — El Salvador, 
Guatemala, and Honduras — are moving 
in Costa Rica's direction, with in- 
creasingly open societies and with civil- 
ian presidents chosen in competitive 
elections. We believe this ti-end is en- 
couraging and it will continue despite 
disturbances like the one that occurred 
recently in Honduras. 

What we face in Panama is a threat 
to democracy and a threat to our ability 
to stop the international drug traf- 
fickers. We will not shirk our responsi- 
bility to defend ourselves against these 
threats. We believe that General Nor- 
iega would best serve his country by 
complying with the instruction of Presi- 
dent Delvalle to relinquish his post. 
The earlier Noriega leaves, the better 
Panama's interests will be served and 
a resolution to the political crisis 
achieved. We will continue to fulfill our 
obligations under the canal treaties and 
cooperate with President Delvalle and 
his government. And, we are prepared 
to resume our working relationships 
with the Panamanian Defense Forces 
once civilian government and constitu- 
tional democracy are reestablished. 
Once Panamanians achieve these goals, 
we will work with them to help restore 
Panama's economic health. 

In Nicaragua, for the last 8 years, 
the Sandinistas have monopolized the 
government by combining brute force, 
cunning, and a genius for propaganda. 
The return of Nicaraguan resistance 
leaders to Managua for negotiations is a 
sign that we have entered a new and 
more political phase of the struggle 
there. We must ensure that the door 
finally opened by the strength and per- 
severance of the resistance is not 
slammed shut. We intend to cooperate 
with the freedom fighters and with the 
four democracies in the region on how 
the United States can best further the 
prospects for both peace and freedom 
in Nicaragua. 

In each of these cases, as else- 
where in the hemisphere, we believe 
that democratic leaders and groups are 
the key to success in combatting illegal 
drug dealers, communist insurgencies, 
and other enemies of peace and free- 
dom. We are proud to support their 

Persian Gulf. In the Persian Gulf, 
sustained American commitments re- 
main essentia! to international stability 
and Western economic interests. The 
President's decision to respond in a firm 
and measured way to the resumption 
by Iran of minelaying, causing damage 
to a U.S. Navy ship and injury to its 
crew, has served notice that Iran must 
pay for such reckless and provocative 
conduct. We do not seek a military con- 
frontation with Iran, but we will con- 
tinue to act with resolve to defend our 
interests. The bipartisan support the 
Congress has shown for the President's 
decision has sent a clear message to 
Iran that the American people are 
united in support or our efforts to de- 
fend freedom of navigation in the gulf 

During my visit to Moscow, I dis- 
cussed the escalation in the gulf war 
with Foreign Minister Shevardnadze, 
urging that the Soviet Union cooperate 
with efforts in the UN Security Council 
to bring the war closer to an end by 
imposing an arms embargo against 
Iran. We now continue to work inten- 
sively in the Security Council to imple- 
ment Resolution 598, which demands 
an immediate cease-fire and withdrawal 
without delay. The use of chemical 
weapons against civilians and the con- 
tinuation of the "war of the cities" be- 
tween Iran and Iraq reinforces the 
need for accelerated efforts to bring 
this interminable conflict to an end. 

Africa. In South Africa, our goal 
remains the rapid and peaceful demise 
of apartheid, the principal source of 
South Africa's problems and of in- 
stability in the southern African region 
as a whole. To that end, we are work- 
ing to foster a dialogue among all ele- 
ments of South Africa's population that 
will lead to the creation of a democi-atic 
society with equal rights for all. At a 
time when the repressive actions of the 
South African Government are stifling 
the interplay of ideas so essential for 
the evolution of a free society, and iso- 
lating South Africa from the free 
world, we must do all we can to keep 
dialogue alive and new ideas coming in. 
Despite the recent serious escalation of 
repression in South Africa, we remain 
firm in our belief that this can best be 

accomplished through a mix of dipl( 
matic and political pressures on thtji 
hand and a series of positive initiat [ 
on the other. 

We face a continuing tragedy ii 
Ethiopia. As you know, we have pr 
vided food on a humanitarian basis 
to all Ethiopians in distress. We ar 
dismayed by the Ethiopian Govern- 
ment's recent decision to expel fort i 
relief workers from the north and 
transfer their food and assets to th 
government-run Relief and Rehabi • 
tion Commission. The effect of this i 
cision has been a virtual halt of rel i 
operations which threatens over 2 : 
lion people with starvation. We are 
working with the United Nations, 
allies, and the Soviet Union to see 
reconsideration of Ethiopia's decisi . 

Asia. The strength of our seci t 
and economic relationships in Asia 
be crucial to regional security and 
global prosperity well into the nex 
century. Of course, the cornerston i 
American policy in Asia is our rel; 
tionship with Japan, our principal i 
ally and largest trading partner, a 
our security ties with Korea, Thai 
the Philippines, and ANZUS [Aus 
tralia. New Zealand, United State 
curity agreement]. It is in Japan t 
our policy of encouraging democra 
had its earliest and most spectacu 
success in Asia. Now, the remark; 
worldwide trend toward democrat 
government has borne fruit in the 
Philippines and South Korea. We 
must actively support them if thee 
democracies are to thrive and to g 
Also, we must sustain our support 
ASEAN [Association of South Eat 
Asian Nations] and the Cambodiai 
communist resistance in their effo 
bring about a political solution to 
Cambodian conflict through a com 
Vietnamese troop withdrawal fron 
Cambodia and self-determination i 
the Cambodian people. As my rec 
conversations with Singapore's Pri 
Minister Lee reminded me, we an 
tunate to have friends in ASEAN 
share — and who have benefited by 
commitment to open markets and 
stitutional democracy. The visit la 
month of Chinese Foreign Ministe 
testifies to the continued positive 
opment of our bilateral relationshi 
with the Peoples' Republic. China' 
creasingly open economy and relia 
on maket approaches are ensuring 
economic development and Integra 
into the global economy. 




Department of State Bulletin/JulyfiS 


Global Issues and Concerns. 

jMnoting domestic prosperity is a cen- 
1 1 foreign policy objective. It used to 
l.said that when the United States 
s-ezed the rest of the world got pneu- 
nnia. Now, it works the other way 
t . Our own economic fortunes have 
: ays been closely linked to conditions 
he world economy. This is especially 
I e now that economic and tech- 
r ogical changes have turned the world 
tde and financial system into a single, 
regrated global marketplace. A 
hlthy, growing world economy is thus 
r re than ever vital to our own pros- 
• ^ -ity. We have a stake in the strength 
r only in the economies of Europe 
ilJapan, but increasingly in the eco- 
r nic health of the developing coun- 
• s in Latin America, Africa, and 
. where in Asia as well. 

And, especially now, when the dan- 
i > of terrorism and the broad range 
hreats to many societies posed by 
■niational narcotics trafficking are 
liming so stark, we must marshal 
I means necessary to counter these 
i aults on human dignity and civilized 
' iety. I have committed the Depart- 
i;t of State— and you have my per- 
lal commitment — to use every 
)ortunity and all our resources to 
. nbat these twin scourges. 

ir Funding Request 

you can see, our foreign affairs 
?nda is a full one. The daily effort to 
fend our security, to establish more 
ible and workable relations with our 
versaries, to ensure continued eco- 
mic growth, and to achieve negoti- 
'd settlements in strife-ridden areas 
a costly e.xercise. But, instability, 
ignation, repression, and war are 
?n costlier, and not just in monetary 

Last September, when the funding 
ospects for 1988 appeared to be very 
?ak, I addressed all of the State De- 
rtment employees on changes that 
ght be required as a result of the 
tentially severe shortage of funding 
• salaries and expenses. The budget 
mmit, the support from you, Mr. 
lairman, and the actions of your com- 
ittee and others in the Congress re- 
iced the urgency to take immediate 
astic action of a kind which could se- 
lusly threaten our foreign policy in- 
rests and institutions. But we 
cognize that we must not relax our 
forts to streamline our internal 

We remain committed to: 

• Reexamining our activities to 
focus on those that deserve the highest 
priority and to eliminate or sharply re- 
duce those that are marginal; 

• Eliminating overlap and duplica- 
tion, which in turn will enable us to 
abolish unnecessary positions and con- 
trol employment levels; and 

• Improving the system under 
which the Department is reimbursed 
for services it provides to other 

For foreign affairs, or function 150 
in total, we seek $18.1 billion in discre- 
tionary spending authority for FY 1989. 
This represents the budget summit 
agreed increase of 2% over the amount 
made available to us in the FY 1988 
continuing resolution. It is 2.9% less 
than the actual amount appropriated in 
FY 1987, including the Central America 
portion of the supplemental. In fact, 
keeping in mind the decline in the value 
of the dollar overseas, the real value of 
the resources we plan to commit to for- 
eign affairs in FY 1989 is worth less 
than this year's amount. 

For 1989, we are requesting appro- 
priations for State Department opera- 
tions totaling $2.75 billion. This is an 
increase of 1.8% — well within the limits 
of the budget summit agreement. 

Our request covers the four catego- 
ries of appropriations: the administra- 
tion of foreign affairs, international 
organizations and conferences, interna- 
tional commissions, and other appropri- 
ations. Let me now review the specifics 
category by category. 

We request $2.2 billion for the key 
component of our nation's diplomacy, 
the administration of foreign affairs. 
These funds would cover the Depart- 
ment's basic diplomatic and consular 
functions, salaries, operating expenses, 
allowances, overseas building construc- 
tion and maintenance, and diplomatic 

This request represents a $43.2 
million net increase over the 1988 level. 
Nearly all of this increase goes to com- 
pensate for inflation, for a permanent 
home for the Foreign Service Institute 
and for replacing Foreign Service na- 
tionals (FSNs) in Eastern Europe. Our 
request is comprised of the following. 
Salaries and Expenses — $1.5 bil- 
lion, an increase of $94 million. Of this 

• $56 million is for net mandatory 
built-in changes, including anticipated 
price and wage increases here and 

• $30 million is for the first perma- 
nent home that the Foreign Service In- 
stitute will have in its 64-year history. 
This is a subject to which I have given 
a lot of time and thought. I attach a 
great deal of importance to this partic- 
ular request. A permanent and up-to- 
date facility is vital to ensure that the 
people who represent the United States 
abroad meet the highest standards of 
excellence and that they are fully effec- 
tive in their assigned positions. The 
new institute would not only provide 
language, area, and professional train- 
ing to State Department employees, 
but also to personnel from some 40 
other agencies such as DOD [Depart- 
ment of Defense], AID [Agency for In- 
ternational Development], and USIA 
[U.S. Information Agency]; 

• $7.7 million is for improving the 
security in our East Eui'opean missions 
through the replacement of selected 
Foreign Service national staff with 
cleared Americans; and 

• Note that the diplomatic security 
program has been held at 1988 levels, 
requiring the absorption of inflation. 

Foreign Buildings Program — $240 
million, a decrease of $73 million from 
the 1988 continuing resolution level. In 
addition to ongoing programs, this level 
of funding provides for major rehabili- 
tation projects only at our chancery 
buildings in Tel Aviv and Bonn. We are 
not requesting funds for any new cap- 
ital projects, effectively putting our 
security buildings program on hold. 
However, during FY 1989, the Depart- 
ment will continue work on 61 capital 
projects that were funded in previous 

Foreign Service Retirement and 
Disability Fund— $107.7 million, a 
mandatory increase of $22 million made 
necessary by a lower than expected 
rate of conversion by employees to the 
new Federal Employees Retirement 

For international organizations and 
conferences, the Department requests 
$524.9 million to make payments of as- 
sessed contributions to international or- 
ganizations of which the United States 
is a member; contributions for UN 
peacekeeping activities; and American 
participation in multilateral interna- 
tional conferences. 

Under the heading of international 
commissions, we are requesting $31.4 
million to meet our treaty commitments 
under boundary agreements with Can- 
ada and Mexico — and to cover our share 
of expenses as a member of 11 interna- 
tional fisheries commissions. 

iiilfkoartment of State Bulletin/Julv 1988 


Finally, in the "other appropria- 
tions" category, we are requesting $16.8 
million for bilateral science and tech- 
nology agreements with Yugoslavia, 
the Asia Foundation, the Soviet-East 
European Research Training Fund, the 
Fishermen's Protective Fund, and Fish- 
ermen's Guaranty Fund. 

Diplomatic Security 
and Building Programs 

Turning now to the important subject 
of diplomatic security and our building 
programs: In section 163 of the Foreign 
Relations Authorization Act, for fiscal 
years 1988 and 1989, the Secretary of 
State is required to "implement a pro- 
gram of counterintelligence polygraph 
examinations for members of the Diplo- 
matic Security Service during fiscal 
years 1988 and 1989." When the Presi- 
dent signed the authorization act, he 
noted that with respect to this provi- 
sion, he was interpreting it (and I 
quote) "consistent with my position 
concerning the discretion of agency 
heads to determine when polygraph 
examinations will be conducted in 
specific cases." 

It is no secret to the Congress or 
to this committee that I have consist- 
ently opposed the use of "lie detector" 
tests as a tool for screening or manag- 
ing people. Nor do I believe that we 
can single out one class of State De- 
partment employees for special treat- 
ment just because they are called a 
security service. If our security objec- 
tives are to be met, then our security 
program and whatever use there is of 
lie detector tests in that program, 
should apply to all employees. 

We are complying with the require- 
ments of that act. Regulations have 
been drafted that allow me to authorize 
lie detector testing for any Department 
of State employee under three circum- 
stances with the voluntary consent of 
the individual. 

1. When warranted during the 
course of a criminal, counterintelligence 
or personnel security investigation 
after all other reasonable investigative 
steps have been taken. 

2. When an employee requests to 
take such a test for the purpose of 

3. When a State Department em- 
ployee volunteers to work in an intel- 
ligence agency that requires polygraph 
tests, or volunteers to participate in 
certain special access programs — specif- 
ically designated by me — which involve 
joint programs with the intelligence 

community where the community re- 
quires a lie detector test. 

These regulations comply with the 
requirements of section 163. The reg- 
ulations are modeled on those in use 
by the Department of Defense and, as 
required by our authorization act, 
incorporate all provisions concerning 
scope and conduct of examinations and 
rights of individuals subject to such 

I believe these regulations are 
good, because they are clear, circum- 
spect in scope, and protect individual 
rights. But I am deeply concerned 
about the attitudes and atmosphere in 
this town at present regarding these 
so-called lie detectors. 

Take a look at the science — or 
rather the lack of science — in these 
tests. I don't even like to use the 
phrase "polygraph" because it implies 
precision where precision does not ex- 
ist. We all know what they pretend to 
be — lie detectors. But the truth is, as 
the Congress' own Office of Technology 
Assessment (OTA) has pointed out, 
that those machines cannot detect lies 
in a scientifically reliable manner. 

Congress' Office of Technology As- 
sessment found meaningful scientific 
evidence of polygraph validity only in 
the area of criminal investigations. 
Even there results ranged from 17 to 
100% for correct guilty detections. But 
consider this striking fact. In screening 
situation's (where one in 1,000 may be 
guilty) OTA pointed out that even if one 
assumed that the polygraph is 99% ac- 
curate, the laws of probability indicate 
that one guilty person would be cor- 
rectly identified as deceptive but 10 
persons would be incorrectly identified 
as deceptive (false positives). An ac- 
curacy rate of something less than 
100% may be acceptable in attempting 
to forecast the weather. It should never 
be acceptable in matters affecting the 
reputations and the livelihoods of 

Lie detector tests have a limited 
place in our security program, to a dif- 
ferent extent in different agencies. But 
they must not become an excuse or a 
substitute for a real security program. 
There are both physical and psychologi- 
cal dimensions to such a program. That 
is, we must have physically secure 
places in which to work and everyone 
doing the work must be security con- 
scious. It's like safety in the workplace. 
It can be done very effectively through 
persistent and continuous effort with 
everyone lending a hand. 

Over the last several years, we 
have acted on numerous recommeni 
tions to put such a program in plac' 
Our efforts to improve State Depar 
ment security reflect both our own 
ideas and those of special study grc ds 
such as the Inman panel and the L; d 
commission. Congress approved a •'' 
billion program based on the Inmai 
panel's proposals in 1985. That sam^ 
year, we established the Diplomatic Se- 
curity Service and elevated its chie o 
the assistant secretary level. 

Throughout, the State Depart 
ment's security program has been . 
the top of my personal list of prior - 
Of course, we cannot go over everj 
thing we have done in open session 3u 
let me cite a few examples in the a as 
of greatest need. 

First, espionage: 

• All of the FSNs in Moscow h e 
been eliminated. After some initia 
problems in screening and sorting t 
what kind of employees we need, \ 
have a system there that seems to ; 

• We are now going to apply t se 
lessons to other posts in Eastern 1 - 
rope. In the near future, we expe( to 
replace other FSNs in Eastern bl( 

• In Eastern Europe, we are i ab 
lishing CORE areas of the embass ~ 
where no one but cleared America 
will be allowed. Our aim is: ensun hat 
classified is processed in areas fre 
from all foreign nationals or other \- 
cleared personnel. 

• The typewriter bugging in 
Moscow led us to increased rigor i 
protecting our office equipment. T ■■ 
new plain text processing equipmt , fa 
cility — which we have set up joint 
with the CIA [Central Intelligence 
Agency] — allows us tight control c ir 
the office equipment that may be ; o- 
ject to tampering. Purchase, ship] ig, 
and maintenance are all handled b 
trained American personnel. 

• Embassy construction is nov 
done by cleared American firms. ( n- 
struction sites are guarded by ele;6d 
Americans. Construction security (o- 
grams are in place at 14 new office ' 
buildings and will be part of all fu ri 
projects. Materials are screened a I 
protected from the time of purcha tun 
til final disposal. ;' 

Second, counterintelligence: J 

• We have gotten help from th 
FBI [Federal Bureau of Investigai 
with our counterintelligence (CI) ) 



Deoartment of State Bulletln/Julvl 


I 111, The new chief of our CI shop is 
!(ian from the FBI. We also have a 
Sessional trainer from the Bureau to 
P VIS build up our own talent in this 

• Our CI program is oriented to- 
ri I the protection of classified infor- 
iioii. Consequently, the program 

. pliasis is on training, security 
iiireness, employee screening (over 
■;) applicants were denied security 
c arances last year), and selection. 

• We pursue an active program to 

; lire that our employees comply with 
ipiilicable regulations regarding 

ii- eiinduct. If they do not, we take 
I ■ appropriate steps. Last year, 40 
f ployees had their clearances sus- 
pded, downgraded, or revoked be- 
( ise of personal security issues. We 
I iducted over 1,200 update investiga- 

is (in our current employees. 

• We have worked to raise the level 
iwareness in the Foreign Service to 
lionage. Each Ambassador has been 

' 1 to establish a counterintelligence 
rking group (CIWG) to focus atten- 
1 on CI matters at a high level at 
■h post. And each Ambassador has 
'n made personally accountable for 
•urity at his mission. All personnel 
ng assigned during the summer cy- 
to the bloc countries are required to 
end a 1 week counterintelligence 
ining program jointly sponsored by 
ite and the CIA. 

• We have instituted a more inten- 
e use of counterintelligence debrief- 
; and are developing a new program 

I screening to use before selecting in- 
itijidduals for such assignment. 

"^ Third, security standards: 

intli j • Last fall we put out strict new 
jtf'i-ysical and procedural security stand- 
ds for any embassy that is to handle 
issified information. Posts are being 
i ought into compliance. We have re- 
: ced the level of classified material au- 
orized at several posts and have 
certified dozens of facilities from the 
orage of any classified material until 
e new standards are met. This is a 
inful process for many posts in the 
ort run. But in the long run it will 
fi^prove their ability to do their work. 

• I have talked to Bill Webster 
i^)OUt how the intelligence community 
n help us to make sure our standards 
e what they should be — especially in 
eas like technical security where 
1 lere are very few qualified experts, 
'e will be establishing an organization 
hich can give me an independent look 

at our technical security standards 
without building up a big new bureau- 
cracy and without tangling the lines of 

Our job will never be finished. 
There is more to be done and we are 
trying to do it. But what we are doing 
is the best way to achieve our objec- 
tives. To divert our resources and at- 
tention from these constructive 
activities to the destructive alternative 
of lie detector tests would be a serious 
blow, not just to morale but to security 

In August 1986, Congress passed 
and the President signed the Omnibus 
Diplomatic Security and Anti-Terrorism 
Act. This landmark legislation, care- 
fully crafted by Congress, gave us the 
authority, and a major start on the re- 
sources we needed, to implement the 
recommendations of the Advisory Panel 
on Overseas Security chaired by Admi- 
ral Bobby Inman. 

This legislation authorized a world- 
wide diplomatic security effort. Subse- 
quently, we began a multi-year 
program to replace and upgrade facili- 
ties at our most vulnerable posts over- 
seas. The Inman panel found that 
buildings at 134 of our 263 posts were 
substantially below minimum security 
standards. We began the most exten- 
sive construction program in the De- 
partment's history. We also started 
making improvements in security oper- 
ations and organizations. 

Unfortunately, today's budget real- 
ities are forcing us to slow the program 
down. In both FY 1988 and FY 1989, 
there will be no newly authorized starts 
in the security building program. In ad- 
dition, we propose to hold the Diplo- 
matic Security salaries and expenses to 
the 1988 level. Because this does not 
compensate for inflation, this means a 
real decrease in operations. 

I accept the need to hold down 
expenditures in the interest of the na- 
tion's economic and financial health. 
The State Department is doing its part 
in that effort. But I also fear that if we 
continue to constrain diplomatic se- 
curity expenditures in future years, the 
momentum toward improving the se- 
curity of our operations will be lost. In 
short, it is critical that the levels re- 
quested for security be viewed as part 
of the Department's response to the 
budget process— not as a reduced com- 
mitment to security by the Administra- 
tion or Congress. 

fthartmant nf Qtato Rllllptin/JulV 1988 

With specific respect to the 
Moscow Chancery, a subject in which 
this committee has expressed a particu- 
lar interest, we continue to make good 
progress on rehabilitating the existing 
chancery. At the same time, we are 
moving ahead with planning on how to 
achieve a new security chancery facility 
in Moscow. 

The Department has worked 
closely with other agencies represented 
in Moscow to reach a consensus on the 
most feasible long-term solution to our 
needs in Moscow. Before expending sig- 
nificant additional funds to a specific 
approach, we want to be certain that 
the design and logistics of fully secur- 
ing a building are feasible in the harsh 
security environment of the U.S.S.R. 
To get those answers, we have awarded 
a contract for an engineering and se- 
curity survey of the new building to 
determine options for the present 
structure and development of a fully se- 
cure building. Concurrently, the survey 
will also look at the feasibility of re- 
structuring the present chancery into a 
totally secure facility; a much less de- 
sirable option, in my view. 

We will have the results of the sur- 
vey in hand by late summer and will 
then prepare a proposed course of ac- 
tion for the consideration of the Con- 
gress. We expect to be able to present 
a package complete with funding re- 
quirements before the end of the fiscal 
year. In this regard, I should note that 
we believe no new funding for recon- 
struction of a new office building will be 
required prior to fiscal year 1990. 

Let me now try to drive home 
some funding realities which demand 
attention. We fully understand the di- 
lemma everyone faces under current 
budget limitations. And, we fully 
intend to operate within the level 
agreed upon at the budget summit, as 
our austere budget request indicates. 

Contributions to International 

Following on the $480 million appropri- 
ated for FY 1988, and in line with the 
budget summit compromise of late last 
year, the President's FY 1989 budget 
requests only $489.9 miUion for the 
contributions to international organiza- 
tions account. This is $166 million less 
than estimated 1989 net requirements 
(a shortfall of over 25%) for which we 
normally would seek U.S. funding. This 
will bring our cumulative shortfall to 
over $500 million by the end of 1989— a 
record high. 



This significant shortfall for FY 
1989 forces us once again to confront an 
extremely difficult decision about the 
allocation of very limited funds. No one 
receiving less than 100^7^ funding will be 
fully satisfied. But the facts dictate 
that many organizations will have to re- 
ceive less than 100% funding because 
the Administration must seek less than 
75% of full requirements for this 

I recognize our budget problems 
and the need to live within the budget 
summit, yet I must point out my con- 
cern over the growing shortfalls in our 
payments. Looking ahead to 1990 in 
this account, if we continue virtually to 
straightline our appropriations, we will 
be falling even further behind. 

If we do not reverse this trend to- 
ward further shortfalls in our assessed 
contributions to international organi- 
zations, the United States could lose its 
right to vote in some organizations. 
More immediately, continued shortfalls 
in our contributions undermine our 
efforts to achieve implementation of the 
important budgetary reforms which 
have been approved in the United Na- 
tions and key affiliated agencies at 
our initiation. 

There are some who view the solu- 
tion to this problem as negotiating a 
reduction in our assessments. Others 
argue just as forcefully that for the 
United States to seek an assessment 
reduction would be tantamount to ac- 
cepting a diminished American role in 
world affairs — a diminished ability for 
America to pursue our most fundamen- 
tal security, humanitarian, and eco- 
nomic interests around the world. They 
further argue that such negotiations 
would most probably be contentious 
and provide our adversaries with 
another opportunity to attack the 
United States. 

There is no easy solution to this 
dilemma. The Department is studying 
the problem and is taking a hard look 
at all of the alternatives. This process 
will require e.xtensive consultation with 
Congress over the next year. I ask for 
your support in this difficult 

State Department Improvements 

In difficult times such as these, there is 
a temptation to put off badly needed 
programs and projects. Inevitably, sev- 
eral years later, it will be painfully evi- 
dent that such a response to budget 
constraints was extremely 

The construction of an up-to-date 
Foreign Affairs Ti-aining Center is a 
high priority for me. I urge the com- 
mittee to approve this project. The is- 
sue is simple: ensuring the professional 
excellence and effectiveness of the men 
and women who represent our country 
abroad. I am convinced that the ability 
of the United States to effectively carry 
out its diplomatic functions is directly 
related to the skills of our professional 
staff At a time of declining numbers in 
our workforce, it is particularly impor- 
tant that the quality of our personnel 
be the highest that is possible. The new 
Foreign Affairs Training Center will 
provide an adequate facility to address 
this need. 

We must press ahead with skill de- 
velopment through training and the use 

of current technology. We must tak fic- 
tion now to ensure the future. 1 

In closing, let me say again thijif 
we fail to provide the resources tha 
give substance to our words, lend cid- 
ibility to our commitments, and peiit 
the effective execution of our plans ve 
will be shortchanging our most fun - 
mental national goals and interests ily 
colleagues and I recognize that we usi 
have the cooperation of Congi-ess t( 
achieve all our foreign policy object es 
We are committed to working with )u, 
and we welcome your close scrutin; )f 
our budget proposals. 

'Press release 81 of May 2, 1988. 1 ; 
complete transcript of the hearings w be 
published by the committee and will t 
available from the Superintendent of 1 CU' 
ments, U.S. Government Printing Off . 
Washington, D.C. 20402. ■ 

Secretary's Interview on "This Week With 
David Brinkley" 

Secretary Shultz was interviewed 
on ABC-TV's "This Week With David 
Brinkley" on May 22, 1988, by David 
Brinkley, Sam Donaldson , and John 
McWethy of ABC News.'' 

Q. Tell us what you think of the 
Gorbachev interview? 

A. It's an interesting interview. As 
always, he has lots to say about many 
different subjects. In terms of tone, it's 
quite apparent that he wants to see 
things move forward, and I think that's 

Q. Is there anything new in there 
that you had not seen or heard 

A. I haven't had a chance to read it 
in all of its detail. He did make one 
proposal about a space mission that 
caught a lot of attention; and that's 
something that's been talked about, but 
it's a long way from being agreed on. 

Q. Do you think, however, the 
United States would like to pursue it 
and would like to eventually agree to 
do it? 

A. We have a space agreement that 
we finished about a year ago. Under 
that agreement, particular projects get 
taken up and we examine them and de- 
cide whether to go forward with them 
or not, so I presume this will come up 
under that heading. 

Q. It doesn't sound like you nt 
to put it on the front burner. 

A. By the time you talk about 
sending something to Mars — and it 
wasn't clear to me whether it's an i ■ 
manned or a manned flight. I've s€ 
that report both ways. I saw it uni n- 
ned, but then I thought in your rui ip 
newscast it said "manned." But at y 
rate, obviously this has to be studi 
carefully and gone forward right, i 
eluding we always have to be caref 
with problems of technology transf 

Q. Let me ask you about son • 
thing that obviously will come uj 
What difference, real difference, 'es 
it make if the INF [Intermediate 
Range Nuclear Forces] Treaty is t 
completely finished by the Senati - 
assuming it is finished at some p nt 
before long — before you and the I ;si 
dent go to Moscow? Does it make ny 
real difference? 

A. It helps, certainly, to have 'iii- 
pleted something and to register tl t 
fact. Let me point out also that it 6 
been, I think, since 1972 that we 
haven't ratified a treaty with the S 
Union, and we've had several on th 
table. So it's good to register the fi 
that we can do it. 

Q. Do you have any particul: 
words of advice to the leadership'ip- 
parently you're going to Capitol liH 

It nt Qtato Riillotin/.liilu 188 


fiorrow to try to move the process 
«ng. What are you going to be tell- 

A. Actually, I think the process 
i,nine well, and I have only compli- 
n its for the Senate in the way in 
•^ ch they've handled this. It's been a 
\ thorough process. We've had over 
learings. We've answered over 1,300 
stions. I've appeared three times 
-I'll'. We have pinned things down 
I iieople wanted to pin down, and I 
ik it's been thorough going. Now the 
ity is being debated. I think there's 
una time for hearings and a time for 
qstions and a time for critiques and a 
t e for debate; and there also has to 

■ e le a time to decide, and I think 
V re about there. 

Q. Wouldn't it be embarrassing 
t you and the President to have con- 
i vative Republicans leading the op- 
I iition against this treaty in the 

11 ! late and trying to delay it, ob- 

'll ' usiy, past the Moscow summit? 
A. I don't know. I wouldn't try to 
I . down any motives. But certainly it's 
! ood thing to have people who probe 

,|.j 1 struggle and criticize. It helps to 
i ure people that there's been no stone 

,, 1 ; unturned. 

ii Q. There are a number of indica- 
Ntns at this point that the Admin- 

i ration may be changing its position 

I SDI, the Strategic Defense Initia- 
r. le. The Defense Science Board has 
i I ommended that the Administration 

' ce a much lower first step than had 
?n advocated in years past by the 
ministration. Are you taking some- 
ng new with you to the Soviet 
lion next week that will indicate a 
^ ghtly different approach to SDI? 

A. The President's position, insofar 
. negotiations are concerned, has 
, ^ver changed. It is that basically he 
^1^ 11 not agree to anything that in any 

^ y impedes the development of our 
[^|ility to figure out how to defend our- 
^, |.ves against ballistic missiles, if we 

ti do it. That has always been his 
, ,sition. 

.,, That still leaves room for a lot of 
"jings with the Soviet Union, such as a 

riod of nonwithdrawal from the ABM 
, ^ ntiballistic Missile] Ti-eaty, that pro- 
;, lie assurances on both sides of what 

■ je general environment is going to be 

■ lien we have massive cuts in our of- 
insive forces. 

iltij Personally, I think that we, as well 
i ! they, are well advised to want to see 
\lha.t that atmosphere is going to be. So 
ose are things we have negotiated 


There are a variety of things on the 
table that we're struggling with. We 
did agree on some language here at the 
Washington summit, that both sides 
agreed on. The only difficulty with that 
language is that we also agree that we 
don't agree on what it means, so we 
still have a lot of work to do. 

Q. Gorbachev also said, "Who 
would have thought in the '80s that 
Ronald Reagan would have been — 
would become — the first President to 
sign a nuclear arms treaty with the 
Soviet Union." He refers, of course, 
to the days when — 

A. Nuclear arms reduction. 

Q. What did I say? 

A. You said "agreement." 

Q. All right. 

A. There have been agreements, 
but they've been agreements under 
which nuclear weapons were allowed to 
increase, and the President has always 
objected to that. He said what he 
wants to do is decrease them. 

Q. Anyway, I was referring to his 
— he was referring to the '80s when 
the President was saying "the evil em- 
pire" and so on. What's changed him? 
You've watched him all this time. He's 
come quite a long way. 

A. We need to remind ourselves 
that in 1981 President Reagan proposed 
the zero option. I presume he would 
have signed it then if the Soviets would 
have agreed to it. They wouldn't agree 
to it. 

In 1982 he proposed 50% cuts in 
strategic arms. We have completed an 
agreement on the zero option, and we 
have all of the basic structure of a 50% 
reduction arrangement there, although 
there are immense amounts of addi- 
tional difficult undej'structure to that 
agreement yet to be done. So these are 
things that have been consistently pur- 
sued objectives on the part of our 

Q. So. as you're seeing it then, 
who would have believed that Gor- 
bachev would be the first to sign a 
nuclear reduction treaty with the 
United States? 

A. Mr. Gorbachev is new in power, 
in a sense. He's been there now for 
about 3 years. I would have to tell you, 
from the first time I met him, which 
was assisting Vice President Bush at 
the Chernenko funeral — we met for 
about an hour and a half — I went away 
from that meeting saying this is a dif- 
ferent kind of Soviet leader from what 
we've seen in the past. You could see it 

Q. Bring us to date on the Nor- 
iega negotiations in Panama? Where 
do we stand? 

A. We have had a lot of discussion 
with him, and we haven't concluded any 
agreement. Our objective is to have 
him give up his command of the Pan- 
amanian Defense Forces and to leave 
Panama, and to have the forces of de- 
mocracy there and national reconcilia- 
tion have a political opening so that 
they can basically get in charge of that 

I think in terms of what it cost 
somebody to get involved in drugs and 
violate the U.S. law, a penalty such as 
having to leave his command is a 
great — although we would wish for 
more — penalty. 

Q. On that point, it is reported 
that you would be willing to drop the 
drug indictments against Noriega as 
part of an agreement which leads to 
the objective you've just outlined. Is 
that true? And, if so, why? 

A. I give my advice to the Presi- 
dent, so I'm not going to talk about 
anybody's position, but I will talk about 
the proposition. 

Q. All right. T^lk about your par- 
ticular position. 

A. Let me just talk about the 
proposition. We have pushed very hard 
for more democracy, more freedom, 
more rule of law throughout our hemi- 
sphere, and, for that matter, through- 
out the world. We've seen a great deal 
of success in that, although we've also 
seen setbacks. We certainly want that 
same thing in Panama. We've pushed 
for it there. 

With General Noriega and his com- 
mand of the armed forces there now, 
that's a setback. It's particularly a set- 
back when we see that he's involved in 
drugs. So we have the two objectives. 
Now we want to pursue both of those 
objectives as part of our general policy 
in that area. 

We have in our hands a variety of 
tools. We have great economic stroke 
which people have felt and Noriega has 
felt. We have various other possible 
things we can do. We do want to be 
very strict in our observance of the 
Panama Canal treaties and not in any 
way do anything that disrupts that. 

We also have the fact that there is 
an indictment against him. It's an in- 
dictment for violation of U.S. law, and 
it would be desirable to bring him to 
the United States and try him here. 
However, we have no way of doing that. 
We have no ability to extradite him 

.JiPartmont »f Qt;.tP R..llfttin/ 1QBB 



from Panama. So you ask yourself, 
which situation are we better off in: to 
have Noriega more or less in charge in 
Panama and us with an indictment that 
we can't do much about, but nev- 
ertheless holding onto it; or having 
Noriega giving up power in Panama 
and leaving Panama, but also, having 
paid that penalty, not having the indict- 
ment hang over his head? 

There are very important argu- 
ments to be made on all sides of that 
issue. It's a real judgment to be made, 
and it's a difficult judgment. 

Q. You know what the next argu- 
ment is — that is, if you set a prece- 
dent of deciding that this objective is 
important enough to drop the indict- 
ments, then that sends a signal to the 
next guy that we want to indicate 
that if you'll just hang tough, the 
United States will give in. 

A. It's not a question of hanging 
tough. We have indicted lots of people. 
If you have a person who isn't the head 
of state, you have a chance of getting 
that person. We've had people extra- 
dited from — 

Q. Noriega isn't a head of state. 

A. We recognize Delvalle as the 
constitutional President of Panama — 

Q. But you're going to change 
that, I understand. 

A. Noriega has a great deal of con- 
trol there, and so that's what we want 
to see — 

Q. But I understand you're going 
to change that, that you might agree 
to recognize Solis Palma, the Noriega 

A. No. I don't know where you get 
that understanding. There's nothing to 

Q. If he were to go to some other 
country, leave Panama and go to 
some other country — not this one — 
the indictment would essentially be 
meaningless, wouldn't it? 

A. If he went to some other coun- 
try from which we could extradite him, 
it wouldn't be meaningless. That's an 
argument for holding onto it. 

Q. Read the extradition laws — 

A. In effect, you make him a pris- 
oner in Panama, to a certain extent. Of 
course, many countries don't have ex- 
tradition treaties with us. Some do. 

Q. Since the United States began 
imposing different sanctions on Pan- 
ama, the opposition claims that they 

are losing power — the opposition 
which the United States is support- 
ing. Noriega is still there. He is still 
stringing you along, and it is looking 
more and more like a sucker play, 
that Noriega is just playing the 
United States for all it's worth and 
hanging in there, seeing how much he 
can get. 

A. There is a balance of pressure 
on both sides. The pressures on him, as 
a result of inability to meet military 
payrolls and things of that kind, are 
quite great. And so the fact that his 
presence there constitutes a major 
problem for Panama, not just with us 
— and here I agi'ee with something 
Senator [Sam] Nunn said on the pro- 
gram — but also with other countries 
around there. Other countries are en- 
gaged and they do care, and they would 
like to see him out. So he is a figure of 

Q. One other point on the inter- 
view with Gorbachev. He admitted 
that there was some opposition. 
Could you add anything to that? Do 
you know how strong it is, how much 
opposition he has within his own 

A. Our Ambassador to Moscow, 
Jack Matlock, has had three tours ol 
duty in that country. He says now, f 
the first time, he really enjoys readi 
the papers because it's full of contro 
versy and people arguing this, that, 
and the other thing. So there has be i 
a change. Of course, when there's co 
troversy, that means there are peop 
arguing for things and people arguii 
against them, as is the case here. 

Q. Gorbachev also, in the inte 
view, talked about continuing the ■ 
gotiation on the START [strategic 
arms reduction talks] treaty. He s; I 
he was optimistic about it, and he 
would do it even though the Presi- 
dent, Mr. Reagan, is about done. I 
you think a START treaty can be < i- 
eluded before the end of the Presi- 
dent's term? 

A. It's certainly possible. I feel 
certain that at the Moscow summit ' 
will both want to agree to keep wor 
ing on it hard. But whether it actu; ■ 
will happen or not, I don't know. Tl 
issues are tough. 

'Press release 96 of May 23, 1988.1' 

U.S. Arms Control Initiatives 

Following is the latest in a series of 
updates on current U.S. arms control 

Arms reduction negotiations are one el- 
ement in the Administration's strategy 
for ensuring peace and strengthening 
security. Through arms reductions, the 
United States seeks to preserve a sta- 
ble strategic balance at the lowest 
possible levels of military force, thus 
reducing the risk of conflict. The 
United States took an important step 
toward this goal when President 
Reagan signed the INF Ti-eaty in 
Washington last December. 

As part of our efforts to make the 
world safer, we have undertaken a 
number of arms reduction initiatives, 
including proposals for: 

• A stabilizing and effectively 
verifiable 50% reduction in U.S. and 
Soviet strategic offensive arsenals; 

• A managed transition to deter- 
rence based increasingly on defenses — 
which threaten no one — rather than on 
the threat of nuclear retaliation; 

• An effective, verifiable, and t ly 
global ban on chemical weapons; 

• Effective verification provisio 
for existing treaties limiting nuclea 

• A strengthened nuclear non- 
proliferation regime; 

• Reductions of conventional fo 3S 
in Europe to equal levels; and 

• Confidence- and security-buil ig 

Intermediate-Range Nuclear Fore 

The INF negotiations have concludi 
successfully. On December 8, 1987, 
President Reagan and General Seer 
tary Gorbachev signed the historic IF 
Treaty. The treaty provides for the 
elimination of all U.S. and Soviet 
ground-launched INF missile systen 
in the range of 500-5,500 kilometer: 
(about 300-3,400 miles) and the elir 
ination of related support facilities d 
support equipment within 3 years aer 
it enters into force. The treaty ban; ill 
production and flight testing of the; 
missiles immediately upon entry int 

rtctn'irtmant n< Ctoto Di illatin / ll llll MR 


f as well as the production of any 
sik' stages or launchers for these 
,-iles. After the 3-year period of 
i lination, neither side may possess 
a( INF missiles, launchers, support 
jtietures, or support equipment. The 
trity contains the most comprehensive 
vr fication provisions in the history of 
jjis control, including various types of 
slrt-notice, onsite inspections as well 
a^nspection by resident, onsite teams 
ai key missile facility in each country. 

The success of these negotiations is 
a rect consequence of the President's 
sddfast commitment to achieving real 
ajis reductions rather than merely 
li ting increases as in previous trea- 
'• . The treaty is also the result of 
■ ro solidarity in responding to the 

at posed by Soviet deployment of 

_'(! missiles. 

On -January 25, 1988, the treaty 

submitted to the U.S. Senate for 

iilvice and consent to ratification. 

- itcRic Offensive Forces 

I'liited States places highest pri- 
y on its efforts to reach an equita- 
u and effectively verifiable agreement 
v n the Soviet Union for deep and sta- 
b ',ing reductions in strategic nuclear 
-, In particular, the United States 
s reductions in the most destabiliz- 
11 nuclear arms — fast-flying ballistic 
n siles, especially heavy, interconti- 
r tal ballistic missiles with multiple 
V -heads. 

As a concrete step toward this end, 
t United States presented a draft 
t ity at the strategic arms reduction 
t ;s in Geneva on May 8, 1987. This 
c ft treaty reflected the basic areas of 
a eement on strategic arms reductions 
r ched by President Reagan and Gen- 
6 1 Secretary Gorbachev at Reykjavik 
i Dctober 1986 to achieve 50% redue- 
tis in U.S. and Soviet strategic nu- 
c ir arms. The Soviets presented a 
ft treaty on July 31, 1987. While the 
let draft contained some areas of 
Milarity to the U.S. proposal, it of- 
fed no movement on the major out- 
snding issues. The U.S. and Soviet 
ijift treaties provided the elements for 
i'oint draft treaty text, which con- 
ues to be the basis of negotiations. 

During their meetings in Wash- 
• ton in December 1987, President 
agan and General Secretary Gor- 
' 'hev agreed to instruct their nego- 
tor.s to work toward completion of a 
ART agreement at the earliest possi- 
'; date. The negotiators are building 
• 'on areas of agreement: 50% reduc- 
i^ns as reflected in the joint draft 

START treaty text, including ceilings of 
no more than 1,600 strategic offensive 
delivery vehicles with 6,000 warheads 
and 1,540 warheads on 154 heavy 
ICBMs as well as the agreed rule of 
account for heavy bombers and their 
nuclear armament. 

During the Washington summit, 
the two leaders made further progress 
on START, including agreement on a 
sublimit of 4,900 for the total number of 
ballistic missile warheads, the numbers 
of warheads attributed to existing 
types of ballistic missiles, and approxi- 
mately a .50% reduction in the existing 
aggregate throw-weight of Soviet inter- 
continental ballistic missiles and sub- 
marine-launched ballistic missiles, with 
this level not to be exceeded by either 
side for the duration of the treaty. The 
leaders also agreed on guidelines for 
effective verification of a START treaty, 
including short-notice, onsite inspec- 
tions, data exchanges, and continuous 
onsite monitoring of critical facilities. 

In recognition of the importance of 
details for effective verification, the 
United States has presented a number 
of key verification documents, including 
a draft protocol on conversion or elim- 
ination (October 1987), a draft protocol 
on inspection and monitoring (February 
1988), and a draft memorandum of un- 
derstanding on data exchange (March 
1988). After the Soviets had put forth 
their own versions of these documents, 
the negotiators were able to develop 
joint draft texts, a step critical to com- 
pletion of a START treaty. 

However, important substantive 
differences remain on issues such as 
mobile intercontinental ballistic mis- 
siles; a warhead sublimit on ICBMs; 
modernization of existing types of So- 
viet heavy ICBMs; counting rules for 
air-launched cruise missiles; sea- 
launched cruise missiles; and the details 
of an effective verification system. In 


ABM — Antiballistic Missile Treaty 
CORRTEX— continuous reflectometry 

for radius versus time experiment 
IAEA— International Atomic 

Energy Agency 
ICBM — intercontinental ballistic missile 
INF— intermediate-range nuclear forces 
MBFR— mutual and balanced force 

SDI — Strategic Defense Initiative 
START — strategic arms reduction talks 

apartment of State Bulletin/July 1988 

addition, the Soviets continue to link 
agreement on strategic arms reductions 
with U.S. acceptance of measures 
which would cripple the U.S. Strategic 
Defense Initiative. The United States 
has repeatedly told the Soviets that 
such measures are unacceptable. 

The United States seeks a fair and 
durable agreement to bring about — for 
the first time in history — deep reduc- 
tions in the strategic nuclear arsenals 
of the United States and the U.S.S.R. 
We believe such an agreement could be 
reached this year if the Soviet Union 
will match our constructive approach to 
the Geneva negotiations. 

Defense and Space Issues 

In the defense and space forum, the 
United States seeks to discuss with the 
Soviets the relationship between strate- 
gic offense and defense. We also seek to 
discuss how, if we establish the feasi- 
bihty of effective defenses, the United 
States and U.S.S.R. could jointly man- 
age a stable transition to deterrence 
based increasingly on defenses — which 
threaten no one — rather than on the 
threat of retaliation by offensive nu- 
clear weapons. 

During their December 1987 meet- 
ings in Washington, President Reagan 
and General Secretary Gorbachev — tak- 
ing into account the preparation of the 
START treaty — instructed their Geneva 
negotiators to work out an agreement 
that would commit the sides to observe 
the Antiballistic Missile Treaty as 
signed in 1972, while conducting their 
research, development, and testing as 
required, which are permitted by the 
ABM Treaty, and not to withdraw from 
the ABM Treaty for a specified period 
of time. They agreed that intensive dis- 
cussions of strategic stability shall be- 
gin not later than 3 years before the 
end of the specified period, after which, 
in the event the sides have not agreed 
otherwise, each side will be free to de- 
cide its own course of action. Such an 
agreement would have the same legal 
status as the START treaty, the Anti- 
ballistic Missile Treaty, and other sim- 
ilar, legally binding agreements and 
would be recorded in a mutually satis- 
factory manner. 

On January 22, 1988, the United 
States put a draft defense and space 
treaty on the table at the Geneva nego- 
tiations. This draft fulfilled the instruc- 
tions of President Reagan and General 
Secretary Gorbachev. The U.S. draft 
treaty seeks to transform the areas of 
agreement reached at the Washington 
summit into treaty language and to 



identify and resolve areas of 

The U.S. draft calls for a new and 
separate treaty and incorporates the 
following elements: 

• Entry into force contingent upon 
entry into force of a START treaty; 

• Agreement not to withdraw from 
the ABM Treaty for a "specified period 
of time" to be determined through 

• Observance of the ABM Treaty 
through that period and until either 
party chooses a different course of ac- 
tion; and 

• After the "specified period of 
time," either party is free to choose its 
own course of action, including deploy- 
ment of strategic missile defenses be- 
yond the limitations of the ABM Ti*eaty, 
after giving the other party 6-months 
written notice of its intention to do so. 

The United States also proposes 
confidence-building measures — in the 
form of a protocol on predictability — 
as an integral part of the defense and 
space treaty. Such measures would 
provide predictability regarding each 
side's strategic defense programs. On 
March 15, 1988, the United States pro- 
posed a draft predictability protocol to 
its January 22 di-aft treaty, including an 
annual e.xchange of programmatic data 
on planned strategic defense activities, 
reciprocal briefings on respective stra- 
tegic defense efforts, reciprocal visits 
to associated research facilities, and es- 
tablishment of procedures for reciprocal 
observation of strategic defense tests. 

In early May 1988, the Soviets pre- 
sented drafts for a separate defense 
and space agreement and associated 
side agreements. Although these Soviet 
drafts use the agreed language from 
the Washington summit, the Soviets 
have made clear that they continue to 
maintain an interpretation of the ABM 
Treaty that is more restrictive than 
agreed to by the parties in 1972. The 
Soviet proposal fails to meet funda- 
mental U.S. concerns such as the 
retention of rights of withdrawal 
recognized under international law. 
f\irthermore, Soviet violations of the 
ABM Treaty continue. The United 
States cannot agree to any further ob- 
ligations until the Soviets deal with 
these violations satisfactorily. 

We hope that the Soviets will join 
us in serious discussions to conclude a 
defense and space treaty that achieves 
the important goals which the two lead- 
ers identified at the Washington sum- 
mit. We hope that such a treaty will 

hasten progi-ess toward a safer, more 
stable world — one with reduced levels 
of nuclear arms and an enhanced ability 
to deter war based on the increasing 
contribution of effective strategic de- 
fenses against ballistic missile attack. 

Nuclear Testing 

The United States and the Soviet 
Union have undertaken step-by-step ne- 
gotiations on nuclear testing. In these 
talks, the two countries agreed as a 
first step to negotiate effective verifica- 
tion measures for two existing but un- 
ratified nuclear testing treaties, the 
Threshold Test Ban Treaty and the 
Peaceful Nuclear Explosions Treaty. 
Once these verification concerns have 
been satisfied and the treaties ratified, 
the United States will propose negotia- 
tions on ways to implement a step-by- 
step parallel program — in association 
with a program to reduce and ulti- 
mately eliminate all nuclear weapons — 
of limiting and ultimately ending nu- 
clear testing. 

We are making progi'ess toward 
our goal of effective verification of the 
two existing treaties. During the De- 
cember 1987 summit in Washington, the 
United States and the Soviet Union 
agreed to design and conduct a joint 
verification experiment intended to fa- 
cilitate agreement on effective verifica- 
tion of these two treaties. This joint 
experiment, which will take place at 
each other's nuclear test site, will pro- 
vide an opportunity to measure the 
yield of nuclear explosions using tech- 
niques proposed by each side. Through 
this experiment, we hope to provide 
the Soviet Union with all the informa- 
tion it should need to accept U.S. use 
of CORRTEX— the most accurate tech- 
nique we have identified for verification 
of the Threshold Test Ban Treaty and 
the Peaceful Nuclear Explosions 

During their April 20-22, 1988, 
meetings in Moscow, Secretary Shultz 
and Foreign Minister Shevardnadze 
approved a schedule for the joint veri- 
fication experiment as well as an 
agreement on its conduct. They also in- 
structed the negotiators to complete 
annexes to the agreement which would 
contain technical details of the experi- 
ment. Preparations for the experiment 
are already underway, and it is ex- 
pected the experiment will be con- 
ducted this summer. 

At their April meeting, the two 
ministers also instructed their nego- 
tiators to complete work on a verifica- 

tion protocol to the Peaceful Nuclea ' 
Explosions Treaty for signature at t 
Moscow summit. In the case of the 
Threshold Test Ban Treaty, however 
the Soviets have insisted that the e.\ 
periment is necessary before the pn, > 
tocol can be finalized. The negotiato 
are now focusing on arrangements f 
conducting the experiment as soon : 
possible, at the same time continuin 
to work on the protocols. We hope t 
Soviets will continue to work with 
us toward agreement on effective 
verification measures that would pe it 
these treaties to be ratified — a long 
time goal of the Administration. 

Nuclear Risk Reduction Centers 

On April 1, 1988, the U.S. Nuclear sk 
Reduction Center, which is located 
the Department of State, officially 
opened. This center, along with its - 
viet counterpart in Moscow, was esi i- 
lished through an agi-eement signet y 
Secretary Shultz and Soviet Foreig 
Minister Shevardnadze on Septem- 
ber 15, 1987. These centers, which ; 
the direct result of a U.S. initiative 
are practical measures that strengt n 
international security by reducing t 
risk of conflict between the United 
States and the Soviet Union that n' lit| 
result from accident, misinterpreta n, 
or miscalculation. The centers exch g« 
information and notifications requii 
under certain existing and possible 
future arms control and confidence- 
building measures agreements. For 
ample, the centers would be used t 
transmit notifications related to sh( 
notice inspections conducted under 
INF Ti-eaty. 

Nuclear Nonproliferation 

In January 1988, the United States ' 
the Soviet Union held the 10th roui 
in an ongoing series of consultation 
which began in December 1982, on 
nuclear nonproliferation. These con 
tations have covered a wide range 
of issues, including prospects for 
strengthening the international noijj 
proliferation regime, support for tl J 
Nuclear Nonproliferation Ti'eaty, a\ 
the mutual desire of the United Sti 
and the U.S.S.R. to strengthen thd 
ternational Atomic Energy Agency| 
These consultations are not negotia 
tions but, rather, discussions to rev 
in depth various issues of common 
cern related to efforts to prevent til 
spread of nuclear weapons. The ne;l 
consultations will be held around til 
time of the June IAEA Board of G'l 
nors meeting. 


Department of State Bulletin/July^ 


Chronology: January 1, 1986-May 13, 1988 


Nclear and Space T^lks 

Bind IV: January 16-Mareh 4, 1986 
^md V: May 8-June 26, 1986 
Ijind VI: September 18-Novem- 

ler 13, 1986 
Find VII: January 15-March 6, 1987 

INF continued to March 26) 
fand VIII: April 23-December 7, 1987 

I INF); May 5-November 23, 1987 

START and defense and space) 
I md IX: Began on January 14, 1988 

(inference on Confidence- 
ii Security-Building Measures 
ii Disarmament in Europe 
(I ultilateral) 

1 and IX: January 28-March 15, 1986 
1 und X: April 15-Mav 23, 1986 
i und XI: June 10-July 18, 1986 
1 und XII: August 19-September 19, 
986 — agreement concluded 

I nference on Security 
; d Cooperation in Europe 

■st Round of FoUowup Conference: 

\Iovember 4-December 20, 1986 

jiiiid Round of FoUowup Conference: 

lanuary 27-April 11, 1987 

inl Round of FoUowup Conference: 

Vlay 4-July 31, 1987 

urth Round of FoUowup Conference: 

September 22-December 18, 1987 

fth Round of FoUowup Conference: 

January 22-March 25, 1988 

<th Round of FoUowup Conference: 

Began April 15, 1988 

)nference on Disarmament 

lemical Weapons Committee Rump 

Session: January 13-31, 1986 

)ring Season: February 4-April 25, 


immer Session: June 10-August 29, 


(lemical Weapons Committee Chair- 
man's Consultations: November 24- 
December 17, 1986 
lemical Weapons Committee Rump 
Session: January 6-30, 1987 
iring Session: February 2-April 30, 

-immer Session: June 8-August 26, 

Chemical Weapons Committee Rump 

Session: November 30-December 16, 

Chemical Weapons Committee Rump 

Session: January 11-29, 1988 
Spring Session: February 2-April 28, 

Summer Session: To begin July 7, 198^ 

Mutual and Balanced Force 
Reductions (Multilateral) 

Round 38: 
Round 39: 
Round 40: 

Round 41: 
Round 42: 
Round 43: 

Round 44: 
Round 45: 

January 30-March 20, 1986 
May 15-July 3, 1986 
September 25-December 4, 

January 29-March 19, 1987 
May 14-July 2, 1987 
September 24-December 3, 

January 28-March 17, 1988 
To begin May 19, 1988 

Nuclear Risk Reduction Centers 

Round I: January 13, 1987 

Round II: May 3-4, 1987— agreement 

concluded, ad referendum; 

agreement signed in Washington on 

September 15, 1987 

Nuclear Testing Talks 

Round I: November 9-20, 1987 
Round II: Began on February 15, 1988 


Mutual and Balanced 
Force Reductions Tklks 

August 6-7, 1986, in Moscow 
September 10-11, 1986, in Washington 

Conference on Confidence- 
and Security-Building Measures 
and Disarmament in Europe 

August 14-15, 1986, in Stockholm 

Chemical Weapons Treaty Talks 

January 28-February 3, 1986, in Geneva 
April 15-25, 1986, in Geneva 
July 1-18, 1986, in Geneva 
October 28-November 18, 1986, in New 
York City 

February 16-March 5, 1987, in Geneva 
July 20-August 7, 1987, in Geneva 
November 30-December 17, 1987, in 

March 8-25, 1988, in Geneva 

Biological and Toxin 
Weapons Convention 

March 31-April 15, 1987, in Geneva 

Chemical Weapons 
Nonproliferation Discussions 

March 5-6, 1986, in Bern 
September 4-5, 1986, in Bern 
October 7-8, 1987, in Bern 

Conventional Stability 
Mandate Consultations 

February 17-April 6, 1987, in Vienna 
May 11-July 31, 1987, in Vienna 
September 28-December 14, 1987, in 

January 25-March 24, 1988, in Vienna 
April 20, 1988, began in Vienna 

Nuclear Testing 

First Session: July 25-August 1, 1986, 
in Geneva 

Second Session: September 4-18, 1986, 
in Geneva 

Third Session: November 13-25, 1986, 
in Geneva 

Fourth Session: January 22, 1987 re- 
cessed on Februai'y 9; resumed on 
March 16; concluded on March 20 in 

Fifth Session: May 18-29, 1987, in 

Sixth Session: July 13-20, 1987, in 

Nuclear Risk Reduction Centers 

May 5-6, 1986, in Geneva 
August 25, 1986, in Geneva 

Nuclear Nonproliferation Talks 

December 15-18, 1986, in Washington 
July 28-30, 1987, in Moscow 
January 11-14, 1988, in Washington 

ihHepartment of State Bulletin/July 1988 



Chemical Weapons 

In April 1984, the United States pre- 
sented, at the 40-nation Conference on 
Disarmament in Geneva, a draft treaty 
banning development, production, use, 
transfer, and stockpiling of chemical 
weapons to be verified by various 
means, including short-notice, man- 
datory onsite challenge inspection. At 
the November 1985 Geneva summit, 
President Reagan and General Secre- 
tary Gorbachev agreed to intensify bi- 
lateral discussions on all aspects of a 
comprehensive, global chemical weap- 
ons ban, including verification. Since 
then, we have held eight rounds of bi- 
lateral talks on a chemical weapons 
treaty. A ninth round is proposed for 
July 1988. These discussions have nar- 
rowed differences in a few areas, in- 
cluding early data exchange and 
destruction of production facihties. 

Until March 1987, the Soviets— 
who possess by far the world's largest 
chemical weapon stockpile — had not ad- 
mitted that they even had such weap- 
ons. In April 1987, they claimed that 
they had stopped producing them, had 
no chemical weapons positioned outside 
their borders, and were building a facil- 
ity to destroy existing stocks. They also 
hosted a visit by Conference on Disar- 
mament representatives to the Soviet 
chemical weapon facility at Shikhany in 
October. In addition, the Soviets finally 
accepted a longstanding U.S. invitation 
to observe the U.S. chemical weapon 
destruction facility in Tooele, Utah; on 
November 19-20, 1987, a delegation of 
Soviet experts visited that facility. We 
see these moves as useful steps toward 
building confidence, which will facilitate 
negotiation of an effectively verifiable 
ban on chemical weapons. 

Nonetheless, a number of key is- 
sues remain, including how to ensure 
participation of all states that could 
pose a chemical weapons threat; how to 
strengthen verification in light of new 
technologies, the continuing prolifera- 
tion of chemical weapons, and the 
nature of chemical industries capable of 
both military and civihan production; 
how to maintain security under a con- 
vention; and how to protect sensitive 
information not related to chemical 
weapons during inspections. 

At the December 1987 Washington 
summit. President Reagan and General 
Secretary Gorbachev reaffirmed the 
need for intensified negotiations toward 
conclusion of a truly global and verifia- 
ble convention encompassing all chem- 
ical weapons-capable states. They also 
agreed on the importance of greater 
openness and confidence-building mea- 
sures. The United States is prepared to 
work constructively with other mem- 
bers of the Conference on Disarmament 
to resolve outstanding issues. 

In addition to treaty discussions, 
we are working with allies and other 
friendly countries as well as with the 
Soviets on preventing the proliferation 
of chemical weapons. Primarily in re- 
sponse to the continuing use of chem- 
ical weapons in the Iran-Iraq war, the 
United States and 18 other Western in- 
dustrialized countries have been con- 
sulting since 1985 to harmonize export 
controls on commodities related to 
chemical weapon production and to de- 
velop other mechanisms to curb the il- 
legal use of such weapons and their 
dangerous spread to other countries. 
Also, in bilateral discussions with the 
Soviets on chemical weapon non- 
proliferation, we have reviewed export 
controls and political steps to limit the 
spread and use of chemical weapons. 

Conference on Confidence- 
and Security-Building Measures 
and Disarmament in Europe 

In September 1986, after almost 3 
years of negotiations, the 35-nation 
Stockholm Conference on Disarmament 
in Europe adopted a set of concrete 
measures designed to increase openness 
and predictability of military activities 
in Europe. These measures, which are 
built around NATO proposals, provide 
for prior notification of certain military 
activities above a threshold of 13,000 
troops or 300 tanks, observation of cer- 
tain military activities above a thresh- 
old of 17,000 troops, and annual 
forecasts of upcoming notifiable mili- 

tary activities. The accord also conta 
provisions for onsite air and ground i 
spections for verification, with no rig 
of refusal. Although modest in scope, 
these provisions were the first time t 
Soviet Union agreed to inspection on 
its own territory for verification of ai 
international security accord. The 
United States is encouraged by the r 
cord of implementation to date which 
generally reflects both the letter and 
the spirit of the Stockholm document 
On August 30, 1987, the United 
States — under the terms of the Stocl 
holm document — successfully complei I 
the first-ever, onsite inspection of a !r 
viet military exercise. Since then, se 
eral inspections have been conducted , 
both NATO and the Warsaw Pact. M 
recently, the United States conduete' 
an inspection in April of troops from 
the German Democratic Republic an( 
the Soviet Union in East Germany. 
This was the first inspection by a We ■ 
ern state of a non-notified activity. Ii 
early May, Bulgaria conducted an in- 
spection of a NATO amphibious exer 
cise in Italy. The United States 
considers inspections an integral par f 
the Stockholm agreement and an im| - 
tant step in the process of increasinj; 
openness and building confidence am 
security in Europe. 

Further Negotiations on Confidenc 
and Security-Building Measures 

At the Vienna CSCE followup meeti 
in July 1987, NATO proposed that tl 
35 CSCE participating countries re- 
sume negotiations on confidence- anc 
security-building measures in order 
build on and expand the work begun 
Stockholm. Warsaw Pact and neutral 
and nonaligned states also support ri 
sumption of these negotiations. How 
ever, final agreement to resume such 
negotiations can only come as part o 
balanced outcome to the Vienna CSC 
Followup Conference, including signi 
cant progress in Eastern-bloc human 
rights performance. 

Conventional Stability T^lks 

NATO began consultations with the 
Warsaw Pact in February 1987 to de- 
velop a mandate for new negotiations 
on conventional stability in Europe. . 


Department of State Bulletin/July I'jg 


Jiy 1987, representatives of NATO 
psented a draft mandate for negotia- 
t IS between the countries belonging 
t;;he NATO alliance and the Warsaw 
Fl't, covering their conventional forces 
o'land from the Atlantic Ocean to the 
lal Mountains. These negotiations 
wjld take place within the framework 

he CSCE process but would be au- 
tiomous regarding subject matter, 

ticipation, and pi-ocedures. 
Ill the ensuing months, the ne- 
g iators have reached preliminary 
a'eement on several aspects of the 
- ndate, including procedures, partici- 
its, objectives and methods, and ver- 
atiiin. Discussion continues on the 
, laiiiing issues. We hope to conclude 

M' mandate discussions in 1988 so we 
c get the new negotiations underway. 
i with the negotiations on confidence- 
al security-building measures, our 
lily to proceed with new conven- 
lai stability negotiations depends on 
achievement of a balanced outcome 
he Vienna CSCE Followup Confer- 
. e, including progress in Eastern- 
\ c human rights performance. 

1 itual and Balanced 
1 -ce Reductions 

( December 5, 1985, NATO pre- 
.- ited, at the MBFR negotiations, a 
I jor initiative designed to meet East- 
( 1 concerns. The proposal deferred 
I ■ Western demand for data agree- 
I nt on current forces prior to treaty 
i nature. The Soviets had claimed that 
( s Western demand was the primary 
I idblock to agreement. The proposal 
o called for a time-limited, first- 
ise withdrawal from Central Europe 
'5,000 U.S. and 11,500 Soviet troops, 
1 lowed by a 3-year, no-increase com- 
: tment by all parties with forces in 
s zone. During this time, residual 
ce levels would be verified through 
tional technical means, agreed entry/ 
It [loints, data exchange, and 30 
nual onsite inspections. Effective 
rification of a conventional arms 
reement requires such special mea- 
res. The Soviets have not responded 
nstructively to the Western 

Visit of Canadian Prime Minister 

<i ri»ii i T imn ' nir 


F TTTTTrajf Tt^l^ 

Prime Minister Brian Mulroney of 
Canada made an official working visit 
to Washington, D.C., April 26-28, 
1988, to meet with President Reagan 
and other government officials. 

Following are remarks made by 
President Reagan and Prime Minister 
Mulroney at the arrival ceremony on 
April 27 A 

President Reagan 

Bienvenue [Welcome], Brian et Mila. 
Nancy and I welcome you in the name 
of all Americans. Your visit is more 
than the last Washington meeting of 
two fortunate Irishmen who became 
leaders of their two countries. To- 
gether, we're looking ahead to a new 
era of growth and well-being for our 
two countries. In 1988 we're witnessing 
a dream come into being that many on 
both sides of the border have worked 
for: an agreement created to drastically 
reduce trade and tariff barriers be- 
tween our two great nations. We shall 
show by deed and dedication, after the 
legislative process has been completed, 
that the lowering of tariffs and trade 
barriers is the way to a more pros- 
perous world. Protectionism is out, and 
trade expansion is in. 

We're embarking on an exciting 
new beginning. Our free trade agree- 
ment is recognized beyond North 

America as a venture never before at- 
tempted on such a scale by two sov- 
ereign and independent nations. When 
accepted by Parliament and Congress, 
the agreement will become one of the 
most important achievements of my 
tenure in Washington. President 
Eisenhower asked "the free world to 
recognize that trade barriers, although 
intended to protect a country's econ- 
omy, often in fact shackle its pros- 
perity." Ike would be satisfied, I'm 
certain, with our efforts this past year. 
We are unshackling our trading rela- 
tionship in a broad-based effort to 
make our two countries more pros- 
perous at home while making ourselves 
more competitive abroad. We're players 
in a world economy, and our free trade 
agreement will help make us the world- 
class competitors we must be. 

Our agreement is remarkable in 
many ways. It has balance and offers 
mutual gains for two huge trading part- 
ners. Permit me, Brian, to salute the 
very special and dedicated Canadians 
and Americans who worked to put this 
agreement together and who made it 
happen. We both fielded teams of big 
league negotiators, and the agreement 
is indeed a product of their combined 
abilities. Our countries and peoples 
have been well served. 

rii$artment of State Bulletin/July 1988 



I am confident that the legislatures 
in both of our countries will vote favor- 
ably on this historic free trade agree- 
ment. Important as that step is, there 
are still other steps to be taken on the 
global economic stage. You and I will 
be meeting again, in Toronto this June, 
at the economic summit, where we will 
have discussions with our colleagues 
from Europe and Japan. We hope to 
move the process of international eco- 
nomic coordination forward. These dis- 
cussions will also speed the way to 
what we trust will be a successful 
GATT [General Agreement on Tariffs 
and Trade] round of negotiations. We 
know that Canada shares with us our 
concerns about those many barriers to 
agricultural and services trade that are 
damaging to world trade. 

We both attach great importance to 
GATT. While the tasks of the present 
round are formidable, it is essential 
that we give substance to a comprehen- 
sive multilateral reform of the interna- 
tional trading system. This will not be 
easy to accomphsh, but it must be un- 
dertaken. And our objectives must in- 
clude meaningful progress on 
agriculture. Agriculture is fundamental 
to both our economies, and it is an ex- 
port area in which we're highly com- 
petitive in a free and open world 
market. The United States actively 
seeks the elimination of all subsidies in 
agriculture as a top priority. Together 
we must be successful in order to re- 
store market forces in world 

Cooperation is the hallmark of our 
relationship in other areas. We will be 
working with Canada on the largest co- 
operative high-technology project we 
have ever undertaken: the permanently 
manned civil space station. Cooperation 
has also been the basis of our nearly 
80-year tradition of shared concern for 
our environment. Much has already 
been done, and experts on both sides of 
the border recognize the results that 
have been achieved. Both our countries 
have made substantial progress in im- 
proving air quality. We have advanced 
our efforts to improve the water quaHty 
of the Great Lakes. More can be done 
to protect our environment as science 
clearly points the way, but make no 
mistake, we are moving. 

Ours is a relationship of people and 
their ability to hold personal rela- 
tionships across a national border. They 
form them easily and quickly, in good 
times and during times of stress. Today 
warm and close professional working 
ties are enjoyed and valued by serv- 

icemen and women of both our armed 
forces. It has made for an everyday ca- 
maraderie that has become both unique 
among armed forces and commonplace 
in our bilateral security relations. It is 
of great benefit to the smooth operation 
of NORAD [North American Aerospace 
Defense Command] and NATO and our 
shared responsibilities for the defense 
of North America. 

In recent years we've been heart- 
ened by Canada's renewed efforts to 
strengthen its military forces — efforts 
forcefully spelled out in last year's de- 
fense white paper. With this strength- 
ening has gone the Canadian 
Government's commitment to enlarge 
its contribution to the defense effort of 
the West and to support this commit- 
ment with the necessary budgets. This 
is but another illustration of a shared 
sense of purpose that Canada and the 
United States nurture to make the al- 
liance stronger. 

As I prepare for Moscow, I wel- 
come your thoughts on how we can fur- 
ther relieve international tensions. 
Thus, Brian, we have our work, as al- 
ways, cut out for us during our visit. 
Let's go to it. 

Prime Minister Mulroney 

I want to thank you, Mr. President, for 
your kind words and generous welcome. 
It's a pleasure to be back among good 

The friendship between our people 
stretches back generations and 
stretches across a continent. Our rela- 
tionship is a model for civilized con- 
duct. It reflects what is best in the 
democratic values on which free so- 
cieties are based. On more than one 
occasion we have made common cause 
in the defense of the values we hold 
dear, and we remain vigilant in the de- 
fense of freedoms we cherish. As one of 
my distinguished predecessors, John 
Diefenbaker, once put it — he happened 
to be a conservative as well — "We are 
the children of our geography, products 
of the same hopes, faith, and dreams." 

Last year, Americans made almost 
37 million visits to Canada, the world's 
largest tourist invasion, save one, 
which would be the nearly 45 million 
visits made last year by Canadians to 
the United States. And I think that 
gives you an indication of what really 
goes on in February in Canada. [Laugh- 
ter] Don't try and call a meeting. 
[Laughter] You would be quick to note 
an imbalance in those figures, and I 
point this out to Secretary Baker [Sec- 

retary of the Ti-easury James A. Baki 
III] — there's an imbalance in those fi{ 
ures, an imbalance in your favor. But) 
assure you, we have no plans to legis* 
late against it. 

I was determined when I took ofi 
fice to approach relations between oui 
countries in a spirit of openness and 
perseverance in dealing with the prol 
lems that faced us. I found in you a 
leader of warmth and directness. We 
have met regularly. In fact, our seriei 
of annual meetings is unprecedented 
the history of Canada-U.S. relations,, 
and I would hope that it is now a pen 
manent feature of our relationship. Iv 
the President's second term of office- 
and in what I hope will be known afti 
wards as my first [laughter] — we havi 
done much to repair and refurbish tU 
relationship between Canada and the« 
United States. I haven't the slightest 
doubt that the President could go on 
and on — to quote Mrs. Thatcher's [U. 
Prime Minister Margaret Thatcher] 
noted turn of phrase — but I gather ye 
have something in this country callec 
the 22d amendment. But the principl 
we set out for ourselves at Quebec in* 
1985, by this President and myself, I| 
believe have served us well. 

We have reinforced our links in t' 
largest trading partnership in the hia 
tory of the world. In January the Pre! 
dent and I signed the free trade 
agreement, under which both countri* 
stand to gain. As Secretary Baker sa 
in Ottawa last week, this achievement 
will grow in stature and importance 
over time. Its geopolitical potential is 
most significant. And I, too, want toi 
pay tribute to Jim Baker and Claytoi* 
Yeutter [U.S. Trade Representative] 
for the very constructive role they 
played with our top people at a most! 
critical juncture of the negotiations. 
The implications of the free trade 
agreement go far beyond our border 
and far beyond the shores of this con 
nent, for what transpires between thi 
world's largest trading partners hold 
certain significance in the multilaten 

We have renewed our defense re, 
tionship with the modernization of al 
defense arrangements and enhanced 
contributions to NATO. We have 
reached a pragmatic solution on the i 
sue of transit through the Northwes' 
passage. The issue of acid rain remai 
a challenge for us. This, as you said- 
Quebec City, Mr. President, is a prdl 
lem that belongs to both of us. We m 
continue — and we shall — to work to- 
gether for an equitable solution to t| 
important challenge. 


Department of State Builetin/Julv lifA 


And so, we have a good deal to 
iiss together and with our officials. 
ik forward to my lunch today with 
letary Shultz, as well as my meet- 
with the congressional leadership 
. in a special way, my meetings with 
\'ice President. 

1 want to thank you again for the 
inth and genuineness of your wel- 
e. Mila and I are delighted to be 
1 .\()u and Nancy again. And if I 
(.iinclude, Mr. President, I will by 
liuling with a remark that you 
le to me in Quebec City when you 

were leaving, as you observed Nancy 
and Mila getting out of their car to 
come and join us. And you took one 
look at it, and you said to me, "Brian, 
well, for two Irishmen, we certainly 
married up." [Laughter] 

Thank you, Mr. President. 

B kgrround 

T relationship between Canada and 
United States is both productive 
ti implex — more so than our ties to 
I it her country. We each play a dis- 
t 1 1 lit compatible role in world af- 
, and our security interests are 
t lieable. We are each other's most 
iitant economic partner. With two 
CI itries as interdependent as ours, oc- 
c; onal differences naturally arise, but 
b 1 Prime Minister Mulroney and 
P sident Reagan have placed a high 
p irity on maintaining the good rela- 
ti s that now e.xist. 

In September 1984, the two agreed 
ti neet annually (this year, April 27-28 
ii Vashington) to cover bilateral and 
g 3al concerns, and Cabinet officers 

* e encouraged to talk frequently 

V h their counterparts. Secretary 

S iltz meets at least four times a year 

V h Canadian Secretary of State for 
I ternal Affairs Joe Clark. 

Irlier Summits 

I March 1985, the President met with 

* Prime Minister at Quebec City. 
> signed a number of important 
uiiients, including declarations on 

i ernational security and trade rela- 
tns; agreed on the modernization of 
■' rth American air defenses; and 
'.'hanged ratifications on a Pacific 
' Imon Treaty. They also agreed to 

:)oint special envoys to examine the 

d rain issue. 
During their March 1986 meeting in 

ishington, the President and Prime 
inister signed a 5-year renewal of the 
jjrth American Aerospace Defense 

ORAD) Agreement and committed 

^mselves to implementing the acid 

m report. 

'Made on the South Portico of the 
White House where Prime Minister 
Mulroney was accorded a formal welcome 
with full military honors (te.xt from Weekly 
Compilation of Presidential Documents of 
May 2, 1988).B 

LS. -Canada Relations 

The April 1987 summit in Ottawa 
underlined the importance the two 
leaders attached to their bilateral trade 
initiative, focused on the Arctic sov- 
ereignty issue, and reviewed environ- 
mental concerns. 

Global Interests 

Canada and the United States are 
founding members of the United Na- 
tions and the North Atlantic Treaty Or- 
ganization (NATO). Both are active in 
international affairs and consult exten- 
sively on development assistance, arms 
control efforts, and peacekeeping 

Security Relations 

In addition to being NATO allies, the 
United States and Canada maintain the 
joint NORAD Command. A unique ar- 
rangement to develop and procure de- 
fense goods also exists. Our security 
relationship is coordinated by the Per- 
manent Joint Board on Defense. 

Economic Relations 

The volume of U.S. -Canadian trade has 
tripled, from $39 billion in 1974 to more 
than $125 billion in 1987, accounting for 
about 22% of total U.S. trade and more 
than 75% of Canada's exports. Our ex- 
ports to Canada amount to one-and- 
one-half times the total exported to 
Japan, our next largest customer. 

Canada is also our largest invest- 
ment partner. In 1987 U.S. investment 
in Canada totaled about $57 billion, 
20% of U.S. investment abroad. Can- 
ada's private direct investment in the 
United States amounted to about $20 

The duty-free bilateral trade in ve- 
hicles and parts we share with Canada 
was established under a 1965 agree- 
ment. The total exchange for auto- 
motive products in 1987 was about $45 

The United States and Canada 
have the world's largest bilateral trad- 
ing relationship, and it is now to be 
dramatically strengthened. On January 
2, 1988, the President and Prime Minis- 
ter signed a historic free trade agree- 
ment that Congress and the Canadian 
Parliament must now approve. Over 10 
years, it will remove all tariffs; remove 
virtually all import and export restric- 
tions; reduce or eliminate many non- 
tariff barriers; resolve many 
longstanding bilateral irritants; estab- 
lish an effective trade dispute settle- 
ment mechanism; and liberalize trade in 
several areas, including agriculture, 
autos, energy, financial services, and 
government procurement. By applying 
binding rules to guide trade in services 
and setting agreed rules to govern bi- 
lateral investment activity, the free 
trade agreement breaks new gi-ound. 


At the 1985 Quebec summit, both coun- 
tries declared their intention to 
strengthen their market approach to bi- 
lateral energy trade. Since then Canada 
has removed certain legislative and reg- 
ulatory measures that discriminated un- 
fairly against U.S. and other foreign 
investors, while the United States has 
continued to deregulate its energy mar- 
kets. Canada is by far our largest sup- 
plier of imported energy — oil, uranium, 
natural gas, and electricity — and this 
relationship will be made secure under 
the free trade agreement. 

During 1987 Canada also was the 
largest market for U.S. coal exports. 
The total value of two-way energy trade 
has grown to $9.3 billion. 


Canada and the United States both de- 
sire to protect the North American en- 
vironment. Environmental cooperation 
has a long history; the joint cleanup of 
the Great Lakes following a U.S. -Can- 
ada agreement in 1972 is a recent suc- 
cess story. Canadian controls on air 
pollution and toxic chemicals generally 
have been less stringent than U.S. reg- 
ulations, although the Canadian Gov- 
ernment has moved to tighten some 

artment of State Bulletin/July 1988 



An important bilateral issue is acid 
rain, a form of transboundary air pollu- 
tion that Canadians fear threatens their 
forests and freshwater streams; they 
have proposed that both countries be- 
gin soon to reduce the emissions be- 
lieved responsible. Canada has initiated 
a program to reduce its sulfur dioxide 
emissions 50% by 1994. The United 
States is continuing to reduce emissions 
under current laws while devoting large 
sums to intensive research and pilot 
demonstration projects, as part of a 
multi-year, $5-billion joint Federal- 
private industry program. The special 
envoys' joint report on acid rain has 
been completed and is being 

Maritime Boundary and Fisheries 

In October 1984, the International 
Court of Justice, at the request of the 
United States and Canada, ruled on the 
disputed boundary in the Gulf of Maine. 
The ruling settled the boundary, which 
gave Canada jurisdiction over about 
one-si.xth of the rich Georges Bank fish- 
ing grounds. 

With the signature of the Arctic 
Cooperation Agreement in January 
1988, the United States and Canada 
solved their dispute concerning the wa- 
ters off the Canadian Arctic Islands. 
Canada claims these waters are inter- 
nal, a claim the United States does not 
recognize. The agreement will permit 
the United States and Canada to in- 
crease their cooperation in the Arctic 
without prejudicing the legal position of 
either country. 

U.S.-Canada Free Trade Agreement 

Taken from the GIST series of April 1988, 
published by the Bureau of Public Affairs, 
Department of State. Editor; Harriet 

On January 2, 1988, President Reagan 
and Prime Minister Mulroney of Canada 
signed the U.S.-Canada Free Trade 
Agreement (FTA). This historic agree- 
ment represents the culmination of 
efforts stretching back more than 100 
years. When approved by the U.S. 
Congress and the Canadian Parliament, 
it will strengthen an already extensive 
trading relationship and will enhance 
economic opportunity on both sides of 
our common border. 

Each year the United States and 
Canada exchange more goods and serv- 
ices than any two countries in the 
world. Bilateral trade in goods and 
services exceeded $166 billion in 1987. 
The elimination of tariffs and most 
other barriers to trade between the 
two countries under the FTA will in- 
crease economic growth, lower prices, 
expand employment, and enhance the 
competitiveness of both countries in 
the world marketplace. 

While the FTA does not eliminate 
all trade problems between the United 
States and Canada, it does provide a 
consultative framework in which these 
problems can be managed before they 
create serious economic and political 
frictions. Predictably in the years 
ahead, industries in both the United 
States and Canada can expect to un- 
dergo some structural readjustment to 
adapt to changing market conditions. 
However, freer, less restricted trade 
permitted by the FTA will spur both 
the American and Canadian economies 
to higher growth rates, increased effi- 
ciency, and improved competitiveness 
with other trading partners. 

The FTA is fully consistent with 
U.S. and Canadian obligations under 
the General Agreement on Tariffs and 
Ti-ade (GATT). It does not lessen com- 
mitments to achieve multilateral trade 
liberalization. Rather, it establishes 
useful precedents for such negotiations 
and encourages worldwide trade liber- 

The GATT system has served trad- 
ing nations well for 40 years. However, 
this global system has traditionally 
been restricted to trade in goods. Serv- 
ices and investment have become in- 
creasingly important aspects of 
international economic activity, how- 
ever, and the United States and Canada 
are working together in the ongoing 
Uruguay Round of multilateral trade 
talks to expand GATT coverage to in- 

clude investment and services. Ratil i- 
tion of the FTA this year is importa. 
in providing needed impetus to thesi 

The FTA and implementing legi 
lation must be approved by the U.S. 
Congress, which under "fast track" j- 
cedures has 90 legislative days for C( 
sideration; amendments are not per- 
mitted. The Administration agreed ( 
February 17, 1988, to work with the 
appropriate congressional committer 
in drafting the implementing legisla n 
and not to submit the bill until aftei 
June 1, 1988. In turn, the congressic .1 
leadership agreed to vote on the bill 
during its current session. 

In Canada, entry into an intern 
tional agreement is exclusively a poi r 
of the Prime Minister and Cabinet, i- 
liament only approves the implemen ig 
legislation. The parliamentary syste 
which ensures party discipline in th 
House of Commons, should lead to j - 
sage of the FTA bill. Although the i i- 
ate, which is controlled by the oppo 
tion, also must approve the bill, the 
appears to be significant support fo 
in that body. Article 103 of the FTA 
obligates Canada to ensure that the 
needed changes to provincial laws a 
regulations are made. Prime Minist 
Mulroney has stated that Canada wi 
implement the agreement, as sched- 
uled, on January 1, 1989. 

Assuming that the U.S. Congre 
and the Canadian Parliament appro' 
the FTA during 1988, the agreemen 
will enter into force on January 1, 1! I. 
The two governments will then esta 
lish a joint Canada-U.S. Ti-ade Com 
mission to oversee its implementatic 
A secretariat in each capital (Wash- 
ington, D.C., and Ottawa) will be tl 
principal government office responsi e 
for that country's implementation of le 
agreement. In the United States, g( 
ernment agencies will continue to st < 
the views of business and industry i 
the FTA is implemented, including i J 
possible expansion of the agreement 


The agreement contains provisions 
covering virtually every traded sect 
The following is a synopsis of these 
provisions. , 


Department of State Bulletin/July 1)6 


.i lagement of Trade 

Tariffs: Eliminates all tariffs on 
' and Canadian goods by 1998. 
, tariffs will be removed immedi- 
> i.Ianuary 1, 1989, if agreement ap- 
ed in 1988), while the others will be 
fil out over 5-10 years. 
Rule of Origin: Rules of origin de- 
fii goods eligible for FTA treatment 
' prevent "free riding." Goods wholly 
( liK-ed in the United States or Can- 
(lualify for FTA treatment. Goods 
cc.aining imported components qualify 
if ifficiently transformed to change 
,, ff classification. In some cases there 
. 1 additional requirement that 50% 
'St of manufacturing be in the 
•.111 States or Canada. 

Customs: Ends customs user fees 
fc goods and most duty drawback pro- 
- Tis (in which importers have duty 
- ited) by 1994 for bilateral trade; 

- duty waivers linked to perform- 

■ requirements by 1998 (except for 

Auto Pact). 

Quotas: Eliminates import and ex- 
p ; quotas unless consistent with the 
G TT or explicitly grandfathered (al- 
k =d to remain in place) by the FTA. 

National Treatment: Reaffirms 
IT principle preventing discrimina- 
against imported goods. 

Standards: Prohibits use of prod- 
u standards as a trade barrier and 
p ddes for national treatment of test- 
fa labs and certifications bodies. 

Emergency Action: Allows tempo- 
T y import restrictions to protect do- 
ll 5tic industries harmed by increased 
ii lorts from the other country in lim- 
it I circumstances. 

A-iculture and Industry 

Agriculture: Eliminates all bilat- 
e 1 tariffs and export subsidies and 
1: its or eliminates quantitative restric- 
t:s on some agricultural products, in- 
I'ding meat. Eliminates Canadian 
i rort licenses for wheat, oats, and 
'ley when U.S. crop price supports 
e(|ual to or less than those in Can- 
- ;. Increases Canadian poultry and 
<!? import quotas. For 20 years, allows 
' iffs on fruits and vegetables to be 
mposed to protect the domestic 
I'ket if prices fall below the 5-year 
■ 'rage. 

Energy: Prohibits most import and 
export restrictions on energy goods, in- 
cluding minimum export prices. Re- 
quires any export quotas designed to 
enforce either short supply or conserva- 
tion measures to ensure continuation of 
the historical proportionate share of re- 
sources. Provides for Alaskan oil ex- 
ports of up to 50,000 barrels per day to 
Canada under certain conditions. 

Autos: Replaces eligibility rule for 
duty-free Auto Pact imports into the 
United States with tougher FTA rule of 
origin. (Most auto trade already is duty 
free under the 1965 U.S. -Canada Auto 
Pact.) FTA continues Auto Pact and 
programs allowing pact-qualified com- 
panies to import duty free into Canada 
but does not allow new firms to qualify 
for pact membership. Permits U.S. 
auto and parts exports that meet the 
FTA rule to enter Canada at FTA tariff 
rates, which will be reduced to zero by 
1998. Ends by 1996 Canadian non-Auto 
Pact production-based duty remission 
programs (under which producers pay 
less duty for automotive imports into 
Canada for meeting Canadian produc- 
tion requirements) and export-based 
programs by 1998 (those based on ex- 
ports to the United States will be 
ended on January 1, 1989). 

Wine and Distilled Spirits: 

Removes most discriminatory pricing 
and listing practices against wine or 
spirits imported from the other coun- 
try. Prohibits new restrictions on beer. 

Softwood Lumber: Preserves the 
1986 Memorandum of Understanding 
with Canada on lumber pricing prac- 
tices of Canadian provinces. 

Cultural Industries: Exempts in- 
dustries such as publishing, broadcast- 
ing, and films. However, if this exemp- 
tion results in practices that restrain 
trade (otherwise inconsistent with the 
FTA), the injured party may take mea- 
sures of equivalent commercial effect 
without resort to dispute settlement. 


Government Procurement: 

Expands the size of federal government 
procurement markets open to compet- 
itive bidding by suppliers from the 
other country. 

Services: Commits governments 
not to discriminate against covered 
service providers of the other country 
when making future laws or regulations 
(transportation services are excluded). 

Business Travel: Facilitates cross- 
border travel for business visitors — in- 
vestors, traders, professionals, or exec- 
utives transferred within the company. 

Investment and Financial Services 

Investment: Provides national 
treatment for establishment, acquisi- 
tion, sale, conduct, and operation of 
businesses (exempts transportation). 
Commits Canada to end review of indi- 
rect acquisitions by U.S. companies 
and raises the threshold for review of 
direct acquisitions in most sectors to 
C$150 million (constant 1992 Canadian 
dollars). Bans imposition of most per- 
formance requirements (i.e., local con- 
tent, export, import substitution, and 
local sourcing requirements) imposed 
on foreign investments. 

Financial Services: Exempts U.S. 
bank subsidiaries from Canada's 16% 
ceiling on Canadian domestic banking 
assets allowed to be held by foreign 
banks. Ends Canada's foreign owner- 
ship restriction on U.S. purchases of 
shares in federally regulated financial 
institutions. Assumes that reviews of 
U.S. firms' applications for entry into 
Canadian financial markets will be on 
the same basis as Canadian firms' ap- 
plications. Permits banks in the United 
States to underwrite and deal in debt 
securities fully backed by the Govern- 
ment of Canada or Canadian political 

Resolving Disputes 

General Dispute Settlement 

(except for cultural industries— publish- 
ing, broadcasting, film, etc. — financial 
services, countervailing duty, and anti- 
dumping cases): Establishes a bina- 
tional commission to resolve disagree- 
ments; allows for arbitration if the par- 
ties desire. 

Dispute Settlement for Counter- 
vailing Duty and Antidumping Cases: 

Countries will continue to apply exist- 
ing national laws, but court review of 
administrative agency determinations in 
either country will be replaced by a 
binational panel. The panel will apply 
the same standard and scope of review 
as would the relevant court. 

ipartment of State Bulletin/July 1988 




The following are frequently asked 
questions about how the FTA is ex- 
pected to operate and how it might 
affect various sectors of the U.S. 


Q: Does the United States have a 
free trade agreement with countries 
other than Canada? 

A: The United States has a less 
comprehensive free trade agreement 
with Israel. 

Q: What other free trade 
agreements is the Administration 

A: The Administration has no plan 
at this time to negotiate other free 
trade agi'eements. If the Administra- 
tion were to consider negotiating an- 
other agreement, it would need to 
consult with and seek special authority 
from the Congress. 

Q: Why is the United States plan- 
ning to eliminate its duties on such 
sensitive products as textiles and ap- 
parel, lead, zinc, and certain fish 
products, etc., when these industries 
are in economic distress. 

A: Both countries agreed to elimi- 
nate duties on all products, including 
sensitive ones. Canada also must elimi- 
nate duties on sensitive products. The 
total elimination of tariffs between the 
United States and Canada is the only 
way to achieve the widest trade liber- 
alization possible in goods and services. 
However, recognizing the sensitivity of 
certain industrial sectors in both coun- 
tries, the FTA provides for a 10-year 
phase-out period for duty elimination — 
the maximum period of time permissi- 
ble under the agreement. 

Q: What does the United States 
gain from the FTA's services provi- 

A: The United States gains three 
important benefits because the FTA: 

• Ensures that the U.S. -Canadian 
market, already substantially open in 
services trade, will become more open 
through the prospective establishment 
of national treatment; 

• Establishes a mechanism to re- 
solve trade disputes for scores of serv- 
ice sectors and creates a forum for 
bringing other sectors into the FTA; 

• Provides a useful precedent for 
ongoing negotiations in the Uruguay 
multilateral trade round. 


Q: Will the FTA impair Congress' 
ability to change domestic support 

A: The agreement will not affect 
the ability of either country to change 
domestic support programs for agri- 
cultural products. Of course, the pro- 
grams would need to be consistent with 
the other provisions of the agreement 
regarding such matters as import du- 
ties and export subsidies. 

Q: Has the United States given 
up protection from unfair import 
competition under Section 22 of the 
Agriculture Adjustment Act and cor- 
responding GATT protection? 

A: Both countries reserve the right 
to impose or reimpose import restric- 
tions on a particular grain (specifically 
wheat, oats, barley, rye, corn, triticale, 
and sorghum) if imports increase signif- 
icantly as a result of a substantial 
change in either country's support pro- 
grams for that grain. The United 
States may use section 22 when there is 
(1) a significant increase in imports re- 
sulting from (2) a substantial change in 
the price support programs of either 
country and (3) provided the conditions 
of section 22 are otherwise met. Past 
trade patterns are not likely to be af- 
fected by the elimination of the small 
U.S. duties on grain from Canada. It is 
not expected that U.S. imports of Ca- 
nadian grain will increase significantly 
as a result of the removal of trade re- 
strictions by the FTA. 

Q: How will the FTA affect trade 
in wheat? 

A: Canada has agreed to eliminate 
import licenses for U.S. wheat, barley, 
oats, and their products when U.S. 
Government support for the particular 
grain is equal to or less than that of 
Canada. Each country will calculate its 
own support level in accordance with 
the agreement; it contains a mechanism 
to resolve any disagreement over cal- 
culations. The elimination of import li- 
censes will provide improved mutual 
access to respective markets for both 
grains and processed products contain- 
ing grains. 

Auto Trade 

Q: Why didn't the United Sta 
renegotiate the 1965 Auto Pact to • 
move its inequities, such as Cana in 
performance requirements (local n- 
tent, etc.) and multilateral sourci; 

A: Automotive trade was one c ;hc 
most difficult issues in the FTA ne - 
tiations. The Auto Pact, under whi 
most auto trade has been conducte ibr 
over 20 years, essentially provides i- 
duty-free trade in automotive good be- 
tween Canada and the United Stat if 
certain content requirements are n ' 
In addition, Canada has duty remiion 
(waiver) programs based on meetir 
certain performance requirements, he 
FTA leaves the Auto Pact in place it 
limits eligible firms for duty-free e ry 
into Canada to a specified list. Fui er- 
more, Canada agreed to restrict b( ;- 
fits such as duty remission progi'ai 
based on production in Canada for In- 
pact members to a limited number 
firms. These programs will termin ■ 
by 1996. Programs which tie benef tc 
exports to the United States will t mi' 
nate on January 1, 1989. 

Q: Why didn't the FTA requi a 
60% direct cost of processing rub or 
autos to increase the benefits to IS. 
industry and labor? 

A: U.S. negotiators explored ' 
possibility of moving to a 60*^ Noi 
American rule. The Canadians, hf 
ever, were concerned that this woi b( 
too restrictive for new foreign aut 
motive manufacturing subsidiaries lat 
recently have invested in Canadiai 
operations. The FTA did, however 
toughen the Auto Pact's 50% rule 
origin for entry into the United Si es 
by basing it on manufacturing cos in- 
stead of value added, as is custom ily 
the case. Profits and costs, such a »d- 
vertising and administrative overh id. 
will no longer count toward the 5C . 

Q: Under the FTA, the Cana an 
production-based duty remission 
(waiver) schemes are not elimina d 
until January 1, 1996, but in the 
meantime they continue to disto 
trade. Shouldn't they be elimina d 
immediately or be subject to GA" 

A: No, we have achieved an ec ita- 
ble, but not perfect, solution to th 
unfair Canadian trade practice. U '. in 
dustry still may challenge Canadit 


Department of State Bulletin/Jul>IS8t 


.ii-mance requirements under U.S. 
if their continuation under the FTA 
asonably burdens or restricts U.S. 
nierce or materially injures U.S. 


I ural Industries 

Q: Whv aren't cultural industries 
,n uded in the FTA? 

A: The United States is sensitive 
aiiadian interests in fostering its 
net cultural heritage. Therefore, 
ain cultural industries are exempt 
1 the FTA provisions. These include 
nablication, sale, distribution, or 
I'ltion of books, magazines, and 
-|ia|:iers; film and video recordings; 

111- video music recordings; and 
li. television, and cable dissemina- 

Hdwever, the FTA recognizes that 
adian cultural policies should not 
titute a discriminatory barrier to 
. trade. For example, the FTA in- 
es the elimination of tariffs on vid- 
rccords, and printed material, 
. -d investment provisions for 
■ of cultural industries, and 
uht protection for the retransmis- 
iif commercial broadcasts. Further- 
. f, the United States retains the 
ri t to rebalance concessions with 
m sures of equivalent effect if future 
ci ural policies are detrimental to our 
C( mercial interests. The agreement 
4 ; not require invocation of its dis- 
ft i settlement provisions in order to 
IR ' such countermeasures. 

Q: Doesn't the cultural exception 
t ersely affect U.S. firms? 

A: No, the FTA improves Canadian 
ti itment of U.S. commercial interests 
ir he cultural area. It provides for tar- 
' liniination (e.g., on videos, records, 
itfd material), improved provisions 
sale of cultural industries, and 
' I'l^ht protection for broadcast re- 
ismissions. In addition, the FTA 
w - the United States to take mea- 
■s (if equivalent commercial effect in 
fvciit that Canada enacts additional 
-iirtions which impair U.S. access to 
I aiiadian market. This right should 
' as a disincentive to the use of the 
ural exception for measures that, 
'•lough nominally cultural, have sig- 
' cant commercial effects. 

Q: How is border broadcasting 
Sected by the FTA? 

A: The FTA will remedy the prob- 
1 of unauthorized and uncompensated 
ransmission by Canadian cable sys- 
is of copyrighted television pro- 

grams. By January 1, 1990, Canada will 
need to provide a right of remuneration 
(royalty) to the copyright holder for the 
simultaneous and unaltered retransmis- 
sion of copyrighted programming. In 
addition, the FTA generally prohibits 
the nonsimultaneous or altered re- 
transmission of copyrighted program- 
ming except with permission of the 
copyright holder. 


Q: How will the FTA improve our 
energy security? 

A: The FTA will provide the 
United States with more secure access 
to Canadian energy supplies to meet 
our long-term energy needs. This ac- 
cess to secure Canadian resources is 
important to reduce our dependence on 
OPEC supplies. The Canadians have 
agreed that, even in the event of a sup- 
ply disruption, they will continue to 
provide the United States with its his- 
torically proportionate share of their 
energy supplies. Furthermore, the Ca- 
nadians have agreed that they will not 
discriminate against U.S. consumers in 
the pricing of their energy resources, 
ensuring that U.S. consumers will not 
be cut off suddenly in the event of 

Q: What barriers to energy trade 
will be removed by the FTA? 

A: There are virtually no barriers 
today in our bilateral energy trade. 
However, in order to preserve gains we 
have made, both sides agreed to pro- 
hibit restrictions on imports or exports 
in terms of supply, price, or taxes. Nei- 
ther country may impose any taxes, 
duties, or charges on imported or 
exported goods that also are not im- 
posed in equal quantities on the same 
products for domestic use. 

Neither country may discriminate 
against suppliers or consumers in the 
other country, relative to its own do- 
mestic suppliers or consumers, in the 
pricing of energy supplies. (For exam- 
ple, under current Canadian regula- 
tions, exporters of Canadian electricity 
may not chai'ge a price for that elec- 
tricity which is significantly less than 
the least cost energy alternative avail- 
able to their U.S. customers. Canadian 
regulations have, in the past, required 
that the minimum price for oil and gas 
exports be higher than the prevailing 
price to Canadian consumers. These 
practices will be eliminated under the 

Q: What impact will the FTA 
have on U.S. oil and gas producers? 

A: The agreement is not expected 
to have any direct effect on U.S. oil and 
gas producers, large or small. The FTA 
should not change the level of Canadian 
exports of oil or gas, since the Canadi- 
ans are not currently restraining ex- 
port levels or discriminating against 
U.S. consumers in the pricing of their 
exports. The United States, in turn, is 
not restricting imports. 

Financial Services 

Q: How does the agreement affect 
U.S. commercial banks? 

A: The FTA will remove current 
limits on growth, capital, and market 
share in Canada. Specifically, U.S. 
banks will be exempt from the 16*7^ ceil- 
ing on domestic assets of all foreign 
banks in Canada, as well as the individ- 
ual capital limits used to implement the 

Q: How does the FTA affect U.S. 
insurance companies? 

A: They will have the same rights 
as Canadian insurance companies to di- 
versify in the federally regulated finan- 
cial sector They can either establish or 
acquire a closely held bank, an insur- 
ance or a trust company. As a result of 
Ontario provincial reforms, they also 
will be able to acquire Canadian se- 
curities firms. (Ontario is the center of 
Canada's securities industry.) 

Q: How are securities firms 

A: As a result of the FTA, U.S. 
securities firms are granted access to 
Canada and will, for the first time, be 
able to diversify their activities in Can- 
ada by affiliating with insurance com- 
panies, trust and loan companies, or 
closely held commercial banks. Through 
a financial holding company, they can 
enter these new areas of business ei- 
ther as new companies or by acquiring 
an existing firm. 

Prior to this agreement, U.S. se- 
curities firms established in Canada 
were not primary distributors of Cana- 
dian Government paper or money mar- 
ket funds. The FTA assures that their 
applications to engage in these ac- 
tivities will be considered on an equal 
basis with Canadian firms. 

Q: Is the FTA consistent with the 
principles of the Glass-Steagall Act? 

A: The FTA is fully consistent with 
the Glass-Steagall Act but broadens its 
application to allow Canadian (and 

li'^partment of State Bulletin/July 1988 



other) banks in the United States to 
underwrite and deal in debt obligations 
fully backed by the Canadian Govern- 
ment and its political subdivisions (the 
vast majority of current business of Ca- 
nadian securities firms). This conforms 
with the existing ability of banks in the 
United States to underwrite and deal in 
securities of the U.S. Government and 
its political subdivisions, now permitted 
under the act. In addition, any future 
Glass-Steagall liberalization would auto- 
matically apply to Canadian, as well as 
to U.S.,' financial institutions. 

Trade Remedies 

Q: Does the FTA change U.S. 
antidumping and countervailing duty 

A: No, the FTA preserves the 
rights of U.S. companies to obtain re- 
lief from injurious dumping and govern- 
ment subsidies under such laws. It 
creates a procedure under which bina- 
tional panels, substituting for national 
courts, will review determinations in 
U.S. or Canadian cases on products of 
the other country. 

Q: Is it constitutional to have a 
binational panel — instead of U.S. 
courts — review antidumping and 
countervailing duty determinations? 

A: There is no constitutional right 
to have a federal court hear an appeal 
of administrative decisions in such 
cases. The Congress has the power to 
prescribe or limit the jurisdiction of 
federal courts; indeed, it was only in 
1980 that the Congress, by statute, pro- 
vided for the range of appeals to 
federal courts that are now available. 
Moreover, there is no constitutional 
right to import or to be subject to a 
particular tariff. Consequently, elim- 
inating judicial review of determina- 
tions in cases against Canadian 
products does not raise due process 

Q: Why doesn't the FTA elimi- 
nate Canadian subsidies? 

A: Although the negotiators at- 
tempted to achieve greater discipline 
over subsidies by both governments, 
there is little international consensus 
on what constitutes a subsidy. Both the 
United States and Canada continue to 
have subsidies. This issue will continue 
to be addressed over a 5- to 7-year pe- 
riod in bilateral negotiations. Our joint 
aim is to develop agreed discipline on 
government subsidies that will ensure 
fair trade within the FTA.B 

The "Budget Crunch" 
and the Foreign Service 

by Ronald I. Spiers 

Address during Foreign Service 
Day at the Department of State on 
May 6, 1988. Ambassador Spiers is 
Under Secretary for Management. 

This is the fourth Foreign Service Day 
on which I have been asked to meet 
with you and review the major devel- 
opments of the past year which have 
affected the Foreign Service of the 
United States, of which you have all 
been a part. I have always welcomed 
this opportunity. Your presence here 
bespeaks your continuing interest in 
the institution you have all served well 
and truly. 

In a larger sense Foreign Service 
Day is an opportunity to pay our re- 
spects to the great traditions of Ameri- 
can diplomatic history in practice and 
to those who have so recently been re- 
sponsible for the conduct of our diplo- 
macy. It is also an occasion to talk 
among ourselves about current policy 
and problems. 

Foreign Affairs Budget 

It will not surprise any of you that our 
major concern over the past year has 
been the financial resources which will 
be available for the conduct of U.S. for- 
eign affairs. You will recall that at this 
time last year the budget situation for 
the Department was grim. We were pre- 
paring for a looming shortfall of at least 
$84 million in our salaries and e.xpenses 
appropriation, deep cuts in the foreign 
buildings program, and only two-thirds 
of the funds necessary to pay our con- 
tributions to the various international 
organizations to which we belong. 

The November budget summit 
agreement gave us a 12th-hour stay of 
e.xecution. Our budget was restored to 
a level that will enable us to meet cur- 
rent service requirements and fund 
a very limited amount of program 
growth, although we face grave diffi- 
culties in meeting our obligations to in- 
ternational organizations, and many 
stringencies in a range of programs. 

As one colleague has observed, 
what we got was a reprieve and not a 
pardon. We face deep uncertainties 
with regard to the funds we will have 
for operations in the fiscal year that 

begins this coming October. Even jw, 
only 6 months before that date, w(lo 
not know within a range of perhap 
$100 million just what our shortfal fi\ 
be. There are many variables to ta 
into account: What will overseas iia- 
tion rates do to our requirements? j 
What new emergencies will arise \ jidi 
will place further demands on our ^■ 
sources? Will the Congress approv 
disapprove, or alter the Administr 
tion's FY 1989 request? Will we ha 
more e.xchange rate losses? Until 
have clearer answers to these que: 
tions, we do not know whether we rill 
face a $35-million problem or a $lf 
million problem. This makes resou e 
planning very difficult indeed. 

Exchange rate losses have be( 
devastating for the Department in je 
last 2 years. In this period the cos Df 
running two of our largest Embas es- 
Tokyo and Bonn — has doubled. E' 7 
time the dollar drops one pfennig 
value, our bills in the Federal Re) oli 
of Germany go up $200,000. 

Wliat is beyond argument is 1 it 
the Department of State will face \n 
ous resource constraints over a pi 
longed period ahead. Over the pa tw 
decades, our resources have grow 
slowly but measurably. We are no jpt 
haps at the end of an era. It seen 
clear that the American public is ite 
mined to deal effectively with the ud 
get deficit. That concern over the 
deficit is already affecting every i in 
and every part of the Federal bud it. 
Given the cuts already made in d( es 
tic programs and the cuts about t be 
made in those programs and in th mi 
tary, it is highly unlikely, in my v A', 
that the American public or the C 1- 
gress will allow the Department ( 
State to escape the consequences ' 
this determination. Therefore, I c m 
think that we face a temporary si a- 
tion that can be dealt with by ad <c 
cuts here and there or by pushing; in 
lems off for a year or two. We fac a 
protracted period of diminished n 
sources, and we must accept the 'ti- 
sequences of that fact. 

Twenty-three years ago, I wa'D 
rector of NATO Affairs and deepl-ir 
volved in a debate which, for all Iim 
may still be going on: was it betttit( 
maintain a larger defensive force in 
ture at the expense of war-fightin c; 
pability or to spend the money nele 


Department of State Bulletin/Juhl9 


iiivide ammunition and training 
>sary for effective military action 

i if it meant a smaller force struc- 
' I was one of those who felt that 

latter was the correct alternative. 

!\ I feel that the Department of 

r faces the same kind of strategic 

Accordingly, we have been looking 
j^'fully at both our Washington orga- 
" linn and the pattern of our repre- 
atiiin overseas. I believe that it is 
ilile to consolidate and streamline 
Washington organization, reduce 
. ring and duplication, and reverse 
r proliferation of new organizational 
ii ties. Overseas it is important to 

carefully at where we maintain our 
II s and how we staff them. Our rela- 

: ly dense network of consulates in 
i|ie contribute to meeting our for- 
[Milicy interests and respon- 
iiies. Nevertheless, many were 
lilished in the 1800s and early 1900s 
n transportation and communica- 

, s facilities wei'e not what they are 
ly. Furthermore, requirements for 

1 jjosts constantly arise. Recently, 
I ?.\ample, we have opened three 

' s in the South Pacific, with a fourth 

It to be launched. We have also es- 

Hhed an embassy in Mongolia, and 

opening of a second consulate in the 

^ let Union is under active considera- 

. All of these take resources, and, 
I have indicated, we are not just in a 
; i-sum game, we are in a minus zero- 
u'ame. In a shrinking resource en- 
nment, prioritizing our functions 
1 become more crucial and important 
:'i 1 it has ever been before. 

Nevertheless, there are strong 
I'll intei'ests against taking some of 
.-^teps that our resource constraints 
ruire. There are vested interests in 
1 ntaining bureaus and positions in 
,'* Aington which might, if they were 
ilished, even increase our effective- 
1 s. There are strong lobbies against 
iiit,'- posts overseas. Last year, Con- 
-.^ almost adopted provisions which 
■' lid have penalized us heavily for 
-' iing overseas posts and which would 
■ 1 e required us to establish a new 
. ■ ler secretary for security, a new 

eau for south asian affairs, and two 
I V' ambassadors at large. Proposals 
*) additional geographic bureaus for 
Caribbean and Eastern Europe 
■e not far behind. Whatever the ab- 
, act merits of these organizational 
iij'posals, they would have imposed 
ivy personnel and financial require- 
nts on us at a time our resources 
re being reduced. Thanks to help 
iieim a few of our friends in the 

ijipartment of State Bulletin/July 1988 

Congress, these proposals were struck 
in the final hour. They, nevertheless, 
continue to have advocates. 

It is still far from clear how we will 
face the future resource situation. The 
slogan "cut things, not people" has a 
surface attraction, but the fact is that 
we have already cut too deeply into 
"things." We cannot continue to fall 
behind in the modernizaton of our com- 
munications facilities, our information- 
handling capabilities, our building and 
maintenance programs, and our profes- 
sional training. If we continue on this 
road, the Department of State will be- 
come increasingly irrelevant. Our se- 
curity program in 1989 will be limited 
to the funds it received in 1988. It will 
have to absorb price increases and thus 
we will be $39 million short in the up- 
dating of our security programs, both 
personnel and counterintelligence, 
which has been a major objective of 
this Administration. Our building pro- 
gram received no new money in either 
1988 or 1989. In fact, the appropriations 
that we expect for 1989 will not even 
cover the costs of routine maintenance 
of our 2,500 U.S. -owned properties 
abroad. What we have done in recent 
years to meet our budget challenge are 
things that we cannot keep doing: 
postponing maintenance and equipment 
purchases; cutting travel funds; cutting 
language training; cutting publication 
procurement; forcing embassies to take 
long staffing gaps, which mean that ac- 
cumulated contacts, e.xperience, and 
knowledge of one officer cannot be ef- 
fectively handed on to a successor. 

There are only two new programs 
in our 1989 budget. One is a request 
for $7 million to permit us to assign 
American personnel to potentially sen- 
sitive jobs heretofore held by Foreign 
Service nationals (FSNs) in Eastern 
Europe. This program has been man- 
dated by the Congress and strongly 
supported in the Department of State. 
The second new request is for $30 mil- 
lion to begin construction of a new For- 
eign Service training center in 
Arlington Hall on 72 acres of land that 
the Congress deeded to the Depart- 
ment for this purpose 2 years ago. This 
will give FSI [Foreign Service In- 
stitute] the first permanent home in its 
64-year history and permit us to escape 
from the hot, crowded, noisy, inade- 
quate quarters we now rent in Rosslyn. 
Our aim is to make FSI the world's 
best training establishment, worthy of 
the Foreign Service and the 35 other 
institutions it serves. Our ability to 
sustain the Department's leadership 

role in foreign affairs will depend in- 
creasingly on our ablity to equip our- 
selves with the highest level of 
knowledge and professional skills — es- 
pecially in a period of declining re- 
sources. Furthermore, the General 
Services Administration estimates that 
this will save the American taxpayer — 
and the State Department budget — up 
to $61 million in rental payments over 
the next 30 years. 

Foreign Affairs Management 

Especially in view of the need to live 
with fewer resources in coming years, 
there are many fundamental questions 
which I believe need to be looked at 
long and carefully as we move into the 
transitional period leading to a new ad- 
ministration. I believe we need a kind 
of a Hoover Commission look at how 
the foreign affairs function in the U.S. 
Government is organized. In my view 
the Secretary of State must become re- 
sponsible for the planning of all foreign 
affairs (Function 150) funds. This ac- 
count is now fragmented among many 
agencies, and there is no one coordinat- 
ing authority recommending to the 
President how these funds should be 
allocated among competing foreign pol- 
icy requirements. 

There are also a number of other 
important management policy issues 
which need to be looked at, including: 

• The desirability and practicability 
of reconsolidated foreign affairs respon- 
sibilities, now divided among USIA 
[United States Information Agency], 
the State Department, AID [Agency 
for International Development], and 
ACDA [Arms Control and Disarma- 
ment Agency]; 

• The need for a new mechanism 
within both the executive and legisla- 
tive branches to permit comprehensive 
evaluation of how we spend our foreign 
affairs, intelligence, and international 
security dollars; 

• How to achieve a more candid 
and cooperative relationship with the 
Congress, reversing the thrust toward 
organizational micromanagement and 
extensive earmarking; 

• How a leaner and less layered 
structure of the Department might bet- 
ter serve the conduct of foreign policy; 

• How to enhance chiefs of mis- 
sion's ability to coordinate the activities 
of organizations over which they pres- 
ently have only nominal control, includ- 
ing issues of staffing and the effective 
use of resources; 

• Improving methods of cost alloca- 
tion and cost recovery for services to 
the public: passports, visas, information 
services, licenses, etc., and to other 



agencies of government for buildings 
and housing, administrative support, 
communications and security, and so on; 

• Whether we should follow the ex- 
ample of the Department of Defense 
and others in adopting capital budget- 
ing to ensure reliable funding for the 
construction and maintenance of our 
facilities abroad, which ai-e currently 
valued at over $10 billion; 

• Whether we are inundating 
Washington with unassimilable quan- 
tities of information; 

• How to control the staffing levels 
of our posts overseas, where 72% are 
non-State Department personnel; 

• Whether all our posts overseas 
are necessary and whether they could 
be more austerely staffed; and 

• How can we improve the teaching 
and development of leadership, manage- 
ment, and organizational skills which 
do not come naturally to a service 
which encourages the solo performer, 
the writer of telegrams and memo- 
randa, the individual virtuoso. 

These are just a few of the issues 
which I believe our budget situation 
makes more compelling. A change in 
administration, before patterns are set 
and vested interests established, is pos- 
sibly the only occasion in which this can 
be done. 

We have been able to take a few 
steps which should be helpful in dealing 
with our future challenges. For exam- 
ple, we are in the process of establish- 
ing a Department regional center in 
Miami that will permit us to pull back 
some of our regional personnel now 
posted overseas at substantially greater 
expense. We now have 33 posts in our 
Special Embassy Program which should 
permit us to control and perhaps re- 
duce staffing at our smaller missions 
and to maintain them on a more austere 
and less expensive basis. We are reduc- 
ing modestly the number of deputy 
assistant secretaries which have 
proliferated unconscionably in recent 
years. I anticipate that we will be able 
to save some positions by reducing 
some overlapping of functions in Wash- 
ington. We are setting up our own 
household effects storage facilities, 
which should save us some of the claims 
that we have had to pay as a i-esult of 
many unsatisfactory experiences with 
commercial storage companies. Each of 
these will make a small contribution to 
our savings requirements. Since 65% of 
our salaries and expenses costs are per- 
sonnel related, anything that permits 
us to reduce further the demand for 
people will help us toward living within 
our resources. 

Secretary Shultz has labeled the 
budget problem as his number one for- 
eign policy issue. I believe he is en- 
tirely correct. This issue will be one of 
the most challenging to be faced by 
those who will succeed us in handling 
responsibilities for the management of 
our foreign affairs. 

Let me report on two other areas 
which have continued to preoccupy 
us in the past year; security and 


Some in the Foreign Service have ques- 
tioned the resources that we have de- 
voted in recent years to security. They 
fear that our embassies will be turned 
into fortresses; that our personnel will 
be inhibited from getting out and mak- 
ing contacts and doing their jobs; that 
we are diverting money and effort away 
from our primary function of diplomacy; 
that a "Big Brother Is Watching You" 
atmosphere will result from an over- 
whelming secui'ity apparat. 

I believe these concerns are mis- 
placed. I believe we owe our people 
abroad a work and home environment 
that will provide security for them and 
their families and will protect our infor- 
mation against the determined intel- 
ligence efforts of adversaries. Our 
experience in Moscow has proved that 
this is no academic problem. The sad 
truth is that the threats we face — from 
terrorism on the one hand to espionage 
on the other — have become increasingly 
sophisticated and menacing. The De- 
partment simply cannot afford to re- 
main indifferent and unconcerned in 
the face of this threat. 

Although the Congress has not ap- 
propriated all that it has authorized and 
our security funds, as I indicated ear- 
lier, are likely to be frozen at their cur- 
rent level, we have made substantial 
improvements in our situation over the 
past year Congress authorized a $2.5- 
billion program based on the Inman 
panel's proposals in 1985. That same 
year, we established the Diplomatic 
Security Service and elevated its chief 
to the assistant secretary level. 

Throughout, the State Depart- 
ment's security program has been at 
the top of the Secretary's personal list 
of priorities. Let me cite a few exam- 
ples of what we have done in the areas 
of greatest need. 

First, espionage — Our dependence 
on Soviet national employees in Moscow 
has been ended. After some initial 
problems in screening and sorting out 

what kind of employees we need, \ 
have a system there that seems to 
working. We are well on our way t 
having a mission that is not only nre 
secure but also better managed an 
more efficient. We are now going t 
apply those lessons to other posts 
Eastern Europe. We expect to rej: 
another 50-75 FSNs in other bloc un 
tries by the end of this year. 

In Eastern Europe, we are es ()- 
hshing core areas of the embassies! 
where no one but cleared America - 
will be allowed. Our aim is to have 
whole buildings where classified ii <r- 
mation is processed free from all 1 • 
eign nationals or other uncleared 

The typewriter bugging in M( iow 
led us to increased rigor in protee Itr 
our office equipment. The new Pis 
Text Processing facility — which wi ur 
set up jointly with the CIA — allov us 
tight control over the office equipi nt 
that may be subject to tampering, tir 
chase, shipping, and maintenance e 
all handled by trained American 

Construction security prograi ar 
in place at 14 new embassy constr tio 
sites and will be part of all future ip- 
ital projects. The use of cleared A ?ri 
can firms and personnel for the c( 
struction and protection of our bu jinj 
projects is essential if we are to a id 
damaging, costly, and politically e mi 
rassing security compromises like le 
one that occurred in Moscow. 

Second, counterintelligence- tVe 

have gotten help from the F'BI wi oi 
counterintelligence (CI) program, ae 
new chief of our CI office is on lot 
from the FBI. We also have a pro •• 
sional trainer from the Bureau to 'Ip 
us build up our own talent in this 'ea 
Our CI program is oriented t'lar 
the protection of classified inform; on 
the compromise of which would bt 
damaging to the national interest. A 
the heart of the program is greatl e.v 
panded training to make all empk ies 
more aware of and better able to ( oe 
with the sophisticated espionage t h- 
niques being deployed against us. .s 
part of that training program, all tr- 
sonnel being assigned during the : m- 
mer cycle to the bloc countries ar 
required to attend a 1-week count' - 
intelligence training program join / 
sponsored by State and the CIA. I tl 
field, chiefs of mission have establ'hei 
Counterintelligence Working Groui t' 
focus attention on CI matters at a iel 


Department of State Bulletin/July>98 


As part of the effort to heighten 
irity awareness, we have also had 
lili.tration to strengthen procedures 
granting individuals access to our 
mi's most sensitive, classified infor- Consequently, we have in- 
ised the frequency with which 
iiity clearances are updated and 
II steps to ensure that employees 
A and follow applicable regulations 
ii'ding security and conduct. We 
instituted a more intensive use of 
• iterintelligence debriefing and are 
ii sloping a program for more careful 
K'ening of individuals selected for 
;i 1 assignment. 

Third, security standards — Last 
a we put out new physical and pro- 
« Jral security standards for the han- 
j g of classified information. Posts are 
n being brought into compliance with 
!:l;e new standards. In the interim, 

lave had to reduce the level of clas- 

(1 material authorized at several 
f> ,s and have temporarily withdrawn 
, B n a number of facilities the author- 
k to store any classified material until 
ti new standards are met. This is a 
.^ iful process for many posts in the 
s! i-trun. But in the long run, it will 
ii rove their ability to do their work — 
D vided we e.xpeditiously develop solu- 

s to the problems that led to decer- 

ation. We can and must find ways of 
a wing posts abroad to take full ad- 
V tage of the dramatic advances in 
c imunications and informations sys- 
1 1 technology — and of the cost sav- 
ri s inherent in these new technol- 
8 js. As I said earlier, we simply can- 
D continue to fall behind others in 
t se critical areas. 

There are still controversial issues 
tore us, and perhaps the most contro- 
' .-^ial of all is polygraphing. This is an 
: le in which the Secretary of State 
r iself has taken a direct, strong, and 
l^hly principled position. There have 
t 'n substantial pressures on the De- 
F tment and directly on the Secretary 
I accede to the kind of lie detector 
seening which some advocate. 

Recently, Secretary Shultz said 
tore the Senate Appropriations 

Congress' Office of Technology Assess- 
' nt (OTA) found meaningful scientific 
''';dence of polygraph validity only in the 
'H of criminal investigations. Even these 
iults ranged from 17% to 100% for cor- 
i<!|t guilty detections. But consider this 
-(iking fact. In screening situations 
..Jhere one in 1,000 may be guilty), OTA 
nted out that even if one assumed that 
'■ polygraph is 99% accurate, the laws of 
ibability indicate that one guilty person 
uld be correctly identified as deceptive 

but 10 persons would be incorrectly identi- 
fied as deceptive (false positives). An ac- 
curacy rate of something less than 100%' 
may be acceptable in attempting to fore- 
cast the weather. It should never be ac- 
ceptable in matters affecting the reputa- 
tions and the livelihoods of individuals. 

As you know, the State Depart- 
ment authorization bill adopted last De- 
cember contains a provision requiring 
the Department to establish proce- 
dures, modeled on those currently in 
force at the Department of Defense, for 
the use of the polygraph, specifically 
with respect to personnel of the Diplo- 
matic Security Service. Importantly, 
these regulations still leave to the Sec- 
retary of State the authority to deter- 
mine the e.xact circumstances under 
which polygraphs may be used, author- 
ity which President Reagan in signing 
the authorization bill reaffirmed. 

Accordingly, the regulations 
drafted pursuant to that legislation 
would permit the Secretary to author- 
ize lie detector testing under the follow- 
ing circumstances: 

• During the course of a criminal, 
counterintelligence, or personnel se- 
curity investigation after all other rea- 
sonable investigative steps have been 

• When an employee requests to 
take such a test for the purpose of 

• When a State Department em- 
ployee volunteers to work in an intel- 
ligence agency that requires polygraph 
tests or volunteers to participate in cer- 
tain special access programs — specifi- 
cally designated by the Secretary — 
which involve joint programs with the 
intelligence community where the com- 
munity requires a lie detector test. In 
each instance, a lie detector test can 
only be administered with the volun- 
tary consent of the employee 


The final topic I want to touch on is 
personnel. In the past several years, I 
have reported to you on the travails and 
agonies that the Foreign Service has 
gone through in implementing and ad- 
justing to the 1980 Foreign Service Act. 
I agree that this has been a very di- 
visive factor within the Foreign Serv- 
ice, and I very much regret that fact. 
So far we have lost many good of- 
ficers as a result of the operation of 
both the 6-year window and of the Lim- 
ited Career E.xtension (LCE) system. 
It is probably also true that many have 
left who should not have been con- 
tinued in this very competitive service. 

We have tried to be fair in managing it 
so that a disproportionate part of the 
burden falls neither on the members of 
the Senior Foreign Service (SFS) or on 
the Class 1 officers who have opted to 
open their promotion windows. The 
bottom line remains, however, that in 
an "up-or-out" system some will go 
"up" and some will go "out," and there 
can always be question about the equity 
of individual cases. 

The system itself was mandated by 
the Congress of the United States with 
the support of the Department of State 
and of the Foreign Service, and it must 
be administered in accordance with the 
objectives of those who drafted and ap- 
proved it. Since 1983, 155 senior officers 
have had to retire involuntarily because 
they did not receive LCEs; and since 
1986, 81 FS-ls have had to retire invol- 
untarily because they were not pro- 
moted within the 6-year window. We 
believe an unusual combination of cir- 
cumstances contributed to the high loss 
of FS-1 officers through the "6-year 
window" and that this problem will 
gradually abate as FS-ls recalculate 
their promotion prospects and adjust 
their window decisions accordingly. The 
Limited Career Extension procedure 
will no doubt continue to be the instru- 
ment through which the SFS will be 
kept competitive. 

So far this morning, the message 
that I share with you has been fairly 
somber. But that is not the note I wish 
to leave with you today. On the con- 
trary, what always gives me heart is 
our basic resource — and the resource 
that absorbs the greatest part of our 
budget — the people in the Foreign 
Service and Civil Service. 

Their dedication has been recog- 
nized, in part, through the presentation 
of awards. I have reviewed many of 
these. They bear witness to the notable 
accomplishments of those people with 
whom we casually v/ork every day and 
whose devotion we take for granted. 
These men and women should be proud 
of their accomplishments, and we 
should take pride in their sense of pur- 
pose. All have shown a strong commit- 
ment to public service, a disciplined 
approach to their work, and a will to 
continue. The quality of these award 
recipients mirrors the overall quality of 
the Foreign Service, and I remain con- 
fident that potential for leadership of 
the service is as good as ever. 

I'd like to give you a brief report 
on how we stand as regards women and 
minorities. I believe we are making 
progress. Several years ago, I noted we 
had no career minority officers and few 

*!partment of State Bulletin/July 1988 



women in the key positions of deputy 
chief of mission, principal officer, dep- 
uty assistant secretary, or office direc- 
tor. We now have 29 minorities and 32 
nonminority women in these positions, 
which are often principal stepping 
stones to chief of mission and assistant 
secretary. There are presently only five 
career minorities and eight career 
women in jobs at this level. Since we 
are a bottom entry system, these sta- 
tistics should steadily improve in the 
future. Last year, 34% of our entering 
Foreign Service officers were women; 
17% were minorities. I anticipate these 
statistics will hold up, and we will be 
on our way to achieving our objective of 
a more representative service, while we 
maintain our high competitive 

Family Liaison Office 

Finally, I want to conclude by recogniz- 
ing that this has been the 10th anniver- 
sary of one of the most important and 
fruitful organizational innovations I 
have seen during my 30-plus years in 
the Department: the establishment of 
the Family Liaison Office (FLO) in 
Washington and Community Liaison Of- 
fices (CLO) overseas. These have given 
us an unusually productive instrument 
for dealing with some of the most diffi- 
cult problems of foreign service. In a 
real sense they are the equivalent of 
the kind of community support in- 
frastructure we take for granted here 
at home. We are about to open our 
144th CLO; only 24 of our embassies 
are still without them. These units are 
intimately involved with security, 
health, education, family evacuation, 
and community activity planning. 

As you can appreciate, spouse em- 
ployment in this era of two-career fami- 
lies is a major concern for the Foreign 
Service. Thanks to FLO, we now have 
reciprocal work arrangements with 66 
countries and formal bilateral agree- 
ments with 22. A skills data bank has 
been launched and our posts can now 
know in advance what skills spouses are 
bringing to post and plan for the use of 
these skills rather than turning to out- 
siders. It is appropriate on this anni- 
versary to pay tribute to the foresight 
of our colleagues of 10 years ago who 
initiated these changes. 

This ends my review of our 
past year and my look at the problems 
which lie just ahead. I look forward to 
discussing these or any other issues 
you wish to pursue. ■ 

Elections in Korea 

by Gaston J. Sigur, Jr. 

Statement before the Subcommittee 
on Asian and Pacific Affairs of the 
House Foreign Affairs Committee on 
May 12, 1988. Mr. Sigur is Assistant 
Secretary for East Asian and Pacific 

Thank you for the opportunity to dis- 
cuss with you once again the very posi- 
tive process of political change — of 
democratization — in the Republic of 
Korea. Thank you, too, for the support 
which you and your colleagues have 
given this process. 

Our gi-eatest congratulations go 
once again to the Korean people. Over 
the past year the Korean people have 
made things — very positive things — 
happen. They demanded the creation of 
a more open, democratic political proc- 
ess in order to settle important issues 
through dialogue and compromise in 
the chambers of government, rather 
than in the streets with rocks flying 
and the air polluted by tear gas. The 
Korean people are determined to create 
a political system with the vitality and 
stability to lead Korea's entry into the 
21st century. We enthusiastically ap- 
plaud their resolve and commend their 
remarkable achievements. 

I would also like to congratulate all 
of the successful candidates in the re- 
cent election. The leaders of each of the 
major political parties have pledged to 
work together constructively to address 
the challenges their nation faces. We 
admire that spirit. Moreover, we look 
forward to working together with all of 
the Korean parties to strengthen our 
firm alliance, to promote the ongoing 
process of political change, and to re- 
solve in mutually beneficial ways the 
occasionally thorny trade issues before 

The April 26 

National Assembly Election 

The April 26 National Assembly elec- 
tion reaffirmed the Korean people's de- 
termination to continue the process of 
orderly political change. The main con- 
testants — the Democratic Justice Party 
(DJP), the Peace and Democracy Party 
(PPD), the Reunification Democratic 
Party (RDP), and the New Democratic 
Republican Party (NDRP)— fought 
hard, just as they did in last fall's presi- 

dential election. Over a thousand c 
dates ran in 224 districts. Candida 
spoke openly and vigorously; the r 
covered the campaigns e.xtensively 

The previous assembly contaii 
two members per district. The ne\ 
sembly law enacted earlier this ye 
calls for single-member districts. ' 
change created a heated winner-ta 
atmosphere during this election. T 
were some violent incidents. Also 
some candidates apparently attem 
to influence the voters through ilk 
or unethical means. Nevertheless, 
75% of the eligible voters turned c 
cast their votes for the men and w 
of their choice. The results attest 
the Korean people again demonsti 
their firm determination to make 
mocracy work. 

Frankly, the results surprise! 
observers. The government party 
never before won less than a majt 
in the assembly, but failed to achi 
one this time. The DJP did win tl 
most votes among the parties and 
has the most seats. Its candidates- 
ceived 34% of the popular vote an 
of the 299 seats. The PPD swept 
Dae Jung's home region in the Ch 
Provinces and did well in Seoul, v 
ning 19% of all votes and 70 seats. 
PPD's success makes it the larges 
position party in the assembly. T\ 
RDP, led by Kim Young Sam, act 
finished second in total votes with 
but came up with only 59 seats, ii 
because the DJP and" RDP split tl 
vote in the Kyongsang Provinces ( 
southeast. President Roh comes f: 
the Taegu area, and Pusan is Kim 
Young Sam's home base. Last but 
tainly not least, former Prime Mil 
Kim Jong-Pil's NDRP did better t 
expected, drawing on its strength 
Mr. Kim's home Chungchong Prov 
to win 15% of the vote for 35 seat: 
Many news organizations have cor 
mented on the potentially pivotal 
of the NDRP, inasmuch as its 35 \ 
would produce a majority if combi 
with either the ruling party or wi 
two other opposition parties. Inde 
ents or minor party candidates w( 
seats, though one of these indepei 
assemblymen plans to join the PP 

Everyone realizes that the re: 
of this election mark another maj( 
step in the democratization proces 
The old days when the governmen 
party could get its way any time i 





Department of State Bulletin/Jul>98 

President Roh has pledged to 

with the new assembly and has 
led his party's leadership to facili- 
that process. There are reports 
the government is considering an- 
■ prisoner amnesty — we certainly 
hat is needed. All the parties have 
red to cooperate in the new assem- 
kim Dae Jung recently affirmed 
ersonal commitment to dialogue 
K'ompromise, and pledged to work 
If, successful Olympics in particular, 
democratization is a process, as I 

stated previously. There is still 
1 111 be done. The new assembly 

oiivene soon to organize. The 

mi;- session will provide all the par- 

lu'ir first opportunity to demon- 

I , their willingness to cooperate in 
. niistructive manner the Korean 

. I'xpect. The dynamics of Korean 
> < are changing rapidly. The new 
iiial Assembly consists mainly of 
liiTs with no previous experience 
lisiative politics; members must 
f ti) the new situation and learn to 
ite in new ways. Clearly, Korea 
a irogressed tremendously; Koreans 
i levertheless continue to push for- 
- their country's political develop- 
. They will grapple with serious 
i-ms of governance — introduction 
al autonomy, distribution of re- 
es, priorities of economic develop- 
. and human rights, including 
•ii's rights. It is natural for any 
. y- ty to have to work to address 
n ' problems. The important point is 
; « Korea's present government, in- 
it ng the new National Assembly, has 
■ w nitted itself to shaking off the au- 

II tarian past and moving into a new 
e )cratic future. President Roh, with 
'\ n I met in early April, has commit- 

k J< limself publicly and often to such 
rress, as have the leaders of the op- 
'0 ion parties. 

The road is new; there will be diffi- 
. u es. Koreans will have to build this 
i'.oi as they go. Making the necessary 
if.dstments may cause considerable 
f tus— that is only natural. But we be- 
.',e that the election results show that 
jl'ans want a government based on 
l>ks and balances — on cooperation 
a er than confrontation. We also be- 
' that the actors in the political 
ess understand that and are as 
nitted as the Korean people to 
' ing democratization work. 

Implications for U.S. -Korean 

We heartily welcome the changes tak- 
ing place in Korea. Korea's rapid prog- 
ress in economic, social, and political 
development, won through the diligent 
efforts of its citizens, impresses us. The 
National Assembly election, together 
with the presidential election last year, 
constitute historic developments in 
Korea's political evolution. These events 
will produce far-reaching benefits for 
Korea as well as for our bilateral rela- 
tions. Democratic government will be 
no easier in Korea than anywhere else. 
We recognize that the new, more open 
political environment in Korea may 
make dealing with some bilateral issues 
more complex in the short term. That 
is fine. We Americans have some e.xpe- 
rience in governments with executive 
and legislative branches controlled by 
rival parties. The cooperation and fun- 
damental agreement that we are enjoy- 
ing today, between this subcommittee 
of a Democrat-controlled Congress and 
myself as a representative of a Re- 
publican Administration, illustrates the 
point nicely. Shared democratic ideals 
will allow our friendship to grow even 


warmer. Our alliance will remain firm. 
Bilateral trade, already large, should 
continue to expand. I am sure that you 
gentlemen here look forward, as I do, 
to the continued development of our re- 
lationship with our good friends and 
close allies in Korea. 

Ten years ago, Korea faced an eco- 
nomic slump with democracy nowhere 
in sight. It would have been difficult to 
imagine choosing the country as an in- 
ternational showcase for anything. This 
year Korea will host the Summer Olym- 
pics in an atmosphere of openness and 
prosperity. All Koreans can justifiably 
take pride in their nation's achieve- 
ments. As athletes and spectators from 
around the world prepare to gather in 
Korea for the Olympic Games, I cannot 
imagine a more fitting place for such a 
celebration of sport, peace, and human 
determination. That same spirit of de- 
termination — to set new goals, then 
surpass them — accounts in large meas- 
ure for the accomplishments of the cit- 
izens of the Republic of Korea. 

■The complete transcript of the hear- 
ings will be published by the committee 
and will be available from the Superin- 
tendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402.1 

FY 1989 Assistance Requests 
for East Asia and the Pacific 

by Gaston J. Sigur, Jr. 

Statement before the Subcommittee 
on Foreign Operations of the House Ap- 
propriations Committee on March 30, 
1988. Mr Sigur is Assistant Secretary 
for East Asian and Pacific Affairs.^ 

It is with great pleasure that I come 
before you this morning to discuss the 
Administration's policies in Asia and 
the Pacific and to request your support 
for much needed economic and military 
assistance to a handful of important de- 
veloping nations in this region. 

The past year was a benchmark 
year for American interests in Asia. 
Signs of democratic advancement were 
abundant. Transitions in leadership 
were managed successfully in the Re- 
public of Korea, the People's Republic 
of China and Taiwan, and democratic 
institutions became more deeply rooted 
in Thailand. Korea's peaceable election 
and inauguration of President Roh 'Kie 
Woo is nothing short of remarkable and 

demonstrates that nation's full emer- 
gence into the community of democratic 
and world class nations. In the Philip- 
pines, a democratic constitution was 
adopted and a new congress was 
elected and seated. Also in Southeast 
Asia, the members of ASEAN [Asso- 
ciation of South East Asian Nations] 
celebrated the 20th anniversary of the 
founding of their organization at a sum- 
mit in Manila. 

Progress was also made in our rela- 
tions with China. A series of high-level 
exchanges took place with the Chinese 
which carried with them agreements on 
a range of issues, economic and scien- 
tific, which are in the interests of both 
our peoples. The past year has also 
seen Japan increase her role in the re- 
gion not only as the economic dynamo 
of Asia, but as the largest foreign aid 
donor as well. 

Through the increased realization 
of democratic ideals in Asia, through 
the growth of trade among Asian na- 
tions and between Asian nations and 

iiartment of State Bulletin/July 1988 



the United States, and through the im- 
proved and noticeable consumer life- 
styles and distribution of wealth inside 
many of these countries, the United 
States can draw much hope that Asia's 
future is a bright one, one which, with 
continued wise action and assistance on 
our part, will enhance our future as 

One of the most important objec- 
tives of the United States in this region 
is the maintenance of a stable, peaceful 
environment conducive to continued 
economic, political, and social progress. 
We hope to see the further emergence 
of more representative governments, 
more open markets and adoption of free 
trade principles, more consultations be- 
tween allies and adversaries alike, and 
greater security through mutual confi- 
dence as well as a stable deterrence 
framework. To attain these goals, how- 
ever, and to truly profit from the oppor- 
tunities this vast, diverse region holds 
for us, it is going to be necessary for us 
to continue to demonstrate by our eco- 
nomic and security assistance that we 
are determined to be a part of Asia's 

While this region enjoys fairly 
broad tranquility today, there is ample 
need for concrete action to resolve spe- 
cific sources of tension. The Vietnamese 
occupation of Cambodia, a communist 
insurgency in the Philippines, a con- 
tinued Soviet interest in asserting in- 
fluence in the region, and residual 
problems of poverty are just a few rea- 
sons the United States needs to provide 
economic and security assistance to na- 
tions there. 

While my colleagues Rich Armi- 
tage from Defense [Assistant Secretary 
for International Security Affairs Rich- 
ard Armitage] and Julia Chang Bloch 
from AID [Agency for International 
Development! will join with me this 
morning in emphasizing the Admin- 
istration's commitment to support of 
the Aquino government in the Philip- 
pines, I ask the committee to consider 
our requests for other countries in the 
region as well. On my visits to Asia 
over the last 2 years, I have always 
stressed the reliability of America's 
commitments and our intention to as- 
sist as much as we are able in the re- 
gion's development. 

For this reason, I am submitting in 
my testimony for the record a complete 
outline of our security and economic aid 
recommendations for 13 countries and 
three regional programs in East Asia 
and the Pacific. In toto, this assistance 
program amounts to $442 million, or 
S.TVf of all U.S. bilateral and regional 

assistance funding. A small amount 
compared to the return the United 
States receives on this investment in 
the continued friendship and coopera- 
tion of the dynamic nations of this 
important region. 

Foreign aid has never been popular 
in this country, nor in the Congress. 
For as long as I can remember it has 
been the whipping boy, the hook on 
which we like to hang our traditional 
reluctance to play the role thrust upon 
us by our national wealth and power 
and the ideals we stand for. In submit- 
ting our request this year, however, I 
am concerned that unless these levels 
are met, we will be jeopardizing funda- 
mental U.S. interests in the Asia- 
Pacific region. Failure to support our 
friends in this part of the world with 
the minimum assistance I am recom- 
mending will send signals to them to 
look elsewhere for support and provide 
the Soviet Union with a comparatively 
ine.xpensive way of expanding its 

I do not make this assertion 
lightly. There are plenty of positive rea- 
sons for dispensing foreign aid — eco- 
nomic and humanitarian. But we also 
provide it because of the direct impact 
it has upon the security and foreign 
policy interests of the United States. 
For all these reasons, I ask you to look 
favorably upon our request. 

I would now like to review the indi- 
vidual country programs in greater 


A stable, democratic, and prosperous 
Philippines, with friendly ties to and 
continued close security cooperation 
with the United States, is important to 
the peace and stability of Southeast 
Asia and to U.S. interests both within 
and outside the region. The Philippines 
are host to U.S. Air Force and Naval 
facilities that are important to the se- 
curity of the United States, the Asia- 
Pacific region, and the Philippines in 
the face of an expanding Soviet pres- 
ence. These military facilities are vital 
to U.S. power projection capability into 
the western Pacific and Indian Ocean- 
Southwest Asia regions and to protec- 
tion of economically vital sealanes. 

Our interests in the Philippines are 
much greater than the presence of U.S. 
mihtary facilities, however The U.S. 
Government has an important interest 
in assisting Filipinos consolidate politi- 
cal gains they have made over the past 
2 years. The Philippine people can jus- 
tifiably be proud of the peaceful transi- 

tion to democracy in February 198 
We, on our part, are pleased that 
support was helpful at this critical 
juncture. As President Reagan de rt 
in his November 1987 radio addreson 
the Philippines "we have a moral t d- 
gation to help all democracies suc< (d. 
. . . We will work with President Ac mo 
to build a safer home for democrai in 
the Philippines. Most of the respo ibi' 
ity belongs to the people of the PI : 
pines, but we can and will lend a 
hand." I continue to be impressed 
the progress the Aquino governmt 
has made in restoring democracy 
by the depth of popular support f( he 
government. President Aquino ha 
asked for our assistance in helping ro 
mote economic recovery and defer ng 
democracy. We must do what we c i tt 

The level of our security assis m 
commitment established in the Pr i- 
dent's "best efforts pledge" growii 
out of the 1983 review of the U.S. 
Philippine military bases agreeme 
(MBA) provides the current floor ■ 
our assistance program. President .ea 
gan pledged his "best efforts" to 1 1- 
vide $475 million in economic supj 1 
funds (ESF) and $425 million in n - 
tary assistance grants and credits ji- 
ing the period FY (fiscal year) 19! M 

While U.S. assistance progra 
will assist the Government of the il- 
ippines in strengthening democrai an 
accelerating economic growth, thf 'V- 
els of foreign assistance funding t^ he 
Philippines envisioned in the Pres 
dent's best efforts pledge are insu - 
cient to address adequately the 
enormous Philippine economic anc e- 
curity requirements. Over the pas I 
years, the needs of the Aquino go rn- 
ment for greater military and ecoi piii 
aid have led us to provide assistar \ 
beyond proportional levels necess; ' ' 
fulfill the President's best efforts 
pledge and also to seek higher lev • 
for FY 1989 than would be necess. ^ i 
complete the ESF commitment. Of 
ESF request of $124 million is low 
than ESF commitments in FY 19? am 
FY 1987 of $219.6 and $250 milliore- 
spectively at a time when Philippi ' 
political and economic needs rema . 

In both FY 1986 and FY 1987 J.i 
economic assistance, largely as bu?et 
support, was adequate to show a t^on 
political commitment to the Aquir 
government and to ensure, in comlna 
tion with generous debt reschedul gs 
and international donor commitmecs, 
that the Government of the Philip nes 
could meet its foreign currency firnc- 
ing needs while stimulating its ec' - 


Department of State Bulletin/Juiv ! 


r.S. economic assistance can 
iiue to be an important element of 
olution to the Philippines funding 
kins and ideally should grow 
r than shrink as currently contem- 
il, hut budget restrictions leave us 

lialanced, sustainable economic 
th, which leads to greater employ- 
and higher rural incomes is essen- 
.1 combatting the widespread and 
istent communist insurgency which 
sents the major threat to democ- 
m the Philippines. U.S. assistance 
lams play a vital role in helping 
liilippine Government meet politi- 
11(1 economic challenges to its au- 
I \ . In order to counter the appeal 
insurgents, the government must 
-trate that newly created demo- 
mstitutions represent a real 
jc and that elected officials will be 
'iisive to popular demands for es- 
al services including health care, 
at ion, improved infrastructure as 
K as preservation of law and order 
in dispensation of justice. 

Xir economic assistance programs 
alldw US to engage the Government 
'■ Philippines in a useful policy di- 
ii- which promotes Philippine eco- 
e reforms intended to produce 
u lined free-market-based growth. 
i( Tnment reforms such as import lib- 
■r zation, privatization, and the 
: ku|( of monopolies contributed to 
y'l economic growth in 1987 after 
• iif decline. My distinguished col- 
li from AID, Julia Chang Bloch, 
( umment in more detail on the role 
''iiomic assistance in promoting 
' ppine development. 
U.S. security assistance requests 
if 10 million in MAP [military as- 
pince programs] and $2.6 million in 
jf IT [international military education 
.# training program], while sufficient 
• leet only the highest priority AFP 
jSned Forces of the Philippines] 
■ It Is, are all that is possible, given our 
U budget constraints. Security as- 
Jiance resources are of critical impor- 
'•:e to the Armed Forces of the 
W ippines. AFP resources are so lim- 
;!li that U.S. military assistance cur- 
'.»::ly constitutes 83% of the AFP's 
(-■(rations, maintenance, and procure- 
iiyit budgets. Rich Armitage will com- 

3 it on the positive effort our security 
stance has on enhancing AFP 
i, j I do have some final comments, 
^:Ji'ever. The Administrations FY 1989 
'IJ.P request for the Philippines is the 
m\ amount of the President's 5-year 

best efforts pledge made at the conclu- 
sion of the 1983 review of the military 
base agreement. The U.S. Govern- 
ment's fulfillment of commitments made 
in previous negotiations is essential to 
maintaining consensus for continued 
unhampered access to military facilities 
in the Philippines by demonstrating 
U.S. reliability as a democratic partner 
and military ally. 


Strategically placed astride vital air- 
and sealanes between the Pacific and 
Indian Oceans, Indonesia's continued 
political and economic stability is essen- 
tial for U.S. interests in Asia. Indo- 
nesia is also an important source of 
valuable raw materials, especially oil 
and natural gas. Over the past two dec- 
ades, the Soeharto government has 
managed an impressive economic devel- 
opment effort, maintained political sta- 
bility, and played a constructive role in 
international affairs as a moderate non- 
aligned state. Indonesia is a leader in 
ASEAN's efforts to end the Vietnamese 
occupation of Cambodia. 

The largest country in Southeast 
Asia and the fifth most populous, Indo- 
nesia is still relatively poor and heavily 
dependent on e.xports of petroleum and 
natural gas. In 1986, the collapse of oil 
prices precipitated Indonesia's worst 
economic reverse in two decades. Ex- 
ternal debt, e.xacerbated by changes in 
the yen-dollar rate, now stands at 
about $43 billion, with a debt service 
ratio approaching 40%. The Indonesian 
Government's response to these exter- 
nal shocks has been impressive. Aus- 
terity budgets, prudent macroeconomic 
management, and major trade and in- 
dustrial policy reforms have helped In- 
donesia, now expanding its non-energy 
exports at an annual 15% rate, through 
difficult years. Nonetheless, with an 
annual per capita income of about $400 
and 2 million new entrants into the la- 
bor force each year, Indonesia needs 
continued bilateral and multilateral for- 
eign assistance to ensure continued eco- 
nomic development and domestic 

Our economic assistance for Indo- 
nesia consists of development assistance 
and food aid under PL 480 Title I and 
Title II. It is increasingly focused on a 
coordinated effort to improve long- 
term, sustainable employment and in- 
come-generating opportunities through 
means that promote efficiency and pro- 
ductivity. These include human re- 
sources development, primary health 

care and family planning, agricultural 
productivity, and support for a more 
open and trade oriented economy. De- 
centralization and private sector in- 
volvement are key. Policy analysis and 
policy dialogue are strengthened 
through research and projects designed 
to test policy options for the Indonesian 

We have requested $45 million in 
development assistance for FY 1989. 
These funds will support our tradi- 
tional, ongoing economic development 
programs, as well as projects to encour- 
age and reinforce Indonesia's commit- 
ment to economic and trade deregula- 
tion. Despite a minor drought, our $10 
million request for PL 480 Title I is 
only 30% of the FY 1987 program. Our 
$8.i million request for PL 480 Title II 
funds will support a variety of effective 
voluntary agency programs. 

The security assistance program 
for FY 1989 includes $1.9 million in 
IMET and $10 million MAP which is 
almost the same as the FY 1987 level. 
The Indonesian military has been com- 
pelled to swallow a disproportionate cut 
in an already austere national budget. 
MAP will help Indonesia to continue to 
purchase U.S. equipment, such as a 
limited number of F-16s. The Indone- 
sian Armed Forces view our security 
cooperation as an important indication 
of our concern for the security needs of 
their country. 

Faced with an austere budget cli- 
mate, Indonesia's Armed Forces also 
appreciate and fully utilize the IMET 
program, which offers advanced and 
specialized training for Indonesian 
Armed Forces command and manage- 
ment personnel. Numerous senior Indo- 
nesian military officers have received 
U.S. training;' the FY 1989 IMET fund- 
ing request will permit as many as 250 
younger military officers to have the 
same opportunity. 


Thailand, the only U.S. treaty ally on 
the Southeast Asian mainland, is also 
the front-line state resisting the Viet- 
namese occupation of Cambodia. The 
Thai coped admirably with a domestic 
but externally supported communist in- 
surgency which threatened stability in 
the 1960s and 1970s. They must now 
restructure their military forces to face 
not only the indigenous armies of Laos 
and the Heng Samrin regime in Cam- 
bodia, but also the more than 150,000 
Vietnamese forces in those countries. 

ftpartment of State Bulletin/July 1988 



Together, these armies significantly 
outnumber the Royal Thai Army, with- 
out considering the even larger and 
better equipped military units in Viet- 
nam itself. 

The threat to Thailand is real and 
immediate. In 1987, the Thai fought an 
intense series of bloody engagements to 
oust Vietnamese forces from Thai ter- 
ritory where Thailand, Laos, and Cam- 
bodia meet. This year, they have 
suffered hundreds of casualties as they 
fought to drive the army of communist 
Laos from positions in Thailand. While 
a cease-fire betwen Laos and Thailand 
is now in place, and there is hope that 
this situation can be resolved through 
negotiations, the recent battles 
Thailand has had to fight with foreign 
intruders is vivid evidence that 
Thailand's status as a front-line state is 
not simple rhetoric. 

I think it important to remember 
that instability elsewhere in the region 
and the growth of Soviet military power 
in Asia — as exemplified by their base at 
Cam Ranh Bay — have increased the 
strategic importance of Thailand to the 
United States. Thailand's stability, in- 
dependence, and territorial integrity 
are critical to the stability of Southeast 
Asia and to our strategic position west- 
ward into the Indian Ocean. However, 
as you know, we have been forced to 
reduce substantially — by more than 
half — our security assistance pi-ogram 
in Thailand from the modest FY 1985 
levels. It should come as no surprise for 
me to tell you that as security as- 
sistance funding has diminished, our in- 
fluence relative to that of others has 
diminished as well. This trend does not 
bode well for our ability to defend our 
interests in the future. 

Thailand shares with the United 
States a commitment to suppress nar- 
cotics trafficking. Like the United 
States, Thailand is a net importer of 
narcotics. It is aLso the main transit 
route for drugs produced in Laos and 
Burma, both major sources of opiates. 
The Royal Thai Government has de- 
ployed police, paramilitary, and even 
regular army units to assist in the 
eradication of crops, destruction of re- 
fineries, and interdiction of supply 
routes. By helping to modernize the 
communications and transportation ca- 
pabilities of the Thai Armed Forces, 
the U.S. security assistance program 
also contributes directly to our efforts 
to combat the drug menace. 

The tragedy that befell Laos, Cam- 
bodia, and South Vietnam when the 
communists won power on the bat- 
tlefield continues and the tens of thou- 

sands of Indochinese refugees who flee 
each year bear witness to the misery 
wreaked upon their homelands. Be- 
cause of Thailand's proximity to Viet- 
nam and its common borders with Laos 
and Cambodia, most of those who seek 
temporary shelter or first asylum do so 
in Thailand. On February 24th, I testi- 
fied before the East Asia and Pacific 
Subcommittee of the House Foreign Af- 
fairs Committee on the current refugee 
situation in Thailand. I will not repeat 
that extensive presentation. I would, 
however, like to note briefly that the 
Royal Thai Government views this situ- 
ation as one which poses a threat to 
Thai security, as an economic drain, but 
also as a problem which begs for a hu- 
manitarian response. By bolstering the 
resources of the Royal Thai Govern- 
ment as it copes with the problems of 
development, weak markets for many 
traditional commodities, and increasing 
protectionist sentiment toward its ex- 
ports of manufactured goods, the U.S. 
security assistance program enhances 
the fragile ability of Thailand to sustain 
a generous first asylum policy. 

Our funding for development as- 
sistance to Thailand has suffered much 
the same fate as our security assistance 
efforts. Once the largest source of de- 
velopment assistance, the United 
States now ranks ninth among donors 
to Thailand. To give you some idea of 
the disparity between the United 
States and others, Japan alone now ac- 
counts For about 40 times as much de- 
velopment assistance as the United 
States. Our modest program today is 
concentrated on areas where we have a 
comparative advantage vis-a-vis other 
donors and where we think we can play 
a catalytic role in initiating new pro- 
grams. These areas include science and 
technology, rural industries and devel- 
opment, a sophisticated policy dialogue, 
and natural resources and environment. 
We also have requested ESF monies 
which help Thailand to offset the im- 
pact of refugee influxes on its borders 
with Laos and Cambodia. 


As Korea continues its progress toward 
a more open, democratic society, the 
United States has a vital interest in 
assisting the efforts of the Republic of 
Korea to strengthen its own defense ca- 
pabilities. In the process, we hope to 
help maintain peace and stability in 
Northeast Asia while providing a shield 
on the peninsula for continued Korean 
political and economic progress. 

The United States and Korea in' 
a continuing close and mutually b( 
ficial security relationship. U.S. fi 
in the Republic help to provide th 
terrent shield against attack from 
well-armed and unpredictable Noi 
Recognizing Korea's economic pro 
we ended in 1986 our funded prog 
there; we continue an active IME 
gram and FMS [foreign military .- 
cash-sales program, under which ire 
continues to obtain much of the si • 
plies and equipment for its contin i? 
defense modernization. 

The proposed FY 1989 securi- 
sistance program continues suppn 
the modernization of Korea's defei 
capabilities. The upcoming decisii .-; 
Korean FX advanced fighter aircr :, 
the largest single item under acti 
consideration, features major Am lea 
companies in the bidding. Korea \ } 
also continue to obtain munitions, jp^ 
plies, and technological upgrades iU 
air, land, and sea systems. In add on 
the IMET program in Korea stim ite 
better understanding within the 1 rea 
military of U.S. military doctrine id 
traditions, including the role of tl mi 
itary in a democratic system. Tht ro- 
gram will further strengthen our 
important security and overall 


Strategically located on the Malai 
Straits, Malaysia's continued polit il 
stability and economic developme an 
essential to U.S. interests in Sou 
Asia. Confronted with the Vietna 
occupation of Cambodia and a ma : 
viet base at Cam Ranh Bay, Mala la 
has been in the forefront of ASE.; I's 
strategy to compel a withdrawal ( 
Vietnamese forces from Cambodi; ind 
secure a negotiated settlement en jrin 
the rights of the Cambodian peop 

A stable parliamentary demo ^c.v 
Malaysia is nonaligned, but staun ^y 
anticommunist. Gradually emergi f 
from its first economic recession ; ice 
independence, Malaysia greatly ai re- 
ciates U.S. security assistance, tl 
only form of aid it now receives fi n 
the United States. Faced with coi 
tinued austere defense budgets, t ■ 
Malaysian Government is looking r 
ways to maximize the armed forc( 
ability to utilize current equipmei am 
manpower. The $1.1 million IMETro- 
gram we are requesting in FY 19>|w 
play an important role in helping fC 
Malaysian Armed Forces meet thtr 
training needs as they adjust to aioK 
conventional force structure and i)re 
sophisticated equipment. 


Department of State Bulletin/Jui\l98i 


achieving independence in 1984, 
;.i has strengthened cooperation 
ii> ASEAN neighbors and the 
:! States. U.S. Pacific Command 
itu's, including visits by U.S. war- 

.; ami miUtary aircraft, have fos- 
! military cooperation, an 
itaiit dimension of our bilateral re- 
1... For the first time, a $50,000 
r Item for Brunei has been in- 
,1 111 the FY 1989 foreign as- 
,Ke request. A small IMET 
ram will strengthen our military 
ill It only lowering overall costs of 
a IV training, but also encouraging 
„ ltd look to the United States for 

; ing- and equipment. 

I apore 
a] Hire's location on the Straits of 
oa places it at a strategically 
It ant chokepoint for maritime traf- 
t ween the Pacific and Indian 
US. Its modern and efficient har- 
airfields, and maintenance facilities 
made it a valuable port of call for 
military ships and aircraft. The 
i-nment of Singapore shares our 
-■rns about Vietnamese expan- 
,( sm and the Soviet presence in 
i( heast Asia. Singapore is a leader of 
V; ;AN's efforts to compel Vietnam to 
■ draw its occupation forces from 
hodia and publicly supports the 
J facilities in the Philippines. 

Singapore is a stable parliamentary 
1( ncracy. Internationally, it pursues a 
iligned, but strongly anticommunist 
un policy. Its free-market policies 
fostered rapid economic develop- 
t. For many years the only U.S. 
;un assistance to Singapore has 
11 the form of a modest IMET pro- 
!i. The $50,000 we are requesting in 
;T this year will allow the Sing- 
e defense forces to continue to 
t key training needs and help solid- 
lur military links with this impor- 
Southeast Asian democracy. 

nbodian Resistance 

- modest assistance program for the 
1 Lommunist Cambodian resistance is 
i ty element in our support for 
' BAN'S effort to compel Vietnam to 
; -pt a negotiated settlement in Cam- 
" ia and to return that country to the 
■ trol of the Cambodian people. 
EAN's united approach in dealing 
h Vietnamese aggression has been a 
jor factor in preserving the security 
Thailand and the pohtical and eco- 

nomic stability of Southeast Asia. 
Moreover, even this low level of fund- 
ing, supplemented by financial support 
from other countries, contributes to the 
abihty of the Cambodian noncom- 
munists to maintain their campaign 
against the Vietnamese and to stand up 
to the still powerful Khmer Rouge. 
Continued U.S. support is essential as 
the various parties involved in the con- 
flict maneuver for political position in 
anticipation of possible negotiations. 

The U.S. initiative to provide funds 
to the noncommunist resistance has 
been hailed by ASEAN and others as a 
positive measure of American support 
for efforts to reach a settlement to the 
Cambodian conflict. The money allo- 
cated is currently being used to provide 
nonlethal training and equipment to 
noncommunist resistance fighters. 


Relations between the United States 
and Burma are the best that they have 
been in the Ne Win era. Burma's aging 
leaders will transfer power to a new 
generation by the turn of the century. 
The new leadership will likely come 
from the military, whose attitudes to- 
ward the United States are friendly but 
less informed than earlier as a result of 
a considerable period during which con- 
tact was quite limited. I should add 
that Burma follows a policy of genuine 
nonalignment. In fact, Burma, which 
was one of the founders of the non- 
aligned movement, left the nonaligned 
movement when it concluded the orga- 
nization had strayed from its original 
principles and become too pro-Soviet. 

Since independence in 1948, the 
Burmese Government has been battling 
myriad insurgent groups, most based 
on Burma's many ethnic minorities. 
Fighting between the Burma Army and 
the insurgents or among the insurgents 
themselves often spills over into 
Thailand and occasionally into China. 
Most of the insurgents, including the 
Burmese Communist Party, finance 
their operations through drug produc- 
tion and trafficking, and often possess 
more firepower than the Burma Army 
units which oppose them. It is not an 
exaggeration to say that some of these 
groups are little more than armed com- 
mercial drug dealers hiding behind al- 
leged minority grievances. For its part, 
the Burmese Government has sup- 
ported strongly U.S. narcotics goals, 
including initiating in 1985 an aerial 

spraying program with U.S. support 
that has eradicated an increased area of 
poppy plantings each year of its 

Burma's ability to defeat the insur- 
gents and narcotics traffickers is se- 
verely limited by the parlous state of 
the economy. Burma was recently ac- 
corded "least developed developing 
country" status by the United Nations, 
certifying it as among the poorest of 
the poor. Despite its economic difficul- 
ties, Burma is a land of rich potential. 
U.S. oil companies believe that Burma 
may possess some of the richest hydro- 
carbon reserves outside the Middle 
East and several have maintained an 
active dialogue with the Burmese Gov- 
ernment aimed at cooperation in ex- 
ploiting these resources. 

Our very small IMET program is 
needed to help develop a Burmese mili- 
tary capable of effectively combatting 
the insurgencies and drug traffickers. 
Not only has U.S. military training 
contributed to a more effective Bur- 
mese military, IMET also has provided 
one of the principal avenues of contact 
between Burmese officers and the 
United States, in a relationship where 
such opportunities are still relatively 

Our $7 million dollar AID program 
is designed to assist the people of 
Burma by encouraging the government 
to move toward more pragmatic and ef- 
fective economic policies. In the agri- 
cultural sector, our efforts focus on 
increased production of oilseeds, a sta- 
ple in the Burmese diet and a food item 
which is in chronic shortage. In the 
realm of health, we have projects to 
improve primary health care and child 
survival services. We also have a train- 
ing program that provides a growing 
number of Burmese with an opportu- 
nity to acquire needed technical skills 
in the United States, thereby also ex- 
posing them to the workings of a free 
enterprise system in a political 

Recent developments such as the 
decontrol of rice prices and the freeing 
of trade in basic food crops mark the 
most significant change in Burmese 
economic policy in the last 25 years. We 
are encouraged by these developments 
and believe that a sustained effort on 
our part will help Burma realize its tre- 
mendous potential. 


The statutory hold on assistance under 
Section 513 of the FAA [Federal Avia- 

ijjartment of State Bulletin/July 1988 



tion Administration] has been suc- 
cessful in demonstrating U.S. support 
of democratic institutions. The Govern- 
ment of Fiji is aware of our keen inter- 
est in encouraging a process that will 
lead to the restoration of elections and 
a constitutional government with 
broadly based support. In view of re- 
cent developments in Fiji that indicate 
that the interim government is on a 
course leading to the restoration of con- 
stitutional government, we have begun 
consultations with the Congress to e.\- 
plore ways of restoring our economic 
assistance programs in Fiji. As we take 
this step we note that all of Fiji's tradi- 
tional friends have restored economic 
assistance to that country. Further, the 
dislocation in Fiji's economy brought 
about by 12 months of political uncer- 
tainty has placed great strains on all of 
Fiji's institutions and its people. We 
intend to work with the appropriate 
committees in Congi-ess to find a way 
to join with the other nations of the 
West in resuming economic assistance 
to Fiji. 

When the hold on bilateral as- 
sistance is lifted and subsequently a de- 
cision is made to resume military 
assistance, our MAP and IMET pro- 
grams are designed to enhance Fiji's 
ability to carry out internationally 
important peacekeeping responsibilities 
in the United Nations Interim Force in 
Lebanon (UNIFIL) and the Sinai Mul- 
tinational Force and Observers (MFO). 
Specifically, our IMET program is 
geared to enhance Fiji's military skills 
for peacekeeping operations. More im- 
portantly, it provides exposure to U.S. 
military traditions, including the demo- 
cratic concepts of the separation of po- 
litical powers and the noninvolvement 
of the military in the political process. 

Papua New Guinea 

Papua New Guinea is the largest, most 
populous nation in the South Pacific re- 
gion. A country of vast economic poten- 
tial, it has a vigorous democratic, free 
enterprise tradition. The $.')(), 0(1(1 IMET 
program provides command and staff 
training to its national defense force at 
the highest levels as well as offering 
speciality courses in technical areas not 
otherwise available. These courses in- 
crease the overall effectiveness of the 
Papua New Guinea military and build 
strong bonds between our two 


Solomon Islands 

The Soloman Islands play an in- 
creasingly influential role in regional 
and subregional (that is Melanesian) af- 
fairs, while occupying a strategic geo- 
graphic position in the southwestern 
Pacific. The proposed $30,000 IMET 
progi-am will provide professional, man- 
agerial, and technical training for ap- 
proximately three military personnel. A 
key element of the training is ordnance 
disposal skill which is especially impor- 
tant given the continued presence of 
unexploded World War II ordnance in 
and around the nation's capital. 


Tonga is one of our most steadfast 
friends in the South Pacific. Our IMET 
program allows us to provide needed 
assistance to a reliable friendly nation 
which actively supports a U.S. pres- 
ence in the region and which has 
warmly welcomed visits from U.S. 
ships. At the same time, Tonga's par- 
ticipation in training exposes officers 
from other nations to the strong pro- 
U.S., anti-Soviet views of the Tongan 
defense force. 

South Pacific Oceanographic 

Aside from their fishery resources, the 
small island nations of the South Pacific 
have few resources. The oceanographic 
research program has been highly suc- 
cessful in terms of the data it has accu- 
mulated on off-shore minerals and 
hydrocarbons, and as a counter to So- 
viet efforts to establish a presence in 
the region through scientific exchange 
programs. The $200,000 in ESF re- 
quested for FY 1989 will support the 
further development and skills of the 
regional marine research organization. 
Australia and New Zealand have also 
contributed to this effort and are ex- 
pected to continue their roles. 

South Pacific Regional 
Development Program 

This fiscal year we are seeking $4 mil- 
lion in development assistance and 
$1 million in ESF for this program, a 
sum which we believe is the minimum 
we can safely invest in the development 
of this strategic one-eighth of the 
earth's surface. The development as- 
sistance portion of the program is 
aimed primarily at private sector 
growth, agriculture, health, and educa- 

tion in 10 of the region's 11 indeperi 
or self-governing nations. The ESI' 
funded portion of this program is < 
signed to help the South Pacific re 
develop an indigenous, private-sec 
oriented fishing industry. The pro| 
is extremely popular in the region 
accurately reflects local needs and 
pabilities. It also helps counter So 
bloc efforts to use the region's inte 
in fishing as a means of expanding 
political and economic influence in le 

South Pacific Tuna [ 

Frustration with U.S. tuna policy 
threatened vital national security ;er 
ests in the region and prompted i.^ 
states to look at issues such as shi 
access and support for U.S. positi 
international fora as means of exp 
ing their discontent with the U.S. 
tion. This resentment also afforde .he 
Soviet Union a rare opportunity t' :m- 
barrass the United States and ex( id 
its influence by offering financialb t- 
tractive fisheries agreements to S th 
Pacific nations. 

The regional fisheries treaty , 
dresses these problems by providi ;ii 
cess for the U.S. fleet to the regi - 
fisheries while compensating islan 
states for the resource. The $10 n lor 
ESF program developed in conjur ior 
with the treaty provides economic - 
sistance to the island nations par- 
ticipating in the treaty with the g n 
strengthening the region's self-suf 
ciency and lowering its long-term • 
pendence on foreign assistance. T 
program also helps counter aid ofi ^ 
that are linked to the establishme ol 
a permanent Soviet presence in tl is- 
lands. FY 1989 will be the second 'ai 
of this program. 

'The complete transcript of the t !r- 
ings will be published by the commit i 
and will be available from the Superi pn 
ent of Documents, U.S. Government fir 
ing Office, Washington, D.C. 20402.» 



Departnfient of State Bulletin/Jul.vS 


^tWard a Stronger International Economy 

ihn C. Whitehead 

lldress before the Municipal Pro- 
oii the Toronto Snin)nit of the 
, for International Studies in 
i„ on April 21, 1988. Mr White- 
ns Deputy Secretary of State. 

iiu" 19, when the 14th economic 
lit convenes, the world's attention 
ncus on Canada for the second 
this year. The similarities between 
lithcoming events in Toronto and 
I'lt'nt doings in Calgary are, how- 
iV'w indeed. Economic summitry 
iKit only the beauty, but also the 
: inty, of Olympic sport. In summi- 
, here are no clear "winners" and 
[■-," despite a sometimes vigorous 
1 itition of ideas. And I must tell 
hat not even the most charming of 
clans or agile of government offi- 

la- can hold a candle to the natural 

r^ ' of an Elizabeth Manley. 

i: lomic Summitry 

ADvy of economic summitry began 
thf breakdown of the Bretton 
i.~ system in 1971 and the first 
. <' oil price and supply shocks in 
The curtain then went up on a 
e form of economic consultation — one 
hi involved the highest elected offi- 
ii of the world's foremost industrial 
a ns. 

[n his impressive lecture of last 
)( mber. Ambassador Gotlieb [Cana- 
ii Ambassador to the United States] 
10 1 the significance of Canada's par- 
ic ation in the economic summits, 
le ining with the second summit in 
'^' He kindly mentioned the part 
•il by the United States and Japan 
iciiuraging this happy and appro- 
'■ development. As Ambassador 
u'b described, "It confirmed, and in 
ii sense validated, Canada's new posi- 
k in the world." 

' Though the curtain was raised on 
■c omic summitry in the mid-1970s, 
h prologue was being written and the 
was being set years — even dec- 
' arlier. The playwrights were 
>f millions of the world's peo- 
iiiled by intelligent economic 
I's that rewarded effort and 
• mraged growth. Between them they 
0' e possible history's first global 

Yet, for the sake of perspective, let 
us begin even earlier than the postwar 
period. Indeed, let us venture back two 
centuries, to the time when Europeans 
were just beginning to lift themselves 
from the hardship of life in societies 
with traditional, precapitalist 

In one of his recent books, the- 
ologian Michael Novak reported that in 
1795 four out of five French families 
devoted 90% of their incomes to buying 
bread — merely bread — to stay alive. 
Life expectancy in France in 1795 was 
27.3 years for women and 23.4 for men. 

Nor were French conditions — de- 
spite the revolution and the chaos that 
followed — dramatically different from 
the conditions found elsewhere in Eu- 
rope. In the whole of Germany in 1800, 
fewer than 1,000 people had incomes as 
high as $1,000. Such statistics are the 
more remarkable when one recalls that 
this was the level of prosperity on the 
world's most economically advanced 

In less than two centuries — a 
proverbial drop in the bucket in the 
course of human history — conditions 
have improved so dramatically that such 
pervasive poverty is today scarcely 
imaginable to people living in modern, 
advanced economies. What wrought 
this extraordinary improvement in 
living conditions? The answer is: two 
intellectual giant steps. 

First, and most important, was the 
liberation of human initiative made pos- 
sible by the idea that individuals could 
improve their conditions by their own 
efforts and by the growing realization 
on the part of governments that indi- 
viduals had a right to the fruits of their 
labors; and 

Second, there was the crucial un- 
derstanding that when wealth was in- 
vested in economic enterprises — rather 
than, as had been the case, consumed 
in the purchase of luxury, sport, or tri- 
fles — more wealth might thereby be 

This is what Walter Lippmann was 
referring to some years ago, when he 

For the first time in human history, 
men had come upon a way of producing 
wealth in which the good fortune of others 
multiplied their own... for the first time 
men could conceive a social order in which 
the ancient moral aspii-ation for liberty, 
equality, and fraternity was consistent 
with the abolition of poverty and the in- 
crease of wealth. 

Global Economic Integration 

The increase of wealth — not only in fi- 
nancial terms but also in improvements 
in health, in life expectancy, and in the 
decline in infant and child mortality — 
has been greater in our own century 
than in any other. At the same time, 
particularly in recent decades, advances 
in economics, finance, and technology 
have caused the world's nations, and es- 
pecially the most advanced of them, to 
become evermore integrated. We see 
evidence of this new reality everywhere 
we turn. 

• Consider the tremendous expan- 
sion in world trade. Since 1950, the vol- 
ume of world exports has increased 
ninefold, and the volume of world out- 
put has increased fivefold. 

• Dramatic increases in interna- 
tional financial flows have accompanied 
this expansion of trade. Consider that 
the daily volume of foreign exchange 
transactions, at over $1 trillion per day, 
is about the same as the annual budget 
of the U.S. Government. 

• Consider, also, the growing inter- 
national exchange of technology. It, 
too, is a mark of the extent to which 
national economies are increasingly in- 
tegrated. Today over 40% of the stu- 
dents enrolled in engineering doctoral 
programs in the United States are for- 
eign students, as are over two-thirds of 
the postdoctoral engineering students. 

• And, as with technology, produc- 
tion and manufacturing now also spill 
over national borders. Consider, for ex- 
ample, that even "North American" 
General Motors automobiles consist of 
parts made in Brazil, Japan, Mexico, 
France, West Germany, Singapore, the 
United Kingdom, Italy, and Australia. 

Economists have long asserted that 
an open international economic system 
accelerates economic growth. Open 
markets facilitate economies of scale 
and allow countries to specialize in 
fields in which they have the greatest 
relative advantage. Yet the most per- 
suasive arguments for an open system 
arise not from abstract reasoning but 
from experience. Ti-ade across borders 
and prosperity within borders are inti- 
mately linked. 

The postwar successes of the 
United States, Canada, our West Euro- 
pean allies, and Japan have not been 
lost on the rest of the world. In 1960, 
the combined gross national products of 

yltartment of State Bulletin/July 1988 



the NATO countries exceeded those of 
the Warsaw Pact bv some $2.5 trillion 
(in 1986 dollars). By 1986, the gap had 
more than doubled, to $5.5 triUion. 

How was this made possible? 
The answer is clear to us — and, in- 
creasingly, to the leaders of Third 
World countries interested in economic 
development. The West European econ- 
omies were relatively free to expand, 
while the ingenuity of the peoples of 
Eastern Europe and the Soviet Union 
were smothered by red tape, bureau- 
cratic directives, and central plans. 

Perhaps the most dramatic exam- 
ple of the success of market-based, 
open economies is the spectacular 
growth performance of the newly indus- 
trialized economies of Asia — Taiwan, 
South Korea, Hong Kong, and Singa- 
pore. During the past 25 years, this 
group has grown at a rate exceeding 
109!: per year in real terms. 

Again, how did it happen? Despite 
their considerable differences in form of 
government, in defense commitments, 
and in their political economies, each of 
these economies shares two common 
traits. First, the governments have 
avoided the temptation to set prices 
themselves, thus permitting market- 
based allocation of their resources ac- 
cording to decentralized price signals. 
And second, they have maintained out- 
ward-looking development strategies 
based on the global marketplace. These 
four Asian economies are home to a 
mere 2% of the total population of the 
world's developing countries, and yet — 
as incredible as it sounds — they account 
for over half the manufactured goods 
exported by all the developing coun- 
tries of the world. 

Nikita Khrushchev used to predict 
that it would be in Asia that commu- 
nism would win the world's masses. As 
it happens, it has been the success of 
Asia's newly industrialized countries 
that has dimmed the attraction of 
Marxist ideology. Many developing 
countries that adopted import-substitu- 
tion policies and central planning in 
decades past have begun to rethink 
their approaches. 

Perhaps the most dramatic changes 
are occurring in China. After nearly 30 
years of seclusion, China has opened its 
borders to trade, investment, tech- 
nology, and tourism. The Chinese econ- 
omy has responded. From 1980 to 1986, 
it grew at a real rate of 8.69f^ per year. 

Would that the story ended there. 
But it doesn't. For just as the weight of 
historical evidence is winning the intel- 
lectual battle for open markets, open 
market policies have come under attack 
in some of the world's most developed 
industrial countries. The large trade 

imbalances of the 1980s have fueled i-is- 
ing concern about, and frustration 
with, the world ti-ading system. Protec- 
tionist measures have gained support as 
a misguided remedy. And recently, in 
the United States, alarm over foreign 
investment has led to proposals to reg- 
ulate, or even limit, such investment. 
Such proposals may be well inten- 
tioned, but they are woefully mis- 
guided. It would be tragic — truly 
tragic — if at this juncture the industri- 
alized countries were to turn their 
backs on the open economic arrange- 
ments that have contributed so much to 
our well-being and lighted the way to 
future prosperity for the less developed 

Policymakers in our democracies 
face conflicts between the generalized 
benefits that accompany global eco- 
nomic integration and the interests of 
particular domestic constituencies. Flir- 
thermore, the integration of the world 
economy over the past 40 years has 
markedly increased the intensity of 
competition and forced structural 
changes with which it is sometimes 
quite difficult to cope. In such circum- 
stances, policies that soothe powerful 
domestic interests by promoting isola- 
tionism and claiming to advance self- 
sufficiency have a natural but super- 
ficial attractiveness. 

What our current situation re- 
quires, therefore, is genuine states- 
manship: the overcoming of fragment- 
ing forces of domestic interests for the 
greater good of our national and the 
world's economic well-being. That is a 
tall orde'r. It means, in some cases, 
swimming against the tide of unin- 
formed opinion. 

But a return to economic na- 
tionalism must be avoided at all costs. 
How, then, might we avoid it? 

GATT and Trade Liberalization 

The United States and its trading part- 
ners are currently engaged in a wide 
range of activities to preserve and 
strengthen our open international eco- 
nomic arrangements. The most impor- 
tant effort involves the current 
Uruguay Round of multilateral trade 
negotiations, conducted by the General 
Agreement on Tariffs and Trade, or 

GATT has played a major role in 
lowering the average tariff on manufac- 
tured goods among major countries 
from about 50% in the 1930s to roughly 
5% today. But the popularity of trade 
agreements that are illegal under 
GATT rules, as well as the falling share 
of world trade conducted under GATT, 
have led some to conclude that GATT is 
not worth salvaging. Clearly, it does 


not command the respect that oth ij) 
ternational organizations do, such 
the World Bank and the Internatii' 
Monetary Fund. 

So how can we revitalize GAT' 
First, we must improve its instituim 
framework. Perhaps most imports i, 
the existing consensual method of tt- 
tling disputes should be replaced ■ th 
system that is decisive, expeditioi 
and binding on the disputants. 

Second, GATT needs a survei ,nc 
mechanism, to provide internatioi 
scrutiny and discipline of member iui 
tries' trade policies. The surveillai ■ 
function should, furthermore, incl e 
developing countries, which heret )re 
have been accorded "special and d ier- 
ential" treatment under GATT. It i e 
sential that the developing countr t, 
and especially the newly industris led 
countries, begin to shoulder the f in 
sponsibilities of membership in G. T. 
In addition, the GATT frame rk 
must be extended to new areas, s 
trade in services. In the past, GA 
rules have been applied primarily 
manufactured goods. Yet the argi 
ments that support free trade in ,i <> 
apply equally to services. Furthei on 
liberalization of trade in services 11 
promote free trade in goods, sine he 
two are closely linked. 

Although many developing cc - 
tries initially opposed the inclusic of 
services in the Uruguay Round o 
GATT, it now seems likely that a de 
on services can be negotiated. Se ice 
account for a growing share of mc 
economies, in developing as well ; 
developed countries. In Mexico, f 
example, services now account fo 
about 40% of the gross national p i- 
uct. A number of developing cour les 
have relaxed their opposition to a We 
on services, upon realizing that n ly 
lesser developed countries enjoy ( ti- 
parative advantages in service sei irs 
The newly industrialized Asian co i- 
tries, for example, are internatioi 'ly 
competitive in such fields as ship] \g, 
financial services, and constructic' 

Agricultural trade is another ^ea 
that must, at a minimum, be broilt 
under normal GATT discipline. M 'y 
nations, particularly developed ntDn; 
including the United States and C h- 
ada, have pursued farm policies tit 
are inconsistent with liberalized tide 
in order to achieve other goals — sth 
income maintenance for farmers. '.- 
strictive agricultural policies impc 
tremendous costs on consumers a 
taxpayers — costs that far exceed i - 
gains to farmers. By some estima s, 
world gross national product couli in- 
crease by at least $40 billion annujly 
the major industrial countries wei'to 
even partially liberalize agricultui. 


Department of State Bulletin/Jul) ! 


riu' skyrocketing costs of current 
ulturai policies have created an op- 
iiutv to reach an agreement on ag- 
inv for the new GATT round. Last 
ihf United States proposed the 
nation — gradually, over 10 years — 
subsidies that distort agricultural 
lis. The U.S. initiative was consis- 
with proposals put forward by 
. I la. as well as by the Cairns 
|i, an informal organization of 14 
uoclaimed nonsubsidizing nations, 
ling major exporters from both 
nyvd and developing nations. 
\ final issue in the new GATT 
1 addresses the protection of intel- 
al property rights. This is an ex- 
. ly important matter, not only for 
II > such as the United States and 
:1a — who are pioneering the tech- 
iis of tomorrow — but also, ulti- 
I,, for future generations through- 
iif globe, who will benefit or suffer 
I iliiig to whether technological in- 
iiiti is rewarded or stifled. Unfor- 
rly, copyright piracy is wide- 
iil in many parts of the world, and 
my countries patents are violated 
' impunity. According to the U.S. 
■national Ti'ade Commission, intel- 
al piroperty infringements cost 
' .S20 billion annually in lost sales, 
u he ultimate losses from intellectual 
'1, 'v — which stifles the very incentive 
novate — cannot be measured. 

I should mention that the Canada- 
J, free trade agreement (FTA) has 
'■ Ided an example for worldwide 
■ ' liberalization under GATT. The 
■' highlights the unique relationship 
i£ 'een the United States and Canada 
n out disadvantaging other countries 
ir, irly. It is the first major agreement 
^tablish rules for trade in services, 
it itablishes useful precedents for 
D ilateral negotiations and encour- 
ii trade liberalization worldwide. Its 
i>ions regarding services, 
-inient, elimination of export re- 
in ms, and efficient resolution of 
ales are especially instructive. The 
. has another strength. It can be 
ited to a changing environment 
unh consultations and mutual 

I cannot leave the topic of trade 
ilralizaton and the Uruguay Round 
Hint saying a word or two on the 
If l)ill now before the U.S. Con- 
>. 1 recognize that there is great 
ri'st here and elsewhere in the om- 
is trade bill, in large part because it 
•v, originally highly protectionist. As 
-iigress looked at the legislation more 
' ely. they eliminated many, but not 

iif the most most objectionable 
'Visions. Congress continues to make 
(^isions, but it still contains some 

World Trade Week, 1988 

MAY 5, 1988' 

Setting aside a week in celebration of in- 
ternational trade is a fitting way to remind 
ourselves of the countless benefits of world 
trade for Americans and for people around 
the globe, and to remember that freedom 
is, and must be, an essential element in 
economic life — individual, national and 

International trade can link individuals 
and nations alike by providing oppor- 
tunities for the interchange of goods and 
services, the fruit of human talents that 
transcend boundaries of geography and 
culture. The key ingredient in every act of 
trade is freedom. Only freedom respects 
the inherent rights, dignity, conscience and 
worth of individuals; only freedom encour- 
ages individuals to develop their creative 
abilities to the fullest and to command fair 
return for their labor; and only freedom 
provides a rational and humane basis for 
economic decision-making. The freedom of 
exchange that is at the heart of every gen- 
uine economic transaction benefits all par- 
ties and builds competition, enterprise, 
prosperity, justice, cooperation and social 
well-being as people achieve economic suc- 
cess by finding their fellow man's unmet 
needs and filling them well. 

Our country's prosperity likewise de- 
pends on our ability to identify needs and 
markets for goods and services and to 
meet them well. Our free market economy, 
our belief in free but fair trade on a global 
basis and the American people's ingenuity 
and ability all make our products among 
the world's most competitive — and we 
intend to keep it that way. 

My Administration has worked to im- 
prove the climate for international trade by 
seeking a renaissance in American com- 
petitiveness. Last year, as American goods 
regained price competitiveness overseas, 
exports hit a record level; more than 
407,000 manufacturing jobs were created; 
and employment surged with more Ameri- 
cans in the labor force than ever before. 
Exports spell opportunity for American 
business; thousands of U.S. firms have in- 
creased their profit margins by exporting, 
and thousands are beginning to discover 
their untapped potential to succeed in ex- 
port markets. This year's World Trade 

Week theme, "Export Now," champions 
the message that I have joined the Secre- 
tary of Commerce in sending and ex- 
emplifies America's winning spirit. 

Foreign markets are now more open to 
American goods than in the past, but we 
have far to go in the quest to undo unfair 
restrictions on trade. We seek to encour- 
age removal of foreign barriers to free 
trade, but we simultaneously work to dis- 
courage domestic protectionism — more ac- 
curately described as "destructionism," 
because it stifles progress and prosperity 
by preventing competition and economic 
transactions that people everywhere desire 
and need. We also reiterate the intention of 
the United States Government to ensure 
that our trade policies serve to reinforce 
our national security interests around the 
world. International trade policies and 
practices must promote the causes of free- 
dom, human rights and economic growth 

World Trade Week is a truly appropri- 
ate time to remember the many benefits 
international trade has conferred on our 
country and to reflect on the many bless- 
ings the spread of economic freedom has 
brought, and can bring, to people in every 

Now, Therefore, I Ronald Rea- 
gan, President of the United States of 
America, by virtue of the authority vested 
in me by the Constitution and laws of the 
United States, do hereby proclaim the 
week beginning May 22, 1988, as World 
Trade Week. I invite the people of the 
United States to join in appropriate obser- 
vances to reaffirm the great promise of in- 
ternational trade for creating jobs and 
stimulating economic activity in our coun- 
try and for generating prosperity every- 
where freedom reigns. 

In Witness Whereof, I have here- 
unto set my hand this fifth day of May, in 
the year of our Lord nineteen hundred and 
eighty-eight, and of the Independence of 
the United States of America the two hun- 
dred and twelfth. 

Ronald Reagan 

'Text from Weekly Compilation of 
Presidential Documents of May 9, 1988.1 

lu^llaartment of State Bulletin/July 1988 



provisions we oppose, such as manda- 
tory sanctions against non-U. S. com- 
panies in cases involving the export of 
controlled goods or technology to the 
Eastern bloc of countries. We believe 
such sanctions would weaken, not 
strengthen, the security of the West 
because they would undermine support 
for multilateral efforts to control tech- 
nology tranfers. 

Because such troublesome provi- 
sions remain, President Reagan is faced 
with a difficult decision within the next 
week or two — whether to veto this bill. 
Congress must decide, in the mean- 
time, whether it will override a presi- 
dential veto. Few pieces of legislation 
have received such widespread atten- 
tion in the United States— or have pre- 
sented issues that have been so difficult 
to resolve. Our goal is to ensure that 
the resulting legislation is not protec- 
tionist in nature. 

International Investment 

Important as they are, renovating 
GATT and liberalizing trade policies 
are not our only concerns. There is a 
need as well to move toward a free 
market in international investment. By 
doing so, we will contribute to moi'e 
efficient use of investment capital and 
at the same time promote more favor- 
able circumstances for improved trade 
in goods and services. A lessening of 
restrictions on foreign investment will 
greatly assist developing countries as 
they strive for economic gi'owth. 

One of the reasons for the debt 
problem of the developing countries is 
that they financed long-term equity in- 
vestments with short-term loans from 
international banks. Had they relied on 
foreign investment capital instead, they 
would have avoided, or dramatically 
lessened, the debt-servicing problems 
that resulted from the adverse develop- 
ments of the early 1980s. 

One of the goals of U.S. policy, 
therefore, is to encourage conditions fa- 
vorable to greater investment in devel- 
oping countries. One initiative — the 
creation, just last week, of the Multi- 
lateral Investment Guarantee Agency — 
will ensure investments in member 
countries against expropriation, against 
political violence, and in cases where 
there is a breach of contract or where 
earnings are not convertible. We also 
seek an end to such restrictions on 
trade-related investment as domestic- 
content regulations, export require- 
ments, and exchange controls. I might 
also mention, parenthetically, that since 
1982 the United States has signed bilat- 
eral treaties with 10 developing coun- 

tries as part of our efforts to promote 
growth-oriented policies and a more fa- 
vorable investment climate. 

Economic summits, such as the one 
you will host in June, reflect the in- 
creasing desire on all our parts for 
greater coordination of international 
policy than existed — or, indeed, than 
was necessary — in decades past. It is 
one of a number of innovations of recent 
years intended to help us deal with the 
new reality of a global economy. 

International Policy Coordination 

International policy coordination has 
made considerable progress during the 
past few years. As each trading nation 
experiences effects resulting from the 
decisions of other trading partners, the 
usefulness of consultation and policy co- 
ordination becomes increasingly clear. 
Of course, there are still those who 
maintain that such matters as monetary 
and fiscal policy, and structural ques- 
tions involving labor markets and sub- 
sidies, are strictly domestic issues. This 
is an understandable position — but, I 
think, an unrealistic one. In our in- 
creasingly integrated international 
economy, it is in everyone's interest 
that decisionmakers be aware of the 
impact of their economic policies on 
other nations. 

Recognizing this, the leaders of the 
summit countries have encouraged the 
evolution of a mechanism for economic 
policy coordination, with the participa- 
tion of the International Monetary 
Fund. This institutional mechanism is 

When the leaders of the Group of 
7 countries meet, monetary and fiscal 
policies grab the headlines. Yet these 
macroeconomic issues do not exhaust 
the agenda for policy coordination. 
Over the past several years, for exam- 
ple, the OECD [Organization for Eco- 
nomic Cooperation and Development] 
has pioneered analysis of micro- 
economic, or structural, issues — with 
particular attention to their effects on 
the functioning of market economies. 
Since 1985, successive OECD minis- 
terial meetings have emphasized the 
importance of these structural issues. 
In other coordination efforts, the 
United States and its allies are attend- 
ing to security issues. One effort has 
been to strengthen the Coordinating 
Committee for Multilateral Export 
Controls, or COCOM. COCOM is 
emerging from the shadows in which it 
spent its first years of existence. At a 
meeting I attended in January, the 
member countries agreed to improve 
coordination and enforcement of the 
rules governing the export of high- 
technology products to the Soviet bloc. 

Particularly noteworthy have been 
measures taken by Japan in the wt 
the Toshiba machine affair. Tokyo ] 
expanded its export-screening stafi 
lengthened prison terms for violat* 

Now I know that all of us here 
member, perhaps all too well, the 
culties that followed the interrupt! 
oil supplies in the 1970s. In anothe 
ample of coordination, the Westerr 
countries, through the Internation 
Energy Agency, have undertaken 
stockpiling effort to guai-d against 
disruptive effects of future temper 
interruptions of oil supplies. 

Assistance for Third World ec 
nomic development also requires ii) 
national cooperation. The developi 
countries benefit from a system oti 
ternational institutions that provio| 
them financial assistance and tech 
support. The World Bank, establif 
initially to channel reconstruction nd 
to Europe, is the preeminent insti ■ 
tion for development lending. 

Recently, the executive direct 
the Bank agreed to a general capi 
increase of approximately $75 biUi to' 
support continued lending to deve ii! 
countries. Furthermore, in recent 
the Bank has enlarged its efforts 
provide policy advice and assistan ic 
client nations. In addition, it has j lec 
with the International Monetary I id 
to encourage sound, market-basec ?o- 
nomic policies conducive to growtl i 
developing countries. 

Already we have touched on a 
great number of topics: GATT, lib 
alized trade, intellectual property, 
proving the international investmi 
climate, COCOM, the World Bank i ^ 
quite a long list. Yet all our effort o I 
strengthen the international econc c 
system have one thing in common: 
they will succeed only if all of us \ ' 
benefit from the system cooperate • 
improve it. 

The United States led the wo) 
economy in the postwar period, w , a 
gross national product equal to (50 ,of 
the combined gross national prodii '^* 
the OECD countries. Today U.S. > 
national product equals roughly S'l 
Some say this decrease in the IKS 
share of world trade and output is 
indication of America's decline. Bu :: 
fact, this trend demonstrates the iw 
ing strength of international trade knc 
this strengthening is good for the ' 
United States. The growing roles at 
the European Community, Japan, .d 
Canada share in world production id 
trade demonstrate their contributik t' 
a healthy global economy. That gnfth 
brings with it a responsibility — th:i 
Canada and others have assumed- o 


Department of State Bulletin/Jul>^ 


tiister a more open and efficient 

I economy. 

This is the responsibility of Clevel- 
and developing nations alike. As 
11 1 ling countries — and especially 
v\\\\ industrialized countries — 
nue to advance, they must gradu- 
iicept the responsibilities of full 
iiiTship in the global economic 
r lunity. 

I lusion 

lit'ijan by speaking of conditions in 
]if two centuries ago, perhaps I 
il conclude with a few words about 
li .America at that same time. This 

II IK I left a city — Washington, 
that in 1788, 200 years ago, corn- 
el a trading post called George- 

rather large swamp, and four 

farms on what is now called Capitol 
Hill. Like Toronto — which began as a 
fort and for a time changed its name to 
"York"— Washington, D.C., has come a 
long way in the intervening 200 years. 
When it comes to foresight, how- 
ever, you simply cannot be equaled. 
The city returned to its original name 
of "Toronto" in 1834. "Toronto" was a 
Huron Indian word meaning — etymo- 
logists are uncertain about this — either 
"a place of meeting," as in summit 
meeting, or meaning "plenty," as in 
economic abundance. Does that not 
convince you that Toronto is the per- 
fect city in which to hold an economic 
summit? It certainly convinces me. 
It also convinces me that you have 
thought of everything to make the 
summit a success. You are e.xemplary 
hosts, indeed. ■ 


le U.S. and Japan: 
Firtners in Global Economic Leadership 

. Mien Wallis 

Address before the Federation of 
iiiiiiic Organizations (Keidanren) 
n jkyo on April 19. 1988. Mr. Wallis 
s nder Secretari/ for Economic Af- 
(I : a)id Agriculture. 

Ki'idanren is one of the most influ- 
II il and respected groups of its kind 
n e world, so it is a special privilege 
' invited to speak to you today. I 
h k you for the honor 

1 want to discuss the importance of 
' iimic relations between the United 
■> and Japan and how the relations 
'\nlving. First, I will review the 
111 (if our increasingly close rela- 
aiifl our cooperation on economic 
■s, which is impressive. It involves 
iiation not only on bilateral issues 
ulsii on global matters. Then, I will 
- nil the importance of adjusting 
-tinctures of our economies, and of 
h global economy, in order to ensure 
a imum sustained gi-owth. Finally, I 
■ fli.scuss the agenda that lies before 
laiticularly in the Uruguay Round 
lultilateral trade negotiations. 

-.Japan Economic Ties 

iiiiiarkable that two countries 
■h are so different in customs, lan- 
4f, and tradition — and which com- 
' SI I vigorously in world markets — 
lid form a partnership as close and 
etive as ours is today. Both coun- 

tries for much of our histories have 
looked inward, but those times have 
passed. With our combined economies 
accounting for so much of the world's 
economic activity, we cannot escape 
leadership. Our prosperity requires a 
sound international financial system, 
free and open markets, and the flexibil- 
ity to adjust to changing international 
economic conditions. 

The strength and increasing com- 
plexity of our economic ties are, of 
course, no secret to you. Nonetheless, 
I would like to cite some impressive 

• In 1987 our combined gross na- 
tional products (GNP) totaled over $7 
trillion, which is about 40% of the total 
GNP of the world and some 60% of the 
GNP of the Western industrialized 

• Last year, Japan bought about 
$28 billion worth of U.S. exports, far 
more than any other country except 

• The United States bought 38%- of 
Japan's exports in 1987. By contrast, in 
1982 the figure was 26%. " 

• The two-way trade between our 
two countries in 1987 was $116 billion, 
for Japan its largest trading relation- 
ship and for the United States the 
largest except for Canada. Six years 
ago, our two-way trade was only half as 

• The total direct investment 
in each other's economies was over 
$43 billion in 1987. In 1982, it was only 
$16 billion. During the past 5 years, 
Japanese investment in the United 
States grew from less than $10 billion 
to nearly $31 billion, and it continues to 
grow rapidly. U.S. investment in Japan 
grew during those 5 years from about 
$6 billion to almost $13 billion. 

These are more than just numbers. 
They represent better jobs; more effi- 
cient production and exchange; more 
choices and higher standards of living 
for our consumers. They indicate viv- 
idly just how interlinked and interde- 
pendent our economies have become. 
And they indicate what the future 
holds: even closer ties, a mushrooming 
of linkages, and fuller interpenetration 
of each other's economies. 

Perception and Reality: 
Competition and Cooperation 
Between Economic Equals 

In conversations with Japanese busi- 
nessmen and other Japanese people 
outside government circles, I am 
amazed that many Japanese still see 
Japan as a small island nation with a 
fragile economy that requires special 
protective measures and government 
support to compete in world markets. 
The reality could not be farther from 
this perception. Japan's $2.7 trillion 
economy is the second largest in the 
entire world and one of the most dy- 
namic. Its per capita GNP of some 
$19,000 surpasses that of the United 
States at current exchange rates. 
Thanks to a strong spirit of cooperative 
discipline and striving for excellence, 
Japan has caught up with, and in some 
instances surpassed, the rest of the in- 
dustrialized world. It is a leader in 
fields as diverse as automobiles, bio- 
technology, electronics, machine tools, 
robotics, supercomputers, artificial in- 
telligence, and superconductivity. 

Today Japan is an economic super- 
power. The United States and Japan are 
peers. This has important implications 
for the future course of the relation- 
ship. First, it means that our economic 
partnership must be a two-way street 
grounded in mutual trust and openness. 
This is essential if we in the United 
States are to continue to resist protec- 
tionism and promote open commercial 
competition between our industries. 
Second, it means that Japan must 
shoulder a greater share of the lead- 
ership of the world economy, in part- 
nership with the United States and the 
other industrialized economies. 

iDartment of State Bulletin/July 1988 



In practical terms, this means that 
Japan should redouble its efforts to 
open markets, including opening to de- 
veloping countries, and its efforts to re- 
solve troublesome bilateral problems, 
particularly in trade. We have made 
much progress during the last 6 or 7 
years — for example, in standards, tele- 
communications, the other so-called 
MOSS [market-oriented, sector- 
specific] sectors, and other ai-eas — 
but much remains to be done. 

The United States has benefited 
gi-eatly from Japan's economic gi-owth 
and development. We have received 
quality products at competitive prices, 
enormous amounts of capital, and the 
spur of technological competition, all 
strengthening our own economy. But 
that is potentially only half of the equa- 
tion. On its side, Japan could benefit 
more from our relationship if its market 
were as open as the United States mar- 
ket is. That also would help us to gen- 
erate greater income to pay for the 
goods and services we purchase from 
Japan. If both markets were open, both 
Japan and the United States, as well as 
the rest of the world, would gain. 
Greater exchange based on comparative 
advantage would allocate resources 
more efficiently — we would each pro- 
duce more of what we are best at pro- 
ducing — and raise further the 
standards of living of both our peoples. 
Such a contribution by Japan would 
be all the more appropriate since the 
United States and the major West Eu- 
ropean nations devote substantially 
greater shares of GNP to defense than 
does Japan, with all the attendant polit- 
ical as well as economic costs involved. 
This is why I believe Japan also should 
play a greater leadership role on other 
international issues, for example, by 
further increasing the amount and en- 
hancing the quality of its economic as- 
sistance to developing countries, by 
being more active on international debt 
problems, and by coordinating on other 
monetary and financial matters. Some 
would call this "burden sharing," but 
that misses the point. It is in Japans 
own interest to open markets, to pro- 
mote growth in developing countries, 
and otherwise to strengthen its own 
and the international economy. That is 
why I am confident that Japan will con- 
tinue to move on these fronts, and at an 
accelerating rate. 

International Imbalances and the 
Importance of Structural Adjustment 

One area where Japan has already dem- 
onstrated considerable leadership, and 
where I hope it will continue its 
efforts, is in helping to reduce interna- 
tional imbalances. Fimdamentally, the 
problem is to adust continuously to 
changes in the world economy and 
thereby promote sustained growth. 

You, Japan's business leadership, 
understand well that change is always 
with us. New economic conditions de- 
velop: exchange rates shift; new tech- 
nologies appear; new products enter 
the market. The less innovative, less 
productive, and less efficient producers 
shrink and disappear. As painful as this 
process of adjustment may be to indi- 
vidual companies, overall it strengthens 
our economies and helps us reach 
higher levels of growth by promoting 
the more efficient and more productive. 

This assumes, of course, that gov- 
ernment policies and programs, as well 
as private attitudes and practices, allow 
adjustment to proceed. In our market 
systems, adjustment is, and must be, a 
natural part of economic life. The econ- 
omy does not change abruptly; if there 
are no barriers to adjustment, it ad- 
justs continuously. 

As we move toward the last decade 
of this century, the pace of change is 
accelerating and the imperative to ad- 
just is increasing. In the case of the 
United. States and Japan, our huge ex- 
ternal imbalances signal an urgent need 
for further adjustment. 

International imbalances are not in- 
herently bad, at least not in economic 
terms. Whether they are detrimental to 
our two economies, or to the global 
economy, depends largely on the effi- 
ciency with which each economy oper- 
ates. They can be detrimental if saving 
or consumption is artificially encour- 
aged or discouraged by governmental 
action, if investment decisions are di- 
rected or distorted by public policy, or 
if the public sector is simply too over- 
bearing, either through regulation or 
sheer weight. In these circumstances, 
international imbalances will reflect 
policy-induced domestic imbalances and 

Policies that inhibit adjustment to 
change interfere not only in the domes- 
tic economy but also in the economic 
relations among countries. That is why 
large imbalances, especially trade defi- 
cits, lead to political problems, espe- 
cially when the markets of the surplus 
countries are closed or appear to be 

closed. That is a prescription for n 
pant protectionism, as most recent 
manifested in the numerous trade 
posals put forward in the U.S. 

We know, of course, that, fund 
mentally, trade balances are deter- 
mined by savings, investment, and 
international capital flows. If we d 
work to identify ways to reduce th io 
mestic imbalances among these ini • 
ences and make our economies opt te 
more efficiently, then the political b 
will persist, in spite of our best ef J|' 
to open markets and liberalize traiJl* 

Moving Toward Better Global Ba nc 

If the United States and other coi 1 
tries with current account deficits 
to increase their exports, then con 
sumption and investment in countf 
with current account surpluses neij 
grow at a greater rate than outpun 
There needs to be a greater focus 
"homegrown" growth in trade sur 
countries. If other countries were 
follow policies that made their eco - 
mies as attractive to investors as ! 
U.S. economy, that would reduce ail 
trade surpluses and lower the U.^ lei 
icit. This is why we have frequent 
urged Japan and Germany to ado] ■'-' 
icies that would provide an attrac 
climate for investment. This is th' 
soundest way to expand their don .Ui 
economic growth. Economic gi-owi re- 
quires freeing up their economies la 
ket forces — free enterprise and fr 
choice for consumers — must be th 
guiding principles. ^ 

The issue of structural adustr nt 
has become one of the major item m 
the international economic agenda 
Building on the consensus reache( t 
the economic summit at Williamsl e 
in 1983 and extended since then, e 
nomic officials of the major indust 
alized countries in September 198!: 
outlined in the Plaza Agreement a m 
priate domestic structural measur . 
These included reducing rigidities i li 
bor and capital markets and provic Jg 
sound basis for more balanced, su!| 
tained noninflationary growth. Thi| 
strategy was reconfirmed at the Ty( 
and Venice economic summits, ant , 
think even greater emphasis may 1 a 
corded to the importance of struct fa 
adjustment at the Toronto economi 
summit in June. In fact, I think wlw 
see the issue of structural adjustn'.'it 
playing a more prominent role in j lic 
coordination as summit nations, ot-'f 



Department of State Bulletin/July 9i 


-trialized economies, and the newly 
strialized countries search for ways 
istain growth into the 1990s. 
I'he United States has approached 
\vn structural reform with four 
ipal economic priorities aimed at 
ni;- our economy responsive to mar- 

il) Deregulating our domestic 

(2) Curtailing the growth of gov- 
■rjient expenditures; 

(3) Reforming our tax system; and 
I I ) Opening the international mar- 
in part by resisting protectionism 
line and championing a new round 
:i(le negotiations internationally. 

We have not done badly. Tax re- 
is a reality. Far-reaching steps 
lit'en taken in deregulation. A new 
iiiund has been launched, and we 
ii;i;ressively tackling the most in- 
able problem — excessive govern- 
expenditure — which is the cause 
1- excessive government deficits. 
ia\e begun to make good progress 
11)1 this front, and our Federal def- 
aiid the growth in Federal spend- 
iie declining. 

All told, this is a strong record and 
latistics again speak for them- 
: The U.S. economy has created 
~t 1(5 million net new jobs since 
, unemployment has fallen to its 
St level in 14 years, interest rates 
fallen dramatically from their lev- 
if the early 1980s, inflation has been 
rolled, and the American economy 
.^ its 65th month of sustained 
?i rth. 
We also see major shifts taking 
I'. Growth in real GNP exceeded 
ith in real domestic demand by 
at It one percentage point last year. In 
Mirt industries, growth in investment 
II employment is strong. Real net ex- 
s improved by $11 billion last year, 
the trade deficit, in volume terms, 
ln'en falling in each of the last 15 
li>. This year we expect the im- 
1 nient in real net exports to con- 
iite nearly half of our economic 
vth. In short, the U.S. economy is 
ne. healthy, and vigorous. 

•lapan Structural Dialogue 

I'riflay, I will be leading the U.S. 
Ill discussion with our Japanese 
1 riiment counterparts in the U.S.- 
111 structural dialogue. This fourth 
tint;- of the dialogue is an important 
; of our mutual progress on struc- 
il issues. We organized this dialogue 
luse both sides recognized that it 

Japan Continues Quotas 
on Beef, Citrus Imports 

Folloiving is a statement by U.S. 
Trade Representative Clayton Yeutter 
on May S. 1988. 

I have met with Japanese Agriculture 
Minister T^kashi Sato for nearly a week 
trying to reach an agreement that 
would liberalize Japan's beef and citrus 
markets. Regrettably the final Japanese 
proposal offered only a modest increase 
in access, and it would have left in 
place provisions that the United States 
considers to be incompatible with the 
GATT [General Agreement on Tariffs 
and Trade] rules. 

The United States has been seek- 
ing an elimination of the Japanese beef 
and citrus quotas by a certain date 
along with a transparent and compre- 
hensive package which would assure 
U.S. beef and citrus producers full ac- 
cess to Japan's market. In addition, the 
United States sought an immediate end 
to the GATT-illegal citrus juice blend- 
ing requirement as well as substantial 
cuts in Japan's citrus tariffs. 

The Japanese were willing to make 
concessions in some areas; however, for 

beef they wanted to substitute other 
measures that would sustain a high 
level of import protection. In addition, 
none of our citrus concerns were ad- 
dressed to our satisfaction. Under the 
Japanese proposal, U.S. exporters and 
Japanese consumers would continue to 
bear the cost and burden of Japan's in- 
sistence on constraining agricultural 

Tomorrow, the GATT council will 
meet in Geneva, Switzerland, and the 
United States will for a second time 
ask for the establishment of a panel to 
review our complaint about Japan's ob- 
structive beef and citrus import prac- 
tices. We hope that Japan will live up to 
its international obligations and agi'ee 
to this action. 

It is essential that the Japanese 
Government join the United States and 
other major trading partners in pursu- 
ing and promoting open global trade — 
in agricultural as well as industrial 
goods. The continuation of GATT incon- 
sistent quotas, or alternative schemes 
of a similarly constricting nature, do 
not meet that responsibility. ■ 

was time to give greater emphasis to 
the fundamental domestic imbalances 
that underlie external imbalances. 

Together, we have studied the evo- 
lution of the external imbalances, the 
relationships between savings and in- 
vestment in our two countries, and how 
imbalances between these elements un- 
derlie external imbalances. Going 
deeper into these issues, we also have 
examined a number of specific sectors, 
including agriculture, housing, con- 
sumer credit, labor relations, and com- 
petition policies — all of which influence 
savings and investment in our respec- 
tive economies. 

The structural dialogue provides 
the analytical underpinning necessary 
to make structural issues an integral 
part of international coordination. The 
dialogue is not a formal negotiation but 
an enlightening and sometimes spirited 
discussion of topics that are inherently 
domestic but which unquestionably are 
related to achieving our common goal of 
sustained, noninflationary growth in 
the differing circumstances of the two 
countries. Fundamentally, structural 

adjustment means nations doing what 
is in their own best economic interest. 
This means overcoming special interests 
that are resistant to change and unwill- 
ing to submit to free competition and 
open markets. Nations may find the 
process of international coordination 
helpful in placing their long-term na- 
tional interests over short-term and 
short-sighted special concerns. 

Japan's Adjustment and the Need 
for Further Structural Reform 

Japan's economy has undergone re- 
markable adjustments during the last 3 
years in response to shifts in exchange 
rates and other changes in the interna- 
tional economy, and Japan is to be ad- 
mired and commended for its 
accomplishments. After a difficult year 
in 1986, when corporate profits dropped 
an average of 25% and growth of GNP 
was relatively weak, the Japanese econ- 
omy is now booming, thanks largely to 
policies designed to increase domestic 
demand. GNP grew nearly 4.2% last 
year, with the growth over 5% in do- 

liartment of State Bulletin/July 1988 



mestic demand contributing to adjust 
ment, in real terms, of Japan's high 
trade and current account surpluses. 
As I see it, Japan now needs to 
build a solid domestic basis for sus- 
tained growth by reducing structural 
impediments to economic activity and 
otherwise reducing inefficiencies in its 
economy. Thus, I hope that .Japan will 
undertake a thorough assessment of 
policies which affect the allocation of 
resources among sectors and between 
consumption and savings. If govern- 
ment policies interfere with the trans- 
mission of market signals, the structure 
of the economy is distorted. This has 
adverse consequences for both the cur- 
rent economic situation and the future. 
A stronger, more flexible domestic mar- 
ket is important to meet the immediate 
problem of external imbalances and also 
to prepare Japan's economy for the fu- 
ture, when newly industrialized coun- 
tries will increase competition in export 
markets traditionally dominated by Jap- 
anese products. In essence, Japan 
needs to increase the attractiveness of 
its economy to investors — both Jap- 
anese and non-Japanese. 

As we prepared for the structural 
dialogue, we identified a number of 
areas that we want to discuss with our 
Japanese colleagues, including Japan's 
cumbersome retailing and distribution 
systems; depressed industries and car- 
tel pohcies; buying practices; consumer 
credit and housing loans. 

From a U.S. point of view, how- 
ever, it is Japan's agriculture which pro- 
vides the most striking example of the 
costs of inefficiency and the need for 
reform. The maintenance of high sup- 
port prices and restrictive import bar- 
riers hinders structural adjustment in 
the agricultural sector and throughout 
the economy and results in the mis- 
allocation of resources — both in Japan 
and abroad. Various studies indicate 
that the total cost of such policies to 
Japan's taxpayers and consumers is 
about $50-$60 biUion annually. Japanese 
consumers spend $40 billion — 5 triUion 
yen — more on food than they would 
spend if they paid world prices. 

For beef the Japanese consumer 
pays three to five times the world 
price. The beef for which Japanese con- 
sumers now pay $20 billion would cost 
them only $4 to $7 billion if they could 
buy beef at world prices. Rice prices 
in Japan are six times the world price 
and cost Japanese consumers another 
$10 billion extra. Additional rice sup- 
ports paid to farmers cost Japan's tax- 
payers several billion dollars more. All 

told, Japanese consumers spend ap- 
proximately 24% of their income on 
food, compared with 12% in the United 
States and 15% in the United Kingdom 
and the Netherlands. 

The relatively high percentage 
of income spent on food reduces the 
amount of income available for other 
uses, such as housing and imports. The 
same studies indicate that Japan's agri- 
cultural policies subsidize producers on 
the order of 70% for major commodities 
as compared to 28% in the United 
States. In other words, the total value 
of government support programs equals 
about 70% of total agricultural income 
in Japan. This means that more than 
two-thirds of farm income is really so- 
cial welfare transfers, not earnings. 
Sectors other than agriculture are be- 
ing made less competitive, resulting m 
a loss of economic growth and 

Japan is the largest customer for 
U.S. agricultural exports. Yet, Amer- 
ica's farmers, who are many times as 
productive as Japan's, could provide 
substantially greater amounts of food to 
Japanese consumers at a much lower 
cost than they pay currently. They are 
prevented from doing so, in many cases, 
by quotas and high tariffs, state trad- 
ing, and other restrictive arrange- 
ments. It does not make economic 
sense for Japan to restrict severely im- 
ports of products in which its trading 
partners enjoy an overwhelming com- 
parative advantage, especially since 
those partners welcome products in 
which Japan has a comparative advan- 
tage, such as electronics, robotics, and 
automobiles. If Japan must support 
farmers for political and social reasons, 
it should do so in ways that do not 
distort trade. The 70% of farm income 
that consists of social welfare payments 
should be transferred in ways that are 
not related to production. 

Japan's quotas on beef and citrus 
products are of immediate concern and 
are a source of great friction between 
our two countries. I realize the process 
of adjustment will be difficult for some 
Japanese farmers, just as it has been 
for U.S. farmers. Yesterday, I visited 
with two beef and dairy farmers and 
listened firsthand to their concerns. 
However, it is time for Japan to ehmi- 
nate the quotas and bring other aspect; 
of the trade into conformance with the 
GATT [General Agreement on Tariffs 
and Trade]. 

Changing Course in Japan 

Japanese leaders recognize the ne 
further restructuring of Japan's t'( 
omy. The efforts made over the lasj 
several years underscore their detd 
mination. Indeed, there has been ai 
change in Japanese attitudes towar j 
Japan's role in the global economy. I 
believe there now is consensus builj 
for the kinds of economic adjustmel 
have discussed. This prestigious or j 
zation, Keidanren, has strongly su 
ported Japan's need for structural I 
reform. You have recommended thJ 
Japan should remove all import red 
tions, abolish tariffs on manufactuij 
goods, undertake thorough deregu m 
of the economy, and achieve openn ^ •■ 
administrative systems and operat 
I encourage you to press toward t! 

Structural Adjustment at 
the Multilateral Level 

Our two nations have responsibilit 
that are not limited to our domest 
economies and our bilateral relatic 
ship. As the two largest industrial id. 
economies, we have responsibilitie or 
international leadership as well. V 
cannot prosper without an open ai 
fair worid trading system. Trade i k 
mechanism by which structural ac st 
ment is transmitted internationall Ai 
the pace of change picks up, it is t en 
tial that the guidelines for trade, ' ; 
rules of the road for international m 
merce, be kept up-to-date to help S- 
tain global growth. 

Our two governments have an 
important stake in the success of i • 
Uruguay Round. GATT has playec 
major role in expanding world tra 
and economic growth in these last u 
decades. Much of the increase in t 
standard of living of the Japanese ^c 
pie was fueled by trade. In fact, J a 
has secured sure sources of suppb |ii 
major markets abroad on a scale i , 
greater than was imagined by the |i 
tary rulers of the 1930s who so tn 
icaily sought to achieve such acces ^ 
through military conquest. 

Now the GATT must address 
areas, as technology and changinu 
cumstances vastly increase the po i 
tial and scope of economic dealinti 
^ between nations. Services, invest i 
and protection of intellectual prop 
erty— formerly of only domestic i- 
(■ern— are now part of the arena « 
world commerce and must be incl i 
in any arrangement that seeks to 


Department of State Bulletin/Jul^' 


n international trade. The United 

> and Japan need to lead in these 

lATT efforts. By and large, we 

the same interests in these new 

, and there is great scope for co- 
ition between us. 
tilt the work of the new trade 
1 must not neglect the traditional 

sectors where problems remain. 

important, we must tackle the 
i tiuricultural mess. The new trade 
I provides us with a chance to es- 
-h a world trading structure that 
aiTv mankind to new levels of en- 
ist', opportunity, and well-being. 
•wv. that goal cannot be achieved 
lut broad, compi-ehensive reform of 
ultui-al policies worldwide. We 

ti good starting point is the sub- 
i\e proposal on agriculture that 

nited States has set forth aimed 
tting agricultural production and 

on a market-oriented basis. 

iiless decisive common action is 
1, the growing burden of our mis- 
med farm policies could overwhelm 
n the major Western economies, 
iiect and indirect cost of farm sub- 
- now exceeds $250 billion at cur- 

'xhange rates, according to the 
I M Organization for Economic Co- 
ition and Development]. This is a 
Hi- misallocation of resources on a 
il scale which prevents our econo- 
-; from reaching the growth of which 
1 are capable. 
We would like to see the total elim- 
iiii (luring the next 10 years of farm 
'1 subsidies, quotas, nontariff bar- 
, and all other distortions of agri- 
iial markets. As a result, world 
insts would be cut, government 
ifts pared, wasteful practices elimi- 
'1, and economic growth stimulated 
ir broad international scale. By the 
T of the century, we envision an open 
u" free trading system in agricultural 
)r lucts. For Japan, I can think of no 
^ i Striking proof that it accepts its 

iiornational leadership than by 
ivith us in this effort to ra- 
auze agriculture. 

■ nomic Leadership 

uiiimary, the United States and 
•i m face two related sets of economic 
r eratives which demand action and 
t ership. For their own prosperity 
\\('ll-being, they must free up their 
ifstic economies so that they will be 
• tu adapt more efficiently and more 
i'll,\' to change. Success in removing 
' riers to economic activity — in addi- 
1 to the beneficial effects on their 
pective economies — will provide in- 

creased growth opportunities for their 
trading partners, including, and espe- 
cially, developing countries. 

Our two nations have important in- 
ternational economic responsibilities as 
well. We cannot exert real leadership 
just through technological development 
or export expansion. We must exert 
leadership in the overall functioning of 
the international economy. I mentioned 
the new trade round, but there are also 
other important multilateral tasks — in- 

cluding monetary stability: debt and 
economic assistance to developing na- 
tions — where the United States and 
Japan must lead. 

Our extensive political cooperation 
and close economic links make it possi- 
ble to address these issues together 
with confidence. Moreover, it is in our 
own national interests to promote the 
kinds of growth-oriented economic pol- 
icies I have discussed — which is why I 
think we will succeed to the benefit of 
all mankind. ■ 

U.S. Foreign Economic Policy, 1981-87 

Free Trade. The Reagan Administra- 
tion continues to pursue the goal of free 
and fair international trade in order to 
promote effective economic develop- 
ment in the United States and through- 
out the globe. At U.S. urging and as 
part of our effort to reduce record U.S. 
trade deficits, foreign governments 
have eliminated some of their barriers 
to U.S. -exported goods and services. 
The United States has signed impor- 
tant free trade agreements with Can- 
ada and Israel that will eliminate tariffs 
and other obstacles to bilateral trade 
and investment. The United States 
played a major role in the initiation 
of a new round of multilateral trade 
negotiations under the auspices of 
the General Agreement on Tkriffs and 
Trade (GATT) in order to strengthen 
the international trading system. 

Economic Assistance. The United 
States has provided substantial aid to 
developing countries in order to pro- 
mote economic growth based on private 
sector initiative and market-oriented 
policies. More prosperous foreign coun- 
tries are better markets for U.S. 
goods, services, and investment. U.S. 
emergency food aid and disaster relief 
have been sent to numerous countries, 
particularly in Africa, for humanitarian 
reasons. The United States also has en- 
couraged private foreign investment in 
developing countries as an important 
part of the economic development 

External Debt of Developing Coun- 
tries. Since 1982, the United States has 
provided leadership in forging a strat- 
egy to solve the acute debt problems of 

developing countries without endanger- 
ing the long-term growth prospects of 
the debtors or the integrity of the in- 
ternational financial system. With the 
international financial institutions, es- 
pecially the International Monetary 
Fund (IMF) and the World Bank, at 
the center, the strategy involves all 
concerned parties — the debtors, the 
commercial banks, and the creditor 
governments. A key element is the en- 
couragement of debtor countries to 
adopt growth-oriented structural ad- 
justment policies, and thereby foster 
new lending by commercial and multi- 
lateral development banks. 

Exchange Rate/Monetary Coordina- 
tion. Since 1985, major industrial coun- 
tries — United States, Federal Republic 
of Germany (F.R.G.), United Kingdom, 
France, Japan, Canada, and Italy — 
have renewed efforts to consult closely 
on coordination of domestic economic 
policies in order to restrain inflation, 
encourage growth, and provide stability 
to exchange rates and exchange mar- 

Energy Security. The Reagan Admin- 
istration has strengthened U.S. energy 
security by decontrolling the price of 
oil, deregulating domestic natural gas 
prices, promoting coal and nuclear 
power, building up the Strategic Pe- 
troleum Reserve, and promoting the 
coordinated use of oil stocks by Inter- 
national Energy Agency countries in 
the event of an oil crisis. 

ihartment of State Bulletin/July 1988 




January 28: President Reagan signs an 
executive order abolishing price con- 
trols on most domestic crude oil and its 
byproducts. This decontrol allows oil 
companies to raise the price of domestic 
crude to world levels, in order to pro- 
mote conservation and increase U.S. 
production of crude. 

April 16: United States stops interven- 
ing in currency markets. The purpose 
of the new policy is to allow the cur- 
rency e.xchange rates of the major trad- 
ing countries to find more realistic 
levels through the operation of market 

April 24: President Reagan ends the 
U.S. embargo of grain and phosphate 
fertilizer exports to the U.S.S.R.; 
keeps controls on strategic technology 
products and foreign policy controls on 
oil and gas equipment. He says that the 
grain embargo was ineffective and was 
harmful to U.S. farmers. The lifting of 
the embargo is designed to increase 
U.S. farm exports to an important 

July 19-21: Economic summit meeting 
in Ottawa. President Reagan raises the 
themes of reliance on market forces and 
the urgency of structural reform. (The 
leaders of seven industrial countries — 
the Group of 7, comprised of the United 
States, Japan, F.R.G., United King- 
dom, France, Italy, and Canada — meet 
annually to discuss and make decisions 
on a wide range of international eco- 
nomic and political issues.) 

October 22-2.3: The International Meet- 
ing for Cooperation and Development 
convenes in Cancun, Mexico. Leaders 
of 8 industrial countries and 14 develop- 
ing nations plus the UN Secretary Gen- 
eral discuss the development challenges 
of the poorer nations. President Reagan 
declares that free trade and free eco- 
nomic development are the keys to 
prosperity for the developing world. 


February 24: President Reagan an- 
nounces to the Organization of Ameri- 
can States a six-point plan aimed at 
improving the economies of the Carib- 
bean region. The centerpiece of the 
Caribbean Basin Initiative is duty-free 
treatment for Caribbean Basin products 
(except textiles and apparel products) 
exported to the United States for the 
next 12 years. He requests additional 
economic assistance of $350 million and 

additional security assistance of $60 
million for Caribbean nations for FY 
1982. The Caribbean Basin Initiative is 
designed to foster economic growth in 
the region and increased trade and in- 
vestment flows between the United 
States and Caribbean countries. 

June 4-6: Economic summit meeting in 
Versailles. The seven leaders launch the 
process of greater economic coordina- 
tion among their countries. 

August 20: United States assists Mex- 
ico with a bridge loan in the context of 
commercial bank rescheduling arrange- 
ments. Representatives from more than 
100 foreign commercial banks agree to 
postpone repayment of Mexico's $10 bil- 
lion foreign debt now due and to pro- 
vide $1 billion in new credits. The debt 
package not only assists the U.S. bank- 
ing system but also provides a more 
viable basis for future economic growth 
in Mexico. 

December 9-10: United States, F.R.G., 
United Kingdom, France, and Japan 
(the Group of 5) agree to a 50% in- 
crease in the basic lending resources of 
the IMF, which provides loans to devel- 
oping countries to help finance balance- 
of-payments deficits in conjunction with 
a program of necessary economic policy 
reforms designed to restore external 


March 10: Pi-esident Reagan proclaims 
an exclusive economic zone in which the 
United States will exercise sovereign 
rights over its living and nonliving re- 
sources within 200 nautical miles of the 
U.S. coast. The policy is designed to 
protect valuable offshore assets, such 
as fish and minerals. 

May 10: Organization for Economic Co- 
operation and Development (OECD) 
ministers agree that "their countries 
would seek to avoid undue dependence 
on any one source of gas imports and to 
obtain future gas supplies from secure 
sources, with emphasis on indigenous 
OECD sources." 

May 28-30: Economic summit meeting 
in Williamsburg, Virginia. It lays the 
groundwork for our international debt 
strategy, which evolved into the Baker 
Plan (see October 8, 1985). 

July 28: United States and U.S.S.R. 
reach agreement on a new long-term 
grain agreement for 5 years. The 
U.S.S.R. will purchase a minimum 
of 9 million metric tons of U.S. grain 

annually in approximately equal 
quantities of wheat and corn. 

September 9: President Reagan an- 
nounces U.S. international investme 
policy. Its fundamental premise is ti 
foreign investment flows which resp 
to private market forces will lead tc 
more efficient international product 
to the benefit of both home and hoa 


January 30: United States announo 
an aid initiative for Africa to provic 
food and promote economic reform 
development. In addition to ongoinji 
sistance programs, the economic pa 
initiative is expected to cost appro 
mately $500 million over a 5-year ps 
and is directed to those African cou 
tries that carry out economic refom 
a manner that will use the money itt 

May 29: United States and Japan a| 
nounce a series of measures aimed • 
opening Japan's financial markets a« 
increasing the use of the Japanese 
as an international currency. The tl! 
main provisions of the agreement e< 
pand the market for international t! 
issues denominated in yen, dereguM 
Japanese domestic capital markets,', 
give foreign companies greater acc«i 
to Japanese financial markets. U.S' 
ficials hope that the measures will 
to a stronger yen and a consequent 
provement in the U.S. balance oft) 
with Japan. 

June 7-9: Economic summit meetin 
London. It builds constructively on 
foundations for international coope: 
tion established at the two previous 

September 18: President Reagan a•^ 
nounces that his Administration wi 
seek to negotiate voluntary restrai< 
agreements with foreign governmei 
in order to protect domestic steel ) 
ducers from rising imports. He rej| 
steel industry requests for imposit; 
strict quotas or higher tariffs on i 
ported steel. 




January 3: President Reagan an- 
nounces a comprehensive African h 
ger relief initiative. Total U.S. com 
ment to Africa for emergency and 
regular food aid and disaster relief 
grams will exceed $1 billion duringi 
1985. On the economic developmem 

Department of State Bulletin/July, 


r.S. efforts in Africa will con- 
sul three fronts: policy reform, 
ultural research, and human re- 
r development. 

ary 28: United States and Japan 
1 ti-ade negotiations and agree to 
\ tniir market areas — telecom- 

, cat ions, pharmaceuticals, com- 
i> and electronics, and forest 
acts — in which the United States 
IS that Japan unfairly discriminates 

. 1st U.S. goods and services. These 
llfd MOSS (market-oriented, sec- 
lit'cific) talks, which last until Jan- 
1!)S(;, are successful in opening up 
use markets for U.S. exports of 
- and medical and telecommunica- 
ri|uipment. MOSS negotiations on 
h sector — transportation equip- 
liegin in June 1986. 

■h 1: United States announces a 
IS. -Israel free trade agreement 
! ruinate all tariffs between the two 
ti'ies by 1995. The agreement is ex- 
mI to increase trade and other eco- 
c ties between the two countries. 

H ch 18: President Reagan and Cana- 
Kj Prime Minister Mulroney agree to 
.■ itf talks toward establishment of a 
trade area, which would liberalize 
iiicrease trade in goods and serv- 
I and investment between the two 
' tries. (The United States and Can- 
have the largest bilateral trade 
Mids and services in the world — 
cding$166 bilhon in 1987.) 

--1: Economic summit meeting in 
; II. It plays a key role in initiating 
h Uruguay Round of multilateral 
' e negotiations under the GATT in 
nnlier 1986. 

1 [finber 22: Senior economic officials 
1 the United States, F.R.G., United 

. Ilium. France, and Japan agree that 
111- further orderly appreciation of 
main nondollar currencies against 
diiHar is desirable" and are "ready 
iHiperate more closely to encourage 
," The Plaza Accord is an attempt 
nive at more realistic e.xchange 

: ■ I'ldationships that better reflect 
iniderlying economic conditions of 

I major industrial countries in order 
ichicve more balanced growth. 

~ itcmber 23: President Reagan an- 

iici's a new sei'ies of measures de- 

ud to identify and combat unfair 

hiiir practices by other nations in 

II- to allow more U.S. exports to 

. iun markets. The centerpiece of the 

jjn is the establishment of a $300-mil- 

yi "war chest" in the Export-Import 

Bank to counter subsidized export 
credit offers by other industrial 

October 8: At IMFAVorld Bank meet- 
ings in Seoul, South Korea, U.S. Treas- 
ury Secretary Baker pi-oposes a 
"Program for Sustained Growth," a 
three-point approach to debt problems 
of large middle-income developing coun- 
tries. The Baker Plan includes an in- 
crease in annual World Bank and Inter- 
American Development Bank disburse- 
ments, a key role for the IMF in foster- 
ing economic reform, and net new 
lending by commercial banks of approx- 
imately $20 billion over a 3-year period. 
A major goal of the program is to en- 
courage principal debtor countries to 
adopt comprehensive, growth-oriented 
macroeconomic and structural adjust- 
ment policies. 

December 23: President Reagan signs 
the Food Security Act of 1985. The law 
establishing U.S. farm programs for 
1986-90 is designed to improve U.S. 
competitiveness in world markets, 
where our agricultural exports have 
been slipping since 1981. The act au- 
thorizes export subsidies for wheat and 
other agricultural products to selected 
markets, creates favorable crop loan re- 
payment terms that can assist rice and 
cotton exports, and progressively re- 
duces price support levels for several 
major export commodities. 


January 19: Senior economic officials 
from the United States, F.R.G., United 
Kingdom, France, and Japan coordinate 
reductions in their interest rates in 
order to promote economic growth with 
low inflation. 

May 4-6: Economic summit meeting in 
Tokyo. It elaborates the process of in- 
ternational economic coordination and 
places agricultural reform squarely on 
the international economic agenda. 

July 31: United States and Japan reach 
agreement on a 5-year trade pact in- 
volving computer chips. Japan agi-ees to 
let U.S. semiconductor manufacturers 
gain a larger share of its market and to 
prevent Japanese producers from en- 
gaging in predatory pricing in the 
United States or in third countries. The 
United States agrees to suspend tariffs 
on Japanese chips that had been im- 
posed as penalties for the alleged 

September 20: 74 countries belonging 
to the GATT agree to an agenda for the 
8th (Uruguay) round of multilateral 
trade negotiations. Major U.S. objec- 
tives of these talks, expected to last 
3^ years, are to liberalize international 
trade in services; promote freer, more 
market-oriented agricultural trade; re- 
duce nontariff barriers to trade and so 
improve market access; eliminate trade- 
distorting investment policies; end the 
international piracy of patents, trade- 
marks, and copyrights; and strengthen 
the GATT's procedures for settling 
disputes. The overall purpose of the 
Uruguay Round is a more effective 
international trading system with 
freer trade in goods and services. 

October 31: United States and Japan 
announce a broad agreement on eco- 
nomic cooperation. Japan promises to 
cut interest rates and taxes and in- 
crease government spending, while the 
United States agrees to continue seek- 
ing reductions in the budget deficit. A 
major purpose of the agi-eement is to 
reduce the large external trade im- 
balances in both the United States 
and Japan. 


February 22: United States, F.R.G., 
United Kingdom, France, Japan, and 
Canada agree (the Louvre Accord) to 
cooperate closely in official currency 
market interventions as may be neces- 
sary, as part of the process of better 
economic policy coordination. 

June 8-10: Economic summit meeting 
in Venice. The leaders agree on the 
need for effective structural adjustment 
policies, especially for creating jobs. 

September 29: Secretary Baker, in his 
address to the IMF/World Bank annual 
meetings, calls for creation of an exter- 
nal contingency mechanism by the IMF 
to assist developing countries overcome 
unfavorable developments in the world 
economy which might otherwise derail 
their adjustment efforts. 

October 3: United States and Canada 
agree to a historic free trade pact that 
would eliminate tariffs in three stages 
over a 10-year period and end most 
other bilateral trade barriers. The 
agreement also would liberalize U.S. 
and Canadian investment regimes, 
thereby facilitating cross-border invest- 
ment by the private sectors of both 
countries. President Reagan and Prime 
Minister Mulroney sign the final text on 

Ipartment of State Bulletin/July 1988 



January 2. 1988. The agreement is sub- 
ject to the approval of the U.S. Con- 
gress and the Canadian Parliament. 

December 29: The U.S. Treasury De- 
partment announces that it will cooper- 
ate in a plan proposed by Mexico and 
J. P. Morgan & Company to swap up to 
$20 billion of Mexican external debt — 
almost one-fifth of the total — into se- 
curities backed by Mexican purchase 
of U.S. Treasury bonds. Commercial 
banks would trade their Mexican loans 
with a face value of almost twice that of 
the new securities. The purpose of the 
proposal is to allow Mexico to reduce 
both its debt and its burdensome inter- 
est payments. ■ 

Update on Europe 

by Rozanne L. Ridgway 

Prepared statement before the Sub- 
committee on Europe and the Middle 
East of the House Foreign Affairs 
Committee on Matj 18, 1988. Ambas- 
sador Ridgway is Assistant Secretary 
for European and Canadian Affairs A 

I am pleased to be back with you for 
one of our periodic updates in open ses- 
sion of developments affecting U.S. in- 
terests in Europe. 

U.S. -Soviet Relations 

At the weekend I returned from Ge- 
neva, from the fifth U.S. -Soviet minis- 
terial so far this year. Preparations for 
the Moscow summit continue in full 
gear. We view the Moscow meeting not 
only as an "event" — though it surely 
will be that — but also as an integral 
step in the process undertaken by the 
President to construct a stable, sus- 
tainable framework for U.S. -Soviet re- 
lations. Our approach is grounded in a 
realistic appraisal of the basically com- 
petitive nature of our relationship. But 
at the same time it recognizes the im- 
portance of imparting stability to that 
competition, and also the potential sig- 
nificance of changes currently under- 
way in the Soviet Union. Our policy is 
designed to make the most of any op- 
portunities that change may provide. 

At Moscow, as in the previous two 
summits, the President intends to pur- 
sue meaningful progress across the en- 
tire spectrum of our broad agenda. 

including arms control, human rights, 
regional issues, and bilateral matters. 
His policy and program have yielded 
significant achievements and he plans 
to build on them, both in Moscow and 
in the remaining months of his 

We hope the two leaders will be 
able to exchange instruments of 
ratification of the INF [Intermediate- 
Range Nuclear Forces] Treaty in 

Considerable progr-ess has been 
made toward achieving a balanced, ver- 
ifiable .50% reduction in our strategic 
nuclear arsenals. We will work to make 
as much additional progress as possible 
in the coming months. 

We have also registered significant 
forward movement on other arms con- 
trol issues: among other things, we 
have begun nuclear testing negotiations 
and are working in the CSCE [Confer- 
ence on Security and Cooperation in 
Europe] context to develop a mandate 
for conventional stability talks. 

With the April 14 signing of the 
Geneva accords, something has begun 
which many thought until recently 
would never occur — the withdrawal of 
Soviet troops from Afghanistan. 

Our bilateral dialogue on regional 
issues continues. We will review the sit- 
uation in Afghanistan, as well as the 
Middle East, southern Africa and Cam- 
bodia, and other areas where conflict 
has brought tension to our relations 
with the Soviet Union. As the Wash- 
ington summit joint statement presents 
it, our objective in the U.S. -Soviet di- 
alogue on regional issues is "to help the 
parties to regional conflicts find peace- 
ful solutions that advance their inde- 
pendence, freedom and security." 
Assistant Secretary of State Crocker 
[Assistant Secretary for African Affairs 
Chester A. Crocker] and Soviet Deputy 
Foreign Minister Adamishin will meet 
again before the summit to discuss 
southern Africa. 

Recently the Soviets have been 
willing to engage in discussion of hu- 
man rights issues. Since the beginning 
of the summit process in Geneva in 
1985, we have seen the resolution of 
many individual cases, some well- 
known, others not. We have seen, from 
the 1985 starting point, substantial in- 
crease in emigration. As of today, the 
monthly rates are well over 2,000 for 
ethnic Germans, over 1,000 Armenians, 
and about 1,000 Soviet .Jews. 

But thousands more want to leave, 
and they are frustrated by an arbitrary 
system which does not, in practice, rec- 

ognize the basic right to emigrate, 
much moi'e needs to be done, for ir 
viduals and for categories (political 
tivists, religious believers, and 
psychiatric abuse) to remove the ar-l 
bitrariness. We are working for im-. 
provement in the institutions and 

A recent downturn on human 
rights issues, the arrests of Gri- 
goryants and Ayrikyan, is a curren' 
concern. We hope these reverses wi 
righted by the time of the summit. 

U.S. -Soviet exchanges have ex-; 
panded significantly. We'll continue 
pursue opportunities to broaden ouj 
knowledge of one another and brealt 
down old stereotypes. 

We are working on a number oli 
lateral agreements which would be 
signed during the Moscow summit, 
aim is to take advantage of oppor- 
tunities that exist to take mutual b« 
fit from areas of shared interest. 

The Alliance 

We could not have gotten where w» 
with the Soviets without a strong m 
liance, and a strong alliance consenn 
behind us. When I last appeared bw 
this subcommittee, I shared with y 
some of the hopes we had for the IV ch 
NATO summit. Let me now say a \ fd_ 
about the actual results. 

I was taken, as I know the Sec 
tary was, by the sense of common ] 
pose which we encountered in Brus» 
The INF experience was really a vtt 
important lesson for all of us on thw 
need to stick to basic principles. It 
the determination of the allies to mi 
tain our deterrent strength, while 
the same time remaining open to di* 
alogue, which brought the Soviets 1 
the bargaining table and made the 
Treaty possible. The summit declar 
tion made it clear that this will ren n 
our approach to the East. 

The declaration was equally cle 
regarding the alliance commitment 
basic human rights. We will contimto 
press the Soviets and the other cou 
tries of the East to remove the bar:'rs 
to freedom which currently charac- 
terize life in those societies. In thatfe 
gard, we and the allies are committ 
to a balanced outcome to the CSCE 
review conference in Vienna — and 
are willing to remain at the table u 
we get one. 

The NATO summit also produc' '< 
constructive statement on conventic al 
defense. On this score, we and the - 



Department of State Bulletin/July '86 


icreed that Soviet conventional 
;iiy superiority is the most de- 
lizing factor in the Atlantic se- 
> equation. We have challenged the 
ts to work with us in Vienna to 
1 a mandate for negotiations on 
I iitional forces which would lead to 
ii' stable balance at lower and 
1 levels in Europe. We and the al- 
,\ ill not neglect ongoing efforts to 
ove our own conventional defense 
hilities while such negotiations are 

Dver the years, NATO has been 
ed with exceptional leaders. At 
lime 9-10 NATO ministerial in 
rill, we will be saying goodbye to 
n )l' them. Peter Carrington, Secre- 
,8) General for the last 4 years, will 
le loving on in July. He has done an 
- Ititely magnificent job at NATO in 
I tnric period of severe challenge and 
idi'dinary opportunity. Former Ger- 
Defense Minister Manfred 
iier will be taking over the reins at 
( I. We look forward to working as 
■ly with him as we have with Lord 
, iiigton. 

i Southern Flank: Maturing 
nerships and Base Negotiations 

-,- NATO's southern flank, we have 
iiiiiships with several allies eharac- 
e ,ed by maturing partnerships, with 
I : ige of deepening and broadening 
if In all of these the security rela- 
-hip and its contribution to NATO 
lulls remain important, even as it 
- account of changing times. In two 
iiies, as you know, base negotia- 
.1. ^ are in progress on our future se- 
X ty relationships. 

We are working toward the early 
liision of the negotiations with 
n. Working groups are continuing 
(liiir to negotiate final texts to re- 
!■ the old accord, which expired last 
k. Although our rights and priv- 
> remain protected for 1 year, we 
1 t(i wrap this up soon. Major ele- 
1^, such as continued use of Rota 
l>ase, Bardenas Reales bombing 
if. and other Spanish installations 
e aijreed last January. However, 
h work remains to be done to reach 
tisfactory conclusion. The new ac- 
I's longer 8-year term, an end to 
nity assistance programs, and plan- 
: fill- use of Spanish bases to rein- 
■!■ NATO in time of crisis or war, are 
iiajor improvements. We remain dis- 
iinted by the Spanish Government's 
ision that our F-16 Wing must leave 
■ 111 within 3 years. 

Visit of Finnish Prime IVIinister 

President Reagan welcomed Prime Minister Harri Holkeri to the White House on 
May 2, 1988, as part of the celebration of the Year of Friendship With Finland. The 
Prime Minister presented the President with a medal commemorating the 350th anni 
versary of the first Finnish settlement in America in what is now Wilmington, 

We appreciate the willingness of 
the Italian Government to consider the 
possibility of accepting the 401st Tac- 
tical Fighter Wing should NATO so rec- 
ommend. This is another example of 
Italy's broad range of support for West- 
ern security interests. The fate of the 
401st is up "to NATO. We have some 
important details yet to work out. But 
I am reasonably confident the unit can 
remain forward deployed under condi- 
tions acceptable to us and to Congress. 

Our current base agreement with 
Greece is terminable on December 20, 
1988. In accordance with its terms we 
expect the Greek Government will give 
the required notice of termination 5 
months before that date. We have be- 
gun negotiations for a new post-1988 
agreement. The last round was held 

here May 9-13. The negotiations con- 
tinue to be marked by orderly progress 
and a professional atmosphere. The sev- 
enth round of negotiations will take 
place in Athens the week of June 20. 

In February, as you know, the 
Turkish Government ratified the exten- 
sion of our 1980 Defense and Economic 
Cooperation Agreement through 1990. 
The continuing Modernization of Turk- 
ish forces and the further strengthen- 
ing of Turkish-American relations are 
important to the security of the United 
States, NATO, and Turkey. 

Additionally, as you know from Por- 
tuguese Prime Minister Cavaco Silva's 
visit here in February, the Portuguese 
have requested consultations on our re- 
lationship. The opening, procedural 
round took place in Lisbon on April 29. 

Ipartment of State Bulletin/July 1988 



Although a formal agenda has yet to be 
agreed upon, we expect the consulta- 
tions to review our bilateral cooperation 
efforts and explore ways to strengthen 
and broaden cooperation in light of po- 
litical and economic developments since 

While the talks will address se- 
curity cooperation matters, we also an- 
ticipate examining prospects for 
expanding nonsecurity aspects of our 
relationship. In requesting the con- 
sultations, Portuguese Prime Minister 
Cavaco Silva has stressed that Portugal 
does not intend to reduce U.S. access 
to mihtary facilities on Portuguese soil, 
but instead to identify and overcome 
difficulties in order to strengthen the 
relationship. We share that approach. 

Eastern Europe 

Change is the word today in Eastern 
Europe. Aging leaderships, a chronic 
sense of illegitimacy, and declining 
economies are creating a more fluid sit- 
uation. Pressure from the Soviet Union 
to become more efficient economically 
adds to the indigenous pressures for 
change, as does the example of Gor- 
bachev's reform program. 

East European regimes are fearful 
of rapid change and see openness as a 
threat to their stability. Most lead- 
erships want better functioning econo- 
mies, but not at the cost of losing 

The situation in Poland confirms 
the risks inherent in trying to move on 
economic reform without acquiring pub- 
lic support for the program. The strikes 
were spontaneous and indicated pent-up 
frustration with the austerity element 
of reform measures. The lesson to be 
learned is that the Government in Po- 
land must obtain popular support and 
must engage in a process of national 
dialogue, reconciliation, and broad re- 
form if economic reform is to have a 

We witness in Hungary an 
amazingly open debate on reform. The 
authorities are also fearful of public re- 
action to economic reforms which will 
bring austerity. The Hungarian Govern- 
ment too must seek popular support. 

Czechoslovakia and Bulgaria are 
making motions toward economic re- 
form but give no concrete indication of 
political reform. Romania rejects re- 
form altogether. 

The prospects for change in East- 
ern Europe present the United States 
with both challenges and opportunities. 

Our influence is limited, but there are 
new openings to promote Western val- 
ues and encourage genuine reform. We 
have seen change coming for 2 years 
now and have adopted a more active 
and flexible approach with change in 
mind. Deputy Secretary Whitehead 
[Deputy Secretary of State John C. 
Whitehead] has now visited the area 
four times and will be going again in 

With every country we have put in 
place a kind of "challenge program" of 
practical activities which would be to 
mutual benefit if our partners are will- 
ing to take our concerns into account. 
With most we have made some prog- 
ress. They have in general been recep- 
tive to this approach. The topics differ 
from country to country, but in every 
case they involve greater dialogue, 
gi'eater openness, more contacts, and 
more efficient means of solving 

While the countries of the region 
want political dialogue and cultural 
ties, and we mean to pursue these, 
what they want most from us is eco- 
nomic support. We are prepared to ex- 
pand economic and trade ties in 
nonstrategic areas, but we are not will- 
ing to let trade get out in front of the 
rest of our agenda, and we recognize 
Western economic support will be 
squandered without meaningful reform 
and support from the people. 

Our policy is well-suited to the 
challenge. Holding to a realistic, sus- 
tainable framework for relations, we 
will be able to weather the inevitable 
ups and downs while pursuing our in- 
terests in the area. This will require 
patience and a long-term perspective. 

OECD Ministerial 

Of late, we've talked together about 
NATO summits and U.S. -Soviet sum- 
mits. There is a third summit ahead of 
us on the calendar, which also touches 
on vital U.S. interests. As we speak. 
Secretaries Baker [Secretary of the 
Treasury James A. Baker, III], Verity 
[Secretary of Commerce F. William 
Verity], Lyng [Secretary of Agriculture 
Richard E. Lyng], Ambassador Yeutter 
[U.S. Trade Repre.sentative Clayton 
Yeutter [, Chairman Sprinkel [Chairman 
of the Council of Economic Advisers 
Beryl W. Sprinkel], and Deputy Secre- 
tary Whitehead are participating in the 
annual OECD [Organization for Eco- 
nomic Cooperation and Development] 
ministerial in Paris, a meeting which 
traditionally sets the stage for the eco- 

nomic summit, this year in Toronto 
June 19-21. As is evident from our ■ 
net-level delegation, this is an impo 
tant session. It is an opportunity fo 
the industrialized democracies to m 
a collective statement on the directi 
of the world economy and the polici 
we are prepared to pursue to meet 
day's economic challenges — and 

I believe we will find broad agi - 
ment among ministers on fundamer Is, 
OECD economies have proven resili 
after the October market crash and 
generally performing well, but we ( 
face important challenges — strengt i- 
ing our open trading system, reduc ; 
structural rigidities in and among c j 
economies and, for Europe, tacklin; 
high levels of unemployment. Thesf 
two issues are closely tied and the It- 
age is increasingly recognized by o 
European partners. 

There is less consensus when vi 
move to the specifics of trade and i 
culture. The U.S. is seeking in Par a 
strong impetus for progress at the d- 
term review of the GATT [General 
Agreement on Tariffs and Trade] I • 
guay Round, scheduled for Decemt in 
Montreal. At the top of our agenda 
long-term, market-oriented agricul 'al 
reform, which is essential if we are ■ 
end costly and inefficient farm pro 
grams and eliminate constant debil t- 
ing trade disputes with Europe. Oi 
partners take a much more cautiou p- 
proach, but I believe we will close ; 
meeting tomorrow with a strengthi 'd 
commitment to concrete results in 


'The complete transcript of the he ■ 
ings will be published by the committi 
and will be available from the Superin id- 
ent of Documents, U.S. Government I it- 
ing Office, Washington, D.C. 20402. ■' 


Department of State Bulletin/July 

M\TO Nuclear Planning 
Soup Meets in Brussels 


.The Nuclear Planning Group of 

lnMorth Atlantic Treaty Organization 

\ TO) met in Brussels April 27-28, 

The United States was repre- 

,,l hi/ Secretary of Defense Frank 

'iirlKcci III. Following is the final 

. Ill unique issued on April 28. 

NATO Nuclear Planning Group (NPG) 
111 ministerial session at NATO head- 
•. IS, Brussels on 27th and 28th April, 
I. I'land attended as an observer We 
■.(1 a variety of security matters per- 
'o NATO's nuclear forces, such as 
arms control negotiations, the im- 
mis of the INF [Intermediate-Range 
, ar Forces] Treaty, the status of im- 
intation of the 1983 Montebello deci- 
thf activities of several study groups 
luture NPG work. 

I (Hir discussions were pursued in the 
xt (if the commitments expressed in 
iiclaration of the NATO Summit of 
' l!iS8. The Heads of State and Gov- 
! of the Alliance noted that, while 
III' encouraging signs of changes in 
"licies of the Soviet Union and some 
. alhes, they had witnessed no relaxa- 
"!' the military effort pursued for 
- liy the Soviet Union and that this 
. i\e force, much greater than required 
iefenee, constituted a fundamental 
w ce of tension between East and West. 
n ' reaffirmed the long-standing Alliance 
t) Tiitment to a balanced security policy 
p iding both the strategy of deterrence, 
-^ d on adequate military strength, and 
so tractive dialogue and cooperation with 
th East, of which arms control is an inte- 

gral part. They also expressed their deter- 
mination to ensure the continued viability, 
credibility and effectiveness of an appropri- 
ate mix of conventional and nuclear forces, 
including nuclear forces in Europe, which 
will continue to be kept up-to-date where 

3. For the foreseeable future nuclear 
forces will continue to play an integral role 
in providing for deterrence against all 
forms of aggression, and their presence in 
Europe is therefore essential. We recalled 
the framework established in Montebello in 
1983 to maintain a credible nuclear deter- 
rent posture at the minimum necessary 
level of weapons. This has allowed us to 
reduce the number of NATO's nuclear 
weapons to the lowest level in twenty 
years. At this meeting, we have reviewed 
and re-validated this framework, taking 
into account our security requirements, 
arms control developments and the for- 
midable array of capabilities deployed by 
the Warsaw Pact. We have confirmed that 
the forces remaining after the INF Treaty 
must be kept survivable, responsive and 
effective, and structured in an adequate 
and balanced way. In that regard, we re- 
affirmed our continuing support for na- 
tional efforts to meet requirements 
stemming from Montebello. We also en- 
dorsed our step-by-step approach towards 
the measures necessary to achieve our ob- 
jectives and have provided further guid- 
ance on the way ahead. This ongoing 
process will continue to be pursued in ac- 
cordance with our comprehensive and inte- 
grated concept for security and arms 
control as it is further developed. This will 
in no way undercut the real reduction in 

NATO's nuclear weapons resulting from 
the implementation of the INF agreement. 
4. The recently concluded INF agree- 
ment between the United States and the 
Soviet Union is a milestone in our efforts 
to achieve a more secure peace at lower 
levels of arms. The 
solidarity and determination of the 
Alliance members have made the 
achievement of this long-standing NATO 
arms control objective possible. We looked 
forward to the early entry into force of this 
agreement. But, while eliminating an en- 
tire class of nuclear weapons, it will not 
prevent the Soviet Union from continuing 
its evident force modernization and im- 
provement efforts which build upon its ad- 
vantages in other areas, including 
conventional and chemical and those nu- 
clear forces not covered by the agreement. 
We nevertheless expressed the hope that 
this treaty indicates a fundamental and 
lasting change in Soviet policies towards a 
constructive and more stable political as 
well as military situation between East and 
West. In that connection, we fully support 
the United States position in the START 
[strategic arms reduction] negotiations 
aiming at a 50% 

reduction in the strategic nuclear 
arsenals of the United States and the So- 
viet Union and would welcome rapid pro- 
gress in that area. 

5. We accepted with pleasure the invi- 
tation of The Netherlands Government to 
hold our next NPG ministerial meeting in 
The Netherlands in Autumn 1988. 

6. Greece has expressed its 
views in a statement included in the 
minutes. ■ 

irtment of State Bulletin/July 1988 



FY 1989 Request 

for Foreign Assistance Programs 

by Alan Woods 

Statement before the Subcommittee 
on Foreign Operations of the Senate 
Appropriations Committee on April 26, 
1988. Mr. Woods is Acting Director of 
the International Development Cooper- 
ation Agency (IDC A) and Admiyi- 
istrator of the Agency for International 
Development (AID).^ 

It is a pleasure to appear before you to 
present the Administrations FY (fiscal 
year) 1989 proposed program for for- 
eign economic assistance. 

The overall fiscal framework estab- 
lished by the budget summit in 
November has challenged us to formu- 
late a budget request that will meet 
our country's highest priority foreign 
policy and economic assistance objec- 
tives with extremely limited resources. 
Because of these fiscal limitations, our 
FY 1989 request is essentially straight- 
lined from FY 1988. 

A combination of critical foreign 
policy needs that must be met through 
the foreign assistance budget, changing 
country requirements, and severely lim- 
ited budgetary resources demands that 
we look very carefully at our whole pro- 
gram to ensure that we are pursuing 
our objectives in the most effective 

Foreign aid is critical to the 
achievement of U.S. foreign policy ob- 
jectives — objectives which are inex- 
tricably tied to the economic health of 
our country. The economic growth and 
development of other nations is clearly 
in the interest of the United States — 
just as it is in the national interest of 
the countries to which we provide as- 
.sistance. Domestically, however, these 
linkages often are understood poorly, 
particularly in times of overall budget 

Benefits to the United States 

Political stability based on economic 
stability in, for example, the Middle 
East and Central America is basic to 
U.S. national security interests. With- 
out U.S. assistance, the prospects are 
grim for economic growth in many 
Third World countries that are in- 
creasingly important to us politically 
and as trading partners. 

The returns on U.S. investments in 
the economic growth of other countries 
are demonstrable. Some of this invest- 
ment began 40 years ago. Today, West- 
ern Europe and Japan, helped by the 
United States following World War II, 
are economically sound — they are our 
allies — and they are also leading con- 
sumers of U.S. exports. 

Dramatic progress has also been 
made by early recipients of U.S. eco- 
nomic assistance that began about 25 
years ago. Korea, Tkiwan, Brazil, and 
Greece are examples. Many countries 
that received U.S. assistance when 
they were "developing" are now "newly 
industrialized." As such they have be- 
come important trading partners of de- 
veloped countries and they are also in a 
position to help other less developed 
countries (LDCs). 

Our foreign aid investments over 
the past 25 years have resulted in sig- 
nificant economic benefits to the United 

• Tkken together the developing 
and newly industrialized countries pur- 
chase more than 35% of all U.S. 

• For 1987, exports to these nations 
were worth $81.6 billion to the United 

• Our sales of manufactured goods 
to developing nations are impressive. In 
1987, 34% of our earnings in America's 
top export line — machinery and trans- 
port equipment — came from sales to 
developing countries. 

High rates of economic growth in 
other countries for the last several dec- 
ades have benefited U.S. farmers. De- 
veloping countries' agricultural imports 
from the United States increased 
15-fold from 1970 to 1981. 

• Of the 50 largest buyers of U.S. 
farm goods, 21 are countries that used 
to receive PL 480 food aid from the 
United States. 

• Korea now buys as much from 
U.S. farmers in 1 year as it received in 
its 25 years as a PL 480 recipient. 

Benefits to LDCs 

U.S. foreign aid brings substantial im- 
provements in the quality of life in 
LDCs. As a result, our assistance is 



one of the most important means of i 
promoting the humanitarian ideals i 
democratic values of the American 

Without our food aid, an estima 
20 million people would have died ini 
sub-Saharan Africa in one of the wo 
droughts in history. Americans are 
justly proud of their role in this eni' 
gency relief, and we will continue tc 
respond to such needs in the future 
The challenge from this experience 
help countries develop to the point 
where they can survive their short- 
term crises and resume strategies 
aimed at growth and development 
rather than continue to depend on 
amounts of external relief. 

There are many sustained impri 
ments in the quality of life in LDCsi 
with which we are proud to have bi 

• Substantial progress toward r 
ducing world poverty and improving ie 
basic conditions of life. Between 19( 
and the early 1980s GNP [gross na- 
tional product] per capita in develo] g 
countries, excluding China and the jh 
income oil exporters, rose by 75%. 

• The reduction of child mortali 
by one half: 

• The elimination of smallpox fi i 
the world: 

• The entrance into primary scl )l 
of the majority of children in develc ig 

• A 10-20 year increase in life e 
pectancy in the Third World; 

• The ability of many couples 
throughout developing countries to 1- 
untarily plan the number and spacinof 
their children. 

A Strategy for Economic 

A strategy for broad-based and sus, 
tainable economic development inchps 
a number of critical and mutually n i- 
forcing elements: a political and ecc 
nomic climate in which economic 
gi-owth can occur: a vital private seor; 
the human capital necessary for prt Ji' 
tivity; institutional structures that |11 
sustain growth and broaden partici- 
tion of the people; access to technolo 
with which to improve productivity 
health, and communications; ami, a a- 
tional capacity to manage rather thi 


Department of State Bulletin/July |88i 


ly exploit resources — financial, 
ral, and human. 

1 would like to cite some successful 
ipk's of AID'S strategy upon which 
itiiul to build in the future. 

Economic Growth. The first ele- 
ne; in our strategy is a sound eco- 
loi c policy climate to stimulate 
Tolh and promote efficient resource 
■:( Many economic problems in devel- 
j iduntries result from economies 
■ullfd by the government and 
iUmI from the operation of market 
s. Through experience, AID has 
itit'd and targeted for change spe- 
.lolieies which are detrimental to 
th in developing countries. 

• I'rice control policies, protec- 

st trade regimes, and regulations 
limit broad participation in the 
(imy or shield government-owned 
;n rprises from private sector com- 
)e ion all work against the nations 
- aiiply them— while offering these 
ms the illusion of being in control 
eir economic destiny. 

• Instead of harnessing the en- 

f< reneurial energies of their people, 
nf these nations are driving their 
■eneurs underground, as a recent 
111 Peru and anecdotal informa- 
fnim many other countries attests. 

The trends toward economic policy 
« -m have already been embraced by 
!0 ? developing countries, for example 
ria, without donor involvement. 
\er the transition to a more ap- 
)i a-iale economic policy environment 
re :ires difficult decisions that many 
n rnments predictably resist. Recog- 
it; this, the United States and other 
ii-s must include in their assistance 
tegies measures to ameliorate the 
t-term consequences of policy re- 
1. while at the same time improving 
indigenous capacity to analyze pol- 
'idblems and alternatives and to 
ai;e the reform program. Our Af- 
11 economic policy reform program 
ib tempting to do just that in several 
c( itries, by providing temporary bal- 
ii ? of payments and budgetary sup- 
along with technical assistance and 
ning in support of significant reform 

Substantial progress has been 
le in adopting economic policy and 
' itutional changes necessary for 
\\ th in a number of countries includ- 
Bangladesh, the Dominican Re- 
lic, Costa Rica, Ecuador, 
itemala, the Gambia, Ghana, Ja- 
i-a, Indonesia, Tunisia, Senegal, 
:er, Swaziland, and Mauritius. 

In Bangladesh, policy reforms have 
stimulated economic growth while also 
meeting the needs of the poor. For ex- 
ample, PL 480 Title III food aid has 
been used to elicit important opera- 
tional and policy changes that encour- 
age farmer production. Food subsidies 
to segments of the population have also 
been cut by up to 75%. Buffer stocks 
and distribution management have been 
used to stabilize prices and make food 
more affordable to the rural poor. Prior 
to the recent floods, wheat production 
in Bangladesh was dramatically in- 
creased and near self-sufficiency in rice 
production had been achieved. 

As a result of other reforms, asso- 
ciated with the Fertilizer Distribution 
Improvement Project, farmers in 
Bangladesh are now paying more rea- 
sonable prices and using more fertilizer 
to produce more food and increase their 
incomes. When AID-sponsored analysis 
revealed that fertilizer subsidies and 
government marketing costs threatened 
to absorb the country's entire agri- 
culture budget, Bangladesh officials in- 
stituted reforms to encourage 
participation by private fertilizer re- 
tailers. These private entrepreneurs 
significantly expanded the reach of the 
distribution system at competitive 

Guatemala now has an impressive 
record of successful economic reforms 
and an improved business climate. The 
country is on a tenuous but credible 
path back to sustainable, positive eco- 
nomic growth rates as a result of these 
reforms. Inflation has been brought 
down from more than 30% in late 1986 
to under 10% in 1987. Foreign debt re- 
payments have been kept current. The 
exchange rate has remained stable for 
more than 15 months. From January to 
June 1987, foreign investment was up 
by $90 million over the same period in 
1986. The Bank of Guatemala reports a 
2.5% growth rate for 1987— only the 
second positive real GDP [gross domes- 
tic product] growth rate in 5 years. 

Private Enterprise. Most govern- 
ments in all parts of the woHd have 
begun to realize that their public re- 
sources will never be adequate to pro- 
vide all the goods people need or the 
kind of income and employment oppor- 
tunities that are key to sustained eco- 
nomic growth. Policy changes that open 
up new opportunities for the operation 
of market forces both domestically and 
internationally are essential to provide 
the climate within which to increase the 
private sector involvement in develop- 
ment. In addition to encouraging such 

policy reforms, AID is working directly 
with the private sector to produce in- 
creased incomes, self-sustained employ- 
ment, and higher standards of living. 
Our commitment to this focus is ex- 
emplified by a wide range of activities 
in such areas as investment and export 
promotion, management and skills 
training, credit and financial markets 
development, and technology transfer. 
Jamaica has made major strides in 
restructuring its economy for growth, 
following 7 consecutive years of eco- 
nomic decline. Major government enter- 
prises have been sold to the private 
sector, eliminating a major drain on the 
government budget, and the tax system 
has been greatly improved. As a result, 
the economy is now recovering, and un- 
employment among job seekers has 
fallen "below 10% for the first time in 
more than a decade. 

Human Capital. The beneficiaries 
of economic growth are people. Those 
same people are also the human capital 
for that economic growth. The economic 
and political chmate must engage the 
energies of people and offer productive 
employment opportunities that allow in- 
dividuals the means to contribute and 
to provide for themselves and their 
families. Without education, skills, and 
technology, people in developing coun- 
tries are handicapped in their attempts 
to improve their own lives and to parti- 
cipate in and contribute to the economic 
growth of their societies. AID projects 
to raise the level and quality of educa- 
tion, health, and participation in soci- 
ety are a direct investment in the 
human capital of a country and an 
important part of its overall economic 
growth strategy. Countries such as Jor- 
dan, Tunisia, Taiwan, and many others 
have grown exceptionally rapid over the 
past three decades, meeting the needs 
of their citizens much more effectively 
and equitably than most of their neigh- 
bors. They have done so by investing in 
strategies which improved health and 
education and relied on relatively free 
markets and private initiatives. 

AID has given particular impor- 
tance to education in areas such as 
Central America and the Caribbean. 
Though many qualitative and admin- 
istrative problems remain, most coun- 
tries have made major progress toward 
full enrollment. In Honduras, El Sal- 
vador, and Costa Rica, for example, 
most children are now enrolled and al- 
most 60% complete primary school. 

Apartment of State Bulletin/July 1988 



Botswana, an example from a very 
different part of the world, has moved 
rapidly from few educated people at in- 
dependence to a situation today in 
which most children can expect to com- 
plete at least primary school and plan- 
ners are beginning to worry about how 
to match school graduates with avail- 
able jobs. 

Institutional Structures. Our aid 

is also directed toward strengthening 
the institutional structures that are crit- 
ical to sustainable development and 
democratic processes in developing 

In some countries, such as Kenya 
and Indonesia, we are working to liber- 
alize the financial system and 
strengthen the capital markets and 
stock exchanges. In many of the Carib- 
bean and Central American countries, 
we are supporting business and trade 
associations that help the private sector 
present its views to host governments. 
We have also provided funding for trade 
and investment promotion groups that 
promote trade between U.S. and devel- 
oping country private enterprises. 

The rural savings project, initiated 
in 1982 to address credit constraints to 
small farm producers, has shown that 
the mobilization of local savings could 
not only strengthen rural financial in- 
stitutions, but also provide local, and 
therefore, sustainable funds for lend- 
ing. Morever, transaction costs to farm- 
ers distant from banks were too high, 
due to the expenses of transportation, 
lodging, and time lost from work — all 
burdens required of farmers in order to 
secure a loan. The project recom- 
mended approaches that capitalized on 
local informal institutions, connecting 
them with a second tier of credit 
unions, thus reducing costs and increas- 
ing reliability of credit delivery to re- 
mote small farmers. These approaches 
have proved successful in locations as 
diverse as Honduras, Bangladesh, and 

Institutional strengthening has 
been successful in other arenas as well, 
such as the activities to improve demo- 
cratic participation in the Central 
American countries of Guatemala, Hon- 
duras, El Salvador, and Costa Rica. 
These efforts are intended to achieve 
economic stability and renewed long- 
term growth, to promote "broader par- 
ticipation in development, and to 
strengthen democratic institutions and 
respect for human rights, thereby con- 
solidating the region's progress toward 
democracy and helping to deal with the 
underlying sources of social and politi- 
cal unrest. 

Changes become permanent only 
when a broad segment of society values 
them and benefits from them. That is 
why we work so hard to ensure that 
the people who need to be involved in 
creating change are actually involved. 
We know that in many situations, it is 
the women of a country who play a crit- 
ical role in institutionalizing new behav- 
ior — on the farm and in businesses as 
well as in the family. Our programs 
must reach them and engage their 

Technology. Through our as- 
sistance programs, we are making 
available and more accessible tech- 
nology, developed by the United States, 
that can make a critical difference in 
productivity, health, and communica- 
tions. The development of a malaria 
vaccine, the institutionalization of the 
use of oral rehydration therapy (ORT) 
for treating diarrheal disease, "the 
green revolution" in agriculture, and 
access to education through radio in re- 
mote village areas evidence the impor- 
tance of technology to the survival and 
quality of life of millions. 

The technology for oral rehydration 
has been successfully institutionalized 
in Egypt with AID assistance. In 1979, 
AID undertook an experimental ORT 
progi-am that cut the infant mortality 
rate by 40% in just a few months. A 
subsequent $36 million AID project be- 
gun in 1981 and extended through 1990 
has helped to extend the program na- 
tionwide. The oral rehydration salts are 
packaged by a private Egyptian firm; 
60% of the packets are marketed 
through private pharmacies and over 
90%. of pharmacies now have oral re- 
hydration salts available for sale. 

Capacity to Manage Natural Re- 
sources. Most developing countries de- 
pend principally on their renewable 
natural resource endowments for eco- 
nomic growth, and will continue to do 
so for the foreseeable future. Yet the 
resources essential to economic growth 
in developing countries are thi-eatened 
by rapid population growth; extreme 
poverty; resource tenure problems; pol- 
lution of the air, water and soil; short- 
sighted economic policies; and economic 
and political instability. The agency's 
central environmental objective is to 
promote environmentally sound, long- 
term economic growth by assisting de- 
veloping countries to conserve and pro- 
tect the environment and manage their 
exploited resources for sustainable 

A salient example of the types 
activities supported by AID to achi r 
this objective is the Regional Inte- 
grated Pest Management Project in 
Central America. This project strei li- 
ens national and regional capabiliti( 
for integrated pest management, tl 
control of pests that destroy crops 
using a variety of techniques that n i- 
mize application of chemical pesticii ;. 
As a result farmers can cut produc n 
costs while maintaining or increasii 
yields. In addition to increasing inc le 
and improving sustainability, a redi 
tion in pesticide use also has the pc n- 
tial to improve local water quality ; 
improve health by reducing exposu to 

This integrated strategy for au 
ing broad-based and sustainable ec 
nomic growth and improving the qi it\ 
of life in developing countries is re- 
flected in our FY 1989 request. 

FY 1989 Request 

For the FY 1989 bilateral economic ■ 
sistance programs, AID is request! 
an authorization and appropriation 
$5,485,651,000 for development as- 
sistance and the economic support id 

The FY 1989 request reflects 
agreement between the Administn in 
and the Congi-ess on overall levels 
in the bipartisan budget summit, i 
though essentially straightlined, tl 
FY 1989 budget reflects slight in- 
creases in ESF, the education and - 
man resources account (Section lOt 
and the private sector, environmen .no 
energy (Section 106) account. Criti 
ESF funds in a number of base rig • 
and Caribbean, Central American, id 
Andean countries were cut or elim 
nated in FY 1988. Some funding hi 
been restored for the Caribbean ar 
Andean countries in the FY 1989 r 
quest. The education and 106 accoi is 
are particularly important to our a lit) 
to continue certain priorities whicl he 
Congress shares — in the case of ed a- 
tion; basic education efforts and pf ici 
pant and regional training; in the c e 
of Section 106 — to permit continue( 
support of PVOs [private volunteei r- 
ganizations], funding for energy, eii- 
ronment, and private sector 
development activities. 

The FY 1989 request reflects itig- 
nificant effort on our part to take Hy 
into account congressional concern is 
to the appropriate mix of program; 
within that agreed ceiling, as refleed 


Department of State Bulietin/JulyiS 


he FY 1988 continuing resolution, 
ivsulting budget request for FY 
I, we hope, will persuade Congress 
!-.i\ide the Administration a greater 
; \i' of flexibility in the programing 
jf inds in FY 1989 as a result of agree- 
m it on the basic priorities of the for- 
'i I assistance program. 

Jielopment Fund for Africa 

F( FY 1989, AID is requesting $510 
"inn for the Development Fund for 
<a (DFA). In FY 1988, Congress 
nved the Administration's request 
I sjjecial funding mechanism for 
. Saharan Africa to replace the tradi- 
:i' al functional account divisions (as 
wj as the Sahel Development Pi'ogram 
¥. lint) and provide for greater flexi- 
\ in addressing the complex prob- 
• that continue to beset that 
iiu-nt. We believe that this fund 
It also be a forerunner of the future 
:: etion for AID overall. 

With the establishment of the De- 
v( pment Fund for Africa, AID has 
1i latitude it needs for a broad-based 
?i vth strategy. We intend to use this 
til ibility to make our program more 
p< ormance based by shifting re- 
3( 'ces to countries and programs 
w re results are being achieved and to 
in grate nonproject and project re- 
S( -ces in a more coherent package. In 
at ffort to prioritize, the FY 1989 re- 
qi st is based on a further shift in re- 
3( -ces toward the more populous 
c( itries, the poorer countries and 
tl ;e that are most committed to creat- 
in an environment in which growth 
ai development can take place. 

er Functional Development 
A istance 

T agency's FY 1989 request for the 
fi.;tional development assistance pro- 
T m outside of Africa totals $1,140 bil- 
The comparable FY 1988 appro- 
ited level is $1,161 biUion. 

Aiculture, Rural Development, 
«l Nutrition 

f. appropriation of $461,062,000 (not 
i) uding agriculture activities funded 
D ler the Development Fund for Af- 

i lis requested in FY 1989 for the 
' Kulture account compared to an FY 
'i'^ appropriation of $488,715,000. 
^ 3's FY 1989 agriculture, rural devel- 
' nent, and nutrition program focuses 

increasing the incomes of the poor 

majority and assuring the availability of 
food, while maintaining the natural re- 
source base. This is based on recogni- 
tion that efforts to address virtually all 
development problems, including hun- 
ger, infant mortality, disease, illiteracy, 
and inadequate shelter will be frus- 
trated unless rural incomes increase 
sufficiently to stimulate sustained eco- 
nomic growth. Activities are designed 
to: increase farm and nonfarm employ- 
ment and income; promote private agri- 
cultural marketing and distribution 
systems; develop sustainable improved 
agricultural technologies; encourage 
market-oriented, efficient low-cost pro- 
duction of food and other crops on small 
family farms; provide targeted food as- 
sistance to children and women in low 
income families; and incorporate sound 
nutritional and food consumption princi- 
ples into the design and implementation 
of agricultural and rural development 

Examples of activities we expect to 
fund in FY 1989 in Asia and the Near 
East and Latin America and the Carib- 
bean include: agricultural research in 
Bangladesh ($3 million), Pakistan ($5 
million). El Salvador ($5 million), and 
Honduras ($4.8 million); irrigation man- 
agement and training in India ($3 mil- 
lion) and Pakistan ($5 million); and 
forestry and watershed management in 
India ($5.6 million), Costa Rica ($5 mil- 
lion), and Haiti ($5.3 million). 

Population Planning 

AID is requesting $190,940,000 for pop- 
ulation assistance in FY 1989, not in- 
cluding population activities funded 
under the Development Fund for Af- 
rica. This compares to $197,940,000 ap- 
propriated for the population account in 
FY 1988. 

Initial estimates for FY 1989 indi- 
cate that 80% of the population budget 
will be directed to family planning serv- 
ices; 89c is planned for data collection 
and policy analysis, 6% for operational 
and biomedical research, and 6% for 
specific information and training 

In FY 1989, AID's program will as- 
sist in improving the management and 
cost-effectiveness of public and PVO 
programs. We will continue to pursue 
private sector approaches to voluntary 
family planning, including assisting 
firms to add family planning to the 
health services offered to their employ- 
ees. Natural family planning, the trans- 
fer of policy analysis technology to 

population and development planners, 
and the use of mass media channels to 
communicate messages about i-esponsi- 
ble parenthood remain an important 
part of the portfolio. As in the past, no 
AID funds will be provided to foreign 
nongovernmental organizations that 
promote or perform abortions with 
funds from any source or to organiza- 
tions that support or participate in the 
management of programs of coercive 
abortion or involuntary sterilization. 


For FY 1989, AID requests a total of 
$210 million in funding for health-re- 
lated activities under three separate ac- 
counts. Of this amount $114,000,000 is 
in the health account. This amount is 
exclusive of health activities funded un- 
der the Development Fund for Africa. 
This compares to $119,000,000 appropri- 
ated in FY 1988. 

In FY 1989, AID will support ma- 
jor health projects which contain child 
survival components in Bangladesh, 
Yemen, Nepal, and Honduras. The proj- 
ect in Honduras will also fund rural 
water and sanitation activities. In the 
Dominican Republic, health funds will 
be used for a private sector health care 
project to create a private sector deliv- 
ery system that provides basic health 
services, including child survival 

Centrally funded health projects 
include the Water and Sanitation for 
Health Project and the Vector Biology 
and Control Project. Health funds will 
support research on development and 
field testing of a malaria vaccine; on 
diarrheal disease; on tropical diseases, 
including onchocerciasis; on aging in 
LDCs; and operations research to im- 
prove management and cost effective- 
ness of child survival and other health 

Child Survival Fund 

AID is requesting $66,000,000 for the 
Child Survival Fund in FY 1989, the 
same level as appropriated in FY 1988. 
The Child Survival Fund is used for 
oral rehydration therapy, immunization, 
birth spacing, and focused child nutri- 
tion activities including breastfeeding. 
In addition, other interventions that 
contribute substantially to child sur- 
vival in some countries, such as treat- 
ment of malaria and acute respiratory 
infection in young children, are sup- 
ported with Child Survival funds. 


partment of State Bulletin/July 1988 



In FY 1989, AID will support a 
competitive grants program for U.S.- 
based PVOs to undertake child survival 
projects in child survival emphasis 
countries. Additional funds will support 
the Rotary International PolioPlus im- 
munization campaign. We will continue 
to support the Latin America and Car- 
ibbean regional effort to strengthen im- 
munization programs, in cooperation 
with other donors (PAHO [Pan Ameri- 
can Health Organization], UNICEF 
[UN Children's Fund], Rotary, and the 
Inter-American Development Bank). 

Several major centrally funded ac- 
tivities will support child survival 
efforts worldwide. The Technology for 
Primary Health Care Project will pro- 
vide technical assistance and logistical 
and financial support for ORT and im- 
munization programs, as well as as- 
sistance in health care financing. Child 
Survival funds will support major bilat- 
eral projects in several child survival 
emphasis countries in FY 1989, includ- 
ing Pakistan, India, Bangladesh, Peru, 
and Honduras. 

AIDS Prevention and Control 

For AIDS [Acquired Immune Defi- 
ciency Syndrome] prevention and con- 
trol $30 million is requested. This 
funding will support the WHO [World 
Health Organization] global program 
for AIDS ($15 million); funding for 
Latin America and the Caribbean ($3 
million); and centrally funded AIDS 
projects at $12 million. Funds will be 
used for the global AIDS technical sup- 
port project to provide short- and long- 
term technical assistance, training, op- 
erations research and commodities, and 
equipment to countries on request in 
Africa, Asia and the Near East, and 
Latin America and the Caribbean. Con- 
tinuing database and modeling ac- 
tivities and condoms for AIDS 
prevention will also be supported. Di- 
rect bilateral and regional AIDS pre- 
vention and control activities will 
continue to be supported under the De- 
velopment Fund for Africa. 

Education and Human Resources 

AID is requesting $129, .541, 000 for FY 
1989 education and human resources 
programs, exclusive of those funded un- 
der the Development I"\ind for Africa. 
This compares to $117,000,000 appropri- 
ated for this account in FY 1988. 

About 40*?^ of the request will sup- 
port training for administrators, man- 
agers, scientists, and technicians. 

About 30% supports elementary, sec- 
ondary, and adult education; 9% voca- 
tional-technical training; and 7% labor 
programs. The balance supports plan- 
ning and research, PVO programs, 
women-in-development, and other hu- 
man resources development activities. 
About 53% of the FY 1989 request 
will support programs in Latin America 
and the Caribbean, where there is a 
major emphasis on participant training 
as well as attention to strengthening 
basic schooling and skills training sys- 
tems. Appro.ximately 39% will support 
participant training, education, labor, 
and PVO activities in Asia and the 
Near East. The remainder of the re- 
quest, about 8%, will provide central 
bureau support for research and de- 
velopment, evaluations, administra- 
tion of participant training, women-in- 
development, and PVO programs. 

Private Sector, Environment, 
and Energy 

AID is requesting $135,957,000 in FY 
1989 for the 106 Account, not including 
$8,662,000 for the Office of the Science 
Advisor. This compares to $129,371,000 
appropriated in FY 1988. Neither year 
includes programs funded under the 
Development Fund for Africa. 

The 106 Account provides as- 
sistance to stimulate sustained eco- 
nomic growth by supporting the 
development of market-oriented econo- 
mies and by mobilizing developing 
country human and capital resources. 
This account provides funding for ac- 
tivities designed to encourage the adop- 
tion of sound economic policies which 
stimulate private enterprise, mobilize 
domestic and foreign capital, and en- 
courage the privatization of production 
and service activities which can most 
efficiently be performed outside of the 
public sector. It also assists countries 
in meeting their long-term energy 
needs and in addressing envii-onmental 
problems in urban areas. The fle.xibility 
of 106 Account funds has been invalu- 
able to aid's privatization initiative. 
The presence of an economic and politi- 
cal climate that encourages individual 
productivity, human rights, and the 
management of natural resources is es- 
sential to long-term sustainable eco- 
nomic growth. 

Unlike the other more narrowly 
focused functional accounts which are 
designed to address specific develop- 
ment problems related to population, 
health, agriculture, or education, the 
106 Account supports programs that 

provide the foundation required to su 
tain and expand the output of goods 
and services in all economic social sei 
tors. Thus, activities supported by tl 
106 Account complement the more ta; 
geted assistance provided by the oth( 
functional accounts. 

Specifically, categories of activiti 
funded under this account include: 

• Support for private enterprise i 
velopment and efforts to reform gov- 
ernment policies and institutions; 

• Research and technical assistari 
activities to alleviate energy con- 
straints to development; 

• The promotion of human rightsi 
and democratic initiatives; 

• Support for the activities of pri* 
vate and voluntary organizations and} 
cooperatives; and 

• Environmental activities in urM 

These activities together with 
funding for policy reform efforts andi 
the program development and evaluaij 
tion activities of regional bureaus an 
field missions account for about 80% 
funding in this account. 

In addition to supporting econoi 
and political policies, the 106 Accour 
also assists countries to meet their 
long-term energy needs. Energy is eJM 
sential for development. Developing 
countries cannot expand their econO' 
mies without adequate, affordable, i 
reliable supplies of energy services. 
Agriculture, industry, transportatioi 
commercial activities, and the provis 
of many social services depend on ei 
ergy. Without increases in energy s{ 
ices, political and economic stability 
threatened, private entrepreneurshij 
lags, and the development engine slit 

The 106 Account makes a small 
significant contribution to AID's env 
ronmental activities through suppor 
urban environmental activities. Eco- 
nomic growth is inextricably linked 
with a country's natural resource has 
and environment. Protecting the env 
ronment and managing natural re 
sources assure a supply of raw 
materials and the maintenance of en 
ronmental systems that are necessar 
for sustainable development. Activiti! 
funded through 106 help developing 
countries improve regulation of haz- 
ardous chemicals and promote indus-l 
trial health and safety. 


Department of State Bulletin/July 1'i^ 



Projects and activities which will 
■ecive funding from the 106 Account in 

'^1989 include an industrial produc- 
tfchnology project in the Domin- 

, iiepublic to expand the production 

A)bilities of small- and medium-sized 
•n rprises. The project will rely upon 

'• the International Executive Serv- 
ni'lis and commerical banks. In El 
tdor a privatization project will 
id;,' technical assistance, training, 
I it her support to the Government of 
alvador to help it in the privatiza- 
(if trovernment-owned enterprises. 
Rural Electrification Project con- 

I s to strengthen the institutional 
tichnical base needed to reach the 
n{ rural Central Americans who 
lack access to electricity. The En- 
I'lilicy Development and Conserva- 
I'l-dject will support prefeasibility 
ks in economically viable systems, 
as clean coal technology and en- 
rtficiency and will improve the 
I cement of environmental impacts 
risks associated with energy pro- 
inii. The Environmental Planning 
Miinagement Project strengthens 
apabilities of developing country 

! tut ions to better manage and con- 
f their natural resources for sus- 
ilile development. 

t nomic Support Fund 

Pi FY 1989, AID is requesting an ap- 
! iation of $3,281 billion for the eco- 
-upport fund. The request is up 
. .iightlv from the FY 1988 appro- 
pi ted level of $3,201 billion. The in- 
n ,se is necessary in view of serious 
we were forced to take in this ac- 
ii in FY 1988. In Central America, 
n aica, and the Dominican Republic 
w have restored support we were 
fc ed to eliminate in FY 1988 which 
hi funded economic reform, expansion 
o1 he private sector, and continued par- 
ti nation in the Caribbean Basin Initia- 
ti . Portugal and Turkev were cut in 
F 1988, and our FY 1989 budget in- 
dies minimum funds for these base 
nits countries. This request will in- 
ise funding for Andean countries to 
)iiit support for strugghng econo- 
- and to support narcotics control 
Its. Key elements of the FY 1989 
I I'equest include: continued efforts 
"liieve peace and stability in the 
Mlt East through economic aid for 
1 ael, Egypt, Jordan, the West Bank 
a}l Gaza, and regional cooperation ac- 
t ities among Israel, Egypt, and other 
lihhoring countries; economic as- 
aiice to base rights and military ac- 

cess countries such as the Philippines, 
Turkey, Portugal, and several in Africa; 
economic reform in the Dominican Re- 
public and Jamaica; assistance to Cen- 
tral American democracies for the 
achievement of economic stability and 
gi'owth and strengthening their demo- 
cratic institutions and respect of human 

Operating Expenses 

For FY 1989, AID requests 
$414,000,000 in new budget authority 
for its operating expense appropriation. 
This represents an increase of $8.0 mil- 
lion over the FY 1988 appropriation and 
a reduction of $12 million from the FY 
1988 request. The FY 1989 request in- 
cludes less than the amount necessary 
to cover inflation and the recent rapid 
increase in costs, especially in Africa, 
as a result of the declining value of the 
dollar. Currency devaluations have a 
major impact on our ability to cover the 
administrative costs of operating over- 
seas. AID is looking for ways to realize 
savings through management improve- 
ments and changes in the way the 
agency conducts its overseas program. 

The Challenge for the Future: 
An Agenda for the 1990s 

Despite striking progress by some 
countries, economic growth is stagnat- 
ing in many developing countries. In 
some countries the economic base is ac- 
tually deteriorating — and individual in- 
comes are declining — as a function of 
negative growth rates over the past 
5 to 10 years. Neither educated guesses 
nor straightline projections of past 
trends really tell us what will happen in 
the future. Nevertheless, projections 
can suggest quite vividly what could 
occur if existing trends persist. A con- 
tinuation of recent and current rates of 
economic growth in developing coun- 
tries will result in an even greater gap 
between their levels of income and 
those of developed countries. One thing 
is certain: without growth, the quality 
of life in developing countries is not 
going to improve on a sustainable basis. 

Targeted development assistance 
programs have helped to improve life 
expectancy in these situations, and to 
increase the likelihood that children 
will be protected against major diseases 
and have a minimal education. These 
gains are important, but in and of 
themselves, they are not enough and 
under stagnating or deteriorating eco- 
nomic conditions, they may not be 

Despite what we know about the 
common threads that tie together the 
economic growth and development ex- 
periences of diverse countries, and 
about what are the most important ele- 
ments of an economic growth strategy, 
there is much that we do not know. The 
critical point is that each country is 
unique and the type and timing of the 
interventions to implement a growth 
strategy must be tailor-made for each 
country situation. 

The country-by-country approach 
to development entails not only some 
risktaking and experimentation, but 
also flexibility in where, when, and 
what type of assistance we provide. 
Flexibility in our funding allows us to 
invest in the right opportunities at the 
right time and to target our assistance 
based on actual country performance. 

The Development Fund for Africa 
reflects the kind of mechanism that is 
best suited to the implementation of 
such a strategy. It is designed to imple- 
ment programs that integrate struc- 
tural economic reforms with specific 
assistance projects in traditional devel- 
opment areas. With the fund we are 
able to follow up on successful policy 
dialogue undertakings by supporting 
positive performance in a particular 

A Strategy for Advanced 
Developing Countries 

Our investment must not stop with the 
very poor countries, although it will be 
different in those which have reached a 
certain level of development. As a re- 
sult of 25 years of foreign assistance, 
there are now a number of advanced 
developing countries (ADCs) that no 
longer need the type of economic as- 
sistance they once received from AID. 
Their relationship with the United 
States has not ended, but it has 

We are now developing a strategy 
that will be the basis for more produc- 
tive bilateral relationships between the 
United States and a selected group of 
advanced developing countries, such as 
Brazil and Mexico. In addition we will 
focus on assistance strategies to help 
those countries approaching ADC sta- 
tus do so more quickly, while laying a 
strong institutional foundation for a ma- 
ture ADC relationship. These new rela- 
tionships would facilitate the eventual 
transition from traditional U.S. eco- 
nomic assistance programs to a differ- 
ent type of assistance designed to 

Itpartment of State Bulletin/July 1988 



preserve and extend valuable bilateral 
institutional linkages. We have already 
initiated ADC programs in sevei-al 
Latin American countries, which 
strengthen the ties established earlier 
between U.S. and host country institu- 
tions while securing nongovernmental 
funding to support common efforts in 
the exchange of science and technology. 

The evolution from a relationship 
dominated by an economic assistance 
program to one that is varied and com- 
plex is not easy, but now is the appro- 
priate time to develop such a strategy. 
We want to consult Congress on this 
initiative at the appropriate time. 


Although the remaining challenges of 
economic development are sobei'ing, 
foreign assistance has brought substan- 

Secretary Meets With Israeli 
Foreign Minister 

tial accomplishments as well as a 
wealth of experience upon which to 
base investments in future progress. 

We need to forge a new consensus 
on foreign assistance that will allow us 
to meet the particular needs of individ- 
ual developing countries that will at the 
same time unite the Congress, the ex- 
ecutive branch, and the people of 
America behind foreign policy objec- 
tives and foreign aid. I look forwai'd to 
working with you in this effort. 

'The complete transcript of the hear- 
ings will be published by the committee 
and will be available from the Superin- 
tendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402.1 

Secretary Shultz's statement fol- 
lowing his meeting with Israeli Foreign 
Minister Shimon Peres on May 17, 

I've just finished now about 5 or 6 
hours I guess altogether, over the last 
couple of days, with the Foreign Minis- 
ter, my friend, Shimon Peres. Much of 
our discussion has been about the peace 
process. So, I'd like to make a state- 
ment about it. 

At President Reagan's request, I 
will return to the Middle East in early 
June in order to continue efforts to 
bring about negotiations. The United 
States is for comprehensive peace 
achieved through negotiations. The peo- 
ple of the Middle East require peace. 
The situation is not improving, and the 
status quo remains unacceptable. So, I 
am returning to the region to reaffirm 
our belief that a workable avenue to 
peace exists. 

Surely, the odds against a break- 
through are high. Pessimism and 
cynicism run deep. But the United 
States will keep moving forward. We 
have a plan — the only plan pn the 
table — and we will pursue it. Some 
have tried to say the plan won't work, 
but they have failed. 'The plan can 
work. It can bring about negotiations. 
It can help achieve peace. 


Our plan for achieving comprehen- 
sive peace through negotiations rests 
on the solid and internationally ac- 
cepted basis of UN Security Council 
Resolutions 242 and 338. All of Resolu- 
tion 242's provisions and principles — in- 
cluding its promise of an exchange of 
territory for peace — will apply to each 
negotiation between Israel and its 
neighbors. Bilateral, direct negotiations 
between Israel and the Arabs can begin 

Negotiations between the Israeli 
and Jordanian-Palestinian delegations 
are central, reflecting the historic rela- 
tionship between Jordan and the Pal- 
estinian people. The initial challenge 
will be to formulate transitional ar- 
rangements. Political and economic au- 
thority will pass from Israel to 
Palestinians, and Palestinians will — for 
the first time in their history — be able 
to exercise real authority over political 
and economic decisions that affect their 

These negotiations will be inter- 
locked with negotiations on the final 
status of the West Bank and Gaza. That 
is, final status negotiations will begin 
on a specified date, before transitional 
arrangements are implemented. This 
will give both sides the confidence in 

the process required for successsful 1 1 J 
gotiations. The negotiations will be . 
launched by a properly structured in ■ 
ternational conference, attended by t 
five permanent members of the Se- 
curity Council and the parties to the 
conflict. This conference will facilitat 
negotiations — not interfere with ther 
impose a settlement, or veto agree- 
ments reached bilaterally. 

This process of negotiations will 
achieve what is needed in the Middle 
East. Palestinians will achieve their 
gitimate rights through negotiations 
which they will participate actively, 
this way, they will be able to enjoy li • 
of security, dignity, and freedom. Isi . 
elis will achieve the recognition and 
curity which they deserve. The Arab 
will achieve an end to a conflict whic 
drains resources that should be di- 
rected at human and economic 

But this plan requires partners 
willing to participate. Each party fa 
a simple but historic test: stop what! 
you are doing for a moment and con-l 
sider whether you want to continue 
down the road of animosity and vio- 
lence, or whether your energies wow 
be better directed at the tough roadi 
peace. Ikke a look at what you migh 
miss. Consider whether you want to 
lose out on another opportunity to 
make peace. 

So, we will continue our work o 
this realistic plan. We will continue 
work actively and creatively with am 
one prepared to work with us. 

This readiness to engage — cre- 
atively and constructively — marked 
talk with Shimon Peres today, as it 
marked our collaboration in the past) 
Peace is not a matter of choice; it is 
matter of necessity. Israel — strong < 
secure as it is now — can be stronger! 
and more confident in implementing! 
agreements reached through negoti; 
tions with its Arab neighbors. I app 
ciate Foreign Minister Peres' 
commitment and resolve to achieve •■ 
good negotiating process, and I look 
forwai-d to continuing our efforts 

'Press release 94. 


IS. to Extend 
i^^^otection to 
i^utral Ships 
ir Persian Gulf 

Stiifement by Secretary of Defense 
:ik Carlucci on April 29, 1988. 

I'l-esident has decided to provide 
stance under certain circumstances 
hips in distress in the Persian Gulf 
Strait of Hormuz in keeping with 
standing, time-honored Navy and 
itinie tradition. Such aid will be 
•ided to friendly, innocent neutral 
els flying a nonbelligerent flag, out- 
declared war/exclusion zones, that 
not carrying contraband or resist- 
legitimate visit and search by a 
iian Gulf belligerent. Following a 
lest from the vessel under attack, 
stance will be rendered by a U.S. 
ship or aircraft if this unit is in the 
lity and its mission permits render- 
such assistance. With this as- 
mce, we anticipate no increase in 
current force levels. 
We are not the policemen of the 
, nor do we wish to be. For over 200 
•s, U.S. policy has been to help pro- 
freedom of navigation in interna- 
al waters. This assistance is a 
:al and humanitarian outgrowth of 
•nt events in the gulf which further 
ngthens our adherence to this prin- 
i. We cannot stand by and watch 
icent people be killed or maimed by 
ieious, lawless actions when we have 
means to assist, and perhaps pre- 
, them. We do not intend to de- 
be our specific rules of engagement 
he methods we plan to use in ren- 
ing this assistance. We see no rea- 
to give advantage to those who 
h us ill. 

Canadian Acquisition 
of Nuclear-Powered Submarines 

APR. 27, 1988' 

As you know, last year the Canadian 
Government announced its intention to 
acquire a fleet of 10 to 12 nuclear- 
powered attack submarines. 

The Canadians further announced 
that they would make a decision this 
year between competing British and 
French submarine design. 

U.S. involvement will be required 
if the Canadians select the British de- 
sign for their submarines. This is be- 
cause the nuclear propulsion plant for 
the British Ti-afalgar-class submarine is 
derived from U.S. technology furnished 
to the United Kingdom under the 1958 
U.S. -U.K. agreement for cooperation 
on the use of atomic energy for mutual 
defense purposes. 

As a result, the British formally 
requested U.S. assurances that, if the 
Canadians select the British design, the 
United States would allow the transfer 
of the necessary technology. 

After careful review of the views of 
his senior advisers, the President has 
determined that, if the Canadians se- 
lect the Trafalgar design, the interests 
of the United States are best served by 
agreeing to the British request. We 
have so informed both the British and 
Canadian Governments. 

I should stress that the President's 
determination was made only because 
of the unique circumstances involving 
the United Kingdom and Canada, two 
of our oldest and closest allies. U.S. 
policy remains opposed to the transfer 
of nuclear submarines to other nations. 

•Read to news correspondents by De- 
partment spokesman Charles Redman. ■ 

With regard to mines, I have con- 
sulted with our allies who were attend- 
ing the nuclear planning group meeting 
in Brussels last week. We all agreed 
that we should provide each other mu- 
tual support and cooperation in the in- 
terest of keeping the international 
waterways free from this threat. 

Finally, this policy should not be 
construed as a tilt in either direction in 
the war. Our policy has been and will 
continue to be one of strict neutrality. 
We, along with the rest of the civilized 
international community, want this war 
to end. In this respect we support 
strongly implementation of UN Se- 

curity Council Resolution 598 and pas- 
sage of a second resolution imposing an 
arms embargo on that belligerent that 
does not accept 598 as a means to reach 
diplomatic settlement of this tragic war. 
We also want to see an end to the wan- 
ton waste of human life that has charac- 
terized this war. In that regard, we 
especially deplore the use of chemical 
warfare by either belligerent which has 
become one of the most regrettable de- 
velopments in this protracted conflict. 
This policy will go into effect once 
we have informed those free world, 
nonbelligerent countries that maintain 
shipping interests in the gulf ■ 

partment of State Bulletin/July 1988 



Essential Ingredients in 
the Fight Against Terrorism 

by L. Paul Bremer, III 

Address before the Commonwealth 
Club in San Francisco on May 12, 
1988. Ambassador Bremer is Ambas- 
sador at Large for Counter-Terrorism . 

It is a pleasure to speak to you today 
about terrorism, a worldwide problem 
that periodically seizes the world's at- 
tention as it has in the past few weeks. 
The dramatic hijacking of a Kuwaiti air- 
liner — and bombings in Italy, Spain, 
Afghanistan, and Lebanon — all serve to 
remind us that terrorism is still very 
much a part of the international scene. 

Over the past 
2 years, we have made considei-able 
progress in the fight against interna- 
tional terrorism. The number of inci- 
dents has decreased significantly in 
some areas, and state sponsorship of 
terrorism is down. Fewer Americans 
have been killed. More terrorists have 
been arrested and convicted by courts 
from Paris to Ankara, from Rome to 

In 1987 the number of anti-U.S. at- 
tacks worldwide was 25% lower than in 
1985. International terrorism in Latin 
America dropped 32% in the same pe- 
riod. Terrorism is steadily declining in 
Europe, falling 31% there in the past 2 
years. There were only two terrorist 
hijackings in 1986, and only one last 
year, which is the lowest number we 
have recorded since we began keeping 
tallies 20 years ago. The recent Kuwait 
Air hijacking, which is still fresh in our 
minds, was a deadly and professional 
operation. It is still being investigated 
to determine how the weapons got on 
board. But it has been the only ter- 
rorist hijacking so far this year. 

In spite of these successes, the 
overall number of terrorist attacks rose 
last year to over 800, making 1987 the 
worst year ever. It was also the blood- 
iest year; more persons were wounded 
in terrorist attacks than ever before- 
well over 2,000. Over 600 persons died 
in terrorist attacks. 

Clearly, the problem of interna- 
tional terrorism is very much with us, 
and it will certainly last for years to 
come. The modest successes that our 
country has enjoyed have given us some 
pespective on fighting the problem. We 
have an idea of what works and what 

does not work. And we know what kind 
of a policy is needed. This is what I 
want to discuss with you today. 

There are three essential elements 
to any successful counterterrorism 
strategy: good intelligence information 
about the threat, the capacity to act on 
the basis of that information, and the 
political will to take action. America 
has recognized the need for these in- 
gredients and has put together a strat- 
egy based on them. 

Good Intelligence 

The fundamental underpinning of a 
counterterrorist policy is good intel- 
ligence — or information — about the ter- 
rorists, their plans, and their 
capabilities. Without solid and timely 
intelligence, no government can formu- 
late polices and take effective action 
against terrorists. 

We need to know things like: 

• Which terrorist groups are we 
dealing with? 

• What are their political goals? 

• Who are the members? 

• What are their nationalities and 

• How and why were they 

• How well armed and trained are 

• Do they carry out their threats? 

• Where are their bases of 

Terrorists operate in the shadows. 
They change their names, rearrange 
their internal loyalties and groupings, 
and change operating areas with frus- 
trating frequency. They take great 
pains to cover their movements and 
make their weapons untraceable. Their 
tightly knit structure maximizes se- 
crecy and minimizes the chance that in- 
formation about the group or its 
planned operations will leak out. 

But another factor makes it even 
more difficult to get information about 
terrorists. That is the support which 
many terrorists get from state spon- 
sors. Nations like Iran, Libya, Syria, 
and North Korea use terrorism as an 
integral part of their foreign policies 
and provide extensive support networks 
for their operatives. These networks 
can give the terrorists training, false 


passports, forged travel documents, 
transportation on state-owned airlim 
and safe houses. And, of course, it i; 
more difficult for us to get good info 
mation about terrorist groups when 
they hide under the protective umbr a 
of a nation state. 

In order to uncover and unravel 
these networks, two types of intel- 
ligence information are available to i 
The technical kind, such as spy sate) 
lites and secret detection equipment 
provides some useful data on terrori ■ 
But the most useful information con 
from human intelligence — agents wh 
penetrate a terrorist group and otb 
people who report on movements, ii 
tities, and planned attacks. 

Penetrating terrorist groups — 
placing an agent on the inside — is ei 
mously difficult. Terrorist organizat 
are secretive by nature; some accep' 
members only people with a given ei 
nic, religious, or even family back- 
ground. Even then, the "entry fee 
join can be very high. For example, 
Sendero Luminoso, one of the world( 
most highly disciplined and dangero 
terrorist groups, operating in Peru, 
quires that before being allowed int 
the group, an aspiring new memben 
tablish his or her credentials by fira 
killing a judge or policeman. Only ai 
that will their application for mem 
bership be considered. Obviously, tl 
makes placing agents in such a groui 
difficult or impossible. And in the c^ 
of the United States anyway, illegalj, 

In spite of the difficulties, we h» 
had some successes in recruiting agj 
in some terrorist outfits. Not all ten 
rorist groups are as secure as their 
leaders would hke to think. 

Yet once we have agents in plao 
the intelligence work has only begun 
We will receive bits and pieces of in 
ligence, pieces of a puzzle. We may 
have a photo here, an overheard con 
sation there, two false passport nun 
bers, and three airplane tickets. Th 
challenge is to analyze the pieces an 
fit them together in order to get thi 
whole picture in time for us to take 
effective counteraction. 

It is rather like trying to do a j 
saw puzzle without knowing what tl 
picture is supposed to look like. Ant 
the more help we can get putting tl 
pieces together, the better. That is 




Department of State Bulletin/July 


ring intelligence with our allies is so 
ortant. I will extend the picture 

;le analogy just a bit further: A 
ikle with half its pieces in place is 
m'e than twice as comprehensible as 
a only a quarter solved. InteUigence 
shring helps us solve more of the 
pizle faster than we could do alone. 

For e.xample, last November a pair 
of Jorth Korean terrorists planted a 
b(ib on a South Korean plane that 
ld?d all 115 passengers aboard. We ini- 
cily had very little information about 
W) was responsible. The plane had 
bin destroyed, and one of the suspects 
cnmitted suicide by swallowing poison 
fc wing his arrest. However, after ex- 
el nging bits and pieces of information 
Wh a number of other countries, we 
we able to develop a complete travel 
iterary of the terrorists, a history of 
tJ terrorist training they received, de- 
ti 5 of how the bomb was supplied and 
Pi ited, and direct evidence of North 
K 'ean culpability in the act. 

But even without the complete pic- 
'. i, we can find useful information. 
F example, we might discover that a 

V ipon found at an Irish Republican 
Pny [IRA] shootout matches weapons 
1 1 were manufactured in Libya. Or 

V might find that a newly appointed 

I nian diplomat in a European country 
li a history of involvement in ter- 

r ism, dating back to the seizure of 
t American Embassy in Tehran. Or 

I I a passport carried by a terrorist 

a ually belongs to an innocent Tunisian 
c zen but which was confiscated by 
I lyan authorities and provided to the 
t rorist. 

A recent bit of intelligence was 
I 'd as evidence at a terrorist trial in 
^ st Germany. A ransom note demand- 
i the exchange of a Gei'man hostage 
t a Lebanese terrorist carried the la- 
l it fingerprint of the terrorist's 
1 )ther. When the brother fiew to Ger- 
iiny, he was arrested and charged 
Uh hostage-taking. Just 3 weeks ago 
ut man, Abbas Hammedi, was sen- 
I iced by German courts to 13 years in 
; 1 for his role in the hostage taking. 
Recognizing the importance of in- 
J-mation gathering to the fight against 
"rorism. Congress 2 years ago gave 
■^ State Department $2 million for a 
iigram to offer rewards for informa- 
iii leading to the prosecution of ter- 
'rists for specific terrorist attacks. We 
'tend to expand that program soon to 
:lude payment of money for informa- 
in leading to the prevention of a ter- 
rist attack against U.S. citizens or 

property. This new progi-am will be 
widely publicized both domestically and 
overseas and will, we hope, make it 
more dangerous for terrorists. 

The increased cooperation and in- 
telligence sharing with the United 
States and among European countries 
themselves has been a key factor in re- 
ducing terrorism in Western Europe by 
one-third since 1985. And our increased 
intelligence gathering and exchange has 
helped us prevent more than 200 ter- 
rorist attacks during the past 3 years. 

Actions Speak Louder Than Words 

No amount of intelligence information 
will help a government catch terrorists 
unless the government has the ability 
to act on that information. The second 
essential element in countering ter- 
rorism is the capacity to act against 
terrorists. This requires trained per- 
sonnel and equipment that can do the 

In the past 5 years, terrorism has 
become a matter of urgent concern not 
only to governments and policymakers 
but also to police, scientists, so- 
ciologists, historians, and the military. 

The number and variety of counter- 
terrorist personnel may surprise you. 
They include: 

• Analysts in the intelligence com- 
munity, who can trace a pattern of at- 
tacks for a given terrorist group, 
develop modus operandi for terrorists, 
identify terrorists by name, and project 

• Technicians skilled in the field of 
communications, including people who 
can establish secure telephone lines 
through the use of tactical satellites for 
long-distance exchanges of classified 

• Experts in forensics and ballistics 
and a multitude of other highly spe- 
cialized fields who can examine clues in 
the aftermath of a terrorist attack; 

• Policy officers, hke those in my 
office who meet regularly with their 
counterparts in other countries to fos- 
ter cooperation and to coordinate 

• Negotiators skilled in hostage ne- 
gotiations whose main task is to resolve 
a situation without loss of life, to gain 
time, wear down the terrorists, and 
withhold substantive concessions; and 

• Specialized military counterter- 
rorist units, which become invaluable 
when attempts to resolve a situation 
without violence fail. 

The United States actively recruits 
people in all these fields. We develop 
and offer specialized training where 
needed. Getting the most qualified per- 
sonnel is a top priority for us, and al- 
though the cost is substantial, we 
believe the benefits we get in return 
justify our commitment. As cooperation 
with foreign governments has in- 
creased, the United States has been 
able to draw from its reservoir of well- 
trained analysts and technical spe- 
cialists to help foreign governments in- 
vestigating terrorist attacks. Just last 
week, we had about a dozen experts in 
Kuwait helping that government collect 
evidence on the Kuwaiti Air hijacking. 

Often the efforts of these people 
are only as good as the equipment with 
which they work. The equipment that is 
needed to fight terrorism includes: 

• Research laboratories to examine 
evidence and to develop new ways to 
detect explosives; 

• All types of defensive equipment 
to thwart terrorist attacks, such as con- 
crete barriers, shatter-proof glass, ar- 
mored vehicles. X-ray machines, and 
bomb-sniffing dogs; 

• Sophisticated computers that can 
store complete databases on terrorists 
and can read digitized fingerprints; and 

• The full range of offensive equip- 
ment, such as special weapons, sur- 
veillance devices, night vision 
binoculars, and eavesdropping gear. 

Not all nations engaged in fighting 
terrorism have all these personnel and 
equipment available to them, but most 
Western democracies do. The allocation 
of funds to pay trained personnel and to 
buy and maintain the proper equipment 
is clear evidence of a nation's commit- 
ment to fighting terrorism. 

The United States is committed to 
helping other countries get the best 
personnel and equipment. For example, 
my office is responsible for offering 
antiterrorism training assistance to 
friendly nations so that they can better 
defend themselves and American inter- 
ests located in their countries. During 
the last 3 years, we have trained over 
6,000 civilian law enforcement au- 
thorities from 50 countries. We also 
help to coordinate similar training pro- 
grams offered by allied governments to 
eliminate overlap. 

In addition, my office manages a 
congressionally funded research pro- 
gram to develop new, practical ways to 
identify, track, and apprehend ter- 
rorists. The aim of the program is to 

spartment of State Bulletin/July 1988 



anticipate potential new tactics by ter- 
rorists and to improve existing tech- 
nology to thwart them. 

Among other subjects, we are cur- 
rently funding research: 

• To help us better detect and more 
rapidly and safely disarm explosives; 

• To meet the menace of chemical 
and biological attacks; and 

• To provide our hostage rescue 
forces with better weapons and 

Counterterrorism research and de- 
velopment is a new and challenging 
field. Our effort involves 25 government 
agencies as well as private companies 
and universities. 

Political Will Must Be Present 

All the intelligence, manpower, and 
equipment are to no avail if a govern- 
ment is not willing to use them. Politi- 
cal will, therefore, is the third essential 
element in fighting terrorism. 

Twenty years ago, most of the 
West clearly lacked the political will to 
confront terrorism. Countries reacted 
to the new wave of terrorism in a con- 
fused way. We were on the defensive 
against both domestic and international 
terrorists. Some governments believed 
that appeasement was the answer, and 
some even made quiet deals with the 
terrorists, offering not to disturb the 
terrorists in exchange for the terrorists' 
pledge not to commit attacks on home 

By the end of the 1970s, however, 
the outrage at terrorist acts slowly be- 
gan to turn the tide of opinion in the 
West. Increasingly, people realized that 
nothing justified the wanton slaughter 
of innocent civilians. Public pressure 
forced governments to face the problem 
and to develop the political will and a 
coherent strategy to oppose terrorism. 

In the past few years, the West has 
made important measurable progress in 
developing a coherent counterterrorist 
strategy and the required political will 
to carry it out. The U.S. military strike 
against terrorist facilities in Libya was 
the watershed. Immediately thereafter, 
European governments began to show 
an increased willingness to fight ter- 
rorists. Two years ago, the nations of 
Western Europe, in a major show of 
collective political will, closed down Lib- 
ya's terrorist infrastructure of embas- 
sies, "businessmen," and "students." 
Several months later, after Syrian sup- 
port for terrorism was proven in two 

well-publicized trials in London and 
West Berhn, the European Community 
imposed a series of sanctions against 

Confronting terrorist states with 
collective political will works — that is, 
it changes the behavior of states using 
terrorism. Libyan-sponsored attacks 
dropped by two-thirds last year. Syria 
expelled the Palestinian terrorist Abu 
Nidal from its borders last year, and we 
have detected no direct Syrian involve- 
ment in terrorist attacks for the past 18 

Because of the West's growing 
counterterrorist consensus, terrorists 
are also finding it harder to get refuge 
and overt support. For example, the 
Abu Nidal Organization was expelled 
from Iraq in 1983 and from Syria in 
1987. In Eastern Europe, efforts have 
been made to disrupt a network of en- 
terprises of the Abu Nidal Organiza- 
tion. Newspaper stories about the 
terrorist links of a Syrian family named 
Qassar, notorious for arms trafficking 
with terrorists, have led to action 
against them by Spain and Austria last 
year Colonel Hawari, the infamous 
leader of the special operations group of 
the Palestine Liberation Organization 
[PLO], was expelled from Iraq in June 
1987. When he subsequently entered 
Yugoslavia illegally, he was expelled 
from that nation. 

More Needs to Be Done 

Still, the record of action against ter- 
rorists remains mixed. There is plenty 
of room for improvement. Three areas 
come to mind. 

We have all read accounts of pur- 
ported "deals" in order to gain the re- 
lease of hostages. These undercut 
Western solidarity in meeting terrorism 
head-on. In other instances, some coun- 
tries, such as Austria, are reluctant to 
act vigorously against Libyan diplo- 
matic missions, even when they are 
caught red-handed supporting a ter- 
rorist action. Some European countries 
accredit ambassadors — notably from 
Iran — who have well-documented rec- 
ords of personal involvement in ter- 
rorist actions, such as the seizure of the 
U.S. Embassy in Tehran. 

As we fight terrorism, we must re- 
member some important facts. 

First, there is no cheap or fast way 
to prevail. As with crime, the scourge 
of terrorism cannot be entirely eradi- 
cated, and as we make gains in one 
area, the terrorists have proven their 
ability to shift tactics and threaten 
other areas. 

Second, it is important to be fir 
against terrorists, for behavior re- 
warded is behavior repeated. Makin; 
concessions to terrorists only encoui 
ages more terrorism. The policy is 
strongly supported by the people of 
this country and by most Western 

A policy of firmness is not easy,' 
especially when it involves American 
hostages and when it appears that ni 
ing concessions will lead to their re- 
lease. But the government has an 
important responsibility to the genei 
public, all of whom would become mi 
vulnerable to hostage-taking were W 
to reward the kidnappers in LebanoM 
As Thomas Jefferson said when he 
counseled against the ransom paymei 
demanded by the Barbary pirates iro 
1787: "This is cruelty to the individvM 
now in captivity, but kindness to tha 
hundreds that soon would be so, wen 
we to make it worth the while of tho 
pirates " 

And finally, we must be willingy 
take risks, even to risk tactical failu 
in order to gain strategic advantagel 
We cannot become, as Secretary Sh| 
said, "the Hamlet of nations." We 
be ready to undertake bold efforts. 
There is an important place in our 
counterterrorism policy for covert at 
tions and, where necessary, for milil 
action. The American raid against ti 
rorist targets in Libya was full of ril 
We lost two American pilots during I 
that raid. But the raid was a watera^ 
event in the West's fight against terl 
rorism. It catalyzed the Europeans [ 
warned terrorist sponsors. 


We have learned at the cost of blood 
and treasure what works and what ( 
not work in dealing with terrorism. 1 
And we know that each of the three! 
elements I have described — intel- 
ligence, resources, and political will-] 
necessary but not by themselves suff 
ent to suppress terrorism. This undJ 
standing has shaped our policy, and [ 
is paying off. 

Our progress has been uneven, 
we have made progress. I expect we 
will continue to show gains as we md 
against international terrorism. But! 
must understand that suppressing ' 
rorism is a long-term business. Therl 
are no simple knock-out punches. Bii 
we continue to devote resources to 
countering terrorism and, most impd 
tant of all, if we maintain our politici 
will, we can, in the long run, prevailf 


Department of State Bulletin/July <l 


-frgh Technology Terrorism 

I'aul Bremer, III 

<tiilf'inent before the Subcommitfee 

ciniology and the Law of the Seri- 

iiiliriary Committee on May 19, 

Ambassador Bremer is Ambas- 

ur at Large for Counter-Terrorism A 

It is a pleasure to appear before 

(•(immittee to discuss the Admin- 
i inn's assessment of the threat pre- 
d hy high technology terrorism 
n brief you on the Administration's 
iiise to that threat. Throughout my 

• iiioiiy, I will use the committee's 
It ion of high technology terrorism: 
actual or potential use of advanced 
ipliisticated technology by ter- 
ts to achieve their objectives." 
With your permission, I propose to 
CSS the first two questions you 
i\ to the Administration; the use of 
isticated technologies to conduct 
villi! of terrorist attacks we have 
M,\ seen and the possibility of ter- 
i> turning to weapons of mass de- 
tion — nuclear, biological, or 

,! ileal weapons. 

ifa lent Use of Older Technologies 

Oi age is almost defined by tech- 
nt gical advance. The transistors that 
w I the marvel of the 1950s are passe. 
1 h of this testimony was written on 
a me lap-top computer which would 
hi ' filled an entire room 20 years ago. 

Yet terrorists mostly use weapons 
te nologies developed 50-100 years 
aj —pistols, hand grenades, and ma- 

I' guns. State Department figures 

\ that the bomb remains the ter- 
.1 st.s' preferred weapon. Consistently 
ov the past 20 years, 50%-60% of all 
ttorist incidents have been bombings, 
IT it of which have used explosives and 
di^nators available for decades. 

Terrorists generally use the sim- 
p 5t technology available for their at- 
t;<ts. There are solid reasons for them 

lo so. 

• Simpler technology is less expen- 
■ and often more reliable. 

• Low tech equipment is easier to 
ain and attracts less attention. A 

lib made from agricultural chemicals 
y not be as powerful as one made 
m the latest plastic explosives, but 
. .one can buy and transport a truck- 

load of fertilizer without arousing sus- 
picion. More important, the operatives 
who carry out the attacks need less 
training with low tech equipment. 

• Finally, the older weapons and 
technologies are as effective now as 
they have been in the past. Terrorists 
continue to receive wide-ranging pub- 
licity for their attacks using older or 
simpler technology and weaponry. 

As the targets originally preferred 
by terrorists have become "harder" — 
that is to say, better defended — ter- 
rorists have usually switched targets 
rather than turn to new technologies to 
penetrate defenses. When an embassy 
is too well protected, terrorists may 
switch to unprotected individuals or 
businesses associated with the target 
country. Or they may decide to attack 
the same country's embassy in another 

The phenomenon of target switch- 
ing has been particularly notable in at- 
tacks against civil aviation. As 
enhanced security on flights to Israel 
made it difficult to smuggle weapons 
into the cabin, the Japanese Red Army 
and the Popular Front for the Libera- 
tion of Palestine (PFLP) switched tar- 
gets. Rather than try to seize an 
aircraft, they checked their grenades 
and machine guns and attacked pas- 
sengers in the baggage claim area of 
Israel's international airport. After ex- 
amination of checked baggage became 
more common on high-risk flights, tar- 
gets were switched again and the 
check-in counters were attacked, for 
example by the Abu Nidal group at the 
Rome and Vienna airports in December 
1985. More recently, in Karachi, ter- 
rorists chose not to confront security 
measures in the terminal at all and, 
instead, stormed a Pan American air- 
plane from the tarmac. 

In short, there is no persuasive ev- 
idence yet that the availability of higher 
technologies has led to their automatic 
or widespread use by terrorists. In 
fact, in each of the incidents mentioned 
above, the terrorist weapons of choice 
remained largely the same— handguns, 
automatic weapons, and hand grenades. 

New Technologies Are Available 

There are, however, no grounds for 
complacency about the utilization of 
modern technologies. Several terrorist 

groups have used sophisticated bat- 
teries and integrated circuits to im- 
prove the timing devices used on 
bombs. The Provisional Irish Re- 
publican Army bomb intended to kill 
Prime Minister Margaret Thatcher at 
Brighton Beach 3 years ago used a 
long-delay timing device (days rather 
than hours). Terrorists have also used 
more sophisticated trigger mechanisms 
for bombs, using radio signals instead 
of wires leading from the device to a 
switch. The Greek terrorist group, 
November 17, used this technique to at- 
tack a U.S. military bus last year. 

In some cases, the bombs them- 
selves have changed. The Czech plastic 
explosive Semtex, more powerful and 
less detectable than traditional ex- 
plosives, is becoming very popular with 
those groups which can gain access to 
it. Lebanese terrorist Mohammed Ali 
Hammadei, accused of helping direct 
the hijacking of TWA #847 in 1985, was 
captured last year trying to enter the 
Federal Republic of Germany with the 
volatile liquid explosive methyl nitrate 
concealed in hquor bottles. 

The Popular Front for the Libera- 
tion of Palestine-General Command 
(PFLP-GC) used a modern, but not es- 
pecially sophisticated, technology when 
it launched an attack into Israel on 
motorized hang-gliders. One group 
in the Far East has used frequency- 
jamming equipment to block police 
communications during its attacks, 
while another has constructed and uti- 
lized home-made mortars to conduct 
standoff attacks against buildings and 
other targets of interest. 

There are other off-the-shelf mod- 
ern technologies or products which 
have been or could be used by ter- 
rorists. Nonmetallic weapons made 
from polymers can cause problems for 
current detection devices. The ter- 
rorists know that certain kinds of ex- 
plosives are much less susceptible to 
dogs and mechanical sniffers than oth- 
ers. Night vision devices and stand-off 
weapons, such as mortars and rocket 
propelled grenades, could enhance ter- 
rorist capabilities and thus present 
greater risks. Lasers and high-powered 
microwave transmitters are also poten- 
tial threats. Increasingly sophisticated 
and available photoreproduction equip- 
ment can make document forgery 
easier than in the past. 

sartment of State Bulletin/July 1988 



Dynamics of Weapons and Tactics 

While we have some abihty to track 
past uses of modern technologies, we 
cannot forecast with precision future 
uses. One thing we can do is watch the 
dynamic relationship between protec- 
tive measures and terrorist targeting 
and tactics. Most of the terrorists' pri- 
mary targets are better defended to- 
day. Secondary and tertiary targets are 
also being "hardened." So far when ter- 
rorists are presented with a well- 
defended target, they would rather 
switch than fight. But there may come 
a point at which our success in protect- 
ing current targets will drive terrorists 
to use new technologies. 

Turning to new technologies does, 
however, present the terrorists some 
problems. Many of the newer technolo- 
gies available require greater e.xpertise 
than members of many terrorist groups 
now have. Some weapons, such as re- 
motely piloted vehicles and rockets, re- 
quire considerable space for testing and 
training. There are entire areas of the 
world where that much space is simply 
not available for use as a terrorist fir- 
ing range. The costs of some new tech- 
nologies would also be prohibitive for 
all but the largest and best-financed 
terrorist organizations. 

The requirements for training, 
money, and test areas suggest that the 
terrorists most likely to employ the 
products of new technologies are those 
who already have, or who can acquire, 
state sponsorship. A sovereign state 
can dispense sums of money impossible 
for an organization to raise alone. And 
almost any country can provide training 
and testing facilities at a closed mili- 
tary base. 

The need for technical expertise 
could most readily be overcome by ter- 
rorist groups whose programmatic ob- 
jectives already attract to them highly 
educated individuals. For example, 
violence-prone elements in some anti- 
nuclear, extreme environmentalist, and 
animal rights groups might find among 
their members the expertise requisite 
to move to "high-tech" terrorism. 

Nuclear, Biological, 
and Chemical Terrorism 

Much has been said and written in re- 
cent years about the possibility of ter- 
rorists employing nuclear, chemical, or 
biological terrorism. Our government 
has confidential assessments on this 
topic which I would be pleased to dis- 
cuss in closed session. For this hearing, 
I can make some general observations. 

First, we should understand that 
there have not been any actual nuclear 
terrorist attacks, and we do not assess 
that as a likely possibility in the near 
future. Chemical substances, on the 
other hand, have been used for malev- 
olent purposes by a variety of groups 
and individuals and must be considered 
as presenting a somewhat more likely 
terrorist choice. 

While not an act of political ter- 
rorism, we can remember the poisoning 
of medicines which have caused deaths 
in the United States. Though no case in 
the United States has been traced to 
political terrorists, the possibility of 
terrorists ultimately using this tactic 
against us or other nations is sobering. 
There have been similar instances in 
other countries. Several years ago ter- 
rorists poisoned .Jaffa oranges, which 
had a disastrous effect on Israeli citrus 
exports. More recently, a threat to poi- 
son the air in another Mediterranean 
nation with dioxin — which was later 
proven specious — initially caused grave 

According to our analysis, up to 
now there have been technical and psy- 
chopolitical constraints on the use of 
nuclear, biological, and chemical 

Technical constraints are especially 
important when considering nuclear 
terrorism. While the basic principles of 
nuclear weaponry are available in any 
research library, the actual acquisition 
of the correct materials and assembly of 
a workable nuclear device remains an 
immensely complicated undertaking. 
Moreover, handling nuclear materials 
can be e.xtremely dangerous to the ter- 
rorists. In our view, few groups, and 
certainly none without considerable 
state support, have the technical capac- 
ity to acquire, fabricate, and employ a 
nuclear device. 

Steahng an existing nuclear 
weapon is a theoretical alternative. 
However, our government has taken ex- 
traordinary precautions to protect 
against this possibility. It is also con- 
ceivable that a state could make a nu- 
clear device available to a terrorist 
group. However, we also judge this as a 
remote possibihty. 

Development of biological and 
chemical weapons present similar al- 
though less compelling technical con- 
straints. The major problem here is 
that the raw materials with which to 
construct at least a crude chemical or 
biological device are more readily avail- 
able to the terrorists than are the ma- 
terials and equipment needed to 
develop a nuclear weapon. 

For example, virulent biological 
agents can be grown or acquired froi 
variety of sources. Toxic chemical mf 
rials are, of course, widely available 
through manufacture or theft in mos 
open societies. Poisonous gases and 
chemicals are routinely transported 
through many countries to support e 
sential economic activities. The acci- 
dent at the Union Carbide plant at 
Bhopal, India, demonstrates how 
deadly modern chemicals can be. A i 
liberate terrorist attack against such 
plant or possibly against the transpo 
tation vehicles conveying such mate« 
anywhere in the world might have di 
astrous consequences. 

Psychopolitical Constraints 
on Terrorists 

Of course technical barriers can even 
ally be overcome. However, there alii 
may be some psychopolitical constrai 
to terrorists' use of such weapons. Tl 
fundamental question is whether tea 
rorists will actually act to cause mas 
casualties — a thousand or more in a 
gle incident — through the use of nu- 
clear, chemical, or biological terrorii 

Many experts point out that tei 
rorist actions may disgust us, but tl 
are not without a certain logic. Man 
terrorist acts are intended to accom 
plish specific political goals in both 
short and longer terms. For many 
groups, the long-range goal is often 
tainment of power in a new or existi 
sovereign state. These experts belie 
that terrorist groups have not and 
not resort to using weapons causing 
mass casualties because such an atti 
would do severe damage to their Ion 
term goals. Put another way, a cred 
threat to kill 100,000 people in a maj 
city may get a terrorist colleague ou if 
prison. But the general revulsion en 
gendered may make establishment c 
the new political order impossible, e 
pecially if mass casualties occur. 

While there is a certain logic he , 
we should also recognize that terror: s 
with the technical sophistication to i i 
weapons of mass destruction may ve 
well also have the political sophistic; 
tion to protect their long-range goal 
while acting in the nearer term. For 
example, terrorists could overcome t ■ 
constraints on using such weapons s; - 
ply by downscaling the initial weapo 
so that it produces only a low or mo(;r- 
ate number of casualties. This wouldj 
offer a demonstration of the credibil)' 
and lethality of their threat to inflict 
mass casualties later if their demanc 
are not met now. 


Department of State Bulletin/July ISj 


Moreover, some terrorist groups 
already showing little aversion to 
rtiiig large numbers of casualties. 
((• ladical Sikh and T^mil elements, 
.■ irroups in Lebanon, and Sendero 
liiioso in Peru have used conven- 
:il weapons in attacks in which hun- 
l> have died. These groups may be 
hesitant than others about switch- 
id even more lethal weapons. Or, if 
1(1 opinion becomes jaded, these or 
■V terrorist groups could move to 
s casualty terrorism to attract 

linally, of course, chemical weap- 
:ire known to be in the hands of 
- such as Iran and Iraq which have 
I iced terrorism. The world commu- 
lias shown little outrage at the re- 
ii.'^e of chemical weapons by both 
I I and Iraq in their war. Perhaps a 
hiilogical barrier has already been 
u'li for terrorists to use them. 

Wat Are We Doing 
K )ut the Threat? 

Administration's response to the 
at of high technology terrorism is 
!( ised in the Inter-Departmental 
G up on Terrorism (IG/T), which I 
c! in This is because the President has 
d ignated the State Department as 
k 1 agency on international terrorism. 
- interagency group has directed in- 
L^ciice analysis into the potential 
■at from high technology terrorism. 
T ' IG/T has also worked to coordinate 
'. U.S. Governments policy response, 
e ecially concerning research and de- 
V jpment efforts to counter nuclear, 
b logical, and chemical threats. 

Under IG/T leadership, we are pur- 
s ag an aggressive research and devel- 

nent program on emerging tech- 
rogies which could be used by ter- 

r ists or by those fighting terrorism. 

1 listinguished panel of scientists has 
hped the IG/T identify and prioritize 
CT 70 projects for research. These 
pjects are concentrated in areas 

\ ere there seems to be no private sec- 
t initiative on readily available fund- 
i ; from other government agencies. 
< r program, funded through a State 

partment account, has so far allo- 
' ed $17 million to 22 different 
Our concept is to use our limited 

ids as seed money. Once a project 

has proven viable, we seek to turn re- 
sponsibility for project followup to the 
appropriate government agency. We 
have concentrated our research and de- 
velopment efforts in five main areas. 
Two of these in particular may be of 
interest to this committee. Specifically, 
we have devoted a great deal of effort 
to developing means to detect newer 
varieties of explosives and detonating 
mechanisms. We are also attempting to 
discover new methods and equipment to 
detect chemical and biological agents. 

In the past year, we have begun a 
program to coordinate our research and 
development efforts on high technology 
terrorism with research in like-minded 
countries. To date we have proposed 
such activity with the United Kingdom, 
Canada, the Federal Republic of Ger- 
many, and Japan. This effort is still in 
its initial phase, but I am hopeful that 
it will yield high dividends in future 

We have also established a Nuclear 
Biological Chemical (NBC) Working 
Group. This specialized group is exam- 
ining our government's capacity to re- 
spond to nuclear, biological, and 
chemical threats. While I cannot go 
into detail in open session, I can assure 
you that the Federal Government has 
substantial capacity to respond to 
threats of nuclear terrorism. 

We are working to develop similar 
capacities to respond to chemical and 
biological threats. The NBC working 
group has also developed an active pro- 
gram of exercises to test our response 
capability. Various exercises have in- 
volved the Federal Government alone, 
the Federal Government coordinating 
with State and local government, and 
the Federal Government acting with 
other countries. 

What Remains To Be Done? 

The relative scarcity of high tech ter- 
rorism up until now gives us no basis 
for complacency. While I have offered 
some views about relative threat levels, 
I must emphasize to you that assess- 
ments grounded on predicting terrorist 
behavior cannot be taken as protection. 
There is too much uncertainty. 

It should be clear that to some ex- 
tent there is a race between terrorist 
adaptations of new technologies and the 
development and application of counter- 
measures. A key factor will be the U.S. 
Government's ability to conduct re- 
search into countermeasures quickly 
and effectively. I believe it only prudent 
that we devote more money to these 
research and development efforts. 

There are also ways in which Con- 
gress can help without straining the 
Federal budget. We should work to- 
gether to examine the possibility of re- 
quiring that taggants be included in all 
explosives, weapons, and ammunition 
manufactured in or imported into the 
United States. Such a measure would 
greatly simplify efforts to detect con- 
cealed explosives and weapons and im- 
prove our ability to investigate terrorist 
acts which have already occurred. We 
should also explore the possibility of 
taggants for detonators. 

Congress has before it pending leg- 
islation which would help control the 
importation, production, and possession 
of nonmetallic firearms. This is an area 
of special concern to the airline indus- 
try, indeed to the entire counterter- 
rorism community. I urge quick and 
favorable congressional action on this 


I congratulate the committee for its ini- 
tiative in convoking these hearings to 
examine the risks of high technology 
terrorism. While the counterterrorism 
community's assessment is that current 
risks are modest, the long-term picture 
is much less clear. One of the ironies we 
face is that successful protection of 
more and more targets may drive ter- 
rorists to use higher technologies. That 
is why it is so important that we work 
together to turn the new technologies 
to our advantage in fighting terrorism. 

'The complete transcript of the hear- 
ings will be published by the committee 
and will be available from the Superin- 
tendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402.1 

lijgpartment of State Bulletin/July 1988 



Policies for the Americas in the 1990s 

by Richard S. Williamson 

Address before the Economic Com- 
mission for Latin America and the 
Caribbean (ECLAC) in Rio de Janeiro 
on April 26, 1988. Ambassador 
Williamson is Assistant Secretary for 
International Organization Affairs. 

I would like to take just a minute to 
note this 40th anniversary of the found- 
ing of the commission. This organiza- 
tion has the ability to provide clear, 
analytic, and insightful work to the 
countries of Latin America and the 
Caribbean. The need for such guidance 
has never been greater. We wish you 
gi'eat success over the coming years 
of your service to our hemisphere. 

This 22d session of ECLAC is an 
opportunity to review the past four 
decades and the wide swings of the eco- 
nomic pendulum which have occurred. 
As ECLAC embarks on its fifth dec- 
ade, we hope a consensus can emerge 
on the approach we must take to even 
out some of the economic swings and 
begin a steady climb of sustained eco- 
nomic progress. ECLAC can help solid- 
ify this consensus. ECLAC can help all 
of us to focus our efforts toward the 
difficult adjustments critical to eco- 
nomic development, toward greater pri- 
vate sector contribution to growth, and 
toward the development of strong cap- 
ital markets in debtor countries. 

Relationship Between 
Economic and Political Freedom 

Underlying the strictly economic issues 
which we will discuss in this 22d ses- 
sion is the direct relationship and inter- 
play between economic and political 
freedom. This is a basic tenet of U.S. 
Government policy. 

For Latin America, the decade of 
the 1980s has been marked by profound 
political change. It is a decade where 
freedom has been on the march in 
Latin America. Democratically elected 
governments have come to power in 11 
countries, replacing dictatorships or 
military regimes. Over 90% of the 
peoples of Latin America and the 
Caribbean now live under democratic 
regimes, as compared to only one-third 
in 1976. This profound advance for de- 
mocracy is tremendously encouraging. 

The acceleration of democratization 
in Latin America is exciting and vital. 
But it is not in itself sufficient. Even 
some believers in political democracy 
have misguidedly infringed upon eco- 
nomic and personal freedoms in the 
service of statist or other restrictive 
theories of economic life. The United 
States is committed to the proposition 
that economic freedom and political 
freedom are inseparably linked. Presi- 
dent Reagan is personally dedicated to 
this principle, which is founded on the 
lessons of hard e.\perience. The evi- 
dence of the failure of the statist model 
is seen whenever and wherever it is 
compared with one based upon individ- 
ual freedom of economic choice. 

This connection is clear in the ex- 
perience of Latin America in the 1980s. 
The shift to democracy coincided with 
a period of economic difficulties that 
made the job of elected governments 
harder. Economic gains, particularly in 
per capita income, were eroded by fall- 
ing commodity prices, global recession, 
and by internal debt servicing costs. 
Above all, democracies were beset by 
lack of confidence in their own econo- 
mies by citizens who withdrew huge 
amounts of capital from the region. It 
became clear, more than ever before, 
that fiscal deficits could not be covered 
by foreign borrowing. Deficiencies in 
the economic policies of most govern- 
ments in the region were identified as 
the root cause of economic instability, 
of the massive capital flight, and of 

The task of newly elected demo- 
cratic leaders in consolidating democ- 
racy consequently has been complicated 
by the need to reduce and reorient the 
government's dominant role. Govern- 
ments have begun to see the need to 
begin to shift to market-oriented pol- 
icies in order to permit their citizens to 
produce at levels closer to their true 
potential. We should never underesti- 
mate the ability and resourcefulness of 
our citizens to work toward a better 
future. As governments, we must be 
sure that we don't stand in their way. 

Sustaining Economic Growth 

The serious debt problem is symptoma- 
tic of the general economic difficulties 
confronting debtor countries. However, 
a narrow focus on the debt burden 
alone too often has obscured and dis- 
tracted attention from the underlying 

and more important issue — how to f 
our economies on a path of noninflal 
ary economic growth which is sustai 
ble over the long term. For this reaj 
the "international debt strategy" pli 
emphasis on the measures needed t* 
achieve that kind of gi'owth. The me 
ings of the Interim Committee and 
Development Committee of the Wor 
Bank, just concluded in Washington 
reaffirmed the importance of contini 
a case-by-case approach to debt proi 
lems. The Interim Committee stresi 
the importance of maintaining open^ 
growing markets for debtor countrirt 
exports and timely financial supporil 
facilitate the pursuit of growth-orie; 
adjustment policies in debtor counti 
Clearly, the debt problems of tl 
region remain of fundamental concel 
to us, and we recognize that a strort 
cooperative approach must be contij 
to address these problems. Economi 
growth is the basis of that approacHi 
the context of comprehensive progri 
of reform supported by adequate fijl 
cing to support the reform process, 
international strategy to address da 
problems of the region is a dynamic* 
evolving one. The development of at 
"menu" approach to commercial bai< 
financing packages provides additioi 
flexibility for both new financing flw 
and new debt conversion techniquefi 
And while all of us would wish for 
faster progress, the results to date 
been greater than generally realizei 
According to the World Bank, grow- 
last year for the five major debtors 
globally averages 2.5%-3% versus £ 
negative growth in 1983. Export eai. 
ings rose sharply last year to 13%, 
imports were up 7%. Debt service 
ratios have fallen, and, in some cast- 
capital flight has begun to be reveri 
And while growth in a few countrie 
faltered last year, we expect the im 
mentation of sound economic reforn 
programs will allow for sustained 
growth in the period ahead. We exp 
the international environment to re 
main supportive with another year 
solid global growth; near 3% in indi 
trial countries and 3.5% or more foi 
non-oil LDCs [less developed coun- 
tries]. Industrial country inflation v 
remain low, and global trade volumt 
will continue to expand. 



In this context, the policy prescrip- 
i which we make here today are 
d on recognition that a free mar- 
lace is the most efficient and pro- 
ive model. The functions of a 
imic market require a sound mac- 
inomic setting: realistic exchange 
5, greater fiscal discipline, market- 
rmined pricing of goods and serv- 
control of inflation, more liberal 
J policies, and reducing other dis- 
lons which impede the function of 
marketplace. We believe ECLAC 
Id devote much more of its efforts 
ludying the introduction and imple- 
.ation of these tried and true pre- 
itions. The market makes choices 
d on efficiency and effectiveness. A 
imarket is the answer to achieving 
Ificant and lasting long-term bene- 
particularly in terms of more effi- 
. use of resources, sustainable and 
d-based growth, and greater flexi- 
l in response to external change, 
laring government can avoid re- 
■sibility for the future, for the well- 
g of the next generation and the 
hfter that. Time and again, the re- 
^1 of such price controls has re- 
fld in increased supplies, and 
ally higher prices have then fallen — 
ne would expect from the operation 
lee markets. 

iBureaucratic and legal constraints 
ivestment protect the firms pres- 
f operating in a market. However, 
jcation of such constraints will per- 
JBntry of new firms and in this way 
jte far greater economic benefits, 
iter employment, increase in 
Ler skills, increased tax revenues, 
la wider choice of goods and serv- 
:for consumers are the result. 
The hard experiences of the 1980s 
i prompted most countries in our 
lisphere to take steps toward a con- 
•.us that economic growth requires a 
lamental shift away from the statist 
•oach. It is this emerging consensus 
:h I believe will set the policy 
lework for the Americas (North, 
tral, and South) in the 1990s. For 
Tiple, Mexico, supported by World 
k trade policy loans, has signifi- 
.ly reduced both tariff and nontariff 
riers to trade, even surpassing Bank 
I targets. Bolivia has undertaken a 
lamental restructuring of its econ- 
'. Colombia, Chile, and Uruguay 
linated many price controls and im- 
iii iments to pi-ivate sector activity. 
ta Rica, the Dominican Repubhc, 
ninica, and Jamaica have adopted 
'6 export-oriented policies which 

; lartment of State Bulletin/July 1988 


U.S. Supports Security Council Resolution 
on Chemical Weapons 

Following are a statement by Ver- 
non A. Walters, U.S. Permanent Rep- 
resentative to the United Nations, 
before the Security Council on May 9, 
1988, and the text of the UN Security 
Council resolution adopted that day. 


The United States fully supports this 
strong action by the Security Council. 
We condemn without reservation illegal 
use of chemical weapons by both sides 
in the gulf conflict. The report submit- 
ted April 25 by the Secretary General 
notes a recent alarming escalation in 
such use. 

As the other Council members are 
aware, we have condemned in the 
strongest terms the recent use of chem- 
ical weapons in violation of the 1925 
Geneva protocol. In particular, use of 
chemical weapons against noncombat- 
ants is an egregious offense against civ- 
ihzation and humanity. 

We are also troubled by evidence 
that both Iraq and Iran are continuing 
to enhance their chemical weapons ca- 
pability through acquisition of precur- 
sors for chemical weapons production. 
We continue to urge those states that 
have not already done so to adopt strict 
controls on the export of chemical 
weapons precursors to both parties. 

It is imperative to act to prevent 
further erosion of existing international 
constraints on chemical weapons use. 
We reiterate our appeal to both sides to 
cease use of chemical weapons and to 
abide by the terms of customary and 
conventional international law, includ- 
ing the Geneva protocol to which they 
both subscribe. 

The horror of this recent illegal use 
of chemical weapons underscores the 
urgency of achieving a negotiated set- 
tlement to the gulf war as soon as pos- 
sible through implementation in full of 
UN Security Council Resolution 598, 
the agreed framework for ending this 
senseless conflict. We call on members 
of the Council to rededicate themselves 
to this vital effort. 


The Security Council. 

Having considered the report of 
25 April 1988 (S/19823) of the Mission dis- 
patched by the Secretary-General to inves- 
tigate allegations of the use of chemical 
weapons in the conflict between the Isla- 
mic Republic of Iran and Iraq, 

Dismayed by the Mission's conclusions 
that chemical weapons continue to be used 
in the conflict and that their use has been 
on an even more intensive scale than 

1. Affirms the urgent necessity of 
strict observance of the Protocol for the 
Prohibition of the Use in War of Asphyx- 
iating, Poisonous or Other Gases, and of 
Bacteriological Methods of Warfare, signed 
at Geneva on 17 June 1925; 

2. Condemns vigorously the continued 
use of chemical weapons in the conflict be- 
tween Iran and Iraq contrary to the obli- 
gations under the Geneva Protocol; 

3. Expects both sides to refrain from 
the future use of chemical weapons in ac- 
cordance with their obligations under the 
Geneva Protocol; 

4. Calls upon all States to continue to 
apply or to establish strict control of the 
export to the parties to the conflict of 
chemical products serving for the produc- 
tion of chemical weapons; 

5. Decides to remain seized of the mat- 
ter and expresses its determination to re- 
view the implementation of this resolution. 

'USUN press release 41. 
-Adopted by a unanimous vote. I 



have enabled them to take advantage of 
the benefits of the U.S. Caribbean 
Basin Initiative. 

Over the past several years, the 
Central American democracies have 
adopted macroeconomic policies and 
programs designed to stimulate export- 
led growth generated by the private 
sector. The fact that the average real 
growth rate of these five countries im- 
proved from a negative 4% in 1982 to a 
positive 2.5% in 1987 is a remarkable 
achievement. Argentina, Chile, and 
Guyana have taken steps to make state- 
run enterprises more efficient and in 
some cases to convert them to more 
dynamic and productive private sector 

Despite these and other examples, 
the process toward free market and 
growth-oriented policies has been slow 
and there has been some backsliding. It 
is difficult. This process forces hard 
choices and requires governments to tell 
some special interest constitutents that 
favorite programs cost too much. How- 
ever, evidence shows that where gov- 
ernments encourage, rather than hin- 
der, the development of entrepre- 
neurship, private initiative will point 
the way toward economic growth. The 
role of the government needs to be 
carefully limited and defined to provide 
a clear and level playing field for busi- 
ness activity. Privatization of state- 
owned enterprises is only one, but an 
increasingly important, means to 
achieve this end. 

As we have seen many times, pri- 
vate investment — whether domestic or 
foreign — shies away from climates of in- 
stability and overregulation. The mas- 
sive capital flight experienced by Latin 
American countries in the last decade 
was the result of unfavorable and shift- 
ing investment climates. It will be re- 
versed only if the owners of capital 
believe that the rules have changed for 
the long haul. Likewise, foreign invest- 
ment will follow adoption of sound eco- 
nomic policies. 

The United States is prepared to 
assist in efforts to encourage flows of 
foreign investment capital, where inves- 
tors are attracted by favorable domestic 
policies and business potential. We have 
ratified the newly created Multilateral 
Investment Guarantee Agency and 
support the agency in its efforts to di- 
rect equity capital to developing coun- 
tries. We encourage those governments 
of the region who have not yet done so, 
to take a careful look at the potential 
benefits membership could offer to 
their economies. 

Liberalization of financial markets 
and the development of strong capital 
markets in developing countries are es- 

sential areas in which increased focus 
can reap large, significant, long-term 
benefits. For economic development to 
be self-sustaining, the financial sector 
must operate on a market basis and be 
capable of functioning efficiently, free 
of excessive regulation. Mobilizing sav- 
ings, domestic as well as foreign, and 
the efficient allocation of these savings 
are critical to sustaining economic 

The Need for an Open Trading System 

Finally, economic growth is strongly 
dependent upon international com- 
petitiveness. Developing country lead- 
ers are recognizing the costs and 
limitations of inward-looking trade pol- 
icies. The benefits of import substitu- 
tions are quickly exhausted. Such 
policies leave as their inheritance high- 
cost industries which are confined to 
small domestic markets and dependent 
on high levels of protection. 

Such a waste of economic potential 
is particularly tragic at a time when 
new technologies in production and in- 
formation are revolutionizing the world 
economy. Our capacity for producing 
and distributing goods and services is 
changing and growing in ways unim- 
agined just a few years ago. Technology 
is creating an increasingly interdepend- 
ent and specialized world economy. The 
benefits of participating in such an 
economy are large and growing. At- 
tempts to live quietly and securely be- 
hind protectionist walls are a harsh 
sentence to economic stagnation, stran- 
gulation, and poverty. 

The countries of Latin America 
and the Caribbean have the natural and 
human resources to play a major role 
in the world economy. Fortunately, a 
number of them have begun to take the 
steps necessary to fulfill their po- 
tential — more rational, more market- 
based, and more open trading regimes. 
Reduced protection and greater trans- 
parency in policymaking and admin- 
istration of trade regimes will 
encourage more efficiency and in- 
novation in production, improved com- 
petiveness internationally, and 
improved allocation of domestic re- 
sources. There are costs to these policy 
changes. They disrupt entrenched in- 
terests and force adaptation and 
change. But the benefits are enormous. 
Real lasting economic growth will be 
achieved that far exceeds any transitory 
dislocation costs. 

It is fortuitous that the current I 
series of global trade negotiations is* i 
designated by the name of an ECL.^' 
country. The Uruguay Round serve.^ 
a symbol of the contributions made 
the region to the world economy an()f 
the need for greater participation in he 
international trading system. As coi • 
tries of the region achieve greater d 
velopment and trade competitivenes 
they have both the right and the ob a- 
tion to participate more fully in the 
shared responsibility for the interna 
tional trading system. 

The Uruguay Round is aimed a( 
major liberalization of trade barrier 
both in industry and in agi-iculture- 
sector which is of crucial importance 
to so many countries of the region. 
Clearly, developed countries have a - 
sponsibility to lead the Internationa 
progress toward trade liberalization Ki 
the same time, the countries of Lat 
America and other developing regio 
also have an increasingly important •- 
sponsibility in this process, commer i- 
rate with their growing importance 
the world trading system. 

Another major objective of the 
round is to increase the effectivenet of 
the GATT [General Agreement on '' ■- 
iffs and Ti-ade], so that its rules are ot 
only improved but also are respecte 
more fully. Again, the advanced de\ ■ 
oping countries will have a crucial i ? 
in ensuring the implementation of 
agreed rules negotiated in the roun 

Finally, the round is aimed at 
adapting the international trading t .- 
tern to the profound changes which 
technology has brought and will cor 
tinue to bring to international econi lic 
exchanges. Ti-ade used to be definei n 
terms of "a barrel of port and a boh f 
cloth" moving between London and 
Lisbon. It now includes such exchai es 
as an electronic impulse sent by a c i- 
puter in Kuala Lumpur to a comput ' 
in San Francisco or a set of technic; 
specifications from an engineer in S 
Paolo to an engineer in Rome. The 
rules of the international trading sy 
tern must adapt to these new dynan ; 
types of trade. Developing countriet 
have an enormous stake in ensuring 
that the benefits of technological ini - 
vation are exchanged as freely and 
competitively as possible. 

The United States has long beeia 
leader in the drive toward a more o m 
and integrated international economi 
system. We remain strongly commiljd 
to resisting protectionist pressures, iot 
only because we believe such a worli 
best serves our own long-term interjts 


Deoartment of State Bulletin/Julv 108 


"'ffj ; also because it is the surest and 

I test route to long-term, self-sustain- 
Kl ; growth for the developing world. 


delegation came to the 22d session 
Asti ECLAC because we remain con- 
ned, engaged, and optimistic about 
i economic future of our hemisphere, 
of us have long pointed to the great 
ential which e.xists for many coun- 
ilensles in the region and for the hemi- 
ere as a whole. The United States is 
imitted to help realize this potential 
i our bilateral relations and through 
iiltilateral institutions and organiza- 
t n.-^. We will continue our support for 
t ' international financial institutions 
; evidenced most recently by the 
; reement on a general capital increase 
(the World Bank. We will continue to 
I iport and further the objectives of 
r international institutions as we 
i\e to maintain a domestic market 
-11 to the exports of developing 

Our hope is that the governments 
our Latin American and Caribbean 
ighbors will be able to use the avail- 
le support to develop the untapped 
man. material, and financial re- 
Ji-ces of the hemisphere. To succeed, 
iically important economic policies to 
pport sustained growth must be put 
place. However, if we work together, 
' can look forward to realizing the 
tential for dynamic, sustained eco- 
mie growth too long unfulfilled. 
It is up to us, the members of 
I3LAC, to insist that our organization 
eet the needs of the present and of 
e future — not those of times past. 
lis can be an important forum for in- 
llfctual leadership to spur economic 
uwth and advance human dignity. 

I began my talk with a reference to 
le 40 years which have passed since 
le founding of this organization. I will 
S|mclude with the observation that the 
rst inter-American conference, called 
/ Simon Bolivar, met more than 160 
itjears ago. There is no more fitting time 
) rededicate ourselves to the dream of 
le Americas. ■ 

FY 1989 Assistance Requests 
for Organizations and Programs 

by Richard S. Williamson 

Statement before the Subcommittee 
on Foreign Operations of the House Ap- 
propriations Committee on April 13, 
1988. Ambassador Williamson is As- 
sistant Secretary for International Or- 
ganization Affairs.^ 

It is a pleasure to appear before you 
today in support of the President's 
fiscal year (FY) 1989 budget request of 
$200 million for the "International Or- 
ganizations and Programs" account. 
This request is a sound one. As you 
know, this account funds U.S. volun- 
tary contributions to development, hu- 
manitarian, and scientific assistance 
programs of the United Nations and 
the Organization of American States 

Our request represents a modest 
3% increase over last year's request but 
is below what was actually appropriated 
for FY 1988. The increase in our re- 
quest arises from our sensitivity to the 
priority which Congress attaches to the 
programs in this account, tempered by 
a realistic assessment of what they can 
achieve and the Administration's com- 
mitment to maintaining the budget 
summit compromise reached with the 
Congress last year. We have done our 
best to include sufficient funding for 
the organizations usually included in 
our request as well as for several items 
added by the Congress in past years to 
our requests. 

As you know, our contributions 
funded by this account are voluntary. 
As a result, the Congress and the Ad- 
ministration always have been able to 
exercise a greater measure of control 
over the size of the account as a whole 
as well as the amounts allocated to the 
individual components. Therefore, the 
key question before us today is — how 
can we best assure that the use of tax- 
payers' money for voluntary contribu- 
tions promotes the interests and values 
of the American people? We have done 
our best to strike what we believe is a 
realistic balance in behalf of taxpayer 

My statement today will focus, 
first, on three general points: the diver- 
sity of the activities and programs in 
this account, the need for multilateral 
programs to address global challenges 
that no one nation can tackle alone, and 

the direct benefit of those activities for 
U.S. citizens. I will then turn to a 
more detailed review of the account, 
weighing the importance and effective- 
ness of the programs against the four 
criteria which we have used to help as- 
sure that they do, in fact, serve signifi- 
cant U.S. interests. 

Diversity of Account Activities 

This account addresses some of the 
most critical global challenges of this 
decade. It ranges from the outstanding 
efforts in child survival of the United 
Nations Children's Fund (UNICEF), to 
the monitoring of ecosystems and storm 
systems of the World Meteorological 
Organization (WMO) and United Na- 
tions Environment Program (UNEP), 
to the efforts to harness nuclear energy 
safely and efficiently of the Interna- 
tional Atomic Energy Agency (IAEA). 

There are less well-known pro- 
grams, which also affect important 
global issues. For example, the UN 
Capital Development Fund is helping 
the Government of Somalia to rehabili- 
tate reservoirs which provide some 
700,000 nomads and their livestock with 
water during the dry season. The UN 
Educational and Training Program for 
Southern Africa has tried, by awarding 
scholarships to college-age black South 
Africans and Namibians, to provide 
support to those opposed to apartheid. 
U.S. contributions to the UN Voluntary 
Fund for Victims of Torture provide 
medical and legal assistance to victims 
of oppression. 

Need for a Multilateral Approach 

U.S. voluntary contributions to interna- 
tional organizations are a small, but 
important, part of our involvement in 
the international system. In many in- 
stances, U.S. unilateral activity would 
not be as effective or have as broad an 
impact as does a multilateral effort. It 
would, in many instances, cost us more. 
For example, weather forecasting by 
WMO gives us fast, effective access to 
data from many other nations which we 
could not collect ourselves. 

Multilateral progi-ams are also able 
to operate in areas of genuine need 
where an identifiable U.S. program 
might be unwelcome. In addition, UN 

l()epartment of State Bulletin/July 1988 



agencies can often assume a coordinat- 
ing role in urgent and sensitive situa- 
tions. UNICEF has made an important 
contribution tlirough its partnership 
with the international donor community 
in providing emergency relief in war- 
torn countries — far exceeding U.S. ca- 
pability for outreach. 

Because of UNEP's global approach 
to environmental issues, such as protec- 
tion of the ozone layer and control of 
pollution of regional seas, including the 
Caribbean, we can maximize collective 
efforts to protect the international en- 
vironment. The success of recent nego- 
tiations to protect the ozone layer is an 
example of the kind of problem that the 
United States cannot tackle alone. 

Another example of the need to 
find multilateral answers to multilateral 
problems is the safeguards system of 
the International Atomic Energy 
Agency. By U.S. law, the United States 
is required to apply IAEA safeguards 
to U.S. nuclear exports. Without the 
international safeguards system, we 
would be forced by our own laws to 
implement our own safeguards system. 
Such a system would almost certainly 
be less effective. It would definitely be 
more costly than the current interna- 
tional system. 

Under our budget constraints, and 
as OECD-nation [Organization for Eco- 
nomic Cooperation and Development] 
economic assistance to developing coun- 
tries remains static, the effectiveness of 
UN system programs is more impor- 
tant than ever U.S. contributions to 
these programs, though small by com- 
parison with the billions the United 
States provides annually in economic 
assistance, give us considerable influ- 
ence on the content and management of 
UN programs, making the United 
States a key voice in the way the inter- 
national system addresses development 

Benefits to Americans 

Too often there is a temptation to dis- 
miss the international organizations and 
programs account as simply "foreign 
aid." Although it does indeed assist 
those abroad, it is important to under- 
score that U.S. citizens benefit directly 
and significantly from the activities 
funded through this account. 

Many of the activities funded with 
international organizations and pro- 
grams money (for example, training) 
are undertaken here in the United 
States, or use U.S. experts, services, 

and equipment. A significant portion of 
this funding never leaves the United 
States, or it returns home to American 
pockets in the form of salaries or ex- 
penses. These economic and profes- 
sional ties, moreover, have long-range 
implications. None of us can say with 
certainty just how many follow-on con- 
tracts have gone to U.S. firms, how 
many U.S. experts have been re- 
quested by name by other govern- 
ments, and how much U.S. equipment 
has been purchased as a spin-off of 
U.S. assistance provided by interna- 
tional organizations and programs 

The FY 1989 Request 

Let us now turn to a more detailed 
review of our request. Our congres- 
sional presentation for FY 1989 indi- 
cates proposed funding for each 
organization, including a comparison 
with last year's funding levels. As I 
noted at the outset, we have also made 
a concerted effort to ensure that funds 
appropriated for FY 1989 are used 
wisely to serve the interests of the 
American people. In considering ac- 
tivities for inclusion in our funding re- 
quest, we have applied four criteria in 
screening these activities. I believe that 
these four criteria would enjoy broad 
support among the American people. 
According to these criteria, expend- 
itures from this account should: 

• Serve national interests that can- 
not be met more effectively through ei- 
ther unilateral or bilateral actions; 

• Demonstrate tangible U.S. sup- 
port for humanitarian activities; 

• Encourage reliance on market 
forces and the private sector which are 
the real engines for development; and 

• Reflect a cost-effective approach 
to implementation of projects and pro- 
gi'ams. The operational improvements 
which the United States has encour- 
aged for organizations receiving our as- 
sessed contributions should apply also 
to those receiving our voluntary 

In preparing our request, every 
effort was made to assure that the ac- 
tivities to be funded by our proposed 
contributions meet these criteria. I be- 
lieve we have succeeded in our efforts. 
These agencies are generally responsive 
to U.S. concerns. We do believe, how- 
ever, that most of the organizations in 
this account could do a much better job 
at hiring more Americans. We have 

made this point consistently and wi 
continue to work to assure equitabl 
U.S. representation in these intern 
tional organizations. 

Keeping in mind these criteria, 
which helped to shape our budget i 
quest, I would now like to focus on le 
individual programs within the acciiit 

The largest item in the accounika 
$112 million request for the United la- 
tions Development Program (UNI'). 
This amount represents a significar in- 
crease over our FY 1988 request ai 
reflects our longstanding policy to 
strengthen the UNDP as the prim;/ 
source of funding and overall coord i- 
tion for technical cooperation activ: b 
conducted by UN system agencies d 

Administrator William Draper, 
U.S. citizen, has strengthened the 
management reform effort begun l 
Brad Morse, your former colleague n 
1985, aimed at improving program .al- 
ity and strengthening its impact. 1 ■ 
internal management review syste 
that Administrator Draper has put i 
place, coupled with the increased c r- 
sight made possible by members 
through the UNDP Governing Con il's 
Working Group of the Committee ( :h( 
Whole, has opened up new avenue; o 
the improvement of progi'am desig 
implementation, and financing. 

Administrator Draper, with co cil 
members from both donors and rei i- 
ent countries, is committed to add >s- 
ing the tough management probler of 
far-flung field programs and makii 
sure UNDP's activities make a me ar- 
able difference. One aspect of this n- 
cern is the dispersion of programs to 
many small activities. With this cc 
cern in mind, we have encouraged 
UNDP to focus its efforts. UNDP is 
been responsive to this concern in, Dr 
example, its careful review of its p - 
grams in Africa. UNDP can play a at- 
alytic role and needs to retain a b£ mo 
between flexibility and focus in its ro- 
graming. UNDP is also playing an \- 
creasingly important role in the 
structural adjustment process in d el- 
oping countries by helping them fi , 
in conjunction with the World Ban 
appropriate ways to address the scial 
issues in the design of future strucfra 
adjustment programs and strengtln- 
ing the capability of developing coiltn 
officials to manage these complex 

The second largest item in ourje- 
quest is $32 million for the United ■ 
Nations Children's Fund. This is ;; 
modest increase of $2 million over ir 


Department of State Bulletin/JulybSi 


UtSS request. UNICEF's widely ac- 
nied, cost-effective measui'es in 
J health — particularly immunization 
iirams against the six major child- 
li diseases and the promotion and 
( if oral rehydration therapy — are 
iiiiated to avoid up to 40,000 child- 
il deaths per week. The fund is also 
lived in other important — if less 
; publicized — programs, such as 
'■ supply and sanitation. Our re- 
reflects our dual commitment to 
ihstantive work of the organiza- 
i and the necessity for fiscal 
The third largest item in our 
r uest is $24 million for the Inter- 
n ional Atomic Energy Agency. 
1 s request represents a 7.6% increase 
1 V our FY 1988 request. This increase 
tmues our longstanding effort to re- 
iice the overall credibility and effec- 
•iii'ss of international nuclear 
miards. Approximately one-third of 
iiital U.S. voluntary contributions 
IAEA for FY 1989 will be spent in 
iljort of the safeguards system. This 
s iport is increasingly critical in light 
[ p-owing demands on the IAEA for 
£ )anded safeguards coverage, due to 
t increasing number and complexity 
[ luclear facilities. Strong U.S. finan- 
( I support for safeguards is essential 
i he effectiveness of this central ele- 
' nt of international efforts to prevent 
lurther spread of nuclear weapons 
II be maintained. Although we 
: iingly support the safeguards pro- 
. mi, we have registered our concerns 
warding the downward trend of U.S. 
c izens employed in the safeguards de- 
I'tment. I personally have had discus- 
ns with Director General Blix on this 
jjfct, and he is well aware of my 
s.i.pectations in this regard. 
, I Members of the Organization of 
nerican States look to the United 
ates for support in what they con- 
ler to be their primary concern — 
•hnical assistance for development. 
11' request of $15 million represents a 
increase over our FY 1988 request. 
' believe it demonstrates the con- 
lued U.S. commitment to the inter- 
iierican system and will influence the 
■ el (if support which the United 
atis can expect from other OAS 
iiibers on issues of concern to us, 
eluding respect for human rights, fair 
ade, private investment, and narcot- 
5 control. 

Our request for $6.8 million for the 
N Environment Program is a signifi- 
int increase over our FY 1988 request, 
he increase is a reflection of our satis- 
ction that UNEP's programs and ac- 

epartment of State Bulletin/July 1988 

UN Security Council Resolution 
on South Lebanon 

by Vernon A. Walters 

Statement before the UN Security 
Council on May 10, 1988. Ambassador 
Walters is U.S. Permanent Represen- 
tative to the United Nations. '^ 

The United States today has voted 
against the draft resolution on southern 
Lebanon. As we have explained on pre- 
vious, similar occasions, we believe the 
Security Council should not address the 
problems of southern Lebanon in reso- 
lutions that fail to recognize the attacks 
and reprisals originating on both sides 
of the Israeli-Lebanese border. 

The United States strongly sup- 
ports the independence, territorial in- 
tegrity, and unity of Lebanon. We have 
called publicly and repeatedly for the 
withdrawal of all foreign troops from 
Lebanon and the extension of central- 
government authority throughout the 
country. This is still our position. 

We are deeply concerned by the re- 
cent heavy casualties, the devastation 
of property and displacement of individ- 
uals, and by the cross-border shellings 
and other activities in both directions. 

The sad truth remains that as long 
as armed, extremist elements use 
southern Lebanon to stage terrorist at- 
tacks against Israel, the border be- 

tween Israel and Lebanon cannot be 
secure. All those who provide funds 
and arms to militias and other groups 
that operate in southern Lebanon, 
while denying the authority of the cen- 
tral Lebanese Government, must share 
the responsibility for the continued in- 
stability in that area. 

The United States is aware that 
armed Palestinian elements, supported 
by Hizballah and other groups, have 
made repeated attempts in the last 4 
months to enter Israel from Lebanon to 
carry out violent acts. Therefore, we 
cannot accept a resolution that does not 
acknowledge the well-known fact that 
hostile acts against Israel are originat- 
ing in Lebanon. 

My government reaffirms its com- 
mitment to UN Security Council Reso- 
lution 425. We abhor the senseless loss 
of life and recurrent terrorist violence 
that afflict the lives of those on either 
side of the Israeli-Lebanese border who 
desire to live peacefully. We remain 
ready to work with all parties for the 
restoration of peace and security for 
both Lebanon and Israel. We continue 
to believe it is essential that there be 
agreed security arrangements to assure 
stability and security in this area. 

'USUN press release 44. 

tivities closely parallel U.S. interests 
and complement efforts to improve our 
own environment. We continue to be- 
lieve that other donors must contribute 
a greater share and that we would like 
to see more Americans employed by 

For some years, U.S. payments to 
the International Fund for Agri- 
cultural Development (I FAD) have 
been included in this account. IFAD is 
nearing the end of its second replenish- 
ment period, and the $2.5 million re- 
quested will complete our obligation. 
Negotiations for the third replenish- 
ment are getting underway, and they 
face many of the same problems that 
existed at the time the last replenish- 
ment was negotiated — specifically, the 
capacity of the OPEC [Organization of 
Petroleum Exporting Countries] to con- 
tinue to share the burden with OECD 
donors. We continue to believe that 
IFAD has a unique and important role 

to play in responding to the needs of 
small farmers and the landless poor. 
This role has increased in importance 
as developing countries, especially 
those in Africa, have recognized the 
need to take effective steps to revitalize 
their agricultural sector. 

The World Meteorological Organi- 
zation serves important U.S. economic 
and strategic interests by providing vi- 
tal worldwide weather information 
through its World Weather Watch Pro- 
gram. These data would otherwise be 
inaccessible to the United States or 
available only through the establish- 
ment of costly bilateral arrangements. 
This information assists the United 
States in the military, commercial, and 
civilian sectors, through such ca- 
pabilities as storm detection, agri- 
cultural forecasting, and the 
determination of international shipping 
and air traffic routes. To assist funding 



this program, we are seeking $2.0 mil- 
lion for FY 1989. 

The request for $1.8 million for 
International Convention and Scien- 
tific Organization Contributions 
(ICSOC) is related to the U.S. with- 
drawal from UNESCO lUN Educa- 
tional, Scientific and Cultural 
Organization]. With the withdrawal, 
the United States no longer contributes 
its share of costs for some specific ac- 
tivities supported directly by UNESCO 
which significantly benefit U.S. domes- 
tic interests. The programs proposed 
for funding under the rubric "Interna- 
tional Convention and Scientific Organi- 
zation Contributions" protect the more 
important, direct benefits to American 
scientific, educational, cultural, and 
business communities — benefits which 
were formerly derived through U.S. 
membership in UNESCO. ICSOC will 
finance continued U.S. participation in 
critical UNESCO activities such as the 
Universal Copyright Convention, 
the Intergovernmental Oceanographic 
Commission, and the Man and the Bio- 
sphere Program. Additionally, we have 
included under the ICSOC request 
funding for two major international 
conventions on the environment, the 
Vienna Convention on the Protection 
of the Ozone Layer and the Cartegena 
Convention for the Protection and De- 
velopment of the Marine Environment 
of the Wider Caribbean Region and 
related protocols. 

The United Nations Capital De- 
velopment Fund (UNCDF) provides 
seed capital, on a grant basis, for small 
development projects using technology 
appropriate to community-based devel- 
opment activities. Because of their size, 
these projects are unlikely to attract 
financing by multilateral development 
banks. Our request of $1.5 million will 
enable UNCDF to continue to assist in 
projects financed jointly with bilateral 
agencies and other multilateral 

Our request of $800 thousand for 
the UN Educational and Training 
I*rogram for Southern Africa, coupled 
with our request of $250 thousand for 
the UN Trust Fund for South Africa, 
provides tangible evidence of a U.S. 
commitment to peaceful change in 
southern Africa and a positive indica- 
tion of our support for the forces op- 
posed to apartheid. 

Our $500 thousand request to fund 
the UN Industrial Development Orga- 
nization (UNIDO) Investment Promo- 
tion Service office in Washington, 

D.C., does not represent an increase 
over last year's request, but does repre- 
sent a sizeable increase over the 
amount appropriated. We have re- 
quested this increase because promo- 
tion of private sector development is a 
major U.S. priority both in interna- 
tional organization affairs and in devel- 
opment assistance. UNIDO's 
Investment Promotion Service provides 
one of the clearest examples within the 
UN system of the importance of private 
investment capital in the development 
process. The program stimulates the 
private sector in developing countries, 
which leads to increased markets for 
U.S. goods and services. A contribu- 
tion of $500 thousand to the Wash- 
ington Investment Promotion Service 
office would, for the first time, fully 
fund the activities of the office. 

In FY 1989, the Convention on in- 
ternational Trade in Endangered Spe- 
cies (CITES) will continue its role as a 
major contributor to international con- 
servation efforts and the primary inter- 
national mechanism governing 
international trade in wildlife. CITES 
will continue work on major projects 
such as the investigation of legal and 
illegal trade in key species. Our request 
includes $200 thousand for CITES. 

We have also included a request for 
the UN Voluntary Fund for Victims of 
Torture. Our contribution to the fund 
complements our objectives in the UN 
Human Rights Commission and U.S. 
bilateral human rights efforts. A U.S. 
contribution of $100 thousand will help 
the fund expand to include some social 
services to torture victims and to their 
families along with its present empha- 
sis on medical and psychological 

I would now like to address three 
items included in our request, which 
the Congress has often added to our 
request in past years. 

The first of these items is a contri- 
bution of $200 thousand to the United 
Nations Fellowship Program. These 
funds will be used to reimburse, at es- 
sentially a token level, U.S. Govern- 
ment offices which administer 
placement of UN-funded trainees who 
come to study in the United States. 

The next such item in our request 
is the World Heritage Fund. Our .$200 
thousand contribution will assist na- 
tions to protect universally acclaimed 
cultural and natural sites from deterio- 
ration and destruction. I am pleased to 
announce that in 1987 with the inscrip- 
tion of Chaco Culture World Heritage 
Site in New Mexico; Hawaii Volcanoes 

National Park in Hawaii; and the M( 
ticello/University of Virginia Jeffer.*; 
Thematic in Virginia, the United St, 
now has the most sites inscribed on ' 
World Heritage list. 

The final item is our $150 thous.ii 
request for the UN Development Fid 
for Women (UNIFEM) which will s, 
ply critical financial support to enal 
UNIFEM to assure that considerati 
of gender issues is integrated into 
mainstream development activities. 
Given the stage at which the UN s> 
tem is in taking issues of "Women ii 
Development" into account in progr i 
and project design. It is important ■ 
UNIFEM to strengthen its budget; 
practices and management to assun 
that these monies will be used 


Before concluding my statement I 
would like to emphasize one point 
which is too often overlooked. We h e 
not achieved such an extraordinary 
gree of influence in the multilateral 
tem simply through the size of our 
contributions alone. We enjoy this j ;i- 
tion because we are recognized as t 
leading thinker on development issi ;, 
and we bring an unrivaled level of t h- 
nical expertise to the international fii- 
munity. In fact, our ideas and expe se 
are often more important than the 
number of dollars contributed. It is le 
combination of U.S. resources — inti 
lectual, financial, and technical — th 
makes us the major force in the mi - 
lateral system. I believe that the r( 
quest before you today is sufficient > 
maintain our role as the major forc' m 
the international development seem in 
fact, our voluntary contributions to le 
international system continue to dw "f 
those of the Soviet Union. Accordii to 
documentation provided by the Uni fl 
Nations, our voluntary contribution to 
the UN system in 1986 were almost 
times higher than those of the Sovi 

We believe that U.S. contribut n.< 
to the "International Organizations id 
Programs" account both reflect the i- 
terests of U.S. citizens and serve tl 
needs of other nations. 

'The complete transcript of the he ■• 
ings will be published by the committf 
and will be available from the Superimpd- 
ent of Documents, U.S. Government PiJt- 
ing Office, Washington, D.C. 20402.B i 


Department of State Bulletin/July kB8 


lansfer of U.S. Funds to Panama 


11 R. 31, 19881 

, iimmend those persons who are 
-mig General Noriega's threats 
mtimidations to provide him with 
iicial resources. We urge all U.S. 
ipanies and persons to comply 
1 the lawful requests of President 
\alle concerning payment of finan- 
(ihligations to the Government of 
aiiia. Meanwhile, the U.S. Gov- 
lii'iit is taking the following steps 

, ,i|i|)ort of the legitimate Govern- 

; It of Panama. 

• U.S. Government payments due 
1 liiivernment of Panama are to be 

isited in an account of the Govern- 
i it uf Panama at the Federal Reserve 
8:k of New York. This account will be 
» up at President Delvalle's request. 
,-: •The Department of Justice will 

Iticipate in actions by private parties 
) have debts to the Government of 
ama to declare that President Del- 
i" e is the leader of the recognized 
; ernment of Panama. Pursuant to 
,' rt orders, the Seci'etary of the 
1 asury will assist in the establish- 
1 It of an account to be available for 
i deposit of funds. 

'? •The Internal Revenue Service will 
le guidance to U.S. taxpayers ex- 
ining how tax credit may be claimed 
I Panamanian income taxes paid into 
account to be specified at the 
leral Reserve Bank of New York. 

Through these measures, we are 

; ing U.S. companies and persons an 

c^ntive and opportunity not to pro- 

1 e financial support to the Noriega 

r ime. Should these measures prove 

1 ufficient, we will review additional 

al steps that may be necessary to 

ly transfer of funds to the Noriega 

' ;ime from U.S. companies and 


I These measures are in addition to 
il:< ! following actions that were an- 
is tinced on March 11. 

Withdrawal of trade preferences 
iilable to Panama under the gener- 
zed system of preferences and the 
ribbean Basin Initiative. 

• Increased scrutiny of Panama by 
2 Immigration and Customs Services 

ff order to apprehend drug traffickers 
■ d money launderers. 

• Placing in escrow certain pay- 
ents by the Panama Canal Commis- 
)n to the Government of Panama. 

The United States remains commit- 
ted to the goal of restoring democratic 
government and constitutional order in 
Panama. When that goal is achieved, 
the United States is fully prepared to 
work with the Government of Panama 
to help restore quickly Panama's eco- 
nomic health. In addition, the U.S. 
Government is providing one-quarter 
million dollars to support the Caritas 
emergency feeding program in Panama. 
We will continue to examine the food 
needs of the poor in Panama. 

'Text from Weekly Compilation of 
Presidential Documents of Apr. 4, 1988.1 

Pan American Day 
and Week, 1988 

APR. 11, 1988' 

For nearly six decades, the observance of 
the annual Pan American Day has told the 
world that the nations of the Western 
Hemisphere share a unique harmony of 
ideals — the love of liberty, independence, 
and democracy; the willingness to seek 
these treasures and to preserve them 
wherever they are found; and firm and pro- 
found opposition to totalitarianism. Each 
year the United States joins with countries 
throughout the Americas in pledging 
fidelity to these ideals so vital to our 

Almost a century ago, in Washington, 
D.C., the First International Conference of 
American States made the idea of hemi- 
spheric unity a reality by establishing the 
International Union of American Re- 
publics, the predecessor of the Organiza- 
tion of American States (OAS). The 
common aspirations of the peoples of the 
Americas for freedom, independence, de- 
mocracy, peace, security, and prosperity 
inspire the OAS, which is charged with up- 
holding and defending these critical objec- 
tives within the Inter-American System. 

The past decade has witnessed several 
victories for freedom and democracy in the 
Americas. Ten years ago, the great major- 
ity of Latin Americans lived under oppres- 
sion; today, more that 90% of the people of 
the Americas live under democratic gov- 
ernment. We can all be truly grateful for 
these transformations to democracy. 

On April 30, the OAS will celebrate 
the 40th anniversary of the signing of its 
charter in Bogota in 1948— a charter that 
declares, "the solidarity of the American 

States and the high aims which are sought 
through it require the political organiza- 
tion of those States on the basis of the 
effective exercise of representative democ- 
racy." This principle continues to encour- 
age brave men and women in the fight for 
liberty and democracy. 

The OAS Charter establishes the basis 
for hemispheric cooperation in the peaceful 
settlement of disputes, economic and social 
development, education, and the protection 
of human rights. In recent years, the OAS 
has added a new dimension to its regional 
problemsolving by creating the OAS Drug 
Abuse Control Commission to combat nar- 
cotics trafficking and drug abuse. The 
United States of America accords special 
priority to the crucial work of the OAS in 
the fields of human rights and narcotics 

The foundations of the Inter-American 
System emerged from the Americas' inde- 
pendence movements, but its consolidation 
dates from the signing of the OAS Charter; 
so it is especially fitting that we renew our 
commitment to the principles of the Orga- 
nization of American States and its spe- 
cialized agencies on Pan American Day this 
year as 40th anniversary celebrations take 

Now, Therefore, I, Ronald Rea- 
gan, President of the United States of 
America, by virtue of the authority vested 
in me by the Constitution and laws of the 
United States, do hereby proclaim Thurs- 
day, April 14, 1988, as Pan American Day, 
and the week of April 10 through April 16, 
1988, as Pan American Week. I urge the 
Governors of the fifty States, the Governor 
of the Commonwealth of Puerto Rico, and 
officials of other areas under the flag of the 
United States of America to honor these 
observances with appropriate ceremonies 
and activities. 

In Witness Whereof, I have here- 
unto set my hand this eleventh day of 
April, in the year of our Lord nineteen 
hundred and eighty-eight, and of the inde- 
pendence of the United States of America 
the two hundred and twelfth. 

Ronald Reagan 

'Text from Weekly Compilation of 
Presidential Documents of Apr 18, 1988.1 

ijepartment of State Bulletin/July 1988 



Current Actions 



The Antarctic Treaty. Signed at Wash- 
ington Dec. 1, 1959. Entered into force 
June 23, 1961. TIAS 4780. 
Accession deposited: Canada, May 4, 1988. 


Convention for the suppression of unlawful 
seizure of aircraft. Done at The Hague 
Dec. 16, 1970. Entered into force Oct. 14, 
1971. TIAS 7192. 

Accession deposited: Yemen (Aden), 
Apr 20, 1988.' 

Protocol for the suppression of unlawful 
acts of violence at airports serving interna- 
tional civil aviation. Done at Montreal 
Feb. 24, 1988. [Senate] Treaty Doe. No. 

Transmitted to the Senate for advice and 
consent: May 20, 1988. 

Judicial Procedure 

Convention on the civil aspects of interna- 
tional child abduction. Done at The Hague 
Oct. 25, 1980. Entered into force Dec. 1, 
1983; for the U.S. July 1, 1988 [Senate] 
Treaty Doc. 99-11. 

Ratification deposited: U.S., Apr. 29, 


International agreement on jute and jute 
products, 1982, with annexes. Done at Ge- 
neva Oct. 1, 1982. Entered into force provi- 
sionally Jan. 9, 1984; definitively Aug. 26, 

Accession deposited: Portugal, Apr. 28, 

Marine Pollution 

Convention for the protection and develop- 
ment of the marine environment of the 
wider Caribbean region, with annex. Done 
at Cartagena Mar. 24, 1983. Entered into 
force Oct. 11, 1986. [Senate] Treaty Doc. 

Protocol concerning cooperation in combat- 
ting oil spills in the wider Caribbean re- 
gion, with annex. Done at Cartagena Mar 
24, 1983. Entered into force Oct. 11, 1986. 
Ratification deposited: Colombia, Mar. 3 

Maritime Matters 

International convention on maritime 
search and rescue, 1979, with annex. Done 
at Hamburg Apr. 27, 1979. Entered into 
force June 22, 1985. 

Ratifications deposited: Poland, Feb. 26, 
1988; U.S.S.R., Mar. 25, 1988. ■' 


Convention for the protection of the ozone 
layer, with annexes. Done at Vienna 
Mar. 22, 1985.- [Senate] Treaty Doc. 99-9. 
Ratification deposited: Egypt, May 9, 1988. 
Accession deposited: Hungary, May 4, 
1988; Maldives, Apr. 26, 1988. 


Constitution of the Universal Postal Union. 
Done at Vienna July 10, 1964. Entered into 
force Jan. 1, 1966. TIAS 5881. 
Additional protocol. Done at Tokyo 
Nov. 14, 1969. Entered into force July 1, 
1971. TIAS 7150. 

Second additional protocol. Done at 
Lausanne July 5, 1974. Entered into force 
Jan. 1, 1976. TIAS 8321. 
Ratification deposited: Nicaragua, Feb. 15, 

Third additional protocol to the Constitu- 
tion of the Universal Postal Union of 
July 10, 1964, general regulations with an- 
nex, and the universal postal convention 
with final protocol and detailed regula- 
tions. Done at Hamburg July 27, 1984. En- 
tered into force Jan. 1, 1986; for the U.S. 
June 6, 1986. 

Accessions deposited: Albania, Feb. 15, 
1988; Nicaragua, Feb. 15, 1988. 
Ratifications deposited: Australia, Feb. 9, 
1988; France, Jan. 19, 1987; Israel, Mar. 18, 
1988; San Marino, Mar. 14, 1988. 
Money orders and postal travelers' checks 
agreement, with detailed regulations with 
final protocol. Done at Hamburg July 27, 
1984. Entered into force Jan. 1. 1986; for 
the U.S. June 6, 1986. 
Ratifications deposited: France, Jan. 19, 
1987; San Marino, Mar. 14, 1988. 
Postal parcels agreement with final pro- 
tocol and detailed regulations. Done at 
Hamburg July 27, 1984. Entered into force 
Jan. 1, 1986; for the U.S. June 6, 1986. 
Accessions deposited: Albania, Feb. 15, 
1988; Nicaragua, Feb. 15, 1988. 
Ratifications deposited: Australia, Feb. 9, 
1988; France, Jan. 19, 1987; Israel, Mar. 18, 
1988; San Marino, Mar. 14, 1988. 
Satellite communications systems agree- 
ment relating to the International Telecom- 
munications Satellite Organization 
(INTELSAT), with annexes. Done at 
Washington Aug. 20, 1971. Entered into 
force Feb. 12, 1973. TIAS 7532. 
Accession deposited: Swaziland, May 18, 

Operating agreement relating to INTEL- 
SAT, with annex. Done at Washington 
Aug. 20, 1971. Entered into force Feb. 12, 
1973. TIAS 7532. 

Signature: Posts and Telecommunications 
Corporation (Public) [Swaziland], May 18, 

Amendments [aeronautical services] to 
convention and the operating agreemei 
the International Maritime Satellite Or 
nization (INMARSAT) of Sept. 3, 1976 
(TIAS 9605). Adopted at London Oct. 1 

Acceptances deposited: Australia, Mar. 
1987 (conv.), July 10, 1987 (op. agt.); Bv 
garia, June 3, 1987; Belorussian S.S.R, 
Dec. 22, 1986; Canada, Mar. 14, 1988; 
Chile, Feb. 24, 1988; China, May 15, 19 
Denmark, Jan. 12, 1987; Finland, Jan. ( 
1987; Kuwait, Jan. 25, 1988; Netherlani 
May 13, 1987; Norway, July 1, 1986; Phi 
pines, Aug. 17, 1987; Poland, Dec. 2, 18 
Portugal, June 1, 1987; Saudi Arabia, I 
9, 1986; Sri Lanka, June 10, 1986; Swed 
Dec. 15, 1986; Ukrainian S.S.R., Oct. 1 
1986 (conv.), Nov. 28, 1986 (op. agt.); 
U.S.S.R., Nov. 25, 1986; U.K., May 12J 
1986; U.S., Apr. 6, 1988. 

Seabed Disarmament 

Treaty on the prohibition of the empL 
ment of nuclear weapons and other wej 
ons of mass destruction on the seabed 
the ocean floor and in the subsoil then 
Done at Washington, London, and Mogi 
Feb. 11, 1971. Entered into force May ij 
1972. TIAS 7337. 

Ratification deposited: Brazil, May 10, 
1988. ■■> 


International telecommunications conv* 
tion, with annexes and protocols. Don^ 
Nairobi Nov. 6, 1982. Entered into for»r 
Jan. 1, 1984; definitively for the U.S. 
Jan. 10, 1986. [Senate] Treaty Doc. 99-| 
Ratification: Nepal, Jan. 4, i988 


Convention on the prevention and punn 
ment of crimes against internationally 
tected persons, including diplomatic 
agents. Done at New York Dec. 14, 19'' 
Entered into force Feb. 20, 1977. TIAS 

Accession deposited: Syrian Arab Re 
public, Apr 25, 1988. 

International convention against the ta 
of hostages. Done at New York Dec. 1' 
1979. Entered into force June 3, 1983; 
the U.S. Jan. 6, 1985. 
Accession deposited: Gei'man Dem. Re 
May 2, 1988. 


Convention against torture and other 
cruel, inhuman, or degrading treatmei 
punishment. Adopted at New York De 
1984. Entered into force June 26, 1987 
[Senate] Treaty Doc. 100-20. 
Signatures: Afghanistan, Argentina, 
Belgium, Bolivia, Costa Rica, Denmar 
Dominican Republic, Ecuador, Finland 
France, Greece, Iceland, Italy, Nethei 
lands, Norway, Portugal, Senegal, Sp£ 


en, Switzerland, Uruguay, Feb. 4, 
Algeria, Nov. 26, 1985; Austria, Mar. 
185; Brazil, Sept. 23, 1985; Bulgaria, 
10, 1986;' Belorussian S.S.R., Dec. 
185;' Canada, Aug. 23, 1985; Chile, 

23, 1987; China, Dec. 12, 1986;' Co- 
,a, Apr. 10, 1985; Cuba, Jan. 27, 1986; 
IS, Oct. 9, 1985; Czechoslovakia, Sept. 
16;' Gambia, Oct. 23, 1985; German 

Rep., Apr. 7, 1986;' Germany, Fed. 
of, Oct. 13, 1986; Guinea, May 30, 
Guyana, Jan. 25, 1988; Hungary, Nov. 
186;' Indonesia, Oct. 23, 1985; Israel, 
22, 1986; Liechtenstein, June 27, 1985; 
imbourg, Feb. 22, 1985; Mexico, Mar. 
(85; Nicaragua, Apr. 15, 1985; Panama, 
22, 1985; Peru. May 29, 1985; Sierra 
e, Mar. 18, 1985; Sudan, June 4, 1986; 

Mar. 25, 1987;^ Tunisia, Aug. 26, 

Turkey, Jan. 25, 1988; Ukrainian 
I., Feb. 27, 1986;' U.S.S.R., Dec. 10, 

U.K., Mar. 15, 1985; U.S., Apr. 18, 
' Venezuela, Feb. 15, 1985. 
ssions deposited: Belize, Mar. 17, 1986; 

roon, Dec. 19, 1986; Dominica, 

9, 1986; Egypt, June 25, 1986; Philip- 

, June 18, 1986, Uganda, Nov. 3, 1986. 

ications deposited: Afghanistan, 

1, 1987;' Argentina, Sept. 24, 1986; 
k-ia, July 29, 1987;-* Bulgaria, Dec. 16, 
' Belorussian S.S.R., Mar. 13, 1987;' 
«da, June 24, 1987; Colombia, Dec. 8, 

Denmark, May 27, 1987; Ecuador, 

30, 1988; France, Feb. 18, 1986;''^ Ger- 
IDem. Rep., Sept. 9, 1987;' Hungary, 

15, 1987;' Luxembourg, Sept. 29, 

3 Mexico, Jan. 23, 1986; Norway, 

9, 1986;'' Panama, Aug. 24, 1987;' Sen- 

Aug. 21, 1986; Spain, Oct. 21, 1987;3 
«erland, Dec. 2, 1986;3 Togo, Nov. 18, 
3 Ukrainian S.S.R., Feb. 24, 1987;' 
S.R., Mar 3, 1987;' Uruguay, Oct. 24, 

ismitted to the Senate for advice and 

int: May 20, 1988 


*na convention on the law of treaties 
feen states and international organiza- 
or between international organiza- 
., with annex. Done at Vienna Mar. 21, 


fication deposited: Sweden, Feb. 10, 


ititution of the United Nations Indus- 
Development Organization (UNIDO), 
annexes. Done at Vienna Apr. 8, 1979. 

;red into force June 21, 1985. 

;ssions deposited: Albania, Apr. 19, 

Maldives, May 10, 1988. 
fication deposited: El Salvador, 

29, 1988. 



Swap agreement between the U.S. 
Treasury and the Central Bank of the 
Argentine Republic/Government of the 
Argentine Republic, with related letter 
and amendment. Signed at Washington and 
Buenos Aires Feb. 23, 1988. Entered into 
force Feb. 23, 1988. 


Agreement relating to relief from double 
income on shipping profits. Effected by 
exchange of letters at Beijing Nov. 18, 
1981. Entered into force Nov. 18, 1981. 
Notice of termination by U.S.: May 5, 


Agreement for the exchange of information 
with respect to taxes. Signed at 
Washington Oct. 1, 1987. 
Entered into force: May 9, 1988. 


Agreement amending the agreements for 
sale of agricultural commodities of June 7, 
1974 (TIAS 7855), and Dec. 30, 1986. 
Effected by exchange of notes at Cairo 
Aug. 26-27, 1987. Entered into force 
Aug. 27, 1987. 

Agreement relating to the agreement of 
June 7, 1974, for sale of agricultural 
commodities, as amended (TIAS 7855). 
Signed at Cairo Mar. 21, 1988. Entered into 
force Mar. 21, 1988. 


Agreement of social security. Signed at 

Paris Mar. 2, 1987. 

Administrative arrangement concerning 

the application of the agreement on social 

security of Mar. 2, 1987. Signed at 

Washington Oct. 21, 1987. 

Entered into force: July 1, 1988. 


Agreement regarding the consolidation and 
rescheduling of certain debts owed to, 
guaranteed by, or insured by the U.S. 
Government and its agencies, with 
annexes. Signed at Libreville Feb. 11, 1988. 
Entered into force Mar. 21, 1988. 


Agreement amending agreement of Feb. 15 
and 25, 1983 (TIAS 10666), as amended and 
extended, relating to trade in wool and 
manmade fiber textiles and textile prod- 
ucts. Effected by exchange of notes at 
Budapest Apr. 8 and 15, 1988. Entered into 
force Apr. 15, 1988. 


Memorandum of agreement regarding joint 
political, security, and economic coopera- 
tion. Signed at Washington and Jerusalem 
Apr. 21 and 28, 1988. Entered into force 
Apr. 21, 1988. 



Agreement concerning the acquisition and 
production of the EP-3 aircraft in Japan. 
Effected by exchange of notes at Tokyo 
Mar. 29, 1988. Entered into force Mar. 29, 


Agreement amending agreement of Aug. 3, 
1987, as amended, relating to trade in tex- 
tiles and textile products. Effected by ex- 
change of notes at Kuala Lumpur Mar. 29 
and Apr. 19, 1988. Entered into force 
Apr. 19, 1988; effective .Jan. 1. 1988. 


Agreement amending the agreement of 
Feb. 27, 1985, concerning trade in certain 
steel products and trade liberalization 
measures for certain other products. Ef- 
fected by exchange of letters at Wash- 
ington and Mexico Dec. 29, 1987. Entered 
into force Dec. 29, 1987. 

Agreement extending the agreement of 
July 31, 1970, as amended and extended 
(TIAS 6941, 7927), for a cooperative mete- 
orological observation program in Mexico. 
Effected by exchange of notes at Mexico 
Mar. 28 and Apr. 25, 1988. Entered into 
force Apr. 25, 1988; effective Apr. 1, 1988. 


Agreement amending the agreement of 
July 8, 1985, for sales of agricultural com- 
modities, with annexes. Signed at Manila 
Apr. 14, 1988. Entered into force Apr. 14, 


Agreement amending the agreement for 
sales of agricultural commodities of Feb. 
28, 1988. Effected by exchange of notes at 
Khartoum Mar. 31, 1988. Entered into 
force Mar. 31, 1988. 


Treaty on mutual assistance in criminal 
matters, with attachments. Signed at 
Bangkok Mar. 19, 1986. ^ [Senate] Treaty 
Doc. 199-18. 

Transmitted to the Senate for advise and 
consent: Apr. 25, 1988. 


Agreement for sales of agricultural com- 
modities. Signed at Tunis Mar. 16, 1988. 
Entered into force Mar. 16, 1988. 

'With reservation(s). 
'Not in force. 
-'With declaration(s). 
^With designation of U.S. Central 

^With understanding and statement. 
••Not in force for the U.S.H 


artment of State Bulletin/July 1988 



Department of State 

Press releases may be obtained from the 
Office of Press Relations, Department of 
State, Washington, D.C. 20520. 

No. Date Subject 

*81 5/2 Shultz: statement, Senate 
Appropriations Commit- 
tee, Apr. 28. 

*82 5/6 George A. Trail sworn in as 
Ambassador to Malawi 
(biographic data). 

*83 5/4 Shultz: address. National 
Conference on Soviet 
Jewry, May 3. 

*84 • 5/6 Shultz:' remarks at the 23d 
annual Foreign Service 

*85 5/9 Shultz, Shankle: remarks at 
dedication of new memo- 
rial plaque names. May 6. 


Press releases may be obtained from the 
Public Affairs Office, U.S. Mission to the 
United Nations, 799 United Nations Plaza, 
New York, N.Y. 10017. 

No. Date Subject 

*1 1/5 Okun: situation in the Israeli 
occupied territories. Se- 
curity Council. 

2 1/14 Walters: situation in the oc- 

cupied territories, Security 

3 1/18 Walters: situation in south 

Lebanon, Security Council. 

*4 2/1 Okun: situation in the oc- 
cupied territories, Security 

*5 2/16 Smith: outer space, Commit- 
tee on the Peaceful Uses of 
Outer Space (COPUOS). 

*6 2/17 Walters: Korean Air Flight 
858, Security Council. 

*7 2/17 Hodgkins: space applications 
program. Scientific and 
Technical Sub-committee, 

*8 2/18 USUN Review of the 42d 
General Assembly. 

*86 5/9 

*87 5/11 

*90 5/16 

92 5/16 



















*18 3/2 

Shultz: dinner toast in 
honor of China's Vice Pre- 
mier Tian Jiyun, May 8. 

American Art of the 20th 
Century at U.S. Embassy 
in Moscow. 

Shultz: arrival statement, 
Geneva, May 11. 

Shultz: news conference fol- 
lowing U.S.-U.S.S.R. 
ministerial meeting, Ge- 
neva, May 12. 

Shultz: news conference, 
NATO headquarters, 
Brussels, May 13. 

Digest of United States 
Practice in International 
Law, 1980, released. 

Shultz: statement, Senate 
Foreign Relations 

American Foreign Policy: 
Current Documents, 
1983, released. 

Smith: space transportation, 
COPUOS, Feb. 19. 

Smith: International Geo- 
sphere Biosphere Program, 

Smith: geostationary orbit, 
COPUOS, Feb. 19. 

Smith: remote sensing 

Nicogossian: life science, 

Smith: planetary exploration, 

Smith: astronomy, COPUOS. 

Smith: space, COPUOS. 

Walters: key foreign policy 
issues. Subcommittees on 
Human Rights and Inter- 
national Organizations and 
on International Opera- 
tions, House Foreign Af- 
fairs Committee. 

Okun: Report of the Commit- 
tee on Relations with the 
Host Country, General 

Okun: South Africa, Security 

*97 5/24 


Shultz: statement follo] 
meeting with Israeli 
eign Minister Peres. 

Shultz: interview on US 

Shultz: interview on AB 
TV's "This Week With 
David Brinkley," May 

Frederick M. Bernthal 
sworn in as Assistant 
retary of Internationa 
Environmental and S( 
tific Affairs (biograph 

Shultz: interview on C! 

Shultz, Armacost, Abri 
news conference 

Shultz: interview on CB 
TV's "Face the Natioi 
Moscow, Mav 29 


"Not printed in the Bulletin. 

*20 3/10 Note to Correspondents 
Human Rights Situatiw 

*21 3/16 Byrne: donors meeting, (I 
gram of Humanitarianl 
Assistance to the 
Kampuchean People. 

*22 3/17 Okun: Falkland and Mal- 
vinas. Security Couno 

*23 .3/17 Okun: Falkland and Mal- 
vinas. Security Counci" 

*24 3/18 Note to Correspondents! 
Clarification of Ambasi 
sador Walters' remark; 

*25 3/18 Okun: Nicaragua, Secur 

*26 3/18 Okun: Nicaragua, Secur 

*27 3/22 Okun: Nicaragua, Secur 

*28 3/23 Okun: closing the PLO I 
manent Observer Miss 
General Assembly. 

*29 3/31 Okun: Occupied Territor 
Security Council. 

*30 3/31 Note to Correspondents 
U.S. Issues Visas on 1 
manitarian Grounds 

*Not printed in the Bulletin. 



Deoartment of State BuKetin/Julv 


;i3artment of State 

single copies of the following Depart- 
ni State publications are available 
I 111' Public Information Division, Bu- 
i[ I'ublic Affairs, Department of 
Washington, D.C. 20520. 

lary Shultz 
leViiunng Hand: American Leadership 
«; the Global Economy. Massachusetts 
Iititute of Technology annual dinner, 
Hshington, D.C, Apr. 28, 1988 (Cur- 
tit Policy #1070). 

Lavements of the INF Treaty, Senate 
Heign Relations Committee, May 16, 
1(8, (Current Policy #1075). 

illl Control 

■J Arms Control Initiatives, May 13, 
lis (Special Report #177). 

Mrtment of State 

'hj Budget Crunch" and the Foreign 
S vice. Under Secretary Spiers, For- 
e n Service Day, May 6, 1988 (Current 
i icy #1073). 

h. )epartment of State Today, March 
' "< I Public Information Series). 

1 .\sia 

Philippines Relations (GIST, May 

1 .s). 

" oiiiics 

S and the Pacific Basin: Trade and 
Mi.-tment Issues, Undersecretary 
Ills. Asia Society, New York City, 
r 2iS, 1988 (Current Policy #1069). 
' ' S. and Japan: Partners in Global 
iiMimic Leadership, Under Secretary 
Ills. Federation of Economic Organiza- 
Keidanren), Tokyo, Apr. 19, 1988 
> lit Policy #1072). 

I a Stronger International Economy 
puty Secretary Whitehead, Municipal 
■ uram on the Toi-onto Summit, Centre 
International Studies, Toronto, Apr. 
V.ixS (Current Policy #1074). 
Foreign Economic Policy, 1981-87, 
lltSS (Public Information Series). 
in Community (GIST, May 1988). 
vui-ld Debt (GIST, May 1988). 

c Policy Coordination and the Dol- 
■ IST, Mav 1988). 
; , ade Policy (GIST, May 1988). 
Priisperity and the Developing Coun- 
.•- (GIST, May 1988). 

u-al Adjustment and Economic Per- 
nce (GIST, May 1988). 


rican Vision of Peace in the Middle 
.Assistant Secretary Murphy, 
a.-limgton Institute on Near East Pol- 
., .\pr. 18, 1988 (Current Policy #1067). 

Military Affairs 

Controlling Transfer of Strategic Tech- 
nology (GIST, May 1988). 

Conventional Forces in Europe (GIST, May 

Science & Technology 

International Communications and Infor- 
mation Policy Agenda, Acting U.S. Coor- 
dinator and Director of the Bureau of 
International Communications and Infor- 
mation Policy Borg, Subcommittee on 
Communications, Senate Committee on 
Commerce, Science, and Transportation, 
Apr. 19, 1988 (Current Policy #1066). 

South Asia 

Agreements on Afghanistan, Apr. 1988 (Se- 
lected Documents #26). 


International Terrorism (GIST, May 1988). 

United Nations 

Policies for the Americas in the 1990s, As- 
sistant Secretary Williamson, ECLAC, 
Rio de Janeiro, Apr. 26, 1988 (Current 
Policy #1071). 

Third UN Special Session on Disarmament 
(GIST, May 1988).B 

Foreign Relations Supplement Released 

The Department of State on April 15, 
1988, released the microfiche publica- 
tion, "Memoranda of Conversation of 
the Secretary of State, 1947-1952," a 
supplement to the Foreign Relations of 
the United States series. The publica- 
tion presents a chronological recoi'd 
from April 1947 through December 1952 
of 1,729 meetings and telephone conver- 
sations between the Secretary of 
State — either George Marshall 
(1947-49) or Dean Acheson (1949-53)— 
or their principal deputies and major 
U.S. and foreign officials. Many meet- 
ings confront the broad issues of war 
and peace in varying contexts: postwar 
peace settlements involving Germany, 
Austria, and Japan; the threat of Soviet 
aggression against Germany and 
Berlin, Greece, Turkey, and Korea; con- 
flicts involving emerging nations, espe- 
cially Indonesia and the French and 
former Italian protectorates in North 
Africa; the Kashmir dispute involving 
India and Pakistan; and the longstand- 
ing attempts to reconcile Jewish and 
Arab claims to Palestine. 

The records in this collection re- 
flect the foreign affairs problems that 
concerned Secretaries Marshall and 
Acheson. A number of meetings are de- 
voted to post- World War II reconstruc- 
tion, the enactment and implementation 
of the Marshall Plan in Europe, and the 
movement toward greater economic and 
political unity in reaction to the consol- 
idation of Soviet power in Eastern Eu- 
rope. Department principals also 
discussed the question of foreign as- 
sistance to non-Marshall Plan countries, 
such as China and Yugoslavia, which 

were threatened either by internal sub- 
version or external aggression. The 
growth of political and economic unity 
is another recurrent theme, with em- 
phasis on fostering European economic 
unity and achieving greater interna- 
tional economic cooperation through the 
General Agreement on Tariffs and 
Trade (GATT) and the Bretton Woods 
monetary system. There is also much 
documentation on the founding and 
early development of regional defense 
pacts, such as the North Atlantic 
Treaty Organization (NATO) and the 
Organization of American States (OAS), 
established at the 1948 Bogota 

These memoranda of conversation 
comprise a unique file that was origi- 
nally maintained by the Executive Sec- 
retariat of the Department of State. 
The memoranda are generally carbon 
copies whose originals were filed else- 
where, usually in the Department's cen- 
tral files. Many of these documents, 
however, are not located there or in 
other Department files. This publica- 
tion presents these documents in the 
same chronological order in which they 
were originally maintained for the 
Secretary of State and also includes 
attachments, such as routing chits, 
supporting memoranda, and aides- 
memoire, when these documents were 
in the file. It contains all documents 
except for a few papers which could not 
be declassified in whole or in part be- 
cause of continued sensitivity on na- 
tional security or privacy grounds. The 
original documents in the file have been 
transferred to the National Archives. 

I partment of State Bulletin/July 1988 


This publication is part of the De- 
partment's effort to make the official 
foreign affairs record more widely avail- 
able to scholars, libraries, and other 
users. These microfiche publications 
present significant and unique collec- 
tions of historical documents, only a 
small part of which can be printed in 
Foreign Relations volumes. The series 
editors are obliged to select for the vol- 
umes onlv the most vital documents 

from a foreign policy record that has 
markedly increased in size in the last 
three decades. 

"Memoranda of Conversation of the 
Secretary of State, 1947-1952," com- 
prising about 4,700 pages on 49 micro- 
fiche cards and accompanied by a 
119-page printed guide containing a 
comprehensive list of documents, was 
prepared by the Office of the Historian, 
Bureau of Public Affairs, Department 

Digest of United States Practice 
in International Law Released 

The Digest of United States Practice iv 
International Law, 1980 is now avail- 
able at the U.S. Government Printing 
Office (1,134 pp.). The eighth in the an- 
nual series, the volume also includes 
the final 3 weeks of President Carter's 
Administration in January 1981 and in- 
dicates developments in certain fields 
subsequent to the period of coverage. 

The 1980 Digest was edited by Mar- 
ian Nash Leich, an attorney in the Of- 
fice of the Legal Adviser, and contains 
an introduction by the Legal Adviser of 
the Department of State, Abraham D. 
Sofaer. The Department's Legal Ad- 
viser in 1980 was Roberts B. Owen. 

Describing legal, diplomatic, and 
other responses by the United States 
to Iran's continuing, lawless detention 
of the American hostages captured in 
1979, the volume conveys the totahty of 
the U.S. response to the crisis. It sets 
out actions undertaken by the Presi- 
dent and the executive branch, includ- 
ing appearances by the U.S. Govern- 
ment in domestic litigation and before 
the International Court of Justice. It 
summarizes the negotiations that led to 
the resolution of the crisis, under the 
catalytic effect of an impending change 
in U.S. Presidents, and e.xplains the 
legal issues considered in formulating 
the Algiers Declarations, including the 
establishment of the Iran-United States 
Claims lYibunal at The Hague. 

The 1980 Digest details measures 
undertaken to curb foreign govern- 
ment-sponsored (Libyan) terrorism 
within the United States, which culmi- 
nated in the closing of the Libyan Peo- 
ple's Bureau in Washington. In another 
area involving Libya, the Digest 
discusses the U.S. Government's sup- 
port, amicus, in judicial proceedings 
brought by an American corporate 
claimant to enforce a foreign arbitral 
award obtained against Libya (the 
LIAMCO case). 

Other government participation in 
domestic litigation involved interpreta- 
tions of the Foreign Sovereign Immu- 
nities Act and the act of state doctrine, 
as well as various provisions of the Im- 
migration and Nationality Act. In re- 
gard ta the latter, the United States 
succeeded in revoking the naturaliza- 
tion of a former Nazi death camp 
guard; this resulted in his deportation 
and in a number of successful similar 
efforts. A challenge to the constitu- 
tionality of that act's legislative veto 
provision, which would have required 
deportation of an East Indian individual 
seeking adjustment of status, was also 
successful (the Chadha case). 

of State. Copies of the publication (] 
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The volume outlines the legal ai 
other problems presented by the IS) 
Mariel boatlift from Cuba and by t! 
waves of illegal migrants from Haitt 
also relates government efforts to «■ 
elude common crimes of violence fn 
the political offense exception to ex- 
dition, initially in arguments before 
U.S. extradition magistrates and cc 
(and, finally, through renegotiation 
key extradition treaty provisions). 

Lastly, the 1980 Digest traces '< 
enlargement of the U.S. role in Mi 
East peacekeeping, which was to r i! 
in the establishment of the Multint 
tional Force and Observers. 

Digest of United States Practit 
International Law, 1980 may be pu ,, 
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Press release 91 of May 16, 1988.1 


Department of State Bulletin/July 



A rent Documents, 1983 Supplement 

itpartment of State on May 18, 
• I'rleased American Foreign Pol- 
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rope, North Africa, and Asia, negotia- 
tions on the withdrawal of foreign 
troops from Lebanon, visits to the 
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tary involvement in Grenada, and de- 
velopments in Nicaragua and El 

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iiartment of State Bulletin/July 1988 


Atlas of United States 
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Jjly 1988 
Volume 88, No. 


.%]hanistan. Reflections on U.S. -Soviet 

elations (Reagan) 1 

\l ca. FY 1989 Request for Foreign 

ssistance Program (Woods) 54 

ills Control 

.Vievements of the INF Treaty 

;hultz) 6 

F 1989 Foreign Policy Budget Request 

;hultz) 8 

S«!-etary's Interview on "This Week 

'ith David Brinkley" 14 

U . Arms Control Initiatives 16 

U late on Europe (Ridgway) 50 


C adian Acquisition of Nuclear- 

5wered Submarines 

.)epartment statement) 61 

TJ ard a Stronger International 

■; conomy (Whitehead) 39 

d .-Canada Free Trade Agreement .. 24 

C ..-Canada Relations 23 

V t of Canadian Prime IVIinister 

■ Julroney, Reagan) 21 

C igress 

A ievements of the INF Treaty 

;hultz) 6 

E ctions in Korea (Sigur) 32 

F 1989 Assistance Requests for 

ast Asia and the Pacific 

5igur) 33 

f 1989 Assistance Requests for 

rganizations and Programs 

iVilliamson) 71 

I 1989 Foreign Policy Budget Request 

ihultz) ." 8 

F 1989 Request for Foreign Assistance 

rograms (Woods) 54 

I ;h Technology Terrorism (Bremer) . . 65 

I date on Europe (Ridgway) 50 

I partment and Foreign Service 

I 1989 Foreign Policy Budget Request 

^hultz) 8 

■I'.udget Crunch" and the Foreign 

< r\ ice (Spiers) 28 

i st Asia. FY 1989 Assistance Requests 

or East Asia and the Pacific 

Sigur) 33 

1 onomics 

1 ■ 1989 Request for Foreign Assistance 

-■rograms (Woods) 54 

'i)an Continues Quotas on Beef, Citrus 

mports (Yeutter) 45 

llicies for the Americas in the 1990s 

Williamson) 68 

'ward a Stronger International 

iilconomy (Whitehead) 39 

e U.S. and Japan: Partners in Global 

Economic Leadership (Wallis) 43 

S. Foreign Economic Policy. 

1981-87 47 

hiopia. Reflections on U.S. -Soviet 

Relations (Reagan) 1 

jrope. Update on Europe (Ridgway) . 50 

inland. Visit of Finnish Prime 

I Minister 51 

Food. FY 1989 Request for Foreign 

Assistance Programs (Woods) 54 

Foreign Assistance 

FY 1989 Assistance Requests for East 

Asia and the Pacific (Sigur) 33 

FY 1989 Foreign Policy Budget Request 

(Shultz) 8 

FY 1989 Request for Foreign Assistance 

Programs (Woods) 54 

Health. FY 1989 Request for Foreign 

Assistance Programs (Woods) 54 

Human Rights 

FY 1989 Request for Foreign Assistance 

Programs (Woods) 54 

Our Human Rights Agenda With the 

Soviet Union (Reagan) 4 

Update on Europe (Ridgway) 50 

Iran. U.S. Supports Security Council 

Resolution on Chemical Weapons 

(Walters, text of resolution) 69 

Iraq. U.S. Supports Security Council 

Resolution on Chemical Weapons 

(Walters, text of resolution) 69 

Israel. Secretary Meets With Israeli 

Foreign Minister (Shultz) 60 


Japan Continues Quotas on Beef. Citrus 

Imports (Yeutter) 45 

The U.S. and .Japan: Partners in Global 

Economic Leadership (Wallis) 43 

Korea. Elections in Korea (Sigur) 32 

Lebanon. UN Security Council Resolution 

on South Lebanon (Walters) 73 

Middle East. U.S. to Extend Protection 

to Neutral Ships in Persian 

Gulf (Carlucci) 61 

Military Affairs 
Canadian Acquisition of Nuclear- 
Powered Submarines 

(Department statement) 61 

U.S. to Extend Protection to Neutral 

Ships in Persian Gulf (Carlucci) 61 

Nicaragua. Reflections on U.S. -Soviet 

Relations (Reagan) 1 

North .Atlantic Treaty Organization 
Achievements of the INF Treaty 

(Shultz) 6 

NATO Nuclear Planning Group Meets in 

Brussels (final communique) 53 

U.S. Arms Control Initiatives 16 

Update on Europe (Ridgway) 50 

Organization of American States. Pan 

American Day and Week, 1988 

(proclamation) 75 

Pacific. FY 1989 Assistance Requests 

for East Asia and the 

Pacific (Sigur) 33 


Secretary's Interview on "This Week 

With David Brinkley" 14 

Transfer of U.S. Funds to Panama 

(White House statement) 75 

Presidential Documents 

Our Human Rights Agenda With the 

Soviet Union 4 

Pan American Day and Week, 1988 

(proclamation) 75 

Reflections on U.S. -Soviet Relations ... 1 
Visit of Canadian Prime Minister 

(Mulroney, Reagan) 21 

World Trade Week, 1988 

(proclamation) 41 


Current Documents. 19S.i Supplement 

Released 81 

Department of State 79 

Digest of United States Practice in 

International Law Released 80 

Foreign Relations Supplement 

Released 79 


Essential Ingredients in the Fight 

Against Terrorism (Bremer) 62 

High Technology Terrorism (Bremer) . . 65 


Japan Continues Quotas on Beef, Citrus 

Imports (Yeutter) 45 

Policies for the Americas in the 1990s 

(Williamson) 68 

Toward a Stronger International Economy 

(Whitehead) 39 

The U.S. and Japan: Partners in Global 

Economic Leadership (Wallis) 43 

U.S. -Canada Free Trade Agreement .. 24 
U.S. Foreign Economic Policy, 

1981-87 47 

World Trade Week, 1988 

(proclamation) 41 

Treaties. Current Actions 76 


Achievements of the INF Treaty 

(Shultz) 6 

Our Human Rights Agenda With the 

Soviet Union (Reagan) 4 

Reflections on U.S. -Soviet Relations 

(Reagan) 1 

Secretary's Interview on "This Week With 

David Brinkley" 14 

U.S. Arms Control Initiatives 16 

Update on Europe (Ridgway) 50 

United Nations 

FY 1989 Assistance Requests for 

Organizations and Programs 

(Williamson) 71 

FY 1989 Foreign Policy Budget Request 

(Shultz) 8 

Policies for the Americas in the 1990s 

(Williamson) 68 

UN Security Council Resolution on 

South Lebanon (Walters) 73 

U.S. Supports Security Council Resolution 

on Chemical Weapons (Walters, text of 

resolution) 69 

Western Hemisphere 

Pan American Day and Week, 1988 

(proclamation) 75 

Policies for the Americas in the 1990s 

(Williamson) 68 

Name Index 

Bremer, L. Paul, III 62,65 

Carlucci, Frank C, III 61 

Mulroney, Brian 21 

Reagan, President 1,4,21,41,75 

Ridgway, Rozanne L 50 

Shultz, Secretary 6,8,14,60 

Sigur, Gaston J., Jr 32,33 

Spiers, Ronald I 28 

Wallis, W. Allen 43 

Walters, Vernon A 69,73 

Whitehead, John C 39 

Williamson, Richard S 68,71 

Woods, Alan 54 

Yeutter, Clayton 45 

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im of stuiv -^ -w J ^ 


1 3 Official Monthly Record of United States Eo j^ifl n PonG W ^V o l u m euBS / Number 2137 

*- IIP 10 11 

wKrM mm 

August 1988 

Moscow Summit 

ij^HlHB $ 



President Reagan and General Secretary 
Gorbachev on their walk to Red Square 
with St. Basil's Cathedral in the back- 

(White House photo by Pete Souza) 

Dppartm4»ni of Staip 


Volume 88 / Number 2137 / August M 

The Department of State Bulletin, 
published by the Office of Public Com- 
munication in the Bureau of Public 
Affairs, is the official record of U.S. 
foreign policy. Its purpose is to provide 
the public, the Congress, and govern- 
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1 Moscow Summit (Vice President Bush, Mikhail S. 

Gorbachev, President Reagan, Secretary Shultz, 

Joint Statement) 
42 Summary of U.S. -Soviet Agreements Signed in 

46 Toronto Economic Summit (President Reagan, 

Political and Ecoyiojyiic Declaratioyis, Chairman's 

Statemeyit, White House Statement) 
55 U.S. -Japan Agreement on Cooperation in Science and 

Teclinology (White House Fact Sheet) 

Th Secretary 

Sfr Interview on "Meet the Press" 


58 The Potential Impact of Impos- 
ing Sanctions Against South 
Africa Uohv C. Whitehead) 

62 Review of Events in Ethiopia 
(Chester A. Crocker, Charles 
Gladson, Richard S. 

A IIS Control 

67 U.S., Soviet Union Sign Joint 

Verification Experiment 
Agreement (Text of Agreement) 

68 President Welcomes Entry Into 

Force of INF Treaty (Letter to 
the Senate) 

hit Asia 

69 China and the U.S.: Presnet and 

Future (Michael H. Armacost) 



The United States in the World 
Economy (W. Allen Wallis) 


76 North Atlantic Council Meets in 
Madrid (Final Communique) 

76 37th Report on Cyprus (Message 
to the Congress) 

Foreign Assistance 

77 Humanitarian Aid to 

Nicaragua (Alan Woods) 

78 Aid to the Nicaraguan Demo- 

cratic Resistance (President 

Human Riglits 

79 U.S. Signs UN Convention 

Against Torture (Message to 
the Senate, Text of Convention) 

Middle East 

83 President's Meeting With Israeli 
Foreign Minister Peres (White 
House Statement) 

United Nations 



Third Special Session on Disar- 
mament Convenes (U.S. State- 

Arms Control: Progress and 
Global Challenges (Secretary 

Western Hemisphere 



Situation in Panama (Elliott 
Abrams, Michael H. Arma- 
cost, Secretary Shultz) 

Cuban Independence Day 
(President Reagan) 


92 Current Actions 

Press Releases 

94 Department of State 


94 Department of State 


Department of State Bulletin/August 


Moscow Summit 

Moscow Summit 

President Reagan and Mikhail S. Gorbachev, 

General Secretary of the Ceritral Committee 

of the Communist Party of the Soviet Union, 

met in Moscow, May 29-June 2, 1988. 

En route to Moscow, President Reagan 

visited Helsinki (May 25-29); and 

he visited London (June 3), 

before returning to Washington. 

Following are various remarks 

made during his trip. 


1 :marks, 

b white house, 

L 25, 19881 

■lliiw Americans and all our Ambas- 
s ( if our friends and allies who are 
' nil the eve of my fii'st meeting with 

■ I'al Secretary Gorbachev in 1985, I 

! ou that my mission, simply stated, 
ffl I mission for freedom and peace. I 
■a ed to sit down across the table from 
'• Hii-hachev and try to set out with 
i liasis for peaceful discourse and co- 
it n in between our two countries, at 
;iiiie time working to advance the 
and frontiers of human freedom. 

■ approached that first meeting in Ge- 
. I wanted to establish a better 

lilt: relationship with the Soviet 
II — one no longer subject to the dan- 
• IS highs and lows of the past; a 
'0 jng relationship that would be based 
1 'alities, not merely on a seeming re- 
it m of tensions between our two 
i lies that could quickly disappear. 
enmplish that, the United States 
1(1 to see solid and steady progress 
ir major areas: human rights, re- 
il conflicts, arms reductions, and bi- 
ll exchanges. 

\Vt 've come a long way since then. 
. as 1 depart on this trip to Moscow, 
liiiu' the agreement I made vrith Gen- 
Secretary Gorbachev back in 1985 
w f would visit each other's country, 
I piiint to achievements we can all be 
il "f in each of the areas of our four- 
aecnda. The United States and the 

Soviet Union have signed the Geneva ac- 
cords providing for the vrithdrawal of all 
Soviet troops from Afghanistan, and the 
first withdrawals have begun. We have 
signed an amis reduction treaty that will 
reduce the level of nuclear arms for the 
first time in history, eliminating an en- 
tire class of U.S. and Soviet nuclear mis- 
siles. We've made progress on the main 
points of a treaty that will cut in half our 
arsenals of strategic offensive nuclear 
weapons. Our new Nuclear Risk 
Reduction Centers are already transmit- 
ting messages that reduce the risk of 
conflict. Our representatives have held 
broad-ranging discussions on human 
rights, and we've seen concrete steps 
taken. The levels of emigration have 
risen. Some political and religious prison- 
ers have been released, and a number of 
divided families have been reunited. 
Somewhat more diversity of expression 
is permitted. There has been a recogni- 
tion of religious persecution in the past 
and a pledge that some restrictions on 
the right to worship will be eased. We 
have greatly expanded our bilateral ex- 
changes. The number of travelers be- 
tween our two countries is rising 
sharply, with unprecedented totals ex- 
pected this year. There's more, of 
course, but I'd miss my plane if I went 
through the entire list [laughter]. And 
yet impressive as these achievements 
may be, they represent only a beginning. 

In my talks with General Secretary 
Gorbachev next week, we will be looking 
to the future, for there remains much to 
be done. Permit me to outline the sub- 

stance of our four-part agenda for those 

On human rights, I will press to see 
that the positive trends I've mentioned 
continue and the reforms are made per- 
manent. We certainly welcome the re- 
cent signs of Soviet progress toward 
greater freedom of religion, greater free- 
dom of speech, greater freedom of move- 
ment. There have been indications that 
this progress may be written into Soviet 
law and regulations so that it can be a 
more permanent part of Soviet life. We 
will be doing all we can to encourage just 

Concerning regional conflicts, we'll 
be looking for Soviet actions to help ad- 
vance negotiations on the Angola and Na- 
mibia problems and to support UN ef- 
forts to end the Iran-Iraq war. We will 
ask the Soviets to use their influence 
with the Ethiopian Government to pre- 
vent a manmade crisis of starvation 
there. We'll urge the Soviets to help 
move the Middle East peace process 
closer to a just and lasting solution. And 
we'll look for ways to help the parties re- 
solve other regional conflicts in Africa, 
Asia, and, yes. Central America. 

Regarding arms reductions, we'll 
strive to resolve the issues that still 
stand in the way of our agreement to cut 
U.S. and Soviet strategic offensive nu- 
clear arms in half. As we make progress, 
our negotiators will be able to move for- 
ward in their work on the draft START 
[strategic arms reduction talks] treaty. 
We'll continue to seek ways to improve 
the verification procedures of two exist- 

|artment of State Bulletin/August 1988 

ing treaties on nuclear testing — the 
Peaceful Nuclear Explosions Treaty and 
the Threshold Tfest Ban Treaty— so that 
those treaties can be ratified. And I will 
urge the Soviets to move ahead at the 
Vienna followup meeting of the Confer- 
ence on Security and Cooperation in 
Europe. At these discussions, negotia- 
tors from 35 nations are working on ways 
to advance human rights and strengthen 
the confidence- and security-building 
measures they negotiated at Stockholm 
in 1986. Separately, the 23 members of 
the Atlantic alliance and Warsaw Pact 
are negotiating a mandate for new talks 
on conventional forces. Success here 
means the Soviets must make continued 
progress on human rights, for the secu- 
rity in Europe involves much more than 
military arrangements. It must be based 
on a solid foundation of respect for the 
rights of individuals. 

Concerning the final portion of our 
four-part agenda, our bilateral relations, 
we wall address both new agreements 
and renewals of existing agreements to 
extend the areas in which we cooperate. 
This will include everything from practi- 
cal matters of nuclear safety to radio- 
navigation and the protection of our 
global environment. We'll seek to 
broaden still further our people-to-peo- 
ple contacts and, especially, to give more 
of our young people the opportunity to 
participate in such exchanges. 

So, as you see from the outline of 
that agenda, there will be plenty of work 
for Mr. Gorbachev and me in Moscow 
next week. I don't expect it to be easy. 
We may have many differences, deep dif- 
ferences, moral differences, but we're 
still fellow human beings. We can still 
work together to keep the peace. And in 
working with the Soviet Union, the 
United States can still remain true to its 
mission of expanding liberty throughout 
the world. 

Since my first meeting with Mr. Gor- 
bachev, we have, as I've said, come a 
long way. My task next week wall be to 
go still farther — farther in the interests 
of peace, farther toward a universal re- 
spect for fundamental human rights, far- 
ther toward world freedom, and farther 
toward a safer world for all people. And 
now, as I embark upon this great task, I 
ask for your prayers. 




MAY 27, 19882 

Let me begin by saying thank you to our 
hosts, the Finnish Government, the 
Paasikivi Society, and the League of 
Finnish- American Societies. It's a par- 
ticular honor for me to come here today. 
This year — the Year of Friendship, as 
Congress has proclaimed it, between the 
United States and Finland — this year 
marks the 350th anniversary of the am- 
val of the first Finns in America and the 
establishment of a small Scandinavian col- 
ony near what is today Wilmington, Dela- 
ware — an ancient people in a new world. 
And that is the story, not only of those 
Finns, but of all the peoples who braved 
the seas, to settle in and build my coun- 
try, a land of freedom for a nation 
of immigrants. 

Yes, they founded a new world, but 
as they crossed the oceans, the moun- 
tains, and the prairies, those who made 
America carried the old world in their 
hearts — the old customs, the family ties, 
and of all, the belief in God, a belief 
that gave them the moral compass and 
ethical foundation by which they ex- 
plored an uncharted frontier and con- 
structed a government and nation of, by, 
and for the people. 

And so, although we Americans be- 
came a new people, we also remain an an- 
cient one, for we're guided by ancient 
and universal values — values that Prime 
Minister [Karri] Holkeri spoke of in Los 
Angeles this February when, after recall- 
ing Finland's internationally recognized 
position of neutrality, he added that Fin- 
land is "tied to Western values of free- 
dom, democracy, and human rights." 
And let me add here that for America, 
those ties are also the bonds of our friend- 
ship. America respects Finland's neutral- 
ity. We support Finland's independence. 
We honor Finland's courageous history. 
We value the creative statesmanship 
that has been Finland's gift to world 
peace. And in this soaring hall, which is 

the great architect Alvar Aalto's stat< | 
ment of hope for Finland's future, w(| 
affirm our hope and faith that the fri| 
ship between our nations will be unen j 
ing- i 

We're gathered here today in this | 
hall because it wasliere, almost 13 ye | 
ago, that the 35 nations of the Confer | 
ence on Security and Cooperation in 
Europe (CSCE) signed the Helsinki 
Final Act, a document that embodies 
same ethical and moral principles anc 
same hope for a future of peace that 
Finns and so many other European ii 
grants gave America. The Final Act i 
singular statement of hope. Its "thret 
baskets" touch on almost every aspec 
of East- West relations, and taken to- 
gether form a kind of map through th 
wilderness of mutual hostihty to oper 
fields of peace and to a common home 
trust among all of our sovereign na- 
tions — neutrals, nonaligned, and allia 
members alike. The Final Act sets n6 
standards of conduct for our nations i 
provides the mechanisms by which tc 
apply those standards. 

Yes, the Final Act goes beyond 
arms control — once the focus of inter 
tional dialogue. It reflects a truth the 
have so often noted: nations do not di 
trust each other because they are ar 
they are armed because they distrust 
each other. The Final Act grapples w 
the full range of our underlying diffe: 
ences and deals with East- West rela- 
tions as an interrelated whole. It re: 
the belief of all our countries that hui 
rights are less likely to be abused wl 
nation's security is less in doubt; thai 
economic relations can contribute to 
rity, but depend on the trust and con 
dence that come from increasing ties 
tween our peoples, increasing openni 
and increasing freedom; and that th( 
no true international security wathot 
spect for human rights. 

I can hardly improve on the wor 
President [Mauno] Koivisto used in t 
hall 2 years ago when he recalled tha 
"security is more than the protection 
borders and social structures. It is er 
phasized in the Final Act that Individ 
persons who live in the participating 

Moscow Summit 

■ 's have to feel in their own lives secu- 

■ \\ hich is based on respect for funda- 
tal human rights and basic free- 

s ■■ And beyond establishing these 
aated standards, the Final Act 
lilishes a process for progress. It 
up a review procedure to measure 
nrmance against standards. And de- 
' the doubts of the critics, for the 
i:'. years, the signatory states have 
: tci-t'd the pohtical will to keep on 
kinp and making progress. Let me 
tliat it seems particularly appropri- 
ii' me that the Final Act is associated 
iiist'ly with this city and this country. 
!■ than any other diplomatic docu- 
.1 t, the Final Act speaks to the yearn- 
in :hat Finland's longtime President, 
[J Kekkonen, spoke of more than a 
'ttT century ago when he said, in his 
lis: "It's the fervent hope of the Finn- 
iniple that barriers be lowered all 
■ I'Airope and that progress be made 
J }y the road of European unity." And 
bi dded that this was, as he put it, "for 
tt good of Europe, and thus of human- 
it as a whole." Well, those were vision- 
x words. That vision inspired and 
si 3ed the drafting of the Final Act and 
iiiues to guide us today. 
Has the Final Act and what we call 
! Helsinki process worked or not? 
i\ say it hasn't, but I believe it has. 
Ill- security field, I would point to the 
t recent fruit of the process: the 
kholm document of confidence- and 
i I \-building measures in Europe. i 
ureement lays dovm the rules by 
rt ch our 35 states notify each other of : 
B oming military activities in Europe; ' 
i vides detailed information on these ac- ■ 
pties in advance; and lets the others 
'W their plans for very large military 
ivities 1 or 2 years in advance and 
ees not to hold such maneuvers un- 
5 this notice is given; invites observ- 
to their larger military activities; and 
Tnits onsite inspections to make sure 
agreement is honored. 
I am happy to note that since our 
ffesentatives shook hands to seal this 
reement a year and a half ago, all 35 
tes have, by and large, honored both 
letter and the spirit of the Stockholm 
:ument. The Western and neutral and 
laligned states have set a strong e.xam- 
in providing full information about 

artment of State Bulletin/August 1988 



/ 350 Years of 

1 RiXiishAmerican 

L^, Fnen^ 

■ 1638^1988 

^ HebiikiRSid 


President Reagan's address before the Paasikivi Society and the League of Finnish- 
American Societies at Finlandia Hall where the Helsinki Final Act was signed 13 
years ago. 

their military activities. In April, Fin- 
land held its first military activity sub- 
ject to the Stockholm notification require- 
ments and voluntarily invited observers 
to it. The Soviet Union and its allies also 
have a generally good record of im- 
plementation, though less forthcoming 
than the West. Tfen onsite inspections 
have been conducted so far, and more 
and more states are exercising their 
right to make such inspections. I can't 
help but believe that making inspections 
a matter of routine business will improve 
openness and enhance confidence. 

Nor was Stockholm the end of the 
process. In Vienna, all 35 signatory 
states are considering how to strengthen 
the confidence- and security-building 
measures, in the context of a balanced 
outcome at the CSCE followup meeting 
that includes significant progress on 
human rights. 

In the economic field, as in the secu- 
rity field, I believe there has been prog- 
ress, but of a different kind. Issues and 
negotiations regarding security are not 
simple, but military technology makes 
arms and armies resemble each other 
enough so that common measures can be 
confidently applied. Economic relations, 
by contrast, are bedeviled by differences 
in our systems. Perhaps increases in non- 
strategic trade can contribute to better 
relations between East and West, but 
it's difficult to relate the state-run econo- 
mies of the East to the essentially free- 
market economies of the West. Perhaps 
some of the changes underway in the 
state-run economies will equip them bet- 
ter to deal with our businessmen and 
open new arenas for cooperation. But 
our work on these issues over the years 
has already made us understand that 
differences in systems are serious obsta- 
cles to expansion of econ omic ties, and 
since understanding of unpleasant reali- 
ties is part of wisdom, that, too, is 

The changes taking place in the East- 
em countries of the continent go beyond 
changes in their economic systems and 
greater openness in their military activi- 
ties. Changes have also begun to occur in 
the field of human rights, as was called 
for in the Final Act. The rest of us would 
like to see the changes that are being an- 
nounced actually registered in the law 
and practice of our Eastern partners and 

in the documents under negotiation in 
the Vienna followoip to the Helsinki con- 

Much has been said about the human 
rights and humanitarian provisions in the 
Final Act and the failure of the Eastern 
bloc to honor them. Yet, for all the bleak 
winds that have swept the plains of jus- 
tice since that signing day in 1975, the ac- 
cords have taken root in the conscience 
of humanity and grown in moral and, in- 
creasingly, in diplomatic authority. I be- 
lieve that this is no accident. It reflects 
an increasing realization that the agenda 
of East- West relations must be compre- 
hensive, that security and human rights 
must be advanced together or cannot 
truly be secured at all. But it also shows 
that the provisions in the Final Act re- 
flect standards that are truly universal in 
their scope. The accords embody a funda- 
mental truth, a truth that gathers 
strength with each passing season and 
that will not be denied — the truth that, 
like the Finnish settlers in America, all 
our ancient peoples find themselves 
today in a new world and that, as those 
early settlers discovered, the greatest 
creative and moral force in this new 
world, the greatest hope for survival and 
success, for peace and happiness, is 
human freedom. 

Yes, freedom — the right to speak, to 
print; the right to worship, to travel, to 
assemble; the right to be different — the 
right, as the American philospher, 
Henry David Thoreau, wrote, "to step to 
the music of a different drummer." — 
this is freedom as most Europeans and 
Americans understand it and freedom as 
it is embodied in the Universal Decla- 
ration of Human Rights and, yes, in the 
Helsinki accords. And far more than the 
locomotive or the automobile, the air- 
plane or the rocket, more than radio, 
television, or the computer, this concept 
of liberty is the most distinct, peculiar, 
and powerful invention of the civilization 
we all share. 

Indeed, without this freedom there 
would have been no mechanical inven- 
tions, for inventions are eccentricities. 
The men and women who create them 
are visionaries, just hke artists and writ- 
ers. They see what others fail to see and 
trust their insights when others don't. 

The same freedom that permits litera- . 
ture and the arts to flourish, the same i 
freedom that allows one to attend I 
church, synagogue, or mosque withou ( 
apprehension, that same freedom fron 
oppression and supervision is the free 
dom that has given us, the peoples of 
Western Europe and North America, 
our dynamism, our economic growth, 
and our inventiveness. Together with 
Japan and Australia, and many others 
we have hved in this state of freedom 
this house of democracy, since the em 
the Second World War. The house of ( 
mocracy is a house whose doors are o] 
to all. Because of it, because of the lib 
erty and popular rule we've shared, 
today we also share a prosperity mon 
widely distributed and extensive, a p 
cal order more tolerant and humane t 
has ever before been known on earth. 

To see not simply the immediate 
the historic importance of this, we sh 
remember how far many of our natioi 
have traveled and how desolate the fi 
ture of freedom and democracy once 
seemed. For much of this century, th 
talitarian temptation, in one form or 
other, has beckoned to mankind, also 
promising freedom, but of a different 
kind than the one we celebrate today 
This concept of liberty is, as the Czec 
Slovak writer, Milan Kundera, has pi 
"the age-old dream of a world where 
erybody would live in harmony, unit( 
by a single common will and faith, wi 
out secrets from one another" — the 
dom of imposed perfection. 

Fifty, forty, even as recently as 
thirty years ago, the contest betweer 
this Utopian concept of freedom on or 
hand and the democratic concept of fi 
dom on the other seemed a close one. 
Promises of a perfect world lured ma 
Western thinkers and miOions of othe 
besides. And many believed in the co 
dent prediction of history's inevitabl 
umph. Well, few do today. Just as d 
cratic freedom has proven itself incre 
ibly fertile — fertile not merely in a r 
rial sense, but also in the abundance 
has brought forth in the human spirit 
so, too, utopianism has proven brutal 
and barren. 

Albert Camus once predicted thf 
in his words, "when revolution in the" 
name of power and of history become |a 

Department of State Bulletin/August 

Moscow Summit 

lit Tdus and immoderate mechanism, 
\ ifbellion is consecrated in the 
I ' (if moderation of Hfe." Isn't this 
t ly what we see happening across 
! iinuiitains and plains of Europe and 
! beyond the Urals today? In West- 
-urope, support for Utopian ideolo- 
iiK-luding support among intellectu- 
als all but collapsed, while in the 
I inocratic countries, leaders grapple 
(lie internal contradictions of their 
111 and some ask how they can make 
system better and more productive. 
-ruse, the front line in the competi- 
)t' ideas that has played in Europe 
\merica for more than 70 years has 
mI East. Once it was the democra- 
hut doubted their own view of free- 
' and wondered whether Utopian sys- 
inight not be better. Today the 
t IS on the other side. 
Ill just 2 days, I will meet in Moscow 
1 I kneral Secretary Gorbachev. It 

■I- our fourth set of face-to-face 
i) . since 1985. The General Secretary 
n I have developed a broad agenda for 
-Soviet relations — an agenda that is 
il directly to the agenda of the Final 
"lis, as does the Final Act, we will 
security issues. We wall pursue 
-s in arms reduction negotiations 
-.s ihe board and continue our ex- 
h ges on regional issues. Yes, we will 
1: discuss economic issues, although, 
the Helsinki process, we have seen 
( int years how much the differences 
ir systems inhibit expanded ties and 
difficult it is to divorce economic re- 
:• ns from human rights and other ele- 
1' ts of that relationship. And, yes, as 
t countries did at Helsinki, we will 
1 up other bilateral areas, as well, in- 
ing scientific, cultural, and people- 
eople exchanges, where we've been 
B 1 at work identifying new ways to co- 
l-ate. In this area, in particular, I be- 
3 we'll see some good results before 
week is over. 

And like the Final Act, our agenda 
■ includes human rights as an integral 
ponent. We have developed our dia- 
ls and put in place new mechanisms 
discussion. The General Secretary 
spoken often and forthrightly on the 
blems confronting the Soviet Union. 

In his campaign to address these short- 
comings, he talks of glasnost and peres- 
troika, openness and restructuring, 
words that to our ears have a particu- 
larly welcome sound. And since he began 
his campaign, things have happened that 
all of us applaud. The list includes the re- 
lease from labor camps or exile of people 
like Andrey Sakharov, Irina Ratush- 
inskaya, Anatoliy Koryagin, Josif Begun, 
and many other prisoners of conscience; 
the publication of books like Dr. Zh ivago 
and Children of the Arbaf; the distribu- 
tion of movies like Repentance, that are 
critical of aspects of the Soviet past and 
present; allowing higher levels of emigra- 
tion; greater toleration of dissent; 
General Secretary Gorbachev's recent 
statements on religious toleration; the 
beginning of Soviet withdrawal from 

All this is new and good. But at the 
same time, there is another list, defined 
not by us but by the standards of the 
Helsinki Final Act and the sovereign 
choice of all participants, including the 
Soviet Union, to subscribe to it. We need 
look no further through the Final Act to 
see where Soviet practice does not — or 
does not yet — measure up to Soviet com- 

Thirteen years after the Final Act 
was signed, it's difficult to understand 
why cases of divided families and blocked 
marriages should remain on the East- 
West agenda or why Soviet citizens who 
wish to exercise their right to emigrate 
should be subject to artificial quotas and 
arbitrary rulings. And what are we to 
think of the continued suppression of 
those who wash to practice their religious 
beliefs? Over 300 hundred men and 
women whom the world sees as political 
prisoners have been released. There re- 
mains no reason why the Soviet Union 
cannot release all people still in jail for 
expression of political or religious belief, 
or for organizing to monitor the Helsinki 

The Soviets talk about a "common 
European home" and define it largely in 
terms of geography. But what is it that 
cements the structure of clear purpose 
that all our nations pledged themselves 
to build by their signature of the Final 
Act? What is it but the belief in the inal- 
ienable rights and dignity of every single 

human being? What is it but a commit- 
ment to true pluralist democracy? What 
is it but a dedication to the universally 
understood democratic concept of liberty 
that evolved from the genius of Euro- 
pean civilization? This body of values — 
this is what marks, or should mark, the 
common European home. 

Mr. Gorbachev has spoken of, in his 
words, "the artificiality and temporari- 
ness of the bloc-to-bloc confrontation 
and the archaic nature of the 'iron cur- 
tain.' " Well, I join him in this belief 
and welcome every sign that the Soviets 
and their allies are ready not only to em- 
brace but to put into practice the values 
that unify, and, indeed, define contempo- 
rary West European civilization and its 
grateful American offspring. 

Some 30 years ago — another period 
of relative openness — the Italian social- 
ist, Pietro Nenni, long a friend of the So- 
viet Union, warned that it was wrong to 
think that the relaxation could be perma- 
nent in, as he said, "the absence of any 
system of judicial guarantees." And he 
added that only democracy and liberty 
could prevent reversal of the progress un- 

There are a number of steps, which, 
if taken, would help ensure the deepen- 
ing and institutionalization of promising 
reforms. First, the Soviet leaders could 
agree to tear down the Berlin Wall and 
all barriers between Eastern and West- 
ern Europe. They could join us in making 
Berlin itself an all-European center of 
communications, meetings, and travel. 
They could also give legal and practical 
protection to free expression and wor- 
ship. Let me interject here that at one 
time Moscow was knowoi as the City of 
the Forty Forties because there were 
1,600 belfries in the churches of the city. 
The world welcomes the return of some 
churches to worship after many years, 
but there are still relatively few function- 
ing churches and almost no bells. Mr. 
Gorbachev recently said, as he put it, 
"Believers are Soviet people, workers, 
partriots, and they have the full right to 
express their conviction with dignity." 
Well, I applaud Mr. Gorbachev's state- 
ment. WTiat a magnificent demonstration 
of good will it would be for the Soviet 
leadership for church bells to ring out 

iartment of State Bulletin/August 1988 

again not only in Moscow but throughout 
the Soviet Union. 

But beyond these particular steps, 
there's a deeper question. How can the 
countries of the East not only grant but 
guarantee the protection of rights? The 
thought and practice of centuries has 
pointed the way. As the French constitu- 
tional philosopher, Montesquieu, wrote 
more than 200 years ago, "There is no lib- 
erty if the judiciary power be not sepa- 
rated" from the other powers of govern- 
ment. And like the complete independ- 
ence of the judiciary, popular control 
over those who make the laws provides a 
vital, practical guarantee of human 
rights. So does the secret ballot. So does 
the freedom of citizens to associate and 
act for political purposes or for free col- 
lective bargaining. 

I know that for the Eastern coun- 
tries such steps are difficult, and some 
may say it's unrealistic to call for them. 
Some said in 1975 that the standards set 
forth in the Final Act were unrealistic, 
that the comprehensive agenda it embod- 
ied was unrealistic. Some said, earlier in 
this decade, that caOing for global ehmi- 
nation of an entire class of U.S. and So- 
viet intermediate-range nuclear missiles 
was unrealistic, that calling for 50% re- 
ductions in U.S. and Soviet strategic of- 
fensive arms was unrealistic, that the So- 
viets would never withdraw from Af- 
ghanistan. Well, is it realistic to pretend 
that rights are truly protected when 
there are no effective safeguards against 
arbitrary rule? Is it realistic, when the 
Soviet leadership itself is calling for and democratization, to say that 
judicial guarantees, or the independence 
of the judiciary, or popular control over 
those who draft the laws, or freedom to 
associate for political purposes are unre- 
alistic? And finally, is it realistic to say 
that peace is truly secure when political 
systems are less than open? 

We believe that realism is on our 
side when we say that peace and freedom 
can only be achieved together, but that 
they can indeed be achieved together if 
we're prepared to drive toward that 
goal. So did the leaders who met in this 
room to sign the Final Act. They were vi- 
sionaries of the most practical kind. In 
shaping our pohcy toward the Soviet 

Union, in preparing for my meetings 
with the General Secretary, I have taken 
their vision — a shared vision, subscribed 
to by East, West, and the proud neutral 
and nonaligned countries of this conti- 
nent — as my guide. I believe the stand- 
ard that the framers of the Final Act set, 
including the concept of liberty it em- 
bodies, is a standard for all of us. We can 
do no less than uphold it and tiy to see it 
turn, as the Soviets say, into "life 

We in the West will remain firm in 
our values, strong and vigilant in defense 
of our interests, ready to negotiate hon- 
estly for results of mutual and universal 
benefit. One lesson we drew again from 
the events leading up to the Intermedi- 
ate-Range Nuclear Forces (INF) Treaty 
was that, in the world as it is today, 
peace truly does depend on Western 
strength and resolve. It is a lesson we 
will continue to heed. 

But we're also prepared to work 
with the Soviets and their allies when- 
ever they're ready to work with us. By 
strength we do not mean diktat, that is, 
an imposed settlement; we mean confi- 
dent negotiation. The road ahead may be 
long, but not as long as our countries had 
before them 44 years ago when Finland's 
great President J.K. Paasikivi, told a na- 
tion that had shown the world uncommon 
courage in a harrowing time: "A path 
rises up from the slope from the floor of 
the valley. At times the ascent is grad- 
ual, at other times steeper. But all the 
time one comes closer and closer to free, 
open spaces, above which God's ever 
brighter sky can be seen. The way up 
will be difficult, but every step will take 
us closer to open vistas." 

I believe that in Moscow, Mr. Gor- 
bachev and I can take another step to- 
ward a brighter future and a safer world. 
And I believe that, for the sake of all our 
ancient peoples, this new world must be 
a place both of democratic freedom and 
of peace. It must be a world in which the 
spirit of the Helsinki Final Act guides all 
our countries like a great beacon of hope 
to all mankind for ages to come. 

Thank you and God bless you. And 
bear with me now — Onneaja menestysta 
koko Suornen kansalle [Good luck and 
success to the entire Finnish people]. 


MAY 27. 19882 

I am very pleased with the action oft 
U.S. Senate in consenting to ratificati 
of the INF Treaty. In 2 days, I will ai 
rive in the Soviet Union to meet with 
General Secretary Gorbachev to disci 
our four-part agenda. Today's action I 
the Senate clearly shows support for i 
arms reduction objectives. 

I want to e.xpress my appreciatio 
for the leadership demonstrated by M 
jority Leader Bob Byrd and Republic 
Leader Bob Dole in securing the time 
approval of this treaty. I have invited 
them to join me for the exchange of ri 
cation documents in Moscow. 

I continue to have concerns abou 
the constitutionality of some provisio! 
of the resolution of ratification, partic 
larly those dealing with interpretatio 
and I will communicate with the Sens 
on these matters in due course. 


MAY 28, 19882 

As this pretaped broadcast reaches y 
I'm in Helsinki, Finland, on my way t 
the Soviet Union, where I arrive on 

When I meet in the coming days 
with Soviet General Secretary Gor- 
bachev, it will be our fourth set of fac 
to-face talks in 3 years. Through our 
versations, U.S. -Soviet relations hav 
moved forward on the basis of frankn s 
and realism. This relationship has not 
rested on any single issue, but has be 
built on a sturdy four-part agenda t h: 
includes human rights, regional cdiif :: 
arms reduction, and bilateral exchain- 
What has been achieved in this biii i 
span of time offers great hope for a 
brighter future and a safer world. 

Through Western firmness and r 
solve, we concluded the historic INF 
Treaty that provides for the global t n 
nation of an entire class of U.S. and i*- 
viet intermediate-range nuclear mis- 
siles. Soviet Armed Forces are now Ul 
drawing from Afghanistan, a historic 
event that should lead finally to peaci 

Department of State Bulletin/August tl 

Moscow Summit 

hdetermination, and healing for that 
■suffering people, and to an inde- 
lent and undivided Afghan nation. 
It is also encouraging to hear Gen- 
>r Secretary Gorbachev speak forth- 
tly about glas>iost and perestroika — 
uii'ss and restructuring in the Soviet 
111 — words that to Western ears have 
I'ticularly welcome sound. And since 
■ it'iran his campaign, we can list devel- 
I c'lits that the free world heartily ap- 
il>. We've seen many well-known 
liners of conscience I'eleased from 
h labor camps or strict internal 
, courageous people like Josif Begun 
Audrey Sakharov. 
Soviet authorities have permitted 
]mhlication of books, like Dr. 
I"/", and the distribution of movies, 
I a- Repentance, that are critical of 
its of the Soviet past and pres- 
i Ireater emigration has been al- 
'il. (ireater dissent is being toler- 
1 And recently. General Secretary 
T liachev has promised to grant a meas- 
iif religious freedom to the peoples of 
lI Soviet Union. 

" All this is new and good. But at the 
3! le time, there's another list that the 
V ••X cannot ignore. While there are im- 
p venients, the basic structure of the 
s; ;em has not changed in the Soviet 
L on or in Eastern Europe, and there 
'•■ lain significant violations of human 
it.s and freedoms. In Asia, Africa, and 
itral America, unpopular regimes use 
ut arms to oppress their own people 
iiimmit aggression against neighbor- 
; -tales. These regional conflicts ex- 

t a terrible toll of suffering and 
'eaten to draw the United States and 
Soviet Union into direct confronta- 

These and related concerns will be 
he top of my agenda in the days 
ad. I shall say, among other things, 
t't the Soviet Union should fully honor 
I ■ Helsinki accords. In view of that 
( 'ument, signed in Helsinki in 1975, it 
i iifficult to understand why almost 13 
; irs later, cases of divided families and 
licked mamages should remain on the 
•I'St-West agenda or why Soviet citi- 
is who wish by right to emigrate 
jukl not be able to do so. And there 
,r|l; other issues: the recognition of those 

who wish to practice their religious be- 
liefs and the release of all prisoners of 

In working for a safer world and a 
brighter future for all people, we know 
arms agi'eements alone will not make the 
world safer; we must also reduce the rea- 
sons for having arms. As I said to Gen- 
eral Secretary Gorbachev when we first 

met in 1985, we do not mistrast each 
other because we're armed; we're armed 
because we mistrust each other. History 
has taught us that it is not weapons that 
cause war but the nature and conduct of 
the governments that vrield the weap- 
ons. So, when we encourage Soviet re- 
forms, it is vrith the knowledge that de- 
mocracy not only guarantees human 

Andrei Gromyko. Chairman of the Presidium of the Supreme Soviet, and Soviet 
Foreign Minister Eduard Shevardnadze welcome President and Mrs. Reagan to 
Moscow at Vnukovo II Airport. 

siipartment of State Bulletin/ August 1988 


Arrival ceremony in St. George's Hall at the Grand Kremlin Palace. 

rights, but also helps prevent war, an ; 
in truth, is a form of arms control. So 
ally, our whole agenda has one purpo; 
to protect peace, freedom, and life its 

We would like to see positive 
changes in the U.S.S.R. institutiona 
so that they'll become lasting feature: 
Soviet society. And I would like to se 
more Soviet young people come here 
experience and learn from our societj 
And that's why we're ready to work 
the Soviets, to praise and criticize ani 
work for greater contact and for char 
because that is the path to lasting pe; 
greater freedom, and a safer world. 

MAY 29, 19883 

General Secretary Gorbachev^ 

On behalf of the people and Governn- 
of the Soviet Union, I extend to you 
sincere greetings on the occasion of j 
visit. Welcome. 

It is now almost 6 months since 
meeting in Washington, which went 
down in history as a major milestone 
Soviet-American and in internation; 
lations. Now, on this return trip, yoi 
Mr. President, have traversed the gi 
distance that lies between our two a 
tals to continue our political dialogue 
This is a fact we duly appreciate. As 
is our fourth meeting, we can alread; 
make some meaningful assessments. 
we see it, long-held dislikes have be( 
weakened; habitual stereotypes sten 
ming from enemy images have been 
shaken loose. The human features of 
other nation are now more clearly vi 
ible. This in itself is important, for ; 
turn of the two millenniums, history 
objectively bound our two countries 
common responsibility for the destin 
of mankind. The peoples of the work 
and, in the first place, the Soviet ano 
American people welcome the emerg 
positive changes in our relationship i 
hope that your visit and talks here w 
be productive, providing a fresh imp 
in all areas of dialogue and interactic 
tween our two great nations. 

Department of State Bulletin/August It 

Moscow Summit 

You and I are conscious of our two 
■»• pies' longing for mutual understand- 
cooperation, and a safe and stable 
111. This makes it incumbent upon us 
N'uss constructively the main as- 
if disarmament: the set of issues 
1 to 50% cuts in strategic offensive 
I.-, while preserving the 1972 ABM 
titiallistic Missile] Treaty; problems 
■uinating chemical weapons; reduc- 

I armed forces and conventional ar- 
nts in Europe; cessation of nuclear 
iiiu. The world is also looking to us 
ris|ionsible judgments on other com- 
; issues of today, such as the settle- 
it I if regional conflicts; improving 
I I'liational economic relations; pro- 
I ing development, overcoming back- 
dness, poverty, and mass diseases; 
humanitarian problems. And of 
rse, we shall discuss bilateral 

Our previous meetings have shown 
t constructive Soviet-U.S. relations 
possible. The treaty on intermediate 
shorter range missiles is the most im- 
issive symbol of that. But even more 
hplex and important tasks lie ahead. 
H so, you and I still have a lot of work 
lo. And it is good when there is a lot 
vork to be done and people need that 
rk. We are ready to do our utmost in 
se coming days in Moscow. 
Mr. President, you and Mrs. Reagan 
here on your first visit to the Soviet 
ion, a country which you have so often 
ntioned in your public statements. 
are of your interests in Russian prov- 
■Jfs, let me add another one to your col- 
* (ion: "It is better to see once than to 
"pra hundred times." Let me assure 
1 that you can look forward to hospital- 
, warmth, and good will. You wdll 
ve many meetings with Soviet people, 
ey have a centuries-old history behind 
^ !m. They love their land and take 
''de in their accomplishments. They re- 
it things that are presently standing 
their way, and they are heatedly dis- 
"jssing how their country can best 
^' 3gress. They are full of plans for 
3 future. 
Being ardent patriots, Soviet people 
't' e open to friendship and cooperation 
'" th all nations. They harbor sincere re- 
ect for the American people and want 

good relations with your country. Here, 
within the walls of the ancient Kremlin, 
where one feels the touch of history, peo- 
ple are moved to reflect over the diver- 
sity and greatness of human civilization. 
So, may this give greater historical 
depth to the Soviet-American talks to be 
held here, infusing them with a sense of 
mankind's shared destinies. 

Once again, I bid you welcome. 

President Reagan 

Thank you for those kind words of wel- 
come. We've traveled a long road to- 
gether to reach this moment — from our 
first meeting in Geneva in November 
1985, when I invited you to visit me in 
Washington and you invited me to 
Moscow. It was cold that day in Geneva, 
and even colder in Reykjavik when we 
met the followdng year to work on the 
preparations for our e.xchange of visits. 
We've faced great obstacles, but by the 
time of your visit to Washington last De- 
cember, although we still had to grapple 
with difficult issues, we had achieved im- 
pressive progress in all the areas of our 
common agenda — human rights, regional 
issues, arms reduction, and our bilateral 

We signed a treaty that will reduce 
the level of nuclear arms for the first 
time in history by eliminating an entire 
class of U.S. and Soviet intermediate- 
range missiles. We agreed on the main 
points of a treaty that will cut in half our 
arsenals of strategic offensive nuclear 
arms. We agreed to conduct a joint ex- 
periment that would allow us to develop 
effective ways to verify limits on nuclear 
testing. We held full and frank discus- 
sions that planted the seeds for future 

It is almost summer. And some of 
those seeds are beginning to bear fruit, 
thanks to the hard work we have both 
done since our last meeting, including 
monthly meetings by our Foreign Minis- 
ters and the first meeting of our Defense 
Ministers. We have signed the Geneva ac- 
cords, providing for the withdrawal of all 
Soviet troops from Afghanistan, and the 
first withdrawals have begun. We and 

our allies have completed technical ar- 
rangements necessary to begin imple- 
menting the INF Treaty as soon as it en- 
ters into force. For the next major step 
in arms control, reductions in U.S. and 
Soviet strategic offensive arsenals, our 
negotiators in Geneva have produced 
hundreds of pages of joint draft treaty 
text recording our areas of agreement, 
as well as those issues yet to be resolved. 

Our new Nuclear Risk Reduction 
Centers have begun their transmissions 
of routine notifications to reduce the risk 
of conflict. Our scientists are instalhng 
the equipment for our joint experiment 
to verify limits on nuclear testing. Our 
experts have held broad-ranging discus- 
sions on human rights, and important 
steps have been taken in that area. We 
have gi-eatly expanded our bilateral ex- 
changes since we signed our agreement 
in 1985. I hope you'll agree with me that 
more of our young people need to partici- 
pate in these exchanges, which can do so 
much to lay the basis for greater mutual 
understanding in the next generation. 

I could go on — the list of accomplish- 
ments goes far beyond what many antici- 
pated. But I think the message is clear: 
despite clear and fundamental differ- 
ences, and despite the inevitable frustra- 
tions that we have encountered, our 
work has begun to produce results. 

In the past, you've taken note of my 
liking for Russian proverbs. And in order 
not to disappoint anyone on this visit, I 
thought I would mention a literary say- 
ing from your past, another example of 
your people's succinct wisdom: Rodilsiya 
ne toropilsiya — it was born, it wasn't 

Mr. General Secretary, we did not 
rush. We have taken our work step by 
step. And I have come here to continue 
that work. We both know it will not be 
easy. We both know that there are tre- 
mendous hurdles yet to be overcome. 
But we also know that it can be done be- 
cause we share a common goal: strength- 
ening the framework we have already 
begun to build for a relationship that we 
can sustain over the long term — a rela- 
tionship that will bring genuine benefits 
to our own peoples and to the world. 

[partment of State Bulletin/August 1988 

MAY 30, 19882 

It's a very great pleasure to visit this 
beautiful monastery and to have a chance 
to meet some of the people who have 
helped make its return to the Russian Or- 
thodox Church a reality. I am also ad- 
dressing in spirit the 35 million believers 
whose personal contributions made this 
magnificent restoration possible. 

It's been said that an icon is a win- 
dow between heaven and earth through 
which the believing eye can peer into the 
beyond. One cannot look at the magnifi- 
cent icons created, and recreated here 
under the direction of Father Zinon, 
without experiencing the deep faith that 
lives in the hearts of the people of this 
land. Like the saints and martyrs de- 
picted in these icons, the faith of your 
people has been tested and tempered in 
the crucible of hardship. But in that suf- 
fering, it has grown strong, ready now to 
embrace with new hope the beginnings 
for a second Christian millennium. 

We in our country share this hope 
for a new age of religious freedom in the 
Soviet Union. We share the hope that 
this monastery is not an end in itself but 
the symbol of a new policy of religious tol- 
erance that will extend to all peoples of 
all faiths. We pray that the return of this 
monastery signals a willingness to return 
to believers the thousands of other 
houses of worship which are now closed, 
boarded up, or used for secular purposes. 

There are many ties of faith that 
bind your country and mine. We have in 
America many churches, many creeds, 
that feel a special kinship with their fel- 
low believers here — Protestant, Catho- 
lic, Jewish, Orthodox, and Islamic. They 
are united with believers in this country 
in many ways, especially in prayer. 

Our people feel it keenly when reli- 
gious freedom is denied to anyone any- 
where and hope with you that soon all 
the many Soviet religious communities 
that are now prevented from registering 
or are banned altogether, including the 
Ukrainian Catholic and Orthodox 
Churches, will soon be able to practice 
their religion freely and openly and in- 
struct their children in and outside the 
home in the fundamentals of their faith. 

President Reagan's visit to the Danilov Monastery which was founded in 1282. 
Disbanded shortly after the revolution in 1917, the monastery was returned to th 
Russian Orthodox Church in 198.3. 

We don't know if this first thaw will 
be followed by a resurgent spring of reli- 
gious liberty — we don't know, but we 
may hope. We may hope that perestroika 
will be accompanied by a deeper restruc- 
turing, a deeper conversion, a men- 
tanoya, a change in heart, and that 
glasnost, which means giving voice, will 
also let loose a new chorus of belief, sing- 
ing praise to the God that gave us life. 

There is a beautiful passage that I'd 
just like to read, if I may. It's from one 

of this country's great writers and 
ers, Aleksandr Solzhenitsyn, aboui 
faith that is as elemental to this Ian 
the dark and fertile soil. He wrote: 

When you travel the by-roads of ( 'i 
Russia, you begin to understand the sci 
the passifying Russian countryside. It i 
churches. They lift their belltowers— u 
shapely, all different — high over munil:i 
timber and thatch. From villages that a 
off and invisible to each other, they soa 
same heaven. People who are always sr 


DeDartment of Statp Riillptin/Aiinuchalii 

Moscow Summit 

)ften unkind — but the evening chimes used 
ig out, floating over the villages, fields, 
voods, reminding men that they must 
don trivial concerns of this world and give 
and thought to eternity. 

1 our prayers we may keep that 
^e in mind: the thought that the bells 
ring again, sounding throughout 
cow and across the countryside, clam- 
g for joy in their new-found freedom. 



f 30, 19885 

■r the discussions we've just had, I 
ight it might be appropriate for me 
3gin by letting you know why I so 
ted this meeting to take place. You 
I wanted to convey to you that you 
i the prayers and support of the 
jrican people, indeed of people 
ughout the world. I wanted to con- 
this support to you that you might in 
1 convey it to others, so that all those 

working for human rights throughout 
this vast land — from the Urals to 
Kamchatka, from the Laptev Sea to the 
Caspian — might be encouraged and take 

In one capacity, of course, I speak as 
a head of government. The United 
States views human rights as fundamen- 
tal to our relationship with the Soviet 
Union and all nations. From the outset of 
our Administation, we've stressed that 
an essential element in improving rela- 
tions between the United States and the 
Soviet Union is human rights and Soviet 
compliance with international covenants 
on human rights. 

There have been hopeful signs — in- 
deed I believe this a hopeful time for 
your nation. Over the past 3 years more 
than 300 political and religious prisoners 
have been released from labor camps. 
Fewer dissidents and believers have 
been put in prisons and mental hospitals. 
And in recent months, more people have 
been permitted to emigrate or reunite 
with their families. 

The United States applauds these 
changes, yet the basic standards that the 

Soviet Union agreed to almost 13 years 
ago in the Helsinki accords, or a genera- 
tion ago in the Universal Declaration of 
Human Rights, still need to be met. If I 
may, I'd like to share with you the main 
aims of our human rights agenda during 
this summit meeting here in Moscow. 

Freedom of religion — in the words of 
the Universal Declaration of Human 
Rights, "Everyone has the right to free- 
dom of thought, conscience, and reh- 
gion." I'm hopeful the Soviet Govern- 
ment will permit all the peoples of the So- 
viet Union to worship their creator, as 
they themselves see fit, in liberty. 

Freedom of speech — again in the 
words of the Universal Declaration of 
Human Rights, "Everyone has the right 
to freedom of opinion and expression." 
It is my fervent hope for you and your 
country that there will soon come a day 
when no one need fear prison for offenses 
that involve nothing more than the spo- 
ken or written word. 

Freedom of travel — I've told the 
General Secretary how heartened we are 
that during the past year the number of 
those permitted to emigrate has risen. 

ipartment of State Bulletin/August 1988 

We're encouraged as well that the num- 
ber of those permitted to leave for short 
trips, often family visits, has gone up. 
And yet the words of the Universal Dec- 
laration go beyond these steps, "Every- 
one has the right to leave any country, in- 
cluding his own, and to return to his own 
country." It is our hope that soon there 
will be complete freedom of travel. 

In particular, I've noted in my talks 
here the many who have been denied the 
right to emigrate on the grounds that 
they held secret knowledge, even though 
their secret work had ended years before 
and their so-called secrets had long since 
either become public knowledge or obso- 
lete. Such cases must be rationally re- 

And finally, institutional changes to 
make progress permanent. 

I've come to Moscow with this 
human rights agenda because, as I sug- 
gested, it is our belief that this is a mo- 
ment of hope. The new Soviet leaders ap- 
pear to grasp the connection between cer- 
tain freedoms and economic growth. The 
freedom to keep the fruits of one's own 
labor, for example, is a freedom that the 
present reforms seem to be enlarging. 
We hope that one freedom will lead to an- 
other and another, that the Soviet Gov- 
ernment will understand that it is the in- 
dividual who is always the source of eco- 
nomic creativity, the inquiring mind that 
produces a technical breakthrough, the 
imagination that conceives of new prod- 
ucts and markets; and that in order for 
the individual to create, we must have a 
sense of just that— his own individuality, 
his own self-worth. He must sense that 
others respect him, and, yes, that his na- 
tion respects him — respects him enough 
to grant him all his human rights. This, 
as I said, is our hope, yet whatever the 
future may bring, the commitment of the 
United States will nevertheless remain 
unshakable on human rights. On the fun- 
damental dignity of the human person, 
there can be no relenting, for now we 
must work for more, always more. 

And here I would like to speak to 
you not as a head of government, but as 
a man, a fellow human being. I came 
here hoping to do what I could to give 
you strength. Yet I already know it is 
you who have strengthened me, you who 
have given me a message to carry back. 


While we press for human rights through 
diplomatic channels, you press with your 
very lives, day m, day out, year after 
year, risking your jobs, your homes, 
your all. 

If I may, I want to give you one 
thought from my heart. Coming here, 
being with you, looking into your faces, I 
have to believe that the history of this 
troubled century will indeed be re- 
deemed in the eyes of God and man, and 
that freedom will truly come to all, for 
what injustice can withstand your 
strength, and what can conquer your 
prayers. And so I say with Pushkin: "It's 
time my friend, it's time. The heart begs 
for peace, the days fly past, it's time, my 
friend, it's time." 

Could I play a little trick on you and 
say something that isn't written here? 
Sometimes when I'm faced with an unbe- 
liever, an atheist, I am tempted to invite 
him to the greatest gourmet dinner that 
one could ever serve. And when we fin- 
ished eating that magnificent dinner, to 
ask him if he believes there's a cook. 

MAY 30, 1988« 

General Secretary Gorbachev * 

I welcome you in the Moscow Kremlin. 
For five centuries, it has been the site of 
events that constituted milestones in the 
life of our state. Decisions crucial to the 
fate of our nation were made here. The 
very environment around us is a call for 
responsibility to our times and contempo- 
raries, to the present, and to the future. 

It is here that we wish to emphasize 
the importance of the newly discovered 
truth that it is no longer possible to set- 
tle international disputes by force of 
arms. Our awareness of the realities of 
the present-day world has led us to that 
conclusion. I Uke the notion of realism, 
and I also like the fact that you, Mr. 
President, have lately been uttering it 
more and more often. 

Normal and, indeed, durable Soviet- 
American relations, which so powerfully 
affect the world's political climate, are 
only conceivable within the framework of 

realism. Thanks to realism, for all our 
ferences, we have succeeded in arrivii 
at a joint conclusion which, though ve 
simple, is of historic importance: a nu 
clear war cannot be won and must ne' 
be fought. Other conclusions follow w 
inexorable logic. One of them is whetl 
there is any need for weaponry which 
cannot be used without destroying ou 
selves and all of mankind. I believe tl 
realization of this became Reykjavik'; 
pivotal idea. 

Our Warsaw treaty aUies firmly 
here to this position. This is our pow 
support in all matters related to nucb 
disarmament. They have given the S 
viet leadership a clear mandate to ne 
ate radical nuclear arms limitations a 
reductions with the United States. IV 
talks vrith leaders of socialist countri 
and with authoritative representativ 
other nations make it clear to me tha 
there is a common desire to overcom 
mihtary confrontation and to end the 
race in both nuclear and conventiona 

To this, it should be added that 
alistic approach is making a way for 
in all directions and on all continents 
And the idea of resolving today's pre 
lems solely by political means is gain 
increasing authority. There is an ev€ 
broadening desire of the most divers 
litical and social forces for dialogue, 
exchanges, for better knowledge off 
other, and for mutual understanding 
this is indeed so, if this is the will of 
peoples, an effort is needed to ensur 
that the stocks of the ferment of rea ; 
policies keep growing and never run i 
For that, it is essential to understan 
each other better, to take into accou 
the specific features of life in variou; 
countries, the historical conditions t) 
shape them, and the choice made by 
their peoples. 

I recall the words you once spol 
Mr. President, and I quote: "The on 
way to resolve differences is to unde 
stand them." How very true. Let m( 
just add that seeking to resolve diffi 
ences should not mean an end to bei 
diffei-ent. The diversity of the world 
powerful wellspring of mutual enricl 
ment, both spiritual and material. 

Ladies and gentlemen, comrade 
the word perestroika does not sount 

Moscow Summit 

chronistic, even within these ancient 
Is, for renewal of society, humaniza- 

of life, and elevated ideals are at all 
!es and everywhere in the interests of 

people and of each individual. And 
!n this happens, especially in a gi'eat 
ntry, it is important to understand 

meaning of what it is going through, 
i this desire to understand the Soviet 
on that we are now seeing abroad, 
i we regard this as a good sign be- 
36 we do want to be understood cor- 
,ly. This is also important for civilized 
:mational relations. Everyone who 
its to do business vdth us will find it 
ful to know how Soviet people see 

We see ourselves even more con- 
ned that our socialist choice was cor- 
;, and we cannot conceive of our coun- 
developing without socialism based 
my other fundamental values. Our 
gram is more democracy, more 
most, more social justice with full 
sperity and high moral standards. 
• goal is maximum freedom for man, 
the individual, and for society. Inter- 
ionally, we see ourselves as part of an 
?gral civihzation, where each has the 
it to a social and political choice — to a 
■thy and equal place within the com- 
nity of nations. 

On issues of peace and progress, we 
ieve in the primacy of universal 
nan values and regard the preserva- 
1 of peace as the top priority. And 
t is why we advocate the establish- 
nt of a comprehensive system of inter- 
ional security as a condition for the 
•vival of mankind. Linked with this is 
our desire to revive and enhance the 
e of the United Nations on the basis of 

original goals which the Soviet Union 
i the United States, together with 
ir allies, enshrined in the charter of 
it organization. Its very name is sym- 
lic — the United Nations — united in 
ir determination to prevent new 
igedies of war, to banish war from in- 
national relations, and to affirm just 
inciples securing a worthy life for any 
tion, whether large or small, strong or 
ak, rich or poor. 

We want to build contacts among 
ople in all forums, to expand and im- 
ove the quality of information, and to 

develop ties in the spheres of science, cul- 
ture, education, sports, and any other 
human endeavor. But this should be done 
without interfering in domestic affairs, 
without sermonizing or imposing one's 
views and ways, without turning family 
or personal problems into a pretext for 
confrontation between states. In short, 
our time offers great scope for action in 
the humanitarian field. Nations should 
understand each other better, know the 
truth about each other, and free them- 
selves from bias and prejudice. 

As far as we know, most Americans, 
just like us, want to get rid of the demon 
of nuclear war, but they, just like us, 
just like all people of earth, are becoming 
increasingly concerned over the risks of 
environmental disaster. Such a risk can 
only be averted if we act together. In- 
creasingly urgent is the truly global prob- 
lem of the economic state of the world — 
in the North and South, in the West and 
East of this planet. The economic founda- 
tion of civilization vrill be destroyed un- 
less a way is found to put an end to the 
squandering of funds and resources for 
war and destruction, unless the problem 
of debt is settled and world finances are 
stabilized, unless the world market be- 
comes truly worldwide by incorporating 
all states and nations on an equal footing. 

It is across this spectrum of issues 
that we approach international affairs 
and, of course, our relations with the 
United States of America. We are moti- 
vated by an awareness of the realities 
and imperatives of the nuclear and space 
age, the age of sweeping technological 
revolution when the human race has 
turned out to be both omnipotent and 
mortal. It was this awareness that engen- 
dered the new thinking, which has made 
possible a conceptual and practical break- 
through in relations between us as well. 

This meeting, while taking stock of a 
fundamentally important period in So- 
viet-American relations, has to consoli- 
date our achievements and give new im- 
petus for the future. Never before have 
nuclear missiles been destroyed. Now we 
have an unprecedented treaty, and our 
two countries will be performing for the 
first time ever this overture of nuclear 
disarmament. The performance has to be 

The Soviet Union and the United 
States are acting as guarantors of the Af- 
ghan political settlement. This, too, is a 
precedent of tremendous importance. As 
guarantors, our two countries face a 
very responsible period, and we hope 
they both will go through it in a befitting 
manner. The whole world is watching to 
see how we are going to act in this situ- 

Our main task continues to be the 
working out of an agreement on 50% re- 
ductions in strategic offensive arms 
while observing the ABM Treaty. In our 
talks today, you and I devoted a lot of at- 
tention, and with good cause, to discuss- 
ing the entire range of these problems. 
We are expected to ensure that the 
Moscow summit open up new horizons in 
the Soviet-American dialogue — in rela- 
tions between the U.S.S.R. and the 
United States for the benefit of our two 
nations and the entire world. This is 
worth any effort and any amount of good 

To cooperation between the Soviet 
Union and the United States of America, 
to their better mutual knowledge and mu- 
tual understanding. I wish good health 
and happiness to you, Mr. President, to 
Mrs. Nancy Reagan, and to all our distin- 
guished guests. 

President Reagan 

I want to thank you again for the hospi- 
tality that we've encountered this eve- 
ning and at every turn since our arrival 
in Moscow. We appreciate deeply the per- 
sonal effort that you, Mrs. Gorbachev, 
and all of your associates have expended 
on our behalf. 

Today has been a busy day. I want 
to thank you for the opportunity to meet 
with so many divergent members of So- 
viet society. As you know, I traveled to 
Danilov and met there with the clergy at 
that ancient monastery and later in the 
day had most interesting exchanges with 
other members of Soviet society at Spaso 
House. These meetings only confirmed 
the feelings of admiration and warmth 
that Americans harbor toward the peo- 
ples of the Soviet Union. As wartime al- 
lies, we came to know you in a special 
way. But in a broader sense, the Ameri- 
can people, Hke the i-est of the world, ad- 
mire the saga of the peoples of the Soviet 


* % ^ 

President Reagan makes dinner toast at 
state dinner at St. Vladimir's Hall at the 
Grand Kremlin Palace. 

Union. The clearing of the forest, the 
struggle to build a society, the evolution 
into a modern state, and the struggle 
against Hitler's armies. There are other 
ways, too, that we know you: "Happy or 
sad, my beloved, you are beautiful, " 
says one of your folk songs, "as beautiful 
as a Russian song, as beautiful as a Rus- 
sian soul." 

As expressed in the great music, ar- 
chitecture, art — we need only look about 
us this evening — and literature that over 
many centuries you've given the world, 
we have beheld the beauty and majesty 
of your peoples' national experience. 

And without belittling the serious busi- 
ness before us, all of the fundamental is- 
sues that separate our governments, I 
hope you'll peiTnit me tonight to say that 
in the eyes of the American people, your 
people truly are, as the song suggests, a 
people of heart and mind, a people — to 
use our vernacular — with soul. And 
that's why we beheve there's common 
ground between our two peoples, and 
why it is our duty to find common ground 
for our two governments. 

Over the next 3 days, General Secre- 
tary Gorbachev and I will review what 
has been accomplished over the past 3 
years and what our two nations might ac- 
complish together in the months to come. 
We have a great deal to discuss on both 
accounts. What we have achieved is a 
good beginning. We have taken the first 
step toward deep reductions of our nu- 
clear arsenals. We have taken the first 
step toward dealing with the reality that 
much of the tension and mistrust be- 
tween our two countries arises from very 
different concepts of the fundamental 
rights and role of the individual in soci- 
ety. We have taken the first step to build 
that network of personal relationships 
and understanding between societies, be- 
tween people, that are crucial to dispel- 
ling dangerous misconceptions and 

These are good first steps, and we 
can both take pride in them, but as I 
said, they are just a start. Nuclear arse- 
nals remain too large. The fighting con- 
tinues needlessly, tragically in too many 
regions of the globe. The vision of free- 
dom and cooperation enshrined in the 
Helsinki Final Act remains unrealized. 
The American and Soviet peoples are get- 
ting to know each other better, but not 
well enough. You and I are meeting now 
for the fourth time in 3 years — a good 
deal more often than our predecessors. 
And this has allowed our relationship to 
differ from theirs in more than a quanti- 
tative state of sense. 

We have established the kind of 
working relationship I think we both had 
in mind when we first met in Geneva. 
We've been candid about our differences 
but sincere in sharing a common objec- 
tive and working hard together to draw 
closer to it. It's easy to disagree, and 
much harder to find areas where we can 

agree. We and our two governments 
have both gotten into the habit of look 
for those areas. We found more than w 

I intend to pursue the search for 
common ground during the months left 
to me as President. When I pass the jc 
on to my successor, I intend to tell hir 
is a search that must be continued. 
Based on the achievements of the last 
few years, I will also tell him it is a 
search that can succeed. 

Once again, Mr. General Secretar 
I want to extend my thanks for your 1 
pitality. I also hope you'll permit me t( 
mention that, as you have been a gra- 
cious host, we've tried to be gracious 
guests by bringing along some small e 
pressions of our gratitude. There's on« 
gift in particular that I wanted to men 
tion, not only in view of my own formf 
profession, but because it has, I think 
something important to say to us aboL 
what is underway this week in Mosco\ 
It is a film — not as well knowTi as som 
but an American classic. It is a power 
fully acted and directed story of famil; 
and romantic love, of devotion to the 
land and dedication to higher principle 
It is also fun, it has humor. There's a 
renegade goose, a mischievous young 
boy, a noisy neighbor, a love-struck t 
ager in love with a gallant soldier, an ; 
lescent struggling for manhood, a lov 
highly-principled wife, and a gentle bi 
strong father. It's about the good and 
sometimes difficult things that happer 
between man and wife, and parent an> 
child. The films also has sweep and m; 
esty and power and pathos. For you s 
it takes place against the backdrop of 
American epic, the Civil War. And be 
cause the family is of the Quaker rehg 
and renounces violence, each of its ch: 
acters must, in his or her own way, fa 
this war and the moral dilemma it pos 
The film shows not just the tragedy o 
war, but the problems of pacifism, tht 
bility of patriotism, as well as the lov( 

I promise not to spoil its outcom( 
you, but I hope you'll permit me to de 
scribe one scene. Just as the invadinj 
mies come into southern Indiana — om 
our States — the Quaker farmer is ap- 
proached by two of his neighbors. On^ s 
also a Quaker who earlier in the story 


Department of State Bulletin/August iBa 

Moscow Summit 

en times were peaceful, denounces vio- 
ce and vows never to lift his hand in 
ijer. But now that the enemy has 
Tied his barn, he's on his way to battle 
i criticizes his fellow Quaker for not 
ling him in renouncing his religious he- 
's. The other visitor, also on his way to 
tie, is the intruding but friendly neigh- 
•. Yet it is this neighbor, although a 
(believer, who says he's proud of the 
aker farmer's decision not to iight. In 
face of the tragedy of war, he's gi-ate- 
as he says, that somebody's holding 
for a better way of settling things. 
It seems to me that in pursuing 
•se summit meetings, we too have 
m holding out for a better way of set- 
g things. And by the way, the film's 
e is more than a little appropriate, 
called "Friendly Persuasion." 
So, Mr. General Secretary, allow me 
raise a glass to the work that has been 
le, to the work that remains to be 
18, and let us also toast the art of 
;ndly persuasion, the hope of peace 
■h freedom, the hope of holding out for 
etter way of settling things. Thank 
1 and God bless you. 


iY 31, 1988^ 

i a great pleasure to be here at 
iscow State University, and I want to 
ink you all for turning out. I know you 
ist be very busy this week, studying 
i taking your final examinations. So 
■ me just say zhelayu vain uspekha [I 
sh you success]. Nancy couldn't make 
oday because she's visiting Lenin- 
id, which she tells me is a very beauti- 
city, but she, too, says hello and 
shes you all good luck. 

Let me say it's also a great pleasure 
once again have this opportunity to 
eak directly to the people of the Soviet 
lion. Before I left Washington, I re- 
ived many heartfelt letters and tele- 
ams asking me to carry here a simple 
2ssage — perhaps, but also some of the 
Dst important business of this summit: 
is a message of peace and good will and 
pe for a growing friendship and close- 
ss between our two peoples. 

As you know, I've come to Moscow 
to meet with one of your most distin- 
guished graduates. In this, our fourth 
summit, General Secretary Gorbachev 
and I have spent many hours together 
and I feel that we're getting to know 
each other well. Our discussions, of 
course, have been focused primarily on 
many of the important issues of the day, 
issues I want to touch on with you in a 
few moments. But first I want to take a 
little time to talk to you much as I would 
to any group of university students in 
the United States. I want to talk not just 
of the realities of today but of the possi- 
bilities of tomorrow. 

Standing here before a mural of your 
revolution, I want to talk about a very 
different revolution that is taking place 
right now, quietly sweeping the globe 
without bloodshed or conflict. Its effects 
are peaceful, but they will fundamentally 
alter our world, shatter old assumptions, 
and reshape our lives. It's easy to under- 
estimate because it's not accompanied by 
banners or fanfare. It's been called the 
technological or information revolution, 
and as its emblem, one might take the 
tiny silicon chifi — no bigger than a finger- 
print. One of these chips has more com- 
puting power than a roomful of old-style 

As part of an exchange program, we 
now have an exhibition touring your 
country that shows how information tech- 
nology is transforming our lives — replac- 
ing manual labor with robots, forecasting 
weather for farmers, or mapping the ge- 
netic code of DNA [deoxyribonucleic 
acid] for medical researchers. These mi- 
crocomputers today aid the design of ev- 
erything from houses to cars to space- 
craft; they even design better and faster 
computers. They can translate Enghsh 
into Russian or enable the bhnd to read 
or help Michael Jackson produce on one 
synthesizer the sounds of a whole orches- 
tra. Linked by a network of satellites 
and fiber-optic cables, one individual 
with a desktop computer and a telephone 
commands resources unavailable to the 
largest governments just a few years 

Like a chrysalis, we're emerging 
from the economy of the Industrial Revo- 
lution — an economy confined to and lim- 
ited by the earth's physical resources — 
into, as one economist titled his 

sttspartment of State Bulletin/August 1988 

book The Economy in Mind, in which 
there are no bounds on human imagina- 
tion and the freedom to create is the 
most precious natiu-al resource. 

Think of that little computer chip. 
Its value isn't in the sand from which it 
is made but in the microscopic architec- 
ture designed into it by ingenious 
human minds. Or take the example of 
the satellite relaying this broadcast 
around the world, which replaces thou- 
sands of tons of copper mined from the 
earth and molded into wire. In the new 
economy, human invention increasingly 
makes physical resources obsolete. 
We're breaking through the material con- 
ditions of existence to a world where 
man creates his own destiny. Even as we 
explore the most advanced reaches of sci- 
ence, we're returning to the age-old wis- 
dom of our culture, a vrisdom contained 
in the book of Genesis in the Bible: in the 
beginning was the spirit, and it was from 
this spirit that the material abundance of 
creation issued forth. 

But progress is not foreordained. 
The key is freedom — freedom of thought, 
freedom of information, ft-eedom of com- 
munication. The renowned scientist, 
scholar, and founding father of this uni- 
versity, Mikhail Lomonosov, knew that. 
"It is common knowledge," he said, 
"that the achievements of science are con- 
siderable and rapid, particularly once the 
yoke of slavery is cast off and replaced 
by the freedom of philosophy." You 
know, one of the first contacts between 
your country and mine took place be- 
tween Russian and American explorers. 
The Americans were members of Cook's 
last voyage on an expedition searching 
for an Arctic passage; on the island of 
Unalaska, they came upon the Russians, 
who took them in, and together, with the 
native inhabitants, held a prayer service 
on the ice. 

The explorers of the modern era are 
the entrepreneurs, men with vision, with 
the courage to take risks and faith 
enough to brave the unknown. These en- 
trepreneurs and their small enterprises 
are responsible for almost all the eco- 
nomic growth in the United States. They 
are the prime movers of the technologi- 
cal revolution. In fact, one of the largest 
personal computer firms in the United 


President Reagan's address before students and faculty of Moscow State Univer- 
sity; founded in 1755, it is the largest and oldest continuously operating university 
in the Soviet Union. 

States was started by two college stu- 
dents, no older than you, in the garage 
behind their home. 

Some people, even in my own coun- 
try, look at the riot of experiment that is 
the free market and see only waste. 
What of all the entrepreneurs that fail? 
Well, many do, particularly the success- 
ful ones — often several times. And if you 
ask them the secret of their success, 
they'll tell you it's all that they learned 
in their struggles along the way; yes, it's 
what they learned from failing. Like an 
athlete in competition or a scholar in pur- 
suit of the truth, experience is the great- 
est teacher. 

And that's why it's so hard for gov- 
ernment planners, no matter how sophis- 
ticated, to ever substitute for milhons of 
individuals working night and day to 
make their dreams come true. The fact 
is, bureaucracies are a problem around 
the world. There's an old story about a 
town — it could be anywhere — with a bu- 
reaucrat who is known to be a good-for- 
nothing, but he somehow had always 
hung on to power. So one day, in a town 
meeting, an old woman got up and said 


to him, "There is a folk legend here 
where I come from that when a baby is 
born, an angel comes down from heaven 
and kisses it on one part of its body. If 
the angel kisses him on his hand, he be- 
comes a handyman. If he kisses him on 
his forehead, he becomes bright and 
clever. And I've been trying to figure 
out where the angel kissed you so that 
you should sit there for so long and do 
nothing." [Laughter and applause.] 

We are seeing the power of eco- 
nomic freedom spreading around the 
world — places such as the Republic of 
Korea, Singapore, l^iwan have vaulted 
into the technological era, barely pausing 
in the industrial age along the way. 
Low-tax agricultural policies in the sub- 
continent mean that in some years India 
is now a net exporter of food. Perhaps 
most exciting are the winds of change 
that are blowing over the People's Re- 
public of China, where one-quarter of 
the world's population is now getting its 
first taste of economic freedom. 

At the same time, the growth of de- 
mocracy has become one of the most pow- 
erful political movements of our age. In 

Latin America in the 1970s, only a thin 
of the population hved under democrati 
government; today over 90% does. In 
the Philippines, in the Republic of Kor 
free, contested, democratic elections ai 
the order of the day. Throughout the 
world, free markets are the model for 
gr'owth. Democracy is the standard by 
which governments are measured. 

We Americans make no secret of 
belief in freedom. In fact, it's somethir 
of a national pastime. Every 4 years tl 
American people choose a new presid( 
and 1988 is one of those years. At one 
point there were 13 major candidates r 
ning in the two major parties, not to nr 
tion all the others, including the social 
and hbertarian candidates — all trying 
get my job. About 1,000 local televisic 
stations, 8,500 radio stations, and l,7t 
daily newspapers — each one an indepi 
ent, private enterprise, fiercely inde- 
pendent of the government — report o 
the candidates, grill them in interviev 
and bring them together for debates, 
the end, the people vote; they decide 
who will be the next president. 

But freedom doesn't begin or end 
with elections. Go to any American 
town, to take just an example, and yc 
see dozens of churches, representing 
many different beliefs — in many plact 
synagogues and mosques — and you'll 
famihes of every conceivable national 
worshiping together. 

Go into any schoolroom, and thei 
you will see children being taught the 
Declaration of Independence, that th< 
are endowed by their Creator with ce 
tain inalienable rights — among them '. 
hberty, and the pursuit of happiness- 
that no government can justly deny t 
guarantees in their Constitution for 
dom of speech, freedom of assembly, 
freedom of religion. 

Go into any courtroom, and ther 
will preside an independent judge, b( 
holden to no government power. The 
every defendant has the right to a tri 
by a jury of his peers, usually 12 mei 
women — common citizens, they are t 
ones, the only ones, who weigh the e 
dence and decide on guilt or innocenc 
In that court, the accused is innocent 
until proven guilty, and the word of 
liceman, or any official, has no great< 
legal standing than the word of the 

nartartmont rtf Qtata RiillAti 

Moscow Summit 

(Id to any university campus, and 
hf you'll find an open, sometimes 
Kted discussion of the problems in 
A erican society and what can be done 
r oi-rect them. Tlirn on the television, 
11 >()u'll see the legislature conducting 
! business of government right there 
K ire the camera, debating and voting 
■: hv legislation that will become the 
the land. March in any demonstra- 
,11(1 there are many of them; the 
pir s right of assembly Is guaranteed 
lir Constitution and protected by the 

( ;i) into any union hall where the 
I iiliers know their right to strike is 
) iccted by law. As a matter of fact, 
I I if the many jobs I had before this 

was being president of a union, the 
- rill Actors Guild. I led my union out 
) strike; and I'm proud to say, we won. 
But freedom is more even than this. 
«dom is the right to question and 
nge the established way of doing 
igs. It is the continuing revolution of 
marketplace. It is the understanding 
t allows us to recognize shortcomings 
seek solutions. It is the right to put 
h an idea, scoffed at by the e.xperts, 
I watch it catch fire among the people. 
s the right to dream — to follow your 
am, or stick to your conscience, even 
ou're the only one in a sea of doubt- 



Freedom is the recognition that no 
gle person, no single authority or gov- 
iment, has a monopoly on the truth; 
, that every individual life is infinitely 
icious, that every one of us put on this 
rid has been put there for a reason 
I has something to offer. 

America is a nation made up of hun- 
ids of nationalities. Our ties to you are 
re than ones of good feeling; they're 
3 of kinship. In America, you'll find 
ssians, Armenians, Ukrainians, peo- 
■s from Eastern Europe and Central 
ia. They come from every part of this 
5t continent, from every continent, to 
e in harmony, seeking a place where 
h cultural heritage is respected, each 
k'alued for its diverse strengths and 
auties and the richness it brings to our 

Recently, a few individuals and fami- 
Ms have been allowed to visit relatives 

in the West. We can only hope that it 
won't be long before all are allowed to do 
so, and Ukrainian- Americans, Baltic- 
Americans, and Armenian-Americans 
can freely visit their homelands, just as 
this Irish- American visits his. 

Freedom, it has been said, makes 
people selfish and materiahstic, but 
Americans are one of the most religious 
peoples on earth. Because they know 
that liberty, just as life itself, is not 
earned, but a gift from God, they seek to 
share that gift with the world. "Reason 
and e.xpericence," said George Washing- 
ton, in his farewell address, "both forbid 
us to expect that national morality can 
prevail in exclusion of religious principle. 
And it is substantially true, that virtue 
or morality is a necessary spring of popu- 
lar government." 

Democracy is less a system of gov- 
ernment than it is a system to keep gov- 
ernment limited, unintrusive: a system 
of constraints on power to keep politics 
and government secondary to the impor- 
tant things in life, the true sources of 
value found only in family and faith. 

But I hope you know I go on about 
these things not simply to extol the vir- 
tues of my own country, but to speak to 
the true greatness of the heart and soul 
of your land. Who, after all, needs to tell 
the land of Dostoevski about the quest 
for truth, the home of Kandinski and the 
Scriabin about imagination, the rich and 
noble culture of the Uzbek man of let- 
ters, Alisher Navoi, about beauty and 

The great culture of your diverse 
land speaks with a glowing passion to all 
humanity. Let me cite one of the most 
eloquent contemporary passages on 
human freedom. It comes, not from the 
literature of America, but from this coun- 
try, from one of the greatest writers of 
the 20th century, Boris Pasternak, in the 
novel Dr. Zkivago. He writes: 

I think that if the beast who sleeps in man 
could be held down by the threats— any kind of 
threat, whether of jail or of retribution after 
death— then the highest emblem of humanity 
would be the lion tamer in the circus with his 
whip, not the prophet who sacrificed himself. 
But this is just the point — what has for 
centuries raised man above the beast, is not the 
cudgel, but an inward music — the irresistible 
power of unarmed truth. 

.nartmont of Rtate Bulletin/Auaust 1988 

The irresistible power of unarmed 
truth. Today the world looks expectantly 
to signs of change, steps toward greater 
freedom in the Soviet Union. We watch 
and we hope as we see positive changes 
taking place. There are some, I know, in 
your society who fear that change will 
bring only disruption and discontinuity — 
who fear to embrace the hope of the 

Sometimes it takes faith. It's like 
that scene in the cowboy movie "Butch 
Cassidy and the Sundance Kid," which 
some here in Moscow recently had a 
chance to see. The posse is closing in on 
the two outlaws, Butch and Sundance, 
who find themselves trapped on the edge 
of a cliff, with a sheer drop of hundreds 
of feet to the raging rapids below. Butch 
turns to Sundance and says their only 
hope is to jump into the river below, but 
Sundance refuses. He says he'd rather 
fight it out with the posse, even though 
they're hopelessly outnumbered. Butch 
says that's suicide and urges him to 
jump, but Sundance still refuses, and fi- 
nally admits, "I can't swim." Butch 
breaks up laughing and says, "You crazy 
fool, the fall will probably kill you." 
And, by the way, both Butch and Sun- 
dance made it, in case you didn't see the 
movie. I think what I've just been talk- 
ing about is perestroika and what its 
goals are. 

But change would not mean rejec- 
tion of the past. Like a tree growing 
strong through the seasons, rooted in the 
earth and drawing life from the sun, so, 
too, positive change must be rooted in 
traditional values — in the land, in cul- 
ture, in family, and community — and it 
must take its life from the eternal things, 
from the source of all life, which is faith. 
Such change will lead to new understand- 
ings, new opportunities, and to a broader 
future in which the tradition is not sup- 
planted but finds its full flowering. That 
is the future beckoning to your genera- 

At the same time, we should remem- 
ber that reform that is not institutional- 
ized will always be insecure. Such free- 
dom will always be looking over its shoul- 
der. A bird on a tether, no matter how 
long the rope, can always be pulled back. 
And that is why, in my conversation with 


General Secretary Gorbachev, I have 

spoken of how important it is to institu- 
tionalize change — to put guarantees on 
reform. And we've been talking together 
about one sad reminder of a divided 
world: the Berlin Wall. It's time to re- 
move the barriers that keep people 

I'm proposing an increased exchange 
program of high school students between 
our countries. General Secretary Gor- 
bachev mentioned on Sunday a wonder- 
ful phrase you have in Russian for this. 
"Better to see something once than to 
hear about it a hundred times." Mr. Gor- 
bachev and I first began working on this 
in 1985. In our discussion today, we 
agreed on working up to several thou- 
sand exchanges a year from each country 
in the near future. But not everyone can 
travel across the continents and oceans. 
Words travel lighter, and that's why 
we'd like to make available to this coun- 
try more of our 11,000 magazines and pe- 
riodicals and our television and radio 
shows that can be beamed off a satellite 
in seconds. Nothing would please us 
more than for the Soviet people to get to 
know us better and to understand our 
way of life. 

Just a few years ago, few would 
have imagined the progress our two na- 
tions have made together. The INF 
Treaty, which General Secretary Gor- 
bachev and I signed last December in 
Washington and whose instruments of 
ratification we will exchange tomorrow — 
the first true nuclear arms reduction 
treaty in history, calling for the elimina- 
tion of an entire class of U.S. and Soviet 
nuclear missiles. And just 16 days ago, 
we saw the beginning of your withdrawal 
from Afghanistan, which gives us hope 
that soon the fighting may end and the 
healing may begin and that that suffering 
country may find self-determination, 
unity, and peace at long last. 

It's my fervent hope that our con- 
structive cooperation on these issues will 
be carried on to address the continuing 
destruction on conflicts in many regions 
of the globe and that the serious discus- 
sions that led to the Geneva accords on 
Afghanistan will help lead to solutions in 
southern Africa, Ethiopia, Cambodia, 
the Persian Gulf, and Central America. 

President Reagan and General Secretary Gorbachev greet Soviet citizens during 
their tour of the Kremlin. 

I have often said, nations do not dis- 
trust each other because they are armed; 
they are armed because they distrust 
each other. If this globe is to live in 
peace and prosper, if it is to embrace all 
the possibilities of the technological revo- 
lution, then nations must renounce, once 
and for all, the right to an expansionist 
foreign poUcy. Peace between nations 
must be an enduring goal, not a tactical 
stage in a countinuing conflict. 

I've been told that there's a popular 
song in your country — perhaps you know 
it — whose evocative refrain asks the 
question: "Do the Russians want a 
war?" In answer it says, "Go ask that si- 
lence lingering in the air, above the birch 
and poplar there; beneath those trees 
the soldiers he. Go ask my mother, ask 
my wife; then you will have to ask no 
more, 'Do the Russians want a war?' " 
But what of your one-time allies? What 
of those who embraced you on the Elbe? 
What if we were to ask the watery 
gi-aves of the Pacific or the European bat- 
tlefields where America's fallen were 
buried far from home? What if we were 

to ask their mothers, sisters, and sons 
do Americans want war? Ask us, too, 
and you'll find the same answer, the 
same longing in every heart. People di 
not make wars, governments do. And 
mother would ever willingly sacrifice 
sons for temtorial gain, for economic 
vantage, for ideology. A people free tc 
choose will always choose peace. 

Americans seek always to make 
friends of old antagonists. After a colo 
nial revolution with Britain, we have c 
mented for all ages the ties of kinship 
tween our nations. After a temble civ 
war between North and South, we 
healed our wounds and found true unit 
as a nation. We fought two world war 
my lifetime against Germany and one 
vrith Japan, but now the Federal Rej 
lie of Germany and Japan are two of oi 
closest allies and friends. 

Some people point to the trade dii 
putes between us as a sign of strain, b 
they're the frictions of all families, anc 
the family of free nations is a big and 
vital — and sometimes boisterous — one 
can tell you that nothing would please 


rtonartmont r>f ^tato R 

illotin/Aiiniict 1CB 

Moscow Summit 

V heart more than in my lifetime to see 
\ierican and Soviet diplomats grap- 

lu with the problem of trade disputes 
w ifn America and a growing, exuber- 
txporting Soviet Union that had 
iitii up to economic fi-eedom and 
_• \\th. 

And as important as these official 
1 |ilf-to-people exchanges are, nothing 
\ lid please me more than for them to 
1 niiu' unnecessary, to see travel be- 
.' 't'li East and West become so routine 
tit university students in the Soviet 
Ijion could take a month off in the sum- 
ni- and— just like students in the West 
j now— put packs on their backs and 
b vel from country to country in Europe 

V h barely a passport check in between. 
J thing would please me more than to 

fl the day that a concert promoter in, 
4 . England could call up a Soviet rock 
: I h— without going through any gov- 

■iit agency— and have them playing 
,. , erpool the next night. Is this just a 
am? Perhaps. But it is a dream that is 
. ■ responsibility to have come true. 

Your generation is living in one of 
t most exciting, hopeful times in So- 
\ t history. It is a time when the first 
\ 'ath of freedom stirs the air and the 
1 u-t beats to the accelerated rhythm of 
1 )e. when the accumulated spiritual en- 
t ;^es of a long silence yearn to break 

ie. I am reminded of the famous pas- 
;e near the end of Gogol's Dead Souls. 
mparing his nation to a speeding 
.ika, Gogol asks what will be its desti- 
tion. But he writes, "There was no an- 
er save the bell pouring forth mar- 
lous sound." 

We do not know what the conclusion 
11 be of this journey, but we're hopeful 
at the promise of reform will be ful- 
.ed. In this Moscow spring, this May 
88, we may be allowed that hope — 
ifiiii at freedom, like the fresh green sap- 
«« \g planted over Tolstoy's grave— will 
jii( Dssom forth at last in the rich fertile 
111 Ml of your people and culture. We may 
oiit'n : allowed to hope that the marvelous 

und of a new openness will keep rising 
sde* rough, ringing through, leading to a 
i«l iw world of reconciliation, friendship, 
es. a* id peace. 

fd Thank you all very much and du bla 
H* tslovit vas grospod— God bless you. 



MAY 31, 1988« 

Q. Is the U.S. side feeling as positive as 
the Soviets sound today about the possi- 
bilities of a START treaty being signed 
this fall? 

A. It's certainly possible, and we did 
make some headway during the course of 
this meeting in our working group. It's 
not certain, of course, because the prob- 
lems ahead are difficult ones, and I think 
it's fair to say that both sides want to see 
the job done right. So we'll work on it 
very hard, but I wouldn't want to make a 
flat prediction. 

Q. Does that mean that progress has 
been made on any of the four areas 
dividing the two sides? We had them 
listed for us the other day— SDI [Strate- 
gic Defense Initiative], how you count 
ALCMs [air-launched cruise missiles], 
how you verify whether the submarine- 
launched are conventional or nuclear, 
how to verify the mobile missiles or to 
ban them. On any or all of those areas, 
has significant progress been made? 
A. I think significant progress has 
been made on the air-launched cruise 
missile question and on the great, diffi- 
cult problems of verifying mobile mis- 
siles, if you allow them. And so those are 
the two important areas where I think 
some real headway was made. 

It's possible that we have made 
headway on the others, although that 
headway hasn't emerged into things that 
are concrete and identifiable. But you 
know, when you talk over your positions 
back and forth, you lay the groundwork 
for people going back and sort of think- 
ing it over again and saying, "Well, you 
know, they said this and they said that, 
and maybe there's a point here." It's 
that kind of thing that also makes prog- 
ress, but you can't identify it in any- 

Q. Has the progress you've made 
here been unexpectedly good? I mean, 
did you make more than you came here 
thinking you might make? 

A. Everybody came thinking dif- 
ferent things probably. I felt that we 
would make some and we did, and I think 
I'll just leave it at that. 

Q. How do you, at this level, really 
make significant progress on issues that 
are so fiendishly complicated? It has to 
be on a fairly simple level— I mean, like 
one side saying, "Well, we'll reduce 
our demands on that thing or we'll drop 
that." Is that the kind of level on which 
progress is made at the summit level? 
A. There has been an evolution in 
the way of working at these problems 
that I think is quite interesting and 
seems to work well. Here's what hap- 
pens: we bring here, and the Soviets 
have here, all of the expert people who 
know about this subject— the negotiators 
from Geneva, the people who do the 
work in Washington and their counter- 
parts in Moscow. When we started out, 
the President and the General Secretary 
had a one-on-one meeting. Shortly there- 
after, I had one with Foreign Minister 
[Eduard] Shevardnadze; and at that 
meeting we had around us this great big 
bunch of experts on all kinds of sub- 
jects—on human rights subjects, on re- 
gional issues, on bilateral problems, on 
the range of arms control issues, not just 
START and SDI— and we established 
working groups. And while we have been 
having these various meetings, the work- 
ing groups, who are technically very well 
quahfied, have been meeting themselves. 
Being in the atmosphere of the summit 
meeting, there is the potential for inter- 
action up and down the line from the po- 
litical level of decisions to the technical 
level, and that tends to give a stimulus. 
By and large, I think, in each one of the 
summit meetings we've made progi-ess 
working that way and we've become in- 
creasingly confident that that's a good 

Q. So, if I understand correctly, it's 
the atmosphere of the summit, with all 
the leaderships present and all the ex- 
perts present, which makes them more 
likely to make some progress than when 
they're sitting there without all of you 
sitting on top of them in Geneva. Is that 
what you mean? 

lepartment of State Bulletin/August 1988 


A. There are a variety of things. 
First, the people in Geneva who are the 
negotiators often get frustrated with the 
people in Washington, and maybe about 
Moscow. I can't speak about that and I 
don't know. But they say, "Come on 
Washington, make up your mind. Give us 
an answer to our questions that have 
come up." And the Washington people, 
of course, are watching the negotiations 
and trying to evaluate the proposals that 
are being made, and so on. So when you 
have all these people together in one 
place — 

Q. And clear them through the 
bureaucracy — 

A. Right. So when you have them 
all together in one place, it's all there, 
and there can be an interchange that's 
pretty rapid. At the same time, there 
are political decisions to be made, so to 
speak, and there is a kind of encourage- 
ment to that out of the summit process. 

Q. What did Mr. Reagan mean 
today when he said in the Kremlin when 
reporters were asking questions, 
"We're settled on SDI?" 

A. I think he must have meant that 
as far as the United States is concerned, 
as far as he is concerned, he intends to 
pursue this effort to find out whether we 
can defend ourselves against ballistic mis- 
siles. He feels it's a vitally important 
matter to learn how to do that if we can. 
As far as he's concerned, he's not going 
to agree to anything that would prevent 
that effort from going forward. And I 
think that all the people working with 
him — certainly me — support him in that. 

Q. He didn't mean it was settled 
between himself and the Soviets? 

A. Oh, no. It's not settled by any 
means, although compared with where 
we were, say, 2 years or so ago, or when 
we went to Reykjavik, we've come a 
long way. So there have been a number 
of things worked out. 

Q. There have been hints, indica- 
tions, whatever, in the past that the 
Soviets for their own reasons might find 
it convenient to accept a form of words 
that would enable the United States to go 
on developing, testing, whatever, SDI in 

the way Mr. Reagan wants to. Do you 
get a sense that that is a possibility now, 
that they will simply accept a form of 
words that lets the United States inter- 
pret the ABM Treaty the way it wants to 
and the Soviets can interpret it the way 
they want to? Or is that not coming 

A. That isn't a good idea because if 
you have something that has been agreed 
to in words and you both know that you 
have a different view of what those 
words mean, you're just heading for 
trouble because as soon as there's any 
real pressure on the subject, that dis- 
agreement will emerge. We believe — and 
I think the Soviets believe — that it's bet- 
ter to drive ahead and try to come to 
some kind of an agreement that's clear. 

Q. And on the final thing, you 
mentioned the air-launched cruise mis- 
siles, and you mentioned the mobile 

A. Yes. 

Q. The fourth thing was — you didn't 
mention — the submarine-launched mis- 
siles. No progress on that? 

A. It's on submarine-launched 
ballistic missiles, we really don't have — 
that we've basically handled that. 

Q. I should have said cruise mis- 

A. It's the question of cruise mis- 
siles that the Soviets have raised. And 
we don't see how you can verify a hmit 
on cruise missiles on — it's not just subma- 
rines, on any naval ship — and be consist- 
ent with operating the Navy. Of course, 
you can verify things by having all of our 
ships being swarmed with Soviets all of 
the time, but that doesn't allow the 
Navy to operate. So you've got to find 
something that will really work and 
allow normal operations, and we don't 
see where to find that. At the same time, 
they've put forward a lot of ideas and 
we're evaluating them, but we really 
haven't made much progress on that. 

Q. Assistant Secretary Ridgway 
[Assistant Secretary for European and 
Canadian Affairs Rozanne L. Ridgway] 
told us the other day that if there was to 
be a START treaty signed before Mr. 
Reagan left office, that would depend on 

the progress made here. Has the prog 
ress made here been sufficient that tli 
is not now an impossibility? Is that wl 
you were saying earlier? 

A. Yes, I'd agree with that double 

Q. In other words, enough progr 
has been made here to raise hopes of 
strategic arms reduction treaty being, 
signed before Mr. Reagan leaves offi^ 

A. It's still possible. I don't want t 
get in the position of predicting that it 
will happen. 

Q. Right. 

A. But we'll work at it, and we'd 
like it to happen. The President would 
very much hke it to happen. 

Q. And if it's possible, then a fift 
summit meeting presumably would b» 

A. Certainly, but there's no plan 
it. I think that actually if there's a goo 
reason to have a meeting, it's not that 
difficult to arrange one, but there nee( 
to be a good reason. 

Q. On one agreement which was- 
signed today, which you and Mr. 
Shevardnadze signed, on the 24 hourr< 
least prior notification of the test 
launching of strategic missiles — 

A. Any ballistic missiles. 

Q. Any, excuse me. I'm curious i 
know what happened. Just over a we 
ago, you, having talked to him in Ge 
neva, came out and said this is a real 
possibility — 

A. Yes. 

Q. —we'll pull this out of STAR11 
and sign it. Then it all seemed to go s 
just a few days ago and looked like n 
possibility at all. What happened to 
make it suddenly come about? 

A. We made a proposal, and they 
seemed to be agreeable to it. Then a k 
of things were added to it that we 
couldn't accept, and we said so. The 
press discovered that we were having 
that argument and decided that some- 
thing that we were going to get, we 
thought, wasn't going to be gotten. Th 
was the story. But we kept working o) 


Department of State Bulletin/August U 


Moscow Summit 

And they basically said, "Well, all 
;ht, let's do what we started out to do 
Geneva. But here are these other 
ings over here that we're interested 
and we'd like to study them and see if 
couldn't bring something forward 
re." And we said, "fine." 

Q. As a separate — 

A. As a separate matter, to study, 
iich is only to say that as this relation- 
p has moved along there is an increas- 
jly mature capability of looking at prob- 
ns and going back and forth and hav- 
l disagreements and working them 
rough and resolving them. Every once 
la while, in this very open atmosphere 
at we work in, people take a photo- 
aph and they see the disagreements 
d they jump to conclusions that are not 
cessarily warranted. 

Q. One final area, the Middle East, 
le Soviets have said things today that 
e rather positive about your peace 
itiative in the Middle East. You're 
injj back there yourself? 

A. Yes, I am. 

Q. Are you heading back with some 
ssibility now, or promise, of Soviet 
rticipation in the process? 

A. They want to participate in the 
ocess, and I think they have come to 
are with others, including ourselves, a 
usilnse that the situation there is not sta- 
w e. It's not going to stay the same; it's 
f,e Mng to change. The status quo is not an 
ition. And, of course, it's a very ex- 
osive area, particularly now that we 
te all of these ballistic missiles and 
^emical weapons around. So we'd like to 
»e something worked out, and we've 
id some worthwhile discussions with 
em. But, of course, if it's going to be 
orked out, it will have to be basically 
itween Israel and each of its neighbors 
. those bilateral negotiations. That's 
ihere the action has to be. Our ques- 
ons always are: Is there something we 
in do to help bring that process about? 

Q. And is that made more likely by 
Dur talks here? 

A. Maybe a little bit. But it's diffi- 
alt. It's tough. 

Q. The Soviet official whom we had 
n the show just before you said in this 

summit he would raise atmosphere [as 
of] first importance, substance second. 
What is your rating? 

A. I think I would disagree with him 
in wanting to rate them, because I think 
there is always an interplay. That's the 
real point. If there's no worthwhile sub- 
stance, the atmosphere doesn't mean 
much. And, at the same time, a good at- 
mosphere can contribute to substance. 
So the real point is that there has 
evolved — and this is the big story, it 
seems to me — a greater maturity, a 
greater breadth in the relationship, a 
genuine willingness to discuss practically 
anything, and progress across the board. 
It's not a one-issue relationship. It's not 
an arms control relationship. It's got all 
four categories of subjects — human 
rights, bilateral issues, regional prob- 
lems, and arms control issues — all in it. 
They all get discussed very extensively, 
and we've made progress across the 
board. That's the really important point. 

MAY 31, 19882 

President Reagan 

It's a pleasure to host all of you tonight 
and to reciprocate, in a small way, the 
hospitality you lavished upon us yester- 
day evening. While the General Secre- 
tary and I had already held three meet- 
ings before this one began here in 
Moscow, each of those earlier encounters 
took place in the autumn. The days were 
growing short, the weather ever grayer 
and colder. It makes for a bracing, de- 
lightful change to have this meeting take 
place at the high point of spring, a time 
of long, light-filled days. 

I know that Nancy found her spring- 
time visit to Leningrad earlier today 
both magnificent and moving. The play 
of light upon the rivers and canals added 
the special splendor of the season to a 
city splendid in any season. And every- 
where, Nancy has told me, there was a 
sense of history, especially of Lenin- 
grad's immense courage and sacrifice 

; epartment of State Bulletin/August 1988 

during the Second World War, surely 
one of the most stirring epics in the 
whole human story. 

Here in Moscow, I've been re- 
minded a number of times during this 
springtime visit of a passage in a book 
about your country by Laurens Van der 
Post. Especially struck by the city's 
churches, Van der Post wrote that when 
he caught his first sight of the Moscow 
skyline he saw, "The light of an unusu- 
ally pure evening upon it. That light was 
alchemical and it transformed Moscow 
into a city of gold, the tops of the spires 
and pinnacles drawing the rigid forms of 
the skyscrapers after them into arrows 
of gold aimed at the arched and timeless 
blue." We, too, have found Moscow a 
city of beauties. A city, especially, whose 
pinnacles and spires reminded one at vir- 
tually every turn of man's ancient capac- 
ity for aspiration, for reaching out to- 
ward the light. 

It's a particular pleasure to be able 
to welcome you to Spaso House — a house 
of considerable beauty in its own right — 
the residence of our Ambassadors to the 
Soviet Union. During the 55 years of dip- 
lomatic relations between our two na- 
tions, Spaso House has served as one of 
the principal settings for e.\changes be- 
tween us — exchanges formal and infor- 
mal alike. 

There have been some splendid mo- 
ments within these walls. Prokofiev once 
conducted his marvelous "The Love for 
Three Oranges" in this very room. As 
wartime allies, our representatives met 
often under this roof. And Ambassador 
[Jack F. Matlock, Jr.] and Mrs. Matlock 
have continued the tradition of making 
Spaso House a centerpiece of American 
culture, a place to receive and talk with 
Soviet officials and with people from all 
walks of life and from all parts of the So- 
viet Union. 

But there have also been quiet times 
in this house — unnaturally quiet times. 
Times when difficult relations between 
us meant that this house, this huge, mag- 
nificent house, stood virtually empty of 
visitors. I'm told that it was even possi- 
ble to hear the Moscow Metro rumbling 
past, ever so faintly, deep in the earth 


Senate Minority Leader Robert Dole and Mrs. Reagan with General Secretary 
Gorbachev during a state dinner at Spaso House. 

Mr. General Secretary, we know 
that on matters of great importance, we 
will continue to differ profoundly. And 
yet, you and I have met four times now, 
more often than any previous president 
and general secretary. While our discus- 
sions have sometimes been pointed or 
contentious, we possess an enlarged un- 
derstanding of each other and of each 
other's country. On specific matters of 
policy, we have made progress — often 
historic progress. And perhaps most im- 
portant, we have commited our nations 
to continuing to work together, agi-eeing 
that silence must never again be permit- 
ted to fall between us. 

We have agreed always to continue 
the interchanges between our nations be- 
cause, I believe, we both hear the same 
voice, the same overwhelming impera- 
tive. What that voice says can be e.\- 
pressed in many ways. But I have found 
it in vivid form in Pasternak's poem, 
"The Garden of Gethsemane." Listen, if 
you will, to Pasternak's account of that 
famous arrest: 

There appeared — no one knew from 
where — a crowd of slaves and a rabble of 
knaves, with lights and swords and, leading 
them, Judas with a traitor's kiss on his lips. 

Peter repulsed the ruffians with his 
sword, and cut off the ear of one of them. But 
he heard: "You cannot decide a dispute with 
weapons; put your sword in its place, man." 

That's the voice: "Put your sword in 
its place, man." This is the impera- 
tive, the command. And so we will work 
together, that we might forever keep our 
swords at our sides. 

Spaso House has, as I said, seen 
quiet times — yet the animated conversa- 
tion of this evening has already done 
much to make up for them. And so, I 
would like to raise a glass to the contin- 
ued interchange between our two nations 
and, if I may, to Spaso House itself, as a 
symbol of our relations. May this lovely 
home never lack for visitors, and shared 
meals, and the sounds of spirited conver- 
sation, and even the peal of hearty laugh- 

Thank you and God bless you. And 
to the General Secretary, to Mrs. Gor- 
bachev, to the relationship that I beheve 
must continue. 

General Secretary Gorbachev ^ 

I thank you, Mr. President for the words 
of greeting you just addressed to us. 

Two gi'eat nations have given the two o 
us a mandate to determine what Soviet' 
American relations should be like. Since' 
our first meeting in Geneva, relations I ' 
tween our two countries have overcomt " 
a long drawn out period of confrontatioi ) 
to reach an acceptable level from which I 
it is now easier to move forward. In 
Reykjavik, in Washington, and in this 
present visit of yours, our dialogue has 
been intense. Its most important result 
has been the now ratified first treaty t( 
reduce nuclear weapons. A search is ci 
tinuing to find a solution to problems n 
lating to 50% cuts in strategic offensive , 
arms. The general accord in Afghanists 
has come into force. We now have as 
many as 47 bilateral agreements on cO' 
eration. The visit by a President of the 
United States to the Soviet Union is ar 
occasion for a glance at the past and a 
look into the future. The history of rek 
tions between our two countries has 
known all kinds of things, good and ba( 
Of the good things, we remember parti 
larly well the Soviet-American comra 
ship in arms in World War II. Those 
ginm years saw the emergence of the 
first shoots of Soviet-American friend- 
ship. And there was not one single So- 
viet citizen who did not feel bitter whe 
that glorious page in the history of our 
lations gave way to cold war. That was 
hard test of our peoples. The world foi 
itself in a dangerous situation. We all : 
the breath of impending catastrophe. 
Even today, we're sometimes chilled b 
cold winds. 

But world developments in their 
main tendency are turning toward a 
search for political solutions, toward cc 
operation and peace. We are, all of us, 
witnesses to momentous changes, thoi 
a lot still has to be done to achieve ir- 
reversible change. Although everythin 
urges cooperation and trust, prejudice; 
and stereotypes are still with us, as is 
valry, above all in the military sphere, 
great deal has been said at this meetinj 
too, about how pointless and catastrop 
it is. More importantly, we can registe 
some headway toward better mutual u 
derstanding in this area as well. 

Tbday, I would hke to address an- 
other major world problem: the situatii 


Moscow Summit 

I' developing world, which cannot 
itTect our countries, too. The prob- 

• « hich the developing countries face 
^ ' turned out to be difficult to the 

it I if tragedy. Glaring backwardness, 
. ;tr, poverty, and mass diseases con- 
; ,' t(i beset entire nations. An incred- 
hitrh debt has become an excruciat- 
.; md universal problem. It would 

I that everybody could see its com- 

- it\-, involving as it does extremely di- 

• (■ and truly vital interests, and un- 
taiid that a way out must be solved. 
We believe that if the international 
iiiinity and, above all, the great pow- 
iii' to be of any help, the starting 

t and the essential thing is to recog- 
uiiconditionally the freedom of 
r. We are insisting on fairness. We 
. ■ seriously studied the economic sys- 
iii developing nations, and I am con- 
■d that a way out is possible along 
lies of a radical restructuring of the 
II e system of world economic rela- 
i< ^, without any discrimination for po- 
t il reasons. This would promote a po- 
ll settlement of regional conflicts 

II not only impede progress in that 
nithe world but also cause turmoil 
!■ entire world situation. With such 
p|ii-(iach, our differences as to what 

! nf a future awaits the Third World 
'Id not take on confrontational forms, 
.n this matter too, our relationship is 
ned to have an international dimen- 

Tlirning now to our bilateral rela- 
s, we envision there opportunities 
prospects primarily in light of inter- 
2volution in both countries, but also 
le conte.xt of world developments. 
ly Americans who are studying us 
who have visited the U.S.S.R. — and 
, I hope, those present here as 
— have been able to see for them- 
es the sweeping scope of change in 
country. It is based on comprehen- 
democratization and radical eco- 
lic reform. 

I'm gratified to note that today the 
sident and I have had an indepth ex- 
^ge of views on this subject. We have 
discussed our perestroika a number 
imes vrith other Americans. This is all 
he good. It, too, is a sign of a change 
ur relationship. 

We, for our part, are trying to 
closely follow the profound trends in the 
United States. We see how little similar- 
ity there is between what is happening in 
our country and in yours, in two very dif- 
ferent societies based on different val- 
ues. But we do not regard this as an ob- 
stacle to identifying promising areas for 
mutually beneficial ties or for coopera- 
tion in the interests of the two peoples. 
We're in favor of competition and com- 

And another thing, whatever the 
ups and downs of our dialogue with 
America, Soviet representatives have 
been upholding the interests of the So- 
viet state. In their contacts with us, 
American officials have been acting in ex- 
actly the same way, vis-a-vis their own 
interests. The truth is that, in building 
their relationship, the Soviet Union and 
the United States can effectively serve 
their own interests only if they have a re- 
alistic view and take account of each 
other's interests and intentions. We 
must learn the difficult art of not just ex- 
isting side by side, but of building 
bridges of mutually beneficial coopera- 

Soviet and American people want to 
live in peace and communicate in all 
areas in which they have a mutual in- 
terest. The interest is there, and it is 
growing. We feel no fear. We are not 
prejudiced. We believe in the value of 
communication. I see a future in which 
the Soviet Union and the United States 
base their relations on disarmament, a 
balance of interest, and comprehensive 
cooperation rather than deterring each 
other or upgrading their military capabili- 

I see a future in which solutions to 
real problems are not impeded by prob- 
lems historically outdated or artificially 
kept alive, inherited from the times of 
the cold war, and in which the policies of 
confrontation give way to a joint quest 
based on reason, mutual benefit, and 
readiness to compromise. 

I see a future in which our two coun- 
tries, without claiming any special rights 
in the world, are always mindful of their 
special responsibility in a community of 
equal nations. It'll be a world that is 
safer and more secure, which is so badly 

needed by all people on earth — by their 
children and grandchildren — so that they 
could gain and preserve the basic human 
rights: the right to life, work, freedom, 
and the pursuit of happiness. The path to- 
ward this future can be neither easy nor 
short. We may be standing at the thresh- 
old of a uniquely interesting period in the 
history of our two nations. This new 
meeting between the two of us, Mr. 
President, confirms that 3 years ago in 
Geneva, we took the right decision. 
May the years to come bring a 
healthier international environment. 
May life be triumphant. Tb the very good 
health of the President, to the very good 
health of Mrs. Nancy Reagan, to coopera- 
tion between our two peoples. 


JUNE 1, 1988« 

General Secretary Gorbachev * 

We are approaching the end of the meet- 
ing between the leaders of the Soviet 
Union and the United States of America, 
the fourth such meeting in 3 years. The 
visit of the U.S. President to our country 
is drawing to a close. 

The President and I have summed 
up the results of a dialogue between our 
two countries at the highest level. We 
have discussed both the immediate and 
longer term prospects for Soviet-U.S. re- 
lations. We have signed documents 
which record what has been achieved and 
provide guidelines for the future. Among 
them, a historic place will belong to the 
ratification documents which give effect 
to the treaty on intermediate and shorter 
range missiles. The exchange a few min- 
utes ago of the instruments of ratifica- 
tion means that the era of nuclear disar- 
mament has begun. 

Assessing the work done over these 
past few days, we can say our satisfac- 
tion, say that what has been happening 
these days in Moscow is big politics, poli- 
tics that affect the interests of millions 
and millions of people. Each such meet- 
ing dealt a blow at the foundations of the 

Itartment of State Biilletin/Auaust laflB 


President Reattan and General Secretary Gorbachev sign and exchange 
instruments of ratification for the INF Treatv. 

(White House photos by Bill Fitz-Patrick). 

cold war. Each of them made huge 
breaches in the cold war fortress and 
opened up passages to modern, civiliz 
world politics worthy of the truly nev 

But big politics means difficult pi 
tics in which every step is not easy tc 
take. Weighing carefully each one of ( 
new steps, we measure it against the 
curity interests of our two nations an 
the world as a whole, for that is the c 
way to achieve truly substantial resu 
with the necessary margin of viabilit; 
Big politics also means big responsib 
and so it cannot be built on pursuing 
one's own interest, which is always ii 
ently one-sided. Such politics also m 
great idea. Humankind has conceivec 
that idea in the pangs of wars and dis 
ters, tragedies and calamities, strivii 
and discoveries of the 20th century. 
This, in our view, is the idea of a nu- 
clear-free and nonviolent world. It is 
that idea that is inscribed in the mar 
which the Soviet people give to their 
resentatives at the start of any negol' 
tions. This particularly applies to ou^ 
gotiations with the United States of 

Addressing the Soviet people an 
the Americans, addressing all nation, 
from these hallowed steps of the Mo&< 
Kremlin, I hearby declare we have b- 
working honestly and with persever 
and we shall continue to do so to fujfi 
that historic mandate. 

The first lines have already beer 
wTitten into the book of a world with 
wars, violence, or nuclear weapons, 
lieve that no one can now close that 1: 
and put it aside. President Ronald R' 
gan and I have agreed that the imme 
ate task before us, which is to conclu 
treaty on a 50% reduction in strateg 
fensive arms, can and must be accom 
plished. In our joint endeavors and di 
cussions, we have learned to underst 
each other better, to take into accouii 
each other's concerns, and to search 

The atmosphere in our relations 
improving. We're working to make it 
constant, not only in our official cont 
but also in the day-to-day manageme 
of Soviet-U.S. relations. In this, too,, 
are guided by a mandate from our pe 


Denartment of State Bulletin/Auaust k 

Moscow Summit 

Thanks to the atmosphere of the 
uim's in Washington and in Moscow, 
a result of the agreements 
' I , Americans and Soviet people 
nave more opportunities for commu- 
i; lull and for getting to know each 
jr. I'm convinced that scientists, stu- 
ts, schoolchildren, cultural personali- 
, ordinary tourists, athletes, and of 
rse, businessmen will continue to en- 
:e and add new colors to the fabric of 
perative and even friendly relations, 
netimes, they can do that better than 

Historians who will one day describe 
evaluate what is now being done 
e probably not yet been born. But 
f ry day, babies are being born who 
« live in the 21st century and to whom 
must bequeath a safe and humane 

.V -Id. 

I On behalf of the Soviet leadership 
I the Soviet people, I wish to tell all 
Ise who are concerned, and yet hopeful 
t ut the future, we shall work to 

ieve that goal, and we can only do it 

working together. 

«sident Reagan 

ise are historic moments. As we ex- 
V « nge these documents, the instru- 

.:lnts of ratification, this treaty — the 
ms of which we formally agreed to 
; December in Washington — enters 
D force. 

Mr. General Secretary, you know 
.t our way here has not been easy. At 
icial moments your personal interven- 
a was needed and proved decisive, and 
this we are grateful. So you are 
iare of how important the objective not 
t of arms control but of arms reduc- 

.j n has been to my own thinking, and to 
policy of my Administration since its 

l tset. 

Seven years ago, when I first sug- 

iiiJsted the concept of a double-zero 

4l saty, there were those who said that 
.s was so unrealistic an idea that it was 
esponsible to even propose it. Others 

il nply dismissed the concept as a propa- 
nda ploy or a geopolitical gambit. But 
epticism and doubt bring a barren har- 
st. And today, on this table before us, 

^ ; see the fruits of hope — evidence of 

what candor and realism can accomplish. 
We have dared to hope, and we have 
been rewarded. 

For the first time in history, an en- 
tire class of U.S. -Soviet nuclear missiles 
is ehminated. In addition, this treaty pro- 
vides for the most stringent verification 
in history. And for the first time, inspec- 
tion teams are actually in residence in 
our respective countries. And while this 
treaty makes possible a new dimension 
of cooperation between us, much remains 
on our agenda. We must not stop here, 
Mr. General Secretary; there is much 
more to be done. 

As will be seen in our joint state- 
ment later today, more progress has 
been made toward a strategic arms 
treaty during our meetings. We must try 
to move forward in the months ahead to 
complete this START treaty as soon as 
possible. So let us continue to expand the 
frontiers of trust, even as we verify, Mr. 
General Secretary, even as we verify. 

We've agreed many times that there 
remain differences, important fundamen- 
tal differences, between us. Yet as we 
work over the long run to narrow these 
differences, as we work for what I hope 
will be a new era of peace and expanded 
human freedom, we must also acknowl- 
edge our solemn responsibility to take 
steps now to reduce the chances of con- 
flict and to prevent war. This we have 
done today, a first step toward a 
brighter future, a safer world. America's 
allies and friends welcome this treaty 
too. We consulted them fully during its 
negotiations. We made clear that we 
would never put their security or their in- 
terests at risk, that on the contrary we 
would sign a treaty only if it enhanced 
their security, as this one does. 

And finally, if I may, I would like to 
take a moment to thank the U.S. Senate 
for their work on this treaty. The way of 
democracy is sometimes a complicated 
way and sometimes trying, but it is a 
good way, and we believe the best way. 

And once again, Mr. General Secre- 
tary, I want to extend to you and to all 
those who labored so hard for this mo- 
ment, my warmest personal thanks. 



JUNE 1, 19882 

In accordance with the understanding 
reached during the U.S. -Soviet summit 
meeting in Geneva in November 1985, 
and confirmed at the Washington summit 
in December 1987, Ronald W Reagan, 
President of the United States of Amer- 
ica, and Mikhail S. Gorbachev, General 
Secretary of the Central Committee of 
the Communist Party of the Soviet Union 
(CPSU), met in Moscow May 29-June 2, 

Attending on the U.S. side were 
Secretary of State George P. Shultz; 
Secretary of Defense Frank C. Carlucci, 
III; presidential Chief of Staff Howard H. 
Baker, Jr.; assistant to the President for 
national security Colin L. Powell; 
Ambassador at Large and special adviser 
to the President and the Secretary of 
State on arms control matters Paul H. 
Nitze; special adviser to the President 
and the Secretary of State on arms 
control matters. Ambassador Edward L. 
Rowny; Ambassador of the U.S. to the 
U.S.S'.R. Jack F. Matlock; and Assistant 
Secretary of State for European and 
Canadian Affairs Rozanne L. Ridgway. 

Attending on the Soviet side were 
Member of the Politburo of the CPSU 
Central Committee, Chairman of the 
Presidium of the U.S.S.R. Supreme So- 
viet, Andrei A. Gromyko; Member of the 
Politburo of the CPSU Central Commit- 
tee, Minister of Foreign Affairs of the 
U.S.S.R. Eduard A. Shevardnadze; 
Member of the Politburo of the CPSU 
Central Committee, Secretary of the 
CPSU Central Committee Alexander N. 
Yakovlev; Alternate Member of the 
Pohtburo of the CPSU Central Commit- 
tee, Minister of Defense of the U.S.S.R., 
Dimitri T. Yazov; Secretary of the CPSU 
Central Committee Anatoly F. Dobrynin; 
Assistant of the General Secretary of the 
CPSU Central Committee Anatoly S. 
Chernyaev; Deputy Minister of Foreign 
Affairs of the U.S.S.R. Alexander A. 
Bessmertnykh; and Ambassador of the 
U.S.S.R. to the United States of America 
Yuri V. Dubinin. 

ibnartmont nf StatP Riillotin/Aiiniigt IQHB 


The President and the General Sec- 
retary view the Moscow summit as an 
important step in the process of putting 
U.S. -Soviet relations on a more produc- 
tive and sustainable basis. Their compre- 
hensive and detailed discussions covered 
the full agenda of issues to which the two 
leaders agreed during their initial meet- 
ing in Geneva in November 1985 — an 
agenda encompassing arms control, 
human rights and humanitarian matters, 
settlement of regional conflicts, and bilat- 
eral relations. Serious differences remain 
on important issues; the frank dialogue 
which has developed between the two 
countries remains critical to surmounting 
these differences. 

The talks took place in a constructive 
atmosphere which provided ample oppor- 
tunity for candid exchange. As a result, 
the sides achieved a better understanding 
of each other's positions. The two leaders 
welcomed the progress achieved in vari- 
ous areas of U.S. -Soviet relations since 
their last meeting in Washington, not- 
withstanding the difficulty and complex- 
ity of the issues. They noted with satis- 
faction numerous concrete agreements 
which have been achieved, and expressed 
their determination to redouble efforts in 
the months ahead in areas where work 
remains to be done. They praised the 
creative and intensive efforts made by 
representatives of both sides in recent 
months to resolve outstanding differ- 

Assessing the state of U.S. -Soviet 
relations, the President and the General 
Secretary underscored the historic 
importance of their meetings in Geneva, 
Reykjavik, Washington, and Moscow in 
laying the foundation for a realistic ap- 
proach to the problems of .strengthening 
stability and reducing the risk of conflict. 
They reaffirmed their solemn conviction 
that a nuclear war cannot be won and 
must never be fought, their determina- 
tion to prevent any war between the 
United States and Soviet Union, whether 
nuclear or conventional, and their dis- 
avowal of any intention to achieve mili- 
tary superiority. 

The two leaders are convinced that 
the expanding political dialogue they have 
established represents an increasingly 
effective means of resolving issues of 

mutual interest and concern. They do not 
minimize the real differences of history, 
tradition, and ideology which will con- 
tinue to characterize the U.S. -Soviet 
relationship. But they beheve that the 
dialogue will endui'e, because it is based 
on realism and focused on the achieve- 
ment of concrete results. It can serve as 
a constructive basis for addressing not 
only the problems of the present but of 
tomorrow and the next century. It is a 
process which the President and the 
General Secretary believe serves the best 
interests of the peoples of the United 
States and the Soviet Union and can 
contribute to a more stable, more peace- 
ful, and safer world. 

I. Arms Control 

The President and the General Secre- 
tary, having expressed the commitment 
of their two countries to build on progress 
to date in arms control, determined ob- 
jectives and next steps on a wide range 
of issues in this area. These will guide the 
efforts of the two governments in the 
months ahead as they work with each 
other and with other states toward equi- 
table, verifiable agreements that 
strengthen international stabihty and 


The President and the General Secretary 
signed the protocol on the exchange of 
instruments of ratification of the Treaty 
Between the United States of America 
and the Union of Soviet Socialist Repub- 
lics on the Elimination of Their Interme- 
diate-Range and Shorter Range Missiles. 
The two leaders welcomed the entry into 
force of this historic agreement, which for 
the first time will eliminate an entire class 
of U.S. and Soviet nuclear arms, and 
which sets new standards for arms con- 
trol. The leaders are determined to 
achieve the full implementation of all the 
provisions and understandings of the 
treaty, viewing joint and successful work 
in this respect as an important precedent 
for future arms control efforts. 

Nuclear and Space Talks 

The two leaders noted that a joint t i 
text of a treaty on reduction and lin i 
tion of strategic offensive arms has 1 ^ 
elaborated. Through this process, th ; 
sides have been able to record in the. 
draft text extensive and significant a I 
of agreement and also to detail posit i 
on remaining areas of disagreement. 
While important additional work is 1 1 
quired before this treaty is ready fo j 
signature, many key provisions are j 
corded in the joint draft text and ar 
considered to be agreed, subject to 
completion and ratification of the tn 

Taking into account a treaty on 
tegic offensive arms, the sides have 
tinued negotiations to achieve a sepi 
agreement concerning the ABM Tre 
building on the language of the Was 
ton summit joint statement dated De 
ber 10, 1987. Progress was noted ir 
preparing the joint draft text of an 
associated protocol. In connection w 
their obligations under the protocol 
sides have agreed in particular to us 
Nuclear Risk Reduction Centers foi 
transmission of relevant information 
leaders directed their negotiators to 
pare the joint draft text of a separf 
agreement and to continue work on 
associated protocol. 

The joint draft treaty on reduc 
and hmitation of strategic offensive 
reflects the earlier understanding o 
tablishing ceilings of no more than 
strategic offensive dehvery system; 
6,000 warheads as well as agreeme 
subceilings of 4,900 on the aggregat 
ICBM [intercontinental baUistic mi 
and SLBM [submarine-launched ba 
missile] warheads and 1,540 warhea 
154 heavy missiles. 

The draft treaty also records tl 
sides' agreement that as a result of 
reductions the aggregate throw-wei 
of the Soviet Union's ICBMs and SI 
will be reduced to a level approxin- 
50% below the existing level and this 
will not be e.xceeded. 

During the negotiations the two 
have also achieved understanding th 
future work on the treaty they will a 
the understanding that on deployed 
ICBMs and SLBMs of existing type 
counting rule will include the numt 


Deoartment of State Bullelin/Auoust: 

Moscow Summit 

wheads refen-ed to in the joint state- 

Sit of December 10, 1987, and the 
iber of warheads which will be attrib- 

i|ll to each new type of ballistic missile 

• be subject to negotiation. 

In addition, the sides agreed on a 
iting rule for heavy bomber arma- 
its according to which heavy bombers 
ipped only for nuclear gravity bombs 
SRAMs [short-range attack missiles] 
count as one delivery vehicle against 
1,600 limit and one warhead against 
6,000 limit. 

The delegations have also prepared 
t draft te.xts of an inspection protocol, 
inversion or elimination protocol, and 
emorandum of understanding on data, 
ch are integral parts of the treaty, 
se documents build on the verification 
dsions of the INF Treaty, extending 
elaborating them as necessary to 
!t the more demanding requirements 

I'.TART The START verification 
isures will, at a minimum, include: 

A. Data exchanges, to include dec- 
.tions and appropriate notifications on 
number and locations of weapons 

;ems limited by START, including 

ftions and facilities for production, 
1 assembly, storage, testing, repair, 
'ning, deployment, conversion, and 
lination of such systems. Such decla- 
ons will be exchanged between the 
;s before the treaty is signed and 
lated periodically. 

B. Baseline inspections to verify the 
uracy of these declarations. 

C. Onsite observation of elimination 
strategic systems necessary to meet 

agi'eed limits. 

D. Continuous onsite monitoring of 
perimeter and portals of critical pro- 

;tion facilities to confirm the output of 
apons to be limited. 

E. Short-notice onsite inspection of: 

(i) Declared locations during the 
i)cess of reducing to agreed limits; 
fli| (ii) Locations where systems covered 
this treaty remain after achieving the 
reed limits; and 

(iii) Locations where such systems 
|ve been located (formerly declared 

F. Short-notice inspection, in ac- 
cordance with agreed upon procedures, of 
locations where either side considers cov- 
ert deployment, production, storage, or 
repair of strategic offensive arms could be 

G. Prohibition of the use of conceal- 
ment or other activities which impede 
verification by national technical means. 
Such provisions would include a ban on 
telemetry encryption and would allow for 
full access to all telemetric information 
broadcast during missile flight. 

H. Procedures that enable verifica- 
tion of the number of warheads on de- 
ployed ballistic missiles of each specific 
type, including onsite inspection. 

I. Enhanced observation of activities 
related to reduction and limitation of 
strategic offensive arms by national tech- 
nical means. These would include open 
displays of treaty-limited items at missile 
bases, bomber bases, and submarine 
ports at locations and times chosen by the 
inspecting party. 

The two sides have also begun to 
exchange data on their strategic forces. 

During the course of this meeting in 
Moscow, the exchanges on START re- 
sulted in the achievement of substantial 
additional common ground, particularly in 
the areas of ALCMs and the attempts to 
develop and agree, if possible, on a 
solution to the problem of verification of 
mobile ICBMs. The details of this addi- 
tional common ground have been re- 
corded in documents exchanged between 
the sides. The delegations in Geneva will 
record these gains in the joint draft text 
of the START treaty. 

The sides also discussed the question 
of limiting long-range, nuclear-armed 
SLCMs [submarine-launched cruise mis- 
siles]. Ronald Reagan and M.S. Gor- 
bachev expressed their joint confidence 
that the extensive work done provides the 
basis for concluding the treaty on re- 
duction and limitation of strategic offen- 
sive arms which will promote strategic 
stability and strengthen security not only 
of the peoples of the U.S.S.R. and the 
U.S.A., but of all mankind. 

Guided by this fundamental agree- 
ment, the U.S. President and the General 
Secretary of the Central Committee of 

the CPSU agreed to continue their efforts 
in this area energetically and pur- 
posefully. The delegations of the two 
countries have been instructed to return 
to Geneva on July 12, 1988. It has been 
agreed as a matter of principle that, once 
the remaining problems are solved and 
the treaty and its associated documents 
are agreed, they will be signed without 

Ballistic Missile Launch Notifications 

The agreement between the U.S. and the 
U.S.S.R. on notifications of launches of 
intercontinental ballistic missiles and 
submarine-launched ballistic missiles, 
signed during the Moscow summit, is a 
practical new step, reflecting the desire 
of the sides to reduce the risk of outbreak 
of nuclear war, in particular as a result 
of misinterpretation, miscalculation, or 

Nuclear Tfesting 

The leaders reaffirmed the commitment 
of the two sides to conduct in a single 
forum full-scale, stage-by-stage negotia- 
tions on the issues relating to nuclear 
testing. In these negotiations the sides as 
the first step vrill agree upon effective 
verification measures which will make it 
possible to ratify the U.S.-U.S.S.R. 
Threshold Tfest Ban Treaty (TTBT) of 
1974 and Peaceful Nuclear Explosions 
Treaty of 1976, and proceed to negotiat- 
ing further intermediate limitations on 
nuclear testing leading to the ultimate 
objective of the complete cessation of 
nuclear testing as part of an effective 
disarmament process. This process, 
among other things, would pursue, as the 
first priority, the goal of the reduction of 
nuclear weapons and, ultimately, their 
ehmination. In implementing the first 
objective of these negotiations, agree- 
ment upon effective verification measures 
for the U.S.-U.S.S.R. Threshold Tfest 
Ban Treaty of 1974, the sides agreed to 
design and conduct a joint verification 
experiment at each other's test sites. 

The leaders, therefore, noted with 
satisfaction the signing of the Joint Veri- 
fication Experiment Agreement, the con- 
siderable preparation underway for the 

lipartment of State Bulletin/August 1988 


experiment, and the positive cooperation 
being exhibited in particular by the sub- 
stantial numbers of personnel now en- 
gaged in work at each other's test sites. 
They also noted the substantial progress 
on a new protocol to the Peaceful Nuclear 
Explosions Treaty and urged continuing 
constructive negotiations on effective 
verification measures for the Threshold 
Ttest Ban Treaty. 

Expressing their conviction that the 
progress achieved so far forms a solid 
basis for continuing progress on issues 
relating to nuclear testing, the leaders 
instructed their negotiators to complete 
expeditiously the preparation of a proto- 
col to the Peaceful Nuclear Explosions 
Treaty and to complete the preparation 
of a protocol to the Threshold Tfest Ban 
Treaty as soon as possible after the joint 
verification experiment has been con- 
ducted and analyzed. They confirmed 
their understanding that verification 
measures for the TTBT will, to the extent 
appropriate, be used in further nuclear 
test limitation agreements which may 
subsequently be reached. 

They also declared their mutual in- 
tention to seek ratification of both the 
1974 and 1976 treaties when the corre- 
sponding protocols to the Threshold Ttest 
Ban Treaty and the Peaceful Nuclear 
Explosions Treaty are completed and to 
continue negotiations as agreed in the 
Washington joint summit statement. 

Nuclear Nonproliferation 

The two leaders noted that this year 
marks the 20th anniversary of the Nu- 
clear Nonproliferation Treaty (NPT), one 
of the most important international arms 
control agreements with over 130 adher- 
ents. They reaffirmed their conviction 
that universal adherence to the NPT is 
important to international peace and se- 
curity. They expressed the hope that each 
state not a party to the treaty will join 
it, or make an equally binding com- 
mitment under international law to forego 
acquisition of nuclear weapons and pre- 
vent nuclear weapons proliferation. This 
will enhance the possibility of progress 
toward reducing nuclear armaments and 
reduce the threat of nuclear war. 

The two leaders also confirmed their 
support of the International Atomic En- 
ergy Agency, and agreed that they would 
continue efforts to further strengthen it. 
They reaffirmed the value of their regular 
consultations on nonproliferation and 
agreed that they should continue. 

Nuclear Risk Reduction Centers 

The leaders expressed satisfaction over 
the activation of the new communications 
hnk between the Nuclear Risk Reduction 
Centers in Moscow and Washington, es- 
tabhshed in accordance with the U.S.- 
Soviet agreement of September 15, 1987. 
It was agreed that the centers can play 
an important role in the context of a 
future treaty on reducing U.S. and Soviet 
strategic nuclear arms. 

Chemical Weapons 

The leaders reviewed the status of on- 
going multilateral negotiations and bilat- 
eral U.S. -Soviet consultations toward a 
comprehensive, effectively verifiable, 
and truly global ban on chemical weapons 
(CWs), encompassing all chemical weap- 
ons-capable states. They also expressed 
concern over the grovring problem of 
chemical weapons proliferation and use. 

The leaders reaffirmed the impor- 
tance of efforts to address, as a matter 
of continuing urgency, the unique chal- 
lenges of a chemical weapons ban and to 
achieve an effective convention. While 
noting the progress already achieved in 
the talks and the difficult problems with 
regard to effective monitoring of the 
global prohibition of chemical weapons 
and the non-use of dual-capable chemi- 
cals for chemical weapons purposes, the 
leaders underlined the need for concrete 
solutions to the problems of ensuring 
effective verification and undiminished 
security for all convention participants. 
They gave instructions to their respective 
delegations to this effect. 

Both sides agreed on the vital impor- 
tance of greater openness by all states as 
a way to build confidence and strengthen 
the foundation for an effective conven- 
tion. The leaders also emphasized the 
necessity of close coordination on a 
multilateral basis in order to ensure the 

participation of all CW-possessing anc i 
CW-capable states in the convention, n 
Both sides strongly condemned tl 
dangerous spread and illegal use of 
chemical weapons in violation of the 1 1 
Geneva protocol. They stressed the iif 
portance of both technical and politic; 
solutions to this problem and confirm 
their support for international investi I 
tions of suspected violations. Noting | 
initial efforts being made to control t 
export of chemicals used in manufact 
ing chemical weapons, the leaders ca 
on all nations vrith the capability of 
producing such chemicals to institute 
stringent export controls to inhibit th 
proliferation of chemical weapons. 

Conventional Arms Control 

The leaders emphasized the important 
of strengthening stability and securit; 
the whole of Europe. They welcomed 
progress to date on development of a 
mandate for new negotiations on armu 
forces and conventional armaments. T' 
expressed their hope for an early anc 
balanced conclusion to the Vienna CS 
folio woip meeting. The President and 
General Secretary also noted that ful 
implementation of the provisions of tl 
document of the Stockholm Conferenct 
Confidence- and Security-Building 
Measures and Disarmament in Europ 
can significantly increase openness an 
mutual confidence. 

They also discussed the situatioi 
the mutual and balanced force reducl 
(MBFR) negotiations in Vienna. 

Conference on Security 
and Cooperation in Europe 

They expressed their commitment to 
further development of the CSCE pi 
ess. The U.S. and U.S.S.R. will contii 
to work with the other 33 participants 
bring the Vienna CSCE followup meet 
to a successful conclusion through sig 
nificant results in all the principal ar 
of the Helsinki Final Act and Madrid 
concluding document. 


Department of State Bulletin/August ia 

Moscow Summit 

igistic Missile Tfechnology 
^ iferation 

leaders agreed to bilateral discus- 
- at the level of experts on the 
l( 111 of proliferation of ballistic mis- 
!( ihnology. 

id Special Session of the 
Mieneral Assembly 

'•■ I'li-sident and the General Secretary 
111 t he importance of the ongoing Third 
lal Session on Disarmament. 

I li MAN Rights 


'resident and the General Secretary 
I in a detailed discussion of human 
and humanitarian concerns. The 
, IS reviewed the increasingly broad 
detailed U.S. -Soviet dialogue in this 
11(1 agreed that it should be con- 
at all levels in order to achieve 
I'd, concrete progress. They noted 
IS dialogue should seek to maximize 
anee of the rights, freedoms, and 
.1 an dignity of individuals; promotion 
)f leople-to-people communications and 
' ts: active sharing of spiritual, cul- 
iiistorical, and other values; and 
1- mutual understanding and re- 
; I between the two countries. Toward 

(11(1, they discussed the possible 
^ lilishment of a forum which, meeting 
■(: ilarly, would bring together partici- 

II s from across the range of their two 
.1 ics. They noted steps already taken 

' stablish the exchange of information 
II contacts between legislative bodies of 
K 1 countries, as well as discussions 
■ en legal experts, physicians and 

ciitatives of other professions di- 
!, involved in matters pertaining to 
lan rights, and between representa- 
s of nongovernmental organizations. 

Regional Issues 

President and the General Secretary 
roughly discussed a wide range of 
ional questions, including the Middle 

East, the Iran-Iraq war, southern Africa, 
the Horn of Africa, Central America, 
Cambodia, the Korean Peninsula, and 
other issues. They expressed satisfaction 
with the April 1988 conclusion in Geneva 
of accords on an Afghanistan settlement. 
Although the discussions revealed serious 
differences both in the assessment of the 
causes of regional tensions and in the 
means to overcome them, the leaders 
agreed that these differences need not be 
an obstacle to constructive interaction 
between the U.S. and U.S.S.R. 

They reaffirmed their intention to 
continue U.S. -Soviet discussions at all 
levels aimed at helping parties to regional 
conflicts find peaceful solutions which 
advance their independence, freedom, 
and security. They emphasized the 
importance of enhancing the capacity of 
the United Nations and other interna- 
tional institutions to contribute to the 
resolution of regional conflicts. 

IV. BiL.\TERAL Affairs 

The President and the General Secretary 
reviewed progress in further expanding 
bilateral contacts, exchanges, and coop- 
eration since their meeting in Washing- 
ton, D.C., in December 1987. They noted 
the increasingly important role that mu- 
tually beneficial interchange between the 
two countries can play in improving 
mutual understanding and providing 
stability in the U.S.-Soviet relationship. 
They stated their intention to intensify 
such ties. 

They noted with particular satisfac- 
tion that concrete agreements had been 
reached in most of the areas identified at 
their meetings in Geneva, Reykjavik, and 

Bilateral A^eements 
and Cooperative Activities 

The President and the General Secretary 
welcomed the conclusion of a number of 
bilateral agreements which open new 
opportunities for fruitful cooperation in 
the following fields: cooperation in 
transportation science and technology; 
maritime search and rescue; operational 
coordination between U.S. and Soviet 
radionavigation systems in the Northern 

artment of State Bulletin/August 1988 

Pacific and Bering Sea; and mutual fish- 
eries relations. 

The two leaders welcomed the recent 
signing of a new Memorandum on Civihan 
Nuclear Reactor Safety under the bilat- 
eral agreement on Peaceful Uses of 
Atomic Energy. There was an exchange 
of notes to extend that agreement. 

They expressed satisfaction with the 
recent signing of a new protocol under the 
bilateral housing agreement for coop- 
eration in construction research relating 
to extreme geological and unusual cli- 
matic conditions. 

They reviewed the status of nego- 
tiations between the two countries 
concerning maritime shipping, the U.S.- 
U.S.S.R. maritime boundary, basic 
scientific research, and emergency pollu- 
tion cleanup in the Bering and Chukchi 
Seas. They instructed their negotiators to 
accelerate efforts to achieve mutually 
acceptable agreements in these areas at 
the earliest opportunity. 

The two leaders welcomed the start 
of bilateral discussions on combatting 
narcotics trafficking. They noted vrith 
satisfaction ongoing consultations be- 
tween the two sides concerning law of the 
sea, air and sea transportation safety, and 
areas of mutual interest in the field of law. 

Cultural and People-to-People 

Noting the expansion of exchanges in the 
areas of education, science, culture, and 
sports under the general exchanges 
agreement, the two leaders welcomed the 
signing of a new implementing program 
for 1989-91 under the agreement and 
expressed their intention to continue 
expansion of such exchanges. During the 
time in which this program is in force, the 
two sides, taking into consideration their 
mutual interest as well as financial and 
technical conditions, will conduct ne- 
gotiations on the opening of culture/ 
information centers in the U.S. and the 
U.S.S.R. with the aim of signing an 
appropriate agreement on behalf of the 
governments of both countries. 

They expressed satisfaction that, 
over the course of their dialogue, people- 
to-people contacts and exchanges be- 
tween nongovernmental organizations 


have sigTiificantly increased and become 
one of the most dynamic elements in the 
bilateral relationship. They reaffinried 
their commitment to further growth of 
such exchanges, which contribute to mu- 
tual understanding, and welcomed plans 
for increased exchanges of young people 
in the future. In this context, they ex- 
pressed their readiness to consider in 
practical terms the idea of further devel- 
oping exchanges of high school students. 
They cited recent joint U.S. -Soviet ini- 
tiatives on culture, theater, and the 
cinema as examples of new opportunities 
to engage those involved in the creative 

Noting the rapidly growing sports 
ties between the two countries, includ- 
ing their national Olympic committees, 
the two leaders expressed their support 
for the international Olympic move- 
ment, which promotes international 
cooperation and understanding through 
athletic competition. 

Other Cooperative Activities 

The President and the General Secretary 
noted the successful expansion of scien- 
tific cooperation within the framework of 
bilateral agreements in environmental 
protection, medical science and public 
health, artificial heart research and de- 
velopment, agriculture, and studies of the 
world ocean, and expressed their in- 
tention to continue to expand activities 
under these agreements in areas of mu- 
tual benefit to the two sides. 

The President and the General Sec- 
retary noted with pleasure the com- 
mencement of work on a conceptual de- 
sign of an international thermonuclear 
experimental reactor (ITER), under the 
auspices of the International Atomic En- 
ergy Agency, between scientists and 
experts from the United States, Soviet 
Union, European Atomic Energy Com- 
munity, and Japan. The two leaders noted 
the significance of this next step toward 
the development of fusion power as a 
cheap, environmentally sound, and es- 
sentially inexhaustible energy source for 
the benefit of all mankind. 

The President and the General Sec- 
retary welcomed agreement by represen- 
tatives of the United States, Soviet 

Union, Canada, and France to institu- 
tionalize in the near future the COSPAS/ 
SARSAT, [a] space-based, life-saving 
global search and rescue system. 

Both leaders reaffirmed their sup- 
port for the WHO/UNICEF [World 
Health Organization/UN Children's 
Fund] goal of reducing the scale of pre- 
ventable childhood death through the 
most effective methods of saving chil- 
dren. They urged other countries and the 
international community to intensify ef- 
forts to achieve this goal. 

Global Climate 

and Environmental Change Initiative 

The two leaders expressed their satisfac- 
tion with activities since the Washington 
summit in expanding cooperation with 
respect to global climate and environ- 
mental change, including in areas of 
mutual concern relating to environmental 
protection, such as protection and conser- 
vation of stratospheric ozone and a possi- 
ble global warming trend. They empha- 
sized their desire to make more active use 
of the unique opportunities afforded by 
the space programs of the two countries 
to conduct global monitoring of the 
environment and the ecology of the 
earth's land, oceans, and atmosphere. 
They underscored the need to continue to 
promote both bilateral and multilateral 
cooperation in this important area in the 

Initiative for Expanded 
Civil Space Cooperation 

Recognizing the long-standing commit- 
ment of both countries to space science 
and exploration, and noting the progress 
made under the 1987 U.S.-U.S.S.R. Co- 
operative Agreement in the Exploration 
and Use of Outer Space for Peaceful 
Purposes, the two leaders agreed to a 
new initiative to expand civil space 
cooperation by exchanging flight oppor- 
tunities for scientific instruments to fly 
on each other's spacecraft, and by ex- 
changing results of independent national 
studies of future unmanned solar system 
exploration missions as a means of as- 
sessing prospects for further U.S. -Soviet 
cooperation on such missions. They also 
agreed to expand exchanges of space 

science data and of scientists, to enha ; 
the scientific benefit that can be deri j 
from the two countries' space researci 
missions. They noted scientific missio 
to the Moon and Mars as areas of poss s 
bilateral and international cooperatioi 

Arctic Contacts and Cooperation 

Taking into account the unique enviil 
mental, demographic, and other chai • 
teristics of the Arctic, the two leadei 
reaffirmed their support for expandec \ 
bilateral and regional contacts and i 
cooperation in this area. They noted pi ( 
and opportunities for increased scien i 
and environmental cooperation under , 
number of bilateral agreements as we! i 
within an International Arctic Scienc 
Committee of states with interests in 
region. They expressed their support 
increased people-to-people contacts 
tween the native peoples of Alaska a 
the Soviet north. 

The President and the General 
retary noted the positive role playec 
the multilateral Antarctic Treaty anc 
emphasized the importance of U.S.- 
Soviet scientific and environmental 
cooperation in that region. 

Trade and Economic Affairs 

The two sides reconfirmed their stro 
support for the expansion of mutuall, 
beneficial trade and economic relatioi 
and noted recent activity in this are. 
They reiterated their behef that com 
mercially viable joint ventures compl 
ing with the laws and regulations of 
both countries could play a role in t? 
further development of commercial i 
tions. They welcomed the results of 
meeting of the Joint U.S.-U.S.S.R. 
Commercial Commission in April anc 
noted with satisfaction that working 
groups had been created under the c 
mission to further the establishment 
better conditions under which mutua 
advantageous trade can develop. Ta) 
note of the 1974 joint statement and 
protocol amending the Long-lferm 
Agreement Between the United Stat 
of America and the Union of Soviet 
cialist Repubhcs to Facilitate Econo: 
Industrial, and Technical Cooperatioi 
sued at the conclusion of the Joint C 
mercial Commission, they agreed ths 

Department of State Bulletin/August I'i 

Moscow Summit 

t; commission should continue to meet 
t build upon the forward momentum 
vich has been generated. 

The two leaders cited expanding 
rations between Aeroflot and PanAm 
i 'lines under the government-to- 
gv'ernment Civil Air Transportation 
.-reement as a positive example of 
ritually beneficial cooperation. 

( nsulates Exchanges/Diplomatic 
i d Consular Missions 

' e President and the General Secretary 
r iffirmed their agreement to open Con- 
E ates General in Kiev and New York as 
5 m as practicable. 

The two leaders discussed questions 
1 ating to ensuring adequate and secure 
(iditions for U.S. and Soviet diplomatic 
i i consular establishments and their 
I "sonnel in each other's territory. They 
i 'eed on the need to approach problems 
1 ating to such matters constructively 
i 1 on the basis of reciprocity. 

' FiTURE Meetings 

' e President and the General Secre- 
( 7, recognizing the importance of 
t;ir personal involvement in the devel- 
( ment of relations in the months 
oad, instructed Secretary of State 
1 ultz and Foreign Minister Shevard- 
idze to meet as necessary and to re- 
jrt to them on ways to ensure contin- 
id practical progress across the full 
nge of issues. Expert-level contacts 
ill also continue on an intensified basis. 



\S() HOUSE. 
. )SCOW. 

|NE 1, 19882 

'St, if just this one time I might speak 
all of you as well as myself, I would 
; to extend my thanks to General 
" tiretary Gorbachev, all of his associates 
the Soviet Government, and the people 
'^Moscow for all they've done to make 
stay here a pleasant one and this 
nmit conference the success it has 

This is my fourth summit. For some 
in our governments and some of you in the 
media, the number is higher. But a good 
deal of important work has been ac- 
complished here in Moscow. And the 
relationship between Mr. Gorbachev and 
me, and the various members of our 
respective delegations, has continued to 
deepen and improve. But personal 
relationships and hopes for peace are not 
by themselves enough. I think history will 
note that in our approach to the summit 
process, the United States has sought a 
consistency of expression as well as pur- 
pose. While at every turn I've tried to 
state our overwhelming desire for peace, 
I have also tried to note the existence of 
fundamental differences. And that's why 
it's a source of great satisfaction that 
those differences, in part as a result of 
these meetings, continue to recede. 

In addition, spokesmen for the Soviet 
Government have noted the change of 
policy, indeed, the profound change of 
policy that has occurred in their own 
government. The United States is fully 
cognizant of this change and aware of its 
implications. In noting the differences 
that still stand between us, therefore, my 
desire has not been to sound a note of 
discouragement but one of realism, not to 
conduct a tutorial but to give the kind of 
emphatic testimony to the truth that, 
over the long run, removes illusion and 
moves the process of negotiation 

From our standpoint, this approach 
has borne fruit at previous meetings and 
at this summit conference. And here, 
permit me to go back for just a moment 
to our first summit meeting at Geneva. 
There we agreed on certain fundamental 
realities that would govern our relations: 
that a nuclear war cannot be won and 
must never be fought, that the United 
States and the Soviet Union bear special 
responsiblities for avoiding the risk of 
war, that neither side should seek mili- 
tary superiority over the other. We af- 
firmed our determination to prevent war, 
whether nuclear or conventional, and our 
resolve to contribute in every way possi- 
ble, along with other nations, to a safer 

artment of State Bulletin/August 1988 

We also set out a broad agenda and 
initiated a new process of dialogue to 
address the sources of tension in U.S.- 
Soviet relations. Since Geneva, we have 
achieved through a sustained effort prog- 
ress across this broad agenda. Our first 
discussions here in Moscow focused on the 
important matter of human rights, in- 
dividual freedoms. The United States 
views human rights as fundamental to our 
relationship with the Soviet Union and all 
nations. From the beginning, we've 
stressed this point and are encouraged by 
recent signs of progress in the Soviet 
Union. I beUeve that where people have 
the right to speak, write, travel, and 
worship freely, creative energies are 
released. On several occasions I've said 
that nations do not distrust each other 
because they're armed, they are armed 
because they distrust each other. 

For the past 3 years. General Secre- 
tary Gorbachev and I have worked to 
build a relationship of greater trust. And 
we both recognize that one way to do that 
is to improve understanding between our 
two countries through broader people-to- 
people contacts. A series of agreements 
to expand U.S. -Soviet bilateral coopera- 
tion, including cultural exchanges, have 
been concluded. We agreed to expand our 
student exchange programs, with a goal 
of allowing hundreds, and eventually 
thousands, of Soviet and American high 
school students to study in each other's 
classrooms. For our relations, academic, 
cultural, and other exchanges are of 
greater importance. 

'Riming to regional issues, Mr. Gor- 
bachev and I agree that there must be 
peaceful solutions to these conflicts. Our 
goal is to advance independence, security, 
and freedom. The Soviet decision to 
withdraw from Afghanistan is significant, 
and we agree that building on the Afghan 
settlement leads to an approach to other 
regional problems. Our discussions also 
dealt with Cambodia, Angola, Ethiopia, 
the Middle East and the Persian Gulf and 
Central America. 

Each of our summit meetings moved 
us farther toward an INF Treaty, capped 
by today's exchange of ratification instru- 
ments, which now makes it a reality. 
Each meeting has also moved us farther 
toward meeting the even greater chal- 
lenge of crafting a treaty to reduce our 
strategic nuclear arsenals. 


In Geneva, the General Secretary 
and I agi'eed on the concept of 50% 
reductions; and in Reykjavik on numeri- 
cal limits for warheads and delivery 
vehicles; in Washington, on intensive 
work to complete a START treaty, in- 
cluding comprehensive verification provi- 
sions building upon those in INF. Here 
in Moscow, we've made important addi- 
tional strides toward that objective. 
Verification is one of the most important 
and most difficult issues for us, and I'm 
pleased to report progress in this area 

We've moved forward in other areas 
as well, including agreements on an ex- 
periment to improve the verification of 
existing nuclear testing treaties and on 
notification of strategic ballistic missile 

Finally, let me say how deeply mov- 
ing I have found my discussions with 
various citizens of the Soviet Union. The 
monks of Danilov, the dissidents and 
refuseniks, the writers and artists, the 
students and young people have shown 
once again that spiritual values are cher- 
ished in this nation. It's my fervent hope 
that those values will attain even fuller 

And now, I will be happy to take your 

Q. I know you've touched on this, 
but at your first news conference in 
1981, you said that the Soviets lie and 
cheat and pursue their ends of world 
domination. What has really changed 
your mind? Can the American people 
really trust the Russians now? And I'd 
like to follow up. 

A. That was the first press confer- 
ence that I'd held since being elected 
President. And the question that came 
to me was, could we believe the Rus- 
sians or would they lie to us. And my 
answer at that time was not expressing 
my opinion. I said, I will answer that 
with their own words. And then I cited 
some of the leaders of the communist 
movement in the Soviet Union who said 
that the only immorality was anything 
that slowed the growth of sociaUsm; 
and that there was no immorality in 
lying, or cheating, or doing anything of 
that kind as long as it advanced the 
cause of socialism. Now, that was my 
answer. So, it wasn't an opinion — I was 

quoting what their leaders themselves, 
the beginners of that particular sys- 
tem — said. 

Q. That's what you thought then. 
Do you still think that, and can you now 
declare the cold war over? 

A. I think right now, of course, as 
I've said, dovorey no provorey — trust 
but verify. 

Q. Is that the atmosphere now? 

A. But I think that there is quite a 
difference today in the leadership and 
in the relationship between our two 
countries. And we have held very pro- 
ductive meetings that I think were pro- 
ductive for both sides. 

Q. On the START treaty, what are 
the areas of progress, and what's the 
specific progress that you achieved 
here? And why do you think that you 
can conclude a treaty this year when 
Senate leaders are urging you to go 
slow, and this summit, with all its 
momentum, wasn't able to break the 

A. The Senate leaders themselves 
brought the verification — or the ratifica- 
tion papers here that we just received 
today on the INF Treaty. It meant 
changing their own schedules a gi'eat 
deal and speeding up the ratification 
process. I think that we could count on 
them to feel the same if we are coming 
to final agreement on a START treaty. 

But I want to remind you of one 
thing that we've said over and over 
again. The START treaty is infinitely 
more complex than the INF Treaty, 
and therefore, there is going to be con- 
tinued negotiation on a number of 
points. And then it will depend on the 
Senate once — if we have agreed upon a 
treaty, it is their responsibility to thor- 
oughly study that treaty and then issue 
ratification of it if they find it 

We can hope. I would hope that be- 
fore the year is out that we could elimi- 
nate the differences that still exist, but 
if not, I would hope that my successor 
would continue, because here we are 
getting at, I think, the most important 
reduction that should take place in nu- 
clear weapons. The most destabilizing 
are the intercontinental ballistic mis- 
siles in which someone pushes a button 

and minutes later a part of the earth i 
blows up. And the thing that I expre I 
my hope about is that not only have ( 
said 50%, but in that first meeting in i 
Geneva, the General Secretary pro- 
posed the idea also of reducing by ha 
our nuclear missiles. 

Q. Tb follow up, could you go o 
the areas of progress on START that ; 
achieved here? 

A. No, I don't think that I shouL • 
go on. The conversations are still goi 
on, and there are things still being d; i 
cussed. And, as I say, progress has j 
been made or we wouldn't still be tal j 
ing the way we are. I 

Q. Is there something in Soviet 
American relations that you would ■ 
vise your successor to leave behind, i j 
is there something that you would e: ■ 
cially advise to take to the future? 

A. Wait a minute. If I heard the 
entire question — special advice on 

Q. Is there something in Soviet' 
American relations that you would 
vise your successor to leave behind, 
is there something specific that yoi 
would advise him to take to the futi 

A. To follow up, yes. Yes. If the 
negotiations and so forth are still goi 
on, I will do everything I can to per- 
suade my successor to follow up and 
continue and — as a matter of fact, I 
think I'll tell him that he vdll find th 
Russian people most warm and hosf 
ble and friendly. 

Q. Soviet officials have told us t 
have dossiers on all of the dissidents 
that some of those people — in fact, 
they've said that all those people are 
the best people representing Soviet s 
ety. How do you feel about the fact 1 
they have kept dossiers on these d» 
dents with whom you met, and doe 
that contradict your view that there h 
been improvements here and that th 
a more open society under Mr. Gor 

A. No, the figures themselves n 
veal that improvements have been 
made. Some 300 people have been ft 
from imprisonment. The lists that w( 
bring are names that have been 
brought to our attention by relatives 
friends — their own relatives, for exas 

Department of State Bulletin/August I'l 

Moscow Summit 

p, living in our country now — and I 
h'e brought those names to the Gen- 
eil Secretary and explained the per- 
gial interest that we have in them, 
./da gi'eat many of them have since 
l^;n allowed to come to our country or 
t| other countries that they preferred, 
■h as Israel. And so, I think there 
i been a sizable improvement, and 
still are going to continue doing 

' Q. What about the fact that the very 
p)ple with whom you met have now 
tm investigated by Soviet authorities 
si might be subject to some form of 
r aliation? Mr. Gorbachev said today 
t it you no longer feel that this is the 
( 1 empire, that you told him that 
1 ;hin the Kremlin walls. Doesn't this 
c itradict your new feeling of optimism 
i jut the Soviet Union? 

A. No, because I say, he has re- 
c ved the latest list that I brought 
\ -e, and previous experiences with 
1 5 — a great many of those people 
1 .e been allowed to come to our 
( in try. 

Q. Yesterday you did say you no 
liger believed the Soviet Union is an 
' n\ empire." You said that was an- 
( ler time, another era. What's 
( anged? Is it just Mr. Gorbachev's 
t :cession to the general secretaryship, 
« have you yourself changed or ex- 
I nded your view of the Soviet Union? 
A. No, I think that a great deal of 
- due to the General Secretary, 
i I have found different than previ- 
iviet leaders have been, but that 
- we have pursued this, we have 
them willing to enter into negotia- 
with us. And I think that enough 
i jgress has been made that we 
< 1 look with optimism on future 

Q. I suppose I'm asking if you think 
jat there's anything that you have 
'Urned, that you personally have ex- 
inded or changed your views because 
u've had an opportunity to learn more 
out this country over the years, and 
jjout their system, so that you think 
']'U are part of the process, or is it just 

A. A large part of it is Mr. Gor- 

chev as a leader, and I think there 

Sve been changes here as they have 

sought to make — well, I read Peres- 
troika, and I found much in it that I 
could agree with. 

Q. Mr. Gorbachev said in his news 
conference that he thought you could 
have achieved more in this summit. 
Specifically, he went on to say that on 
the issue of the ABM interpretation of 
the treaty — said that you had gone back 
on your word, that in Geneva you had 
agreed that you would no longer seek 
military superiority, and that by holding 
to the development of SDI you were 
seeking superiority in outer space, and 
that, therefore, you had gone back on 
your word. Are you seeking superiority 
in outer space? Can you reach a START 
agreement without some accommoda- 
tion on SDI and the ABM question? 

A. SDI, in my mind — maybe some 
of my people wouldn't agree with me — 
but the whole thing was my idea, to 
see if there could not be developed a de- 
fensive weapon that would make it vir- 
tually impossible for nuclear missiles to 
get through to their targets in another 
country. And from the very beginning, 
I have said that if and when such a sys- 
tem can be developed, I would support 
the idea of making it available world- 
wide, because since we all know how to 
make nuclear missiles, sometime there 
could be a madman come along, as a 
Hitler came along, who could then 
make those missiles, but that my idea 
would be the sharing of the knowledge 
of SDI, as a defensive weapon, would 
be accompanied by the total elimination 
of nuclear weapons. And I happen to 
believe that this will be a lot better 
world if we get rid of all the nuclear 
weapons. And that is what my dream 
of SDI is: that it can be the tool by 
which we eliminate. 

Q. Mr. Gorbachev said today that he 
did not believe that it's for defensive 

A. I know you said that before, and 

Q. You failed to convince him, 
despite the fact that you're on such good 
terms with him. 

A. Maybe he just doesn't know me 
well enough. But from the very first, I 
have said that that is my goal for that 
defensive weapon. There is nothing 
offensive about it. It cannot hurt or kill 

anyone. It can just make it impossible 
for missiles to get through the screen. 

Q. I want to ask you about this 
effort you again stated today to try to get 
a START treaty before you leave office. 
You have less than 8 months left in 
office. Mikhail Gorbachev could have 20 
years. By setting up any kind of dead- 
line, no matter how unofficial, aren't 
you putting all the pressure on the U.S. 

A. Oh, no. We set no deadline. I 
said we're going to continue working to- 
ward that. And I could hope that 
maybe in that period of time — but, no, 
I am dead set against deadlines. You 
don't make a treaty just to simply have 
it be achieved at a certain point in 
time. The treaty is ready when it is a 
good treaty and good for all sides in- 
volved. And that's what we'll do in- 
stead of setting a deadline and then say- 
ing, well, let's sign it because we've 
reached the deadhne. It has to be good. 

Q. There is also talk about a fifth 
summit sometime this year to sign a 
treaty, which might come sometime in 
the fall. Td prevent U.S. -Soviet rela- 
tions from being mixed up in politics, 
are you willing to rule out a summit 
until the presidential campaign is over 
in November? 

A. I'd make any decision of that 
kind based on how I thought it could af- 
fect the situation. And if it gave a 
promise of success, then go for it. 

Q. You were asked by one of the 
students at Moscow University yester- 
day about the practice in the United 
States of limiting presidential terms. I 
believe you said you were going to go 
out on the mashed potato circuit next 
year and campaign for repeal of that 
constitutional amendment. Were you 
aware that Mr. Gorbachev, as part of his 
reforms, is promoting the idea of limited 
terms for the leader of the Soviet Union? 
And do you think it's a good idea for the 
Soviet Union? 

A. I would hesitate to comment on 
that. I mean, this system of govern- 
ment here — you do not have a national 
election in which all of the people vote 
to see who would be the leader. My ob- 
jection to the constitutional amendment 
that was passed in our country, limiting 
a president to two terms, was the fact 

ipartment of State Bulletin/August 1988 


that that is the only office in the 
United States in which all the people 
vote for the candidates for that office. 
And it seems to me that it is an in- 
fringement on the rights of our people 
in a democracy to tell them that they 
can't vote for someone because of a 
time limit. I think it impinges on their 
right to vote for whomever they want 
to vote for as many times as they want 
to vote for them. That is the principle 
of democracy. 

Q. If I may just ask one more 
question on the students, you talked a 
lot about how it is a positive thing for 
students from both countries to mix and 
mingle, to get to know each other, to 
understand each other. Do you think 
part of your positive feeling about the 
Soviet Union these days comes as a 
result of greater tolerance that you've 
developed as a result of your meetings 
with Mr. Gorbachev over the past few 

A. I have found that Mr. Gorbachev 
and I have a very satisfactory relation- 
ship. But, at the same time, I am never 
going to relax my belief in the need for 
verification of agreements that we 
might make, and I'm quite sure he 
feels the same way. 

Q. I understand that in your first 
meeting with Mr. Gorbachev, he sug- 
gested the reduction of half a million 
military personnel as a certain condi- 
tion, but there was no followup, as it 
were. Was this subject raised again, and 
what was your response? 

A. No, this proposal — that was 
just — a suggestion made of the removal 
of a half a million men on the NATO 
line in the European front. This has to 
be considered. We think that we are 
coming to a point — and that he himself 
is willing to — of reductions in conven- 
tional weapons along that front and con- 
ventional forces as well as the nuclear 
forces. But the simple removing of a 
half a million men would not be exactly 
equal because his military would be 
moved a short distance back away from 
the front. Well, there's a 3,000-mile 
ocean between where our men would 
have to be moved and, in the event of 
an emergency, we'd have an ocean to 
cross to get our men back there and 
equal. So that has to be considered. 


Q. General Secretary Gorbachev, in 
his remarks earlier this afternoon, was 
talking about your comments here on 
human rights, and he said, "I did not 
have a lot of admiration for that part of 
the trip." When you met with the 
General Secretary privately, we know, 
of course, that you discussed human 
rights. Did he say anything to you 
specifically about the meeting with dis- 
sidents, or your remarks at Danilov 
Monastery or the remarks yesterday at 
the writers union? 

A. No, but I do know that he and 
others have had a feeling that in some 
way our concern with this is interfering 
with your internal government policies. 
I have explained to him, and I think 
maybe he has seen the point. 

Our country is very unique. All of 
us, either by ourselves or through our 
ancestors or our grandparents or par- 
ents, came from someplace else — about 
the only nation in the world that can 
say that. As a matter of fact, the esti- 
mate is that one out of eight Americans 
trace their parentage and their heri- 
tage, if not their own immigration, to 
the Eastern bloc. And so, I have put it 
this way, that: you don't stop loving 
your mother because you've taken unto 
yourself a wife. So the people in Amer- 
ica do have a feeling for the countries 
of their heritage. In my case, it was a 
great-grandfather on one side and a 
grandmother and gi-andfather on my 
mother's side. Well, Americans retain 
that feehng of friendship and loyalty to 
the countries that, as I say, are their 
heritage. And so, when we feel that 
people are being unjustly treated— 
imprisoned for something that in our 
country would not be a crime, calling 
for such a sentence — our people get 
aroused, and they come to us, and they 
want help. They want something done. 
A wife, who has been waiting for 8 
years for her husband to be allowed to 
leave this country to join her— things of 
this kind we don't think are really in- 
terfering with someone else's business. 
We think it's very much our business 
to bring it to the attention where we 
feel that there is an injustice to the 
government. And I have explained this 
to the General Secretary, and I think 
he has seen the justice of what I've 
said because many of the individuals 
that we've brought to his attention 

have now been released from confine- 
ment here and have been allowed to 
emigrate — come to other countries, to 
our country. 

Q. Mr. Gorbachev says that he |, 
proposed a draft statement that woij. 
use the words "peaceful coexistenc 
And he said that your first response . 
that was, I like it. But that when y , 
came back from meeting with your 
aides, you seem to have changed yo 
mind. Did you, and why? 

A. I liked the whole tone, the ge , 
eral tone of it, and what it was seeki | 
to achieve was what we're both seekf 
to achieve. But I said at the same tii , 
I would take it to our people; and I ^ 
took it there, and they studied it and | 
saw where there could have been cer , 
tain ambiguities in there that would j 
achieve the general thought of what ^ 
was being proposed. We were in ag) | 
ment with the general thought. So, 
some rewriting was done by our own 
people. And when the total statemen 
is released to you, I think you will fi i 
that we have achieved what it was h 
had with the paragraph that he pro- 
posed. And it's been achieved and im 
proved to the point that it is clear ar 
unmistakable, that it achieves the pu 
pose that he had in mind. 

Q. You've sort of teased us now 
you could give us some sense of wh 
you've proposed to substitute for pes 
ful coexistence? What's the better t( 
that your aides had advised you to i 
A. No, peaceful coexistence — bot 
pieces achieve the same end, but the 
other one had ambiguities in it. And 
don't think they were intentional, bui 
they could have been used to justify 
doing something else that was not in 
keeping with the entire goal of the 
statement here. 

Q. If I could follow up on your 
comments on emigration: yesterday 
when you were talking about a fam 
denied the right to emigrate, you ca 
it a bureaucratic problem; you said 
blamed the bureaucracy. Do you beli 
that essentially it is just bureaucra 
lethargy that has caused that probl 
in the Soviet Union? 

A. Well, now, somebody distract 
me back there. I think someone else 
thought I had pointed at them inste£ 
of you. 
Department of State Bulletin/August 1 

Moscow Summit 

Q. Yesterday when you spoke to the 
gidents about emigration, and a family 
ii particular that had been denied the 
rht to emigrate, and you said you 
bimed the bureaucracy — do you view 
t • emigration problem from the Soviet 
I ion as essentially a problem of just 
aethargic bureaucracy? 
": A. I'm afraid that I have to confess 
•• you that I think one of the sins of 
. , I inment, and one with which we 

St (leal and never have been able to 
c completely successful with — and this 
1 hules our own government — is that 
t' bureaucracy once created has one 
fidamental rule above all others — 
p 'serve the bureaucracy. And I think 
t it governments will always find that 
t y are having to check on bureauc- 
r y and make sure that it is not abid- 
i by its own rules and taking the easi- 
f course. And so I wouldn't — picking 
c one government other than another. 

Q. If I could follow up, you said that 
J J believed you persuaded Mr. Gor- 
t :hev on some of these emigration 
( Bstions. But he said on human rights 
i the United States that he did not find 
jar agruments convincing. Do you 
insider that a failure in this summit? 

A. I think that there is a mistaken 
\ w — and oh, how I yearn to have him 
c ne to our country for long enough to 
g • some of our country — I think there 
i 1 mistaken view about the things 
I' it it occasionally dominate the press 
' 4|)Ut prejudice, racial or religious, in 
'' t * country, about the so-called street 
p)ple that apparently have no place to 
is. And I think these are socioeco- 
ll-nic problems in our land; we have 
tim, of course. We also try to deal 
n;h them. But I don't think he could 
cite understand a recent situation: a 
Jiang lady living on the sidewalks of 
Jiw York — living out there on the side- 
Ik, winter and summer — and so, for 
d <• own sake, the police picked [her] 
to bring her to where she could be 
iced in a shelter. And she took her 
e to court and won her case in court 
it she should be allowed to go back 
d sleep on the sidewalk where she 
d been, because that's what she pre- 
Ted to do. 
4 Well, when you have a free coun- 
how far can we go in impinging on 
freedom of someone who says this 

is the way I want to live. And I think 
we can straighten him out if he saw 
what we did in our country. 

Q. In this room on Monday, you 
heard moving stories of people who had 
been — [inaudible] — and you wrote it off 
to bureaucracy. Is that really your view 
that it is only the bureaucracy? It is not 
a willful policy of the government here 
to keep these people from emigrating? 

A. No. I can't say that it's one; I 
don't know that much about the sys- 
tem. But it was a question presented to 
me on the basis that it possibly was a 
bureaucratic bungle. Maybe I should 
illustrate to you why I feel the way I 
do about bureaucracies. Once during 
the war, I happened to be involved in a 
situation in which one level of the mili- 
tary wanted a warehouse full of filing 
cabinets — wanted permission to destroy 
the files so they could use those filing 
cases — and they were able to prove 
that the documents had no historic 
value. They had no bearing on present- 
day government at all; they were just 
useless. And so the message went up 
through the ranks, requesting permis- 
sion to destroy these obsolete files. And 
then, back down through the ranks, 
from the top command, endorsed by 
each level of command, came the reply: 
permission granted, providing copies 
were made of each file destroyed. 

Q. Don't you think you're letting 
Mr. Gorbachev off a little easy on just 
saying it's a bureaucracy? 

A. No. As I said, I don't — the way 
the question was framed I thought that 
there was a possibility of that. No, but 
I just have to believe that in any gov- 
ernment some of us do find ourselves 
bound in by bureaucracy, and then 
sometimes you have to stomp your foot 
and say, unmistakably, I want it done. 
And then maybe you get through with 
it. But I have great confidence in his 
ability to do that. 

Q. You said starting at the begin- 
ning of this year and going into this 
summit that if there was this progress 
toward a START treaty, you would be 
willing to come together a fifth time and 
sign it, but only if it was a good treaty. 
You've referred to that today again 

several times. What is your judgment, 
your best judgment, on the basis of this 
summit? Have you made enough prog- 
ress that you now think that a START 
treaty is likely within your term? 

A. I honestly cannot answer that. I 
don't know. Let me just give you what 
the mechanics are: that our people have 
been steadily in Geneva — both sides, So- 
viet people and our people — working on 
this treaty, knowing what we hope to 
achieve, and they're working there. 
And, as I say, they've made progress. 
There is no way to judge, and there is 
no way that I would give them a date 
and say, please, you have to get this by 
such and such a time because that's not 
the way to get a good treaty. I want a 
good treaty. 

Q. Is the only condition under 
which you would have a fifth summit 
with Mr. Gorbachev is if there was, in 
fact, what you thought was a good 
START treaty ready to be signed? 

A. You can't rule out — something 
else might come up that necessitates 
our getting together and settling some- 
thing other than that particular treaty. 
So, no one can say no, there will be no 
need for a summit. 

Q. What have you learned about the 
Soviet Union? What have you learned in 
your first trip to Moscow? 

A. I'm going to do one [last] an- 
swer because I've wanted to say this, 
and I say it anytime I get a chance. I 
think that one of the most wonderful 
forces for stability and good that I have 
seen in the Soviet Union are the 
Russian women. 

JUNE 2, 19883 

General Secretary Gorbachev ^ 

One hour from now you will be leaving 
Moscow. In the first place, I want to 
thank you and your colleagues for coop- 
eration, openness, and a businesslike 
approach to the talks that we've had 
here. I believe that both of us have every 
reason to regard this meeting and your 
visit as a useful contribution to the 

Ipartment of State Bulletin/August 1988 


development of dialog-ue between the 
Soviet Union and the United States. 

Mr. President, you and I have been 
deahng with each other for 3 years now. 
From the first e.\change of letters to the 
conclusion of this meeting, we've come a 
long way. Our dialogue has not been 
easy, but we mustered enough realism 
and political will to overcome obstacles 
and divert the train of Soviet-U.S. 
relations from a dangerous track to a 
safer one. It has, however, so far been 
moving much more slowly than is re- 
quired by the real situation, both in our 
two countries and in the whole world. 

But as I have understood, Mr. 
President, you're willing to continue our 
joint endeavors. For my part, I can 
assure you that we will do everything in 
our power to go on moving forward. 
Now, with the vast experience of Ge- 
neva, Reykjavik, Washington, and 
Moscow, and backed up by their achieve- 
ments, we are in duty, bound to display 
still greater determination and consis- 
tency. That is what the Soviet and 
American peoples, international public 
opinion, and the entire world community 
are expecting of us. 

I hope you will have pleasant memo- 
ries of your stay in this country. When 
you return to America, please convey to 
the American people best washes from 
the peoples of the Soviet Union. Over the 
past 3 years, our two nations have come 
to know each other better. They have 
' now taken a really good look in each 
other's eyes and have a keener sense of 
the need to live together on this beautiful 
planet earth. I wish you good journey 
back home, Mr. President and Mrs. 
Reagan. To you and to all members of 
the U.S. delegation, I wish good health. 

President Reagan 

Mr. General Secretary, Mrs. Gorbachev, 
this is an emotional moment for Mrs. 
Reagan and me. We have been truly 
moved by the warmth and the generous 
hospitality we have received from all of 
our Soviet hosts during this brief visit — 
but most especially, from the two of you. 
During this meeting, as in all of our 
previous meetings, I appreciated and 
valued our exchanges and the long hours 
of hard work that we and our experts put 

in to make progress on the difficult 
issues we face. But this meeting has 
added something else for Mrs. Reagan 
and me. Our time here has allowed us to 
know, if only briefly, your art treasures 
and your people: artists, writers, indi- 
viduals from all walks of life — people who 
were wiUing to share with us their 
e.xperiences, their fears, their hopes. 

It is fitting that we are ending our 
visit, as we began it, in this hall named 
for the Order of St. George. I would like 
to think that our efforts during these 
past few days have slayed a few dragons 
and advanced the struggle against the 
evils that threaten mankind — threats to 
peace and to liberty. And I would hke to 
hope that, like St. George, with God's 
help, peace and freedom can prevail. And 
Mr. General Secretary, if you will permit 
me just one more proverb, I think a very 
old and popular saying you have here 
about last Sunday, the day of our arrival, 
spoke to the promise that we've seen 
fulfilled at this summit in this Moscow 
spring. Truly, then, Tmitsa ves les 
raskroitsya — at the Feast of Trinity, the 
whole forest blossoms. 

And now, if I might just conclude on 
a personal note. Eariier this week at 
Moscow State University, I mentioned to 
the young people there that they ap- 
peared to my eyes exactly as would any 
group of students in my owti country or 
anywhere else in the world, so, too, did 
Nancy and I find the faces, young and 
old, here on the streets of Moscow. At 
first, more than anything else, they were 
curious faces, but as the time went on, 
the smiles began and then the waves. 
And I don't have to tell you, Nancy and 
I smiled back and waved just as hard. 

Mr. General Secretary, I think you 
understand we're not just grateful to 
both you and Mrs. Gorbachev, but want 
you to know we think of you as friends. 
And in that spirit, we would ask one 
further favor of you. Itell the people of 
the Soviet Union of the deep feelings of 
friendship felt by us and by the people of 
our country toward them. Ifell them, too, 
Nancy and I are gi-ateful for their coming 
out to see us, grateful for their waves 
and smiles, and tell them we will 
remember all of our days, their faces — 
the faces of hope — hope for a new era in 
human history, an era of peace between 
our nations and our peoples. 

Thank you and God bless you. 

President Reagan's address before 
members of the Royal Institute of 
International Affairs at Guildhall. 

JUNE 3, 19882 

I wonder if you can imagine what it is f 
an American to stand in this place. Bac 
in the States, we're terribly proud of ar 
thing more than a few hundred years ol 
some even see my election to the presi- 
dency as America's attempt to show oui 
European cousins that we too have a 
regard for antiquity [Laughter] 

Guildhall has been here since the 
15th century and while it is comforting 
my age to be near anything that much 
older than myself — [laughter] — the v 
erable age of this institution is hardly 
that impresses. Who can come here ar 
not think upon the moments these wal 
have seen, the many times that people 
this city and nation have gathered her 
in national crisis or national triumph? 
the darkest hours of the last World W 
when the tense drama of Edward R. 
Murrow's opening, "This is London" 
was enough to impress on millions of 

Department of State Bulletin/ August U 


Moscow Summit 

iiiericans the mettle of the British 
pDple, how many times in those days did 
p)ceedings continue here, a testimony 
tthe cause of civilization for which you 
sod? From the Marne to El Alamein, to 
^nhem, to the Falklands, you have in 
ts century so often remained steadfast 
i what is right — and against what is 
"ipng. You are a brave people, and this 
Ij d truly is, as your majestic, moving 
fc-nn proclaims, a "land of hope and 

Sry." And it's why Nancy and I, in the 
sing days of this historic trip, ai'e glad 
tibe in England once again. After a long 
J rney, we feel among friends, and with 
a our hearts we thank vou for having us 

< Such feelings are, of course, espe- 
c lly appropriate to this occasion; I have 
one from Moscow to report to you, for 
t ly the relationship between the 
I ited States and Great Britain has 

I 'n critical to NATO's success and the 
c ise of freedom. 

This hardly means that we've always 

I I a perfect understanding. When I 

t a visited Mrs. Thatcher [Prime Min- 
i 'v Margaret Thatcher] at the British 
1 ibassy in 1981, she mischievously 
r iiiiided me that the huge portrait 
c niiiating the grand staircase was none 
' er than that of George III, though she 
( ui'aciously concede that today most of 
I ■ countrymen would agree with Jeffer- 
: I t hat a little rebellion now and then is 
' iiud thing. [Laughter.] 

S(i there has always been, as there 
iulil be among friends, an element of 
- i aliDUt our differences. But let me 
uic you, it is how much we have in 
niiKin and the depth of our friendship 
it tiuly matters. 

I have often mentioned this in the 
ites, but I have never had an opportu- 
y to tell a British audience how during 
' first visit here 40 years ago I was, 
e most Americans, anxious to see 
■ne of the sights and those 400-year- 
I inns I had been told abound in this 
antry. Well, a driver took me and a 
iple of other people to an old inn, a pub 
lUy — and what in America we would 
IJ a "mom and pop place." This quite 

Iierly lady was waiting on us, and 
ally, hearing us talk to one another, 
e said, "You're Americans, aren't 
u?" And we said we were. "Oh," she 


said, "there were a lot of your chaps 
stationed down the road during the 
war." And she added, "They used to 
come in here of an evening, and they'd 
have a songfest. They called me Mom, 
and they called the old man Pop." And 
then her mood changed and she said, "It 
was Christmas Eve, and you know, we 
were all alone and feeling a bit down. 
And suddenly, they burst through the 
door, and they had presents for me and 
Pop." And by this time she wasn't 
looking at us anymore; she was looking 
off into the distance, into memory, and 
there were tears in her eyes. And then 
she said, "Big strapping lads they was, 
from a place called loway." [Laughter.] 

From a place called loway — and 
Oregon, California, Tfexas, New Jersey, 
Georgia — here with other young men 
from Lancaster, Hampshire, Glasgow, 
and Dorset — all of them caught up in the 
terrible parado.xes of that time: that 
young men must wage war to end war, 
and die for freedom so that fi-eedom itself 
might live. And it is those same two 
causes for which they fought and died — 
the cause of peace, the cause of freedom 
for all humanity — that still brings us, 
British and American, together. 

For these causes, the people of 
Great Britain, the United States, and 
other allied nations have, for 44 years, 
made enormous sacrifices to keep our 
alliance strong and our military ready. 
For them, we embarked in this decade on 
a new postwar strategy, a forward 
strategy of freedom, a strategy of public 
candor about the moral and fundamental 
differences between statism and democ- 
racy, but also a strategy of vigorous 
diplomatic engagement; a policy that 
rejects both the inevitability of war or 
the permanence of totalitarian rule, a 
policy ba.sed on realism that seeks not 
just treaties for treaties' sake but the 
recognition and resolution of fundamen- 
tal differences with our adversaries. 

The pursuit of this policy has just 
now taken me to Moscow, and let me 
say, I beUeve this policy is bearing fruit. 
Quite possibly, we're beginning to take 
down the barriers of the postwar era; 
quite possibly, we are entering a new era 
in history, a time of lasting change in the 
Soviet Union. We will have to see. But if 
so, it's because of the steadfastness of 

.||j ipartment of State Bulletin/ August 1988 

the allies — the democracies — for more 
than 40 years, and especially in this 

The history of our time will un- 
doubtedly include a footnote about how, 
during this decade and the last, the 
voices of retreat and hopelessness 
reached a crescendo in the West — 
insisting the only way to peace was 
unilateral disarmament, proposing nu- 
clear freezes, opposing deployment of 
counterbalancing weapons such as 
intermediate-range missiles or the more 
recent concept of strategic defense sys- 

These same voices ridiculed the 
notion of going beyond arms control, the 
hope of doing something more than 
merely establishing artificial limits 
within which arms buildups could con- 
tinue all but unabated. Arms reduction 
would never work, they said, and when 
the Soviets left the negotiating table in 
Geneva for 15 months, they proclaimed 

And yet it was our double-zero 
option, much maligned when first pro- 
posed, that provided the basis for the 
INF Treaty, the first treaty ever that 
did not just control offensive weapons, 
but reduced them and, yes, actually 
eliminated an entire class of U.S. and 
Soviet nuclear missiles. This treaty, last 
month's development in Afghanistan, the 
changes we see in the Soviet Union — 
these are momentous events; not conclu- 
sive, but momentous. 

And that's why, although history 
will duly note that we, too, heard voices 
of denial and doubt, it is those who spoke 
with hope and strength who will be best 
remembered. And here I want to say 
that through all the troubles of the last 
decade, one such firm, eloquent voice, a 
voice that proclaimed proudly the cause 
of the Western alliance and human 
freedom, has been heard. A voice that 
never sacrificed its anticommunist cre- 
dentials or its realistic appraisal of 
change in the Soviet Union, but because 
it came from the longest-serving leader 
in the alliance, it did become one of the 
first to suggest that we could "do 
business" with Mr. Gorbachev. So let 
me discharge my first official duty here 
today. Prime Minister, the achievements 
of the Moscow summit as well as the 


Geneva and Washington summits say 
much about your valor and strength and, 
by virtue of the office you hold, that of 
the British people. So let me say, simply: 
at this hour in history, Prime Minister, 
the entire world salutes you and your 
gallant people and gallant nation. 

And while your leadership and the 
vision of the British people have been an 
inspiration, not just to my own people 
but to all of those who love freedom and 
yearn for peace, I know you join me in a 
deep sense of gratitude toward the 
leaders and peoples of all the democratic 
allies. Whether deploying crucial weap- 
ons of deterrence, standing fast in the 
Persian Gulf, combatting terrorism and 
aggression by outlaw regimes, or helping 
freedom fighters around the globe, 
rarely in history has any alliance of free 
nations acted with such firmness and 
dispatch, and on so many fronts. 

In a process reaching back as far as 
the founding of NATO and the Common 
Market, the House of Western Europe, 
together with the United States, Can- 
ada, Japan, and others — this House of 
Democracy — engaged in an active diplo- 
macy while sparking a startling growth 
of democratic institutions and free mar- 
kets all across the globe; in short, an 
expansion of the frontiers of freedom and 
a lessening of the chances of war. 

So, it is within this context that I 
report now on events in Moscow. On 
Wednesday, at 08:20 Greenwich time, 
Mr. Gorbachev and I exchanged the 
instruments of ratification of the INF 
Treaty. So, too, we made tangible 
progress toward the START treaty on 
strategic weapons. Such a treaty, with 
all its implications, is, I believe, now 
within our grasp. But part of the realism 
and candor we were determined to bring 
to negotiations with the Soviets meant 
refusing to put all the weight of these 
negotiations and our bilateral rela- 
tionship on the single issue of arms 
control. As I never tire of saying, nations 
do not disti-ust each other because they 
are armed, they are armed because they 
distrust each other. 

So equally important items on the 
agenda dealt with critical issues, like 
regional conflicts, human rights, and 
bilateral exchanges. With regard to 
regional conflicts, here, too, we are now 
in the third week of the pullout of Soviet 


troops from Afghanistan. The impor- 
tance of this step should not be under- 
estimated. Our third area of discussion 
was bilateral contacts between our peo- 
ples, an expanding program of student 
exchanges and the opening of cultural 
centers — progress toward a broader un- 
derstanding of each other. And finally, 
on the issue of human rights — granting 
people the right to speak, write, travel, 
and worship freely — there are signs of 
greater individual freedom. 

Now originally, I was going to give 
you just an accounting on these items. 
But, you know, on my first day in 
Moscow, Mr. Gorbachev used a Russian 
saying: "Better to see something once 
than to hear about it a hundred times." 
So if I might go beyond our four-part 
agenda today and offer just a moment or 
two of personal reflection on the country 
I saw for the first time. 

In all aspects of Soviet life, the talk 
is of progress toward democratic re- 
form — in the economy, in political 
institutions, and in rehgious, social, and 
artistic life. It is called glasnost — 
openness; it is perestroika — restructur- 
ing. Mr. Gorbachev and I discussed his 
upcoming party conference, where many 
of these reforms will be debated and 
perhaps adopted: such things as official 
accountability, limitations on length of 
service in office, an independent judici- 
ary, revisions of the criminal law, and 
lowering taxes on cooperatives; in short, 
giving individuals more freedom to run 
their ow^n affairs, to control their own 

To those of us familiar with the 
postwar era, all of this is cause for 
shaking the head in wonder. Imagine, 
the President of the United States and 
the General Secretary of the Soviet 
Union walking together in Red Square, 
talking about a growing personal ftnend- 
ship, and meeting together average 
citizens, realizing how much our people 
have in common. It was a special 
moment in a week of special moments. 
My personal impression of Mr. Gor- 
bachev is that he is a serious man 
seeking serious reform. I pray that the 
hand of the Lord will be on the Soviet 
people — the people whose faces Nancy 
and I saw everywhere we went. Believe 
me, there was one thing about those 

faces that we will never forget — they I 
were the faces of hope, the hope of a ne I 
era in human history, and, hopefully, ail 
era of peace and freedom for all. I 

And yet, while the Moscow summill 
showed great promise and the response I 
of the Soviet people was heartening, lei ' 
me interject here a note of caution and, i 
hope, prudence. It has never been I 
disputes between the free peoples and i 
the peoples of the Soviet Union that ha I 
been at the heart of postwar tensions ai i 
conflicts. No, disputes among govern- | 
ments over the pursuit of statism and 
expansionism have been the central poi 
in our difficulties. 

Now that the allies are strong and 
expansionism is receding around the 
world and in the Soviet Union, there is 
hope. And we look to this trend to 
continue. We must do all we can to ass 
it. And this means openly acknowledgi 
positive change and crediting it. But le 
us also remember the strategy that we 
have adopted is one that provides for 
setbacks along the way as well as 
progress. Let us embrace honest char 
when it occurs; but let us also be wary 
let us stay strong; and let us be 
confident, too. 

Prime Minister, perhaps you re- 
member that upon accepting your gra- 
cious invitation to address the member 
of the Parliament in 1982, I suggested 
then that the world could well be at a 
turning point when the two great thre; 
to life in this century — nuclear war an( 
totalitarian rule — might now be over- 
come. In an accounting of what might 
ahead for the Western alliance, I sug- 
gested that the hard evidence of the 
totalitarian experiment was now in and 
that this evidence had led to an uprisinj 
of the intellect and will, one that re- 
affirmed the dignity of the individual in 
the face of the modem state. 

I suggested, too, that in a way M 
was right when he said the political on 
would come into conflict with the eco- 
nomic order, only he w^as wrong in 
predicting which part of the world thi: 
would occur in, for the crisis came not 
the capitalist West but in the commur 
East. Noting the economic difficulties 
reaching the critical stage in the Sovie 
Union and Eastern Europe, I said thai 

Department of State Bulletin/August IS 

Moscow Summit 

ifr times in history the ruHng ehtes 
la faced such situations and, when they 
niuntered resolve and determination 

I free nations, decided to loosen their 
It was then I suggested that the 

- iif history were running in the cause 
"i-ty, but only if we, as free men and 
u'li. Joined together in a worldwide 
iiiient toward democracy, a crusade 
' i'ledom, a ciTisade that would be not 
. luch a struggle of armed might, not 
i uK'h a test of bombs and rockets as a 
e: of faith and will. 

I Well, that crusade for freedom, that 
•r ade for peace is well underway. We 

■ found the will. We have held fast to 
1 faith. And, whatever happens, what- 
!V ■ triumphs or disappointments ahead, 
m nust keep to this strategy of 
*' ntrth and candor, this strategy of 
— hope in the eventual triumph of 

■I Inm. 

Mut as we move forward, let us not 
1 1 note the lessons we've learned 
111 g the way in developing our strat- 
ig We have learned the first objective 
i le adversaries of freedom is to make 
Ti nations question their own faith in 
T(iom, to make us think that adhering 
' 11- principles and speaking out 
- ii.-t human rights abuses or foreign 
■i'>si(jn is somehow an act of belliger- 

W'ell, over the long run, such 
uiiiins make free peoples silent and 
nately half-hearted about their 
(■ This is the first and most impor- 
-■ defeat free nations can ever suffer, 
' \ hrn free peoples cease telling the 
:' h about and to their adversaries, 
I case telling the truth to them- 
I-.-. In matters of state, unless the 
1" h be spoken, it ceases to e.xist. 
It is in this sense that the best 
'5 -ator of how much we care about 
il..m is what we say about freedom; it 
tills sense that words truly are 
'ii>. And there is one added and quite 
a-ii-(linary benefit to this sort of 
iMii and public candor: this is also the 
\\ ay to avoid war or conflict. Too 
n 111 the past, the adversaries of 
'luin forgot the reserves of strength 
I' solve among free peoples; too 

II they intei-preted conciliatory words 
lakness; and too often they miscal- 

•» led and underestimated the wilHng- 

ness of free men and women to resist to 
the end. Words of freedom remind them 

This is the lesson we've learned and 
the lesson of the last war and, yes, the 
lesson of Munich. But is is also the lesson 
taught us by Sir Winston [Churchill], by 
London in the blitz, by the enduring 
pride and faith of the British people. Just 
a few years ago. Her Majesty, Queen 
Elizabeth and I stood at the Normandy 
beaches to commemorate the selflessness 
that comes from such pride and faith. It 
is well we recall the lessons of our 
alliance. And, I wonder if you might 
permit me to recall one other this 

Operation Market Garden it was 
called — 3 months after Overlord and the 
rescue of Europe began — a plan to 
suddenly drop British and American 
airborne divisions on the Netherlands 
and open up a drive into the heart of 
Germany. A battalion of British 
paratroopers was given the great task of 
seizing the bridge deep in enemy teiri- 
tory at Arnhem. For a terrible 10 days 
they held out. 

Some years ago, a reunion of those 
magnificent veterans — British, Ameri- 
cans, and others of our allies — was held 
in New York City. From the dispatch by 
The New York Times reporter Maurice 
Carroll, there was this paragraph: 

"Look at him," said Henri Knap, an 
Amsterdam newspaperman who headed a 
Dutch underground's intelligence operation in 
Ai-nhem. He gestured toward General John 
Frost, a bluff Briton who had committed the 
battalion that held the bridge. "Look at 
him — still with that black moustache. If you 
put him at the end of a bridge even today and 
said 'keep it,' he'd keep it." 

The story mentioned the wife of 
Cornelius Ryan, the American writer 
who immortalized Market Garden in his 
book, A Bridge Too Far, who told the 
reporter that just as Mr. Ryan was 
finishing his book — writing the final 
paragraphs about General Frost's valiant 
stand at Arnhem and about how in his 
eyes his men would always be unde- 
feated — her husband burst into tears. 
That was quite unlike him; and Mrs. 
Ryan, alarmed, rushed to him. The 
writer could only look up and say of 
General Frost: "Honestly, what that 
man went through." A few days ago, 

seated there in Spaso House with Soviet 
dissidents, I had that same thought, and 
asked myself: What won't men suffer for 

The dispatch about the Arnhem 
veteran concluded with this quote from 
General Frost about his visits to that 

"We've been going back ever since. 
Every year we have a — what's the word — 
reunion. Now, there's a word." He turned to 
his wife, "Dear, what's the word for going to 

"Reunion," she said. 

"No," he said, "there's a special word." 

She pondered, "Pilgrimage," she said. 

"Yes, pilginmage," General Frost said. 

As those veterans of Arnhem view 
their time, so, too, we must view ours; 
ours is also a pilgrimage, a pilgrimage 
toward those things we honor and love: 
human dignity, the hope of freedom for 
all peoples and for all nations. And I've 
always cherished the belief that all of 
history is such a pilgrimage and that our 
Maker, while never denying us free will, 
does over time guide us with a wise and 
provident hand, giving direction to his- 
tory and slowly bringing good from 
evil — leading us ever so slowly but ever 
so relentlessly and lovingly to a moment 
when the will of man and God are as one 

I cherish, too, the hope that what we 
have done together throughout this 
decade and in Moscow this week has 
helped bring mankind along the road of 
that pilgrimage. If this be so, prayerful 
recognition of what we are about as a 
civilization and a people has played its 
part. I mean, of course, the great 
civilized ideas that comprise so much of 
your heritage: the development of law- 
embodied by your constitutional tradi- 
tion, the idea of restraint on centralized 
power and individual rights as estab- 
lished in your Magna Carta, the idea of 
representative government as embodied 
by the mother of all parliaments. 

But we go beyond even this. Your 
own Evelyn Waugh who reminded us 
that "civilization — and by this I do not 
mean talking cinemas and tinned food nor 
even surgery and hygienic houses but the 
whole moral and artistic organization of 
Europe — has not in itself the power of 
survival." It came into being, he said. 

li)artment of State Bulletin/August 1988 


through the Judeo-Christian tradition 
and "without it has no significance or 
power to command allegiance. It is no 
longer possible," he wrote, "to accept 
the benefits of civilization and at the 
same time deny the supernatural basis 
on which it rests." 

And so, it is first things we must 
consider. And here it is, a story, one last 
story, that can remind us best of what 
we're about. It's a story that a few years 
ago came in the guise of that art form for 
which I have an understandable affec- 
tion — the cinema. 

It's a story about the 1920 Olympics 
and two British athletes: Harold Abra- 
hams, a young Jew, whose victory — as 
his immigrant Arab-Italian coach put 
it — was a triumph for all those who have 
come from distant lands and found 
freedom and refuge here in England; and 
Eric Liddell, a young Scotsman, who 
would not sacrifice religious conviction 
for fame. In one unforgettable scene, 
Eric Liddell reads the words of Isaiah. 
"He giveth power to the faint, and to 
them that have no might, he increased 
their- strength, but they that wait upon 
the Lord shall renew theu* strength. 
They shall mount up with wings as 
eagles. Tliey shall run and not be 

Here then is our formula for com- 
pleting our crusade for freedom. Here is 
the strength of our civilization and our 
belief in the rights of humanity. Our faith 
is in a higher law. Yes, we believe in 
prayer and its power. And like the 
Founding Fathers of both our lands, we 
hold that humanity was meant not to be 
dishonored by the all-powerful state but 
to live in the image and likeness of Him 
who made us. 

More than five decades ago, an 
American President told his generation 
that they had a rendezvous with destiny; 
at almost the same moment, a Prime 
Minister asked the British people for 
their finest hour. This rendezvous, this 
finest hour, is still upon us. Let us seek 
to do His will in all things, to stand for 
freedom, to speak for humanity. 

"Come, my friends," as it was said 
of old by Tfennyson, "it is not too late to 
seek a newer world." Thank you. 

JUNE 3, 19882 

Vice President Bush 

Mr. President and Mrs. Reagan, I'm 
delighted to say on behalf of the people of 
the United States of America, welcome 
home, and well done. Everyone in 
America watched your historic trip and 
hoped for the best and pulled for you. 
And now it's over, and we can all say 
that you made a historic contribution to 
peace in the world. 

On arms control, Mrs. Thatcher 
probably put it best when she said that 
you have bravely gone forward in spite of 
the voices of denial and doubt. You 
showed the only way to succeed is by 
retaining your resolve and speaking with 

As for the latter, I suspect you 
know, Mr. President, that you caught a 
Httle flack for bringing up the issue of 
human rights so forcefully right there in 
the heart of the Soviet system. But most 
Americans felt as I did: we have a 
tradition of freedom and a history of free 
speech, and what's wrong with telling 
the other guy how you feel? 

The fact is you made us proud. This 
week an American President strode the 
hard ground of Red Square and reminded 
the world through the sureness of his 
step and the lilt of his words what a 
bracing thing freedom is — what a moving 
and bracing thing. 

So, welcome back, Mr. President. 
It's good to see you. God bless you and 

President Reagan 

As some of you may have heard, Mr. 
Gorbachev and I've been trading Russian 
proverbs this week. [Laughter] But you 
know, flying back across the Atlantic 
today, it was an American saying that 
kept i-unning through my mind. Believe 
me, as far as Nancy and I are concerned, 
there's no place like home. 

We want to thank all of you for 
coming out today. We're grateful for 
your enthusiasm and for the warmth of 
your welcome. And take it from me, all 
this red, white, and blue scenery hits 

these two weary travelers right when I 
we hve. If I might paraphrase George I 
Cohen: some may call it a flag waving i 
but right now I can't think of a better | 
flag to wave. I 

We're a little tired, but we're ) 
exhilarated at what has happened, \ 
exhilarated, too, at the thought of the I 
future and what may lie ahead for the i 
young people of America and all of the 
world. The events of this week in 
Moscow were momentous — not conclu 
sive perhaps, but momentous. And be 
heve me, right now momentous will d I 
just fine. 

You know, it's occurred to me th 
time does have a way of sorting thing 
out. For many years now, Americans 
have seen the danger of war and plea 
the cause of peace. And other Americ 
have seen the danger of totalitarianisi 
and pleaded the cause of freedom. So. 
was just thinking, why don't we just 
agree today on something that maybe 
should have been saying to each othei 
along: that we're all Americans and t 
we all have one and the same burning 
cause in our hearts — the cause of wor 
peace and the cause of world freedom 

Peace and freedom are what this 
was about, and we saw some real 
progress in several areas in Moscow- 
human rights, on regional conflicts, oi 
greater contacts between the people ( 
the Soviet Union and the United Sta 
We exchanged the documents that pu 
into force a historic treaty that elimi- 
nates for the first time an entire clas 
U.S. and Soviet nuclear weapons and 
establishes real breakthroughs in 
verification procedures. And we made 
tangible progress toward an even moi 
historic treaty on strategic weapons- 
yes, a 50% reduction in nuclear weapc 
All of this was good and promising foi 
the future. 

But there's something else I wan 
tell you about. I wish you could've sei 
the faces we saw in the Soviet Union. 
I said to the young people at Moscow 
State University, it was hard, really, 
tell them apart from any other group 
students — in our country or anywhert 
else in the world. 

And as I told Mr. Gorbachev, the 
were also the faces, young and old, w 
saw on the streets of Moscow. At firs 


Moscow Summit 

hall an.vthing else they were 
I'aces, but as time went on, the 
•cgan and then the waves. And I 
i\e to tell you Nancy and I smiled 
il waved just as hard. The truth 
line to us once again. It isn't 
hut governments that make war. 
:>n't people, but governments 
ct barriers that keep us apart. 
;ih is happening in the Soviet 
We hope and pray that the signs 
-e continue there. Our pledge — 
rhachev and I — is to work to 
■ building a better understanding 
II our two countries. But let's 
niT, too, that just as our forward 
y of peace and freedom antici- 
li positive changes, it remains ready 
ki' us over any bumps in the road. 
at's because our strategy is based 
m the eventual triumph of 
..- iVeedom. 

Tliat faith in freedom, that abiding 
f 111 what the unfettered human 
an accomplish, defines us as a 
and a nation. And you know, I've 
1(1 that even a few veteran 
ists said a chill went through 
lis week at a sight they never 
! they would see in their lifetime: 
rican President there in the heart 
'iw talking about economic, politi- 
I individual freedoms to the future 
I if the Soviet Union; explaining 
'('(lom makes a difference, and 
iiig how freedom works; talking, 
' lut the possibility of a new age of 
ity and peace, where old antago- 
n'tween nations can someday be 
iind us, a new age that can be ours 
we'll reach out to it. 
I. allies and gentlemen, all across our 
tr\- during these weeks of spring it's 
lion time. And I hope our young 
('S know what a sudden, starthng 
may now be before them, a future 
; about by a technological and 
luiiion revolution based on a grow- 

ing understanding of the nexus between 
economic growth and creative freedom. 
But I hope, too, that young Americans — 
and all Americans — will always remem- 
ber that this revolution is only the 
continuation of a revolution begun two 
centuries ago, a revolution of hope, a 
hope that someday a new land might 
become a place where ft'eedom's light 
would beacon forth. That faith in free- 
dom, that belief in the inalienable rights 
of man, begun in Cai-penters Hall in 
Philadelphia traveled last week to the 
Lenin Hills in Moscow. It was the 
selflessness of so many Americans that 
brought it there, selflessness by Ameri- 
cans for over two centuries, but espe- 
cially by those Americans who fought 
what has truly been called the twilight 
stiniggle of the postwar years, a struggle 
where national interest was not always 
clearly defined or adversaries easily 
identified or sacrifice fully appreciated. 
Now, more than ever, we must continue. 
The judgment of future generations will 
be harsh upon us if, after so much 
sacrifice and now at the hour of hope, we 
falter or fail. Let us resolve to continue, 
one nation, one people, united in our love 
of peace and freedom, determined to 
keep our defenses strong, to stand with 
those who struggle for freedom across 
the world, to keep America a shining 
city, a light unto the nations. 

And let us remember, too, that 
there's work remaining here at home, 
that whatever the accomplishments of 
America, we must never be prideful 
toward others. We have much to learn 
from peoples of foreign lands and other 
cultures, nor should we ever grow 
content. Let us never rest until every 
American of every race or background 
knows the full blessing of liberty, until 
justice for all is truly justice for all. And 
most of all, let us remember that being 
an American means remembering an- 
other loyalty, a loyalty, as the hymn puts 

it, "to another country I have heard of, a 
place whose King is never seen and 
whose armies cannot be counted." 

And yet if patriotism is not the only 
thing, it is one of the best things. And we 
can be grateful to God that we have seen 
such a rebirth of it here in this country. 
And you know, it's true, frequently when 
such moments happen in a nation's 
history, there's a popular saying or song 
that speaks for that time. And just 
maybe this verse sounds familiar to you: 
"If tomorrow, all things were gone I'd 
worked for all my life, and I had to start 
again vrith just my children and my wife, 
I'd thank my lucky stars to be living here 
today 'cause the flag still stands for 
freedom and they can't take that away." 

Nancy and I have full hearts today. 
We're grateful to all of you and to the 
American people, grateful for the chance 
to serve, grateful for all the support and 
warmth that you've given us over the 
years. And you know what else? We 
think our friend Lee Greenwood has it 
just right, "All our days, and especially 
today, there ain't no doubt we love this 
land. God bless the U.S.A." 

'Tfext from Weekly Compilation of Presi- 
dential Documents of May 30, 1988. 

-Tfe.xt from Weekly Compilation of Presi- 
dential Documents of June 6, 1988. 

^Made in St. George's Hall at the Grand 
Kremlin Palace (text from Weekly Compila- 
tion of Presidential Documents of June 6). 

^General Secretary Gorbachev spoke in 
Russian, and his remarks were translated by 
an interpreter. 

'Made in the ballroon of the U.S. Ambas- 
sador's residence (text from Weekly Compila- 
tion of Presidential Documents of June 6). 

''Made in St. Vladimir's Hall at the Grand 
Kremlin Palace (text from Weekly Compila- 
tion of Presidential Documents of June 6). 

'Question-and-answer session following 
President Reagan's remarks is not printed 
here (text from Weekly Compilation of Presi- 
dential Documents of June 6). 

^Press release 101 of June 2. ■ 

irtment of State Bulletin/August 1988 


Summary of U.S. -Soviet Agreements 
Signed in IVIoscow 

Joint Verification Experiment 

The security and arms control working 
group completed the technical details of 
the joint verification experiment (JVE) 
enabling us to sign the agreements on 
May 31, 1988. The technical agreements 
cover some 160 pages including 37 
annexes. ^ 

This is an important step toward 
agreement on effective verification meas- 
ures that would permit ratification of the 
Threshold T?st Ban Treaty (TTBT) and 
the Peaceful Nuclear Explosions Treaty 

The agreements on the JVE will 
provide the opportunity for each side to 
measure, using its preferred techniques, 
the yield of one nuclear explosion by the 
other party. 

At the conclusion of the joint verifi- 
cation experiment process, which will 
include analysis by each side and ex- 
change of data, the United States hopes 
that the Soviets will be in a position to 
accept routine U.S. use of CORRTEX 
[continuous reflectrometry for radius vs. 
time experiment] as an appropriate 
method of verification. We hope the joint 
verification experiment can be completed 
this summer. 

The two tests to be conducted will be 
greater than 100 kilotons and will ap- 
proach the TTBT limit of 150 kilotons. 
The U.S. test will be at the Nevada test 
site and the Soviet test will be at the 
Semipalatinsk test site. 

Peaceful Uses of Atomic Energy 

The U.S.-U.S.S.R. Agreement on Scien- 
tific and Tfechnical Cooperation in the 
Field of Peaceful Uses of Atomic Energy 
was originally signed in June 1973 by 
President Nixon and General Secretary 
Brezhnev. The Department of Energy 
administers the implementation of 
cooperation and has the programmatic 
and oversight responsibility for U.S. 
participation in activities under the 


The agreement provides for joint 
cooperation in the fields of fusion and high 
energy physics and will continue to serve 
as the basis for future bilateral activities 
in civilian uses of atomic energy. 

At the conclusion of the seventh 
meeting of the joint committee for the 
agreement, which concluded May 2, 1988, 
in Washington, the two sides endorsed a 
1-year extension of the agreement to 
permit the conclusion of amendments to 
the original intellectual property rights. 
The two sides expressed their interest in 
extending the agreement for a period of 
5-10 years when these amendments are 
completed. They also endorsed new work 
progi-ams in fusion and physics and signed 
into force a new Memorandum of Coop- 
eration on Civilian Nuclear Reactor 

In hght of the benefits resulting from 
this longstanding agreement and given 
the significance of the new nuclear safety 
accord, the two sides agreed that e.xten- 
sion of the agreement should be effected 
by an exchange of diplomatic notes on the 
occasion of the visit of President Reagan 
to the Soviet Union. 

Transportation Science and Tbchnology 

The major interest of the United States in 
pursuing cooperation is to achieve a 
higher degree of safety in national and 
international transportation systems by 
the exchange of technical information and 
operational experience with the Soviets. 
Specific areas for cooperation identified in 
the agreement are civil aviation naviga- 
tion systems, aviation medicine, and air 
accident investigation; railroad safety, 
including locomotive engineer selection 
and training, human factors affecting 
crew performance, and railway bridge 
inspection; highway bridge construction; 
and highway and traffic safety programs. 
No formal agreement on cooperation 
in transportation has existed between the 
United States and the Soviet Union since 
September 1983 when the Soviet Union 
shot down Korean Air Lines #007. At that 

time. President Reagan cancelled plans 
for negotiations for renewing the 1973 ; 
transportation agreement, thus allowir| 
it to lapse. Since then cooperative con- 
tacts have been limited to work in intei 
national organizations, such as the Int 
national Civil Aviation Organization 
(ICAO), and ad hoc bilateral meetings 
aviation safety problems. 

During the 1986 Reykjavik summi 
President Reagan and General Secret 
Gorbachev agreed that the two sides 
should explore interest in a new agree 
ment in bilateral transportation coopf 
tion. During 1987 the two sides ex- 
changed lists of possible areas for coop 
eration. They met in January 1988 in 
Washington for exploratory talks on 
these areas. Negotiations followed in 
April 1988 in Moscow and an agreeme) 
was initialed ad referendum in Washir 
ton on May 13, 1988. 

Maritime Search and Rescue 

The U.S. Coast Guard and the Soviets 
began discussions in 1985 in an effort i 
improve coordination between U.S. ai 
Soviet search-and-rescue centers in th 
North Pacific-Bering Sea area. The ai 
of these negotiations was to improve 
safety for seamen of all nations in the 
area. Further rounds of talks were hel 
1987 and 1988, the last round resultin 
conclusion of an agreement. 

Under this Search and Rescue 
Agreement, procedures are establish^ 
to coordinate search-and-rescue opera 
tions in the North Pacific and Bering i 
including provisions for effective com 
nication between U.S. and Soviet sea 
and-rescue centers and control and c 
dination of search activities. 

Comprehensive Fishing 

Since implementation of the Magnuso 
Fishery Conservation and Manageme 
Act in 1977, Soviet vessels have fishf 
U.S. waters under the terms of a Gov 
ing International Fisheries Agreemer 
Until recently U.S. fishermen were u 
able to utilize the total available catch 
U.S. waters off Alaska, and surplus 
stocks were allocated to the Soviet U 
and other nations for direct harvest a 
mutually beneficial joint ventures. I 

Department of State Bulletin/August J 

Moscow Summit 

V ■, now that U.S. fishermen are able td 
a.est nearly all available fish in U.S. 
■.■;M-'^, they are interested in fishing 
iiM unities in waters of other nations. 
I ifsult, Secretary Shultz and Foreign 
\>U'V Shevardnadze signed an interim 
•nis agreement on February 21, 
dividing U.S. fishermen equal 
o Soviet waters. U.S. fishermen 
, ; .inarily interested in fishing for 
• ', pdUuck, and other species off the 
;i (.iiast of the Soviet Union. 

We have now negotiated a new 5- 
t ■ Comprehensive Fishing Agreement 
' ! the Soviet Union replacing both the 
filling International Fisheries Agi-ee- 
t and the interim fishing agi-eement of 
I iiary 21. The agreement will govern, 
, r similar terms, access to the 200- 
i£ ical-mile zones of both countries by 
if ng vessels of the other country. 
J er its terms, U.S. and Soviet fisher- 
II are likely to undertake joint ventures 
IT other cooperative arrangements in 
b zones of the two countries. 

The Comprehensive Fishing Agree- 
n t also identifies areas of mutual inter- 
ns n the field of fishery science and 
;o ervation, such as fisheries in the 
n rnational waters of the Bering Sea 
ir high seas salmon fisheries. It also 
!S blishes a U.S. -Soviet Intergovern- 
n: tal Fisheries Committee to review, 
>r regular basis, all aspects of the 
)i eral fisheries relationship. 

> er Space 

iipril 1987, Secretary Shultz and For- 
I Minister Shevardnadze signed the 
eement for Cooperation in the Explo- 
Dn and Use of Outer Space for Peace- 
purposes. The agreement provides for 
establishment of five joint working 
ips in the fields of solar system explo- 
on, space astronomy and astro- 
sics, earth sciences, solar ten-estrial 
sics, and space biology and medicine, 
five joint working groups have met. 
ir agendas have been based on one or 
■e of the initial 16 cooperative projects 
ch are listed in the annex to the Outer 
ce Agreement. 

In light of the progress made under 
Outer Space Agreement, both sides 

Secretary Shultz and Foreign Minister 
Shevardnadze shake hands after signing 
the Soviet-U.S. Strategic Ballistic Mis- 
sile Launch Notification Agreement. 
The agreement is a practical new 
step designed to reduce the risk of misin- 
terpretation, miscalculation, or accident. 
In the START negotiations, both sides 
have proposed that there be notification 
of launches of ICBMs and SLBMs. Both 
sides launch such missiles from time to 
time for purposes of testing, training, 
and maintaining their reliability. The 
sides have very similar language to im- 
plement such notifications in the joint 

draft text of the START agreement in 
Geneva. Given this common approach to 
launch notification, the United States 
proposed — at the meeting of foreign min- 
isters in mid-May in Geneva — that we 
separate this provision from the START 
treaty and reach an agreement on this 
subject now. The agreement requires no- 
tification of all ICBM and SLBM 
launches at least 21 hours in advance. 
The notification would include the 
planned date of launch, the launch area, 
and the impact area. The notifications 
will be made through the Nuclear Risk 
Reduction Centers. 

i)s!ffl)artment of State Bulletin/August 1988 


have agreed to continue to expand coop- 
eration in space science. They have 
agreed to expand exchanges of space 
science data and exchanges of scientists, 
as well as to exchange opportunities for 
the flight of scientific instruments on each 
other's manned and unmanned space- 
craft. Finally they have undertaken to 
exchange the results of independent na- 
tional studies on future unmanned solar 
system exploration missions as a means of 
assessing prospects for future U.S.- 
Soviet cooperation on such missions. 


The United States and the U.S.S.R. each 
operates low frequency long-range radio- 
navigation systems (U.S. — Loran-C; 
U.S.S.R. — Chayka). Because of the na- 
ture of these systems, there e.xists the 
possibility of their interfering with each 
other, degrading their usefutaess. Inter- 
ference may render some portions of the 
systems unusable, thus creating situ- 
ations which could result in navigation 
safety problems. 

To deal with such potential problems 
and to provide safe and efficient radio- 
navigation services, the U.S. Coast 
Guard and the Soviets began talks in 
1980. Further rounds of discussions were 
held in 1985, 1987, and 1988 dealing with 
technical issues, including developing 
common terms for the glossary of radio- 
navigation systems, resolving interfer- 
ence problems, and exploring ways in 
which the systems might be made inter- 

In Leningrad in April 1988, the Coast 
Guard and the Soviets concluded work on 
an agreement establishing operational co- 
ordination between a U.S. radio- 
navigation station in Alaska and three 
Soviet stations in Siberia, providing cov- 
erage in the North Pacific and Bering Sea 
areas. The agreement will provide for 
safer and more efficient marine and avia- 
tion navigation in those areas. 

Cooperation and Exchanges, 1989-91 

On November 21, 1985, at the Geneva 
summit. President Reagan and General 
Secretary Gorbachev witnessed the sign- 
ing by Secretary Shultz and Foreign Min- 
ister Shevardnadze of a new bilateral 
agreement on cooperation and exchanges 
in the broad fields of culture, informa- 
tion, and education. The agreement, 
known as the U.S.-U.S.S.R. General 
Exchanges Agreement, is in force for 6 
years (1986-91) and renews an official 
exchange relationship that dates back to 
the late 1950s. There was no intergovern- 
mental agreement during the 6 years fol- 
lowing the Soviet invasion of Afghani- 

The General Exchanges Agreement 
serves two functions. 

First, it mandates specific exchanges 
to be carried out by each government, 
such as exchanges of performing artists 
and groups, distribution of USIA's Rus- 
sian-language magazine America and the 
Soviet Enghsh-language pubhcation So- 
viet Life , a variety of educational and 
academic exchanges, and an exchange of 
traveling thematic exhibitions. 

Second, the General Exchanges 
Agreement encourages the broadest pos- 
sible people-to-people contact between 
the United States and the Soviet Union. 
Many of these pi'ograms are handled by 
the Office of the President's U.S. -Soviet 
Exchange Initiative at the U.S. Infor- 
mation Agency (USIA) in cooperation 
with the U.S. private sector; many others 
are entirely private. 

The agreement signed at the summit 
is an implementing accord for the next 3 
years (1989-91) under the General Ex- 
changes Agreement. It is no mere exten- 
sion of the previous agreement, however, 
but an expansion and an improvement 
which reflects the good will of both 

Some of the key areas of improve- 
ment in the new program are: 

• Agreement to conduct negotia- 
tions during this period on the opening of 

culture and information centers with tl i 
goal of signing an agreement to this | 
effect; ! 

• Strong support for a variety of • 
exchanges of young people, at the highi 
school and university level, including 1 
guage study, regular academic courses 
summer programs, camps, home visits 
and so forth; 

• Increased distribution of the 
magazine America; 

• The first official exchanges be- 
tween conservatories and art institute: 

• Improved financial conditions fc 
U.S. scholars in the U.S.S.R.; and 

• Language reflecting a wide var 
ety of agreements between U.S. and 
Soviet organizations such as the Libra 
of Congress and the Lenin Library, th 
National Archives and the U.S.S.R, N 
Administration for Archives, as well 
other projects, such as a possible U. 
U.S.S.R. cultural exhibition. 

The establishment of an Americai 
culture and information center in the 
Soviet Union has been a longstanding 
objective of the U.S. Government. Th 
U.S. Information Agency operates sue 
centers in scores of countries around t 
world and has long believed that the 
establishment of such centers on a 
reciprocal basis would be a major, eve 
historic, step in the development of ou 
bilateral relationship. 

Under the General Exchanges 
Agreement, we have now agreed with 
Soviet Union to conduct negotiations ( 
the opening of culture and informatior 
centers between now and 1991 with th 
goal of signing an agreement to this ef 
and establishing such centers as soon 

Culture and information centers £ 
gage in a vidde range of activities: 

• Lending libraries for books, pe 
odicals, videotapes, and even video eq 

• Seminars and round-tables on 
topics of interest; 

• Participation in live satellite in 

Department of State Bulletin/August V 

Moscow Summit 

• Shdvvings of films and live televi- 

• Art shows and exhibits; 

• Engligh-language teaching and 
si dent counseling; and 

• Presentation of speakers on topics 

■ lit crest. 

H :h School Exchange Proposal 

I 'resident proposed, and General 

- n tary Gorbachev agreed, to expand 
i i'l-csident's U.S. -Soviet Exchange 
.; laiive, established by agreement in 
J ie\a in 1985. 

Negotiations will begin immediately 
u reate student exchange programs 
bt ween 100 American and 100 Soviet 
fa 1 schools per year, with a goal of 
"• hanging 1,000-1,500 high school stu- 
ts ill each direction within 2 years. 
!■ current agreements would allow no 
■i than 50 Soviet and American stu- 
t- pursuing studies in the other coun- 
u annually.) 

Specific programs would be negoti- 
ai i for the exchange schools, but the 
g eral guidelines would provide for stu- 
d ts to study in each other's schools for 
p iods of at least 1 month. The program 
w lid focus on academics with a foreign 
la ^age emphasis. 

The goal in the first year would be to 
d elop student exchange programs in 

II > public and private schools and to 
il 100 schools in each country in the 

5( )nd year. 

Currently there are over 500 U.S. 
schools with some Russian language pro- 
grams; another 300 schools have potential 
for such programs. 

Many Soviet students would live with 
American families. The American stu- 
dents would either stay in Soviet homes 
or live in dormitories with shared home 
hospitality and meals shared with a Soviet 

The host school would arrange at 
least one trip for visiting students to a 
city for a program of sightseeing and 
cultural events. 

The American Council of Tfeachers of 
Russian (ACTR) and the National Asso- 
ciation of Secondary School Principals 
(NASSP) have been actively involved in 
U.S.-U.S.S.R. student exchanges and 
are interested in being involved in this 
project. Other private sector organiza- 
tions will be invited to support the pro- 
gram. There are already three such ex- 
changes in existence. 

• Phillips Academy in Andover, 
Mass., and the Physics Mathematics In- 
stitute in Novosibirsk signed an agree- 
ment for an annual 5-week exchange of 10 
students and two leaders. The schools 
conducted the first exchange in March- 
April 1987 and the second exchange in 
September-Octoer 1987. The Novosi- 
birsk students met with R-esident Rea- 
gan in October 1987. The third exchange 
is scheduled for September-October 

• Choate Rosemary Hall in 
Walhngford, Conn., and Moscow School 
#18 signed an agreement in January 1988 
for an annual 4-week exchange of five 
students and one leader. The first group 
of Moscow School #18 students has been 
studying at Choate from April 17 to May 
20. The first group of Choate students will 
visit Moscow in September 1988. 

• Under the rubric of sister-cities 
exchange, the McDonogh School in Balti- 
more sent a group of students to Odessa 
for 3 weeks in September 1987 and Odessa 
School #119 sent a group of students to 
Baltimore for 3 weeks in March-April 
1988. The Odessa school students met 
with Vice President Bush in late March. 
The next exchange is scheduled for the 
spring of 1989. 

These are private schools in the 
United States. The first public school 
invitation (Lakeside School in Seattle, 
Wash. , invited Moscow School #20) has 
not yet been accepted. 

'For text of the agreement (without an- 
nexes), see p. 67. ■ 

|>artment of State Bulletin/August 1988 


Prime Minister Mulroney and President Reagan at welcoming ceremony. 




Toronto Economic Summit 

President Reagan attended the lith economic summit 

of the industrialized nations in Toronto 

June 19-21, 1988, which was hosted by 

Canadian Prime Minister Brian Mulroney. 

The other participants were 

President Francois Mitterrand (France), 

Chancellor Helmut Kohl (West Germany), 

Prime Minister Ciriaco De Mita (Italy), 

Prime Minister Noboru Takeshita (Japan), 

Prime Minister Margaret Thatcher (United Kingdom), 

and Jacques Delors, President 

of the Commission of the European Communities. 

J NE 20, 1988 

e t-West 

I. 'e the leaders of our seven countries, and 
i •e|)resentatives of the European Commu- 
li , uphold common principles of freedom, 

■ lit for individual rights, and the desire of 
III! t(] Uve in peace under the rule of law. 
I'^nples stand in solidarity within the 

■ -irk of our existing alliances for the 
I freedom, to safeguard democracy and 
verity which it has produced. In our 
hins we considered how these goals and 
I Duld be pursued in the field of foreign 

■ ii's. particularly with regard to East-West 

We discussed a wide range of regional 

i <tiiins and these discussions are continuing 

' Hii;h(iut the Summit. 
\\V confirmed our belief in constructive 
n-alistic dialogue and cooperation, in- 
iiiK arms control, human rights, and re- 

- lal is.-iues, as the way to build stabiUty 
'. >in East and West and enhance security 
>\\>-y levels of arms. We also reaffmned 

. . fur the foreseeable future nuclear deter- 

■ .-e and adequate conventional strength are 
.eniarantees of peace in freedom. 

In several important respects changes 
f taken place in relations between Western 

■ ntnes and the Soviet Union since we last 
. For our part this evolution has come 

iiut because the industrialized democracies 

have been strong and united. In the Soviet 
Union greater freedom and openness will offer 
opportunities to reduce mistrust and build 
confidence. Each of us will respond positively 
to any such developments. 

5. We welcome the beginning of the Soviet 
withdrawal of its occupation troops from Af- 
ghanistan. It must be total and apply to the 
entire country. The Afghan people must be 
able to choose their government freely. Each of 
us confirms our willingness to make our full 
contribution to the efforts of the international 
community to ensure the return of the refugees 
to their homeland, their resettlement, and the 
reconstruction of their country. We now look to 
the Soviet Union to make a constructive 
contribution to resolving other regional con- 
flicts as well. 

6. Since our last meeting, progress has been 
made between the United States and the 
Soviet Union in agreeing to reduce nuclear 
weapons in a manner which accords fully with 
the security interests of each of our countries. 
The INF [Intermediate-Range Nuclear 
Forces] Treaty, the direct result of Western 
firmness and unity, is the first treaty ever 
actually to reduce nuclear arms. It sets vitally 
important precedents for future arms control 
agreements; asymmetrical reductions and in- 
trusive verification arrangements. We now 
look for deep cuts in U.S. and Soviet strategic 
offensive ai-ms. We congratulate President 
Reagan on what he has already accomplished, 
along with General Secretary Gorbachev, to- 
wards this goal. 

7. Nonetheless, the massive presence of 
Soviet conventional forces in Eastern Europe, 

the ensuing conventional superiority of the 
Warsaw Pact, and its capacity to launch 
surprise attacks and large scale offensive 
operations, lie at the core of the security 
problem in Europe. The Soviet military 
buildup in the Far East is equally a major 
source of instability in Asia. These threats 
must be reduced. Our goal is enhanced security 
and stability at lower levels of forces, after 
having ehminated the present imbalances. We 
seek the early establishment of a comprehen- 
sive, effectively verifiable, and truly global ban 
on chemical weapons. 

8. Genuine peace cannot be established 
solely by arms control. It must be firmly based 
on respect for fundamental human rights. We 
urge the Soviet Union to move forward in 
ensuring human dignity and freedoms and to 
implement fully and strengthen substantially 
its commitments under the Helsinki process. 
Recent progi'ess must be enshrined in law and 
practice, the painful barriers that divide people 
must come down, and the obstacles to emigra- 
tion must be removed. 

9. We pay special attention to the countries 
in Eastern Europe. We encourage them to 
open up their economies and societies, and to 
improve respect for human rights. In this 
context we support the continuation and 
strengthening of the Helsinki process. 

10. We take positive note of Eastern coun- 
tries' growing interest in ending their eco- 
nomic isolation, for example in the estab- 
lishment and development of relations with the 
European Community. East-West economic 
relations can be expanded and serve our 

«partment of State Bulletin/August 1988 


Summit participants from left to right: President Delors, 
Prime Minister De Mita, Prime Minister Thatcher, Presi- 

dent Reagan, Prime Minister Mulroney, President Mitter- 
rand, Chancellor Kohl, and Prime Minister Takeshita, 

common interests so long as the commercial 
basis is sound, they are conducted within the 
framework of the basic principles and the rules 
of the international trade and payments sys- 
tem, and are consistent with the security 
interests of each of our countries. 


11. We strongly reaffirm our condemnation of 
terrorism in all its forms, including the taking 
of hostages. We renew our commitment to 
policies and measures agreed at previous 
Summits, in particular those against state- 
sponsored terrorism. 

12. We strongly condemn recent threats to 
air security, in particular the destruction of a 
Korean airliner and the hijacking of a Kuwaiti 
airliner. We recall the principle affirmed in 
previous declarations that terrorists must not 
go unpunished. We appeal to all countries who 
are not party to the international conventions 
on civil aviation security, in particular The 
Hague Convention, to accede to those 

13. We express support for work cuiTently 
under way in the International Civil Aviation 
Organization aimed at strengthening interna- 
tional protection against hijackings. We wel- 
come the most recent declaration adopted by 

the ICAO Council which endorses the prir 
that hijacked aircraft should not be allowe 
take off once they have landed, e.xcept in 
circumstances as specified in the ICAO de 

14. We welcome the adoption this year i 
Montreal and Rome of two international a 
ments on aviation and maritime security t 
enhance the safety of travellers. 

15. We reaffirm our determination to co 
tinue the fight against terrorism through i 
application of rule of law, the policy of no 
concessions to terrorists and their sponsoi 
and international cooperation. 


Department of State Bulletin/ August ; 




'he illegal use of drugs and the illicit 
.eking in them poses grave risks to the 
,es of Summit countries as well as the 
,es of source and transit countries. There 
urgent need for improved international 
^ration in all appropriate fora on programs 
unter all facets of the illicit drug problem, 
rticular production, trafficking, and fi- 
ng of the drug trade. The complexity of 
roblem requires additional international 
•ration, in particular to trace, freeze, and 
5cate the proceeds of drug traffickers, and 
rb money laundering. 
J We look foi-ward to the successful nego- 
ai n in Vienna in November of a United 
fa ms Convention on illicit trafficking. 
i We supported the initiative of the Gov- 
nj ent of the United States for a special task 
)r to be convened to propose methods of 
iving cooperation in all areas including 
gl nal, bilateral, and multilateral efforts in 
K ght against narcotics. 

IE 20, 19881 

ollowing represents an agreed summary 
' discussions on the Middle East, South 
I a, and Cambodia. 

le East 

xpress our deep concern at the increasing 
bility in the Near East. The current 
nee in the Occupied Tbrritories is a cleai- 
that the status quo is not sustainable. An 

negotiated settlement to the underlying 
i/IsraeU dispute is essential. We declare ou>- 
ort for the convening of a properly struc- 
1 international conference as the appropri- 
ramework for the necessary negotiations 
een the parties directly concerned. In this 
oective we salute current efforts aimed at 
•ving a settlement, particulai-ly the initia- 
pui-sued by Mr Shultz since February. We 

the parties to cooperate fully in the seai'ch 


5 have pursued our consultations about the 
nuing war between Iran and Iraq, which 
lins a source of profound concern to us. We 
irm our support for Security Council Reso- 
n 598, which was adopted unanimously. We 
ess our warm appreciation for the efforts of 
secretary General to work for a settlement 

on this basis and reiterate oiu- firni determina- 
tion to ensure implementation of this man- 
datory resolution by a follow-up resolution. We 
condemn the use of chemical weapons by either 
party, deplore proliferation of balhstic missies in 
the region, and renew ow commitment to up- 
hold the piinciple of freedom of navigation in 
the Gulf. 

South Africa 

We declare our abhon-ence of apartheid, which 
must be replaced through a process of genuine 
national negotiations by a non-racial democ- 

We expressed our urgent opinion on three 
particular matters: 

(1) All legal options available in South Africa 
should be used to secure clemency for the 
Sharpeville Six; 

(2) The enactment of legislation designed to 
deprive anti-apartheid organisations of over- 
seas aid would place severe strain on the 
relations each of us has with South Africa; 

(3) We strongly support the current nego- 
tiations seeking national reconciliation within 
Angola, an end to the Angola/Namibia conflict, 
and early implementation of UN Security 
Council Resolution 435. 


As the recent message from Prince Sihanouk 
has reminded us, the continuing Cambodian 
conflict and the suffering of the Cambodian 
people is of deep concern. We join the vast 
majority of the nations of the world in calling 
for the prompt withdrawal of all Vietnamese 
troops. We support a political settlement in 
Cambodia which will provide for Cambodian 
self-determination and lead to the re- 
emergence of a free and independent 

JUNE 21, 1988 

1. We, the Heads of State or Government of 
seven major industrial nations and the Presi- 
dent of the Commission of the European 
Communities, have met in Toronto for the 
fourteenth annual Economic Summit. We have 
drawn lessons from the past and looked ahead 
to the future. 

2. Over the past fourteen years, the world 
economy and economic policy have undergone 

ysl| lartment of State Bulletin/ August 1988 

profound changes. In particular, the informa- 
tion-technology revolution and the globaliza- 
tion of markets have increased economic inter- 
dependence, making it essential that govern- 
ments consider fully the international dimen- 
sions of their deliberations. 

3. We observed a sharp contrast between the 
1970s and 1980s. The former was a decade of 
high and rising inflation, declining productivity 
growth, policies dominated by short-term 
considerations, and frequently inadequate in- 
ternational policy cooperation. In the 1980s 
inflation has been brought under control, 
laying the basis for sustained strong growth 
and improved productivity. The result has 
been the longest period of economic growth in 
post-war history. However, the 1980s have 
seen the emergence of large external imbal- 
ances in the major industrial economies, 
greater exchange rate volatility, and debt- 
servicing difficulties in a number of developing 
countries. Our response to these developments 
has been an increased commitment to interna- 
tional cooperation, resulting in the intensified 
process of policy coordination adopted at the 
1986 Tokyo Summit and further strengthened 
at the Venice Summit and in the Group of 

4. Summits have proven an effective forum 
to address the issues facing the world econ- 
omy, promote new ideas, and develop a com- 
mon sense of purpose. Especially in the 1980s 
they have helped bring about an increasing 
recognition that the eradication of inflation and 
of inflationary expectations is fundamental to 
sustained gi-owth and job creation. That recog- 
nition has been underpinned by a shift from 
short-term considerations to a medium-term 
framework for the development and implemen- 
tation of economic poUcies, and a commitment 
to improve efficiency and adaptability through 
greater reliance on competitive forces and 
structural reform. Over this period we have 
also singled out for concerted attention a 
number of other issues of decisive importance: 
the overriding need to resist protectionism and 
strengthen the open, multilateral trading sys- 
tem; to maintain and strengthen an effective 
strategy to address the challenge of develop- 
ment and alleviate the burden of debt; and to 
deal with the serious nature of the world 
agricultural problem. 

5. Since we last met, our economies have 
kept up the momentum of growth. Employ- 
ment has continued to expand generally, infla- 
tion has been restrained, and progress has 
been made toward the correction of major 
external imbalances. These encouraging devel- 
opments are cause for optimism, but not for 
complacency. To sustain non-inflationary 
growth will require a commitment to enhanced 
cooperation. This is the key to credibility and 



Macroeconomic Policies 
and Exchange Rates 

6. The Tokyo and Venice Summits have devel- 
oped and strengthened the process of coordi- 
nation of our economic policies. Developments 
in the wake of the financial strains last October 
demonstrate the effectiveness and resilience of 
the arrangements that have emerged. The 
policies, the short-term prospects, and the 
medium-term objectives and projections of our 
economies are being discussed regularly in the 
Group of Seven. The policies and performance 
are assessed on the basis of economic indica- 
tors. We welcome the progress made in refin- 
ing the analytical use of indicators, as well as 
the addition to the existing indicators of a 
commodity-price indicator. The progress in 
coordination is contributing to the process of 
further improving the functioning of the inter- 
national monetary system. 

7. Fiscal, monetary, and structural policies 
have been undertaken to foster the adjustment 
to more sustainable economic and financial 
positions in the conte.xt of non-inflationary 
growth. Efforts in those directions, including 
continued reduction of budetary deficits, will 
continue. We need to maintain vigilance 
against any resurgence of inflation. We reaf- 
firm our determination to follow and, wherever 
feasible, strengthen our agreed strategy of 
coordinated efforts to reduce the growth of 
spending in countries with large e.xtemal 
deficits and to sustain the momentum of 
domestic demand in those with large external 
surpluses. The reduction of large external 
imbalances, however, will require not only our 
cooperative efforts, but also those of smaller 
economies, including newly industrializing 
economies, with large external surpluses. 

8. The exchange rate changes in the past 
three years, especially the depreciation of the 
U.S. dollar against the Japanese yen and the 
major European cuiTencies, have played a 
major role in the adjustment of real trade 
balances. We endorse the Group of Seven's 
conclusion that either excessive fluctuation of 
exchange rates, a further dechne of the dollar, 
or a rise in the dollar to an extent that becomes 
destabilizing to the adjustment process, could 
be counterproductive by damaging growth 
prospects in the world economy. 

Structural Reforms 

9. International cooperation involves more 
than coordination of macroeconomic policies. 
Structural reforms complement macro- 
economic policies, enhance their effectiveness, 
and provide the basis for more robust growth. 

We shall collectively review our progress on 
structural reforms and shall strive to integrate 
structural policies into our economic coordina- 
tion process. 

10. We will continue to pursue structural 
reforms by removing barriers, unnecessary 
controls, and regulations; increasing competi- 
tion, while mitigating adverse effects on social 
groups or regions; removing disincentives to 
work, save, and invest, such as through tax 
reform; and by improving education and train- 
ing. The specific priorities that each of us has 
identified are outlined in the attached Annex 
on Structural Reforms. 

11. We welcome the further development of 
the OECD's [Organization for Economic Coop- 
eration and Development] surveillance of 
structural reforms. Such surveillance would be 
particularly useful in improving pubhc under- 
standing of the reforms by revealing their 
impact on government budgets, consumer 
prices, and international trade. 

12. One of the major structural problems in 
both developed and developing countries is in 
the field of agricultural policies. It is essential 
that recent significant policy reform efforts 
undertaken by a number of parties be contin- 
ued through further positive action by all 
Summit participants. More market-oriented 
agricultural policies should assist in the 
achievement of important objectives such as 
preserving rural areas and family farming, 
raising quality standards, and protecting the 
environment. We welcome the OECD's in- 
creased emphasis on structural adjustment and 
development in the rural economy. 

13. Financial and technological innovations 
are rapidly integi'ating financial markets inter- 
nationally, contributing to a better allocation of 
capital but also increasing the speed and extent 
to which disturbances in one country may be 
transmitted to other countries. We will con- 
tinue to cooperate with other countries in the 
examination of the functioning of the global 
financial system, including securities markets. 


14. A successful Uruguay Round will assure 
the integrity of an open, predictable multilat- 
eral trading system based on clear i-ules and 
will lead to trade expansion and enhanced 
economic growth. At Punta del Este, Ministers 
committed themselves to further trade liber- 
alization across the wide range of goods and 
services, including such new areas as trade- 
related intellectual property and trade-related 
investment measures, to strengthen the multi- 
lateral trading system, and to allow for early 
agreement where appropriate. Countries must 
continue to resist protectionism and the temp- 
tation to adopt unilateral measures outside the 

framework of GATT [General Agreement 
Tariffs and Trade] rules and to allow for e; 
agreements where appropriate. In order t 
preserve a favourable negotiating climate 
participants should conscientiously impler 
the commitments to standstill and rollbacl 
they have taken at Punta del Este and sul 
quent international meetings. 

15. We strongly welcome the Free Trac 
Agreement between Canada and the US.;* 
the steady progi'ess towards the target o! 
European Community to complete the ini 
market by 1992. It is our policy that thesi 
developments, together with other moves 
wards regional cooperation in which our c 
tries are involved, should support the ope 
multilateral trading system and catalyze i 
liberalizing impact of the Ui-uguay Round 

It). We attach major importance to stn 
ening the GATT itself. It is vital that the 
become a more dynamic and effective org 
zation, particularly in regard to the surv( 
lance of trade policies and dispute settlen 
procedures, with greater Ministerial invc 
ment, and strengthened linkages with otl 
international organizations. GATT discip' 
must be improved so that members accei 
their obligations and ensure that dispute: 
resolved speedily, effectively, and equita 

17. Trade plays a key role in developm 
We encourage the developing countries, 
cially the newly industrializing economie: 
undertake increased commitments and ol 
tions and a greater role in the GATT, coi 
surate with their importance in internatic 
trade and in the international adjustmeni 
process, as well as with their respective 
of development. Equally, developed cour 
should continue to strive to ensure more 
markets for the exports of developing coi 

18. In agriculture, continued political i 
petus is essential to underpin the politica 
difficult efforts at domestic policy reform 
to advance the equally difficult and relat( 
process of agricultural trade refonn. Alt 
significant progress was made in 1987 in 
Uruguay Round negotiations, with the t; 
of major proposals, it is necessary to ens 
that the Mid-Tferm Review in Montreal ir 
December, 1988 adds impetus to the neg' 
tions in this as in other fields. We suppor 
efforts to adopt a framework approach, 
ing short as well as long-term elements v 
will promote the reform process as launc 
last year and relieve current strains in a 
tural markets. This would be facilitated 1 
device for the measurement of support a) 
protection. Also, ways should be develop 
take account of food security and social c 
cems. To move the issue forward, and nc 
among other things the diversity of our a 
cultural situations, our negotiators in Ge 
must develop a framework approach whi' 


Department of State Bulletin/August 

les short-term options in line with long- 
goals concerning the reduction of all 
, and indirect subsidies and other meas- 
iffecting directly or indirectly agricultural 

The objective of the framework ap- 
h would be to make the agincultural 
• more responsive to market signals. 
As the Uruguay Round enters a more 
ilt phase, it is vital to ensure the momen- 
if these ambitious negotiations. The Mid- 
Review will provide a unique opportu- 
send a credible political signal to the 
ig world. The greatest possible advance 
be made in all areas of the negotiations, 
ling, where appropriate, decisions, so as 
ch before the end of the year the stage 
? tangible progress can be registered. To 
nd, we support efforts to adopt a frame- 
approach on all issues in the negotiations, 
iform of the GATT system and rules, 
5t access, agriculture, and new issues 
as trade in services, trade-related intel- 
il property rights, and trade-related in- 
lent measures). For our part, we are 
jtted to ensure that the Mid-Tbrm Re- 
establishes a solid base for the full and 
ete success of the negotiations, in accord- 
Adth the Punta del Este Declai-ation. 
We all recognize the critical and expand- 
ile of international investment in the 
economy and share a deep concern that 
ised protectionism would undermine the 
its of open investment policies. We re- 
to progressively liberalize international 
:ment policies and urge other countries to 


ertain newly industrializing economies 
s) in the Asia-Pacific region have become 
isingly important in world trade. Al- 
h these economies differ in many impor- 
■espects, they are all characterized by 
nic. e.xport-led growth which has allowed 
to treble their share of world trade since 
Other outward-oriented Asian countries 
so beginning to emerge as rapidly- 
mg exporters of manufactures. With in- 
'? ed economic importance come gi-eater 
0* fiational responsibilities and a strong mu- 
nterest in improved constructive dialogue 
ooperative efforts in the near term 
^ sen the industrialized countries and the 
< I NIEs, as well as the other outward- 
ted countries in the region. The dialogue 
ooperative efforts could centre on such 
fil r areas as macroeconomic, currency, 
(iilf tural, and trade to achieve the intema- 
* 1 adjustment necessary for sustained, 
oiiri ced growth of the world economy. We 


encourage the development of informal proc- 
esses which would facilitate multilateral dis- 
cussions of issues of mutual concern and foster 
the necessary cooperation. 


22. The performance of developing countries is 
increasingly important to the world economy. 
Central to the prospects of the developing 
countries are a healthy global economic envi- 
ronment and an open ti-ading system, adequate 
financial flows, and, most important, their 
commitment to appropriate economic reform. 
The problems of many heavily indebted devel- 
oping countries are a cause of economic and 
political concern and can be a threat to political 
stability in developing countries. Several coun- 
tries find themselves in that situation in 
various regions of the world: Latin America, 
Africa, and the Pacific, particularly the Philip- 
pines, and that merits our special attention. 

Middle-Income Countries 

23. A number of highly indebted middle- 
income countries continue to have difficulties 
servicing their external debt and generating 
the investment necessary for sustainable 
growth. The market-oriented, growth-led 
strategy based on the case-by-case approach 
remains the only viable approach for overcom- 
ing their external debt problems. 

24. We are encouraged that many indebted 
countries have begim the difficult process of 
macroeconomic adjustment and structural re- 
form necessary for sustained progress, encour- 
aging the return of flight capital and new in- 
vestment flows. The success of these efforts is 
essential for improving the economic perform- 
ance and strengthening the creditworthiness of 
these countries. 

25. Official financing has played a central 
role in the debt strategy through the Paris 
Club (US$73 billion of principal and interest 
have been consolidated since 1983) and the 
flexible policies of export credit agencies. The 
international financial institutions will continue 
to have a pivotal role. We endorse the recent 
initiatives taken by the International Mone- 
tary Fund to strengthen its capacity to support 
medium-term programs of macroeconomic ad- 
justment and sti-uctural refoi-m and to provide 
greater protection for adjustment programs 
from unforeseen external developments. We 
strongly support the full implementation of the 
World Bank's US$75 billion General Capital 
Increase to strengthen its capacity to promote 
adjustment in middle-income countries. We 
also support greater awareness by interna- 
tional financial institutions of the environ- 
mental impact of their development programs. 

artment of State Bulletin/ August 1988 



26. Commercial banks have played an impor- 
tant role in supporting debtor countries' re- 
form efforts through an expanded menu of 
financing options which has facilitated the 
channelling of commercial bank lending into 
productive uses. Their continued involvement 
is indispensable to the debt strategy. In this 
regard, the World Bank and IMF can play an 
important catalytic role in mobilizing additional 
financing from private (and official) sources in 
support of debtor countries' adjustment pro- 

27. We note that in recent years there has 
been increasing recourse to innovative financ- 
ing techniques. The important characteristics 
of these techniques are that they are volun- 
tary, market-oriented, and applied on a case- 
by-case basis. The "menu approach" has 
engendered new financial flows and, in some 
cases, reduced the existing stock of debt. The 
flexibility of the present strategy would be 
enhanced by the further broadening of the 
menu approach and the encouragement of 
innovative financing techniques to improve the 
quality of new lending, but particular initia- 
tives would have to be carefully considered. 

28. International direct investment plays an 
important role in spurring economic gi-owth 
and sti-uctural adjustment in developing coun- 
tries. Thus it contributes to alleviating debt 
problems. Developing countries should wel- 
come and encourage such investment by creat- 
ing a favourable investment cHmate. 

Debt to the Poorest 

29. An increase in concessional resource flows 
is necessary to help the poorest developing 
countries resume sustained growth, especially 
in cases where it is extremely difficult for them 
to service their debts. Since Venice, progress 
in deahng with the debt burden of these 
countries has been encouraging. Paris Club 
creditors are rescheduling debt at extended 
grace and repayment periods. In addition, the 
recent enhancement of the IMF's Structural 
Adjustment Facility; the World Bank and 
Official Developing Assistance (ODA) agen- 
cies' enhanced program of co-financing; and 
the fifth replenishment of the African Develop- 
ment Fund will mobilize a total of more than 
US$18 billion in favour of the poorest and most 
indebted countries undertaking adjustment 
efforts over the period 1988/90. Out of this 
total, US$15 bilHon will be channelled to 
sub-Saharan African countries. 

30. We welcome proposals made by several 
of us to ease further the debt service burdens 
of the poorest countries that are undertaking 
internationally approved adjustment pro- 
grams. We have achieved consensus on 
rescheduling official debt of these countries 
within a framework of comparability that 


allows official creditors to choose among con- 
cessional interest rates usually on shorter 
maturities, longer repayment periods at com- 
mercial rates, partial write-offs of debt service 
obligations during the consolidation period, or 
a combination of these options. This approach 
allows official creditors to choose options con- 
sistent with their legal or budgetary con- 
straints. The Paris Club has been urged to 
work out necessary technicalities to ensure 
comparability by the end of this year at the 
very latest. This approach will provide benefits 
over and above the impressive multilateral 
agreements to help the poorest countries over 
the past year. We also welcome the action 
taken by a number of creditor governments to 
write-off or otherwise remove the burden of 
ODA loans, and also urge countries to maintain 
a high grant element in their future assistance 
to the poorest. 


31. We agree that the protection and enhance- 
ment of the environment is essential. The 
report of the World Commission on Environ- 
ment and Development has stressed that 
environmental considerations must be inte- 
gi-ated into all areas of economic policy-making 
if the globe is to continue to support human- 
kind. We endorse the concept of sustainable 

32. Threats to the environment recognize no 
boundaries. Their urgent nature requires 
strengthened international cooperation among 
all countries. Significant progress has been 
achieved in a number of environmental areas. 
The Montreal Protocol on Substances that 
Deplete the Ozone Layer is a milestone. All 
countries are encouraged to sign and ratify it. 

33. Further action is needed. Global climate 
change; air, sea, and fresh water pollution; acid 
rain; hazardous substances; deforestation; and 
endangered species require priority attention. 
It is, therefore, timely that negotiations on a 
protocol on emissions of nitrogen oxides within 
the framework of the Geneva Convention on 
Long-range Transboundary Air Pollution be 
pursued energetically. The efforts of the 
United Nations Environment Program 
(UNEP) for an agreement on the transfrontier 
shipment of hazardous wastes should also be 
encouraged as well as the establishment of an 
inter-governmental panel on global climate 
change under the auspices of UNEP and the 
Worid Meteorological Organization (WMO). 
We also recognize the potential impact of 
agriculture on the environment, whether nega- 
tive through over-intensive use of resources or 
positive in preventing desertification. We wel- 
come the Conference on the Changing Envi- 
ronment to be held in Tbronto next week. 



34. We, the Heads of State or Government, 
and the representatives of the European Com- 
munity, beheve that the Economic Summits 
have strengthened the ties of sohdarity, both 
political and economic, that exist between our 
countries and that thereby they have helped to 
sustain the values of democracy that underlie 
our economic and political systems. Our annual 
meetings have provided the principal opportu- 
nity each year for the governments of the 
major industrialized countries to reflect, in an 
informal and flexible manner, upon their com- 
mon responsibility for the progi-ess of the 
world economy and to resolve how that 
responsibility should have practical manifesta- 
tion in the years ahead. We believe that the 
mutual understanding engendered in our meet- 
ings has benefitted both our own countries and 
the wider world community. We believe, too, 
that the opportunities afforded by our meet- 
ings are becoming even more valuable in 
today's world of increasing interdependence 
and increasing technological change. We have 
therefore agreed to institute a further cycle of 
Summits by accepting the invitation of the 
President of the French Republic to meet in 
France, July 14-16, 1989. 


Human Frontier Science Program 

1. We note the successful conclusion of Japan's 
feasibility study on the Human Frontier Sci- 
ence Program and are grateful for the opportu- 
nities our scientists were given to contribute to 
the study. We look forward to the Japanese 
Government's proposal for the implementation 
of the program in the near future. 


2. We note that, as part of the continuing 
review of the ethical implications of develop- 
ments in the life sciences, the Italian Govern- 
ment hosted the fifth conference on bioethics in 
April 1988, and we welcome the intention of the 
European Communities to host the sixth con- 
ference in the spring of 1989. 


Europe is pursuing structural reforms to com- 
plement macroeconomic policies in order to 
spur job creation, enhance growth potential, 
and achieve a sustainable pattern of extenial 
balances. Structural reform measures are 

being put into place in the framework of thi 
Communities' program for a unified interna 
market by 1992, including full liberalization 
capital movements; removal of physical, ad 
ministrative, and technical barriers to allov 
the full mobility of persons, goods, and ser 
ices; and an improvement of competition pc 
icy. However, full achievement will depenc 
complete and timely implementation of the 
measures and on complementary policies in 
eluding those in the fields of regional, socia 
and environmental pohcies and of technoloj 

The main elements of Germany's structu 
reforms are tax reform and reduction, der 
lation. and privatization; reform of the post 
and telecommunications system; increased 
flexibility in the labour market; and refortr. 
the social security system. 

In France, the main structural reforms v 
deal with improving the level of education 
professional training and development for 
workers, and with major improvements in 
functioning of financial markets in order to 
facilitate the financing of the economy at tl 
lowest possible cost. 

Italy will seek to promote training and 
education, increase the flexibility of the la 
market to spur emplo>Tnent, improve the 
functioning of financial markets, revise th( 
system to promote efficiency and eliminate 
distortions, and enhance pubhc sector effi- 

In the United Kingdom, there has alrea( 
been a substantial program of tax reform, 
trade union law reform, deregulation, oper 
up of markets, and privatization of state 
industries. This will continue. Further me; 
ures are being introduced to improve both 
quality of education and the flexibility of tl 
housing market. 

Japan will pursue further structural ref( 
to support and sustain the greater reliance 
domestic demand-led growth which has qi 
ened remarkably. Japan will promote refor 
government regulations in key sectors incl 
ing land use policies and the distribution 
system, and reform of the tax system. 

For the United States, where recent in' 
tions that the declining trend in private sa\ 
may have bottomed out are encouraging, ii 
nonetheless a priority to increase incentivi 
save. Also the United States will strengthi 
the international competitiveness of its ind 
trial sector. 

The most promising areas of structural 
reform in Canada are implementation of th 
second stage of tax reform, the proposed 
liberalization of the financial services secto 
and, most important, the implementation c 
the Free Trade Agreement with the Unite 

Department of State Bulletin/August ni 





J £21,19882 


isunimit punctuated the success of 
vsiilent's economic program over 
-t T years. The emphasis on tax 
111. trade liberalization, and individ- 
; tiative has borne fruit in the United 
t . liringing about the longest sus- 
onomic gi-owth in peacetime, 
ilown inflation and unemploy- 
1 iu' leaders expressed personal 
,; 1 l'( >r the President's success and the 
) t It has on other world economies, 
f lilt' economic side, this summit once 
highlights that increased coor- 
of policies is one of the reasons 
economies are doing so well and 
.--ame sort of coordination is 
■( ;arv in areas concerning the 
t iituring of economies. On agricul- 
t till' leaders this morning moved the 
!• ^^ forward. The final language was a 
•a nijjrovement over the early morn- 
% iguage, and the United States is 
.p with the final product. 
the political side, increased coop- 
a1 n on fighting international drug 
xf king is a major step forward. This is 
I./ lerican initiative, something the 
■p lent and Vice President worked on 
1 'lime Minister Mulroney. This is the 
line that we have an initiative that 
Idress the complex issue of in- 
iniial production, trafficking, and 
inu of the drug trade. 
. iwise, in the area of teiTorism, 
rt (if the ICAO action on hijacked 
s another step in the fight against 
II. We hope to build broader 
111 other countries in the months 

iimary the President is quite 
A'ith the outcome of the summit, 
itified by the accolades from his 
aders. He appreciates their 
ip and the personal bonds that 
t-ljeen established in these summits. 

Secretary Shultz with President Reagan before final plenary session. 

JUNE 21, 19883 

Today's ceremonies, as you know, mark 
the end of my eighth economic summit, 
and over the years, I have come to re- 
gard the summit process as extremely 
important in forging a coordinated eco- 
nomic approach for the United States 
and the other industrialized democra- 
cies. It has helped return the nations 
represented here to steady growth and 
helped to estabUsh a consensus among 
us that only free and open markets and 
only free and open societies can foster 
economic progress and opportunity. 

Maybe one of the best ways to view 
these economic summits is to compare 
discussions at them — whether heralded 
in our communiques or not — with later 
results. For example, our 1981 communi- 
que from Ottawa said the primary chal- 
lenge we addressed at this meeting was 
the need to revitalize the economies of 

the industrial democracies. Revitaliza- 
tion, of course, has been achieved in 
part because the common commitment 
at Ottawa inaugurated a search for con- 
sensus on how to work together to re- 
lease the productive energies of our peo- 
ple. And today gross national products 
are growing, as are employment num- 
bers and real personal incomes. Our eco- 
nomic expansion in the United States 
got the ball rolling and helped crystalize 
the new consensus. And now everyone 
is part of the act. 

To take another example, in our 
1986 Tokyo economic communique, we 
said there should be close and continu- 
ous coordination of economic policy 
among the seven summit countries. 
Today policy coordination is a major pil- 
lar of the economic policies of all our 
countries. It is a significant reason why 
the world market instabilities of last Oc- 
tober had so little impact on our underly- 
ing economies. The summit in Tokyo 
gave the political push that ensured that 
the fledging process of coordination 
grew strong and robust. 

yjljlrtment of State Bulletin/August 1988 


Prime Minister Mulroney reading economic declaration on the last day of the 
summit; with him are Prime Minister Thatcher, President Reagan, and President 

So here we are celebrating this sum- 
mit with a measure of pride. Some sig- 
nificant items are still in need of atten- 
tion but, all in all, how things have 
changed over the years. The economies 
of the summit countries have come roar- 
ing back, driven by a common commit- 
ment to replace government control 
with market-oriented policies. These 
summits are building blocks for tomor- 
row. Goals we set in earlier years have 
borne fruit. I believe that the goals we 
are setting now will become the land- 
marks for the future. 

Ijooking back at how much has been 
achieved since the last time the summit 
was in Canada, is it any wonder that 
our seven free democratic industrialized 
nations are turning with confidence to 
the future, to the challenges and oppor- 
tunities that new technology, more 
closely knit global markets, and a free 
world will bring in working together? 

During our meetings here, we dis- 
cussed the international economic and 
political situations. We reviewed the eco- 
nomic policy coordination process, the 
world debt situation — particularly that 
of the poorer countries — the state of the 
Uruguay Round of trade negotiations — 
particularly in agriculture — and inter- 
national cooperation to stop the produc- 
tion and flow of illegal drugs. 

We also had a fruitful exchange of 
views on East- West relations, terror- 
ism, and regional political issues. Yester- 
day afternoon. Prime Minister Mulroney 
organized an informal session where 
leaders shared their thoughts on the eco- 
nomic future of the summit countries. 
In that session, I said that I believe 
that the e.xpansion of global markets 
and the enormous technological ad- 
vances that are coming in the years 
ahead will demand even closer coordina- 
tion of economic policies. 

All of our economies must be flex 
ible and open, not burdened by exces- 
sive regulations, high taxes, and all til 
other rigidities that too many econom 
have known too well. 

Last night my colleagues and I 
spoke of the future, of the education ( 
our children, of assisting those displs 
by the rapid pace of economic change 
most notably our farmers — of removii 
structural impediments in our econo- 
mies. We are all flexible enough to n 
the challenges of the rapid technologi 
changes and economic integration thj 
the hallmark of the future. 

The summit nations can be partn 
in a great venture to progress. Yes, i 
can seize our opportunities or we can 
watch the world go by. I am confider 
which path our nations will choose. A 
said before leaving Washington, the : 
ture belongs to the flexible. Eight ye 
ago, you would have heai'd argument 
about that. Today it defines the const 
sus among the seven nations that me 
at these economic summits. 

In closing, let me say thank you 
the people of Toronto and to Prime 
Minister Mulroney for hosting us wit 
such courtesy and enthusiasm. They 
made all of us in the American delegi 
tion — and I'm confident those in the 
other delegations as well — feel right 
home. And in just 3 days here, we sht 
one common sentiment: We love 

' This statement was read to news cor 
spondents by Canadian Secretary of State 1 
External Affairs Joe Clai'k. 

- Tfext from White House press release 
' Opening statement at a new conferer 
held in the Royal York Hotel in Tbronto: foi 
full text of news conference, see Weekly 
Compilation of Presidential Documents of 
27, 1988. ■ 


JS.-Japan Agreement 

>i Cooperation in Science and Technology 



)ilune 20, 198S, during the economic summit in Toronto, President Reagan and 
'i le Minister Takeshita signed the Agreement on Cooperation in Research and 
>i.^lopment in Science and Technology. 

JE 20, 1988' 


new agreement incorporates provi- 
s and initiatives to establish a more 
need and reciprocal partnership in 
nee and technology. Specifically the 


• Sets forth broad principles 
er which the Governments of the 

United States and Japan will conduct 
their guture science and technology 

• Estabhshes cooperation in sci- 
ence and technology areas of national 
importance in which both countries 
have complementary capabilities and 
from which both countries will obtain 
equitable benefits (among these areas 
of research are advanced materials, in- 
cluding superconductors, life sciences, 

information science, manufacturing tech- 
nology, automation and process control, 
global geoscience and environment, and 
joint database development); 

• Calls for both governments to 
provide comparable access to their 
government-sponsored or supported re- 
search facilities and activities, as well 

as to scientific and technical literature; 

• Creates a broad management 
structure that will oversee the overall 
science and technology relationship and 
generate initiatives and policy recom- 
mendations to strengthen that 

• Sets forth provisions for the ade- 
quate protection of intellectual property 
and the distribution of intellectual prop- 
erty rights arising from the collabora- 
tive activities under the agreement; and 

• Details the shared security obli- 
gations of the United States and Japan 
in the area of collaborative science and 
technology information. The agreement 
states that both countries vrill support 
the widest possible dissemination of 
information, subject to export controls, 
classification procedures, and intellec- 
tual property rights protection. 

The new agreement estabhshes a 
Joint High-Level Committee to meet 
annually to review matters of impor- 
tance in the field of science and technol- 
ogy and policy issues related to the 
overall science and technology relation- 
ship between the two countries. 

The new 5-year accord supersedes 
the Science and Tfechnology Agreement 
that was signed by President Carter 
and Prime Minister Ohira in 1980. 

'Tfext from White House press release. 

f )artment of State Bulletin/August 1988 



Secretary's Interview on 
"Meet the Press" 

Secretary Shultz was interviewed on 
NBC-TV's "Meet the Press" on 
June 19, 1988, by Chris Wallace and 
John Cochran, NBC Neivs, and Robert 
Kaiser, The Washington Post.' 

Q. I want to ask you first of all, if I 
might, about this apparent scandal in 
military procurement which some Re- 
publican Senators, who have been 
briefed on it, are calling the worst in the 
history of the Pentagon. How concerned 
are you about the threat to national 
security, both in terms of this slowing 
down the military buildup, and also in 
terms of it further eroding public sup- 
port to the Pentagon? 

A. First of all, I know nothing 
about this other than what I read. It's 
been uncovered by our chief law en- 
forcement agency, the FBI, and they're 
pursuing it. Just what its dimensions 
are I don't have any information on. 

However, it is essential, I think, 
for our country to maintain our capabil- 
ity to defend our interests and repre- 
sent our values around the world, and a 
strong defense estabUshment is essen- 
tial to that. 

Q. What is it going to do if a number 
of the major Defense contractors in this 
country are now going to be involved in 
investigations for weeks or months or 

A. Individuals who participated and 
the corporate entity, if they are guilty 
of something, will have to pay a pen- 
alty. Nevertheless, those are great 
organizations and very productive — full 
of ability, both scientific and engineer- 
ing production possibilities — and so 
they'U proceed. They're very 

Q. You pride yourself on being a 
good government manager. Some peo- 
ple say that what's happened here is 
exactly what you would expect when 
you throw $2 trillion at the Pentagon, 
that there was just too much money and 
too many contracts for them to be 
adequately overseen. 

A. As I say, I don't know the de- 
tails of this investigation at all. Obvi- 
ously, when you're spending large sums 
of money, you have to have procedures 
and safeguards to do it properly, and 
you have to have people who have high 
standards of proper behavior. By and 
large, I think they have those things. 
Whether there are some people around 
the edges who have managed to distort 

this flow of ethical behavior, I just 
don't know. 

Q. You talk about the flow of ethical 
behavior. I want to ask you, if I might, 
about the public reaction to all of this 
and public support for the military 
buildup. Isn't this just going to add to 
the general impression of the sleaze 
factor, that there's a pattern of unethi- 
cal and, in this case, perhaps illegal 
behavior within the Reagan Admini- 

A. There are problems that come 
out when you have large amounts of 
spending like this periodically. I think 
it's worth noting that this was uncov- 
ered by people working in the Reagan 
Administration, so you have to factor 
that in. But it's a problem, and I think 
that the way to deal with it is to hit it 

I think it was Ike who said he 
wanted people who, his phrase was, 
"were as clean as a hound's tooth." 
And I also remember Senator Paul 
Douglas, one of my favorites from the 
old days, from Illinois who always said, 
"It all starts with a cigar." So you 
have to watch the httle things before 
they become big things. I'm sure that's 

Q. It was announced yesterday that 
you're going to go down to Central 
America. At the same time, one of your 
senior officials said on background that 
the Administration has no hope of get- 
ting more lethal aid, military aid, for the 
contras out of Congress. What sort of 
bargaining cards have you got if you 
don't have the possibility for military 
aid? What can you do down there? 

A. I'm going to carry a U.S. mes- 
sage of what our objectives are and our 
program and ideas for getting there. 
Those objectives have been set out by 
the President way back in a speech to a 
joint session of Congress in 1983. They 
are reaffirmed and developed in the 
Kissinger commission report. 

What are we for? We're for peace; 
we're for freedom; we're for the rule of 
law; we're for economic development. 
We have major efforts and lots of re- 
sources being put into those things, and 
we are in the process of succeeding, 
particularly in El Salvador, Honduras, 
Guatemala, to add to the basically good 
picture in Costa Rica. 

The odd man out is Nicaragua. It's 
the rotten apple in the barrel. Some- 
how or other Nicaragua has got to be 

brought into this fold, and that's a prcl^ 
lem. We want to somehow, through l» 
some combination of pressure that's I 
generated internally to Nicaragua and I 
the obvious opportunities they're miss i 
ing, to get them in the fold. 

You know, the situation in Nicara 
gua is really lousy, both from the star 
point of suppression, repression, and 
from the standpoint of the absolutely 
terrible situation in their economy. So 
they are under intense pressure, but 
we want to bring them into this fold ( 
peace, democracy, freedom, the rule o 
law, and economic development. 

Q. Some people might think you 
description of the Central American 
situation is a little rosy in that the I 
right looks like it's coming back in 
Salvador, President Duarte's deathly 
you've completely had a flop in Panak 
it looks like so far, the contras now se< 
to be a spent force. Aren't you a littl 
concerned about the general drift do 

A. I don't want to say that there 
are no problems. If there were no pr 
lems, we wouldn't be struggling as W' 
are. What I am saying, though, is I 
think it's time to reinject, in as stron; 
a way as I can, our basic objectives ; 
the many things we're doing, and the 
fact that with all of the kinds of prob 
lems you allude to, there has been a 
very strong measure of success. 

I might say, insofar as Panama is 
concerned, it's also kind of an odd ma 
out in a different way from Nicaragu; 
and it's not a good picture from any- 
one's standpoint — not just ours; all of 
Latin America. They don't like the ii 
that a drug-oriented person is as 
strong in a country as Noriega is in 
Panama. He's under a lot of pressure 
and he knows it. 

Q. You and the President are ab< 
to leave for the Toronto summit. I 
gather one of the things you're worr 
about is terrorism and particularly 
countries like Algeria which permit: 
terrorist planes — that is to say, hijacl I 
planes — to land and then take off fc 
another country. Is this the kind of 
thing you're going to focus on? 

A. Tferrorism is one of the subjec 
that has been given a lot of attention 
summits, and the summit meetings ai 
their declarations and the spirit genei 
ated from them have helped a lot in 
what is a basically successful effort 
against terrorism. 

One of the things that I think 
would help would be implementation < 
what is basically, I think, a British s 
gestion that countries all agree that 
hijacked plane lands in your territory 



will lake steps to see that it can't 
(iff. It's sort of a way of imple- 
tiiiu the President's view "no place 


Q. On another subject— SDI [Stra- 
fe Defense Initiative]. An official, an 
^linistration official, said this week 
Hi SDI — that is to say, "star wars" — 
- lout to get a lobotomy, that the 
diinistration decided to scale way 
)n vour SDI hopes. True? 
A. The SDI hopes are very strong. 
n F'resident has reiterated them con- 
-ly, including at the Moscow sum- 
!■ problem with SDI is that it 
.' that have scaled it back: Con- 
> has scaled back the funding. Nev- 
I'ltss, the objectives of the prog^ram 
• nJact, they are right, they are pow- 
, and they'll be pursued. 

^^ You say that the objectives are 
Lt. In fact what this report said is 
n; the .\dministration is headed away 
Wi the space-based shield over a 
01 er period of time and headed toward 
Nter deployment of a ground-based 
,'ni. particularly around Washing- 
Is that true? 

A. There haven't been any decisions 

' kind. There has been a lot of 

1 itten about. But as you make 

-s in the program and as your 

. I iH'gins to turn beyond the strictly 

irch stage to how you would go 
I t deploying a system, then you see 
clearly that you would deploy it in 
I - You just don't suddenly start 
So you ask yourself about these 
and the criteria that the phases 
ill make. 

Q. And would the first phase be 
p:;ind-based interceptors? 

A. It's a matter of debate about 
■r what the right way to go about 
process is, and I think that the 
lie subject has kind of surfaced pub- 
, personally I think in a premature 

Q. I just want to see if we can wrap 
me point in the question about the 
ation in Nicaragua which Bob [Kai- 
was talking with you about earlier. 
You said that you're going to be 
dng this diplomatic effort in your 
on the 29th, but there is also this 
stion about U.S. aid. Has, as was 
t )rted today in The Washington Post, 
Administration basically decided 
t you can't get a lethal military aid 
kage through this Congress? 
A. There hasn't been any decision, 
re's been a lot of discussion about 
■ to maintain support for freedom 
ters in Nicaragua — humanitarian 
port and other kinds of support — 

but there hasn't been any decision 
made about that. 

Q. Let me turn, if I can, to the 
situation involving Manuel Noriega, 
which is one that you say you'll be 
bringing up on the political side of this 
economic summit. Are you going to be 
asking the other countries to join the 
United States in imposing economic 
sanctions against Panama? 

A. The subject that we'll want to 
discuss at the summit — or one of 
them — has to do with narcotics traffick- 
ing and the use and control of this 
whole drug problem which all of the 
countries are concerned about. It is 
clear enough that it is an international 
problem. We have it, so do others, and 
so you need to have an international ap- 
proach to it. So we'll be talking about 
that. It isn't particularly about him. 
It's about the narcotics problem. 

Q. But, in fact, you're trying to get 
Noriega out. You say he is one of the 
major international drug traffickers in 
this hemisphere. Wouldn't one of the 
best things [be] to be getting these other 
countries to join the United States in 
imposing economic sanctions instead of 
helping to fund the Noriega regime? 

A. He's a problem, but he's not the 
main problem. He's under great pres- 
sure and is very vulnerable, and he 
knows it. So that's all I have to say 
about Noriega. The main problem — 

Q. You say he's under great pres- 
sure. I mean, the sense that all of us 
have is that he's faced this Administra- 
tion down and made you look silly. It 
doesn't seem like he's under any great 
pressure at all. 

A. You just keep saying that, but 
the facts are a little bit different, and 
we'll just let them assert themselves. 

Q. Do you have a new plan, be- 
cause, in fact, you were asked this 
question at a White House briefing this 
week [and] you said that the Adminis- 
tration does not have a new plan to get 
Noriega out. 

A. No. I didn't say that. 

Q. Sir, I mean, I heard you from the 
podium myself. You said that the Ad- 
ministration does not have a new plan 
to get Noriega out. 

A. We do not have anything going 
that I care to talk to you about. 

Q. How do you respond to this 
general view that this has been a kind 
of humiliating fiasco for the United 
States on your watch, this whole busi- 

A. I don't particularly like the fact 
that he's emerged in Panama as a per- 

J lartment of State Bulletin/August 1988 

son caught by this Administration hav- 
ing taken part in drug peddling and 
that he's still there. However, there's a 
lot of pressure on him. There is no sup- 
port for him at all other than from 
Nicaragua and Cuba. And in the end, I 
think his days are numbered. 

Q. You are known, either rightly or 
wrongly because you've never con- 
firmed it, as one of the prime advocates 
of using the military option to get 
Noriega out. You say that you have 
ideas, but nothing you want to discuss 
with us. 

There are a number of people, 
including even Richard Nixon on this 
program, who have said that they felt 
the military idea would be a disaster, 
very counterproductive, creating a 
terrible backlash not only in Panama 
but throughout Latin America. Aren't 
they right? 

A. I won't confirm or deny any of 
these so-called stories about my views. 
I give them to the President. 

Q. But do you have anything to say 
about the wisdom or lack of wisdom of 
the military option, without telling us 
what you say in the Oval Office? 

A. It's an option, it's there, and it 
will stay there. 

Q. Let's talk about the Soviet Union 
for a second. Is this SDI — [Secretary of 
Defense] Carlucci seems to favor a 
limited system as a first phase. Does that 
sort of approach offer an option for 
solving the ABM [Antiballistic Missile] 
Treaty, SDI issues, and making it — 
might make it easier to actually have 
that treaty signed before you leave 
office? Do you see much hope of reach- 
ing that agreement before you leave? 

A. There are a number of things on 
the table in our negotiations with the 
Soviets on the ABM Treaty issue, and 
we have made a fair amount of head- 
way. The principal thing that we 
haven't been able to get a good handle 
on with them has to do with the activi- 
ties you can conduct during a period of 
pledged nonwithdrawal from the ABM 
Treaty. The principle of a nonwithdra- 
wal period is agreed, and to a degree 
people understand what you would do, 
but there are some problems there that 
need to be wrestled with. I don't think 
this particular, as I said, premature dis- 
cussion of how you would go about 
what are the right phasings for possible 
deployment particularly helps us one 
way or another on that. 

Q. You've been following Governor 
Dukakis' foreign policy statements to 
some degree. He gave a speech just this 
past week on NATO. What do you think 
about him? 



A. I didn't read that speech care- 
fully, so I don't want to comment on it. 

Q. He talks about doing away with 
some of the bargaining chips that you 
folks are using in this Administration. 

A. He did say that he supported 
what we were doing to bring about a 
START [strategic arms reduction talks] 
treaty, but it also seemed as though he 
threw away some of the things that 
were part of the bargaining. So you 
know when you're bargaining for some- 
thing, you'll get all the cards you can 
into your hands and you play them 
pretty carefully; and before you put one 
down, you want to get one from the 
other side. That's what bargaining is. 
You can't sell it if you give it away, 
and I hope he will come to realize that. 

Q. Speaking of bargaining, you're 
going to be in Toronto and you're going 
to be asking the allies to come up with 
some money for the Philippines and for 
the Afghan resistance. Regarding the 
Philippines, you had a very tough state- 
ment this week about possibly pulling 
American bases out of the Philippines. 
Do you want to explain that? 

A. The Philippines keep talking 
about prohibiting, in effect, ship visits 
as New Zealand has done; and, if they 
do take that policy, then there's no 
place for our Navy in the Philippines. 

Q. Doesn't that undercut your posi- 
tion that they should be getting aid right 

A. No. I think the PhiUppines is an 
important democratic country, and we 
want to support the emergence of de- 
mocracy and freedom and the rule of 
law in the Philippines, as elsewhere. At 
the same time, we do have important 
bases there, but they need to be bases 
in the spirit of friends and allies. They 
are there because they want them 
there as well as because we want them 

I hope, incidentally, that we will be 
able to work these problems out. But 
the United States does have alternates, 
and it's interesting that countries that 
don't have bases or don't have ships 
coming or getting i-epaired and so 
forth, say, "Look we're open for busi- 
ness. We like to do that business." 
And it's important to the Philippines, I 
might say. 

Q. I'm going to go back to Central 
America just one moment. A lot of 
people say that's the greatest area of 
disappointment to this Administration 
— the greatest disaster. Do you agree 
with that, in fact? Is that your greatest 

A. I think that the President's for- 
eign policy around the world is in excel- 
lent shape. It's made tremendous head- 
way, and it's in good shape. 

Q. What are you most disappointed 

A. The area that is the most trouble- 
some is Central America, in spite of 
the fact that we've made great strides 
there, as I said in response to an ear- 
lier question. The fact that we still 
have this bad rotten apple in the barrel 
in the forai of Nicaragua— the Panama 

problem is a little different — is an an- 
noying problem. And I agree with you; 
it's the thing that troubles me the 

Other than with respect to Nicara- 1 
gua, we're in very good shape, and I I 
might say there is broad bipartisan sup I 
port for the general thrust of American I 
foreign policy. People shouldn't forget | 
that. " 1 

'Press release 117 of June 20, 1988. 

The Potential Impact of Imposing 
Sanctions Against South Africa 

by John C. Whitehead 

Statement before the Senate Foreign 
Relations Committee on June 22, 1988. 
Mr. Whitehead is Deputy Secretary of 

Thank you for this opportunity to pre- 
sent the Administration's views on Sen- 
ate Bill 2378, the amendments to the 
Comprehensive Anti-Apartheid Act of 
1986. If enacted, this legislation could 
have important consequences for the fu- 
ture of American diplomacy in South 
Africa and in the southern Africa re- 
gion. For reasons I hope to make clear 
in my testimony, the Administration 
strongly opposes Senate Bill 2378. 
American interests are not served by 
legislation which requires that we ex- 
periment in the economic destabiliza- 
tion of South Africa without genuine 
prospects of contributing to the solution 
of that country's problems. 

Despite our strong objections to 
this bill, we are quick to recognize the 
feelings which motivated it. South Af- 
rica's apartheid system is repugnant to 
all Americans. While many govern- 
ments tolerate or even surreptitiously 
encourage discrimination on the basis of 
ethnicity, only in South Africa is racial 
discrimination a civic duty and the 
failure to practice it a punishable of- 
fense. Among nations which profess to 
identify with Western, democratic val- 
ues, only South Africa classifies indi- 
viduals, herds them into groups, and 
strips them of their individual political 
rights according to racial and ethnic 
criteria. This monstrous injustice af- 
fronts us all and cries out for redress. 

Our aversion deepens when we are 
confronted by the stubborn resistance 
of the South African Government to ap- 
peals for peaceful change. Successive 

generations of black activists — during J 
the defiance campaigns of the early 
1950s and early 1960s, during the 
Soweto uprising of the 1970s, and in th 
latest wave of township protest from ^ 
1984 to 1986— have been shattered by ^ 
progressively harsher and more sophis ^ 
ticated forms of official repression. De 
spite repeated, worldwide censure and 
the imposition of severe sanctions — 
some of them dating back more than 2 
years — South Africa's governing elite 
remains steadfast in its determination 
to retain its monopoly on political 
power I 

Injustice and inequality are en- 
trenched in South Africa, but not all 
the trends are negative. Over the past 
10 years, the nature of apartheid has | 
changed markedly. Numerous petty ^ 
apartheid provisions have fallen by the ; 
wayside, the Pass Laws have been 
scrapped, central business districts 
have been opened to blacks, and black 
labor unions have been legalized and 
have made impressive organizational 
strides. These changes testify to a 
growing awareness among many Soutl 
African whites that apartheid in its 
purest sense is impractical and un- 
economic, if not actually immoral. Coi 
sistent with this trend is the finding c 
the Dutch Reformed Church 2 years 
ago that no scriptural justification 
exists for the practice of apartheid. 
Another institutional pillar of the 
Afrikaner establishment, the Broeder 
bond, also broke with apartheid 
orthodoxy at that time. Regrettably, 
this willingness to dispense with somt 
forms of racial discrimination has not 
yet developed into a consensus in favo 
of addressing the truly critical issue 
confronting South Africa, which is th< 
issue of permitting all South Africans 


Department of State Bulletin/August 19g 


;#?articipate in deciding how and by 
ilfem they are governed. 

A clear and dispassionate analysis 

i|he crisis gripping South Africa is 

lired if the United States hopes to 

a constructive role there. Our in- 

tJsts demand that we avoid the pit- 

tj of desperate activism on the one 

and resignation and disengagement 
ofljhe other. We must accept that the 
tdisition to a nonracial democracy in 
iSflth Africa will inevitably take longer 
:■! all of us would like. We must also 
i^erstand that South Africans them- 
es, black and white, will be the 
its of their own liberation, with out- 
rs, including the United States, 
ing only a secondary role at best. 
Above all, we need to acknowledge 
such limited influence as we cur- 
ly possess derives from our con- 
ing presence on the ground in 
;h Africa. A progressive U.S. busi- 
nd presence, an official aid program 
rd'hing out to tens of thousands of 
\mk South Africans, our persistence 
in'rging South Africans to confront 
th imperatives of dialogue and compro- 
mi' and to consider what they are for 
AS -ell as what they are against — these 
■ the most important assets we have 
■iiallenging apartheid. We can con- 
.c u, censure, and sanction — as this 
leplation requires — and hope against 
■0] • and experience that we can a- 
\f' some beneficial result. Or we can 
a longer view which refuses to dis- 
-r ige, preserves our lines of commu- 
rriition, our contacts, and our limited 
re urces within South Africa and posi- 
".i<s the United States to intervene 
Dfltively at the moment when our lim- 
t leverage can accomplish the most 

Tl Fallacy of Sanctions 

-''' years ago, at the height of the 
•nt unrest in black townships across 
ill Africa, it was fashionable to ar- 
that apartheid had entered its final 
1^. Activists in South Africa, e.xiled 
k leaders, and many observers in 
iipe and the United States pre- 
ed that only a final push was 
liil to topple the system. Compre- 
si\e and mandatory international 
t Kills were thought by some to be 
■isely the push required. 
These prognostications were ob- 
isly wide of the mark. Few persons 
'■ iliar with existing power rela- 
ships in South Africa seriously be- 
e that a rapid resolution of the crisis 
ossible — with or without sanctions 
<siire. Surely it was unrealistic to 
ect the South African Government 

to respond to our pressure by ending 
the state of emergency, releasing politi- 
cal detainees, or meeting any of the 
other conditions for lifting sanctions 
outlined in the Comprehensive Anti- 
Apartheid Act. Not surprisingly, the 
South African Government refused cat- 
egorically to meet these demands. 

Presumably in recognition of these 
factors, Congress has modified its ex- 
pectations. In reporting out House Res- 
olution 1580, the House Foreign Affairs 
Committee describes sanctions as "part 
of a medium- to long-term approach de- 
signed to maximize both internal and 
external pressure on the apartheid re- 
gime." The House report further notes 
that to ensure their effectiveness, sanc- 
tions must be multilateralized; that 
U.S. pressure alone will be insufficient 
to accelerate the pace of change in 
South Africa. 

It should be clearly understood 
that the Administration has consulted 
intensively with South Africa's main 
trading partners, all of whom are major 
allies of the United States. For the 
most part, these governments are 
strongly disinclined to either follow an 
American lead or act unilaterally in 
adopting further punitive sanctions. 
Our allies either reject or are highly 
skeptical of the premise that by de- 
stabilizing the South African economy 
the West can somehow engineer a rela- 
tively peaceful transition to democratic 
rule in South Africa. Moreover, these 
governments judge — as does the Ad- 
ministration — that international sanc- 
tions cannot be effectively enforced 
without recourse to military measures. 

As some of you may be aware, we 
have received in the past 2 weeks sepa- 
rate, official communications from the 
European Community and the British 
Government informing us of their deep 
concerns over extraterritorial provi- 
sions in this bill. Passage of S. 2378, 
particularly the secondary boycott fea- 
tures, could lead to GATT [General 
Agreement on Tariffs and Trade] dis- 
putes with our major trading partners 
and undermine the U.S. negotiating 
position in the current round of GATT 

We should not, therefore, delude 
ourselves into thinking that it is possi- 
ble to internationalize sanctions under 
American leadership. Our allies will re- 
sist this approach, at least until such 
time as we can demonstrate convinc- 
ingly that cutting trade links, selling 
off assets, and relinquishing contacts 
across the board in South Africa will 
result in something other than a costly, 
symbolic protest. 

The central fallacy of the sanctions 
approach is not simply that it isn't fea- 
sible. Rather, the problem lies with a 
fundamental misreading of South Af- 
rican political and economic realities 
and with the acceptance of a false cor- 
relation between economic pain and 
positive social change. Simply put, 
sanctions are the wrong tool brought to 
the wrong job. 

Sanctions are the wrong tool be- 
cause South Africa has the resources to 
resist an economic siege and has been 
preparing for such a contingency for 
many years. Although heavily depend- 
ent on international trade, South Africa 
has domestic deposits of virtually every 
key raw material input needed for an 
industrial economy with the major ex- 
ceptions of crude oil and bauxite. The 
South African Government and private 
sector have spent billions of dollars 
stockpiling strategic imports, ranging 
from crude oil and bauxite to computer 
and aircraft parts. These stockpiles 
would provide a cushion against short- 
ages until alternative sources of supply 
could be found or import substitution 
projects completed. 

Based on previous experiences with 
international embargoes against South 
Africa, we believe that direct controls 
on shipments to South Africa would 
probably not prevent South African 
importers from obtaining the foreign 
supplies that they need. One possible 
exception would be certain high-tech- 
nology goods, for which adequate en- 
forcement mechanisms already exist. 

With regard to South African ex- 
ports, 65% of export earnings are made 
up of low-bulk, high-value items such as 
gold, diamonds, and strategic minerals. 
Most economists believe that an effec- 
tive boycott of these commodities would 
be difficult or impossible to enforce. 
The remaining 35%, mainly steel and 
manufactured products, would be more 
vulnerable to a general boycott. Even 
here, however, a boycott would not be 
airtight. For example, in the past 2 
years, sanctions have closed 80% of 
South Africa's traditional export mar- 
ket for steel, yet South African steel 
exports were only down by about 2.9% 
through October of last year. Given 
South Africa's proven capacity for trade 
realignment and diversion and its still 
untested capacity for full-scale sanc- 
tions-busting, we estimate that even 
reasonably well-enforced, comprehen- 
sive UN sanctions would cut total ex- 
port receipts by something less 
than 25%. 

The net result of a total trade em- 
bargo on South Africa would almost 
certainly be far less dramatic than pro- 

Miartment of State Bulletin/August 1988 



ponents of the sanctions approach be- 
heve. The impact is likely to be a 
moderate recession over the medium 
term comparable to the 1982-86 period 
in South Africa. Over the longer term, 
constraints on growth and a decline m 
competitiveness could push South 
Africa deeper into recession. 

But whatever their economic con- 
sequences, what counts is the political 
impact of sanctions. As one leading 
South African Marxist theoretician re- 
cently noted in a reversal of his pre- 
vious position, the criterion for 
sanctions should be the question of 
whether they consolidate the position ot 
the black worker and black organiza- ^ 
tions He concludes that sanctions don t 
meet that criterion. As I will point out, 
sanctions are far more likely to produce 
perverse results: mild discomfort, at 
most, for white elites, but a risk of 
severe economic dislocation for the 
black work force. 

The Economic Costs to 
the United States 

Sanctions are not cost free for the 
United States; S. 2738 will require U.S. 
business to find new markets, assuming 
they are available, for over $1.2 billion 
in annual exports of mostly manufac- 
tured and high-technology goods. The 
forced liquidation of over $1 billion in 
direct U.S. investment will change ht- 
tle in South Africa except to consoli- 
date the position of local business 
interests acquiring these assets at well 
below market value. It is reasonable to 
expect that at least some U.S. compan- 
ies will challenge the constitutionahty 
of this provision on the grounds that it 
results in the confiscation of assets 
without fair compensation. 

While the precise impact of sanc- 
tions on the U.S. economy is hard to 
measure, some industries will be more 
seriously affected than others. Studies 
indicate that the U.S. coal industry has 
already lost an estimated $250 million 
over the past 3 years. A sizable portion 
of the loss is due to market distortions 
caused by existing U.S. sanctions 
against South Africa. Foreign custom- 
ers of U.S. Government enriching serv- 
ices who use South African uranium 
provide approximately $350 million a 
year in revenues. Some of these cus- 
tomers will take their enrichment busi- 
ness to Europe and the Soviet Union if 
the United States cannot process their 

These estimates do not include the 
potential cost of South African counter- 
sanctions. Even a temporary disruption 
of strategic mineral exports to the 

United States would have serious reper- 
cussions over a broad range of U.S. 

According to the U.S. Bureau ot 
Mines, the direct economic costs to this 
nation resulting from a decision to em- 
bargo South African strategic and criti- 
cal minerals imports are estimated at 
$1.85 billion per year About 94% of 
these estimated costs are for two plati- 
num-group metals, platinum and 
rhodium. . 

Platinum is primarily used in the 
production of automotive catalytic con- 
verters, and about two-thirds of 1986 
total domestic industrial consumption 
was used for this purpose. In 1986, the 
United States imported 86% of its plati 
num supplies from South Africa. 

Outside the Soviet bloc there are 
insufficient alternative supply sources 
to South Africa to meet U.S. platinum 
metal requirements. In 1986, the total 
production of countries other than 
South Africa and the Soviet Union, in- 
cluding domestic primary and second- 
ary production, could only satisfy about 
40% of U.S. demand. 

Rhodium is a very rare metal abso- 
lutely essential for compliance with 
Clear Air Act auto emissions standards 
for nitrous oxides. Omitting the Soviet 
Union and other centrally planned 
economies, U.S. consumption of rho- 
dium was almost one-half of the 
Western world total. The primary ap- 
plication of rhodium is in the production 
of automotive catalytic converters. Over 
70% of U.S. consumption (93,000 
ounces in 1986) was used in this applica- 
tion in 1986. Rhodium demand is in- 
creasing worldwide as emission-control 
requirements are placed on nitrous ox- 
ide emissions and as the control re- 
quirements are applied to a larger fleet 
of vehicles. In 1986, South Africa pro- 
vided about 53% of Western world sup- 
ply the Soviet Union 38%, and 
secondary recovery 5%. There are in- 
sufficient non-South African rhodium 
supplies to meet U.S. demand. 

It should be pointed out that while 
the South African Government has 
never threatened the United States 
with a disruption or a cut-off of strate- 
gic minerals supplies, it certainly has 
this option. Pretoria also has the option 
of slapping countersanctions on neigh- 
boring black states, all of whom are 
critically dependent on South African 
trade or transport routes, or both. Pas- 
sage of this bill would put South Af- 
rica's intentions to the test with regard 
to both the United States and our in- 
terests in stable development of the 

The Political Costs of Sanctions 

If sanctions are the wrong tool, they ^ 
are also being used for the wrong jol|^. 
Ostensibly aimed at infiuencing Sout |: 
Africa's key decisionmakers, sanctioi^. 
miss this target altogether while hit jj 
ting everyone else, causing collateral |fi 
damage in precisely those sectors of ^,. 
South African society which are pus ■ 
ing hardest for fundamental, peacefi ^ 
change. . 

If comprehensive, international ^ 
sanctions against South Africa are e 
tended we should anticipate that th 
main losers will be South African 
blacks. They will be the first to suff 
the effects of a prolonged recession 
terms of lost opportunities; lost jobs 
and decreased government spending 
black housing, black education, and 
services provided to black township 
This is an unintended and possibly 
tragic economic implication of the 
sanctions approach. 

At the same time, the forced w 
drawal of U.S. corporations from S 
Africa will end funding and logistic 
support for a wide range of progra; 
designed to promote black economi 
empowerment, foster black self-re- 
liance, and build professional and li 
ership skills. U.S. and other Weste 
corporations play an important par 
helping to sustain an estimated 2,0- 
such programs which exist at the 
grassroots level. In the face of mou 
ing restrictions on most forms of 
opposition political activity, these i 
grams provide a vital organizations 
network and fall-back position for I 
blacks working to build the power 
bases necessary for challenging th( 

In less direct fashion we stand 

lose other opportunities to deflect 

pressive measures directed at blacl 

the threat of a total economic emb; 

on South Africa becomes reality, t 

South African Government will hai 

even fewer reasons to heed outsidt 

vice on what it regards as its intei 

political affairs. Although our stan 

with the South African Governmei 

chned sharply following passage o: 

Comprehensive Anti-Apartheid A( 

1986, we retained enough influence 

argue persuasively in favor of a st 

execution for the Sharpeville Six. 

black South Africans convicted fo; 

murder committed during a prote 

demonstration. The United States 

joined several other governments 

groups in appealing for clemency 

the six.] We have also successfuU; 

bied to postpone and, hopefully, s 

Department of State Bulletin/Augusi 


.k pending legislation which could 
1 all foreign funding to groups whose 
i\ ities the government broadly de- 
•s as "political." These are small but 
sij:iifioant achievements. We cannot re- 
aJtically expect to repeat them if we 
(tinue down the road toward punitive 
1( embargoes and a severance of ties 
h South African officialdom. 

1 cannot accept the argument that 
iiitlicting additional economic hard- 
nd political frustration on South 
n blacks we create the conditions 
. -ary for a successful challenge to 
apartheid system. Nor is it reason- 
in think that sanctions will have a 
Mi-alizing effect on white elites, 
irliy rendering them more vulnerable 
' inssures for fundamental change. 
U r any conceivable sanctions scen- 
' the South African Government 
-sign top priority to protecting 
jobs and to ensuring that the po- 
aiui military are funded at levels 
ficient to avoid any decline in their 
aliilities. The suppression of new 
' liivaks of black unrest is a foregone 
ilu.sion. To suppose that outside 
VIS can rearrange government pri- 
its through economic quarantines 
I ri'duced contact with South Africa 
o misread tragically the staying 
,j aT of the Afrikaner minority and its 
d ermination to put its security ahead 
ill other interests, including the in- 
t'ests of South Africa as a whole. 

South African blacks will be the 
p mary, but not the only, victims of an 
i)?rnational sanctions campaign 
a linst South Africa. Other victims 
'I lie those South African whites who 
St closely identify with American 
iii'cratic ideals and who support 
1 1; aspirations for a more just soci- 
Leaders such as Frederik van Zyl 
liliert, Wynand Malan, Helen Suz- 
11, and Denis Worrall staunchly 
Hise an economic and diplomatic 
iiaiitine of South Africa. As they 
ule to build bridges across South 
IS racial divide, they need the 
rt that a strong U.S. presence, 
•Fficial and unofficial, provides. 
have seen sanctions contribute to 
ii i^e mentality among whites which 
ruling National Party has success- 
l.\ fostered and exploited by convert- 
to its ranks thousands of relatively 
'ilei-ate, English-speaking voters over 
' past 2 years. They have also wit- 
>sed a steady erosion over the past 
ii' of fundamental civil liberties even 
the hitherto protected sphere of 
lite politics. The same noose which 
•I s been used to strangle black dissent 

is now coiled expectantly around the 
white, reformist opposition. By dis- 
sociating ourselves from South Africa, 
we simply make it easier and less 
costly for authorities to pull that noose 

By the same token, ultraconserv- 
ative factions in South Africa are in- 
creasingly drawn to the prospect of 
cutting trade links, ending the U.S. 
business presence in South Africa, and 
limiting contact with the West. From 
their standpoint, a strong American 
presence is an unwelcome restraint on 
South Africa's internal and external 
policy options. Conservatives resent 
what they regai'd as American med- 
dling in South Africa's internal affairs, 
including our financial and moral sup- 
port to antiapartheid groups, and our 
persistance in seeking ways to disman- 
tle racial barriers and promote di- 
alogue. They also resent American 
films and televisions programs, our mu- 
sic, journalism, and popular culture be- 
cause of their supposedly subversive in- 
fluence on a younger generation of Af- 
rikaners. South Africa's UN represent- 
ative was speaking to this constituency 
when, in responding a few months ago 
to harsh criticism of South Africa in the 
General Assembly, he invited the inter- 
national community to "do its damned- 
est" to Pretoria. He could have as well 
added: "and close the door behind you." 
Neither hardliners in the National 
Party, nor the growing conservative op- 
position, nor the more militant organi- 
zations even further to the right will 
mourn the absence of Americans from 
South Africa. 

Sanctions and the Black Opposition 

Claims that the overwhelming majority 
of South African blacks support sanc- 
tions cannot be substantiated. Cer- 
tainly, respected black leaders of 
community, labor, church, and student 
organizations, as well as the ANC 
[African National Congress] and PAC 
[Pan-African Congress] in exile, con- 
tinue to call publicly for further 
punitive measures against Pretoria. 
Some, like Archbishop Desmond Tutu, 
believe that sanctions are the only al- 
ternative to uncontrollable violence. 
Leaders of the front-line states have 
also, in past years at least, been out- 
spoken in calling for U.S. and Western 
sanctions against South Africa. 

Yet there are signs that over the 
past 2 years a serious rethinking of the 
sanctions strategy has taken place. 
Some mass organizations, such as con- 
servative black churches and Chief 
Buthelezi's Inkatha movement, which 

artment of State Bulletin/August 1988 

claims to represent more than 6 million 
Zulus, have always been opposed to in- 
ternational sanctions. Other organiza- 
tions, such as the National African 
Fedei-ated Chamber of Commerce, 
which represents most major black 
business interests, officially subscribe 
to sanctions while leaving individual 
members ample room to express 
doubts. Even within the staunchly 
prosanctions COSATU [Congress of 
South African Trade Unions], debate 
simmers over the wisdom of promoting 
international embargoes. 

While it would be wrong to infer 
that black opposition leaders are simply 
out of touch with their rank and file, 
debate over the effectiveness of sanc- 
tions is unquestionably livelier now 
than ever before. This new mood is cap- 
tured in Soweto playwright Gibson 
Rente's popular drama Sekunjalo, 
which depicts comrades destroying a 
township by intimidating, burning, and 
boycotting. It ends with a declaration 
of hatred for Afrikaner rule and a 
dance routine in which the actors sing 
"Who's gonna plant that cane? Who's 
gonna drive that train? Who's gonna fly 
that plane?" Rente's actors recount the 
events of the 1850s when the Xhosa na- 
tion killed its cattle and burned its 
grain in the faith that the dead would 
rise and the Russians would come to 
drive the British into the sea. The ac- 
tors compare those times with the cur- 
rent calls for sanctions and bemoan the 
self-destructive tradition of black South 
African resistance to white rule. 

The Marxist intellectual and leader 
of the black consciousness-based Na- 
tional Forum, Neville Alexander 
(hardly an apologist for apartheid), 
makes the same argument from a dif- 
ferent perspective. He wrote recently 
that "I believe . . . that the insistence 
on total sanctions is senseless — as 
senseless as an unqualified academic 
boycott and unlimited school boycotts — 
which amount to suicide if you do not 
have real power, and if the government 
is not yet so weak that such pressure 
can bring it to its knees." 

Across South Africa's borders, re- 
assessments of the effects of sanctions 
and possible South African counter- 
sanctions on the economies of the front- 
line states are also underway. As a re- 
sult, front-line leaders have modified 
their rhetoric, moved serious discus- 
sions of sanctions to the margins of in- 
ternational meetings and abandoned 
plans to apply sanctions of their own. 
Trade between South Africa and most 
neighboring states has actually in- 
creased over the past year. 



These observations are not meant 
to suggest that black South Africans 
have come to terms with white domina- 
tion or that South Africa's black-ruled 
neighbors have accepted the status of 
satellites to the region's economic su- 
perpower. What has occurred, I believe, 
is that sanctions have been reevaluated, 
and strong misgivings have developed 
about both their high costs and 

Keeping Open U.S. Options 

I alluded earlier to the combination of 
outrage and impatience with which 
many Americans react to the situation 
in South Africa. But neither we nor 
South Africans can afford U.S. policies 
motivated primarily by passion. There 
exists a broad American consensus on 
what is wrong in South Africa and on 
the steps South Africa and its citizens 
must take to correct these wrongs. 
This consensus could provide the basis 
for a realistic, workable, and nonpar- 
tisan approach to the South African 

Any sound American policy toward 
South Africa must take into account at 
least two fundamental constraints. 
First, we must accept that South Af- 
rica's crisis is an enduring one. There 
are no quick solutions. Resorting to 
drastic remedies — such as the misuse of 
American power to destabilize the 
South African economy — only increases 
chances of a catastrophic outcome for 
all South Africans. Second, we must 
also accept that our leverage is limited. 
South Africa can survive — even 
thrive — without trade or contact with 
Americans. Our mission should be one 
of using all available means to maximize 
our influence and leverage. This can't 
be achieved through a policy of eco- 
nomic and diplomatic dissociation from 
the problem. 

Operating from these premises, the 
Administration has constructed an ap- 
proach which emphasizes both the pro- 
tection of enduring U.S. interests in 
South Africa and the promotion of 
rapid, fundamental change in that soci- 
ety. This approach has a number of key 

• The Administration has under- 
taken strenuous efforts to keep open all 
our lines of communication, to expand 
contacts across the racial and political 
spectrum, and to open up opportunities 
for the kinds of negotiations which are 
South Africa's only alternative to a slow 
descent into civil war. Over the past 8 
years, all groups in South Africa, in- 
cluding the full range of opposition 

movement leaders, have had access to 
the highest levels of our government. 
We continue to make it clear to the 
South African Government that we be- 
lieve it has a special responsibility to 
create the necessary conditions in 
which negotiations with credible oppo- 
nents can take place. 

• Expanding our assistance to 
apartheid's victims is a top priority. 
South Africa's struggling black commu- 
nities need our financial support, our 
technical and professional training, and 
our help in developing organizational 
and leadership skills. These are the 
building blocks from which the disad- 
vantaged majority will construct a more 
just and more democratic future for 
South Africa. To the extent that num- 
bers of blacks already possess the 
knowledge and the skills, and hence the 
economic power, that a modern indus- 
trial state requires, they have greatly 
strengthened their bargaining position 
vis-a-vis South Africa's governing elite. 
We must work to develop further this 
leverage and to help turn it to political 
advantage. This is the central thrust of 
our official aid program to South Af- 
rica. Obviously, sanctions-induced un- 
employment, a turn by South Africa 
toward autarky and tighter state con- 
trol of the economy, and a reduced 
American presence in South Africa 
would all work against this effort. 

• In dealing with South Africa, we 
must continue to put a strong emphasis 
on the regional context. Turmoil in 
South Africa continues to spread out- 
ward in shock waves which threaten the 
economic and political stability of 
neighboring states. Our regional diplo- 
macy is committed to reducing these 
states' economic vulnerabilities and to 
easing misunderstandings and tensions 
in their dealings with South Africa. 

• In this regard, negotiations cur- 
rently underway to secure Namibian in- 
dependence and the withdrawal of all 
foreign troops from both Namibia and 
Angola assume special importance. A 
negotiated solution would be a signal 
achievement for American diplomacy 
and would win widespread approval 
throughout Africa. Progress has been 
made which even sympathetic observers 
would have said a short time ago was 
impossible. We have laid down the con- 
ceptual basis for a settlement and 
brought all parties to the realization 
that Namibian independence, the re- 
moval of foreign armies from Angola, 
and the resolution of Angola's internal 
conflict are interrelated problems. 
None of these problems can be solved 
in isolation from the others. 

Our mediation continues, and it 
important that Congress not underci 
this effort by ordering drastic change 
in our bilateral relationship with ont 
the negotiating parties. While it ma; 
be in South Africa's best interests tc 
achieve a negotiated settlement in A 
gola and Namibia, Pretoria could wc 
decide that a harsh, diplomatic re- 
joinder to expressions of U.S. hostil 
is a higher immediate priority. 

As a final note, I would like to 
point out that in a few months' time 
new U.S. administration will enter i 
fice and will no doubt undertake a r 
view of U.S. policy toward South Al 
and the region. It would be wrong f 
Congress to commit the United Stal 
in the final days of this Administrat 
to the extreme measures contempla 
in S. 2378. To do so will deny the m 
administration the option of continu 
in U.S. policy while at the same tin 
seriously restricting its choices befc 
it has even entered office. 

The South African dilemma wil 
with us for some time to come. The 
only reasonable course Americans c 
adopt is one which ensures that we 
tain as many diplomatic tools and c 
nels of influence as possible in the 
search for ways to remain relevant 
involved in finding a solution. Regri 
bly, S. 2378 takes us in precisely th 
opposite direction. 

'The complete transcript of the hearii 
will be published by the committee and wi 
available from the Superintendent of Doci 
ments, U.S. Government Printing Office, 
Washington, D.C. 20402. ■ 

Review of Events 
in Ethiopia 

Following are statements by Cheste 
Crocker, Assistant Secretary for A) 
rican Affairs; Richard Williamson, 
Assistant Secretary for Internation 
Organization Affairs; and Charles 
Gladson, Assista7it Administrator, 
Bureau for Africa, Agency for 
International Development. 

APRIL 21, 1988 

Joint statement by Assistant Secre- 
taries Crocker and Williamson and 
sistant Administrator Gladson befo 
the Subcommittees on Africa and o 



/'.'/' Rights a>id International Or- 
; ''ii/(.s of the House Committee on 

■Arlciime the opportunity to meet 
: 'lie subcommittees today to review 
us of events in Ethiopia arising 
panded civil war in the north 
1- impact on international relief 
lilies. Let us note from the outset 
this has been a rapidly evolving 
e. We have moved quickly on many 
■f, iliplomatic, and political fronts 
.ii>e of the seriousness of the threat 
ai\ing people and of the need to 
; quick solutions. We were pleased 
1 the mission to Ethiopia by UN 
I ei- Secretary General Ahtisaari and 
! he reviewing matters with the 
! ed Nations later this week. I wish 
ill] be optimistic, but overall the 

■ f .situation remains very trouble- 
■ and our prognosis is not 

.\> the committee is well aware, 
rents of the problem lie not so much 
eat her as in war and poor agri- 
iral policies. The internal politics of 
la I'll Ethiopia have festered for 
lies with various groups spouting a 
iaii-a of largely Marxist ideologies. 
ie past 10 years, however, when the 
: uistu regime opted for confronta- 

■ rather than accommodation with 
liern dissidents, the stage became 

a>ingly set for the major warfare 
I lew afflicts the area. During this 
nil, rebel armies in Eritrea co- 
ed under the leadership of the 
... rean People's Liberation Front 
ELF), which seeks a separate and 
Hi pendent Eritrea. 

The government's military pre- 
jjc.pation in Eritrea permitted the 
•"rth of another distinct political/mili- 
inovement in neighboring Tigray. 
hard-line Marxist organization, the 
■eaii People's Liberation Front 
l-h), has also expanded its military 
K ities and wages classic guerrilla 
tale ambushing and interdicting 
■riiment movements throughout the 

( urrent Military Situation 

' I result of rebel successes and the 
lective performance of the Ethio- 
I .Army in its last encounter, the 
tary situation in northern Ethiopia 
le most precarious in years. Since 
W-February, climaxing with loss of 
iibet to EPLF surprise attack on 
■ch 20, the Ethiopian Army has lost 
h ground, including garrison towns 
ch it apparently intentionally aban- 

doned. Government forces have with- 
drawn into a defensive perimeter 
centered on Massawa/Asmara/Keren in 
Eritrea and Mekele in Tigi-ay. Positions 
there have been reinforced, and the 
government is actively rebuilding the 
manpower and material of the northern 

This buildup portends a major 
counteroffensive. Whenever that occurs 
and irrespective of whether it is suc- 
cessful, such fighting would likely come 
at high cost in lives, civilian as well as 
military. But even another major battle 
may not be definitive. This war has 
lasted 27 years, at times punctuated by 
bitter fighting and ebb and flow of ter- 
ritorial control. As in the past, it is 
possible, perhaps even probable, that 
no party will be able dramatically to 
alter the military balance in the near 
future. In that case, and in the absence 
of political solutions, the existing stale- 
mate will likely continue, albeit at a 
higher level of mobilization and 

This impasse dramatically under- 
lines the fact that only political solu- 
tions really offer the possibility for 
peace. In the absence of peace, war will 
continue, relief operations will be con- 
strained, and famine will mount. Thou- 
sands if not hundreds of thousands or 
even millions of people may die. Sadly, 
no party to conflict in northern Ethi- 
opia appears ready to negotiate or even 
to consider settlement on other than its 
harshest terms, i.e., total victory. How 
many more must die before belligerents 
recognize that peace rather than con- 
quest is the path to reconciliation? 

We note that in addition to pur- 
suing internal military solutions. Presi- 
dent Mengistu has taken certain diplo- 
matic steps designed to reduce his 
evident vulnerabilities and to under- 
cut support for his opponents or to 
lessen external pressures. In late 
March, Ethiopia accepted with alacrity 
2-year-old Somali propositions which 
would i-educe border tensions between 
these traditional foes. Implementation 
of such measures will release Ethiopian 
troops from the frontier for service on 
the northern front, but the Somalia- 
Ethiopia accord will also deal directly 
with nagging issues such as exchange 
of POWs [prisoners of war] from the 
1977 war and a halt to insurgent ac- 
tivities that have long retarded peace in 
the region. Similarly, there are indica- 
tions that Ethiopia, after several years 
of deliberate destabilization of Sudan, 
might look for an accommodation with 
Sudan, in effect proposing a mutual 
halt to support for insurgents. Real- 
ization of this idea is problematical. 

however, because the issues are intrac- 
table and the parallels between the 
civil wars in these two countries are far 
from exact. The importance of the two 
developments, nonetheless, is that they 
represent Mengistu's near admission 
that Ethiopia has been responsible for 
mischief in the region. 

This latest cycle of war in the 
north is an impediment to consolidation 
of President Mengistu's rule and the 
transformation of Ethiopia into a So- 
viet-style people's democratic republic. 
Although it is now more tenuous than 
before, Mengistu's position is not appar- 
ently threatened by these develop- 
ments. His control of the internal 
security apparatus and the military 
command structure does not appear, 
from available evidence, to be under 
challenge. There is growing discontent 
on the part of the population that must 
forego economic progress and provide 
sons for the army as well as taxes for 
the war, but this is unlikely to erupt 
into popular antigovernment action. 

U.S. Policy Toward Ethiopia 

American relations with the Ethiopian 
Government remain cool, as they have 
for more than a decade. We have indi- 
cated to Ethiopian leaders our willing- 
ness to meet and discuss the many 
issues which divide us, but they have 
consistently turned away from serious 
talk. We have very little direct leverage 
with the Ethiopian Government and its 
leaders. Our longstanding policy, valid 
throughout Africa, supports the ter- 
ritorial integrity of each nation, includ- 
ing Ethiopia. We have never provided 
equipment or other support to any of 
the separatist groups active in 

Our chief involvement with Ethi- 
opia at present, as in 1985-86, centers 
on providing humanitarian relief so that 
victims of famine do not starve. We 
have purposely pursued relief opera- 
tions in concert with other donors 
through private voluntary organiza- 
tions, the United Nations, and interna- 
tional organizations such as the Red 
Cross in order to keep the human- 
itarian agenda in Ethiopia separate 
from the political one. 

Without hesitation we have done 
our utmost to ensure that hungry chil- 
dren are fed and that their parents re- 
ceive the sustenance necessary to 
remain in their homes and on their 
farms so they can plant again when 
the rains return. The U.S. Government 
mobilized large amounts of its own 
resources. We also catalyzed other gov- 

lartment of State Bulletin/ August 1988 



ernments into prompt action. We re- 
peatedly found warm and widespread 
congressional and public support for 
food for Ethiopia. American private 
voluntary organizations, which are 
the backbone of humanitarian efforts 
around the globe, again came through 
with effective, efficient, and compassion- 
ate operations. Always at sacrifice of 
personal comfort and, indeed, in the 
face of some personal risk, relief work- 
ers on the ground struggle daily 
against the odds of nature. All Ameri- 
cans can be proud of our country's 

Humanitarian Operations 

Given the solid early start last summer 
and cooperation from all concerned, re- 
lief operations progressed satisfactorily 
through the fall and into the new year. 
Up until February 1988, food flowed 
into drought-stricken areas through a 
relatively efficient mechanism consist- 
ing of donors, the government's Relief 
and Rehabilitation Commission (RRC), 
PVOs, NGOs [private voluntary organi- 
zations, nongovernmental organiza- 
tions], and the United Nations. People 
were being fed, and we were encour- 
aged that, by slowly increasing food 
deliveries as new transport became 
available, we would be able to stay 
ahead of the problem, that camps would 
be avoided, and that hungry people 
would hve. 

Two of the three major con- 
straints — food availability and trans- 
port — appeared to be solved, but the 
third constraint — insecurity — was the 
unknown factor. Clearly, it was the im- 
ponderable in the north upon which 
success or failure turned. Sporadic re- 
bel attacks against trucks crippled the 
fleet and were a strong psychological 
deterrent to fleet movements. Addi- 
tionally, government forces began clos- 
ing roads more frequently, particularly 
in Tigray where donors met less than 
half of delivery goals in February. 
Stocks held in provincial towns and 
rural feeding centers dwindled and re- 
supply dramatically diminished. Rebel 
forays in Tigray hampered movements, 
but the true turning point was the mili- 
tary setback suffered by the army at 
Afabet, Eritrea, on March 19. 

Following that, the government 
clamped down hard to ensure its con- 
trol, resulting in a virtual halt of relief 
food movement. The military comman- 
deered government food trucks and 
fuel. Relief aircraft were barred from 
the north and port priorities assigned 

to military shipments. By April 6, re- 
lief operations were pretty well stalled 
throughout the rural north, except for 
sporadic airlift into Mekele from the 
south and some residual distribution 
from local stocks. Nonetheless, donors 
were prepared to resume active opera- 
tions whenever security cii-cumstances 
permitted. The government's April 6 
e.xpulsion order came as a surprise, but 
it was quickly enforced; and by April 
13, all expatriates had left the northern 
provinces. Food stocks and assets were 
either left in custody of local employees 
or locked up. 

Current Relief Situation 

Overall the donor community estimated 
that some 5-7 million persons were at 
risk and that half of those were resi- 
dent in Eritrea and Tigray. The rough 
relief plan was to move 100,000 tons of 
food a month from the ports to the peo- 
ple; 50,000 tons to the north and 50,000 
tons to the south. Although we failed 
to achieve this ambitious goal, we did 
move a substantial amount, about 
34,000 tons into the north last De- 
cember and another 30,000 tons in Jan- 
uary. About 31,000 tons were moved in 
February, but only 23,000 tons in 
March and a projected 10,000 tons in 
April. Total deliveries in the south are 
more difficult to calculate given the 
larger number of organizations in- 
volved, but we estimate that approxi- 
mately 30,000-40,000 tons are being 
delivered monthly. Fortunately, opera- 
tions in the south have not been af- 
fected by security constraints similar to 
those in the north and operations there 
continue to be successful. 

Since April 8, virtually all food op- 
erations in Eritrea and northern Tigray 
ceased, with the notable exception of 
distributions by the Ethiopian Catholic 
Church through its joint distribution 
program (JRP). In Eritrea about 23 
of 36 centers remain open. Maybe as 
many as 500,000 beneficiaries are being 
reached by JRP in Eritrea including 
some transfers from ICRC [Interna- 
tional Committee of the Red Cross] 
centers. All centers in Tigray except 
three or four in Mekele are closed. In 
Mekele about 140,000 people are being 

Feeding centers along the main 
road west of Keren to the Sudanese 
border in Eritrea and beginning before 
Adigrat south of Asmara into Tigray 
are closed. Some food continues to 
reach Maychew, Tigray, by road from 
the south. Targeted beneficiaries in 
that area total 117,000. 

Roughly speaking, feeding efforts 
in the north were divided into thirds- 
one-third to the RRC, another to the 
United Nations, and the final third ti 
the PVOs and NGOs. The RRC oper- 
ated mainly in the cities and towns. T 
United Nations assured transport an' 
provided some distribution in outlyin 
towns and nascent camps, but the PV 
and NGOs distributed in rural areas. 


Actions to Date 

Faced with this impasse and fearing 
that 2 million intended recipients coi 
not be reached with food, the Unitec 
States undertook a range of diploma 
contacts designed to achieve a chang 
of Ethiopia's decision and resumptior 
feeding efforts. 

Because we have consistently fo 
lowed the UN lead on famine matter 
in Ethiopia, we looked foremost to t 
UN representative in Addis Ababa, 
Michael Priestley, to dissuade the g( 
ernment. We also urged, then gave ( 
full support to, the undertaking of S 
retary General Perez de Cuellar to i 
his top troubleshooter, Under Secre ] 
Martti Ahtisaari, to Ethiopia to pur 
solutions to the crisis. We plan to c( 
suit with the Secretary General and 
Mr. Ahtisaari later this week to see 
what next steps might be appropria 

We criticized the Ethiopian Go\ 
ment, protested its recent decisions 
noted the catastrophe which will be 
2 million people if the situation is n' 
changed, and encouraged reconsidei 
tion. We approached other donor gc 
ernments to seek common approach 
to protest Ethiopian actions. We foi 
fullest sympathy and support for th 
position that resumed international 
lief efforts were essential to avoid 
greater tragedy. Many allied goven 
ments subsequently approached EtI 
opia bilaterally, issued statements, 
worked multilaterally through the I 
ropean Economic Community to pn 
these points. Essentially, we have a 
called for reversal of the decision to 
elude international agencies from tl 
north. The Department of State's 
spokesman read a statement April 
publicly expressing dismay with de' 
opments in Ethiopia. That was folio 
by a briefing from AID [Agency foi 
International Development] Admini 
tor Woods on relief operation specil 

As you know. Secretary Shultz 
raised Ethiopian issues with Soviet 
Foreign Minister Shevardnadze in C 
eva last week. We have also intensi 
our working and senior-level discus.-; 
on Ethiopia with representatives of 

Deoartment of State Bulletin/ Auaust 


et Union. The immediate and top 
r rity focus of these exchanges is on 
ijiirgency of resolving immediate hu- 
niiitarian relief problems. We wel- 
9ied the Soviet pledge of 250,000 tons 
f lod for famine relief in Ethiopia. 
h provision of such assistance does, 
ited, for the first time, make the 
■oet Union an interested party in 
ecing resumption of viable relief 
p -at ions in the north. As Ethiopia's 
ical ally and chief military supplier, 
mU.S.S.R. clearly has interests 
'. L^ive it unmatched influence with 
an leaders. We have urged the 
1 'nion to use such influence in a 
I (^ live fashion for the benefit of 
ling people. At the same time, we 
; hi'lieve that humanitarian crisis 
I If a recurrent phenomenon as long 
tliKipia is wedded to military op- 
aiul failed economic policies. The 
- tnr political compromise and nego- 
m to end 27 years of war has never 
iiKire apparent. We believe the So- 
1 have a responsibihty to put their 
MiT to the wheel on behalf of peace 
V Horn just as we have done. 

' Moves 

next few days, we intend to 

'!■' opportunities with the United 

: niis and other donors regarding the 

ihilities for including PVO opera- 

; under a wider UN umbrella in the 
h. We still need to learn exactly 
; arrangements have been worked 

• We remain convinced that full re- 
ption of PVO activities is the most 
ane and practical course of action. 

• We intend to continue to coordi- 
and share information with like- 
led allied governments. 

'• We intend to keep the spotlight 

ablic opinion on the Government of 

lopia. This hearing today is cer- 

ly an important part of that 


'• We will be following up with the 

et Union at senior levels. 

• As practical matters, in coordina- 
with WFP [World Food Program] 
other donors, we are also looking 
^scheduling port deliveries in order 
void congestion. We are considering 
■nenting airlift into the most seri- 

y affected areas and are preposi- 
ing materials that will be needed 
n camps inevitably form. 

1 In summary, let me assure you that 
;ii-i leadership and activism will not 

e. We strongly feel the mandate 
cd: the American people have conferred 

upon us to see that starving people 
are fed. Our humanitarian impulse is 
strong, and we will persist until solu- 
tions are achieved that permit food to 
flow again to the innocent victims of 
war and famine in northern Ethiopia. 

APRIL 21, 1988 

Statement by Assistmit Secretary 
Williamson before the House Subcom- 
mittees on Africa and on Human 
Rights and International 

Thank you for the opportunity to meet 
with you today on the subject of 
Ethiopia. The Congress is to be con- 
gratulated for helping put a public 
spotlight on the needless human trag- 
edy unfolding in eastern Africa. 

In the joint statement submitted 
for the record by the AID and the Bu- 
reaus of African and International Or- 
ganization Affairs at the Department of 
State, we have expressed our shared 
concern about the general situation in 
Ethiopia. Given the specific role of the 
United Nations, I would like to comple- 
ment that statement with a brief sum- 
mary of the work of the UN system — 
emphasizing three points: 

First, international compassion for 
the starving people of Ethiopia; 

Second, the status of UN efforts, 
encouraged by the United States, to 
help the Ethiopian people; and 

Third, the determination of the 
Reagan Administration to assure that 
the United Nations helps avert more 
death and devastation in Ethiopia. 

Famine and human suffering have 
been the lot of mankind throughout his- 
tory. The people of Ethiopia have 
known more than their share, suffering 
from recurring droughts and famines. 
The callous and indifferent Government 
of Ethiopia has allied itself with nature 
to jeopardize the lives of more than 2 
million people. 

We will not — indeed, we cannot — 
sit silent during such a time of shame. 
Rather, we are more than ever deter- 
mined to make every effort and to pur- 
sue every channel to help the people of 
Ethiopia through this crisis. 

Working within the mandate of my 
office, I have impressed upon the offi- 
cials of the United Nations the urgency 
of the situation and our deep concern 
and complete commitment to helping 
the people of Ethiopia through all avail- 
able means. 

I met last week in Geneva with UN 
Secretary General Perez de Cuellar on 

lartment of State Bulletin/August 1988 

the subject of Ethiopia. He, like us, is 
extremely concerned. I expressed to 
him our great anxiety over the pos- 
sibility that the horrible prospect of 
millions dying from starvation may re- 
sult from decisions by the Ethiopian 
Government to ban international relief 
agencies from operating in the most se- 
riously affected areas of the country. I 
stressed that the U.S. Government con- 
sidered this situation to be a matter of 
utmost urgency and that we supported 
his efforts and that of the UN system 
to ensure that compassion prevails over 
conflict and blatant disregard for hu- 
man rights. 

In this connection, I expressed our 
full support for the mission of UN Un- 
der Secretary Ahtisaari. This mission, 
which concluded yesterday, has resulted 
in a decision by the Ethiopian Govern- 
ment to permit UN representatives to 
resume relief operations in Tigray and 
Eritrea. We welcome this news. But we 
will be watching very closely to assure 
that the Ethiopian Government adheres 
to this reported agreement. We note 
that the Ethiopian Government is con- 
tinuing its ban on International Red 
Cross and other private voluntary orga- 
nizations in northern Ethiopia. Thus, in 
our view, Ahtisaari's mission has been 
only partly successful. 

We must continue to insist — 
through the United Nations and with 
the active involvement of the diplomatic 
community — that the Ethiopian Govern- 
ment respects its basic responsibilities 
to its own people. I myself have already 
talked with a number of representatives 
of countries able and willing to provide 
assistance and with other senior offi- 
cials in the United Nations. I met on 
April 19 with James Jonah, Assistant 
Secretary General and Director of the 
Office of Research and Collection of In- 
formation for the United Nations, to 
emphasize American concerns and, on 
April 20, I reiterated U.S. determina- 
tion to help restore international relief 
to Ethiopia with Joseph Verner Reed, 
UN Under Secretary for Political and 
General Assembly Affairs. My col- 
leagues and I plan to follow up with 
Under Secretary Ahtisaari upon his re- 
turn from Ethiopia. I have under- 
scored — and will continue to under- 
score — the seriousness with which we 
view the situation and our belief that 
firm resolve on the part of the interna- 
tional community is critical to getting 
needed i-elief supplies to the people of 
Ethiopia. Our U.S. Mission to the 
United Nations in New York has been 
instructed to begin planning, on a con- 
tingency basis, for seeking further 
action in UN fora. 



I would not want to leave the im- 
pression that nothing has been clone 
heretofore. As you know, the UN sys- 
tem took the lead some time ago in 
coordinating the international effort to 
confront the emergency in Ethiopia. 
One of the first steps taken by the UN 
Secretary General was the designation 
of a Special Representative in Ethiopia, 
Michael Pi'iestley, to deal with all as- 
pects of this emergency. Mr. Priestley 
heads the Emergency Prevention and 
Preparedness Group (EPPG) which 
serves as a fulcrum for UN system- 
wide efforts in the country. 

The UN Development Program 
(UNDP) has augmented the financing 
and personnel of the group. UNDP has 
also allocated UN volunteers to work 
with the Relief and Rehabihtation Com- 
mission of the Government of Ethiopia. 
These young and dedicated profes- 
sionals, from a number of countries, are 
providing know-how to expedite re- 
ceipt, storage, transportation, and 
distribution of foodstuffs, medical 
supplies, and other basic necessities. 
They not only know how to get the job 
done but also are committed to taking 
every conceivable step to ensure that 
the people of Ethiopia get the help they 
so desperately need. 

Another UN approach to the prob- 
lem has been through the UN Disaster 
Relief Organization (UNDRO) and the 
World Food Program (WFP). Together 
they have led the effort to move huge 
volumes of food from the ports to 
the devastated areas in the north of 
the country. Also, in response to a 
UNDRO-launched appeal, donors have 
pledged almost $10 million to the Emer- 
gency Transport Fund to pay for the 
airlifting of food to remote areas of Ti- 
gray and Eritrea. The United Nations 
has appealed for an additional $5 mil- 
lion to e.xtend this operation until the 
end of June. In March, before the latest 
crisis, EPPG was responsible for airlift- 
ing some 11,000 tons of emergency sup- 
plies. WFP has a fleet of some 200 
trucks, provided by donors, and is pur- 
chasing an additional 70 vehicles for use 
in the north. We are using every avail- 
able channel to reach the various 
groups which have attacked these relief 
convoys in order to end the loss of 
transport, supplies, and lives. We are 
also supporting UN efforts to persuade 
the government to permit convoys to 
operate freely at their own risk. 

The UN Children's Fund 
(UNICF2F) has raised more than $10 
million in response to its appeal of 
November 1987 for relief to drought- 
affected women and children. The 

UNICEF aid will cover health, supple- 
mentary feeding and relief items, water 
and sanitation needs, and cash for food 
for drought victims. 

The Food and Agriculture Organi- 
zation's (FAO) Food Information and 
Early Warning System project was in- 
strumental in bringing the impending 
drought/famine to the attention of the 
world last June and July. FAO also 
has three crop protection projects in 
Ethiopia addressing the agricultural 
side of emergency needs, valued at 
about $0.5 million. They focus on con- 
trolling army worm infestation, tse-tse 
fly, and desert locusts. 

We know that these efforts and 
those of the rest of the international 
community cannot compensate for effec- 
tive action by the Ethiopian Govern- 
ment. Nor may they be sufficient to 
meet the magnitude of the need. 

We thus appreciate all the more 
this opportunity to highlight the need 
for all, especially the Government of 
Ethiopia, to ensure that the people 
whose lives are at risk get life-sustain- 
ing relief The Government of Ethiopia 
must adopt policies which are grounded 
in the recognition that the needs of its 
people are its foremost concern. I will 
be working actively with my colleagues 
from the Department's Bureau of Af- 
rican Affairs and from AID and else- 
where to keep pressure on the UN 
system. The Government of the United 
States believes that the United Nations 
can and must play a critical facilitative 
role, so that we may deflect what oth- 
erwise will be a catastrophe of monu- 
mental proportions. The strong outcry 
of the international community in be- 
half of the Ethiopian people may make 
the difference between life and death. 

MAY 19, 1988 

Statemeyit by Assistant Secretary 
Williamson before the UN Economic 
and Social Council in New York City.- 

The Economic and Social Council 
(ECOSOC) is second only to the Gen- 
eral Assembly in the range of issues it 
must examine and on which members 
must have views. Its oversight role has 
made the ECOSOC into a major inter- 
national forum for the discussion of the 
principal themes of our time, those of 
violence and peace, death and life, suf- 
fering and triumph. 

The nations represented in this 
ECOSOC chamber are all signatories of 
the UN Charter. As such, we have vol- 
untarily assumed a solemn responsibil- 

ity to advocate the values and moral 
principles reflected in the Preamble ai 
in Article I of Chapter I of the Charte 
It is, I firmly believe, our duty to stat 
up for these values and to call for ac- 
tions which reflect the moral authorir 
of this great organization. When we si 
a situation developing which is contrai 
to these values, we are obligated to 
speak out. We must never leave our- 
selves open to the shame of silence. 

Today we want to discuss a topic 
that only infrequently and very brief] 
comes to life on our televisions and in 
our newspapers or in debates here an 
elsewhere. We come before you to dis 
cuss a situation about which the worL 
community has only occasionally spoli 
out, a situation characterized by the 
deliberate and entirely avoidable suff 
ing of millions of our fellow human b( 
ings. The subject is Ethiopia. 

In 1986, my country went before 
the Commission on Human Rights in 
effort to get that august body to taki 
stand on the situation in Ethiopia. U 
fortunately for the people of Ethiopii 
politics prevailed and the commissior 
refused to act. And sadly, subsequer 
events in Ethiopia proved us correct. 
We will never know how many could 
have been saved had the commission 
acted at that time or how many wen 
in fact, saved merely by our raising 

Once again, we come before a bi 
of the United Nations to plead for tl 
people of Ethiopia. Once again, a bo 
of the United Nations and its memb' 
must face the issue of whether to re 
main mute and blind in the presence 
actions which starve an innocent po| 
lation. Put bluntly, once again a bod 
the United Nations must face the is 
of whether human lives are more va 
able than narrow political interests. 
have no doubt about our answer; weF 
have no doubt about what the answe 
the world community should be. Aik "' 
necessary, we wdll come again befor 
the summer session of the ECOSOC 
and other forums of the United Nat 
to press for that answer. 

The United States hopes that tl 
Secretary General and all the govt r 
ments represented here and throui: 
the United Nations will work tou' 
to persuade the Ethiopian reginn 
I'ebel forces in the north to permit ^r, 
international relief effort to resumelj 
unfettered. In the next few days, L 
the annual summit meeting of the 
Organization of African Unity (OAl 
will take place in Addis Ababa. The 
Secretary General is due to attend 
meeting, as are the leaders of manv i 


Denartmpnt nf cstatp Riillptin/Aiiaust'.l. 


simu'iits that share our human- 
iicerns. We urge that all who 
'■r in Addis Ababa register this 

(• rail upon the United Nations 

> nu-mbers, regardless of ideology 
u'ii:ii policy, to recognize the trag- 

riirring in Ethiopia and to use all 
. Iilf |)eaceful means to end it. 
I ;ill, we hope to use this pres- 

■- ai'ena to call upon the Govern- 

ni Ethiopia to respect the most 

ihiital rights of its citizens. 

i'[ me stress: my government is 
; It'll bv humanitarian concern for 

■ople (if Ethiopia. The United 
it; has consistently demonstrated 
c icern for the people of Ethiopia. 

f the largest donor of relief as- 
; If to the people of Ethiopia and 
! (|uietly condone obstacles to es- 
t 1 aid. 
hile we do not have fully reliable 

lation about what is actually hap- 
: : 111 Ethiopia — and that uncer- 
! is itself one of our greatest 
IS . for consternation — we do believe 


The famine in Ethiopia, espe- 
i 111 the Provinces of Eritrea and 

. lias become e.xtremely serious. 

( If -',.2 million people at risk, only 
n ■^•'>il.000 are now being fed. That 
,t ,sts with almost 2 million who 
■ K ing fed in February of this year. 

iiiainder face a very real prospect 
s :-valion. 

War is the principal culprit in 
li' ig access to hungry people. Mili- 
V ctiuns by both sides and changed 
t lines, compounded by misguided 
( iiiient decisions, have affected de- 
■1 systems, the number of people 
1' Udvernment control, and the abil- 
( relief organizations to operate. 

The decisions of the Ethiopian 

iiiiient on April 6 effectively 

il international relief efforts in 

irth, thereby seriously undermin- 

-■ eding operations. Although sev- 

1 'N personnel have been allowed 

1 iimch more needs to be done. 

' 1 massive undertaking can now 

liiise at risk. 

ly LTovernment deplores this cold- 
il neglect of millions of Ethio- 
111 |iursuit of military objectives in 

• ractable and unwinnable civil war. 
similarly, we condemn the callous 
I'lis, actions, and warfare of the 
fnices, which have resulted in an- 
aiul chaos in the north — which, in 

I have impeded feeding operations. 
t' not addressing politics but hu- 

I leeency. It is a profoundly moral 

issue. We must speak out against — and 
try to stop — this horrible affront by all 
parties to the UN Charter and to civi- 
lization itself 

We must bear in mind as well that 
the apparent willingness by the Ethio- 
pian Government to allow innocent ci- 
vilians to starve has an impact beyond 
Ethiopia's borders. It threatens the 
lives of other Africans and the stability 
of the entire region. A new bout of 
starvation in northern Ethiopia could 
produce anew a mass exodus of refu- 
gees seeking food in neighboring coun- 
tries, particularly in Sudan. We should 
not forget the enormous burdens placed 
on the people and Government of Sudan 
during the famine of 1984-85. Without a 
resumption of unhindered food deliveries 
in the north, hundreds of thousands of 
Ethiopians might have to flee again. 
Many, many may die in the process. 

The great irony is that, due to the 
bitter lessons learned during the last 
famine in Ethiopia and in response to 
the government's impassioned pleas for 
assistance, the international commu- 
nity, in particular the United Nations, 
is ready this time, with adequate stocks 
of food, supplies, and experienced per- 
sonnel to avert mass starvation in Ethi- 
opia. Yet, that same government which 
came before the world seeking as- 
sistance for its people now refuses to 

allow that assistance to reach its peo- 
ple. It cites concern for the security of 
expatriate relief workers. These con- 
cerns are not shared by most of those 
workers; they are willing to resume 
their relief efforts regardless of per- 
sonal risk. 

I want to make clear that we take 
the step of raising this issue here only 
because other approaches have failed. 
We have contacted Ethiopian authori- 
ties and have been in touch with the 
regime's allies. And, we have supported 
strongly the efforts made by the 
United Nations to clarify and rectify 
the situation in Ethiopia, in particular 
during Mr. Ahtisaari's visit last month. 
Important first steps have been taken, 
but much more must be done. _ 

This body should not permit yet 
another sad chapter to be added to the 
history of our time. We should regis- 
ter — for all to hear and act upon — that 
we have not forgotten the people of 
Ethiopia. That is the least, the bare 
minimum, to which the people of Ethi- 
opia are entitled. 

'The complete transcript of the hearings 
will be published by the committee and will be 
available from the "Superintendent of Docu- 
ments, U.S. Government Printing Office, 
Washington, D.C. 20402. 

-USUN press release 50. ■ 

U.S., Soviet Union Sign 

Joint Verification Experiment Agreement 

Following is the text of the Joint 
Verification Experiment (JVE) Agree- 
ment signed in Moscow by Secretary 
Shultz and Foreign Minister Shevard- 
nadze on May 31, 1988 J 

Agreement Between 

the United States of America 

and the Union of Soviet Socialist Republics 

on the Conduct of 

a Joint Verification Experiment 

The United States of America and the Union of 
Soviet Socialist Republics, hereinafter re- 
ferred to as the Parties, 

Reaffirming the statement of the Secre- 
tary of State of the United States and the 
Foreign Minister of the Union of Soviet Social- 
ist Republics of December 9, 1987, 

Proceeding from the agi-eement to conduct 
a Joint Verification Experiment, hereinafter 
referred to as JVE, for the purpose of the 
elaboration of effective verification measures 
for the Treaty Between the United States of 
America and the Union of Soviet Sociahst 

Republics on the Limitation of Underground 
Nuclear Weapon Tfests, hereinafter referred to 
as the 1974 Treaty on the Limitation of 
Underground Nuclear Weapon Tfests, 

Taking into account the agreements 
reached by the U.S. and Soviet delegations at 
the negotiations in Geneva on specific JVE 
technical procedures and organizational plans 
in full conformity with the December 9, 1987, 
ministerial statement. 

Have agreed as follows: 

1. For purposes of the JVE, there shall be 
two nuclear explosions, one at the U.S. Ne- 
vada Tfest Site and one at the USSR 
Semipalatinsk Tfest Site, each hereinafter 
being referred to as a JVE explosion. 

2. The planned yield of the JVE explosion 
at each test site shall be not less than 

100 kilotons and shall approach 150 kilotons. 

3. Each Party shall have the opportunity 
to measure, on the basis of reciprocity, the 
yield of the JVE explosion conducted at the 
other Party's test site using teleseismic meth- 
ods and, at the other's test site, using hydro- 
dynamic yield measurement methods. 

It nf <itate RiillMin/Auaust 1988 



4. Each Party shall also perform teleseis- 
mic measurements with its national seismic 
station network for both JVE explosions. To 
assist in teleseismic measurement, the Parties 
shall exchange data on five nuclear explosions 
conducted after January 1, 1978 but before 
January 1, 1988 to include yield, date and time, 
geographic coordinates, depth of burial, and 
associated geological and geophysical data. For 
each of these historical explosions, the Parties 
shall exchange teleseismic recordings taken at 
five designated stations on each side including 
station corrections and the best network seis- 
mic magnitude. 

5. Each Party shall perform hydrodynamic 
yield measurements within the satellite hole 
provided for that purpose of the JVE explo- 
sions at both Parties' test sites u.sing the 
methods it has identified in this Agi-eement. 

6. As a yield standard, the experiment will 
include yield measurement within the emplace- 
ment hole of the JVE explosions at both 
Parties' test sites using the hydrodynamic 
methods each Party has identified in this 
Agreement. Each Party shall report to the 
other Party the yield values of each of the JVE 
explosions that are derived by each Party on 
the basis of hydrodynamic yield measurements 
undertaken within the satellite hole and within 
the emplacement hole. Each Party shall under- 
take for the pui-pose of the JVE to ensure at its 
test site a test configuration that will allow 
each Party to obtain an accurate yield standard 
of the JVE explosion. The use of hydrodynamic 
yield measurement methods within the em- 
placement hole by the visiting Party is being 
undertaken only in the JVE, and such meas- 
urement methods within the emplacement hole 
shall not be proposed by either Party for 
verification of the 1974 Treaty on the Limita- 
tion of Underground Nuclear Weapon Tfests. 

7. In the course of the JVE, each Party 
shall carry out teleseismic measurements of 
both JVE explosions at its five seismic stations 
for which historical data were exchanged. The 
Parties shall exchange the seismic data ob- 
tained in the JVE in corresponding detail to 
that exchanged for the historical explosions. 

8. The JVE will provide information on the 
basis of which each Party can demonstrate the 
effectiveness of its hydrodynamic yield meas- 
urement methods at the test site of the other 
Party. Because the JVE is not designed to 
produce statistically significant results, it can- 
not by itself estabHsh statistical proof of the 
accuracy of any particular yield measurement 

9. The JVE conducted at both test sites 
will provide sufficient information to resolve all 
concerns, except those of a statistical nature, 
that have been identified by either Party 
regarding methods proposed by the other 
Party for verification of the 1974 Treaty on the 
Limitation of Underground Nuclear Weapon 

Tfests by providing an example of the effective- 
ness of the verification methods used in the 
JVE and by demonstrating their practicability 
and non-intiTJsiveness. 

10. Specific design procedures of the JVE 
configuration within the emplacement hole 
that may have been necessary to accommodate 
technical objectives of the JVE shall not 
provide a basis for objections by either Party 
regarding the use of hydrodynamic yield meas- 
urements within the satellite hole for future 
nuclear tests. Such design procedures of the 
JVE configuration shall not establish a prece- 
dent for requiring similar design procedures in 
the two Parties' future tests as a condition for 
agreement on measures permitting effective 
verification of the 1974 Treaty on the Limita- 
tion of L'nderground Nuclear Weapon Tfests. 

11. The JVE will assist the Parties in: 
finalizing operational procedures for the con- 
duct of hydrodynamic yield measurements 
within the satellite hole and teleseismic yield 
measurements for verification of future nu- 
clear tests; establishing procedures for gather- 
ing the geological and geophysical data that is 
to be exchanged in accordance with any future 
yield measurement method proposed by either 
Party; determining procedures for exchange of 
data by the Parties on shock-wave properties 
of rock; comparing procedures to be used by 
the Parties for analyzing results of either 
hydrodynamic or teleseismic yield measure- 
ment methods proposed by either Party; and 
considering improved measures for reducing 
any intrusiveness associated with the verifica- 
tion methods proposed by each Party. 

12. The Parties will use their best efforts 
to conduct the JVE explosions in accordance 
with the schedule specified in the Annex. 

13. The exchange of the data obtained i 
the preparation for and conduct of the JVE : 
of the results of the analysis by each Party 
be done in accordance with the schedule 
specified in the Annex with a view toward 
agreement on measures providing for effec 
verification of the 1974 Treaty on the Limit 
tion of Undergi-ound Nuclear Weapon Tfests 

14. Upon request by either Party, the 
Parties shall meet promptly to discuss any 
question or concern that may arise concern 
the provisions of this Agreement. 

15. Each Party shall treat with due res 
the personnel of the other Party in its terri 
in connection with the preparatory work fn 
and execution of, the JVE and shall take al 
appropriate steps to prevent any attack or 
person, freedom and dignity of such persoi 

16. To ensure the effective implement; 
of the foregoing provisions, the Parties ha' ' 
reached the agreements set forth in the An I 
which form an integral part of this Agreen I 

This Agreement, including the Annex I 
hereto, shall enter into force upon signatu; 

Do.NE at Moscow on May 31, 1988, in two 
copies, each in the English and Russian la' 
guages, both texts being equally authentic 

George P. Shultz 


E. Shev.ard.nadze 

'The Annex is not printed here. I 

President Welcomes Entry 
Into Force of INF Treaty 


JUNE 10, 1988' 

I was gratified the U.S. Senate gave its advice 
and consent to the ratification of the Treaty 
Between the United States of America and the 
Union of Soviet Socialist Republics on the 
Elimination of Their Intermediate- and 
Shorter-range Missiles (INF Treaty). It was 
my honor to exchange instruments of ratifica- 
tion on June 1 in Moscow, and the treaty has 
now entered into force. During the past four 
months, the Senate has performed its constitu- 
tional duties with respect to the advice and 

consent to this treaty in an exceptionally 
serious and diligent manner. On the Adn 
stration's part, we spared no effort to re 
to the Senate's needs, and to do our best 
ensure that the Senate had all the infom 
it needed to carry out its constitutional r 
sibilities. Administration witnesses appe 
in more than 70 formal hearings and mat 
more informal briefings; we provided de 
written answers to over 1,300 questions 
record from the committees and individi 
senators; and we provided access to the 
tiating record of the treaty, comprising ', 
bound volumes. 



[n short, I believe the executive branch 
»a|;he Senate took their responsibilities very 
i^usly and made every effort to work 
jiher to fulfill them in the common interest 
ifSvancing the national security of the 
I'lted States and our allies and friends. The 
irjjy ^^ill bear v\itness to the sincerity and 
aii|mce of those in the executive branch and 
tt*l«nate who have taken part in this effort. 
\s noted in my statement issued on May 
Hhe date of final Senate action, one provi- 
g^)f the Resolution to Ratification adopted 
oj^e Senate causes me serious concern. 
The Senate condition relating to the 
;y Clauses of the Constitution apparently 
; to alter the law of treaty interpretation, 
rijiccompanying report of the Committee on 
ign Relations accords primacy, second 
to the treaty text, to all executive branch 
ments to the Senate above all other 
es which international forums or even 
courts would consider in interpreting 
ies. It subordinates fundamental and es- 
il treaty interpretative sources such as 
'eaty parties' intent, the treaty negotiat- 
>cord, and the parties' subsequent prac- 

>eaties are agreements between sover- 
j states and must be interpreted in accord- 
[ ftith accepted principles of international 
11(1 I'.S. Supreme Court jurisprudence. 
iiactical matter, the Senate condition 
an work against the interests of the 
"I ,'^tates by creating situations in which a 

> lia.-i one meaning under international law 
> iiother under domestic law. Unilateral 

'. ctions on the United States should be 
( ed, especially in a treaty affecting vital 
I lal security interests. With respect to 
I law, the President must respect the 
I al understandings reached with the Sen- 
! aring the advice and consent process. But 
f itive statements should be given binding 
' It only when they were authoritatively 

umicated to the Senate by the e.xecutive 
' . iiT part of the basis on which the Senate 

111 its advice and consent to ratification. 

> in accordance with the legal standards 

n liy our courts in determining legislative 

! rommend the thoughtful statements 

ring the Senate debate by Senators 

' , Uoth, Wilson and others which am- 

Micse concerns. 

I lll^ Administration does not take the 
Sion that the executive branch can disre- 
I authoritative executive statements to the 
te, and we have no intention of changing 
iterpretation of the INF Treaty which 
presented to the Senate. On the contrary, 
\dministration has made it clear that it 
onsider all such authoritative statements 

as having been made in good faith. Nonetheless 
the principles of treaty interpretation recog- 
nized and repeatedly invoked by the courts 
may not be limited or changed by the Senate 
alone, and those principles will govern any 
future disputes over interpretation of this 
treaty. As Senator Lugar pointed out during 
the debate, the Supreme Court may well have 
the final judgment, which would be binding on 
the President and Senate alike. Accordingly, I 
am compelled to state that I cannot accept the 
proposition that a condition in a resolution to 
ratification can alter the allocation of rights and 
duties under the Constitution; nor could I, 
consistent with my oath of office, accept any 
diminution claimed to be effected by such a 
condition in the constitutional powers and 
responsibilities of the presidency. 

I do not believe that any difference of view 
about the Senate condition will have any 
practical effect on the implementation of the 
treaty. I believe the executive branch and the 
Senate have a very good common understand- 
ing of the terms of the treaty, and I believe 
that we will handle any question of interpreta- 
tion that may arise in a spirit of mutual 
accommodation and respect. In this spirit I 
welcome the entry into force of the treaty and 
express my hope that it will lead to even more 
important advances in arms reduction and the 
preservation of world peace and security. 

Ronald Reagan 

'Ttext from Weekly Compilation of Presi- 
dential Documents of June 13, 1988. ■ 

China and the U.S.: Present and Future 

by Michael H. Armacost 

Address before the National Council 
for United States-China Trade on June 
1, 1988. Ambassador Armacost is Under 
Secretary for Political Affairs. 

Nearly a decade ago, the United States 
and China completed the process of 
normalization — Initiated by President 
Nixon in 1969 — by establishing full dip- 
lomatic relations between our countries. 

Today the U.S. -China relationship 
has been normahzed in every sense of 
the word. We have substantial cultural, 
economic, and trade contacts, and these 
are growing rapidly. Our political di- 
alogue has been broadened and deep- 
ened. We have the normal day-to-day 
problems and differences that mark any 
vibrant relationship. Perhaps most no- 
tably, this important relationship — once 
the subject of such domestic contro- 
versy — is no longer a matter of partisan 
debate as we head into a presidential 

I would like to take a few minutes 
this evening to look at the relationship: 
where we are; where we are going; 
what we have learned. 

The Development of Relations 

First, a brief historical note. Strategic 
concerns, rather than sentiment, 
prompted the United States and China 
to make the initial moves toward rap- 
prochement in the late 1960s. The 
friendlier relations that emerged in the 

early 1970s eased U.S. security con- 
cerns both in Asia and on the wider 
global geopolitical playing field. 

In the late 1970s, full normalization 
of relations was facilitated not only by 
a shared opposition to Soviet expan- 
sionism but by China's decision to accel- 
erate its modernization drive. The new 
relationship got off to a fast start, espe- 
cially in the areas of educational and 
scientific exchange, people-to-people 
contacts, and an upsurge in commercial 
transactions. These and other impor- 
tant substantive ties developed in a 
honeymoon atmosphere in which expec- 
tations on both sides were high. Inev- 
itably, there were disappointments. But 
there was also rapid learning and real 
progress on many fronts. 

The Achievements of the Relationship 

Throughout the Reagan Administration, 
the United States and China have 
worked to diversify and to expand this 
relationship. In so doing, we have rein- 
forced its original foundations. A quick 
look at the record reveals the progress 

• In diplomacy, regular high-level 
consultations on key regional and 
international issues have been 

• In commerce, bilateral trade with 
China has grown from $1.1 billion in 
1978 to $10.5 billion in 1987. 

• Investment flows, nonexistent in 
1978, have grown to $3.1 billion in com- 
mitted funds and $1.7 in paid-in funds; 

J)artment of State Bulletin/Auaust 1988 



there are now approximately 350 joint 
ventures, many of them undoubtedly 
represented in this room; 

• In science and technology, we 
have signed over 30 protocols, more 
than either the United States or China 
has with any other country. Today we 
cooperate across a broad spectrum of 
scientific and technological research — 
from agriculture to superconductivity; 

• In defense, ship and aircraft vis- 
its, personnel exchanges, and transfers 
of technology have flourished, and we 
now have a cash FMS [Foreign Military 
Sales] progi'am with China; 

• In education, we have moved from 
a closed to an open door policy. Almost 
30,000 Chinese students are in the 
United States, while Americans in in- 
creasing numbers are studying and con- 
ducting I'esearch in China. In April 
China agreed in principle to accept a 
Peace Corps contingent. 

This is a record in which both our 
peoples and governments can take 

Changes in China 

This audience is well aware of the strik- 
ing economic transformation now taking 
place in China today. Yet, as busi- 
nessmen, diplomats, and observers of 
China, we may share a certain skep- 
ticism about developments that appear, 
at first glance, to be almost too good to 
be true. Will the reforms continue? Will 
they provoke a backlash? Will they be 
reversed? These are questions that are 
frequently asked. Let me give you my 
own views on the subject. 

Recent developments encourage op- 
timism. Over the past 6 months, both 
the 13th National Party Congress and 
the 7th National People's Congress have 
affirmed Chinas commitment to a broad 
program of economic reform. The inter- 
nal debates are no longer focused on 
the question of whether reform should 
take place — as was the case in the late 
1970s — but on the scope and pace of 
reform. The issue is not whether but 
how far and how fast to effect funda- 
mental changes in the economy and po- 
litical system. Leaders of all stripes, 
including many who were formerly con- 
sidered "economic conservatives," ap- 
pear to accept the necessity for more 
reform. The principal problems now 
facing the leadership are those of man- 
aging a complex process of directed and 
derivative change — how best to intro- 
duce market mechanisms without fuel- 
ing inflation; how to improve enterprise 
efficiency without causing massive un- 
employment; how to introduce greater 

freedom without spawning unaccepta- 
bly high levels of social conflict and po- 
litical demands. 

There is now a heightened political 
will to tackle key reforms, as under- 
scored by policy initiatives in the areas 
of price reform, foreign trade, constitu- 
tional sanction of private property, and 
the further curtailment of central con- 
trol over the daily economic life of 
China. Movement toward a market- 
oriented economy is an unabashed goal 
as Chinese leaders seek to invigorate 
the economy by replacing the heavy 
hand of bureaucracy with the vitality of 
the marketplace. 

In recent weeks, the Chinese lead- 
ership has expressed a renewed com- 
mitment to press ahead with sensitive 
aspects of reform, especially reform of 
the pricing system. Price reform is like 
going to the dentist — the longer you 
put it off, the worse it is when you 
finally go. Yet the willingness of the 
leadership to tackle this knotty issue is 
indicative not only of the political 
strength of reformers but of the bold, 
innovative approach to problems that 
has proven so successful during the 
past 10 years. Just last month, Beijing 
announced new guidelines for state food 
prices. In order to achieve a better bal- 
ance between supply and demand and 
to restrain the latter, some increases in 
the price of food apparently will be 
passed directly to the consumer, and 
price reform may be accelerated in 
other areas. At the same time, the pace 
of reform will be affected by how well 
the leadership handles several difficult 
side effects of systemic reform — for ex- 
ample, double-digit inflation and grow- 
ing disparities in regional development 

The leadership's commitment to 
reform also is highlighted by the fur- 
ther opening of coastal areas to the in- 
fluence of international market forces. 
In January, China announced a market- 
oriented coastal development initiative, 
with increased emphasis on labor-inten- 
sive, export-processing industries. De- 
velopments along the coast may, in 
turn, spur greater decentralization of 
the domestic economy and facilitate 
systemic reforms, e.g., price reform. 

Throughout China, the leadership 
continues to give factory managers 
greater freedom from state and party 
interference; to develop national mar- 
kets for capital goods, raw materials, 
technology, and labor; to permit expan- 
sion of collective and individual enter- 
prises; to reduce direct government 
interference in economic activities; and 
to replace command planning with mac- 

roeconomic fiscal and monetary con- 
trols. To my mind, these are all clear 
indications of the direction in which 
China's present leadership wants to 
take the country. 

Will the reform movement con- 
tinue? My judgment is that it will. W 
should it not? It is delivering the goo' 
today and offering the prospect of an 
even brighter future for the Chinese 
people tomorrow. 

• In 1987, the real GNP [gross n; 
tional product] growth rate was 9.4% 
for each of the past 7 years, it has in 
creased approximately 10%; 

• Over the past 7 years, agricul- 1 
tural output has increased 14% on an I 
annual basis; 

• The gross value of agricultural 
and industrial output for the first 
quarter of 1988 was up 16% ; '• 

• Should GNP continue to grow ' 
an average rate of 7% — a figure that •' 
would appear well within reach — ex- 1 
ports could reach $175 billion by the I 
year 2000, placing China on a par wi 
the United Kingdom and France as 
trading nation. | 

These numbers suggest that de |, 
centralization and the rewards for ii j, 
vidual enterprise may well be creati 
a spontaneous, self-sustaining d\na 
for further reform. This is not to s;i 
that the course of reform will invari j 
be smooth, without reverses and se ,. 
backs, but there are solid reasons t |. 
expect that the reform movement w , 
persist and that it will prevail. It is |i 
important to note, however, that th . 
same dynamic will test the stability j, 
the Chinese political system. Fear ( ^ 
disorder is very strong in China, at ^. 
leaders will be hard pressed to mai ^ 
tain a balance between "order" and k. 
"change." Special interests will pro I 
ate, and growing pluralism could p 
strong challenges to the Party's m( 
oly of power. How it will respond r 
mains to be seen. 

China in the World 

Paralleling China's success at homt 
its increasingly active role in inter 
tional affairs. To discern where Ch 
going in its external relations, we 
first to note that Beijing perceives 
world as moving away from superj; 
domination and in the direction of 
creasing multipolarity. 

From China's vantage point, t 
world of the 1990s will be marked 
relative decline in the position and 
fluence of the superpowers. Thus, 
will be a world of relatively greate 


liMii of maneuver for other 
r>— a world, that is, in which 
,1 .an move with greater security 
:i.-.-i'rtiveness. What will this mean 
r'liina's foreign policy? 
First, greater independence or as- 
' xciu'ss need not prove synonymous 
:ni "equidistant" stance between 
lilted States and the Soviet 
,iii, though Beijing is likely to seek 
;;■ balanced relations with both 
v'aiiiigton and Moscow. 

Given the priority of economic de- 
-I niipnt and reform in China today, I 
-ihiulent that its relations with us 
niitinue to grow. Chinas moderni- 
i n (ibjectives and its market- 
iitt'd growth strategy, if sustained, 
il incline China strongly toward 
\'6 ern markets. Western capital, and 
"f ern technologies. Underlying 
! as inclination toward the West in 
ral, and the United States in partic- 
is a recognition that we pose no 
t'oic threat to China and that we 
e jme China's role as a major player 
m' le world scene. 

We do, as I have said, expect China 
ove toward more normal relations 
; the Soviet Union. Sino-Soviet rela- 
10 are already improving. Ti-ade be- 
w n the two countries has more than 
0' led since 1980 — albeit from a small 
lai — and border trade in particular is 
•0' ling. Although overall volume is 
i niddest, the Soviet Union has be- 
1 ■ China's sixth largest trading part- 
Suhstantive discussions are taking 
■ aliout the longstanding border 
it.'. Cultural relations have im- 
il. A relaxation of political ten- 
aiid propagandistic excesses 
a IS in the interest of both coun- 
, allowing them to devote greater 
irces to economic reform and 
■I -iR'turing. 
! 'Iiina's "three obstacles" to full 
1 normalization — which, after 
ire of the Geneva accords on 
lamstan, could perhaps be reduced 
■ vii — persist. Even if Moscow were 
move all three, Sino-Soviet rela- 
rc unlikely to return to the al- 
rclationship of the 1950s. Beijing 
regards the Soviet Union as posing 
ig-term challenge to China's inter- 
, and this strategic perception is 
^ely to change in the near future, 
geopolitical dimensions of our rela- 
j with China — though more muted 
nuanced than in the past — remain 

Naturally, a move away from the 
lar world system will also compel 
4ia to reexamine and strengthen its 
tions with other important regional 

powers, such as Japan and the ASEAN 
[Association of South East Asian Na- 
tions] nations, as well as Third World 
countries farther afield. The troubled 
history of Sino-Japanese relations in 
this century assures that development 
of the relationship between the two 
countries will be a complicated process. 
It will require statesmanship on both 
sides of the Sea of Japan to prevent the 
frequent irritants from disrupting the 
mutual need for friendly relations. 

China's relations with the ASEAN 
nations are marked to a degree by his- 
toric memories similar to those that 
burden the Sino-Japanese relationship, 
though in this instance China is the ob- 
ject of suspicion. China's opposition to 
the Vietnamese occupation of Cambodia 
and its willingness to forswear material 
support for communist parties in 
Southeast Asia have helped Beijing to 
dispel suspicions harbored by ASEAN 
countries. As China's economy and ex- 
port potential develop, however, the 
ASEAN countries are also likely to find 
themselves increasingly in competition 
with China for shares of Western mar- 
kets. The same is true more generally 
in the Third World, where China may 
frequently find its competitive drive for 
markets in conflict with its desire for 
political solidarity. 

The Bilateral Relationship: 
A Balance Sheet 

Let me return briefly to the present 
state of Sino-American bilateral 
relations. The very range of issues 
currently under discussion — ti-ade, 
technology transfer, Tibet, Afghanistan, 
Cambodia, the Korean Peninsula, 
the Persian Gulf— underscores how our 
relationship has expanded, matured, 
and become thoroughly normal. 

Some of these challenging issues 
have stimulated frictions and disagree- 
ments; others have offered new oppor- 
tunities for cooperation. It is a 
testament to the maturity of our rela- 
tionship that we have been able to dis- 
cuss the most difficult issues without 
major adverse consequences, while con- 
tinuing to cooperate and advance our 
relationship as a whole. 

In the case of Tibet, the Dalai 
Lama's visit to the United States last 
fall and the subsequent clashes between 
demonstrators and security personnel 
in Lhasa aroused sensitivities on both 
sides. We have made clear that we re- 
gard Tibet to be part of China but 
have, at the same time, reaffirmed our 
strong commitment to respect for hu- 
man rights in Tibet as elsewhere in the 

lartment of State Bulletin/August 1988 

world. Despite disagreements and polit- 
ical sensitivities, we have discussed this 
problem at high levels, and China has 
facilitated our efforts to gain firsthand 
information on conditions in Tibet. 

Silkworn missiles and COCOM [Co- 
ordinating Committee for Multilateral 
Security Export Controls] liberalization 
evoked a controversy in which tactical 
differences threatened to obscure paral- 
lel strategic objectives. China's arms 
sales to the Persian Gulf, especially the 
supply of Silkworm missiles to Iran, 
posed dangers to the hves of American 
naval personnel upholding freedom of 
navigation in the gulf We reacted by 
putting a temporary hold on further 
liberalization of COCOM controls on 
technology exports to China. We have 
also engaged the Chinese in a forth- 
right dialogue on the gulf region, the 
Iran-Iraq war, and arms sales. More re- 
cently, we have registered a general 
concern about the sale of ballistic mis- 
siles — a very destabilizing class of 
weapons — particularly to countries in 
the gulf and South Asia — regions of 
special volatility. The Chinese, I be- 
lieve, have understood our concerns, 
though they have not always shared 
them. We anticipate continued frank 
discussions of these issues. 

At the same time, we have cooper- 
ated with China to bring about a reso- 
lution of the conflict in Afghanistan, 
and, with Beijing, we are supporting 
ASEAN in pressing for an early with- 
drawal of Vietnamese forces from Cam- 
bodia. On the Korean Peninsula, the 
United States and China share a com- 
mon objective: to preserve deterrence 
and maintain stability, and to assure 
the peaceful conduct of the Seoul 
Olympics this fall. 

Our economic relations have con- 
tinued to thrive: 

• In February, we signed a new 4- 
year bilateral textiles agreement; this 
will allow us to manage a politically 
sensitive subject in a reasonable way. 

• In March, the United States re- 
sumed deliberations on the liberaliza- 
tions of COCOM restrictions on high 
technology exports to China, poten- 
tially enhancing U.S. competitiveness 
in the multibillion dollar market. 

• Negotiations on China's accession 
to the GATT [General Agreement on 
Tariffs and Trade] continue. We support 
Beijing's accession, but believe that full 
participation carries with it an obliga- 
tion to eliminate over time its nontariff 
barriers and export subsidies. 

• The Administration has resisted a 
variety of protectionist forces while en- 
gaging the Chinese in a dialogue aimed 



at increasing U.S. access to the Chi- 
nese market and improving the attrac- 
tiveness of China's market for U.S. 
businessmen by providing better pro- 
tection of intellectual property and re- 
ducing bureaucratic obstacles and red 

Despite the ups and downs and 
some une.xpected surprises, we have, in 
large part, been successful in dealing 
with these issues. That success owes 
much to a willingness to address prob- 
lems in a spirit of friendship and 

If there is a lesson to be learned 
from our recent e.\perience, it is this: 

since our respective interests will con- 
tinue to expand and intersect, we will 
need to continue to cultivate the forth- 
right approach that has served both 
countries so well. We cannot afford to 
overlook each other's sensitivities, con- 
cerns, or interests. We must work to 
ease frictions where we can, and insu- 
late them from the core of our rela- 
tionship where we cannot. 

This is a sensible strategy. It has 
already paid rich dividends. It provides 
a basis for confidence that friendly 
Chinese-American relations will remain 
a solid fixture in a rapidly changing 
world. ■ 

The United States in the World Economy 

by W. Allen Wallis 

Address before the World Affairs 
Comi.cil in Baltimore on May 10, 1988. 
Mr. Wallis is Under Secretary for Eco- 
nomic Affairs and Agriculture. 

This is a leap year, and the U.S. Con- 
stitution makes every leap year a time 
of great confusion in discussions of eco- 
nomic policy. With the political season 
comes silliness. Slogans and buzzwords 
masquerade as thought. Claims, 
charges, and statistics fly about like ex- 
cited hornets. 

Nevertheless, debate on economic 
policy is a sign of a healthy, dynamic 
society. Static economies, with struc- 
tures fixed by tradition or authority, 
have little debate over economic pol- 
icies. Change is not necessarily healthy, 
but healthy economic progress neces- 
sarily brings change. Change, in turn, 
brings debate about whether to resist 
it, about what changes to make, and 
about adjusting to the changes. 

An economy like the United 
States, open to international markets, 
experiences more pressures for change 
than does a closed economy. Thus, with 
growing integration of the world econ- 
omy, economic issues in the United 
States increasingly relate to our place 
in the world economy. That is my topic 
for this evening. 

The issues behind the rhetoric are 
real and important. Is our economy 
thriving or slumping? Is our prosperity 
soundly based or are we teetering on 
the brink of economic disaster? Are we 
competitive internationally, or are we 
being overwhelmed by more efficient 


producers abroad? Do we benefit from 
foreign trade or are we merely weak 
prey for foreigners who take advantage 
of us? Do our economic policies need a 
change of direction? Should we raise 
taxes; intervene in markets; counterat- 
tack against foreign predators? In this 
year of decision, the American electo- 
rate has to sort out these questions. It 
must separate fact from myth and rea- 
son from fallacy. 

The fundamental question underly- 
ing these policy debates is this: will our 
economy benefit if we continue in the 
direction of the past decade or so — 
increasing our reliance on markets, 
rather than government fiat, to make 
basic economic choices? Or would we do 
better to rely more directly on the gov- 
ernment, and less on private 

An informed choice between these 
alternatives requires that we look both 
inward and outward. We should exam- 
ine our own experience during the past 
several years. How successful have we 
been, particularly in relation to the rest 
of the world? But also we should note 
how the world is changing and, in par- 
ticular, how economic policies around 
the world are evolving. 

The Global Trend Toward the Market 

The observations that follow are based 
partly on experience as the President's 
personal representative for preparing 
and attending six economic summits 
(1983 through 1988), partly on engaging 
in a large number of negotiations and 
discussions with officials and busi- 
nessmen from many countries, and 

partly on participating in many intern; 
tional organizations and conferences. 
During the nearly 6 years that I 
have been in my present position, I 
have observed a remarkable transfor- 
mation of attitudes on economic pol- 
icies. Market-oriented policies that 
were once dismissed as old fashioned, 
naive, and impractical are now seen to 
work in practice, and there is a major 
trend toward such policies throughout 
the world. 

Back in 1981, when President 
Reagan attended his first economic I 
summit with the leaders of the other I 
six major industrialized countries, he ) 
was preaching the benefits of free anc I 
open markets to an audience that, ex- 1 
cept for Margaret Thatcher, was skep i 
tical, to put it mildly — derisive might ' 
be more accurate. Next month at the ' 
Toronto summit, Francois Mitterrand ' 
will be the only remaining socialist, b ' 
even he has moved a long, long way ' 
since 1983 from disastrous policies he ' 
introduced in 1981. 

Many of the poorer countries of t 
world have long been afflicted by sta- 1 
tist, inward-looking, authoritarian ec t 
nomic policies, sometimes rooted in \ 
resentment of a colonial past; more o > 
ten in Marxist ideology. Increasingly * 
however, many of these countries, nc t 
bly in Africa, are coming to realize t I 
such policies lead only to continued 
stagnation and poverty, and they are i 
embarking on fundamental economic [ 
form. Even in Latin America, where | 
the intellectual climate has long beei 
dominated by statism, opinion has bi 
shifted by overwhelming evidence, a 
policies are changing. We see moverr 
toward the market even in communi: 
countries, including the Soviet Unio: 
and China. 

What is the evidence that has ci 
ated this profound shift in attitudes'' 
Let me review some of it for you in 
broad terms. 

The United States and Europe 

During most of the postwar period, 
ropean economic growth outstripped 
that of the United States. In the tw^ 
decades 1961-80, for example, annu 
growth in the European Community 
averaged about half a percentage pc 
above that in the L'nited States. Ho 
ever, since the 1981-82 recession, th 
relationship has been reversed — U.' 
economic growth has been consisteii 
more robust than European, averag 
during the last 5 years about two-th 
higher (about IVa percentage points 

Department of State Bulletin/August '^ 


Similarly, creation of jobs in the 
i' States has been strong — a net 
of over 15 million in employ- 
ee 1982 — while in the European 
I liimity it has been weak or nonex- 
t. and unemployment seems stuck 
( \(1 more than double our current 

iM ii'asingly, the reason for these 
■ I's is becoming understood by 
npeans themselves. In the 
li States we have lowered impor- 
t:i\ rates and deregulated such 
riant sectors of the economy as 
piii-tation and communication. 
rt> for goods and labor are rela- 
I npen and flexible. In Europe, in 
1 ast, governments have intervened 
' y.-- that impede adjustments to 
i;c. Labor mai-kets, in particular, 
1 licen made inflexible and stagnant 
( lal programs and regulations that 
intended to improve economic se- 
, Imt actually have done the op- 
■ l>y creating disincentives for both 
ij ers and employers. 
^Vithin Europe, the United King- 
t -which leads other European 
rii-s in the adoption of free market 
( -. — has had a better growth re- 
< iiijhe 1980s than its partners. 
I • the middle of last year its unem- 
I iit'iit rate has been dropping 
i ilv. 

a .\sia and Latin America 

rasting experience among develop- 
ig ountries provides similar lessons. 
■ei ider the leading "newly industri- 
ikig countries" — NICs, as we call 

I. Four economies in the Far 
— Hong Kong, Korea, Singapore, 
SHaiwan — have economic strategies 
while differing considerably from 
other, are generally speaking out- 
looking and market oriented. Dur- 
he past 20 years, they have 
ned some of the world's highest 
th I'ates; Korea and Singapore, for 
iple, have averaged over 9% per 
Even during the 1980s— when ex- 
il conditions were less favorable 
ieveloping countries as a whole 
red a sharp retardation in 
th — these economies proved re- 
it and continued to progress 

Latin America's main NICs are 
.il, Mexico, and Argentina. Mexico 
particularly Brazil, with aggressive 
rt promotion, did fairly well under 
-able conditions in the 1970s, but 
■ government-dominated econo- 
— with price and wage controls and 
ly protected and inefficient state- 
id enterprises — proved unable to 

cope with the changed conditions of the 
1980s. Their debts skyrocketed, and 
their growth rates collapsed. Argen- 
tina, with the most protectionist, in- 
ward-looking policies of the group, went 
from sluggish growth before 1980 to ac- 
tual decline since then. 

Several countries in both regions 
have now joined the trend toward 
market-oriented reform and are reaping 
benefits. In East Asia, for example, 
Malaysia and Thailand are regarded as 
the most likely new NICs. Thailand, 
following recent stabilization and liber- 
alization measures, has emerged from a 
period of sluggishness and is now grow- 
ing at a strong pace. In the Philippines, 
President Aquino's government has un- 
dertaken major economic reforms, and 
economic growth has resumed. 

In Latin America, Chile — afflicted 
in the early 1980s by heavy debt and 
falling export prices — has rebounded 
since 1983 with healthy growth sup- 
ported by strongly market-oriented pol- 
icies. Colombia is another country 
where sound economic policies are pay- 
ing off in improved growth and easing 
of debt pressures. Mexico is benefiting 
from an ambitious economic reform pro- 
gram, notably in trade liberalization. 
Argentina's leaders are struggling to 
reverse the heritage of decades of sta- 
tist policies and resultant stagnation. 
There are other examples. 


Africa, the continent with the most 
profound economic problems, has seen 
in recent years perhaps the most dra- 
matic reversal in policies. During the 
1960s and 1970s, economic policies in 
Africa were dominated by Marxist ide- 
ology, with large public sectors, sub- 
sidies, controls on prices and exchange 
rates, and other measures that pro- 
tected industry and eroded incentives 
to production. 

Economic decline forced the au- 
thorities to recognize that their policies 
were leading to destitution. A gradual 
but widespread process of reform is 
now getting underway, sometimes fit- 
fully. Perhaps two-thirds of sub- 
Saharan African countries have 
undertaken economic reform in the past 
few years, supported by the IMF 
[International Monetary Fund], the 
World Bank, and bilateral aid pro- 
grams. The United States is taking an 
active role in helping to mobilize such 
support. Progress has been uneven; be- 
cause of extreme poverty, heavy debts, 
and weak export prices, the road ahead 
is bound to be difficult. With outside 
help there is hope that these countries 

♦ irtment of State Bulletin/August 1988 

can succeed, but not unless economic 
reforms are made. 

The U.S. Experience 

Although the performance of the U.S. 
economy has had a profound effect on 
the whole world, and the economy is 
performing about as well as it ever has, 
our policies are coming under heavy 
criticism at home. While much, if not 
most, of the criticism is politically moti- 
vated, this being leap year, some of it 
deserves serious consideration — even 
some of the politically motivated argu- 
ments merit consideration. Some argue 
that our strong performance in growth, 
employment, and price stability is hid- 
ing fundamental flaws. That is a hypo- 
thetical possibility; for example, 
recently Brazil had a great spurt under 
the Cruzeiro plan, only to collapse into 
worse troubles than those that led to 
the Cruzeiro plan. But it definitely is 
not true in the United States. The 
Cruzeiro plan was obviously unsound 
from the beginning, and no competent 
economist had any uncertainty about 

In 1981, the Reagan Administration 
supported a firm disinflationary policy 
by the Federal Reserve and shifted the 
focus of policy toward medium-term 
goals, away from the short-term fine- 
tuning which experience had proved to 
be counterproductive. It worked to gain 
control over excessive Federal spend- 
ing, to curtail the growth of the govern- 
ment, and to encourage healthy growth 
in the private sector The centerpiece of 
this effort was strengthening incentives 
to the private sector through lower in- 
come tax rates and tax reform, while 
reducing structural rigidities through 
deregulation and keeping markets open 
to competition. The program has not 
been successful in balancing Federal re- 
ceipts and expenditures — more on this 
later — but its positive accomplishments 
have been impressive. What do the 
facts tell us about the results? What is 
it that impresses other countries so 
greatly that they are abandoning views 
that they have believed in deeply for 
half a century and are shifting in our 

U.S. Economic Performance 
in the 1980s 

To answer that, start with standard 
indexes of economic performance: 

• The inflation rate (consumer price 
index) came down from more than 12% 
during 1979 and 1980 (December- 
December) to less than 4% by 1982 and 



has since been contained at about that 
level through 5V2 years of economic 

• Since the recession that inevita- 
bly follows disinflation ended late in 
1982, real growth (growth above infla- 
tion) has averaged a strong 4.1% per 
year, and we have now surpassed by 
about 6 months the previous U.S. re- 
cord for the longest period of uninter- 
rupted economic growth in peacetime. 
The economy appears to have weath- 
ered well the shock of the October 
stock market decline and looks stronger 
now than it did a few months ago. 

• As I noted earlier, employment 
has risen by over 15 million during the 
e.xpansion, and the unemployment rate 
is the lowest in 14 years. The propor- 
tion of the population employed has 
been continually setting records during 
the last 3 years. 

What are the flaws in this 

Progress at Lower Income Levels 

Some say that prosperity has been at 
the expense of the poor, who have not 
benefited from economic expansion. 
But, in fact, real cash income rose be- 
tween 1981 and 1986 for every income 
group. The number of persons below 
the poverty level dropped by about 3 
million between 1983-86, a turnaround 
from a sharp upward trend which be- 
gan in 1980. The 1987 data, when avail- 
able, will probably show further 
improvement. Moreover, these data in- 
clude only cash payments and do not 
include income support in kind which 
has been growing rapidly in relative im- 
portance. Finally, the tax reform legis- 
lation of 1986 frees 4.3 million low- 
income families and individuals from 
Federal income taxes. 

Job Quality 

Some have said that the new jobs now 
being created are typically inferior 
ones, turning us into "a nation of ham- 
burger flippers." The data contradict 
that. Job growth has been most rapid in 
higher paying, skilled occupations. The 
share of total full-time employment ac- 
counted for by the lowest paying occu- 
pations has declined. 

Some of the misunderstanding on 
this point arises from the fact that 
wages in manufacturing are higher on 
average than in services. It is thought, 
therefore, that the increase in the pro- 
portion working in services must result 


in lower average wages. This just does 
not follow. There is a lot of variation 
within sectors. Services industries — 
communications, transportation, law, 
medicine, engineering, education, ac- 
counting, journalism, acting, and oth- 
ers — provide many high-quality, high- 
paying, technology-intensive jobs, and 
that's where much of the growth has 

Competitiveness in Manufacturing 

Some complain that our manufacturing 
sector is languishing, losing out to for- 
eign competition. This certainly is true 
of some manufacturing firms and even 
of a few industries, but certainly it is 
not even remotely true for manufactur- 
ing as a whole. U.S. manufacturing 
output is up about 40% from a decade 
ago, and the share of manufacturing in 
total U.S. output is about the same as 
it has been for 30 years or more. Man- 
ufacturing's share of employment has, 
indeed, declined, though the actual 
number of people employed is now 
climbing back toward the historical 
high. The decline in the proportion of 
employment in manufacturing, far from 
reflecting failure, is a consequence of 
success in raising productivity. Man- 
ufacturing contributes the same propor- 
tion of total output but does so with a 
smaller proportion of total employment. 

Of course, what is true of the 
whole may not be true of each individ- 
ual sector. In global markets the pro- 
duction of particular products will shift 
internationally as comparative advan- 
tage shifts. Thus, the textile industry 
in the United States suffers not so 
much from textile imports as from com- 
petition for its labor, capital, and man- 
agement by other industries whose 
products cannot be produced as advan- 
tageously abroad as can textiles. While 
those who own fixed equipment or have 
skills that are not transferable may suf- 
fer from this competition, in general, 
workers benefit and the country bene- 
fits. While some industries are moving 
abroad as the pattern of efficient inter- 
national specialization changes, other 
industries are replacing them. Indeed, 
in a sense, new industries push old 
ones abroad by bidding up the costs of 
their labor, capital, management, and 
raw materials. 

With strengthened incentives to in- 
vest, and under the stimulus provided 
by foreign competition, the growth of 
productivity in manufacturing has been 
particularly impressive during the pe- 
riod 1981-87. It has risen nearly three 

times as fast as during the period 
1973-81. Manufacturing has the benefi 
now of the lower value of the dollar, 
which makes our products cheaper in 
marks, pounds, francs, or yen. The V( 
ume of our nonagricultural exports ro 
12% last year, even in the face of slug 
gish growth in some important markti 
that restrained demand. We expect 
more good performance in 1988. 

International Imbalances: What Is 1 
the Real Threat? I 

What about the huge and persistent 
trade and budget deficits? U.S. trad 
and current account deficits are ofte 
portrayed as the Achilles heel of \].i 
policies, reflecting either weak trade 
policy or imprudent fiscal policy — th 
Federal budget deficit. Many believe j 
that these twin deficits pose grave 1 
threats to our future prosperity. j 
In fact, any threat from the tra(| 
deficit is far less serious than the di i^ 
ger of harmful policies to deal with ,, 
such as the omnibus trade bill now i ,^ 
Congress. Among the many fallacie: ■ 
ten perpetrated in discussing the di 
cit, four are especially egregious. 

Fallacy No. 1: The U.S. econor 1 
has lost fundamental competitivene: i' 
particularly in manufacturing, so \\ 
need a more active government v^l' 
planning and coordinating research 
velopment, investment, finance, am 
marketing, buttressed by "tempora 
subsidies or barriers to imports to n 
serve our manufacturing sector ; 

I have described earlier the wa )i 
which the manufacturing industry 1 |f 
responded to international competil )' 
pressures. Do we really think that it 
ernment officials would have done 1: t 
ter? Would they have had better | 
foresight? Wouldn't the prospect of 
kind of intervention simply invite p 
cally determined, wasteful decision 
Wouldn't the impact of inevitable n 
takes in judgment have been magn 
by being imposed on a broader seal 

Such policies would inevitably 
generate into attempts to preserve 
competitive industries — or to prese 
certain politicians. It makes no ser 
and would do much harm — to try t' 
maintain any particular economic s 
at a particular size. Temporary pn 
tion seldom leads to increased com 
petitiveness; more often it leads to 
pressure for continued protection i 
to extend subsidies or protection ti 
dustries which become noncompeti 
because of the high prices of prote^ 

Deoartment of State Bulletin/Augustl 


Fallacy No. 2: Foreigners have 
riici'd the trade deficit through 

an' practices and trade barriers, 

I" h we have naively acquiesced. 
re, we should protect our own 

.. > in response. 

There are a great many trade bar- 
;; and unfair trading practices 
lail. But such barriers do not ac- 
1 1 tnr our trade deficit, only the 
I lesition of what is traded. Even 
(■ total elimination would do little 
lything to eliminate imbalances, 

h are due to macroeconomic forces. 

1' nf the most highly protectionist 
1 iiies in the world have had trade 

■ it-; some of the most open econo- 
1 have had surpluses. 

This does not mean that we should 

■ iditYerent to foreign barriers to 

■. Such barriers keep us from gain- 
. ii.- full potential advantage of 
'. We get only the benefit that 
■s t(i us from keeping our markets 
. thus being able to buy to our 

■ test advantage. We lose the benefit 
: wiiiild come from being able to sell 

ir ureatest advantage. A country 
closes its markets impoverishes 
' if its own people to enrich others 
M'ople, and in the process it im- 
hes some foreigners, too. 
I can tell you from personal experi- 
1 that the U.S. Government works 
to reduce barriers to our exports. 
1 his in both bilateral and multi- 
negotiations. There has not been 
'•cognition of our successes, 
they have been significant. We 
.1 achieved, for example, significant 
i< -ases in exports to Japan; we have 
e 'cted a number of European protec- 
st measures; we have negotiated a 
I lade arrangement with Canada; 
r succeeded in launching the 
ly Round of multilateral trade 
.1 itions now underway in Geneva. 
'I success will not be improved by 
if-httion which puts us into negotiat- 
straitjackets, reducing our discre- 
as to when and whether we must 
liate to establish our negotiating 

If we are forced into retaliatory 
ectionism, it will not lower the defi- 
mt only our own standard of living, 
ecially now, when our competitive 
ngth is making itself felt in rapid 
vth of exports, we will lose much if 
et involved in an escalating series 
^ade restrictions with our trading 

Fallacy No. 3: The U.S. deficit 
ms that we have lost jobs or, at 
' t, lost high-paying jobs. 

Clearly, such a statement doesn't 
square with the facts on employment 
that I cited earlier. In fact, shifting 
patterns of international trade are re- 
fleeted in the industrial composition, 
not the overall level, of employment. 
When an economy is performing well — 
as ours most definitely is — any jobs lost 
to import competition will be more than 
offset by jobs in other industries. As I 
explained earlier, in a strong economy 
jobs lost to foreign countries are as 
much pushed out by other domestic in- 
dustries competing for their inputs as 
they are pulled out by foreign competi- 
tion from their own industry. Finally, 
we must recognize that the purchasing 
power of all American workers is in- 
creased by the lower priced goods made 
available through trade. 

Fallacy No. 4: The capital inflows 
that balance the trade deficit leave us 
at the mercy of foreign creditors and 
are resulting in the buildup of net in- 
debtedness to foreigners that will im- 
poverish our children. 

Greater growth of foreign claims on 
the United States than of U.S. claims 
on foreigners is a necessary conse- 
quence of net capital inflows. This is 
often called — erroneously — an increase 
in debt, and we are said to be the 
world's greatest debtor, to have lost our 
influence in the world because of it, and 
to have mortgaged our future and our 
children's. Poppycock! 

Inflows of capital from abroad 
make our labor and our natural re- 
sources more productive instead of the 
labor and natural resources of the coun- 
try from which the capital comes. That 
is, in fact, how this country was built. 
Only part of the capital that comes here 
results in debt; much is equity. When 
the Germans build an automobile plant 
in Pennsylvania, or the Japanese in 
Ohio, paying for it is their responsibil- 
ity, not ours. 

Concern is sometimes expressed 
about the growing burden on U.S. in- 
come represented by the returns of for- 
eigners on their investments. But the 
product of the additional investment 
made possible by the capital inflows is 
greater than the income it will pay to 
its foreign owners. Moreover, total in- 
vestment in the United States con- 
tinues to exceed net capital inflows, so 
our national net worth continues to 
grow. Thus, we will be able to make 
these payments while still growing in 

A final warning on alarms about 
foreign debt: do not trust the data. The 
Department of Commerce, which pub- 
lishes them, does not even label them 

tartmant nf <:tato Rllllptin/Auaust 1988 

debt. This is not the time or place to 
elucidate that, but I will toss you two 
tidbits: (1) our gold holdings are valued 
at $42.22 an ounce; (2) in 1987 we re- 
ceived $14.5 billion more income on our 
assets abroad than we paid to for- 
eigners on their assets here — a para- 
doxical position for a debtor. 

What Should We Do About Interna- 
tional Imbalances? 

Imbalances in international current ac- 
counts are not undesirable when they 
reflect temporary differences between 
countries' cyclical positions or when 
they reflect basic differences between 
countries in the profitability of invest- 
ment and the propensity to save. Our 
present imbalances, however, are 
largely the result of distorting govern- 
ment policies. Abroad, government pol- 
icies in many countries have created 
poor climates for investment, so the 
funds are invested here, thus contribut- 
ing to the trade imbalance. In the 
United States the government deficit 
probably reduces savings which, if left 
in private hands, would reduce the 

Our current account deficit also 
would be reduced if foreign economies 
were stronger, for then they would im- 
port more. (Our deficit would, of 
course, be reduced if our economy were 
less strong, for then we would import 
less, but I know of no one who favors 
that remedy.) While Japan's economy is 
growing fairly briskly now, it would 
benefit from internal structural reform. 
European countries need to break down 
the many structural rigidities that im- 
pede growth, employment, and 

In the meantime, market forces are 
already vigorously at work reducing the 
international imbalances to the extent 
to which the market judges they are 
excessive. This is the meaning of the 
dollar's decline in the foreign exchange 
markets. That decline has brought 
about major changes in the growth of 
exports and imports. As long as we 
maintain steady policies, we need not 
fear a sudden loss of confidence and 
flight of capital that would cause the 
dollar to plummet and interest rates to 
rise. The United States is, by far, the 
best place in the world to invest and 
getting even more so. 


Increasingly around the world the mar- 
ket is being recognized to be the most 



successful organizing principle for pros- 
perity and growth. Evidence is gradu- 
ally overcoming ideological doubts. The 
United States, with an economy that is 
robust and competitive, has provided 
the most dramatic evidence. We have a 
considerable way to go in putting mar- 
ket principles fully into practice our- 

selves, but now — when we see success 
all over the world — now is not the time 
to turn back. Our demonstration is do- 
ing more good for the world than could 
any amount of foreign aid and multina- 
tional bank loans, useful as those may 
be. The world economy is going our 
way. ■ 

North Atlantic Council Meets in Madrid 

Secretary Skultz attended the regu- 
lar semiannual session of the North At- 
lantic Coioicil ministerial meeting in 
Madrid June 9-10, 1988. Following is 
the text of the final communique. 

1. At their meeting in Brussels on 2nd and 3rd 
March 1988, the Heads of State and Govern- 
ment of the Alliance reaffirmed its guiding 
principles and stressed their determination to 
continue working for the advancement of our 
common ideals and goals. It was in this spirit 
that at our meeting in Madrid we reviewed the 
international situation and the challenges and 
opportunities before us, taking into account 
recent positive developments. 

2. Guided by our desire for a more peaceful 
and secure state of international affairs, we 
have continued since the Alliance Summit to 
consider the broad spectrum of issues concern- 
ing East- West relations and security, includ- 
ing ai-ms control and the e.xisting military force 
relationship. Against that background we dis- 

• The current situation in and prospects 
for Eastern Europe; 

• The need for a substantial and balanced 
outcome of the CSCE [Conference on Security 
and Cooperation in Europe] follow-up meeting 
in Vienna, at an early date, including signifi- 
cant progress on human rights and human 
contacts, and mandates for negotiations on 
conventional stability and confidence and secu- 
rity building measures; 

• Our continuing commitment to share 
equitably the risks, burdens and responsibili- 
ties, as well as the benefits of our common 
endeavour, and the need to renew our efforts 
to maintain, under evolving circumstances, a 
fair partnership, mindful of the structure of the 

3. We welcome the results of the Summit 
meeting in Moscow between President Reagan 
and General Secretary Gorbachev, both for 
their substance and as a portent for the future 
development of East-West relations. We wel- 
come the unprecedented prominence accorded 
to human rights in the joint statement of the 
Summit, and hope that a more forthcoming 
Soviet attitude will also be reflected in the 
CSCE concluding document. We support the 
progress recorded towards an agreement on a 
50 per cent reduction in United States and 
Soviet strategic nuclear weapons, and stress 
the importance we attach to this objective in 

seeking security at lower levels of armaments. 
We welcome the entry into force of the INF 
[Intermediate-Range Nuclear Forces] Treaty 
as an important step in our search for effec- 
tively verifiable arms control agreements in 
accordance with the declarations of our Heads 
of State and Government. 

4. The North Atlantic Council in Perma- 
nent Session has continued its consideration of 
the further development of the Alliance's 
comprehensive concept of arms control and 
disarmament as called for in the statement 
issued in Reykjavik in June 1987. The Secre- 
tary General reported on the progress of this 
work and we look forward to receiving a 
comprehensive concept of arms control and 
disarmament as called for in the statement 
issued in Reykjavik in June 1987. The Secre- 
tary General reported on the progress of this 
work and we look forward to receiving a 
written report at our ne.xt meeting in Decem- 

5. We welcome the beginning of Soviet 
troop withdrawals from Afghanistan after over 
eight years of occupation. We hope that the 
Geneva Accords mark the start of a process 
which will enable the Afghan people to exercise 
their right to self-determination and enable 
their country to recover its full sovereignty and 

6. The maintenance of calm and stability in 
and around Berlin and the improvement of 
conditions there, as envisaged in the current 
Beriin initiative, remain key elements in East- 
West relations. As the EC's [European Com- 
munities] European City of Culture for 1988, 
Berlin is again demonstrating its vitality and 

7. We greatly appreciate the hospitality of 
the Spanish Government and people on the 
occasion of our first meeting in Madrid. We 
take this opportunity to welcome again Spain's 
membership as yet another confirmation of the 
vitality of the North Atlantic Alliance. We also 
strongly support the process under way in 
response to proposals made by Spain for 
defining a significant Spanish military contri- 
bution to the common defense. 

8. On completion of his term of office, 
we paid tribute to the departing Secretary 
General, Lord Carrington, for his outstanding 
contribution to the North Atlantic Treaty 
Organization. We expressed deep appreciation 
for his services to the strength and unity of 
the Alliance, and therefore to peace and 
freedom. ■ 

37th Report on Cypn 

MAY 24, 1988' 

In accordance with Public Law 95-384, I an 
submitting to you a bimonthly report on 
progress toward a negotiated settlement of 
Cyprus question. 

Major meetings were held by U.S. offi( 
with Cypriot leaders during the past two 
months. Secretary of State Shultz visited 
Cyprus on April 8, 1988, during the course 
travel to a number of Middle Eastern coun- 
tries. The Secretary met with Cypriot For 
Minister lacovou and stressed to him our 
desire to be helpful in the effort to achieve 
Cyprus solution. The Secretary also underl 
our continuing support for the United Nati 
Secretary General's good offices mission. 

Special Cyprus Coordinator M. James 
Wilkinson visited Cypi-us, Greece, and Ta 
in late March and early April, meeting in 
Cyprus with President Vassiliou, Foreign 
ister lacovou, Turkish Cypriot community 
leader Denktash. and other political and g( 
ernment leaders. Mr. Wilkinson strongly « 
phasized our belief that negotiations shou 
started as soon as possible under the aegis 
the U.N. Secretary General and his repre; 
tative in Cyprus, Oscar Camilion. Mr. Wil 
son also stated that the United States wis 
to be helpful in the effort to start negotial 
but that the parties themselves must elect 
begin the process. 

The new U.S. Ambassador to the Rej 
of Cyprus, Bill K. Perrin, arrived in Cypr 
April 28 and presented his credentials to 
President Vassiliou on May 3, 1988. Ami 
dor Perrin begins his tour of duty at a tin- 
when we enjoy excellent bilateral relation 
with Cyprus and stands ready to lend all 
possible support to efforts to solve the Cy 

During the period under review both 
Greek and Tbrkish Cypriot leaders expres 
their continued interest in working with t 
U.N. Secretary General in pursuit of a se 
ment. At the same time, both parties poii 
to statements and actions by the other sic 
that they argue call into question the sin^ 
of such expressions. 

Also, during the reporting period, th 
TYirkish Cypriot authorities began stampi 
the |)assports of certain travelers enterin 
TYirkish Cypriot sector across the U.N.- 
controlled" buffer zone. The Tbrkish Cypr 
have asserted that the new measures wei 
established in response to long-standing 
Cypriot restrictions on travel between tl 
sectors. We and others have questioned t 
initiative and urged maximum effort by a 
parties to restart serious negotiations. 

Financial problems for the United NJ 
Force in Cyprus [UNFICYP] remain sev| 
In mid-April, UNFICYP troop contribut 
vigorously renewed their appeal for a sw 
UNFICYP's funding base to assessed coi 
butions in place of the present voluntary 
contributions. The United Nations Force 
Cyprus's cumulative deficit is over $160 i 
lion, borne entirely by the troop-contribi 
countries. We continue to consult with U, 

norvartmont nf Qtato Rill, 



i:i! and the troop contributors on this 

arding congressional interest in Cy- 
. applaud House Concurrent Resolution 
, that commends the Prime Ministers of 

I If and "Rirkey "on their statesmanship in 
iatiiiu their current dialogue." I agi-ee 

II the positive thoughts expressed in that 

, liuioii and, like its authors, hope that the 
.1 meetings between Greece and Tar- 
\ result in the creation of an atmos- 
■ lat is conducive to ... a resolution of 
. \ l>rus problem." 

Till' United States continues to believe 
' time is ripe for resuming negotiations 
preconditions. An early meeting, fa- 
(• (i as appropriate by the U.N. Secretary 

General, between the leaders of the two 
communities also appears desirable. At the 
same time, we continue to favor e.xpanded 
contacts at all levels to reduce tensions and to 
complement, not substitute for, substantive 

Ronald Reagan 

'Identical letters addressed to Jim 
Wright, Speaker of the House of Representa- 
tives, and Claiborne Pell, chairman of the 
Senate Foreign Relations Committee (text 
from Weekly Compilation of Presidential 
Documents of May 30, 1988). ■ 


Himanitarian Aid to Nicaragua 

iji/on Woods 

Statement before the Subcommittee 
,. Vislcni Hciiii^pkere and Peace Corps 
, IIS iiflhi' SriKite Foreign Relations 
niiltix un May 20, 1988. Mr. Woods 
• htiinistrator of the Agency for Inter- 
niial Development (AID).' 

I ireciate the invitation to discuss the 
nf 4ID's efforts to fulfill Con- 
mandate to provide humanitarian 
i he Nicaraguan resistance and to 

Id It a process for peace and reconcili- 

I. 1 will outline for you today the 

! less of our efforts to implement the 

Ills components of this legislation 
i l()(>-276). 

'1 Nicaraguan Resistance 

Ml Congress passed this legislation, it 
sumed that a modus operandi in 
ise-fire zones would be negotiated 
It ly and that the Nicaraguan Gov- 

II. nt would allow food to be delivered 
I.' resistance inside Nicaragua as 

•I I lor in the Sapoa agreement. But, 
■cks later, this is not the case. And 
' ilks between the resistance and the 

iiinent to resolve this issue have 
■ I 1(1 produce results. 
Putting aside the ongoing political 
erences between these parties, AID 
onfronted by three compelling facts 
ve fulfill our humanitarian mandate. 

The Sapoa agreement said the re- 
ance would get food. 

The U.S. Congi-ess said the 
r>^' [stance should get food. 

• But, nearly 2 months after Sapoa, 
de Nicaragua, resistance units have 

irtmant nf <%t9t<> Biilletin/AuQUSt 1988 

not received food. They are either going 
hungry or going to Honduras. 

Given these simple facts, and guided 
by the congressional mandate to keep 
the resistance together as a viable organi- 
zation able to negotiate with the Nicara- 
guan Government on a firm footing, we 
have taken the following steps. 

On April 19, with the support of the 
Honduran Government, the first truck- 
load of food was delivered to resistance 
combatants and their families in south- 
ern Honduras. These shipments were in- 
spected by nuns, priests, and lay people 
appointed by the Honduran Cathohc 
Church, and the dehveries were made by 
independent Honduran truckers on con- 
tract to AID. 

Routine ground operations — supple- 
mented by air drops that began on April 
28 — continue today, having delivered 
over $1. 15 million worth of food, cloth- 
ing, and other supplies to Honduras, al- 
ways with the inspection by the church. 
In human terms, up to now, troops have 
been given enough food to last through 
May. Today we are meeting the need for 
food supplies in Honduras. 

There is a different picture inside 
Nicaragua. We have been unable to de- 
liver food or any supplies to resistance 
units inside their country. Press and in- 
telligence reports paint a desperate pic- 
ture: The resistance is relying on dona- 
tions, bartering, or credit for the food 
needed to survive. Many are leaving the 
country to reach the food supplies in Hon- 
duras. Some have gone without food for 
days during their trek through the thick 
jungles of Nicaragua. 

Clearly, this is not what the Sapoa 
agreement or the U.S. legislation in- 
tended. To meet the needs of those in- 
side Nicaragua, I announced a week ago 
that we must begin providing measured 
amounts of food and cash-for-food to the 
resistance for delivery to units in the 

The cash-for-food will be in the 
form of Nicaraguan currency — cordobas 
— amounting to about $1.00 per person, 
per day. The resistance will sign for the 
currency and be responsible for its deliv- 
ery. We are confident that the units in- 
side will use these small sums to meet 
their basic needs. Anyone wanting to 
buy anything other than food will have a 
difficult time spending even these small 
amounts of cordobas outside of Nicara- 

Let me emphasize that we have 
taken this particular step as a last re- 
sort. Until the Nicaraguan Government 
agrees to allow routine dehvery of food, 
as called for in the Sapoa agreement and 
expected by Congress, we must use 
other means of getting aid to the resist- 
ance inside Nicaragua. 

In the meantime, we are also deliver- 
ing clothing (fatigues) and medical sup- 
plies to the resistance in Honduras. This 
week, we funded medical services for the 
resistance for April and May, and family 
assistance payments are being made. Re- 
garding authorized communications 
equipment, within a few days, we hope 
to be distributing batteries needed to op- 
erate communications equipment. 

On the issue of aid to the Indian or- 
ganization known as Yatama, we have 
found it to be an increasingly complex 
question. We have met with Brooklyn 
Rivera and his representatives several 
times to discuss the delivery of aid to 
Yatama units. We also have met in Hon- 
duras with Orsonio Coleman, chief of 
staff of the Yatama mihtary. In these 
meetings, we have tried to identify the lo- 
cation and needs of Yatama forces, with- 
out getting embroiled in the political dif- 
ferences between the gi-oups. 

A third group calling itself Yatama, 
and unknown to us, recently signed a 
new accord with the Government of Nica- 
ragua. Information available to us sug- 
gests that these people are not the recog- 
nized leaders of Yatama. 

To date we have been able to reach 
some Yatama troops in the Mosquitia re- 
gion of eastern Honduras. We hope to 
have our first air drops to those units 
very soon. 

That concludes the summary of our 
efforts on aid to the Nicaraguan resist- 



Children's Survival Assistance 

Another component of this legislation is 
$17.7 million for medical care to Nicara- 
guan children affected by the civil strife 
in their country. To date, we have signed 
grants with nine private voluntary or- 
ganizations that intend to provide a wide 
range of services to Nicaraguan children 
throughout that country and in Hondu- 
ras and Costa Rica. 

These groups were selected for their 
experience in Central America and their 
proven track records in delivering those 
services called for in the legislation. The 
over $5 million remaining in this fund 
will be used to "fill in the gaps" in sei'v- 
ices performed and people and regions 
served; we would e.xpect this remaining 
money to be obligated in the ne.xt couple 
of months. 

Seven of the eight groups wanting to 
work in Nicaragua already have pro- 
grams in that country. Not only are they 
familiar with the territory, many of them 
are operating today under agreements 
with the government. We hope this will 
enable them to expand their services to 
Nicaraguan children with the understand- 
ing of the Nicaraguan Government. 

Verification Commission 

The third component of the legislation is 
support for the verification commission 
consisting of Joao Baena Soares, Secre- 
tary General of the Organization of 
American States (OAS), and Cardinal 
Miguel Obando y Bravo, leader of the 
Nicaraguan Catholic Church. In meet- 
ings with the Secretary General and his 
staff immediately after the legislation 
was passed, we requested a plan of opera- 
tions and a budget from the members of 
the commission. Since then we have in- 
vested countless hours attempting to 
forge a simple, clear agreement to sup- 
port all activities of the commission re- 
lated to verifying compliance with Sapoa, 
Esquipulas, and any subsequent agree- 

Quite frankly, these talks were diffi- 
cult. Our first challenge was getting the 
two commission members to work to- 
gether so that the activities of both are 
supported as Congress intended. There 
were disagi-eements between the OAS 
and the Cardinal's representatives re- 
garding Obando's role in the verification 
process. There also was reluctance or in- 
ability on the part of the OAS to provide 

us with an operational program or an esti- 
mated budget for $10 million U.S. tax 

In drafting an agreement, there 
were contentions over what seem to be 
very straightforward matters regarding 
democratization and respect for human 
rights. For example, we have had diffi- 
culty convincing the OAS respresenta- 
tives of the need for a simple, declarative 
statement that the commission "will" 
verify compliance with Sapoa and key 
sections of Esquipulas II. The position of 
the OAS is that the commission "may" 
perform what we consider fundamental 
functions of verification. 

After extensive consultation with 
both parties, we have signed an agree- 
ment that meets our minimum require- 
ments and satisfies the intent of Con- 
gress. The document was signed on 
Wednesday [May 18] under which the 

$10 million will be disbursed in periodic 


Let me close by saying that there shouli 
be no surprises in my testimony this 
morning because of our ongoing consult 
tions with Congress. The director of thf 
task force heading up this effort, Tfed 
Morse, has spent literally dozens of 
hours on Capitol Hill briefing interestec 
parties on the details of this effort. We 
have made every effort to keep you in- 
formed as we strive to fulfill the assign 
ment we have been given. 


MAY 24, 1988' 

Two months have passed since the Con- 
gress limited U.S. assistance to the Nica- 
raguan democratic resistance to food, 
shelter, clothing, and medicine. The Con- 
gress stopped U.S. miHtary assistance to 
the resistance while the Soviet bloc con- 
tinued its military assistance to the com- 
munist Sandinista regime in Nicaragua. 
Some thought that U.S. forbearance 
would bring democracy and peace to 
Nicaragua through negotiations between 
the resistance and the Sandinista re- 
gime, but it has not. 

Tomorrow, as I leave on the first leg 
of my trip to Moscow, the resistance and 
the Sandinistas are scheduled to meet 
again. The Sandinistas will again have 
the opportunity to carry out the prom- 
ises they have made — beginning a decade 
ago with promises to the Organization of 
American States — of establishment of 
freedom and democracy in Nicaragua. 
We do not need more pieces of paper 
bearing empty Sandinista promises and 
Sandinista signatures. We need deeds, 
not more words. 

During the 60-day truce established 
under the Sapoa agi-eement signed 
March 23, the Sandinistas have contin- 
ued, and, indeed, intensified, their re- 
pression of the Nicaraguan people. They 

'The complete transcript of the hearing 
will be published by the committee and will ^ 
available from the Superintendent of Docu- ' 
ments, U.S. Government Printing Office, | 
Washington, D.C. 20402. ■ 

Aid to the Nicaraguan 
Democratic Resistance 

have not carried out their commitmen , 
under the Guatemala accord of Augut „ 
1987, or under the Sapoa agreement. ^ 
Sandinistas have gone so far as to mal 
it impossible to arrange through neuti 
parties to deliver food and medicine h 
sistance members inside Nicaragua. 

The men and women of the Ageni '' 
for International Development (AID) 
who have worked long and hard to en ^ 

sure that the members of the resistan 

have the basic necessities of life deser j; 
the thanks of our nation. The work of 
AID keeps the chance for democracy i 
alive in Nicaragua. 

The United States continues to ?- 
port those fighting for freedom and (h 
mocracy in Nicaragua. The freedom fi t- 
ers of the Nicaraguan democratic resi 
ance deserve the continued support 1 1 
the United States. 

If the current stalemate in thi 
process persists and the Sandini.'^t: 
tinue their policies of repression, ti 
we will call upon the Congress to r^ 
sider its February 3 decision to cui-i 
sistance to the Nicaraguan freedom f 

'Tfext from Weekly Compilation of Pn 
dential Documents of "May 30, 1988. ■ 


nonartmant /\f Qtof^ 



JS. Signs UN Convention Against Torture 

'Following are the President's mes- 
f/)fn the Senate and the text of the 
I !ii))i Against Torture and Other 
hilniiiian or Degrading Treatment 
•;liineiit signed on behalf of the 
ni States by Deputy Secretary of 
John C. Whitehead on April 18. 
-, .(/ the United Nations. The United 
. s luvame the 6Sd nation to sign the 
■ iitxin, which was adopted by the UN 
, ml Assembly in December 198Jf and 
t-ril into force on June 26, 1987, after 
I, s ratified by 20 nations. 


•u 20. 19881 

> a \ ii'w to receiving the advice and consent 
'. Senate to ratification, subject to certain 

iati(]ns, understandings, and declara- 
1 I transmit herewith the Convention 
.■ilk st Torture and Other Cruel, Inhuman or 
)e( iding Treatment or Punishment. The 
■IT 'Tition was adopted by unanimous agree- 
(if the United Nations General Assembly 
criiiber 10, 1984, and entered into force 
; , ae 2(5, 1987. The United States signed it 
n , iril 18, 1988. 1 also transmit, for the