HEADLINE: PREPARED TESTIMONY OF ASSISTANT SECRETARY WINSTON LORD
BEFORE THE HOUSE INTERNATIONAL RELATIONS COMMITTEE
ASIA AND PACIFIC AFFAIRS SUBCOMMITTEE

Introduction

Mr. Chairman, thank you for the invitation to speak before the Asia and
Pacific Affairs Subcommittee so early in this session of the 104th
Congress. It is a distinct pleasure to sketch for you a broad overview of
U.S. policy for the EastAsia and Pacific region under the Clinton
Administration. I reiterate the Administration's commitment to working
with this Congress to shape an activebipartisan policy that will advance
our national interests in the world's most dynamic region.In addition to
submitting the full text of these opening remarks, I would like, with your
permission, to place in the record the text of my January 1995 addressto
the Commonwealth Club in San Francisco.I have just returned from a ten
day, five country tour through Asia with Deputy Secretary Talbott. I was
once again struck by America's large stakes in the region as well as the
strong desire there that the United States remain engaged.The Asia-Pacific
region is impressive for its diversity and dynamism.Geographically it
embraces a broad swath of all four hemispheres stretchingroughly 8,000
miles westward from the US mainland to Burma, and 8,000 miles southward
from Alaska to New Zealand. Its ethnic and religious diversity blends with
some of the world's richest cultures. It includes several of the
lastCommunist regimes in the world (Vietnam, North Korea and China), as
well asfree societies such as Japan and Australia, and newer democracies
such as Thailand, South Korea, the Philippines, Taiwan, Cambodia, and
Mongolia.Economically, the Asia- Pacific region has become the most robust
and importantarea in the world. The 18 members of the Asia Pacific
Economic Cooperation(APEC) forum account for more than one third of the
world's population andproduce $14 trillion in goods and services annually,
about half of the world'sGDP. Even excluding the U.S., the output of the
region still surpasses that ofthe European Union. East Asia is the
destination of nearly a third of total U.S.exports and accounts for over
two and a half million American jobs. American sales in Asia are growing
more rapidly than anywhere else.The region is not uniformly affluent,
however. It is also home to grindingpoverty. It is no coincidence that the
poorest countries generally have some of the most repressive regimes while
the more affluent are among the most free.Strategically, the Asia- Pacific
is the region where four of the world's majorpowers intersect. We have
fought three wars there in the past half century. Hereat home, our
population has been shifting toward the Pacific, and isincreasingly
enriched by large numbers of Asian immigrants. The hopes for apeaceful and
prosperous future are promising provided the United States staysactively
engaged. Administration's Approach During the last two years, the Clinton
Administration has confronted head-on thepost-Cold War world with all its
advantages and ambiguities. The Pacific arenahas been no exceptio n. We
have sought to define for Americans the huge U.S.interests in the region
and to heighten U.S. engagement. We have promoted thefull range of U.S.
goals. In addition to more traditional concerns, thisincludes a new
emphasis on advancing global issues such as narcotics control,population
planning, AIDS prevention and treatment, environmental protection
andcooperation to curb international crime.The broad outlines of U.S.
policy toward the region were articulated byPresident Clinton during his
first overseas trip to Japan and Korea in July1993. At that time, he set
forth his vision of "a New Pacific Community built on shared strength,
shared prosperity and a shared commitment to democraticvalues." The
Administration views the three pillars of this policy --prosperity,
security and freedom -as mutually reinforcing elements. We have
beenpursuing each of these through a variety of initiatives, policies,
statementsand trips, in the process seeking to raise the profile of Asia
in our policy andpublic consciousness. Let me briefly review now what has
been accomplished andthen discuss the specific ways in which we would hope
to continue making progress in the year ahead. Prosperity In an era of
relative peace in the Asia-Pacific, we have been able to focusheavily on
ensuring that the United States contributes to and benefits from the
dynamic economic growth of the region. Within the context of America's
globalefforts to promote free trade through the GATT and now WTO, we have
been workingbilaterally and regionally to remove barriers to trade and to
ensure America'seconomic place in the Pacific community.In 1993, when we
were in the chair of APEC, we played an active role in developing that
young organization into a more effective vehicle for promotingeconomic
growth and trade liberalization in the Asia-Pacific region. In Seattle in
the fall of 1993, the President elevated the APEC forum to the leaders
level by convening the first ever meeting of Asia-Pacific leaders and,
with those leaders, shaped an economic vision statement for the Pacific.In
Bogor last year, the second APEC leaders meeting under Indonesia's
leadership made a commitment to achieve open and free trade in the region
by theyear 2020. In Osaka this November, we look toward a blueprint,
developed underJapan's leadership, to move APEC toward this bold vision.
The Osaka actionagenda will set the work program for APEC for the next ten
years. We need acomprehensive and credible agenda that commits APEC to a
course of active trade and investment liberalization. We see APEC not as a
trade bloc nor a formaltrade agreement like NAFTA but rather as a building
block for global tradeliberalization and a spur to freer trade in other
regions.We have also been working bilaterally to open markets. We have
made progress on economic issues a central element in our relations with
Japan. Through theU.S.-Japan Framework talks we have reached a series of
important sectoralagreements and promoted macroeconomic stimulus in Japan.
But there is muchunfinished business in the automotive sector,
deregulation and the faithful implementation of agreements reached.
However sporadically, Japan is movingtoward a genuine multi- party system
with more competition for consumer votes andtherefore greater pressure for
access to foreign suppliers. Still, significantJapanese trade surpluses,
even if at somewhat lower levels, are likely to persist for the
foreseeable future. We do not seek to balance trade bilaterally;what we do
seek are genuinely open markets and a fair opportunity to compete.With
China, we are in the middle of a series of intense negotiations.
Ourtextile talks last year resulted in a new accord. We also successfully
negotiated a market access agreement and a framework agreement on
intellectual property rights as well as our recently announced accord on
satellite launchservices. However, serious problems remain. We have
recently announced traderetaliation against China because of its failure
to enforce its IPR laws and regulations. Egregious pirating of
intellectual property in China costs Americanfirms about $1 billion
annually. The Chinese have now agreed to resumenegotiations. We remain
prepared to reach an equitable agreement, but we willcontinue to defend
firmly American interests and international trading principles. Another
current issue is China's desire to become a member of the World Trading
Organization, thesuccessor to GATT. We continue to support strongly
China'smembership, but its accession must be based on firm commitments to
the basicrules and disciplines of the GATT/WTO. The Chinese leaders'
willingness to open their system to foreign competition has been
complicated by the recent uncertainty in China's domestic economic
situation and the transition to thepost- Deng era. We have negotiated down
protectionist barriers with other trade partners including Korea, Thailand
and Taiwan. We have consulted individually andcollectively with the six
dynamic ASEAN economies, which together are our fourthlargest trading
partner.Economics has thus become a core element of our overall policy
toward theAsia-Pacific. Active economic engagement helps to anchor America
in the regionnot only in trade and investment but also in security and
political terms. SecurityIn a region where the major powers meet, we have
large, abiding securi tyinterests. Relations among these nations are more
stable today than they havebeen at any time in this century. Managing
those inter-relationships isnevertheless a key challenge in the years
ahead. How are we working to consolidate these favorable circumstances? We
are maintaining our forward military presence in the Western Pacific.
TheBottom Up review concluded that the U.S. interest in deterring
aggression andpreserving stability requires us to maintain the
capabilities that are provided now by an active forward presence of
approximately 100,000. While the specificcomposition of our forces may
change, our commitment to maintain ourcapabilities and active engagement
in the real security challenges of the regionmust not. The Department of
Defense will soon publish a new report on ourstrategy in the region which
will clearly affirm this. Our alliance with Japan is strong and remains
the linchpin of our defenseposture in Asia. We have insulated our security
ties from our trade frictions,while making the point that, if left
unattended, economic frictions couldeventually affect our overall
relationship. We have worked with Japan on what wecall our "Common Agenda"
on global issues and successfully enhanced a global partnership with Japan
-- one which is also reflected in our support for Japan'sbecoming a
permanent member of the UN Security Council.Relations with China are
crucial. It is a permanent member of the UN Security Council with nuclear
weapons and destined to become a global economic power. It has a major
impact on regional issues and on global challenges such as theenvironment.
We have clear national interests in seeing that China is integratedinto
the international system on appropriate terms, whether it is the WTO,
APEC,the ASEAN Regional Forum, non-proliferation agreements, or compliance
with international human rights standards. We welcome China's
participation in bothglobal and regional economic and security forums.
Nearly a year and a half ago, the President initiated our policy
ofcomprehensive engagement. We continue, through high-level dialogue and
workinglevel talks with China, to pursue our national interests. We have
had modestsuccess in securing China's cooperation on certain issues,
including international peacekeeping, the North Korean nuclear issue,
missile exports,narcotics: alien smuggling and regional security dialogue.
In recent months,however, differences over the sensitive issue of Taiwan,
human rights and trade have taken center stage. Resolving these
differences is made more difficult by China's succession politics.We are,
therefore, in a difficult phase in our relationship. We must continue
topursue constructive relations with China, one of the key powers in the
world,but we must also show firm resolve whenever necessary. We have
maintainedTiananmen-related sanctions, have taken firm trade steps where
necessary and arepursuing human rights issues in various ways. At the same
time we seek to makeprogress where we can. Despite some current strains,
we remain confident that over the long run ourshared interests will
clearly outweigh our differences.A comprehensive and balanced China policy
is essential to maintaining peace,stability and economic development on
both sides of the Taiwan Strait. While we recognize the Government of the
People's Republic of China as the sol e legalgovernment of China, we also
maintain a vigorous and expanding unofficialrelationship with Taiwan,
within the framework established by the TaiwanRelations Act and the three
Joint Communiques with the PRC. We acknowledge theChinese position that
there is but one China and that Taiwan is a part ofChina.Administrations
of both parties have embraced this policy, which has enabled us to
developmutually beneficial relations with both the PRC and Taiwan.The
people of Taiwan have also benefitted from our strong, but
unofficialrelationship. The famous Taiwan economic "miracle" has made it
the 13th largest trading economy in the world, and our second largest
export market in Asia. Withour encouragement, Taiwan has taken dramatic
strides toward democracy and theobservance of human rights. All of these
developments have provided the peopleof Taiwan the security to enjoy their
prosperity, and recently a "cross-straitdialogue" between Taipei and
Beijing has replaced the exchanges of shells that once were common in
those waters.Recognizing this, the Administration conducted the first
comprehensive review ofits Taiwan policy in fifteen years and implemented
significant adjustments inourunofficial relations with Taiwan. However, we
will continue to reject proposals which would place at risk the peace and
growth that Taiwan has ach ieved. We will not reverse the policies of six
Administrations of bothparties. That would not be in our interest, and it
would not serve the interestsof the people of Taiwan.With Russia, our
global approach of supporting reform and integration includeswelcoming it
into the Pacific community. Russia is playing a constructive role in the
ASEAN Regional Forum and is eager to join APEC. We have been encouraging
Moscow to address the key issues which will allow it to improve its
relationswith Japan. With Vietnam, the fullest possible accounting for our
missing- in-action remainsour highest priority. We also have important
regional security and economicobjectives which improved relations will
promote. Just last month we opened aliaison office in Hanoi after
favorably settling propert y and claims issues. We envisage that this
liaison office will play an important role in encouragingprogress in
unilateral and joint Vietnamese efforts on MIAs and in furtheringour other
objectives, including human rights. As the President has saidconsistently,
Vietnamese Cooperation in accounting for missing servicemen remains the
priority criterion for further progress in our bilateralrelationship. Our
alliance relationships and forward military presence form the foundations
for our Asian security policy. To supplement, but not supplant these
foundations, the Administration has also explored new multilateral
securitydialogues in Asia. Working with ASEAN, and other friends, the U.S.
has supported the establishment of the ASEAN Regional Forum (ARF), the
Pacific'sfirst broadly based consultative body concerned with security
issues. Aninclusive group, not directed against any country or bloc, the
ARF had its firsthistoric meeting in July 1994, and included the ASEAN
countries, the U.S.,Canada, Japan, Korea, Australia, New Zealand as well
as China, Russia, Vietnamand others. We believe the ARF can play an
important role in conveyinggovernments' intentions, easing tensions,
promoting transparency, developing confidence, constraining arms races and
cultivating habits of consultation andcooperation on security issues.
Together with others, we are also laying the groundwork for a smaller
forum for Northeast Asia, an area where great powers have clashed
historically and thelocus of the region's most urgent security challenges.
The Korean Peninsula represents the most critical security challenge in
Asia. A major Administration accomplishment of 1994 was the successful
negotiation ofthe "Agreed Framework" with North Korea.  The nuclear accord
has received detailed attention in other hearings, so I will only comment
on it briefly. We are confident that the more the Congress and the country
examine the agreement, the more they will share our firm judgment thatit
fulfills America's goals of promoting regional stability and curbing
nuclear proliferation.In this accord, we address the past, present, and
future nuclear threats posed by North Korea.  North Korea has agreed to
allow inspections which the IAEA
  believes will shed light on how much plutonium North Korea produced
in1989-91. To be sure, clarification of the past is scheduled for a few
yearslater than we would have liked. We judged that this delay was
outweighed by the opportunity to deal effectively with the present and the
future. The AgreedFramework obliges North Korea to freeze its nuclear
capacity. So far it hasdone so. It has shut down its small nuclear
reactor. It has sealed itsreprocessing facility; the spent fuel rods will
be safely encased and eventuallyshipped out. It has halted construction on
its two large reactors. All of thisis being verified by IAEA inspections
and our own surveillance. North Korea has reversed itself and remains a
party to the Non-Proliferation Treaty. As for the future, North Korea will
dismantle its entire nuclear program, and with outside help, substitute a
nuclear energy system that is more resistant to proliferation. Moreover,
as it implements the accord, North Korea will beprogressively integrated
into the region and the world, paving the way to greater stability in
Northeast Asia and, ultimately, to a resolution of thetragic division of
the Korean peninsula.This agreement is not based on trust. In addition to
international verification,there are built-in checkpoints along the path
to implementation. To gaintechnical or economic benefits North Korea must
honor reciprocal obligations. North Korea derives no advantages that do
not also promote regional and globalstability. Moreover, the major
financial costs will be borne by theinter national community. In short,
the Agreed Framework is of major benefit to the United States, to the
region, and to the world. The ROK supports the agreement for this reason,
as do Japan and all other interested parties. The alternatives are dubious
anddangerous. Those who are critical of the accord should present a better
option. No one has done so.Implementing the Framework will require
perseverance by all concerned. We are working closely with South Korea,
Japan and others. The Framework stipulatesthat the South-North dialogue
must be resumed. We insist that dialogue betweenSeoul and Pyongyang
develop in rough parallel with steps toward improvedU.S.-DPRK relations.
The future of the peninsula must be shaped by the Koreanpeople themselves;
the Framework can only succeed if there is a climate of civility and
cooperation between the North and the South. Freedom Finally there is the
goal of freedom. Promoting freedom while balancing other objectives is the
most complex challenge, conceptually and politically, that we face. It is
a quest in which we get the least international support. False prophets
claim a contest of values between the United States, or the West,and an
Asian monolith. They assert that Asians do not share universal aspirations
for individual rights. Asian electorates and elected leaders would reject
the notion that human rights are uniquely Western, or the implication that
autocracy is intrinsically Asian. Most would agree with President Kim of
South Korea that, "respect for human dignity, plural democracy, and free
 market economics have firmly taken root as universal values." What is our
approach? We are not trying to impose our form of society or ideals.Each
country must find its own way, consistent with history and culture. But
international obligations to which countries have subscribed should be
fulfilled. No government should violate the core value of human dignity as
articulated in the Universal Declaration of Human Rights. Each nation's
citizensshould have the chance to participate in the decisions that affect
their lives, and the governments they elect should not be overturned by
force. Many Asianshave devoted their lives, and given their lives, for
these values. Americans arebound to respect them.In addition, we appeal to
countries' self interest. Experience teaches that sustained economic
development is more likely where government policies aretransparent, where
courts provide due process, where uncensored newspapers arefree to expose
corruption and to debate economic policy, and where businesspeople can
make independent decisions with free access to information. Economic
rights granted by authoritarians can as easily be taken away. The
foundation of open economies -rights that protect contracts, property, and
patents -- can onlybe guaranteed by the rule of law. The reality of Japan,
Hong Kong, South Korea and Taiwan shows that accountablegovernment is the
bedrock of stability and prosperity. The reality of Burma and North Korea
 is that repression entrenches poverty.The defense of liberty is not
merely an idealistic endeavor. Enlarging freedom serves concrete American
interests as well. The greatest threats to oursecurity, and to Asia's,
come from governments that flout the rule of law athome and reject the
rule of international law abroad. In 353 wars fought since 1819, not a
single one was between two established democracies. Open,accountable
governments do not practice terrorism or generate refugees. Theymake
better trading partners.Our goals remain constant. The President remains
as committed as ever to thecause of freedom. Consequently, we will
continue to champion human and laborrights in Asia without arrogance or
apology. We will do so where we havefriendly relations -- as the President
did in Indonesia in his meeting withPresident Soeharto. We will do so
where our interest in stemming the drug trade goes hand in hand with our
interest in accountable government -- as it does inBurma. And we will do
so where we have an interest in positive engagement on many critical world
issues -- as we have in China.Finally, we will continue our strong support
for fledgling democracies. Lastspring Secretary Christopher participated
in the International Conference on theReconstruction of Cambodia and
pledged our support for rebuilding Cambodia. Lastmonth, Deputy Secretary
Talbott visited Cambodia to reaffirm our support for thedemocratically
elected coalition government. Later this month, I will betravelling to
Mongolia to review our programs for supporting Mongolia'stransition to a
democratic, free market system.Goals for the Coming Year Mr. Chairman, the
President and the Secretary of State have articulated a seriesof goals
which the Administration will energetically and creatively pursue. Inthe
context of the Administration's broad objectives, we will be working in
the coming year on several important fronts in Asia. I will mention some
of the moreimportant ones briefly. -- We will work determinedly to
implement the U.S.-North Korean AgreedFramework, but not at the cost of
our strong ties with the Republic of Korea.  The task is complex; it will
require sustained effort. We will establish KEDOand get it off to a
constructive start. The selection of a South Korean reactor design is
essential on financial, technical and political grounds. We expect to
establish diplomatic relations at the most basic level by opening a
liaisonoffice in Pyongyang, as foreseen in the agreement. North Korea will
have anoffice here. In moving ahead on these fronts, we will insist that
the North'sundertaking to pursue the North-South dialogue be implemented
faithfully. Wehope by these efforts to
 move to a new stage in which we and the other countriesconcerned begin
discussions on a more stable future for Northeast Asia. -- In APEC our
principal objective is to reach agreement at the Osaka leadersmeeting in
November on an effective action agenda and blueprint for implementingthe
Bogor declaration on free trade, investment and economic development.
Tothis end, we will need to work closely with Japan, as chair, with other
APEC members, with Congress and with our private sector. A comprehensive
work planthat addresses liberalization, facilitation and cooperation is
essential to sustaining APEC's credibility as a vehicle for economic
growth. -- During this year, we will be reaffirming with Japan our
security relationshipand working to strengthen cooperation on our common
agenda. This fiftiethanniversary year of the end of the war in the Pacific
is a time which both ourgovernment and that of Japan wish to use to
re-dedicate ourselves to cooperationfor future peace and prosperity. At
the same time, we will continue to work onoutstanding economic issues,
most importantly in the auto sector, and Japan'splans for economic
deregulation. -- We will pursue our strategy of comprehensive engagement
with China. We hope we can successfully conclude important bilateral
negotiations on IPR protection and market access. If not, we will have no
choice but to utilize the provisions of our trade law. We will continue
the multilateral negotiations on China'sadmittance to the WTO. We will
continue our limited bilateral military dialogue,with a view to
encouraging greater openness and transparency on the part of the Chinese
military. We will continue to raise human rights issues vigorously,through
bilateral visits and through multilateral channels such as the UN Human
Rights Commission meeting. And we will search for cooperation where we can
find it on regional issues and global challenges. -- We will further
develop regional security dialogues in the new ASEAN RegionalForum and
elsewhere. Our hope is that patient diplomacy will build consensus fora
meaningful ARF work program that will encompass both confidence
buildingmeasures and cooperation in areas of mutual benefit, such as
peacekeeping or disaster relief. At the same time, we will lay the
groundwork for a separate sub-regional dialogue on security issues in the
critical Northeast Asia sector. -- We will also advance our many other
interests. We will strengthen ties withASEAN, whose countries are our
fourth largest market and a force for stabilityand growth in the region.
We will persistently seek full cooperation in accounting for our POWs and
MIAs in Vietnam, Laos, Cambodia, Russia, China andNorth Korea.  We will
strengthen ties with Australia and New Zealand. We willpress for political
openness in Burma. We will continue our support for theelected governments
in Cambodia and Mongolia. We will continue to supportdemocracy, human
rights and reform throughout the region, working in partthrough effective
non- governmental organizations such as the National Endowment for
Democracy and the Asia Foundation. And we will seek practical progress
onlaw enforcement, environmental and other global issues. Conclusion Broad
public and Congressional support is critical for our policy. A
prosperous,stable and open Asia- Pacific is neither a Republican nor a
Democratic cause.While we will see debate and even disagreementover the
next two years, I amoptimistic that our Pacific guest will enjoy
bipartisan support. Some see a Pacific community as a distant, if not
unrealistic, vision. In fact, it is being shaped now by our actions and
those of others. Clearly, buildingsuch a community will take persistence
and patience. We cannot force itsdefinition; nor should we forfeit our
difference. The diversity of the Asia-Pacific region is a reality we
recognize and respect. Its distinctions willbe a major source for the
region's future dynamism.. . 
 This commemoration of past sacrifice reminds us of our responsibility to
the nextgeneration of young Americans and Asians. It provides an
opportunity torededicate ourselves to shaping a Pacific community that is
richer, safer and freer.