NORTHEAST ASIA PEACE AND SECURITY NETWORK ***** SPECIAL REPORT ***** May 11 1998 The following is the complete text of remarks before the House International Relations Subcommittee on Asia and the Pacific by Walter Slocombe, US under secretary of defense for policy. Slocombe outlined a four-point US security strategy toward the Asia-Pacific region: maintain the vitality of bilateral alliances and friendships; maintain the U.S. forward presence in the region to promote stability; promoting a stable, sound, lasting relationship with the PRC; and take advantage of the opportunities offered by multilateral fora like the ASEAN Regional Forum and the Northeast Asian Cooperation Dialogue. ----------------------------------------------- U.S. SECURITY INTERESTS IN THE PACIFIC STATEMENT OF THE HONORABLE WALTER B. SLOCOMBE UNDER SECRETARY OF DEFENSE FOR POLICY BEFORE A HEARING OF THE HOUSE COMMITTEE ON INTERNATIONAL RELATIONS SUBCOMMITTEE ON ASIA AND THE PACIFIC May 7, 1998 Mr. Chairman and Members of the Subcommittee, thank you for this opportunity to speak to you about U.S. security interests in the Pacific. For half a century, America's military presence and engagement has been the basis for stability in East Asia. That stability has been the key to the region's remarkable economic growth -- a prosperity in which the American people as well as those of the region have a direct national interest. Our interests require that we continue that engagement in the future. In January, I accompanied Secretary Cohen on his visit to Asia, at a time when Asia had entered a period of financial crisis -- a crisis which has security implications as well. As he met with leaders grappling with this period of turmoil, which emerged so swiftly and unexpectedly, he sought to assure them that the American commitment to the region will continue now and into the future, serving as an anchor of stability in times of economic, as well as security, challenge. As Secretary Cohen said, we returned with a renewed appreciation of two fundamental truths. The first is that Asia is a region of great and growing global importance economically, politically, and strategically. Even in this crisis, the sense of dynamism survives. The second is that Asian leaders want the United States to be involved during this crisis and especially to maintain its strong security presence in the region. They value American engagement in good times and bad. SECURITY IS THE BASIS OF PROSPERITY There is a basic interplay between security and economic development. Peace and security are, as others in the Pentagon have said before me, the "oxygen" that permits economic development to occur. What Asians have accomplished in the atmosphere of peace and stability is truly amazing and very much to their own credit, but we must recognize our role in providing the peace and security. Security is even more important in times when nations must take the tough decisions to surmount economic problems than in times of easy prosperity. In this time of financial crisis in the region it is even more important for us to continue to recognize the stabilizing role that only America can play. We have a continuing interest in adhering to four basic strategic tasks: We must maintain the vitality of our bilateral alliances and friendships. We must maintain our forward presence to ensure stability. We must promote a stable, sound, lasting relationship with China, recognizing that both countries have a fundamental interest in regional and global peace. And we must seize the opportunities offered by multilateral fora -- organizations like the ASEAN Regional Forum and the Northeast Asian Cooperation Dialogue -- which advance transparency, resolve tensions, and improve confidence between regional powers. The U.S. government is working, diplomatically and through the economic agencies, to help see that the financial crisis will be resolved quickly and that the new economic structure that emerges will be more open, more democratic, and more sound. With American leadership, these results are certainly possible. At the same time, beyond the necessary connection between security and prosperity, the United States obviously has a great number of direct security interests and challenges in the Asia-Pacific. Let me highlight the following concerns: -- Asia remains a concentration of powerful economically competitive states with the world's largest militaries, some of which are nuclear armed. -- American alliances, built on undeniable mutual interests during the Cold War, are facing new challenges and priorities for responsibility-sharing. -- Ancient rivalries, set aside in times of prosperity, may re- emerge in times of distress. -- Relations between nations with competing territorial claims are already showing strains; unresolved claims to disputed small insular areas and boundaries may prove especially dangerous. -- Deep-seated ethnic tensions could increase perceptions of unfair economic burdens; political turmoil and social unrest could result. -- Key nations in the region are going through periods of fundamental political, social, and economic transition. -- Several nations in the region have active programs for nuclear, chemical or biological weapons and the means to deliver them, which are of concern both in themselves, and for their proliferation potential. In short, the current economic crisis reinforces the fundamental, longstanding strategic policy the U.S. has pursued for decades. Now more than ever the United States has an interest in helping to keep the peace and maintain stability. Indeed, we now have an opportunity to strengthen American leadership. The talk of American decline, so prevalent to a visitor to Asia just a few years ago, is noticeably silenced now. The region's leaders are looking to America. We have an opportunity to work with Asia's leaders to resolve long-standing sources of instability and head off potential future problems. FORCE PRESENCE The Quadrennial Defense Review reaffirmed America's strategic commitment to remain forward-deployed in the region. Specifically, we intend to maintain approximately 100,000 troops in the region, and have committed the necessary resources in our long-term defense planning. Our forward-deployed posture supports our strategy of engagement in the Asia-Pacific region that we pursue through our bilateral alliances and security relationships, our participation in interlocking multilateral security fora, and our strategic engagement of China. There is very broad support in Asia for that presence and recognition by key countries, notably Japan and Korea, of the need to continue to host those forces in bases in the region. We have, of course, an obligation to manage the inevitable problems our presence causes for local communities, but there is every reason to be confident we will continue to have the necessary access and bases to support our forward presence. KEY NATIONS All of the major powers in the region are, in their different ways, undergoing major transformation. It is in the U.S. interest to remain engaged and to help ensure that these transformations unfold in a positive way and that these nations adopt policies that support regional stability and security. 1. China. China is passing through a profound economic transition as it moves from a command to a market economy -- and as a generation of leaders schooled in the age of Mao yields, there will be political change as well. China, by reason of size alone, is a dominant factor in Asia. But it need not dominate or threaten its neighbors. The U.S. has a profound interest in that transition, and in particular in the new China being a constructive partner in international relations -- not a force for instability. To that end, we seek a steady and sustained engagement that can help shape that transition in positive directions. The United States does not fear China, nor do we view China as an adversary. Rather, the U.S. seeks to encourage China to step forward as a responsible and cooperative great nation -- a nation that preserves its unique identity and works to advance its own interests, but is more open on security matters and more respectful of the rule of law; a nation that adheres to international norms in its own affairs, including basic human rights; a nation that plays a constructive international role and respects the corresponding standards, including peaceful resolution of disputes, the control of weapons of mass destruction, and respect for freedom of the seas. And a nation that joins us in rejecting a zero-sum attitude toward security by recognizing the common interests we all share in a stable environment that ensures security and promotes prosperity. Just as economic growth and stability in China contribute to a prosperous and stable Asia Pacific, so, too, does regional stability create a favorable environment for China's economic development. In this regard, it is important to note that Chinese economic development is dependent on stability not only in the Asia Pacific region, but also in the Arabian Gulf -- the source of a significant share of energy imports by China and neighboring countries whose economies are interwoven with China's. Any disruption of the flow of oil from the gulf would clearly have a damaging effect on China's economy. And should that disruption occur through the use of weapon technology provided by China, it clearly would also have a damaging political effect on China's relations with many countries around the world, including the United States. Among the most important agreements reached by Presidents Jiang Zemin of China and Clinton during their summit in October concerned Chinese assurances regarding exports of cruise missiles and nuclear technology. Those assurances were re-affirmed to Sec. Cohen during his visit. Given China's stake in Gulf stability, it is in China's own self-interest to fully implement those assurances, as well as earlier statements regarding WMD-related transfers, in order to ensure that stability in the Gulf and Southwest Asia is not imperiled. Through these assurances and other agreements, the October summit between Presidents Clinton and Jiang gave great hope that our two nations can work together in a variety of ways toward our common goals of stability, security and prosperity. We remain alert to confirm that China is abiding by the commitments it has made in the nonproliferation field. In the security realm, our two nations have already taken several steps to increase mutual confidence and decrease miscalculation: exchanging military personnel, and conducting reciprocal ship visits; adopting procedures for U.S. Navy ships to continue to call in Hong Kong ports; and, last month at the first-ever Sino- American defense talks, signing an agreement to share information on humanitarian exercises. During his visit to China, Secretary Cohen signed a Military Maritime Consultative Agreement, which will both help avoid incidents at sea and create a venue for dialogue between operational naval officers. Such engagement gives hope that China is willing to work with us to our mutual benefit and the benefit of the entire region. I would also note that American interests and the interests of entire region are best served if China also has good relations with Japan, Korea and Russia, and if those countries have good relations with each other. Good bilateral relations among the nations of Asia complement our efforts; they do not threaten them. U.S. Policy Toward Taiwan. The policy of the United States toward Taiwan and the PRC is aimed at preserving peace and stability in the Asia-Pacific region. Our strategy includes comprehensive engagement with the PRC in an effort to bring China firmly into the international system as a responsible participant and maintaining our obligations toward Taiwan as stipulated in the Taiwan Relations Act. The Taiwan Relations Act (TRA) of 1979 and the three joint Communiques form the basis of U.S. policy regarding China, including the Taiwan issue. They have been followed by successive administrations of both political parties. Our premise is that an adequate defense in Taiwan is conducive to maintaining peace and security while differences remain between Taiwan and the PRC. We take our obligation to assist Taiwan in maintaining a self- defense capability very seriously. We do so not only because it is mandated by U.S. law in the TRA, but also because it is in our own national interest. While our arms sales policy aims to enhance Taiwan's self-defense capability, it also seeks to reinforce regional stability. We do not provide Taiwan with capabilities that might provoke an arms race with the PRC or other countries in the region. We understand that as long Taiwan has a capable defense capacity, the environment will be more conducive to peaceful dialogue, and thus the whole region will be more stable. Let me now call attention to an aspect of the August 17, 1982, joint Communique between the United States and the People's Republic of China that is extremely important. At the time the Joint Communique was issued, we made it clear that our statements were premised on the expectation that the PRC would seek only a peaceful resolution of the Taiwan issue. In that connection, we are encouraged by the recent resumption of cross-Strait talks. A constructive and peaceful Taiwan-PRC dialogue serves the interest of all the parties and is a major element in achieving long-term regional peace and stability. 2. Japan. The U.S.-Japan security alliance played a critical role in the Cold War and in fostering regional peace, stability and prosperity. The sense of security it has fostered for Japan and Japan's neighbors has propelled an economic tide that lifted millions of people throughout Asia, promoted democratic development throughout the region, and created a vast new market for America and the rest of the world. A strong U.S.-Japan security relationship will be as important to Asia's future as it has been to its past. Both sides, and indeed nations throughout the region, recognize the alliance as critical to their interests of regional peace and stability. To this end, the U.S. and Japan have taken a series of steps to reaffirm, update and strengthen our alliance following the end of the Cold War. In September 1997, the U.S. and Japan completed revisions to the Guidelines for U.S.- Japan Defense Cooperation to ensure that we are prepared for today's challenges -- from peacekeeping and humanitarian relief to responding to regional contingencies, including developments on the Korean peninsula. For the first time, Japanese political leaders have explicitly authorized provision of rear area support to U.S. forces engaged in the region to meet regional challenges. In direct support of U.S. Forces' activities, Japan will provide logistics supplies and services (including equipment, parts, fuel, transportation, repair and maintenance), medical supplies and services, security, communications, additional ports and airfields, and port services. Japan will also cooperate in responding to a crisis by providing assistance in surveillance, search and rescue, maritime interdiction, minesweeping, air and sea space management, and intelligence. The Guidelines enhance predictability and therefore efficiency in our bilateral operations, and have promoted regional confidence in the continued vitality of our alliance. The Guidelines will be implemented, including by changes in Japanese domestic legislation, within the terms of the Japanese Constitution. They do not automatically commit the U.S. and Japan to any specific action given an event in the region. The decision on whether to respond and how to respond will be made by both of our governments at the time of a crisis, depending upon the nature of the crisis and how each of our national interests are affected. The Guidelines do, however, provide the basis of the advance planning necessary for cooperation to be possible, once it is decided on. The strong U.S.-Japan security relationship is exemplified in Japan's hosting of some 47,000 U.S. troops. Japan pays nearly $5 billion each year to support stationing of these forces on their soil. This translates into about $100,000 per year for every soldier, sailor, airman, and marine serving in Japan. Meanwhile, the U.S. military recognizes its obligation to be a good guest. In that connection, we remain committed to the Special Action Committee on Okinawa (SACO) process and implementation of the SACO Final Report, including the relocation of Marine Corps Air Station Futenma to a new, sea-based facility off Okinawa. The SACO Final Report includes 26 provisions, 12 of which have already been achieved, that are intended to reduce the footprint of the U.S. military on Okinawa while fully maintaining our operational capabilities. 3. Korea. The security alliance between the United States and the Republic of Korea (ROK) serves as the foundation on which all U.S. diplomatic, defense, and economic efforts on the Korean peninsula rest. Without a strong, close bilateral security relationship, the U.S. could not protect its significant interests on the peninsula and in Northeast Asia. That alliance also serves to bolster security and stability as ROK copes with its financial crisis -- so far with great courage and long term perspective, and considerable initial success. We cannot say when and we cannot say how, but change will come to the Korean Peninsula. We are working on several fronts to enable change there to be peaceful and orderly. The substantial deterioration in North Korea's economic conditions has inevitably affected its military forces; nonetheless, they are still capable of inflicting terrible destruction on South Korea, especially with artillery, missile, and chemical weapons. And North Korean leaders might miscalculate that a military adventure could somehow ease, or divert from, their problems. As ROK goes through what is in some sense its first real democratic transition, the US-ROK security alliance will remain focused on deterring renewed hostilities on the Korean peninsula as long as a threat to the ROK exists. In these uncertain circumstances, the ROK and U.S. have consulted closely and are prepared for a wide range of challenges. The combined military forces of the United States and Republic of Korea continue to enhance their capabilities to deter and, if necessary, defeat aggression. In response to the continuing threat, both the U.S. and ROK are modernizing their military equipment, with significant upgrades in armor, artillery, attack aviation, counterfire, and pre-positioned stocks. Also, to sharpen its readiness, the Combined Forces Command is always refining its vigorous program of exercises, field training, and computer simulations. While the South Korean military will need to bear its share of the austerity measures needed for ROK to overcome its financial problems, the new administration of President Kim Dae Jung has made a strong commitment to maintain ROK's defense capability, and its contribution to the costs of U.S. presence. The strong US-ROK deterrence posture has contributed to recent diplomatic breakthroughs on the Korean peninsula. In particular, the 1994 Agreed Framework, which froze the destabilizing nuclear weapons potential of the North's nuclear complex at Yongbyon, defused the most immediate source of tension and deflected what could have been a military confrontation with North Korea. Almost four years after it was negotiated, more than 8,000 spent fuel rods have been canned. IAEA oversight of the facility continues. The reprocessing plant at Yongbyon has stayed closed down, and the reactor, which was capable of producing enough plutonium annually for several nuclear bombs, has been shut down. We continue to have concerns about North Korea's WMD potential, both for its own use and for export, but the scale of the problem has been significantly contained by the Agreed Framework. In this connection, I want to underscore the importance of the U.S. continuing to provide funding for KEDO -- which is a necessary precondition for attracting broader international support and confirming the commitment of Japan and ROK to pay for the light-water reactors. The steadfast US-ROK security commitment has also helped create an opening to pursue the Four Party peace proposal, North-South dialogue, and other issues of concern, such as missile proliferation and the recovery of Korean War remains. Looking to the future, the U.S.-Korean alliance will continue to promote peace and stability in Northeast Asia and the Asia- Pacific region as a whole, even if the direct threat from the North were to recede. 4. Indonesia. Indonesia, as the world's fourth most populous country, and the world's largest Muslim nation, a model of religious tolerance, the dominant member of ASEAN, and an influential participant in the ASEAN Regional Forum and APEC, is poised to achieve even greater influence on the world scene. In the security arena, as in political and economic arenas, we share important, broad interests -- stability, prosperity, and the peaceful resolution of conflicts. Indonesia is highly respected as a responsible international actor. Jakarta has exercised leadership on regional security problems such as Cambodia and the South China Sea, has a long tradition of supporting UN peacekeeping operations, and has been heavily involved in global disarmament efforts. Its vast span of thousands of islands form a gateway between the Pacific and Indian Oceans and straddle some of the world's most critical sea lines of communication. The Indonesian armed forces are remarkably modest in size given the country's size and stature. Indonesian defense spending over the years has been consistently low compared to its neighbors and its purchases of major defense systems have been limited. This reflects budgetary constraints as well as the largely inward- looking orientation the armed forces has maintained since Indonesia's independence. Our cooperation with the Indonesian military, in training activities and through the acquisition of U.S. defense systems, enhances interoperability, which is important in missions such as peacekeeping and disaster relief. We foresee a continued growth in our mutual security interests, and view Indonesia as an increasingly important and constructive strategic actor. The U.S. is also working with Indonesia to curtail its financial crisis by carrying out financial reforms. At the same time, the U.S. has real concerns about the Indonesian government's economic and human rights policies. Failure to open the political process and abuses of official power are not only wrong in principle, they gravely undercut the investor confidence necessary for Indonesia to overcome its economic difficulties. Human rights problems remain an important factor in our defense relationship. In the past several years, in the aftermath of the 1991 Dili incident and 1993 turnover in the military leadership, we have seen signs of improvement in the military's approach to human rights and evidence of greater professionalism in the armed forces. We have noted greater sensitivity and awareness of the military's shortcomings, and more of a commitment to address these problems. Still, the human rights picture is clearly mixed. The tensions raised by the country's economic problems have increased the potential for problems in this respect. We are particularly troubled by allegations of military involvement in the disappearances of students and other political activists, and are concerned by the potential for student demonstrations to turn violent. We have a strong interest in seeing the Indonesian military manage the current situation with restraint and we have strongly and repeatedly conveyed this view to officials in Jakarta. As a component of our extensive and beneficial bilateral relationship, a good working relationship with the Indonesian defense establishment, cooperating in pursuit of our mutual security interests as well as addressing areas of difference, is very much in the national interest of the United States. An Indonesian military that is professional and respected in the region and with which we cooperate operationally serves our interests in both in preserving regional stability and in encouraging better human rights practices. Our bilateral military activities with Indonesia, while not extensive, have incrementally increased in recent years. Combined with our other bilateral defense activities in the region, they offer a good foundation for the continued long-term U.S. military presence -- a low profile presence that ASEAN advocates. We are, however, taking special care to ensure policy review of all U.S. activities with the Indonesian armed forces, especially in light of the unsettled conditions in the country. 5. Russia. Adding to our considerations for long-term stability and development in the Asia-Pacific region is Russia's ongoing transition from a post-Soviet country to a modem nation. Our interests in Russia as a partner among the other Asia-Pacific countries include: -- Preventing the redevelopment of a conventional threat in the region as a result of changes in Russian intentions or capabilities, -- Developing bilateral and multilateral channels responsive to U.S. goals and influence, -- Promoting the development of democratic, free market societies, -- Promoting regional stability, thereby permitting international access to emerging markets and resources, and -- Preventing proliferation of weapons of mass destruction and the means for their delivery. -- Encouraging Russia to play a constructive role in the region. Russia must make significant political, economic, and military changes to ensure it becomes a reliable partner in the Far East. These changes may take generations to resolve, dictating that our strategy with Russia be aimed at the long-term and remain focused on our interests. Our defense relationship with Russia should be a catalyst for the necessary defense and military reforms. Given the current state of the Russian military, Russia poses no immediate military threat to its neighbors, nor does it perceive threats from them. It seeks strategic relationships with China, Japan, and Korea and as it pursues its own self interests, we expect Russia to reach out for more cooperation with its neighbors in the Far East. Far from seeing a threat to U.S. interests in that cooperation, we welcome it, as a step toward Russia being a constructive partner in the region. There is no question that Russia's development, given its contiguous border with China and North Korea, and its long- standing differences with Japan over the "Northern Territories," can and will affect the regions' future. We believe that our continued attention to and cooperation with Russia during its period of transition plays an instrumental role in defining an important element of the region's overall strategic stability, including preventing the emergence of a regional hegemony, facilitating a peaceful evolution on the Korean Peninsula, reaching full normalization of Russo-Japanese relations, and working toward a fuller, integration of Russia's Far East Pacific region into the overall Asia-Pacific economic structure. A modern, economically prosperous, and secure Russia will be a net contributor to the security of the region. 6. Southeast Asia. Southeast Asia is an increasingly important partner and facilitator of the U.S. forward presence through such activities as port calls, repair, training and logistics support. Much has been achieved in recent years to enhance our access, and we look forward to building on this cooperation in the future. a. Emergence of multilateral frameworks. Multilateral frameworks for discussion and cooperation have in a few short years become an important, and permanent, feature of the regional security structure for Southeast Asia especially. The United States is actively engaged in a variety of overlapping multilateral channels such as the ASEAN Regional Forum, the so-called ARF; the sub-regional confidence-building efforts, such as the trilateral dialogues between the US, China and Japan, and the US, South Korea and Japan; and the conferences on practical security cooperation and groups formed to address specific problems from Cambodia to the Four-Party Talks on the Korean Peninsula. Over the last 30 years, ASEAN has developed into a multifaceted power center in its own right, one that is integral to the entire Asia-Pacific. ASEAN has also distinguished itself by tackling such issues as Cambodia and the South China Sea, facilitating region-wide dialogue through the ARF and by serving as a powerful example for the region and the world. Indeed, three decades of solving problems, reducing tensions and working cooperatively for mutual benefit bodes well as ASEAN confronts the challenges of today. Some would like to see multilateral security dialogues and cooperation replace bilateral relationships as the primary feature of regional stability in the coming era. The United States views these multilateral mechanisms as important, and having a greater role to play in the future. But we also believe that they will be successful only if they are built upon the foundation of solid bilateral relationships and a continued U.S. forward presence in the region. That is why the United States will not support efforts that intentionally or otherwise constrain our military posture or operational flexibility efforts that would only undermine, rather than contribute, to the region's security. Given the high stakes involved, security architectures, even more than financial architectures, must be built on a solid foundation, if they are to provide protection in times of turbulence. b. Singapore. Defense relations with Singapore are excellent. Driven by geography and size to be highly attuned to global and regional defense and political trends, Singapore has been Southeast Asia's leading advocate of a continued U.S. military presence. Singapore actively searches for ways to keep us engaged, whether in multilateral institutions like the ASEAN Regional Forum, or by expanding U.S. military access opportunities in Singapore. Well before we entered negotiations with the Philippines in the early 1990s to renew our basing presence at Clark Air Base and Subic Naval Base, Singapore offered to conclude an access agreement with us that would help disperse our physical presence as well spread the political responsibility of hosting U.S. forces. The 1990 Access Memorandum of Understanding has been instrumental in sustaining our post- bases presence in Southeast Asia. With fewer than 200 U.S. personnel permanently assigned to Singapore, we conduct a variety of naval and air training events, most notably, fighter aircraft deployments from Northeast Asia or the U.S. approximately six times per year. A naval logistics unit -- Commander, Logistics Group Western Pacific -- relocated from Subic Bay at the time of our military withdrawal from the Philippines assists in fleet support and coordinates bilateral naval exercises in Southeast Asia. Recently, Singapore continued its forward-looking engagement effort by offering to construct a long-planned new pier to accommodate a U.S. aircraft carrier, which will greatly facilitate carrier visits. The closeness of the relationship has contributed to complementary access arrangements for Singapore forces in the US. Since a shortage of training space at home has led Singapore to train extensively abroad, the U.S. hosts permanent Singapore F-16 fighter and CH-47 helicopter training detachments, with an additional training detachment planned for Singapore's newly purchased KC-135 tankers. c. Philippines. The US-Philippine security relationship has substantially recovered from the strains caused by the decisions that led to the withdrawal of U.S. military bases in 1991-92, and our defense ties with this treaty ally are now positive. We have gradually established a post-bases relationship that is consistent with our activities with other friendly nations in the region -- exercises, ship visits, exchanges, and policy dialogues. The January 1998 conclusion of a Visiting Forces Agreement, which lays out the legal status of U.S. defense personnel temporarily in the Philippines in connection with official duties, will, once ratified by the Philippine Senate, facilitate expanded military cooperation. Familiarity, cooperation, and interoperability are important ingredients of a strong alliance, and we will work to solidify our security partnership in the coming years. Despite lingering suspicion in the Philippines that the U.S. is seeking to re-establish a military foothold, we are not seeking bases, and we are comfortable with developing the defense relationship in ways and at a pace comfortable to the Philippines. d. Thailand. The US-Thai relationship serves our worldwide strategic interests. Our security relationship is all the more important as Thailand copes with the current economic problems. Thailand has been a consistent supporter of the U.S. presence in Asia, and a strong participant on our side of global issues such as counter proliferation and counter narcotics policies. The Thai military has worked to seal the country's northern border and deny access to Thailand by Burmese traffickers. Thailand's close coordination was essential to the success of "Tiger Trap," a joint international heroin investigation conducted through 1994 and 1995 which targeted the Shan United Army (also known as the Mong Tai Army) under the leadership of Khun Sa. (That army disintegrated in the face of a late December 1996 action by the SLORC against Khun Sa's headquarters.) The bilateral relationship with Thailand has facilitated U.S. access that has enabled us to move quickly to trouble spots in the Persian Gulf on two recent occasions. The relationship has afforded the U.S. unparalleled refueling and transit arrangements that have impacted on our ability to operate, or signal our potential to operate in neighboring trouble spots (as in the case of Cambodia in July 1997, when Thailand facilitated a U.S. task force readied for a possible Noncombatant Evacuation Operation). Bilateral training arrangements and other forms of US-Thai cooperation enhance this relationship, and strengthen its strategic relevance. Cobra Gold remains an important mutual training opportunity that goes far towards enhancing interoperability. Cobra Gold has assumed growing importance as a training opportunity in the midst of changes in Southeast Asia. The Thai military places a high value on IMET because of the contribution such training makes to educating professional military leaders, equipping Thai officers with superior technical capabilities, and improving interoperability between our two militaries. The War Reserve Stockpile Agreement, which dates from January 1987, has been important because it provided no cost munitions storage sites, provided Thailand with munitions to meet their requirements via pre-planned FMS case sales drawing from US-titled munitions, and contributed to increased readiness in Southeast Asia. Thailand has been a reliable partner and a good friend. Our support in its economic difficulties is an important element in the Thai government's ability to deal with its economic problems. In that connection, I want to express our appreciation for Congress' funding of the U.S. Marine Corps' assumption of the Thai F-18 purchase, which had to be canceled as part of that country's austerity measures. Thailand's relevance to Southeast Asian security issues, and willingness to participate in regional solutions to critical problems make this a strategic relationship. e. Cambodia. Cambodia is again at a crossroads. Unfortunately, Cambodia has had nothing but crossroads to traverse since 1993. While it had done reasonably well in terms of preserving internal peace, abiding by the principles of the Paris Agreements, and hewing to a basically democratic course until July 1997, the rules were changed by the actions which unseated the First Co- Prime Minister, Prince Norodom Ranarith, whose party, FUNCINPEC, won the most seats in a United Nations-supervised parliamentary election in 1993. Today, the intersection of the disintegration of the Khmer Rouge in the remote escarpment in northern Siem Reap Province, and the scheduled July election, present Cambodia, and Cambodia's friends with a range of challenges, and opportunities. The U.S. views the implosion of the remnant Khmer Rouge organization under Ta Mok, and the government-engineered defections of whole units of Khmer Rouge combatants, as critically important developments. The Royal Cambodian Government pursued the goal of dismantling the Khmer Rouge, through the judicious application of military force, inducements to split the leadership from its rank and file, programs to integrate Khmer Rouge soldiers into post-1993 Cambodian life, and legislation aimed at circumscribing the possibility that the Khmer Rouge as a group could claim a role in Cambodia's future. The formula was essentially correct, and has now borne fruit. The Khmer Rouge has dwindled in size to near irrelevance, and fatal leadership rivalries contributed to the diminishment of this brutal force. The United States strongly supports establishing an international tribunal to hold the most senior Khmer Rouge leaders accountable for their ghastly deeds during 1975-79. We are working with friends and allies in the area, participants in the Paris Peace process, and contributors to Cambodia's post-1993 well being to accomplish this through the United Nations Security Council. As a principal contributor to the Paris Agreements, the United States has clear interests in helping Cambodia toward a more stable, peaceful and fruitful moment in its history, and we intend to contribute to efforts to conduct an election that is free, fair, and credible. The U.S. supported the coalition government that resulted from the 1991 Paris Peace Accords and the elections in 1993. The attempt to oust the first Prime Minister effectively overturns the results of those elections, which means it inevitably undermines the basis for US-Cambodia relations. Specifically, our bilateral assistance program was suspended and placed under intensive review, except for some humanitarian and democracy assistance, and demining -- including assistance to the Cambodian Mine Action Center. For DoD this meant: -- IMET students already in CONUS were allowed to continue their studies. This involved 14 students. -- The student scheduled to participate in Asia Pacific Center course in August was told not to come. -- FMF support for RCAF engineers was suspended. -- The Humanitarian Daily Rations (HDR) contributions to the RCG- run Khmer Rouge Defector Program will be suspended. -- A halt to provision of equipment and security assistance activities. The suspension will remain in effect through July 1998, at which time we expect an election to be conducted. The extent to which the election is reasonably free, fair, and credible will determine future decisions on aid. The Department of Defense will respond to a decision to restart assistance by dispatching another CINCPAC Assessment Team to measure the needs and requirements, and engage the military leadership in discussions aimed at taking stock of the impact of our humanitarian military assistance programs dating from 1993. f. Vietnam. As a member of the Association of Southeast Asian Nations (ASEAN), and a key player in the ASEAN Regional Forum on security issues, Vietnam plays an increasingly important role in Southeast Asia. We have kept the first stages of U.S.-Vietnamese security relationship purposefully modest in pace and scope, and focused on enhancing mutual understanding. We have three key principles guiding us in this start-up phase of the security relationship: -- The fullest possible accounting for POW/MIA cases will continue to be the most important issue in our bilateral relationship. -- The security relationship must be deliberately and carefully phased, kept to modest goals at the outset, and calibrated to develop in tandem with the overall relationship, in a manner that serves our mutual interests. -- The security relationship must be transparent, leaving no possibility that our intentions will be misunderstood by any country in the region. The U.S. has a range of other critical regional security interests that could profitably be addressed through normal, routine contacts with the Vietnamese military. Our goal is to develop a frank and serious dialogue with Vietnam about such issues. To this end, we have carried out a set of modest initiatives, including high level visits, assignment of a Vietnamese Defense Attache to Washington DC, and enhanced contacts between military specialists. In September 1997 the U.S. and Vietnam agreed to another set of modest steps in the defense and security relationship for 1998, including Vietnamese participation in USPACOM-sponsored multilateral conferences and seminars involving regional military officials; the visit to Vietnam of a U.S. Senior Colonels delegation (which took place in March 1998); a U.S. National Defense University visit to Vietnam (scheduled for May); a visit to the U.S. by a vice defense minister (tentatively scheduled for October 1998); and a late year visit to Hanoi by the Assistant Secretary of Defense for International Security Affairs (tentatively set for December 1998). The scheduled October 1998 visit to the United States by Vice Minister of Defense Tran Hanh will represent an important event in the start-up relationship with Vietnam. It is the first official visit since the end of the war in Vietnam by a senior general officer representing the Defense Ministry, and with the later visit of the Assistant Secretary of Defense (ISA) in December, will offer an opportunity to demonstrate our commitment to developing a frank and serious dialogue with Vietnam about regional security issues of mutual concern. Finally, the visit by General Tran Hanh represents an important opportunity to drive home the continued importance of the POW/MIA issue to the United States. 7. Australia and New Zealand. For over 50 years, Australia and the United States have developed a mature, dynamic, mutually- beneficial strategic partnership which is well-suited to meet regional and global challenges. The U.S.-Australian alliance serves as one of the most productive partnerships in the Asia- Pacific region, and beyond. Our bilateral relationship, fortified by the sacrifices made in five wars fought together, side by side, will continue to play a vital role in ensuring peace and stability in the region, and around the globe. We share a vision of the Asia-Pacific region where our alliance, rather than fading in importance after the Cold War, is even more critical to maintaining security and stability in an increasingly important and still uncertain part of the world. Indeed, our alliance provides a firm southern anchor for security in this region, a strong foundation upon which successful economic, diplomatic and cultural initiatives can continue to be built. Our overall relationship with New Zealand is warm, and New Zealand continues to make welcome contributions to multilateral efforts, including sending troops to participate in the recent military buildup in the Gulf. However, our defense relationship remains constrained because of their 1986 anti-nuclear legislation. This legislation would require action by the U.S. inconsistent with our Nuclear Capability Non Disclosure Policy as well as not allowing U.S. Navy nuclear powered ships to enter New Zealand ports. Its passage resulted in a set of Presidential Guidelines for conducting our restricted military to military and intelligence sharing relationship. The goal of our policy is to carry on limited contacts, and make clear that unless New Zealand addresses the nuclear legislation issue, our mil-mil cooperation, and indeed the active development of our alliance, will be sharply curtailed. The issue is precedent setting and how it is handled sends signals to the rest of the region and friends and allies around the world. The ball is in New Zealand's court. A LONG TERM PROPOSITION Our strategy is a long-term one. It is designed to help shape the Asian environment over the long term even as Asia changes and passes through economic crises. We are, and we will continue to be, an Asian power, because we have vital interests in Asia. Our national interests -- economic, military, political and strategic -- dictate that we continue the forward presence and active engagement in Asia that their protection requires. --------------------------------------------- End of text