[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S12026-S12031]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          REPORT ON TRIP TO INDONESIA, VIETNAM, AND HONG KONG

 Mr. COCHARN. Mr. President, it is my pleasure to submit for 
printing in the Record a copy of a letter I am sending today to our 
distinguished majority leader which encloses a copy of a report of a 
trip I took with his authorization to Indonesia, Vietnam, and Hong Kong 
earlier this year.
  I hope Senators and staff will be able to consider my suggestions for 
policies that enhance our economic and security interests in this very 
important part of the world.
  I ask that my letter and report be printed in the Record.
  The material follows:

                                                  U.S. Senate,

                               Washington, DC, September 30, 1996.
     Hon. Trent Lott,
     The Majority Leader, U.S. Senate,
     Washington, DC.
       Dear Trent: I am pleased to submit this report on my trip 
     to Indonesia, Vietnam and

[[Page S12027]]

     Hong Kong from June 28 through July 8, 1996. I undertook this 
     mission to engage senior officials in the region in 
     discussions of political and economic changes in Asia, the 
     impact of U.S. policy on those developments and the outlook 
     for bilateral and multilateral relationships, particularly 
     with regard to U.S. security and trade policy.
       In Indonesia, we met with Hartarto Sastrosoenarto, Minister 
     for Production and Distribution and Dr. Beddu Amang, Chairman 
     of the Agency for National Logistics Administration.
       In Vietnam, we met with Deputy Foreign Minister Vu Khoan, 
     Deputy Minister of Defense Nguyen Thoi Bung, Minister of 
     Trade Le Van Triet, Foreign Minister Nguyen Manh Cam, 
     National Assembly Chairman Nong Duc Manh, and members of the 
     American Chamber of Commerce.
       In Hong Kong, we met with Governor Christopher Patten, 
     members of the American Chamber of Commerce, Hong Kong 
     legislative Council members, Preparatory Committee members, 
     business and academic leaders. Mr. Martin Lee, Chairman of 
     the Democratic Party, and Mr. Robert Ng, Trustee of the 
     better Hong Kong Foundation.
       The trip emphasized the importance the United States places 
     on its relations with the countries visited. We gained 
     valuable insights regarding United States defense and trade 
     policies and issues confronting the countries visited. I 
     believe the trip will enhance United States relations in the 
     area and lead to a better understanding of the issues that 
     confront us.
       We received excellent assistance from Ambassador J. 
     Stapleton Roy and the Embassy staff in Jakarta; Charge 
     d'Affaires Desaix Anderson and the Embassy staff in Hanoi; 
     and Consul General Richard Mueller and the staff in Hong 
     Kong.
       Colonel Terry Paul, USMC, served as our military escort on 
     the trip. His assistance ensured a productive trip.
       Thank you for authorizing me to represent the leadership of 
     the United States Senate.
           Sincerely,
                                                     Thad Cochran,
                                                     U.S. Senator.
                                  ____
                                  

      Report of the Mission of Senator Thad Cochran to Asia June 
                            28-July 8, 1996


                                 purpose

       Senator Cochran welcomed the Republican Leader's 
     authorization to visit Indonesia, Vietnam, and the colony of 
     Hong Kong. His delegation was officially hosted by the 
     respective American embassies and consulates and met with 
     senior officials in each of these locations.
       Enroute to Indonesia Senator Cochran had the opportunity to 
     meet with the U.S. Commander-in-Chief of U.S. Pacific 
     Command, Admiral Joseph Prueher, and the Commander of the 
     Third Marine Expeditionary Force, Major General Rollings, for 
     briefings on Asian Security issues.
       During the July 2-3 stay in Indonesia, the delegation 
     discussed security and trade issues concerning Indonesia and 
     Asia. Senator Cochran was honored at a reception for 
     Indonesian participants in the Cochran Fellowship program, 
     administered by the U.S. Department of Agriculture's Office 
     of International Cooperation and Development.
       In Vietnam from July 3-5, the Senator met with 
     representatives of Vietnam's government to discuss the 
     renewed bilateral relations and defense and trade issues 
     concerning Vietnam and Asia. In addition, Senator Cochran 
     represented the Senate at the American Community Celebration, 
     a gathering commemorating the Fourth of July. This was the 
     first such celebration since the normalization of relations 
     between the two countries.
       The July 5-7 talks in Hong Kong focused on regional issues 
     and the coming transition of sovereignty of the colony from 
     the United Kingdom of Great Britain to the People's Republic 
     of China.
       Enroute to Washington, D.C., Senator Cochran met at Fort 
     Lewis, Washington, with Lieutenant General C.G. Marsh, 
     Commander of the U.S. Army I. Corps.


            commander-in-chief, u.s. pacific command briefing

       Senator Cochran was briefed on June 29, 1996, by Admiral 
     Joseph Prueher, Commander-in-Chief of U.S. Pacific Command. 
     The area of responsibility for Pacific Command comprises 100 
     million square miles spanning fourteen time zones. The vast 
     geography of the region compounds the ever-present challenge 
     facing our military of trying to forecast where the next 
     problem will be before it occurs.
       Approximately 100,000 U.S. service personnel are forward 
     deployed in the Asia-Pacific region, most of which are in 
     Japan and South Korea. The security brokered in the region by 
     the United States since the end of World War II has played a 
     pivotal role in creating the conditions necessary for 
     economic prosperity in the region. This prosperity has a 
     direct effect on the United States, as 37% of U.S. exports 
     are to Asia and the Pacific.
       The U.S. strategy in the region is one of ``cooperative 
     engagement,'' and our regional strategic objectives flow from 
     this strategy: to maintain U.S. influence in the region; 
     promote an environment of trust and cooperation; deny 
     hegemonic control of the region; guarantee lines of 
     communications; deter armed conflict in the region; and, 
     enhance interoperability with our allies in Asia and the 
     Pacific. Admiral Prueher underscored the fact that our 
     strategy, and our strategic objectives, can only be 
     satisfied if the U.S. military retains a credible 
     warfighting capability in the region and around the world.
       There are several sources of instability in the region that 
     are of concern to Admiral Prueher: the prospect of regional 
     conflict, such as in Korea or between India and Pakistan; the 
     many issues surrounding the future of the People's Republic 
     of China, to include questions on the future status of Hong 
     Kong, the PRC's relationship with the Republic of China, and 
     the PRC's continued participation in the proliferation of 
     weapons of mass destruction and ballistic missile delivery 
     systems, this proliferation by itself being one of Admiral 
     Prueher's chief concerns; religious and ethnic conflict; drug 
     trafficking; and territorial disputes, such as the Spratley 
     Islands issue.
       With particular regard to one aspect of the proliferation 
     problem in the region, Admiral Prueher noted that there is 
     ``almost overwhelming evidence'' that the PRC has supplied 
     missiles to Pakistan.
       Admiral Prueher gave an insightful analysis of the 
     recently-concluded PRC ``missile tests'' around the Republic 
     of China just prior to the election of President Lee Teng-
     Hui. While the United States was not seeking overt 
     confrontation with the PRC, but to have a ``measured 
     response,'' American actions were designed to signal China 
     that it was prepared to stand by its commitment to the 
     Republic of China and to signal our allies in the region that 
     the U.S. security commitment to the entire region remains 
     strong.
       In responding to a question, Admiral Prueher said that the 
     Chinese ballistic missiles performed as expected, and that 
     these ``missile tests'' underscored the need for rapid 
     deployment of highly effective theater missile defense 
     systems, such as the THAAD and Navy Upper Tier systems.
       Admiral Prueher is hopeful that the U.S. Navy will be able 
     to continue to use Hong Kong as it currently does after July 
     1, 1997, and believes that full IMET for Indonesia would be 
     very helpful in both maintaining our relationship with 
     Indonesia and improving the lives of Indonesians. Placing 
     restrictions on IMET for Indonesia makes it more difficult to 
     influence the future direction of the Indonesian military.


                                okinawa

       The delegation made a brief stop in Okinawa and had the 
     opportunity to meet with Marine Corps Major General Wayne 
     Rollings, Commander the Third Marine Expeditionary Force, Air 
     Force Brigadier General Hobbins, and Consul General O'Neill. 
     The delegation's visit occurred in the wake of Secretary of 
     Defense Perry's negotiations with Japan to reduce the U.S. 
     force presence on Okinawa, to include reducing the number of 
     bases there. General Rollings, III MEF Commander, discussed 
     the need for access to larger training areas to keep the 
     Marines of III MEF properly trained. He also explained the 
     ongoing coordination that occurs with CINCPAC to ensure that 
     U.S. forces in the region are prepared to respond as 
     necessary to any forseeable contingency.


                               indonesia

       Indonesia has had steady growth in its economy for the last 
     thirty years, increasing its per capita income from $60-$70 
     in the mid-1960's to approximately $1,000 today. The 
     Indonesian economy has a growth rate of 7%-8% per year, and 
     is projected to be the fifth largest economy in the world by 
     2020. Indonesia, in terms of population, is currently the 
     world's fourth largest nation and is the world's most 
     populous Islamic nation.
       The United States is the largest foreign investor in 
     Indonesia, though if oil and natural gas investments are 
     removed, both Japan and Europe invest more. The Japanese 
     government is doing a great deal to help its businesses gain 
     market share there, providing approximately $2 billion per 
     year in soft loans to Indonesia and to Japanese businesses 
     that invest here.
       Indonesia is a large importer of a wide range of 
     agricultural commodities. It is currently America's 14th 
     largest agricultural export market, with the dollar value of 
     U.S. agrciutlural exports having tripled in the last five 
     years. U.S. cotton imports have increased by 58% in just the 
     last year, Indonesia is the second largest foreign market for 
     Washington State apples, and Indonesians are willing to pay 
     more for U.S. beef. Indonesians like American products.
       Indonesia is a country in transition. Half of its 
     population has been born since President Suharto ascended to 
     the leadership of Indonesia, and, while the country's economy 
     is growing strongly, the political expectations of the 
     burgeoning middle class have not yet been met. The human 
     rights situation, particularly in East Timor, though 
     improving, is not satisfactory. However, the human rights 
     violations that have occurred have not, by and large, been 
     committed by military officers trained in the United States. 
     In fact, it is the American-trained officers that American 
     embassy officials are able to go to in seeking to find out 
     the facts when there is a human rights problem involving the 
     military.
       It was because of human rights violations that Indonesia's 
     participation in the International Military Education and 
     Training (IMET) program has been reduced, albeit under the 
     curious name of ``expanded'' IMET. Of the 109 countries 
     participating in IMET in FY '95, only Indonesia's 
     participation was curtailed. During the delegation's visit 
     U.S. Ambassador Stapleton Roy expressed a strong desire for 
     restoring full IMET to Indonesia, telling Senator Cochran 
     that singling Indonesia out for special treatment could 
     ultimately mean the difference between friendly and a hostile 
     regime. This consideration is particularly important in light 
     of the fact that, in times of heightened tensions or crisis 
     ranging from the Mediterranean to the Pacific, American naval 
     forces must transit Indonesia's water when traveling between 
     the Pacific and Indian Oceans.

        Minister for Production and Distribution Sastrosoenarto

       The delegation's first meeting with an Indonesian official 
     was with Hartarto Sastrosoenarto, Minister for Production and 
     Distribution.
       Minister Sastrosoenarto stated that imports are surging in 
     wheat and noodles. Indonesia is interested in becoming self-
     supporting in other agricultural commodities, such as corn, 
     sugar, and rice. However, particularly with regard to rice, 
     Indonesian farmers

[[Page S12028]]

     are having a difficult time growing enough to satisfy demand, 
     despite the fact that noodles have become such a popular 
     staple.
       While Indonesia imports cotton from the United States, 
     Minister Sastrosoenarto mentioned that his importers have 
     recently begun to complain that some American cotton has been 
     shipped to Indonesia with a fungus.
       To help transition to a free market, the government is 
     actively involved in a step by step removal of subsidies in 
     the distribution sector. Minister Sastrosoenarto went on to 
     state the importance of continuing to reform the economy to 
     help generate a larger middle class and enhance social 
     stability. As part of the transition to a free market, he 
     went on to say that the government would be privatizing large 
     portions of the national infrastructure, such as power 
     generation, telecommunications, and harbors.
       Minister Sastrosoenarto commented that the legal system is 
     weak and must be improved to create a strong legal framework 
     emphasizing support for private property as an incentive for 
     continued growth.
       Finally, the Minister expressed his hope that at some point 
     in the future ASEAN and NAFTA can be formally linked 
     together.

          Agency for National Logistics Administration (BULOG)

       The delegation next met with Dr. Beddu Amang, Chairman of 
     the Agency for National Logistics Administration (BULOG).
       Dr. Amang mentioned that trade in agricultural commodities 
     with the United States is continuing to grow, citing soybeans 
     as an example of a commodity which is completely imported 
     from abroad, 90% of which comes from the United States.
       While four million tons of wheat per year is imported by 
     Indonesia, almost 50% of that wheat comes from Australia 
     while just over 10% comes from the United States. In response 
     to a question from Senator Cochran, Dr. Amang attributed 
     Indonesia's low imports of U.S. wheat to high levels of dust 
     that have been found on imported American wheat (also a 
     problem with U.S. soybeans, though not as widespread) and the 
     higher shipping costs (relative to Australia) from the United 
     States. Wheat that only takes six days to be shipped from 
     Australia takes on average 23 days to come from the United 
     States.
       Dr. Amang mentioned that Indonesia makes extensive use of 
     GSM-102 credits, particularly for soybeans and corn, though 
     the bank charges are expensive and the repayment period 
     (three years) is too short. Despite these problems with the 
     GSM-102 credits, and despite the fact that Indonesia would 
     like to become self-sufficient in growing corn, corn imports 
     for feed are increasing every year.
       Dr. Amang expressed the hope that U.S. investment in 
     Indonesian agriculture would increase, to which Senator 
     Cochran stressed the importance of Indonesia's continuing to 
     enhance its legal system to protect the sancity of contracts, 
     as well as the need to continue to decentralize the 
     Indonesian distribution system.
     Other meetings
       The delegation was pleased to have the opportunity to meet 
     with graduates of the Cochran Fellows program and listen to 
     their stories of how they've taken the lessons learned from 
     their exposure to the American marketplace back to Indonesia 
     to build prosperous careers and businesses. The delegation 
     met with a cross section of Indonesians involved in 
     government, the military, private business, and think tanks 
     at an informal dinner hosted by Ambassador and Mrs. Roy. The 
     delegation also had a productive breakfast with 
     representatives from the American Chamber of Commerce in 
     Jakarta.


                     socialist republic of vietnam

       After years of contentious relations, including Vietnam's 
     invasion and occupation of Cambodia, on July 11, 1995, 
     President Clinton announced his decision to establish 
     ambassadorial-level relations with Vietnam. In recent years 
     Vietnam has improved its political and economic relations 
     abroad, while bettering its economic situation 
     domestically. Vietnam has worked to complete a Cambodian 
     settlement, and appears to have made progress on the 
     prisoners of war/missing in action (POW/MIA) and other 
     issues of great interest to the United States.
       Vietnam moved to become a new member of the Association of 
     Southeast Asian nations (ASEAN) in 1995. Since that time, 
     Vietnam has indicated its desire to join the Asia Pacific 
     Economic Cooperation (APEC) group and the World Trade 
     Organization (WTO).
       Now in their tenth year, economic reforms in Vietnam 
     continue to make progress toward a more open market. The 
     delegation observed the beginnings of a growing, vibrant 
     economy based on family-owned small businesses.
       At the time of Senator Cochran's visit, the Communist Party 
     of Vietnam had just completed its Eighth Congress. The 
     Congress conducted a review of its policies, focusing in 
     particular on domestic economic reforms. While changes in the 
     top three leadership positions were expected, no changes took 
     place. The Party Congress determined that the country would 
     continue on its present course of economic reform.
       Upon arrival in Hanoi on Wednesday, July 3, the delegation 
     met with Embassy staff for a briefing. Embassy staff provided 
     a thorough briefing on all relevant issues, including an 
     excellent presentation on the status of operations to resolve 
     outstanding cases of POW/MIAs.
       During each of his meetings, Senator Cochran stressed the 
     importance of a full accounting of the POW/MIA question as a 
     necessary precondition to continuing to improve relations 
     between the Socialist Republic of Vietnam and the United 
     States.

                    Deputy Foreign Minister Vo Khoan

       Senator Cochran was the guest of honor at a July 3, dinner 
     hosted by Deputy Foreign Minister Vo Khoan. The Deputy 
     Foreign Minister stated that he had a chance to welcome 
     several delegations from the United States over the last 
     year, and that he was pleased with the improved relations 
     between the two countries. He looked forward to the arrival 
     of a new ambassador and the completion of negotiations over a 
     bilateral trade agreement.
       Deputy Foreign Minister Khoan discussed the open foreign 
     policy Vietnam is pursuing. He noted the recent admission of 
     Vietnam to ASEAN and its application to join APEC. He added 
     that Vietnam was paying increasing attention to the Asia-
     Pacific region and to improving relations with its neighbors, 
     China, Cambodia and Laos.
       On the domestic side, he stressed that Vietnam had overcome 
     economic and social problems and was entering a new era of 
     development, which will focus on industrialization. He stated 
     that the Vietnamese government wants to encourage the 
     creation of small-and medium-sized businesses. In addition, 
     at the recently completed Eighth Congress of the Communist 
     Party, the government resolved to continue economic and 
     political reform. He also mentioned that the President of 
     China, Li Peng, came to Vietnam and addressed the Party 
     Congress. President Li Peng's visit was a last minute 
     surprise, and was the first time China had sent such a high 
     ranking delegation to Vietnam.
       Senator Cochran and Deputy Foreign Minister Khoan also 
     discussed issues concerning POW/MIAs. The Deputy Foreign 
     Minister explained that there had been good efforts by both 
     sides on this issue, and that he expected continued 
     cooperation.
       On the issue of the repatriation of Vietnamese refugees 
     from abroad, the Deputy Foreign Minister indicated that there 
     is no problem for these individuals returning to Vietnam. One 
     the problems in the South China Sea, the Deputy Foreign 
     Minister recognized it as an important issue. He stated that 
     all countries have agreed to resolve problems through 
     negotiations, but the negotiations are difficult.

        Breakfast with the American Chamber of Commerce Chapter

       In Hanoi on Thursday morning, July 4, Senator Cochran was a 
     breakfast guest of the American Chamber of Commerce. There 
     are over 400 registered American companies in Vietnam, an 
     increase of over 100 since January, 1996.
       Senator Cochran stated that he was anxious to see how he 
     could be helpful in continuing to develop relations between 
     the two countries. While the POW/MIA issue is still the 
     preeminent concern of U.S. policy, he said that the United 
     States must begin also to focus on opening markets in 
     Vietnam, for American firms.
       Several members of the Chamber emphasized the need for 
     services of the Overseas Private Investment Corporation 
     (OPIC) and the Export-Import Bank. If American firms are 
     going to compete in the burgeoning Vietnam market, the 
     services and programs administered by these agencies are 
     critical to success.
       The members of the Chamber strongly complimented American 
     Charge d' Affaires Desaix Anderson and the Embassy staff for 
     the excellent job they had done in promoting economic issues 
     and American businesses in Vietnam.

              Deputy Minister of Defense Nguyen Thoi Bung

       The delegation next visited with Deputy Minister of Defense 
     Nguyen Thio Bung and several other members of the Vietnamese 
     military.
       Deputy Minister of Defense Bung described the work of the 
     Vietnamese government to account for American POW/MIAs. He 
     emphasized that the Vietnamese government had conducted a 
     large number of unilateral investigations of cases before the 
     1988 POW/MIA agreement were reached with the United States. 
     Between 1988 and 1992, over forty joint excavations for 
     remains were conducted by the United States and Vietnam. From 
     1992 to the present the joint efforts have been even greater. 
     The focus of the upcoming excavations will be on the central 
     highlands of Vietnam. He stated that the Vietnamese have 
     shown good will by taking American teams into his country's 
     most sensitive areas, including Cam Ranh Bay and several 
     military depots.
       He emphasized that the Vietnamese treat the POW/MIA issue 
     as a humanitarian issue and want to successfully resolve this 
     issue. Hopefully, the successful resolution of this issue 
     will help bring the countries together by closing the past so 
     the people can look to the future. He also mentioned that 
     Vietnam still has over 300,000 MIA cases of its own.
       He declared that Vietnam has joined ASEAN to build peace, 
     stability, security and prosperity in Asia. As for military 
     relations with the United States, he indicated that the 
     Vietnamese government was pleased with the appointment of a 
     military attache to the American embassy. He was confident 
     that such an appointment would promote friendship between the 
     two countries' armed forces.
       In responding to Senator Cochran's question about his views 
     on what the biggest security threat is to the region's 
     stability, the

[[Page S12029]]

     Deputy Minister responded that international strategists see 
     the Asia-Pacific region as the most stable in the world, but 
     that there is some concern over the South China Sea. He 
     explained that there are some disputes over sovereignty of 
     the Spratleys, but that there is regional agreement that the 
     disputes should be resolved through negotiations. He also 
     stated that there continue to be potentially unstable 
     elements in Korea and Cambodia.
       On the issue of the recent actions taken by the People's 
     Republic of China against Taiwan, the Deputy Minister 
     indicated that it was an internal affair between China and 
     Taiwan. He said that if they could not settle it, it could 
     affect the stability and security of the region.

                     Minister of Trade Le Can Triet

       The delegation next met with Minister of Trade Le Can Triet 
     and discussed several bilateral trade issues, including the 
     ongoing negotiations over a bilateral trade agreement, and 
     human rights issues.
       Senator Cochran indicated that the United States Trade 
     Representative had provided a blueprint to the Vietnamese 
     government concerning some of the issues to be negotiated in 
     order to reach a bilateral trade agreement. He asked if there 
     was a likelihood that the United States would receive a 
     response to its blueprint in the near future.
       Minister Triet explained that the Vietnamese are looking 
     through a list of many questions on the issues that have been 
     discussed. He stated that during the May meeting Vietnam 
     raised several questions to be further negotiated. Currently, 
     the two sides are studying the draft. He indicated that the 
     discussions had been frank, with good will on both sides, and 
     that both sides are patiently listening and working through 
     issues. The Trade Minister stated that while any agreement 
     must reflect mutual benefits, the countries cannot avoid 
     differences and that it will take time to fit different 
     systems together.
       The Trade Minister also discussed Vietnam's application for 
     membership in APEC and WTO. He stated that Vietnam wanted to 
     prove its willingness to move toward freer trade. Vietnam 
     wants to become more deeply involved in the world community 
     and the world economy.

           Reception at American Charge d'Affaires Residence

       This was a formal reception for much of the diplomatic 
     community in Vietnam celebrating the 4th of July. Charge 
     d'Affaires Anderson, the Vietnamese Deputy Prime Minister, 
     Senator Cochran, and Governor Frank Keating of Oklahoma all 
     spoke to the assembled audience, which included the 
     diplomatic corps, military representatives from many 
     countries and representatives from the international business 
     community.

              Minister of Foreign Affairs Nguyen Manh Cam

       The delegation next met with Foreign Affairs Minister 
     Nguyen Manh Cam. The Foreign Minister stated that world 
     opinion could be reassured concerning the outcome of the 
     recent Communist Party Congress. Vietnam intends to maintain 
     its current course of development by continuing policies of 
     openness, diversification and modernization.
       In foreign relations, Minister Cam recounted Vietnam's 
     tradition of having good relations with its neighbors and 
     friends, and stated that Vietnam's foreign policy 
     is consistent with global and regional integration. The 
     Foreign Minister stressed the importance of moving 
     relations between the United States and Vietnam forward, 
     saying that it is important to make up for lost time and 
     to work to overcome past animosities. He was pleased at 
     the progress in relations since normalization.
       The Foreign Minister was very pleased with Secretary 
     Christopher's visit in August, 1995, when the United States 
     and Vietnam agreed to boost economic development and make 
     trade a top priority. Since 1994-95, there has been a four-
     fold increase in trade between Vietnam and the United States, 
     which was done in the absence of Most Favored Nation (MFN) 
     status. He also indicated that if Export-Import Bank 
     financing, OPIC loan guarantees and MFN status were granted, 
     the United States could become Vietnam's largest trading 
     partner. The Foreign Minister emphasized the need for and 
     importance of granting a Jackson-Vanik waiver.
       With regard to the trade agreement talks, the Foreign 
     Minister stated that the signing of a trade agreement is of 
     great importance, but that it will take some time. The 
     current negotiations were brought about through very 
     intensive talks in October and November. The Foreign Minister 
     urged Senator Cochran to help move the process forward. With 
     regard to the POW/MIA issues, Foreign Minister Cam stated 
     that Vietnam had fully cooperated, is cooperating, and will 
     continue to cooperate.
       Senator Cochran asked for the Foreign Minister's assistance 
     in resolving the current impasse over the establishment of 
     the American ambassador's residence. The Foreign Minister 
     said that it was a concern, but said that the United States 
     enjoys the best technical facilities in Vietnam in comparison 
     to other countries. He indicated that the Vietnamese 
     government would continue to work with the United States to 
     find a suitable location and that he would try his best to 
     get the most appropriate location for the residence.
       The Foreign Minister also discussed the appointment of a 
     new ambassador to Vietnam. He stated that the appointment of 
     an ambassador is a way to ensure the continued development of 
     normalization. He said that the nominee, United States 
     Representative Pete Peterson, would make a strong 
     contribution to bilateral relations.
       At the close of the meeting, Senator Cochran presented to 
     the Foreign Minister a statement Senator Claiborne Pell 
     entered into the Congressional Record on June 20, 1996. The 
     statement commended the life of Deputy Foreign Minister, Le 
     Mai, who has recently passed away.

                National Assembly Chairman Nong Duc Manh

       The delegation's last official meeting in Vietnam was with 
     National Assembly Chairman Manh. The Chairman discussed the 
     recently concluded Party Congress and stated that the 
     Congress presented a good opportunity to review Vietnam's 
     Policy of Renewal. He stated that the Congress had many 
     discussions on moving Vietnam into the 21st century.
       In the area of foreign affairs, the Chairman indicated that 
     Vietnam has broadened its approach and was pursuing an open 
     foreign policy. He contended it was his strong desire to 
     increase ties between the United States Senate and the 
     Vietnamese Parliament.
       Responding to Senator Cochran's question about how the 
     recent Party Congress affected the National Assembly and if 
     the National Assembly would play a larger role in Vietnam, 
     Chairman Manh stated that the Congress plays an important 
     role in the process of renewal. He explained that from now on 
     Vietnam would work to move their national industrialization 
     to a higher level. He further stated Vietnam's intention 
     to continue to build its country based on the rule of law 
     and enhancing the role of the judiciary and other 
     institutions.
       On improving the legal system, Chairman Manh states that 
     Vietnam had changed its laws to create a more favorable 
     investment environment. Laws to improve the economy, laws 
     related to foreign investment and the commercial code are in 
     the process of being drafted and will be subject to debate in 
     October.

                     American Community Celebration

       Senator Cochran joined with over 500 people at a picnic to 
     celebrate the Fourth of July. Charge d'Affaires Anderson, 
     Senator Cochran and Governor Keating all addressed an 
     enthusiastic crowd.


                               Hong kong

       Codel Cochran arrived in Hong Kong on July 7 and departed 
     July 9. While in Hong Kong the delegation was briefed by the 
     U.S. Embassy Country Team and held meetings with Governor 
     Christopher Patten, the American Chamber of Commerce, and 
     Democratic Party Chairman Martin Lee. The delegation also met 
     informally with Preparatory Committee members Paul Cheng and 
     Frederick Fung, the Better Hong Kong Foundation, academics, 
     civil servants and representatives of the U.S. business 
     community.
       There are several issues of direct interest to the United 
     States related to Hong Kong's transfer to the People's 
     Republic of China on July 1, 1997. The principal security 
     issue concerns the question of whether the U.S. Navy will be 
     able to continue to use Hong Kong as a frequent port of call 
     in Asia.
       The U.S. Consul General's staff is unaware of any official 
     response by the PRC on the question of whether the U.S. Navy 
     will be able to continue to use Hong Kong as it currently 
     does. Unofficial contacts on the matter have received 
     favorable responses from PRC military officials; however, 
     there has been no response from the political leadership. The 
     lack of military piers in Hong Kong means U.S. ships would 
     have to tie up at commercial moorings. The Chinese Navy is 
     building a base, but it is unclear whether the U.S. would be 
     allowed to use it. Hong Kong's importance to the U.S. Navy 
     for ship visits is underscored by its location. Hong Kong is 
     the closest to deployment tracks of U.S. Navy vessels. Other, 
     such as Australia, Japan and Thailand are far off the 
     deployment track. Approximately 70 U.S. Navy ships currently 
     visit Hong Kong each year.
       The ship visits issue relates to the general issue of 
     continuity--something sought by people of Hong Kong. The U.S. 
     hopes Beijing realizes that changing the practice on visits 
     by U.S. Navy ships would send the wrong signal and undermine 
     confidence in the territory.
       The strategy for U.S. diplomacy on Hong Kong over the past 
     year and a half has been to speak more publicly on commerce, 
     law enforcement, ship visits, consular issues and to let 
     Governor Patten speak on Hong Kong's unique qualities, such 
     as the high degree of civil liberties and the rule of law. 
     The Consulate has tried to raise the level of attention paid 
     to these issues and encourage attention to be paid in and by 
     official Washington, including visits by Members of Congress 
     to Hong Kong and to Beijing, and hearings on Capitol Hill.
       Few problems are anticipated in connection with the 
     continuance in force of various U.S.-Hong Kong bilateral 
     agreements. Several are pending, including a civil aviation 
     agreement and an extradition treaty; a bilateral investment 
     treaty needs to be negotiated as does a mutual legal 
     assistance treaty. All are part of the policy, expressed in 
     the U.S. Hong Kong Policy Act, to maintain a direct U.S.-Hong 
     Kong relationship. The Act is the blueprint for this policy.
       Another major issue confronting the U.S. is the status of 
     the Consulate General and

[[Page S12030]]

     whether, after the People's Republic takes over Hong Kong on 
     July 1, 1997, the consulate will be subordinated to the U.S. 
     embassy in Beijing. Hong Kong is a very valuable post for the 
     U.S. Fifteen U.S. government agencies are represented. Law 
     enforcement is a particularly important function of the 
     Consulate General. Several agencies are represented because 
     Hong Kong is strategically located for gathering information 
     on nuclear proliferation, weapons of mass destruction and 
     narcotics. The Consulate General also plays an important role 
     in promotion of U.S. business.

                            Governor Patten

       Governor Patten noted the dramatic changes that had taken 
     place in Hong Kong's infrastructure since his arrival in 
     1992, including progress on the new airport on Lamma Island, 
     new bridges and reclamation in Victoria Harbor, and a new 
     convention center.
       Governor Patten called Hong Kong's situation astonishing in 
     light of the fact that Britain's colonial governance usually 
     ends with independence and self-governance for the former 
     colony. Hong Kong's situation is different, he said, due to 
     its history, alluding to the late 19th century Opium Wars and 
     the concessions and leases through which Great Britain 
     acquired Hong Kong island, Kowloon peninsula and the New 
     Territories. The Governor said he had been criticized for 
     admitting to having a ``certain moral queasiness'' over 
     handing a free city over to a country with a different idea 
     of freedom. Britain had attempted to solve its moral dilemma 
     by negotiating a detailed arrangement for Hong Kong in the 
     1984 Sino-British Joint Declaration on the Question of Hong 
     Kong which reflects the ``one country, two systems'' approach 
     to Hong Kong's future under PRC sovereignty. Both the Joint 
     Declaration and the Basic Law, the so-called ``mini-
     constitution,'' promulgated by the National People's Congress 
     in Beijing, spell out a detailed prescription for preserving 
     Hong Kong's free and pluralistic society.
       While the Joint Declaration is very specific, the trick, 
     according to the Governor, is making it work. Beijing doesn't 
     get the best advice on making the system work. And the 
     influence of Tiananmen was profound. Some in Beijing choose 
     to blame Tiananmen on outside interference from places like 
     Hong Kong. Ultimately, the influence of Tiananmen was greater 
     on Beijing than on it was Hong Kong. The reaction to the 
     events of Tiananmen in Beijing created problems in Sino-
     British relationship on Hong Kong including, financing the 
     airport, passports for Hong Kongers, the Bill of Rights and 
     arrangements for democratic elections. The Governor said the 
     reason for negotiations over electoral reforms broke down was 
     not Patten's desire to move more quickly, but the PRC's 
     insistence that Great Britain cooperate in rigging the 
     elections.
       Nevertheless, in spite of difficulties, the transition, 
     according to Patten, has gone very well. The economy is 
     strong, particularly the currency as measured against the 
     U.S. dollar. Reserves are large. Exports and investments are 
     good. Unemployment is at 3.1%. Jobs are growing at 4%. There 
     hasn't been any capital flight--though some offshore 
     arrangements are being made. Exceptions to the pattern of 
     confidence are the domiciling of companies in other British 
     colonies, and the acquisition by up to 600,000 Hong 
     Kongers of foreign passports.
       The Governor rejected arguments that Hong Kong people don't 
     care about human rights and democracy. Many of Hong Kong's 
     people fled from repression in mainland China and know the 
     difference between a society based on the rule of law and 
     protection from arbitrary government. The very high number of 
     newspapers in Hong Kong is another indication of the interest 
     of Hong Kong's people in political matters affecting them. 
     Another indication of what Hong Kong people care about is 
     demonstrated by the polls done by Michael DeGolyer of the 
     Hong Kong Transition Project. These polls indicate most 
     anxieties related to the future and the transition are about 
     freedoms of the press and association and whether these will 
     exist after 1997. The polls also reflect a correlation 
     between demographic groups and attitudes about the future. 
     Women are more worried than men. Better educated are more 
     worried than the less educated. Younger people are more 
     worried than older people, and the most worried are those 
     who, because of their education, age, or other 
     characteristics, are able to emigrate.
       In response to questions, the Governor said that Great 
     Britain couldn't fix the inconsistencies between the Basic 
     Law and the Joint Declaration, but was focusing on reforming 
     Hong Kong's laws to make them consistent with the 
     International Covenant on Civil and Political Rights. The 
     Hong Kong government's law reform project is 80% done. 
     Difficulties remain in the areas of official secrets and 
     telephone surveillance. The Governor said his government is 
     determined not to leave behind laws which could be abused by 
     the PRC after 1997.
       Other issues of concern include corruption. Hong Kong's 
     police and Independent Commission Against Corruption (ICAC) 
     make Hong Kong the ``cleanest city in Asia after Singapore. 
     Any effort to take over and control the police would be a 
     violation of the Joint Declaration and the Basic Law. The 
     possibility of influence directed at Hong Kong's institutions 
     by Beijing underscores the importance of a strong Chief 
     Executive selected on the basis of merit.
       Governor Patten said the PRC is serious about its threat to 
     dismantle the Legislative Council (Legco), particularly 
     because of the membership in the Legco of so many democrats. 
     Here Patten said that the real reason for the collapse of 
     talks over constitutional reform was not the specifics of his 
     proposals but the PRC's demands that Great Britain be 
     complicit in the abolition of the Legco and exclusion of 
     certain democratic legislators unacceptable to Beijing. The 
     PRC also demanded 2 member constituencies which would have 
     had the effect of cutting in half the number of democrats 
     elected. If the elections were conducted on one-man, one-vote 
     geographical basis, Patten said, pro-democracy candidates 
     would win 70% of the vote. Patten described Hong Kong's 
     complicated system of election to the Legco based on 20 
     functional constituencies or electorates tied to workplace 
     and professional associations, 10 electoral committee seats 
     and 20 one-man, one-vote geographical constituencies.
       Governor Patten said he was ``very grateful'' to the U.S. 
     Senate for passing S. Res. 217 on June 28 supporting 
     implementation of the Joint Declaration and expressing the 
     position that it would regard establishment of an appointed 
     legislature in Hong Kong as a violation of the Joint 
     Declaration. The Governor said attention by other countries 
     is very helpful to Hong Kong and that the U.S. matters the 
     most of all to China. Since 1992 China has recognized that 
     Hong Kong is an international city implicating international 
     interests. Patten noted that the recent raising of Hong Kong 
     by Chinese Foreign Minister Qian Qichen in a meeting with 
     Secretary of State Christopher wouldn't have happened a few 
     years ago.
       Governor Patten related an anecdote concerning Qiao Shi, 
     the head of the National People's Congress. Qiao Shi, a 
     rising figure in China, has said there is a huge amount of 
     ``face'' involved in the PRC's handling of Hong Kong and that 
     interest in Hong Kong by the U.S. has an impact on Beijing. 
     The Governor said the U.S.-Hong Kong Policy Act provides the 
     proper focus for U.S. interest in Hong Kong and it would be 
     ``very sad'' if the U.S. stopped speaking out or stopped 
     sending visitors.
       In response to Senator Cochran's expression of concern 
     about a textiles transshipment issue dividing the U.S. and 
     Great Britain, Governor Patten reported that his government 
     feels the U.S. has not worked within the rules of the WTO and 
     that Great Britain is sensitive to IPR and strategic trade 
     issues. The Governor asserted that the border between Hong 
     Kong and the PRC and the integrity of Hong Kong must be 
     demonstrated on textiles, IPR, and strategic trade.
       Governor Patten said visits by U.S. Navy ships were very 
     important financially and otherwise to Hong Kong, presented 
     no significant problems from the sailors, and should continue 
     after 1997.

                  Democratic Party Chairman Martin Lee

       Mr. Lee observed that Hong Kong's future will be determined 
     by China's current leadership situation which leads it to act 
     confidently outside of China, but with weakness inside China. 
     As examples, Mr. Lee gave the rearrest of and imprisonment 
     for 14 years of Wei Jingsheng at the same time that Beijing 
     is gathering up valuable contracts with Air France. The PRC 
     is confident that the U.S. government won't react to its 
     treatment of Wei. Yet, trade and human rights don't have to 
     be mutually exclusive. Mr. Lee gave the example of the 
     Canadian trade minister for Asia, Raymond Chan, who raised 
     human rights on a trade mission to China.
       The Taiwan elections were a very important day for Lee 
     since they were the first democratic Chinese elections in 
     5,000 years. China's intimidation tactics both succeeded and 
     failed. The show of force pleased the aging generals and 
     possible the Chinese people, so internally it was a success. 
     However, externally, the show of force was a disaster. 
     Turning away a delegation of Hong Kong democrats who wanted 
     to present a petition opposing the appointment of a 
     provisional legislature in Hong Kong was also a public 
     relations defeat. Beijing could have handled both differently 
     but felt internal pressure not to appear weak.
       On the question of whether Beijing will follow through on 
     its threat to abolish the elected Legco, Mr. Lee said it 
     depended on the type of opposition this threat draws. If only 
     the Democrats oppose the move, Beijing will go ahead. 
     However, support from others inside and outside Hong Kong for 
     the elected legislature and its right to serve out its term 
     could made a big difference in how Beijing proceeds. 
     Recently, the details of the 17 rounds of negotiations 
     between Great Britain and China became known. The Governor 
     refused to acquiesce in PRC demands that Great Britain set up 
     electoral laws which would disadvantage democrats and agree 
     to provisions allowing China to exclude certain individuals 
     from the legislature. The PRC also wants to retain repressive 
     colonial laws that were rarely used by the British, and wants 
     to get rid of the Bill of Rights, which is based on the 
     International Covenant on Civil and Political Rights and 
     confers power on the courts to strike down unconstitutional 
     laws. The PRC also wants to resurrect old versions of 
     colonial laws which allow the government greater control over 
     freedoms of expression and association. For example, an old 
     law on assembling to march was amended to only require notice 
     to the police. The PRC wants to change the law back so 
     that approval for a procession of more than 20 people has 
     to be secured in advance. The power

[[Page S12031]]

     to define what kinds of gatherings require approval would 
     be up to the PRC.
       Mr. Lee said Senate Resolution 271 reiterating the Senate's 
     support for the Joint Declaration and stating that an 
     appointed legislature would violate the Joint Declaration was 
     extremely important. Mr. Lee said that other countries need 
     to act as well--but that someone has to lead. Mr. Lee said 
     that in the past he had favored a quiet, behind-closed-doors 
     approach, but that China's failure to abide by its 
     commitments in the Joint Declaration has shown that approach 
     to be ineffective.
       On the question of selection of the Chief Executive, Mr. 
     Lee said that China itself acknowledges the selection process 
     is not democratic. The selection will be made by the 
     Preparatory Committee, a Beijing-appointed body which 
     includes key officials of the PRC, such as Foreign Minister 
     Qian Qichen. The Preparatory Committee will select 400 Hong 
     Kong people to select the Chief Executive. Three candidates 
     have been identified so far--C.H. Tung, a shipping magnate 
     and former member of the Governor's Executive Council 
     considered close to the PRC, Anson Chan, the Chief Secretary 
     of the Hong Kong Government, and T.S. Lo, a solicitor and PRC 
     advisor.
       On the question of what U.S. policy should be, Mr. Lee said 
     it is a matter for the U.S. to decide but Mr. Lee added that 
     the development of democracy and the rule of law anywhere in 
     the world is beneficial to the U.S. The violation of 
     international agreements by China or other countries is not 
     in the U.S.'s interest and would create a bad precedent. 
     Above all, however, consistency is most important. The U.S. 
     should make a policy and stick with it.

                             Other Meetings

       The delegation also met informally with members of the 
     Preparatory Committee, Paul Cheng and Frederick Fung, the 
     Better Hong Kong Foundation, academics, civil servants and 
     representatives of the U.S. business community to hear their 
     concerns and recommendations for U.S. policy.


             fort lewis/mcchord air force base, washington

       Shortly after arriving from Hong Kong the delegation had 
     the opportunity to tour both McChord Air Force Base and the 
     Army's Fort Lewis in Washington state. After the tour Senator 
     Cochran and other members of the delegation had an informal 
     dinner with Lieutenant General C.G. Marsh, Commander of the 
     U.S. Army's I Corps. General Marsh, who has responsibility 
     for the deployment of I Corps units in the Asia-Pacific 
     region, commented that, having recently commanded U.S. forces 
     in Korea, he is concerned about the volatility in the region. 
     The situation is fluid and could erupt overnight, and the 
     U.S. must be prepared to take action in Korea. General Marsh 
     went on to state he has a close working relationship with 
     others the delegation met with during the trip, such as 
     Admiral Prueher (CINCPAC) and General Rollings (Commander, 
     III MEF), and that their frequent interaction is a key aspect 
     of the U.S. military's being prepared to act in the Asia-
     Pacific region, if necessary.


                               conclusion

       The Asia-Pacific region will dominate many aspects of 
     American policy--foreign, security, trade--in the coming 
     century. It is a region with stark contrasts: North 
     Koreans reading recipes for cooking grass in 
     ``newspapers'', starving in the cities and countryside, 
     while their government spends money buying, building, and 
     selling missiles and weapons of mass destruction; the 
     Politburo of the People's Republic of China, allowing a 
     market economy to run free in the south of the country 
     while at the same time attempting to harness and repress 
     the individual rights of its citizens to think and act 
     freely, all the while increasing the size of its 
     military--for example, building a ``blue water'' navy, 
     building new classes of intercontinental ballistic 
     missiles, to include the PRC's first land-based mobile 
     ICBM--beyond any conceivable needs for self-defense; the 
     Socialist Republic of Vietnam, on the one hand proclaiming 
     itself to be dedicated to the principles of communism yet, 
     on the other hand, encouraging private business and freely 
     allowing information into the country; and, the economic 
     miracle that is most of Asia, where growth rates are the 
     staggering envy of the rest of the world. This is a region 
     that cannot be the afterthought of American policy in the 
     21st century.
       American policy toward the region must take into account 
     the differences within the region. In Indonesia, the United 
     States must work with the government to improve its record of 
     human rights while, at the same time, recognizing that 
     Indonesia is a force for peace and stability in the region 
     and has to be treated with respect. Restricting IMET 
     participation for Indonesia is counterproductive.
       In Vietnam, the United States must continue to insist on a 
     full accounting of those American service members who are 
     still missing or presumed dead. While there is every 
     indication that the Vietnamese government is finally starting 
     to cooperative fully with the United States on this problem, 
     that cooperation must be sustained over a lengthy period of 
     time to create the conditions for closer cooperation between 
     our countries. During this period the United States should be 
     doing everything possible to encourage the development of as 
     open and free a market as possible; during the delegation's 
     visit, it was clear that the Vietnamese government recognizes 
     that its future financial prosperity depends upon allowing 
     private ownership to take place and information flowing 
     freely into the country. This is a country where eventual 
     political reform will most likely be the by-product of an 
     emerging market economy.
       In Hong Kong, the United States must insist that the 
     freedoms guaranteed by the Sino-British Joint Declaration are 
     implemented by the People's Republic of China when Hong Kong 
     reverts to PRC sovereignty on July 1, 1997. China has already 
     made troubling assertions that it will not abide by parts of 
     this Joint Declaration; these assertions can only be 
     translated into reality if the government of the United 
     States ignores its obligations under U.S. law.
       Economic growth has accrued more than financial benefits to 
     many of the citizens of the Asia-Pacific region. Free markets 
     have blazed a path for free people, as the examples of 
     elections in both the Republic of China and South Korea 
     demonstrate. In Japan, our close friend and ally for the last 
     half-century, we also see the political change that has come 
     with the free market. Many other nations in the region are 
     also taking a more serious attitude toward individual 
     freedom, and it is clear that this change in attitude has 
     almost always been preceded by a free, or freer, market.
       America is the glue that binds the region together. Enmity 
     is not quickly forgotten in Asia, and it is the American 
     military presence in the presence in the region that has 
     allowed to countries in the area to concentrate on economic 
     growth rather than military expansion. The reassuring 
     presence of an American carrier battle group--or the 
     knowledge that one is often just over the horizon--has 
     resulted in a stable environment that has been conducive to 
     economic growth for many in the region.
       The United States must remember that this is a region in 
     which our ability to trade cannot be separated from our 
     ability to defend our interests and, if need be, protect our 
     friends. Our security guarantees must be credible. By 
     allowing terrorist states like North Korea to acquire weapons 
     of mass destruction and ballistic missile delivery systems, 
     some of our friends in the region have not-so-privately begun 
     to worry about the credibility of the American security 
     guarantee, particularly given the at best half-hearted effort 
     by the Clinton Administration to build quickly effective 
     defenses against ballistic missiles. American vulnerability 
     to coercion is not missed in Asia; unless the vulnerability 
     if redressed, the credibility of the American security 
     guarantee will evaporate, leading states that are now in an 
     economic race into the invisible arms race. This can only 
     work against American interest.
       The United States will continue to succeed in the region, 
     our trade will continue to grow, if we remember that military 
     strength is respected, and it is upon this strength that 
     American credibility is based. Our military must remain 
     strong and visible in the region, and our security assurances 
     to our allies must be carried out with the spirit, and not 
     just the letter, of our arrangements in mind.

                          ____________________