[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Extensions of Remarks]
[Pages 3089-3091]
[From the U.S. Government Publishing Office, www.gpo.gov]




        MR. BEREUTER GIVES SPEECH BEFORE THE HERITAGE FOUNDATION

                                 ______
                                 

                          HON. EDWARD R. ROYCE

                             of california

                    in the house of representatives

                      Wednesday, February 24, 1999

  Mr. ROYCE. Mr. Speaker, I would like to share with my colleagues a 
thoughtful speech given before the Heritage Foundation by my 
distinguished colleague, Mr. Bereuter of Nebraska, on U.S. policy 
toward Asia.
  As Chairman of the Asia and Pacific Subcommittee, on which I am 
honored to serve, Doug Bereuter has been a leader in shaping U.S. 
policy toward this critical region. Mr. Bereuter's views, as expressed 
here, are a significant contribution to our understanding of the 
challenges and opportunities facing our country in Asia. I encourage my 
colleagues to review this important speech.
  Mr. Speaker, I submit the full text of Mr. Bereuter's address before 
the Heritage Foundation's Asia Roundtable to be inserted at this point 
in the Record.

   Remarks Delivered at the Heritage Foundation, the Honorable Doug 
 Bereuter, Chairman, Subcommittee on Asia and the Pacific, February 9, 
                                  1999


                            I. Introduction

       I am honored to be invited back, for a fifth year, to 
     participate in the Asia Roundtable sponsored by the Heritage 
     Foundation, and to share my Congressional perspective on U.S. 
     foreign policy objectives in Asia. Seeing many familiar faces 
     here today, I am encouraged that so many ``old hands'' (many 
     of them young)--individuals with wide-ranging experience and 
     expertise--remain committed to studying Asian affairs. No 
     region is more dynamic, or more crucial to the future of 
     America, as we stand on the threshold of the 21st century.
       In my role as Chairman of the Asia and Pacific 
     Subcommittee, a position which I have held since January 
     1995, I have found that your questions and related comments 
     have been helpful in offering some different issues, and I 
     hope that today's session will also have that benefit. I will 
     keep my remarks fairly brief to afford maximum time for 
     dialogue. Thus, I propose:
       First, to very briefly reiterate the set of principles that 
     have guided my approach to the Asia-Pacific region.
       Second, to highlight key challenges that we face when 
     viewing the Asian landscape through the larger prism of U.S. 
     ``grand strategy''--even if it isn't clear that our 
     government has one.
       Third, to offer my thoughts on appropriate Congressional 
     responses to achieve our security objectives in Asia.


                 II. Principles to Guide Foreign Policy

       Soon after I assumed Chairmanship of the Asia and Pacific 
     Subcommittee, I established a set of principles to guide 
     goals and initiatives regarding Asia. I believe these 
     principles remain valid today. These include:
       first, Maintaining regional stability and security--
     particularly with respect to potential flashpoints on the 
     Korean peninsula, the Asian subcontinent, and Taiwan--by 
     sustaining our regional security commitments. The presence of 
     American forces strategically forward-positioned in Asia 
     promotes stability, deters aggression and the rise of 
     hegemonic forces, and ensures our strategic agility--the 
     ability to rapidly and flexibly respond to crises. Our forces 
     must remain engaged in Asia to bolster alliances and 
     friendships, build new bonds of trust, and strengthen the 
     joint commitment of the U.S. and regional nations to peace 
     and stability. An increasingly important aspect of the U.S. 
     security responsibility concerns the proliferation and export 
     of weapons of mass destruction and ballistic missiles. Given 
     recent events on the Korean Peninsula, this priority has 
     become increasingly important.
       the second principle, Opening and expanding Asian markets, 
     and leading systemic and structural reforms that contribute 
     to long-term Asian economic health and prosperity. Asia's 
     recent financial crisis underscores the need for this dual-
     track approach. We have engaged economically, for example, by 
     applying public and private resources to our financial and 
     commercial relationships in Asia, and by implementing 
     business strategies that expand our trade and marketing 
     potential. However, we also should provide more leadership in 
     a drive for reforming the economic architecture in Asia. This 
     includes direct assistance in the form of counsel and 
     targeted, limited aid to beleaguered nations, and insistence 
     on appropriate support from multilateral organizations, such 
     as the IMF, and international fora. This integrated approach 
     should help put Asian nations back on their feet and keep 
     them on the path to the robust growth needed for their, and 
     global, economic health.
       the third principle, Promoting democracy & Protecting human 
     rights. We cannot neglect our historic commitment to the 
     fundamental principles of democracy, pluralism, and respect 
     for human rights. Any Congressional policy based strictly on 
     realpolitik and devoid of moral substance will lose the 
     support of the American people.
       In these three areas, then, Congress must seek and seize 
     the initiative so that we can now, and amid the uncertainties 
     of the new millennium, shape, prepare effectively for, and 
     respond appropriately to, the challenges and opportunities in 
     Asia.
       Now, secondly, to move to the challenges, I start with . . 
     .


                          III. Defense Issues

       A more detailed look at the region shows that the post-Cold 
     War period has not ended threats to a peaceful, stable Asia. 
     Threats to U.S. vital interests abound. Relatedly, I believe 
     that maintaining our 100,000 forward-deployed troops is the 
     responsible, prudent course of action now more than ever. 
     That force is a cornerstone of our security strategy and has 
     both symbolic and real value to our allies, and it should to 
     us as well. It represents our tangible commitment to the 
     region--our sacrifice for the common good that deters 
     aggression and defends U.S. and allied interests in crisis or 
     conflict. The 1998 Defense Authorization Bill included-
     language, which I authored, reaffirmed both Congressional 
     support for the 100,000 troop level, and explains why this 
     troop commitment is crucial to peace and security in Asia. 
     Indeed, I believe the presence of forward-based U.S. troops 
     is welcomed by everyone in the region . . . . with the 
     notable exception of North Korea.
       As to North Korea, I remain convinced, as I was in 1995, 
     that there is no more volatile and dangerous spot in Asia, 
     and perhaps the world, than North Korea. The situation on the 
     Korean Peninsula currently is fragile. As you know, the North 
     maintains a huge, standing, million-man army, the bulk of 
     which is forward-deployed within 75 miles of the DMZ. Its 
     nuclear and ballistic missile capabilities may threaten South 
     Korea and Japan and, as demonstrated by Pyongyang's August 
     ``98 missile test, they potentially threaten even American 
     soil--yes, the 48 states too. This test launch, coupled with 
     uncertainty over the North's adherence to the 1994 nuclear 
     framework agreement (generated by its continuing refusal to 
     permit U.S. access to a suspected nuclear-related underground 
     facility at Kumchang-ni) has renewed grave questions about 
     Pyongyang's military intentions.
       The North should realize, but may not, that it now stands 
     at a crossroads and must choose whether to continue its march 
     toward economic and social collapse or to embrace America's 
     exchange of food aid, heavy fuel, and assistance in 
     developing safe nuclear energy for a verifiable commitment 
     that it has not continued--and will not continue--its nuclear 
     weapons program. The Administration's high risk bargaining 
     tactics on this issue require careful oversight; much hangs 
     in the balance--potential war or peace on the Peninsula, 
     large-scale proliferation or its containment. Ultimately, the 
     longer term balance of power and regional stability is at 
     risk. I referred to the Administration's high risk bargaining 
     tactics because the questions we all must ask are:
       What is the Administration's strategy with regard to North 
     Korea? Why is there no linkage among the Administration's 
     individual initiatives to stem the North's ballistic missile 
     proliferation, to halt its nuclear program, and to forge any 
     peace settlement? Have we substituted individual tactical 
     maneuvers for an overarching strategy, a set of disjointed 
     processes for an integrated policy and real progress?
       The implications of North Korea's test launch of a three-
     stage ballistic missile reach far beyond the Peninsula. 
     Tokyo, recognizing the implicit threat, has appeared

[[Page 3090]]

     increasingly receptive to overtures to work with the U.S. to 
     develop a regional missile defense network. Prime Minister 
     Obuchi's hand also has been strengthened in gaining Diet 
     approval for the revised defense guidelines. Once ratified, 
     these guidelines will permit Japan to provide broader and 
     more flexibility non-combat logistical support to U.S. forces 
     in a regional contingency.
       As a nuclear weapons state, a leading regional military 
     power, and a global player with a permanent U.N. Security 
     Council seat, China, too, has a crucial role in building 
     lasting security in the Asia region. Thus, another key 
     security objective in Asia must be to build a firm foundation 
     for a long-term relationship with China based on 
     comprehensive engagement. Clearly, divergent and sometimes 
     conflicting policies on a variety of issues complicate 
     relations. Continuing concerns regarding China's acquisition 
     and possible proliferation of sophisticated technology with 
     military applications poses challenges to improving 
     relations. As you may know, I served recently on the 
     Congressional Select Committee charged with investigating 
     Chinese acquisition of sensitive U.S. military technologies. 
     Our findings, which I will broadly review with you when I 
     turn to proliferation challenges, almost certainly will 
     strain U.S./China relations over the near-term once the 
     maximum amount of the report is released.
       Another weighty U.S. security objective in Asia is to 
     contain the proliferation of weapons of mass destruction in 
     South Asia. Indian's and Pakistan's recent nuclear tests, and 
     their continued development of ballistic missiles, have 
     fundamentally changed the strategic balance and increased the 
     risk of nuclear exchange. As you know, the U.S. imposed 
     mandatory unilateral sanctions on these countries following 
     their tests. Major elements of these sanctions have 
     subsequently been waived. We need to specifically examine 
     whether to continue the President's waiver on Arms Export 
     Control Administration (AECA) economic sanctions, which were 
     based on a number of conditions, including both countries 
     signing the CTBT, halting nuclear testing, and ceasing 
     deployment and testing of missiles and nuclear weapons. It is 
     to say the least, unclear whether those conditions will be 
     met.
       I have included proliferation issues in a number of my 
     subcommittee's past hearings and, during the 106th Congress, 
     I anticipate re-examining some of these concerns and 
     Administration responses. Certainly we will review 
     Presidential certifications on the North's nuclear program as 
     required by the last Congress, and their impact on the KEDO 
     light water reactor project under he Nuclear Framework 
     agreement.
       It also is clear that Congress will carefully review U.S. 
     export and security policies dealing with sensitive military-
     related technologies. As I mentioned earlier, I serve on the 
     House Select Committee on U.S. National Security and 
     Military/Commercial Concerns with the People's Republic of 
     China, which produced what is commonly referred to as the Cox 
     Report. While the findings of the Select Committee remain 
     highly classified, I can say that we found that the transfer 
     of sensitive U.S. technology to China extends beyond the 
     widely publicized Hughes Electronics and Loral cases, to 
     grave and extraordinary losses and severe damage to Amerca's 
     national security through Chinese espionage because of lax 
     security measures. At this point, I cannot provide details as 
     the report is undergoing declassification review. Suffice it 
     to say at this time, however, that the United States must 
     thoroughly, dramatically, and energetically revise its 
     security procedures--no failures to follow-through this time 
     and no half-way, half-hearted efforts are acceptable.


                          IV. Economic Issues

       Now let's look at Asia's economic security challenges.
       Over the course of the financial crisis, five Asian 
     economies have contracted by at least 6 percent: Thailand, 
     South Korea, Indonesia, Malaysia, and Hong Kong. During a 
     recent visit to Asia, I heard leading Hong Kong business-men, 
     who once were supremely confident of Hong Kong's continued 
     prosperity, now admit they are in a depression--no, I didn't 
     say recession. I also had the opportunity to visit Indonesia, 
     and witness first-hand the very real difficulties that 
     important nation faces in pursuing economic recovery. Other 
     nations are in recession or close to it. I believe the U.S. 
     now has a more palpable respect for the possibility of 
     economic undertow because of the Asian crisis. We were 
     ``strategically surprised,'' to borrow a military analogy, 
     and ``strategic surprise'' frequently results in tremendous 
     confusion and very bad results. We can't afford to have this 
     happen in the global economy.
       We need to bolster our economic ``defenses'' now by 
     expanding private and public U.S. economic engagement and 
     leadership in the region, and by paying closer attention to 
     ``indications and warning'' of financial instability. In 
     retrospect, these signs were evident as the crisis built--and 
     even before that if you look at the architectural problems 
     that drove it--but their potential individual and cumulative 
     impact clearly were insufficiently addressed.
       U.S. economic growth of about 2-3 percent in 1999 has been 
     widely projected--down from about 4 percent 1998 and 
     attributable, in large measure, to the economic problems 
     ignited in Asia. In late '98 the strong U.S. economy was, 
     overall, able to more than compensate for the slump in Asian 
     and other markets. Yet the Asian and other global impacts 
     still are not all played out, and more Asia tides may still 
     await us. To date, the rising U.S. trade deficit, largely 
     resulting from the sizable fall in exports to Asia, has been 
     offset in significant part by capital inflows seeking safe 
     harbor in America and by the Federal Reserve three times 
     lowering interest rates. Nonetheless, the impact of the Asian 
     crisis has been weighty and, as I said, it's certainly not 
     over: Asia's recession has cost U.S. industry $30B in lost 
     exports and resulted in manufacturing lay-offs and shrinking 
     farm income. In addition, despite large IMF bailouts to some 
     Asian nations, continuing financial setbacks in the region 
     are shockingly projected to increase the 1999 U.S. trade 
     deficit another $50-60B deep because of Tokyo's role as the 
     world's second largest economy and a U.S. ally. Japan has 
     been America's largest overseas market for agricultural 
     products. Japan has ranked as the third largest, single-
     market country for U.S. exports; it also has been the 
     second largest supplier of U.S. imports.
       Japan's economy has been anemic, and often in decline, for 
     most of the past seven years, and it is now in recession, 
     with nothing encouraging in sight. Recent trends indicate 
     that, barring major shifts in government policies and global 
     economic conditions, Japan's economic growth will be sluggish 
     for at least the near-team. Problematically, the U.S. trade 
     deficit with Japan in fall '98 was $58.2B and nearing its 
     all-time high of $65.7B, which was reached in 1994. Large 
     trade deficits will increase political calls for 
     protectionism. Indeed, we have seen the first shots over the 
     bow on this subject already: The Administration has 
     threatened to file a suit under Section 301 of US trade law 
     against Tokyo unless its steel imports show substantial 
     declines.
       Politically, that instinct is hard to resist, but such a 
     response has adverse consequences, forcing Americans to pay 
     more for products and lowering their standard of living. 
     Protectionism also can seriously damage Asian economic 
     recovery efforts, which will pose longer-term risks for U.S. 
     products, services, jobs, and industry. The trick is finding 
     the line between protectionism and appropriate leverage to 
     demand a fair shake in foreign markets.
       Despite Japan's continuing economic problems, it admittedly 
     has provided financial assistance, structural adjustment 
     loans, and export/import credits to the IMF countries to help 
     contain the financial crisis. Such generosity is to Tokyo's 
     credit, but it is an adequate alternative to restoring a 
     strong Japanese economy. Underlying Japan's market access 
     problems and low productivity in some economic sectors are an 
     abundance of rigid government regulations. While recent 
     governments have promised to undertake deregulation, Tokyo 
     still appears to be ill-prepared to make fundamental changes.
       Although I have viewed Japan as the economic engine that 
     could pull East Asia back to economic recovery, provide 
     insurance against a worldwide recession and reinforce 
     regional stability and security, this prospect is dimming. 
     Last year, I introduced H. Res. 392, which was passed, 
     calling on Japan to more effectively address its internal 
     economic and financial difficulties, and to open its markets 
     by eliminating regulatory, trade, and investment barriers. 
     Japan must act now to stimulate its fiscal economy and make a 
     decisive break with the regulatory webs and closed markets 
     that slow growth. If Japanese markets aren't open--or 
     opened--Asian countries will rely that much more on U.S. 
     markets for their exports, American exports to Asia will 
     decline, our trade deficits will be pushed even higher, and 
     calls for protectionism will escalate.
       U.S.-China Trade is part of our larger comprehensive 
     engagement policy with that nation and reinforces our 
     economic security objectives in Asia at large. The 106th 
     Congress, like those previously, probably may once again, 
     after heated debate, extend normal trade relations status to 
     China; however, the renewal process likely will trigger 
     consideration of other trade-related issues. These may 
     include conditioning China's entry into the World Trade 
     Organization (WTO), possibly linking WTO access with 
     permanent NTR status, and taking a variety of initiatives to 
     reverse the increasing U.S.-China trade deficit. Incredibly, 
     WTO negotiations with China are in their 13th year; however, 
     China's formal trade barriers remain high, and some very 
     recently have been placed even higher. Key service sectors, 
     such as distribution, finance, and telecommunications--the 
     infrastructure of a 21st century economy--remain closed. 
     Moreover, the rule of law, which permits enterprises to grow 
     and flourish, remains severely underdeveloped. The 
     Administration still has no effective plan to induce China to 
     make the changes and commitments necessary for WTO 
     eligibility despite our phenomenal trade deficit with that 
     country, which grows by $1B per week! I am convinced that 
     the U.S. must use, in effect, a ``carrot and stick'' 
     approach to push China on WTO membership. the ``carrot'' 
     is permanent NTR; the

[[Page 3091]]

     ``stick'' is snap-back tariffs. This year, I plan to more 
     energetically push the Bereuter-Ewing-Pickering 
     legislation--H.R. 1712: The China Market Access and Export 
     Opportunities Act. It offers a strategic plan that 
     includes snap-back tariffs to compel Beijing to join the 
     WTO. Equally important, unlike repealing NTR, my approach 
     does not invoke the impossible, severe, wide-ranging set 
     of sanctions that would adversely impact American jobs and 
     industry. Neither does it ease, as China has urged, WTO 
     accession restrictions, which could seriously undermine 
     support for free trade. Now to the final category of 
     challenges for the U.S. in the region:


                      V. Human Rights & Democracy

       There can be no serious discussion of U.S. policy toward 
     Asia--or of challenges and opportunities in that region--
     without addressing U.S. democracy and human rights 
     objectives. As you all know, last year was the 50th 
     anniversary of the signing of the Universal Declaration of 
     Human Rights. In looking back at that half century, an 
     impressive body of international law has been enacted, and 
     the ranks of committed individuals, organizations, and 
     countries have swelled as has their power to command world 
     attention in promoting and protecting the dignity and freedom 
     of all people.
       It should be noted that in 1998, for example, Beijing 
     signed the International Covenant on Civil and Political 
     Rights. In 1998, the U.N. Human Rights Commission and 36 
     Asian-Pacific nations--representing about one-half the 
     world's people--also signed in 1998 the framework for an 
     agreement on technical cooperation in human rights, which 
     commits them to work together to strengthen national human 
     rights strategies, plans, institutions, and education. 
     Strides have been made, but we must do more to translate the 
     legal instruments--the words--that guarantee human rights 
     into actions that transform the daily lives of those 
     citizenries that still live under oppression.
       Competing ideologies on the role of democracy versus 
     authoritarian rule in building Asian stability and economic 
     prosperity have impaired the strengthening of democratic 
     institutions and individual freedoms. The Asian economic 
     crisis brought simmering political tensions to a boil, and 
     amplified regional--indeed, worldwide--calls for government 
     accountability and profound social and political change. If 
     equitable recovery measures are not adopted in 1999, the 
     cycles of violence witnessed last year, and for much of 
     history, well may be repeated.
       Nowhere is that more true than in Indonesia. The widespread 
     protests that brought an end to President Suharto's regime 
     have not abated. President Habibie has lifted some 
     restrictions on freedom of expression and political parties, 
     but sources of political, ethnic, and economic unrest 
     continue to abound. The June '99 parliamentary election 
     process is a key test for democracy and government 
     legitimacy. With political parties blossoming and competing 
     for seats in what hopefully will be the first real election 
     in over three decades, the stakes are very high. Moreover, 
     another important watershed event may be on the horizon: 
     Recently, the Indonesian government announced that it may be 
     willing to consider East Timor's autonomy, perhaps even 
     independence if the East Timorese deem the autonomy plan 
     unacceptable. The jailed rebel leader, Xanana Gusmao, who I 
     visited last month, appears destined for early release. I am 
     told that U.N. Special Envoy Marker has redoubled his efforts 
     to devise a formula that is acceptable to all parties. 
     Portugal and Indonesia must be told it is time to find an 
     acceptable agreement now. The door is opening for an end 
     to this 23 year old violent controversy.
       In another Southeast Asian example, Cambodia's recent 
     electoral history has been bloody. After the violent July 
     1997 coup, in which scores of Cambodians were executed, Hun 
     Sen delivered a devastating ``body blow'' to the democratic 
     aspirations of the Cambodian people. Following a very 
     difficult year, where Hun Sen was ostracized from the 
     international community, elections were held last July. These 
     elections resulted in a small majority for the Cambodian 
     People's Party, led by Premier Hun Sen. Extra-judicial 
     killings, co-opting and coercion of political opponents, 
     human rights abuses, and media censorship that led up to the 
     election tarnished the process at large while allegations of 
     election improprieties undercut claims of a democratic 
     process.
       Moreover, the current power sharing arrangement between Hun 
     Sen and Prince Ranarridh is tenuous at best, and rumors of 
     special deals with Khmer Rouge leaders who recently 
     surrendered have fed additional suspicions. This small, long-
     suffering country has far to go before Western observers will 
     be convinced it is on the way to democratization. I was the 
     author of an amendment that was passed in the foreign 
     operations appropriation bill that barred aid to the 
     government of Cambodia until democracy is restored. I remain 
     unconvinced that this has occurred.
       And, finally, as for China, despite its signing of the U.N. 
     Covenant on Civil and Political Rights, it has yet to be 
     ratified. China's desire for improved relations with the West 
     contributed to the release of some high profile political 
     prisoners and slight loosening of limits on public expression 
     in early 1998; however, the crackdown on the newly formed 
     Chinese Democratic Party and other unregistered pro-democracy 
     groups has demonstrated the continuing closed nature of the 
     political system.
       I want to emphasize here that I continue to support the 
     excellent work of Mr. John Kamm, who has done much to learn 
     the fate, and push for the release, of long-forgotten 
     political prisoners. The physical and psychological lives of 
     these prisoners, and of many other victims of Chinese human 
     rights abuses, hang in the balance. We must continue to 
     vigorously press Beijing to live up to both the letter and 
     spirit of the international agreements it has signed. To this 
     end, the first hearing this year in the House International 
     Relations Committee concerned the recent crackdown on 
     democracy movement leaders; a second hearing already has been 
     held, and more are likely to be scheduled.


                             VI. Conclusion

       I have reviewed a fraction--although a substantial and 
     important fraction--of challenges and opportunities that will 
     face the United States and Congress in Asia as we move into 
     the 21st century. What I do I recommend, as both a Member of 
     Congress and Chairman of the Asia and Pacific Subcommittee to 
     my colleagues and to the Administration? A few bottom lines:
       Vigorously promote regional security. In addition to 
     maintaining our forward-deployed forces and strengthening our 
     web of security Alliances, we need to explain the requirement 
     for, promote, and collaboratively develop a regional missile 
     defense system, as well as a limited national defense system 
     at home.
       Push the Administration to develop an effective, long-term 
     strategy for dealing with Pyongyang in concert with our 
     regional Allies. Such a strategy must hold the North to its 
     commitment to the framework agreement if we are to release 
     any of the $35M pledged. Further, it must link the nuclear 
     initiative with other U.S. security objectives related to 
     ballistic missile proliferation and discussions on peace and 
     stability in Korea and in the region. Most importantly, we 
     must replace the reaction stance our actions and policy have 
     become. They are too much like paying blackmail to avoid 
     North Korean aggression or to delay facing a growing threat 
     of weapons of mass destruction.
       Actively assist Asian countries' recovery plans where 
     possible and appropriate and strengthen U.S. leadership of 
     systemic and structural reform. To do this, we must remain 
     engaged in Asian markets and avoid protectionism, and exert 
     more leadership in pressing for IMF reforms. We also must 
     provide private and public sector expertise for reforming the 
     Asian economic architecture.
       Adopt the Bereuter-Ewing-Pickering plan for Chinese 
     accession to the WTO through snap-back tariff legislation. 
     Engaging China now, on our terms, in a free market economy, 
     is a key means to encourage it toward responsible domestic 
     and international behavior.
       Energetically promote the advancement of democracy and 
     freedom throughout Asia. The United States, for example, 
     should support the Indonesian elections in June--free, fair, 
     and transparent elections are too important for the U.S. not 
     to get involved. We also should support the rule of law and 
     village election assistance in the PRC, and not let a few of 
     our misguided colleagues block the effort and discourage 
     further Administration initiatives. While the costs of such 
     programs are minimal, they can make a significant 
     contribution to the evolution of democratic institutions in 
     Asia.
       Thank you very much for your attention.

       

                          ____________________