    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [June 22, 1997]
    [Pages 782-793]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's News Conference in Denver
    June 22, 1997

        The President. Thank you very much. Please be seated. Let me say I
    have a brief opening statement, and then I will open the floor to
    questions. I know we also have some members of the international press
    here, and I'll take several questions from the American press first, and
    then I'll try to alternate a bit. And I think I have a general idea of
    where everyone is.
        Let me begin by saying that over the past 4 years I have worked with
    our partners in these summits to focus the major industrial democracies
    of the world on both the opportunities and the challenges that we face
    as we move toward the 21st century. Together, we worked to prepare our
    economies to meet new transnational threats to our security, to
    integrate new partners into our community of free market democracies.
        The summit communique I summarized just a short while ago
    demonstrates that here in Denver we have actually made real progress on
    problems that matter to our people. To prevent financial crises from one
    country from sending shock waves around the world, something we have
    seen on two different occasions in the last few years, we've
    strengthened our network of banking and market officials to monitor
    financial policies and police risky practices.
        We moved forward in our fight against new security threats that
    confront all our people. We intend to step up our collective efforts
    against the growing international problem of high-tech and computer-
    related crime. We agreed to work more closely to stem the spread of
    materials of mass destruction that could be used in terrorist attacks.
    To help ensure that as we dismantle nuclear weapons, dangerous materials
    don't fall into the wrong hands, we'll tighten control on plutonium
    stockpiles and establish a rapid response network to prevent nuclear
    smuggling.
        Together, we've begun to tackle another very dangerous threat we'll
    all face together in the years ahead: infectious diseases that can span
    the planet in the space of an airline flight. We've agreed to create a
    global early warning system to detect outbreaks and help us to get the
    right medicines where they're needed quickly.
        And in all of these efforts, we believe we are stronger because we
    now have Russia as a partner. I'm pleased that for the first time Russia
    took part in our summit from the start and that this week we reached
    agreement on Russia's joining the Paris Club for creditor nations--
    evidence of Russia's emergence as a full member of the community of
    democracies.
        The progress we've made here in Denver demonstrates again what I
    have said so many times in the last 5 years. In this new era, foreign
    policy and domestic policy are increasingly intertwined. For us to be
    strong at home, we must lead in the world. And for us to be able to lead
    in the world, we must have a strong and dynamic economy at home and a
    society that is addressing its problems aggressively and effectively.
        To continue that path, let me say, there are some things we have to
    embrace on the homefront and on the international front. First, Congress
    must pass a balanced budget plan consistent with the agreement we made
    and with our

    [[Page 783]]

    values. The balanced budget must include a tax cut that is as fair as
    possible to middle class families and meets their real needs, providing
    help for education, for childrearing, for buying and selling a home. I
    will also insist that any tax cut be consistent with a balanced budget
    over the long run. We cannot afford time-bomb tax cuts that will explode
    in future years and undo our hard-won progress. This will be a crucial
    test of our will to continue the economic strategy that has produced
    American prosperity in the last few years: balancing the budget and
    investing in our people as we move into a new century.
        Second, after our own Independence Day, I will travel abroad for a
    NATO summit where we'll take a historic step to lock in freedom and
    stability in Europe. In Madrid, we'll invite the first of Europe's new
    democracies to join our alliance, to advance our goal of building a
    continent that is undivided, democratic, and at peace for the first time
    in history.
        Third, we'll move ahead with our leadership of the world economy and
    with the obligations and the opportunities that come with it. I urge
    Congress to vote next week to continue normal trade relations with China
    so that we can maintain our ties with one-quarter of the world's people,
    advance human rights and religious freedom there, continue our
    cooperation for stability on the Korean Peninsula and to prevent the
    spread of weapons of mass destruction, and keep Hong Kong's economy
    strong as it reverts to Chinese sovereignty.
        Then I will ask Congress for the fast-track authority that every
    President for two decades has had, to negotiate smart new trade
    agreements so that we can open new markets in Latin America and Asia to
    American goods and services to complement the African initiative I
    announced just a few days ago.
        In closing, let me again thank the thousands of people who put this
    summit together for their hard work. I thank the people of Denver for
    the warmth of their hospitality, the power of their optimism, and the
    strength of their example. And especially I want to thank Harold Ickes
    and Debbie Willhite and our whole team for all the work that they have
    done over the last several months.
        And now I'll be happy to take questions. And I think we'll start
    with Ken [Ken Bazinet, United Press International].

    Bosnia

        Q. Mr. President, in the last year there have been various efforts
    led by the United States to try and move the Balkan States, the former
    Yugoslav States, into adhering to the Dayton accord. Can you tell us why
    you believe this summit is, in fact, going to move those leaders to do
    that? And also, while you have said to try and focus on what's taking
    place now, can you tell the American people whether or not the U.S.
    troops will remain in the former Yugoslavia beyond June 1998?
        The President. Well, I will reiterate American policy on that. Our
    policy is that the SFOR mission should be completed by June of '98, and
    we expect it to be. But to answer your first question, which is the far
    more important one, I made it very clear that I think that we have all
    made a terrible mistake, in dealing with Bosnia, to spend all of our
    time focusing on June of '98 instead of focusing on tomorrow and the day
    after tomorrow and the day after that.
        We have seen some successes in Bosnia not only in the work done by
    IFOR and SFOR and the absence of bloodshed but in the recent--just in
    the last few days we've had the Serbs agreeing to proceed with the setup
    of common economic institutions and to do other things which will make
    them eligible for economic aid. We expect there to be local elections;
    Madam Agnelli from Italy is doing a good job in raising the money there
    to conduct these local elections. And what I urge the parties to do and
    what our statement reflects here is our determination to spend the next
    year trying to implement the Dayton accords, and taking each of the
    seven areas--there are roughly seven areas of activity where Dayton is
    critical to pulling this together--and try to make headway on all
    fronts, and especially on the economic front.
        We have pledged a lot of money, but we need to release the money as
    soon as it's pledged if the parties commit to do what they're supposed
    to do. And I'm convinced that this whole thing is always going to be a
    race against time and hatred and limitations, to try to get people to
    feel and visualize the benefits of peace and living together.
        I'm not ready to give up on Dayton. I believe in it. And I feel that
    you will see over the next several months a number of specific examples
    where the people who are in the Group

    [[Page 784]]

    of Eight are trying to energize this peace process.
        Terry [Terence Hunt, Associated Press].

    Middle East Peace Process

        Q. Mr. President, the communique says that the Middle East peace
    process faces crisis and that you're determined--all the leaders are
    determined to reinject momentum into it. The United States has tried.
    Egypt has recently tried. Yet, the process remains stalled on all
    fronts. What is it that the United States and all the partners here can
    do to reinvigorate this process to get things going?
        The President. Well, first, let me emphasize something. You should
    never believe that just because you don't see high-level air transport
    between Washington and the Middle East that nothing is going on from our
    point of view. We spend--I spend quite a bit of time on this every
    single week. And I'm very concerned about what's happened.
        But let me say, in a nutshell, here's what we have to find a way to
    do: We have to find a way to persuade the Palestinians that there is a
    basis for returning to the negotiating table and that all the final
    status issues are not going to be resolved out from under them. But we
    also have to find a way to persuade the Israelis that the Palestinians
    are serious about security.
        In other words, the Palestinians will have to return to security
    cooperation with the Israelis and will have to manifest an opposition
    that is clear and unambiguous to terrorism, the unauthorized injury or
    murder to innocent civilians, and to continuing the peace process. The
    Israelis, for their part, have got to find specific things that can be
    done that show that there's a commitment to Oslo in fact, not just in
    words, and a commitment to getting this process going.
        Now, there are several different potential scenarios that might
    achieve that, and we've been working very hard on trying to figure out
    what the most effective way to do it is. For all of us who are
    outsiders, including the United States, it is not always self-evident
    what the most effective way to exercise whatever influence you have is.
    And I am prepared to do anything I reasonably can to keep this peace
    process from going awry. I think that it's in a pivotal moment, and I
    think that all of the friends of Israel and the Arab States and the
    Palestinians need to bear down and do what we can to persuade these
    people that they need to get back to the work of the peace process.
        Gene [Gene Gibbons, Reuters].

    China and Hong Kong

        Q. Mr. President, even before next week's reversion of Hong Kong to
    Chinese sovereignty, there are some ominous signs that China plans to
    roll back some of the rights and freedoms that the people of Hong Kong
    now enjoy. I know that the communique here in Denver addressed that
    issue, but what can the United States and the other industrial
    democracies do if China fails to deliver on the 1984 agreement?
        The President. It's interesting, we spent a lot of time talking
    about that this morning, and mostly we were listening to Prime Minister
    Blair, who obviously has the highest level of knowledge about this and
    the deepest experience, and a lot of personal involvement with Hong
    Kong, I might add.
        Our sense is that, obviously, we don't exactly know what will
    happen, but that we have all committed to work with the British to try
    to continue to insist on and preserve the integrity of the '84
    agreement, and we also do not want to assume the bad faith of the
    Chinese. I think that would be an error. China made a commitment in
    1984, and they asked our country when President Reagan was in office to
    actually bless or endorse the commitment when China and Great Britain
    made the commitment to have one China but two systems. And that
    definition clearly included political as well as economic differences.
        You know, I hate--I don't like to answer hypothetical questions, and
    I think anything we do will only make it worse. I think what we want to
    do is to encourage the Chinese to remember they have a unique, almost
    unprecedented place now that is reverting to their sovereignty, and that
    part of the fabric of what makes Hong Kong work is not just open markets
    and industrious people and a haven of hope for people who flee the lack
    of opportunity and often oppression elsewhere, but a lively and open
    society. And it needs to be maintained, and I hope that it will be.
        Yes, Ann [Ann Compton, ABC News].

    Proposed Tobacco Agreement

        Q. When the tobacco deal was announced, you indicated you'd be
    listening for reactions from some, like Dr. David Kessler, who said

    [[Page 785]]

    this morning that he finds, in reading the fine print, that there are
    some hurdles, some impossible burdens. And he called parts of it a step
    backwards. Is there some way you can assure people that this agreement
    will not simply be proposed and then die? Is there something your
    administration can do to follow through to make sure that this
    represents a time of real change for the tobacco industry?
        The President. Yes. I think the answer to that is yes. And let me
    say, obviously, I have not, myself, had a chance to review this in any
    detail. Bruce Lindsey has briefed me on its major provisions, and that's
    why I asked to have the chance to have it reviewed. I don't think any of
    us--at least, I hope none of us are reviewing it with the view toward
    either saying we're going to embrace it or kill it, and there's no other
    opinion.
        I was impressed by some of the comments of Members of Congress in
    both parties that they were hoping that if they couldn't completely
    embrace it, that at least it could be salvaged; and by Attorney General
    Moore from Mississippi, who said that he thought the agreement would
    come apart if what he called--I think he said--radical changes or
    something were made in it, which would undermine its fundamental
    understandings.
        But I think--here's bottom line for me: When two sides make an
    agreement--an honorable, principled agreement--they obviously both
    conclude that it's in their interest to make the agreement. And what we
    have to--those of us who are on the outside of this who represent the
    public interests have to do is to make sure that those things which made
    the tobacco interests conclude that it was in their interest to make the
    agreement do not compromise or undermine our obligation and our
    opportunity to protect the public health and especially children's
    health and reduce child smoking.
        Now, that will particularly bear on the specific language relating
    to the jurisdiction of the Federal Food and Drug Administration and
    exactly what it means. And I just urge you all to read it carefully.
    We're going to be reading it carefully. And we're going to read it
    carefully against what the tobacco companies have already admitted about
    the addictive qualities of nicotine and what was known.
        So you have to not only look at the legal language, but you have to
    look at the factual basis that's out here. We're going to work through.
    But I can tell you, I'm going to do my best to see that this whole
    endeavor, which is massive, results in something positive for the
    American people. But we have to have those tests: public health, child
    smoking.
        George [George Condon, Copley News Service].
        Q.  Mr. President----
        The President. Just a minute, just a minute. I called on this man;
    then I'll call--just hold on.

    NATO Expansion

        Q.  Mr. President, as you prepare to leave for Madrid, NATO is
    undergoing a rather public division over the number of nations that
    should be asked to join. Were you able to bridge the gap here at all
    with President Chirac or the Prime Minister of Italy? And secondly, do
    you see any lasting damage to the alliance from this split?
        The President. I think my answer would be no to both questions. That
    is, we still have differences of opinion about whether in the first
    round there should be three or five nations admitted, or some favor
    four. But I do not expect it to do lasting damage to the alliance, if--
    this is a big ``if''--we maintain the integrity of the process we set
    up; that is, if we say this is not the first entrance, there will be an
    open door, and if we continue to intensify the work of the Partnership
    For Peace, which has been wildly popular with all its members, and we
    have an extra outreach to those who are good prospective members.
        For example, if you just take the two countries in question, Romania
    and Slovenia, I believe that they are excellent candidates for admission
    to NATO membership if they stay on the path of reform and they continue
    to build up their partnerships with us militarily through the
    Partnership For Peace, preserve democracy. Romania has resolved its
    problems with Hungary, has two Hungarians in the Cabinet. It's the
    second biggest country in Central and Eastern Europe. Slovenia is a key
    nation geographically, if for no other reason, between Italy and some of
    the other countries in Europe and Hungary and some of the difficult
    spots that we're likely to have trouble in.
        So I think that there is not as much difference over where we think
    this will be 10 years from now as there is how we should proceed now.
    And I'm hoping we can resolve these things.

    [[Page 786]]

    I'm confident that our position is the prudent, the disciplined, and the
    right one for this military alliance at this moment. But I don't think
    we should in any way discourage or dash the hopes of two countries that
    clearly are moving in the right direction and strategically located in
    an area where it will be very important for NATO to maintain stability
    in the years ahead.
        Now go ahead.

    North Korea

        Q. Mr. President, 2 days ago the representative for the Red Cross in
    Pyongyang announced that there were about 5 million North Koreans in
    imminent danger of starvation. I was wondering if this issue was
    discussed at the meetings in the last 2 days and if you, as chairman of
    the G-7, cannot mobilize the other countries to contribute what is
    necessary and to create the logistical means of getting it to North
    Korea before a catastrophe hits.
        The President. Yes, I discussed this actually personally, one on
    one, with a number of the leaders. And the United States has pledged
    more food aid to North Korea. I am very concerned about it as an
    humanitarian matter, and I believe you will see more action on this
    front. And I'm certainly committed to doing it; I'm deeply troubled.
        And I also would say that in addition to that, we're hopeful that
    the latest statements by the North Koreans indicating that we can have a
    meeting to discuss how to get into the four-party talks with the Chinese
    and the South Koreans--that's also very hopeful. But I'm profoundly
    troubled by the reports that I have read about the scope of human
    suffering in North Korea. And whenever we've been asked, we've come up
    with some more food. But I'd like for us to do more, and I think you'll
    see these other countries willing to do more as well.
        John [John Donvan, ABC News].

    China

        Q. Mr. President, your administration has been criticized for
    cutting China a break in terms of how you deal with it, using a policy
    of constructive engagement, that there's a double standard. You are
    tougher on other countries for similar transgressions, but with China,
    you think talk is best. The basic criticism comes down to the notion
    that for the sake of trade, the administration will compromise its
    principles. Can you respond to that, please?
        The President. Yes. I don't think it's fair. For example, if you
    look at our policy toward Burma which, unlike China, had a
    democratically elected government and reversed it, and represents the
    most severe abuses of political and civil rights that we've dealt with
    recently, in terms of our actions, we've been for sanctions against
    Burma, but we haven't repealed MFN.
        And when you look at China, we still have Tiananmen Square sanctions
    on China that we haven't gotten rid of. We have given up a lot of
    business in China, clearly--and they've made it clear that we have--by
    continuing to press our human rights concerns in the human rights forum.
    What we don't believe would be fruitful is to withdraw normal trading
    status from China--something we have with virtually every country in the
    world--in a way that would estrange us further from them, prevent us
    from working together on problems like North Korea, weapons
    proliferation, and other issues, and endanger the ability of the United
    States to be a partner with China in the 21st century. That's what we
    don't believe.
        We have paid quite a price from time to time for our insistence on
    advancing human rights. I just don't think taking normal trading status
    away from them is much of a way to influence them over the long run. I
    think it's a mistake.
        Wolf [Wolf Blitzer, CNN].

    Medicare

        Q. Mr. President, the Senate Finance Committee, including the
    Democrats, by and large, supported legislation they want you to sign
    that would do two very dramatic things to Medicare: raise the
    eligibility age from 65 to 67 and impose what's called means testing,
    making sure that millionaires and richer Medicare recipients pay more
    for the premiums than poorer Medicare recipients. Could you tell us
    specifically right now how you will come down on these two very
    sensitive, politically sensitive issues?
        The President. Well, let's take them differently--separately. First
    of all, both of them are clearly outside the budget agreement. And if--
    because I felt so strongly about honoring the budget agreement, I did
    not try to help the advocates of the Kennedy-Hatch bill pass their child
    health plan, even though I strongly support it. I didn't try to help
    them pass it because I wanted to honor the budget agreement. So I think
    I can be forgiven for asking

    [[Page 787]]

    that other people honor the agreement if they voted for it. Now, if any
    of these Senators didn't vote for it, I can't expect them to honor it.
    But if they voted for it, it was very specific. And that's what concerns
    me about it.
        Now, let's take them independently on their merits, because I
    wouldn't say that the administration and the leaders of both parties in
    Congress couldn't come back during the course of this endeavor and
    agree, in effect, that this should be considered as consistent with the
    budget agreement--not this issue, but just any particular issue. So
    let's take these two issues.
        Number one, on the question of raising the eligibility for Medicare
    from 65 to 67, when that was done on a phase-in basis for Social
    Security back in '83, I supported that, on the grounds of increased life
    expectancy, changing demographic balance, and because it was part of a
    bipartisan process. My question here would be, apart from the fact that
    it's outside the agreement, is, do we know that this would not lead to
    increased numbers of people without any health coverage? Has there been
    sufficient study here? Do we really have adequate evidence that we won't
    have increasing numbers of people without health insurance?
        On the means testing for--not for the premiums, but for the co-pays,
    which is what was done in the case of the cash--I have said repeatedly
    that, philosophically, I was not opposed to means testing Medicare. And
    I told Senator Lott that on the phone the other day. What my concerns
    are, are the following. Number one, it's outside the agreement. Number
    two, we have an agreement which has a lot of reform in Medicare and will
    realize $400 billion worth of savings and put 10 years on the Trust Fund
    right now. And will this imperil it because people will be opposed to
    it? Or would this endanger the whole Medicare deal in the House, for
    example, where I have reason to believe, based on our preliminary
    negotiations over the budget agreement, that there would be broad
    opposition in both parties? Thirdly, Mr. Reischauer and others have said
    that this particular proposal is probably not capable of being
    administered, that there are a lot of practical problems with it.
        So again I say, I have said to leaders of both parties and to the
    American people, I want to take care of more of the long-term problems
    of the entitlement, both Social Security and Medicare. I am amenable to
    doing it in any bipartisan process. I have the specific problems I
    mentioned on these two issues, but the number one thing is, we have got
    a great budget agreement. We should not alter it unless there is
    agreement among all the parties who made the budget agreement that it's
    acceptable to do because otherwise we risk undermining the prize that we
    have when we could achieve these other objectives as soon as the
    budget's done in an appropriate bipartisan forum.
        Bill [Bill Plante, CBS News] and Mara [Mara Liasson, National Public
    Radio]. Go ahead. We'll do one, two here.

    China

        Q. Mr. President, there's a report out today that your
    administration has chosen to ignore information that China is sending
    missiles to Pakistan, selling them in contravention of its 1994
    agreement, and also helping Pakistan to build a facility to manufacture
    the missiles. Is it true? If so, why did you ignore it? And will it have
    any effect on your MFN decision?
        The President. Well, first of all, you know I can't comment on
    intelligence reports or alleged intelligence reports. I would remind you
    that when we had clear evidence that China was providing ring magnets to
    Pakistan in ways that we thought were plainly violative of our law and
    our national interest, we dealt with them about that and were satisfied.
    And I think it's fair to say that on all these issues we will not
    overlook them, we will not walk away from them, and we will make
    appropriate determinations and take appropriate action. The national
    security of the country is always going to be the most important thing.
        Mara.

    Proposed Tobacco Agreement

        Q. [Inaudible]--your initial take on one of the aspects of the
    tobacco deal. You've said that you're concerned about the ability of the
    FDA to regulate tobacco as you have proposed allowing it to do in the
    rule. Can they do that if they have to prove that regulations would not
    create a black market? Some critics say that's an impossible thing to
    prove; the deal does require it. And isn't that just giving away the
    court victory that you just won?
        The President. Well, you see, I don't know the answer to that. But
    it concerned me, because the first thing I thought was, what happens if
    they go to a zero nicotine ruling, and

    [[Page 788]]

    the technology is available--obviously, the technology has to be
    available to do it since it's otherwise a legal product--how could you
    prove there wouldn't be a black market? What's the definition of black
    market? Is a one percent penetration a black market, or does it have to
    be 10?
        That's why I've been so reluctant to answer these questions. Not--
    I'll be happy to give you my opinion when I have a chance to study it,
    but that's why I want to take 30 days and look at this.
        I've also--let me tell you, I've been involved in these agreements.
    It's like this long budget agreement we did. And one of the things I can
    tell you is, when you're dealing with something with this many complex
    elements, if you are dealing in complete good faith and the other side
    is dealing in complete good faith, it is entirely possible that there
    were three or four things that were put in here that will have likely
    consequences that neither side anticipated.
        So that's why I would--I know that we're all in a hurry to sort of
    rush to judgment on this, and I understand that, but that's why we need
    to take the time to really analyze it and make sure there's not
    something there that would have an unintended consequence that, for all
    I know, neither party meant to have.
        Peter [Peter Maer, NBC Mutual Radio], I'll take you next. Go ahead.
    We'll do both of them.

    Budget Agreement

        Q. Mr. President, you said that you want to avoid time-bomb tax cuts
    in the budget deal, that you would insist on avoiding them. Would you
    also insist on including the $500 child care tax credit for the 4
    million working families? Is that something that you would insist upon?
        And number two, regarding the budget agreement, is it made more
    difficult to get it done by the Republican infighting?
        The President. Let me deal with the questions separately. First of
    all, on the tax credit, my position is that all working people should be
    made eligible for it--the Senate bill in that regard is better than the
    House bill--and that we shouldn't have some other offset, like reducing
    the child care credit as well as the children's tax credit in the new
    bill.
        I understand the Republicans are arguing because they want to save
    money on this to pay for the capital gains and the other things that
    they want. They're arguing that this is, in effect, a welfare thing
    because you're giving a child care credit to people who aren't paying
    income taxes--now, that's their argument--because of the other tax
    credits people are entitled to.
        But let's just take the income group they are dealing with, working
    families with incomes between $22,000 and $25,000. Now, suppose you've
    got a rookie police officer in a medium-size city in the South, the
    average entry-level salary is about $23,000, and it's a woman or a man
    with two kids at home. This police officer is paying Federal taxes, a
    considerable Federal payroll tax. And to treat--to characterize them as
    welfare recipients because they would be made eligible for the same help
    that people making $31,000 a year would get to raise their children, I
    think is wrong.
        So that's an area where we simply have a disagreement. I was
    encouraged that the Senate moved closer to us than the House. This is
    something I expect to work out.
        On the other question, I wouldn't--do I think we're not going to
    make an agreement because of reported divisions within Republican ranks?
    No, I do not expect that to be prohibitive. I think that there was a lot
    of tension within their caucus, obviously, over this disaster aid bill,
    but in the end they did the right thing. And the leaders did the right
    thing. And I think that nobody likes to go through that and have your
    position not prevail. And so that was understandable.
        But I think as time passes, they will see that their leaders did the
    right thing and that the country is better off and that we're moving in
    the right direction. So I don't expect splits to paralyze us.
        Peter.

    Proposed Tobacco Agreement

        Q. Sir, I'd like to ask you about an aspect of this tobacco deal
    where you do have some expertise, the legal aspect. What's your view of
    this concept of protecting the tobacco industry from lawsuits, from
    liability? What kind of legal and what kind of constitutional precedents
    would that set?
        The President. Well, as I understand it, it does not protect them
    from liability for actual damages. It protects them from liability for
    past punitive damages and still permits punitive damages if there is
    misconduct from the date of the agreement forward.

    [[Page 789]]

        Now, in the law, the purpose of punitive damages is to deter future
    destructive behavior. And the concept of punitive damages is provided
    not because the person suing is entitled to it because of his or her
    injuries but because you think the injuries are not enough--compensating
    this person is not enough to take the profit out of whatever antisocial
    conduct and illegal conduct the defendant was engaging in. So you
    enable--you have punitive damages to take the sting out of it.
        The people negotiating on behalf of the public--the attorneys
    general and the lawyers--as I understand it, got another $20 billion or
    so--Mike Moore described what it was--in a kind of advanced penalty
    fund--say, we're going to make you pay up front for the things you've
    done wrong. And that's how they--in the last few weeks, the agreement
    went from involving about 300 and something billion dollars to almost
    370 billion.
        So, that--I think--I can't answer your question except to say I'll
    sit down there, and I'll try to evaluate that. I will evaluate--it's an
    unusual and unique resolution. They got several billion dollars more out
    of the tobacco companies than they had been talking about getting. Can
    you have, in effect, an advance payment for punitive damages? Does it
    sort of--does that, plus all the other things that would be good from a
    consumer's point of view and the public's point of view, would that be
    enough to kind of offset the troublesome areas?
        You and this man and then--[inaudible]--the three of you; I'll take
    you real quick. And then I'll take some foreign journalists back there.

    Campaign Fundraising

        Q. Mr. President, the hearings on campaign fundraising will begin
    soon. And a number of key figures--people who worked for you or old
    friends have either fled the country or have said they would take the
    fifth amendment. Is there anything you can or should do to get them to
    come clean?
        The President. What we can do is to control what we're asked to do.
    We tried to be very cooperative, and all that we have asked is that the
    hearings be fair and bipartisan. And if they are, I think they'll serve
    a valid public purpose.
        Go ahead.

    China

        Q. The President, some of the critics of your decision to renew
    most-favored-nation trade status for China say that perhaps watching the
    transition of Hong Kong should have been taken into consideration before
    granting that status. Was that ever a consideration? And in your
    opinion, how realistic is a one-country, two-systems policy?
        The President. Well, the answer to the first part of your question
    is, we have to make this decision now, and I think we should now. This
    thing will obviously be revisited within a year. I think if we look like
    we were--again, I would say to you, China is a very large country. It
    has great ties with the rest of the world. If we were to basically say,
    the United States believes we can keep you on probation all by yourself,
    and we're going to see what you do, we're like assuming their bad faith.
    I think that would be a mistake.
        On the one-country, two-systems thing, I think it is realistic, but
    I think there will be some tensions there. And what we, of course, in
    the United States hope is that the tensions will steadily be resolved
    over time in favor of freedom and openness, free speech, personal
    freedom, and democracy.
        But let me remind you, 25 years ago, when President Nixon went to
    China, or in 1979 when President Carter recognized China and worked out
    the understandings of how we relate to China and how we would relate to
    Taiwan--there is plainly a lot more personal freedom and mobility and
    personal well-being in China today than there was then. In other words,
    our frustrations with China today are not measured against the standard
    of 1979 or 1972; they're measured with our deep disappointment and
    disagreement with 1989 and Tiananmen Square and our lack of success in
    persuading the Chinese to, in effect, go back to the status quo before
    Tiananmen Square and keep moving forward. In the life of a country like
    China, that's not such a long time. And I'm just not prepared to give up
    on our engagement policy. So that's all I can say about it.
        Bill.

    [[Page 790]]

    Proposed Tobacco Agreement

        Q. Mr. President, now that you have a U.S. tobacco agreement, would
    you favor and encourage some sort of international regulation of
    tobacco? And wouldn't this be a good G-7 issue?
        The President. Well, it might be. But the problem is, you know, the
    G-7 nations are not the primary place where the market is growing. I
    will say this, I hope that other countries around the world that are
    concerned with their own public health and who have primary
    responsibility for the well-being of their own people will look at what
    we've been trying to do here and ask themselves whether they should take
    some similar steps if they want to avoid very high death rates, very
    high disease rates, and enormous social costs.
        Could we have a few questions from the international press now?
    Would someone just stand up over here--anybody from the international
    press? Go ahead. We'll take a few there. Just stand up and I'll get
    around to you. Go ahead.

    Russia-Japan Territory Dispute

        Q. Mr. President, in your meetings here with the leaders of Japan
    and Russia, did you get the sense that the Northern Territories dispute
    between those two countries could be resolved? And do you see any U.S.
    role in that resolution process?
        The President. Yes, I think--well, first of all, I think the only
    appropriate United States role is to try to talk to each party on behalf
    of the other from the point of view of being friends with both. That is,
    this is an area where we plainly have no personal, tangible interest of
    any kind. We have no territorial interest, we have no financial
    interest. Our only interest is seeing two friends of ours get along, and
    trying to stabilize one more--the future of the Asia-Pacific region by
    removing one more deterrent to an alliance between a free and democratic
    Russia and our great ally in Japan.
        So I have talked to both Prime Minister Hashimoto and President
    Yeltsin about this on several occasions. They are beginning to talk
    about it among themselves. They will have to work it out. But,
    obviously, I'm very hopeful that it can be worked out.
        Yes, sir, the gentleman standing there.

    Japan-U.S. Trade

        Q. Mr. President, I think you have been waiting for too long for
    Japan's achievement of deregulation and administrative reforms. Could
    you tell us your opinion, as frankly as possible, on this matter?
        The President. Well, I agree with you. [Laughter] I agree with you.
        Here's the problem we're going to run into with Japan on the trade
    issue. We have made real progress over the last 4 years in our trading
    relations with Japan. It's become a real joy to be able to meet and work
    with Japan where trade was an issue, but not the only issue, and where
    we really thought we could identify the issues and make progress on
    them, that there was no big structural war going on, economic war,
    between the United States and Japan. And I think it has obviously not
    been bad for Japan either. I think it's been good for both of us.
        Now, the Prime Minister has reaffirmed his commitment to a domestic
    demand-led growth strategy for Japan and has put forward a very
    ambitious plan for internal reform and deregulation and opening of the
    Japanese economy. At the same time, he says, quite rightly, that all
    these advanced economies are going to face serious challenges from the
    aging of our populations. That's true. You've heard all the questions
    that were just asked of me about our medical programs. And Japan has an
    even older population than the United States, aging even more rapidly.
        So the decisions by the Japanese Government to try to pursue a path
    of fiscal austerity driven in part by the desire to prepare for the
    retirement and the aging of the Japanese population runs the risk of
    going back to the old export-driven strategy of growth. And we'll just
    have to work through those two conflicts. We can't tell the Japanese
    Government or the Japanese people that they can't prepare for the aging
    of their population. We have to do the same.
        On the other hand, I think they know that if we resort--we return to
    the time when we've got exploding trade deficits, then that will once
    again move front and center into our relations in a way that won't be
    good for either country, I don't think.
        Yes, sir.

    [[Page 791]]

    Russia

        Q. Mr. President, Russian President Yeltsin has played an important
    role in the Denver Summit. What's your reading--when will Russia be
    totally completed into the G-7 circuit as a new member?
        The President. Let me say, this year our commitment was to have
    Russia be a complete member of the Group of the Eight and to have the
    old G-7 meet only on issues that we had unique responsibility for
    because of our present financial standing. So I think it's fair that all
    of us look forward to the day when we don't even have to do that.
        But, just for example, we've got this project going on to help
    Ukraine deal with Chernobyl, and Russia is not responsible for what we
    committed to do before, nor would it be fair to ask Russia to bear any
    responsibility for that. So we had to meet and discuss it, and we did.
    There was nothing secret or esoteric about it; we just had to do what we
    were required to do, and we did that.
        But I think you will see continuing integration of Russia into full
    partnership. The next thing I want to see is Russia into the WTO, and
    we're working on that. So we'll just keep working at it, and as long as
    Russia keeps moving as it is under President Yeltsin, and those
    reformers and the people of Russia keep supporting the direction they
    have, I think that you'll see more and more good things ahead.
        This gentleman has been here a long time, and then this gentleman,
    and then we'll move over here.
        Q. Mr. President, what do you think? Is Russia now ready
    economically and politically to be a full member of the eight?
        The President. I think, yes, they're ready politically and ready
    economically in terms of what's--like the Paris Club membership. But I
    think there are still some things that the old G-7 have to do that it
    wouldn't even be fair to ask Russia to participate in, like this
    Chernobyl thing that I just mentioned. So there will be a smaller and
    smaller role for the seven as we go forward, and a bigger and bigger
    role--basically, this time we had a Summit of the Eight, with a small,
    little afterthought for what the seven still had to do to clean up our
    old business. But I think that, with great prosperity, I think you'll
    see any last little dividing line blurring.
        Yes, sir. These three gentlemen there are fine. Just take them in
    any order.
        Q. Mr. President, I was wondering, how do you think Russia will
    change the balance of forces--or maybe I should say the balance of
    interests within the group now that Russia has joined, specifically
    between U.S. and Europe?
        The President. Well, I hope that Russia will change in two ways that
    I would consider to be immensely positive. One is, I think the
    participation of Russia here, just like the NATO-Russia Founding Act,
    increases the chances that we can maintain stability in Europe in the
    20th century and that we can deal with any problems that arise like
    we're dealing with them in Bosnia, to prevent the outbreak of widespread
    war in Europe.
        The second thing I think is very positive is Russia, don't forget,
    is also a great Pacific power. So in bringing Russia into this
    partnership along with Japan, you will see a little more emphasis, I
    think, on what we can do as a group to deal with what's going on in Asia
    in preserving stability and freedom and opportunity there.
        So in those ways, I think you'll see the texture of this change. And
    you could see it just in the way President Yeltsin operated here at this
    meeting, where I might say I thought he did an extraordinary job.
        Yes, sir.

    Bosnia

        Q. Mr. President, can you assure us that by the time of the next
    summit, the main war criminals in Bosnia will finally have been
    arrested?
        The President. I can't promise you that, but I can tell you that's
    what I support. And I support--generally, I think that it's going to be
    difficult to implement the full spirit of the Dayton accord unless you
    see some progress on the war criminals front, number one. And number
    two, as you may know, I have felt for some time, with so much ethnic and
    racial and religious and tribal hatred in the world, that there probably
    should be an international war crimes tribunal that is permanently
    established and goes forward, because I think that what we see in Bosnia
    is just one example of a whole set of very serious problems.
        This young man in the back has been very patient. Let me take his
    question.

    [[Page 792]]

    Summit of the Eight Accomplishments

        Q. Good afternoon, Mr. President. My name is Colton Alton. I am a
    student taking an international course on the summit with the University
    of Colorado, CU On-Line. There are 450 students internationally, from
    each of the countries. On behalf of the 450 students, what do you feel
    was the most significant accomplishment with this year's summit?
        The President. I think the most significant thing we did here was to
    commit ourselves to a growth strategy that would include not only our
    own countries but other countries around the world, and that would be
    pursued while improving, not undermining, the environment. And that's
    quite significant.
        We've said these things specifically before, but here we said, look,
    we're coming up to Kyoto where we're all bound to adopt legally binding
    targets to reduce greenhouse gas emissions. So that means we have to
    grow our economies while improving our environments, number one.
        And then we said, we're going to reach out to Africa, we're going to
    reach out to the developing countries of Asia and Latin America, that
    our prosperity depends upon their prosperity.
        And to me, I would hope that the students who follow this on-line
    would look at the world in that way, would see America as a unifying,
    not a divisive force in the world, and would embrace the fact that our
    prosperity should depend upon others and upon living in harmony with our
    environment.
        I'll take one more, this gentleman here.

    North Korea

        Q. The communique, just as you said, will test the importance of
    four-party talks. Why didn't you urge North Korea to participate in the
    four-party talks? And I would like to ask you, what is your prospect of
    the four-party meetings?
        The President. Why does the communique not urge North Korea to
    participate? Is that the question you asked?
        Q. Yes.
        The President. I would say that it is an oversight and we should
    have, because I do every time I can. And secondly, I'm fairly optimistic
    now because North Korea has agreed to participate in a meeting to
    determine the conditions in which they would meet with the South Koreans
    and the Chinese and the United States to set out these four-party talks.
    So I'm fairly encouraged by that.
        Go ahead.

    China and Taiwan

        Q. [Inaudible]--over China will definitely try very hard to sell the
    so-called one-country, two-system formula and hope Taiwan will be on
    board. And apparently the leaders in Taiwan made it clear that that
    formula is not acceptable for them. So I wonder what will be the U.S.
    policy on Taiwan after Hong Kong is turned over, and whether the U.S.
    will buy this one-country, two-system formula on the issue of Taiwan.
        The President. Well, the most important element of United States
    policy will not change as it relates to Taiwan, and that is that there
    can be no forcible resolution of that issue, and that while we accept
    the idea of one China, it has always been our policy, for some years
    now, as you know, we also--a critical part of that policy is that the
    people of Taiwan and the people of China must resolve their differences
    in a peaceable way, agreeable to all.
        So that's the only really critical element that we have to reaffirm
    there. I think the people of Taiwan are going to be--and the leaders of
    Taiwan will be watching how the Hong Kong transition goes, and I think
    that their attitude about what their own position should be will
    probably be affected by that.
        Thank you very much.

    Note: The President's 148th news conference began at 2:25 p.m. at the
    Colorado Convention Center. In his remarks, he referred to Susanna
    Agnelli, former Foreign Minister of Italy; Prime Minister Tony Blair of
    the United Kingdom; Attorney General Michael Moore of Mississippi;
    Robert D. Reischauer, former Director, Congressional Budget Office;
    Prime Minister Ryutaro Hashimoto of Japan; and President Boris Yeltsin
    of Russia.

    [[Page 793]]