[Weekly Compilation of Presidential Documents Volume 32, Number 21 (Monday, May 27, 1996)]
[Pages 894-898]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the Pacific Basin Economic Council

May 20, 1996

    Thank you very much. Mr. Tooker, Mr. Fynmore, Mr. Lees, members of 
the administration, my fellow Americans, and our guests from all around 
the world. Welcome to Washington and welcome to Constitution Hall.
    For nearly three decades the Pacific Basin Economic Council has 
stood on the cutting edge of trade, investment, and opportunity. Today, 
with 19 member nations from Mexico to Malaysia, you're an integral part 
of this vibrant Asia-Pacific community. I am especially grateful for 
your active support of APEC.
    Today I am pleased to announce the appointment of three talented 
Americans to the new APEC Business Advisory Council: Frank Shrontz, 
Susan Corrales-Diaz, and Robert Denham. I also want to say a very 
special thank you to Les McCraw of the Fluor Corporation for his 
tremendous contribution to APEC's Pacific Business Forum over the last 2 
years.
    The world has changed a lot since 1967, when PBEC was founded. 
Superpower confrontation has given way to growing cooperation. Freedom 
and democracy are on the march. Modern telecommunications have collapsed 
the distances between us. The new global economy is transforming the way 
we work and live, bringing tremendous opportunities for all our peoples. 
So many of these opportunities and some of our most significant 
challenges lie in the Asia-Pacific region.
    Today half the people on our planet live in Asia. China alone is 
growing by the size of Canada every 2 years. Asia contains four of the 
seven largest militaries in the world, and two of its most dangerous 
flashpoints: the world's most heavily fortified border between North and 
South Korea, and the regional conflict in South Asia where India and 
Pakistan, two of America's friends, live on the edge of conflict or 
reconciliation. At the same time, the economies of East Asia have become 
the world's fastest growing, producing fully one-quarter of our planet's 
goods and services.
    America has vital strategic and economic interests that affect the 
lives of each and every American citizen. We must remain an Asia-Pacific 
power. Disengagement from Asia, a region where we have fought three wars 
in this century, is simply not an option. It could spark a dangerous and 
destabilizing arms race that would profoundly alter the strategic 
landscape. It would weaken our power to deter states like North Korea 
that still can threaten the peace, and to take on problems, including 
global terrorism, organized crime, environmental threats, and drug 
trafficking in a region that produces 62 percent of the world's heroin.
    Our leadership in Asia, therefore, is crucial to the security of our 
own people and to the future of the globe. It is also important to our 
future prosperity. The Asia-Pacific region is the largest consumer 
market in the world, accounting already for more than half of our trade 
and supporting millions of American jobs. By the year 2000 auto sales in 
Indonesia, Malaysia, and Thailand could equal our car sales to Canada 
and Mexico. Over the next 10 years, Asian nations will invest more than 
$1 trillion in infrastructure projects alone. We can help to shape a 
region's open economic development, but if we sit on the sidelines we 
could watch our own prosperity decline.
    When I took office, I had a vision of a Asia-Pacific community built 
on shared efforts, shared benefits, and shared destiny, a genuine 
partnership for greater security, freedom, and prosperity. Given all the 
currents of change in the region, I knew then and I know now the road 
will not be always even and smooth. But the strategy is sound, and we 
have moved forward steadily and surely toward our goal.
    With both security and economic interests so deeply at stake, we 
have pursued from the outset an integrated policy, pursuing both fronts 
together, advancing on both fronts together. Though the end of the cold 
war has lessened great power conflict in Asia and in Europe, in Asia, 
just as in Europe, a host of security challenges persist, from rising 
nationalism to nuclear proliferation, to drug trafficking, organized 
crime, and other problems.

[[Page 895]]

    To meet these tests in Europe we are adapting and expanding NATO, 
emphasizing the Partnership For Peace, including a new and more 
constructive relationship with Russia which is, or course, both a 
European and a Pacific nation and, therefore, must be a partner in 
making a stable and prosperous Asia Pacific future as well.
    Asia has not evolved with similar unifying institutions, like NATO, 
so we are working with Asia to build new security structures, flexible 
enough to adapt to new threats, durable enough to defeat them. Each 
arrangement is like an overlapping plate of security armor, working 
individually and together to protect our interests and reinforce peace.
    Our security strategy has four fundamental priorities: a continued 
American military commitment to the region, support for stronger 
security cooperation among Asian nations, leadership to combat the most 
serious threats, and support for democracy throughout the region. To 
pursue that strategy, we have updated and strengthened our formal 
alliances with Japan, Korea, the Philippines, Australia, and Thailand. 
We have reaffirmed our commitment to keep 100,000 troops in the region.
    Just a few weeks ago, we renewed our security alliance with Japan 
and moved to reduce the tensions related to our presence on Okinawa. 
Today, that security relationship is stronger than ever. We have reached 
a series of security access agreements, magnifying the impact and 
deterrent effect of our forward deployed force. We have supported the 
ASEAN nations in building a new security dialog \1\ in a region long 
fractured by distrust. We have launched new security initiatives such as 
the four-party talks President Kim and I proposed in an effort to bring 
a permanent peace to the Korean Peninsula.
    \1\ White House correction.
    With our South Korean allies, we stopped the North Korean nuclear 
threat that had been brewing since 1985 when North Korea began to build 
a plutonium production reactor. Through firmness and steadiness, we 
gained an agreement that has already halted and eventually will 
dismantle North Korea's nuclear weapons program. Today, a freeze is in 
place under strict international supervision. And last month, we began 
the canning of North Korea's spent fuel. One of the greatest potential 
threats to peace is, therefore, being diffused with American leadership.
    We are meeting today's missile threat to the region by building 
advanced ballistic missile defense systems to protect our troops and our 
allies. We have deployed upgraded Patriot missiles to South Korea. We 
are upgrading the 21 battalions of Patriot systems in Japan and jointly 
examining future requirements with the Japanese government. We recently 
reached an agreement with Taiwan that will provide them with a theater 
missile defense capability. And we are developing even more advanced 
systems for deployment in the next few years, such as the Navy Lower 
Tier, THAAD, and Navy Upper Tier programs. The latter two address 
longer-range missile threats.
    When China expanded its military exercises in the Taiwan Strait, we 
made clear that any use of force against Taiwan would have grave 
consequences. The two carrier battle groups we sent to the area helped 
to defuse a dangerous situation and demonstrated to our allies our 
commitment to stability and peace in the region. In the long run we also 
strengthen security by deepening the roots of democracy in Asia.
    Democratic nations, after all, are more likely to seek ways to 
settle conflicts peacefully, to join with us to conquer common threats, 
to respect the rights of their own people. Democracy and human rights 
are, I believe, universal human aspirations. We have only to look at 
South Korea, the Philippines, and Taiwan, the Cambodians who turned from 
bullets to ballots to build a democratic future, Burma's Aung San Suu 
Kyi, and other courageous leaders in the area.
    We will continue to support our shared ideals in Asia, as elsewhere, 
encouraging reform, shining the spotlight on abuse, speaking out for 
those whose voices are silenced. Reinforcing the security pillar of 
America's relationships in Asia also advances American economic 
interests. Security and stability unleash resources for human progress, 
saving for the future, investing in education and enterprise, expanding 
trade, drawing the region closer together, and making the case for

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peace stronger and stronger. As with our security strategy, our economic 
strategy in Asia employs all the tools available--multilateral, 
regional, and bilateral--to open markets and thereby create more 
opportunities and jobs for Americans.
    Soon after I became President, as all of you know, I called for the 
first ever summit meeting of Asian-Pacific leaders. At that historic 
meeting in Washington State, leaders from China to Indonesia to Brunei 
embraced a common vision of an Asia-Pacific community of shared 
strength, prosperity, and peace. One year later in Indonesia, we made a 
landmark commitment to achieve free trade and investment in the region 
by the year 2020. And last year in Japan, APEC adopted an action plan to 
get there.
    Next November in Manila, I am confident we will take steps toward 
concrete measures to lower trade and investment barriers. With APEC, 
NAFTA, our efforts in this hemisphere and the World Trade Organization, 
the United States is working to lead the construction of a new global 
trading system, a world of expanding markets and fairer rules in which 
America can thrive and people all over the world can have a chance to 
live out their destinies and dreams as well.
    Country to country, we are restoring health and balance to our 
economic relations through firm negotiations and tough action where 
necessary, to open markets for our goods and services, today the most 
competitive in the world. In the past 3 years, our own exports have 
boomed. They're up over 35 percent to an all-time high, creating a 
million new jobs that consistently pay more than jobs that are not 
related to exports. I'm proud to say that once again our Nation is the 
number one exporting country in the world. You can see the results of 
our strategy in the progress we have made in working with our friends in 
Japan. Today we are selling more goods to Japan than ever before. Our 
bilateral trade deficit in the first quarter was down 25 percent from 
last year. Since 1993, our two nations have signed 21 trade agreements, 
focusing on sectors where America's competitiveness is strongest. Our 
exports in those 21 areas are up 85 percent, three times faster than the 
rest of our export growth in Japan.
    In Tokyo today a consumer can drive to work in a Chrysler jeep, talk 
with a friend on a Motorola telephone, snack on an apple from Washington 
State, and have American rice for dinner. Of course, a Japanese speaker 
could say the same thing about an American using all Japanese products, 
but it's nice now that both of us can tell that story. Of course, our 
work is not done. We must achieve further progress. But we are making a 
real difference for American exports and jobs.
    Finally, let me turn to our relations with China, for they will 
shape all of our futures profoundly. How China defines itself and its 
greatness as a nation in the future and how our relationship with China 
evolves will have as great an impact on the lives of our own people and, 
indeed, on global peace and security, as that of any other relationship 
we have.
    China is Asia's only declared nuclear weapons State, with the 
world's largest standing army. In less than two decades it may well be 
the world's largest economy. Its economic growth is bringing broader 
changes as steps toward freer enterprise fuel the hunger for a more free 
society. But the evolution underway in China is far from clearcut or 
complete. It is deep and profound, and today, China stands at a critical 
crossroads. Will it choose the course of openness and integration, or 
veer toward isolation and nationalism? Will it be a force for stability, 
or a force for disruption in the world? Our interests are directly at 
stake in promoting a secure, stable, open, and prosperous China, a China 
that embraces international non-proliferation, and trade rules, 
cooperates in regional and global security initiatives, and evolves 
toward greater respect for the basic rights of its own citizens.
    Our engagement policy means using the best tools we have, incentives 
and disincentives alike, to advance core American interests. Engagement 
does not mean closing our eyes to the policies in China we oppose. We 
have serious and continuing concerns in areas like human rights, non-
proliferation, and trade. When we disagree with China, we will continue 
to defend our interests and to assert our values. But by engaging China, 
we have achieved important benefits for our people and the rest of the 
world.

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    We worked closely with China to extend the nuclear nonproliferation 
treaty and to freeze North Korea's nuclear weapons program. We welcome 
China's constructive position regarding the proposed four-party talks 
for peace on the Korean Peninsula. We are working with China to conclude 
and to sign a comprehensive nuclear test ban treaty by September. And we 
are cooperating to combat threats like drug trafficking, alien smuggling 
and, increasingly, environmental decay.
    Last week we reached an important understanding with China on 
nuclear exports. For the first time, China explicitly and publicly 
committed not to provide assistance to unsafeguarded nuclear programs in 
any country. China also agreed to hold consultations on export control 
policies and practices. We continue to have concerns about China's 
nuclear exports. This agreement provides a framework to help deal with 
those concerns.
    Our economic engagement with China has also achieved real results. 
China's elimination of more than 1,000 quotas and licensing requirements 
has helped to fuel to rise of more than 200 percent in United States 
exports of telecommunications equipment since 1992. China has become our 
fastest growing export market, with exports up nearly 30 percent in 1995 
alone.
    Much remains to be done. Our bilateral trade deficit with China is 
too high, and China's trade barriers must come down. But the best way to 
address our trade problems is continue to work to open China's booming 
market by negotiating and enforcing good trade agreements. That is why 
we will use the full weight of our law to ensure that China meets its 
obligations to protect intellectual property. That is why we are 
insisting that China meet the same standard of openness applied to other 
countries seeking to enter the WTO--no more, no less. And that is why I 
have decided to extend unconditional most favored nation trade status to 
China.
    Revoking MFN and, in effect, severing our economic ties to China, 
would drive us back into a period of mutual isolation and recrimination 
that would harm America's interests, not advance them. Rather than 
strengthening China's respect for human rights, it would lessen our 
contact with the Chinese people. Rather than limiting the spread of 
weapons of mass destruction, it would limit the prospect for future 
cooperation in this area. Rather than bringing stability to the region, 
it would increase instability, as the leaders of Hong Kong, Taiwan, and 
all the nations of the region have stated repeatedly. Rather than 
bolstering our economic interests, it would cede one of the fastest-
growing markets to our competitors.
    MFN renewal is not a referendum on all China's policies. It is a 
vote for America's interests. I will work with Congress in the weeks 
ahead to secure MFN renewal and to continue to advance our goal of a 
secure, stable, open, and prosperous China. This is a long-term 
endeavor, and we must be steady and firm.
    Where we differ with China--and we will have our differences--we 
will continue to defend our interests. We will keep faith with those who 
stand for greater freedom and pluralism in China, as we did last month 
in cosponsoring a U.N. resolution condemning China's human rights 
practices. We will actively enforce U.S. laws on unfair trade practices 
and nonproliferation. We will stand firm for a peaceful resolution of 
the Taiwan issue within the context of the one China policy, which has 
benefited the United States, China, and Taiwan for nearly two decades. 
But we cannot walk backward into the future. We must not seek to isolate 
ourselves from China. We will engage with China, without illusion, to 
advance our interests in a more peaceful and prosperous world.
    Asia is in the midst of an historic transformation, one America 
helped to inspire and one we cannot afford to ignore. I have spoken 
today about challenge and change, but I pledge to you as President of 
the United States that one thing remains unchanging, and that is 
America's commitment to lead with strength, steadiness, and good 
judgment.
    Working together with groups like yours and others, our nations can 
rise to the challenges of this time, reinforcing our strength and 
prosperity into the 21st century. We can build an Asia-Pacific region 
where fair and vigorous economic competition is a source of opportunity, 
where nations work as partners to protect our common security, where

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emerging economic freedoms are bolstered by greater political freedoms, 
where human rights are protected and diversity is respected.
    We can build a Pacific future as great as the ocean that links our 
shores. Let us pray that we have the wisdom, the courage, and the 
firmness to do that.
    I thank you for your dedication to that goal. Thank you very much.

Note: The President spoke at 10:12 a.m. in Constitution Hall. In his 
remarks, he referred to Gary Tooker, vice chairman, Russell Fynmore, 
chairman, and Robert Lees, secretary-general, Pacific Basin Economic 
Council International; and Daw Aung San Suu Kyi, Burmese opposition 
leader and Nobel Peace Prize laureate.