[Weekly Compilation of Presidential Documents Volume 33, Number 26 (Monday, June 30, 1997)]
[Pages 926-937]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 shockwaves 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.

[[Page 927]]

    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 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?
    President Clinton. 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

[[Page 928]]

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 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

[[Page 929]]

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 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

    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

[[Page 930]]

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. 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?

    President Clinton. 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.

[[Page 931]]

    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, 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 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

[[Page 932]]

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 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, 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?

[[Page 933]]

    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.
    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 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 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.

[[Page 934]]

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. President Clinton, 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.

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?
    President Clinton. 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,

[[Page 935]]

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.

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.

[[Page 936]]

    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.

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 for 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.

[[Page 937]]

    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; Mississippi State Attorney 
General Michael Moore; Robert D. Reischauer, former Director, 
Congressional Budget Office; and Prime Minister Ryutaro Hashimoto of 
Japan.