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III. Integrated Regional Approaches

Our policies toward different regions reflect our overall strategy and guiding principles but must be tailored to the unique challenges and opportunities of each region. Thus, each uses a different application of the elements of engagement and does so in differing degrees. Each region may have its own focused strategic objectives, but, in the end, enhancing our own and the region's security while promoting prosperity, democracy, and human rights are still the ultimate goals.

Europe and Eurasia

European stability is vital to our own security. The United States has three strategic goals in Europe: integration of the region, a cooperative transatlantic relationship with Europe on global issues, and fostering opportunities while minimizing proliferation risks posed by collapse of the Soviet Union. The first goal, building a Europe that is truly integrated, democratic, prosperous, and at peace, would realize a vision the United States launched more than 50 years ago with the Marshall Plan and NATO. The greatest challenge to that remains the integration of Southeastern Europe into the rest of Europe, a strategic objective the United States shares with its NATO allies and the EU. The United States, its allies, and the EU recognize that continued instability, ethnic conflict, and potentially open warfare in Southeastern Europe would adversely affect European security and set back the process of creating a Europe that is truly whole and free. Accordingly, our strategy involves a series of interlocking building blocks, the progressive and interactive implementation of which will achieve step-by-step shared objectives. The building blocks identified below define our common priorities for Southeastern Europe, and -- more importantly -- the pursuit of each helps the attainment of all:

Coexistence among ethnic groups and the rebuilding of civic society;

Promotion of the return of refugees and displaced persons to their homes to undo the pernicious consequences of ethnic cleansing;

Economic reform and revitalization, leading to sustainable economic growth;

Democratic government based on the rule of law and full respect for human rights;

Support for the nascent democratic government in the Federal Republic of Yugoslavia (FRY) as a means for advancing its return to the international community;

A peaceful resolution of the status of Montenegro and Kosovo through arrangements acceptable to all sides;

Strengthening regional cooperation as a basis for the region's revitalization and eventual integration with the rest of Europe;

Adherence to international agreements such as the Dayton Accords, especially in recognition of international boundaries.

We are making progress towards our objectives. With the toppling of the Milosevic regime and the ascension of President Kostunica and his government, the process of transition from authoritarian rule to democratic governance is underway in the FRY. The United States and the international community support democratization and economic reform in the FRY to ensure long-lasting change, the removal of impediments to positive social, political, and economic change, and the stability and growth of the entire region of Southeastern Europe. Democratic consolidation and Western integration of the FRY will not be easy, but the United States stands ready to contribute to the achievement of these long-awaited goals.

Elsewhere in Southeastern Europe, elections in Croatia this year saw the victory of a pro-Western, pro-reform government that has become a constructive and stabilizing force in the region. Reform-minded leaders in Macedonia, Albania, and Slovenia continue to press forward with difficult economic reforms. Croatia and Albania both became WTO members this year, on the basis of commercially meaningful commitments that bolster their economic reform programs. Moderate pro-Dayton elements share political power in Bosnia. Kosovars had the opportunity to choose local leaders for the first time this year in Kosovo's democratic elections, and relatively moderate candidates were elected by large majorities. The FRY's new democratic leadership is moving quickly to integrate their nation into Europe and restore constructive cooperation with its neighbors. But much work remains. Economic and political reforms that will allow Southeastern European nations to move forward towards European integration must be accelerated. While Milosevic is out of power in the FRY, democratic change has not yet been consolidated and the new government faces a difficult winter. Greater ethnic reconciliation in Bosnia and Kosovo remains elusive. Security conditions allowing eventual withdrawal of U.S. troops from the region have still not been fully realized. Without a broad strategy of engagement and strong U.S. leadership, our vision of a stable, democratic, and prosperous Europe will not be realized.

Our second goal is to work with our allies and partners across the Atlantic to meet the global challenges no nation can meet alone. This means working together to consolidate this region's historic transition in favor of democracy and free markets; supporting peace efforts in troubled areas both within and outside the region; tackling global threats such as the potential use and continued proliferation of NBC weapons, terrorism, drug trafficking, international organized crime, environmental, problems, or health crises; mass uncontrolled migration of refugees, and building a more open world economy without barriers to transatlantic trade and investment.

Our third goal is to develop the opportunities opened by the collapse of the Soviet Union while minimizing the associated proliferation risks. Russia, Ukraine, and the other New Independent States (NIS) today are undergoing fundamental changes to their political, economic, and social systems -- the outcome will have a profound impact on our own future and security. Core U S. security interests are being advanced through our engagement with these countries, such as through U.S. efforts to help secure and dismantle the former Soviet arsenal of weapons of mass destruction. Our engagement also helps frame the key choices that only the peoples of the former Soviet Union and their leaders can make about their future, their role in world affairs, and the shape of their domestic political and economic institutions. Our strategy utilizes a long-term vision for the region, recognizing that this unprecedented period of transition will take decades, if not generations to complete.

Enhancing Security

NATO remains the anchor of U.S. engagement in European security matters, the foundation for assuring collective defense of Alliance members, and the linchpin of transatlantic security. As the leading guarantor of European security and a force for European stability, NATO must play a leading role in promoting a more integrated and secure Europe; one prepared to respond to new challenges. At the same time, the United States actively supports the efforts of our European partners to develop their own European Security and Defense Policy (ESDP). We further support European efforts to increase and improve capabilities for collective defense and crisis response operations, including the capability to act militarily under the EU when NATO, as a whole, is not engaged. We seek a relationship that will benefit current, and the potential future, members of both organizations, and we intend to remain fully engaged in European security issues, both politically and militarily. The United States has maintained approximately 100,000 military personnel in Europe to fulfill our commitments to NATO. They provide a visible deterrent against aggression and coercion, contribute to regional stability, respond to crises, sustain our vital transatlantic ties, and preserve U.S. leadership in NATO.

NATO is pursuing several initiatives to enhance its ability to respond to the new challenges it will face in the 21st century. At NATO's Fiftieth Anniversary Summit in April 1999, Alliance leaders adopted an expansive agenda to adapt and prepare NATO for current and future challenges. This included an updated Strategic Concept, which envisions a larger, more capable and more flexible Alliance, committed to collective defense and able to undertake new missions. The Defense Capabilities Initiative (DCI) aims to improve defense capabilities and interoperability among NATO military forces, thus bolstering the effectiveness of multinational operations across the full spectrum of Alliance missions, to include Partner forces where appropriate. NATO and the EU are also forging a strategic partnership that will further reinforce European capabilities and contributions to transatlantic security. NATO's WMD Initiative, the other activities of NATO's senior groups on proliferation, and U.S. bilateral NBC defense cooperation with key allies, will increase the ability of the Alliance to counter the threat of NBC weapons and their means of delivery.

NATO enlargement has been a crucial element of the U.S. and Allied strategy to build an undivided, peaceful Europe. At the April 1999 NATO Summit, the alliance welcomed the entry of Poland, Hungary and the Czech Republic as new members. The accession of these three nations has made the Alliance stronger and has reinforced Europe's zone of democratic stability.

Together with our allies, we are pursuing efforts to help other countries that aspire to membership become the best possible candidates. These efforts include the NATO Membership Action Plan and the Partnership for Peace. We are also continuing bilateral programs to advance this agenda, such as the President's Warsaw Initiative, which is playing a critical role in promoting Western-style reform of the armed forces of Central and Eastern Europe, and Eurasia and helping them become more interoperable with NATO. Some European nations do not desire NATO membership, but do desire strengthened ties with the Alliance. The Partnership for Peace provides an ideal vehicle for such relationships. It formalizes relations, provides a mechanism for mutual beneficial interaction, and establishes a sound basis for combined action, should that be desired. This can be seen in the major contributions some Partnership for Peace members have made to NATO missions in the Balkans. Also, on a bilateral basis, the United States has concluded security of classified information agreements with all former Warsaw Pact countries.

NATO is pursuing several other initiatives to enhance its ability to respond to new challenges and deepen ties between the Alliance and Partner countries. NATO's Euro-Atlantic Partnership Council continues to strengthen political dialogue and practical cooperation with all partners, and the Alliance values its distinctive partnership with Ukraine, which provides a framework for enhanced relations and practical cooperation. We welcome Russia's re-engagement with NATO and Permanent Joint Council on the basis of the 1997 NATO-Russia Founding Act. Our shared goal remains to deepen and expand constructive Russian participation in the European security system.

The Organization for Security and Cooperation in Europe (OSCE) has a key role to play in enhancing Europe's stability. It provides the United States with a venue for developing Europe's security architecture in a manner that complements our NATO strategy. In many instances, cooperating through the OSCE to secure peace, deter aggression, and prevent, defuse and manage crises, broadens international support for the resolution of a particular security issue, and gives regional actors greater latitude to develop their own stability mechanisms. The Charter also recognizes that European security in the 21st century increasingly depends on building security within societies as well as security between states. In Istanbul, President Clinton joined the other 29 parties to the Treaty on Conventional Armed Forces in Europe (CFE) in signing the CFE Adaptation Agreement, which will replace obsolete bloc-to-bloc force limitations with nationally-based ceilings and provide for enhanced transparency of military forces through increased information and more inspections. The United States will continue to give strong support to the OSCE as our best choice to engage all the countries of Europe, the Caucasus, and Central Asia in an effort to advance democracy, human rights and the rule of law, and to encourage them to support one another when instability, insecurity, and human rights violations threaten peace in the region.

Kosovo - Securing the Peace

On March 24,1999, after repeated attempts at diplomatic solutions had failed, NATO intervened militarily to end a vicious campaign of ethnic cleansing launched by the Milosevic regime in Belgrade against the ethnic Albanian community in Kosovo. During the eleven-week air campaign that comprised Operation Allied Force, fourteen of the Alliance's nineteen members participated in more than 38,000 combat sorties, almost one third the number flown during the 1991 Desert Storm campaign. In the end, due to the application of force in concert with continued international pressure, Milosevic capitulated, agreeing to NATO's conditions including the return of all refugees, the withdrawal of his military and police forces, and the deployment of an international civil and military presence. This unprecedented display of alliance solidarity ended Belgrade's reign of terror and prevented the real risk that violence in Kosovo would create turmoil throughout the region, undermining its new, fragile democracies and reversing our progress in Bosnia and Herzegovina. NATO's intervention also set the conditions for creating a stable, peaceful, and democratic way of life in Kosovo.

Today, assisting the international community to accomplish those objectives is a NATO-led force (KFOR) of approximately 40,000 personnel from nearly 35 countries (including 6,000 Americans) who continue to protect the peace achieved by last year's military action. The United States never commits its military forces lightly; the decision to contribute to KFOR was firmly grounded in the assessment that national interests, in particular European security and stability, were at stake. At the same time, compared to IFOR and SFOR, we were able to share more of the burden with our European allies, with U.S. troops comprising only 15% of the NATO-led force.

The international community continues to assist refugees and displaced persons to return to their homes and communities, a critical step to social renewal. To date, more than 898,000 Kosovars from diverse ethnic backgrounds have returned (many with the help of KFOR).

Rebuilding infrastructure and promoting economic growth is critical to the hope that one day Kosovo will have a sustainable free market economy. To this end, more than 36,000 new homes have been constructed and more than 70% of private enterprises have been restarted since the end of the war. Much more remains to be done, but the list of impressive economic achievements continues to grow. Supporting democratic institutions and processes is crucial component of our strategy. In October 2000, free and open municipal elections were held for the first time in Kosovo's history, a key step in establishing the autonomous institutions necessary for the Kosovars to govern themselves.

Finally, we continue to promote multiethnic reconciliation in recognition that real democracy requires peaceful coexistence among all ethnic groups and credible protection for minority rights. Statistics indicate a dramatic decline in crime over the past year in Kosovo; however, sporadic ethnic violence still challenges the international community and requires our vigilance.

Today, Kosovo is largely an international protectorate focused on rebuilding itself and inculcating respect for the rule of law. As these intermediate goals are attained, however, Kosovo will continue its journey toward becoming a self-administering democratic community within a unified Europe. Kosovo's final status will ultimately be determined through a political process. The United States will work closely with the EU to ensure that the necessary political and economic environment exists to allow Kosovo's final status to be resolved eventually.

Federal Republic of Yugoslavia (Serbia and Montenegro) - Promoting Democracy

The prospects for sustained peace, stability, and growth throughout the region have improved with the removal of President Milosevic and the election of FRY President Kostunica. President Kostunica's victory signaled the end of destructive and isolationist policies of the Milosevic regime. His government has indicated a desire to seek a future with Europe. The United States remains committed to the people of Serbia and we will support the new democratic governments stated aspirations to reintegrate into Europe and the international community, and to use the transition as an opportunity to foster democracy and market reform in the FRY.

In Montenegro, the democratically elected government of President Djukanovic has made significant progress in implementing political and economic reforms. The United States will continue to support Montenegro and encourage dialogue and negotiation between Montenegro and the new democratic government in Belgrade.

In cooperation with our allies and the international community, efforts are underway to reintegrate the FRY into regional and international organizations. For example, in October 2000, the United States supported FRY admission into the Stability Pact and the United Nations. In November 2000, the U.S. supported the FRY's entry into OSCE. The FRY has also begun discussions with the IMF and World Bank on membership -- as one of the successor states to the Socialist Federal Republic of Yugoslavia -- and has asked to join the European Bank for Reconstruction and Development (EBRD). To bolster the FRY's democratic transition, the United States supported removal of the energy embargo and the travel ban, while maintaining sanctions on financial transactions and trade that could still benefit Milosevic and his cronies. The United States is assessing Serbia's immediate and long-term assistance and humanitarian needs, and is promoting dialogue and negotiation between Montenegro, Kosovo and a new democratic Serb government. While the success of the Kostunica government's effort to consolidate power and build democracy is by no means certain, and while peace in the region remains fragile, the United States stands ready to support the Serbian people at this historic moment in their efforts to have the FRY become a productive member of the international community of democracies.

Bosnia - Implementing Dayton

The full implementation of the Dayton Peace Accords is key to developing Bosnia as a stable, peaceful and economically viable state within Southeastern Europe. Dayton implementation will not only foster Bosnia's integration with Europe, but will also provide the conditions for eventual withdrawal of U.S. troops. To that end, we continue to support the return of refugees, implementation of political and economic reforms, the weakening of the nationalist political parties' grip on political and economic power, the strengthening of state institutions, the reform and integration of the Entity Armed Forces, and the apprehension of remaining war criminals.

While Dayton implementation continues to be measured and incremental, we are making progress. Refugee returns have increased significantly in 2000, in part due to a more secure environment established by NATO-led forces and international financial support. The improved security situation has allowed SFOR to reduce the number of troops in Bosnia from IFOR's initial commitment of 60,000 soldiers in 1995 to current levels of 20,800 -- a reduction by roughly two-thirds. Further progress in implementing Dayton will allow for further reduction in our military presence.

Along with the international community, we continue to press Bosnian officials to accelerate efforts to promote the rule of law, fight corruption, institute economic reforms and create stable state institutions, including those associated with the armed forces. Recent elections have seen growing political pluralism among the electorate and the advancement of moderate, pro-Dayton parties. We seek to support these trends.

Bosnia has benefited from dramatic political change in Croatia, where a reform-oriented government was elected earlier this year. Upon taking power, the new government sent Bosnian Croats the unequivocal message that their future was in Bosnia, not Croatia, and that they should support the full implementation of the Dayton Accords. Croatia's new political orientation has led to the rise of moderate forces in the dominant Bosnian Croat political party and has resulted in a significant decline in Croatian support for the Bosnian Croat component of the Federation army, a necessary step for full military integration in the Federation.

Unfortunately, in the Republika Srpska (RS) some hard-line nationalists still resist efforts to implement several Dayton objectives, from refugee returns to the arrest of war criminals. While we have had some success in moving the Dayton process forward, genuine and sustainable change in the Republika Srpska will depend in part on the cooperation of the new government in the FRY. President Kostunica's public support for the Dayton Accords is encouraging, but must be matched by concrete actions to encourage Bosnian Serbs to pursue their future as part of Bosnia and Herzegovina.

Finally, it is imperative to our objectives that remaining Bosnian war criminals are apprehended and sent to The Hague. Consequently, we strongly support the efforts of the International Criminal Tribunal for the former Yugoslavia (ICTY). In 2000, six additional indicted war criminals were transferred to the ICTY, five of whom were detained by SFOR. The ICTY's work in the region has also benefited from the enhanced cooperation offered by the new government in Croatia.

Cyprus and the Aegean

Tensions on Cyprus, Greek-Turkish disagreements in the Aegean, and Turkey's relationship with the EU have serious implications for regional stability and the evolution of European political and security structures. Our goals are to stabilize the region by reducing long-standing Greek-Turkish tensions, pursuing a comprehensive settlement on Cyprus, and supporting Turkey's full integration into European institutions. A democratic, secular, stable, and Western-oriented Turkey is critical to these efforts and has supported broader U.S. efforts to enhance stability in Bosnia, the nations of the former Soviet Union and the Middle East, as well as to contain Iran and Iraq. The President's trip to Turkey and Greece in November 1999 highlighted encouraging signs of progress for reconciliation in the region, including talks on the Cyprus dispute that are being held under the auspices of the UN in New York and Geneva. The EU's historic decision in December 1999 at its Helsinki Summit to grant candidate status to Turkey -- which the United States strongly encouraged -- reinforced the development of Greek-Turkish rapprochement, while encouraging Turkey to expand its democracy and observance of human rights for all its citizens.

The Baltic States

The special nature of our relationship with Estonia, Latvia, and Lithuania is recognized in the 1998 Charter of Partnership, which clarifies the principles upon which U.S. relations with the Baltic States are based and provides a framework for strengthening ties and pursuing common goals. These goals include integration of Latvia, Lithuania, and Estonia into the transatlantic community and development of close, cooperative relationships among all the states in Northeastern Europe. Through the Northern European Initiative we seek to strengthen regional cooperation, enhance regional security and stability, and promote the growth of Western institutions, trade and investment by bringing together the governments and private sector interests in the Baltic and Nordic countries, Poland, Germany, and Russia.

Northern Ireland

Historic progress was achieved in implementing the Good Friday Accord when, on December 2, 1999, an inclusive power-sharing government was formed in Northern Ireland, the principle of consent was accepted with respect to any change in the territorial status of Northern Ireland, new institutions were launched for North-South cooperation on the island of Ireland, and the Irish Republican Army named a representative to the Independent International Commission on Decommissioning (IICD) of paramilitary weapons (loyalist paramilitaries named their representatives to the IICD soon thereafter). Although differences over the arms decommissioning issue led to suspension of the new institutions on February 11, 2000, the institutions were restored on May 27 following agreement between the British and Irish governments and political leaders. On June 25, the IICD reported that international inspectors visited several IRA arms dumps and concluded that the weapons were secure and could not be used without the IICD becoming aware that this happened. The IRA announced on June 26 that it had reestablished contact with the IICD. These developments followed continued progress in promoting human rights and equality in Northern Ireland, including the introduction of legislation to implement the important recommendations put forward for police reform in the Patten Report issued on September 9, 1999. Disagreements over progress on decommissioning of arms have affected progress.

The United States continues to work with the British and Irish governments and the political leaders in Northern Ireland to achieve full implementation of the Good Friday Accord. Working through the International Fund for Ireland and the private sector, we will help the people seize the opportunities that peace will bring to attract new investment and bridge the community divide, create new factories, workplaces, and jobs, and establish new centers of learning for the 21st century.

Russia and the Newly Independent States (NIS)

There is no historical precedent for the transition underway in Russia, Ukraine, and other NIS. The United States has core national interests at stake in those endeavors and has acted quickly to help people across the NIS to break the back of the Communist system. But the USSR's collapse created new challenges. In Russia, for example, rigidity often gave way to laxness and disorder -- too many rules were replaced by too few. The United States' engagement with each of the NIS recognizes that their transformation will be a long-term endeavor, with far-reaching implications for regional and global stability, as well as disappointments and setbacks along the way.

Open elections are now commonplace in Russia, Ukraine, and most other NIS. We will continue to engage with all these countries to improve their electoral processes and help strengthen civil society by working with grassroots organization, independent media, and emerging entrepreneurs. Though the transition from communism to market democracy is far from complete, the NIS have reduced state controls over their economies and instituted basic protections for private property. It is in our national interest to help them develop the laws, institutions, and skills needed for a market democracy, to fight crime and corruption, and to advance human rights and the rule of law. The conflict in Chechnya represents a major problem in Russia's post-Communist development and relationship with the international community; the means Russia is using in Chechnya are undermining its legitimate objective of upholding its territorial integrity and protecting citizens from terrorism and lawlessness.

The United States strategy toward Russia and the NIS has made every American safer. Threat reduction programs have assisted in the deactivation of former Soviet nuclear warheads and greatly decreased the possibility of sensitive materials, technology, expertise, or equipment falling into the wrong hands. We are working aggressively to strengthen export controls in Russia and the other NIS and to stem proliferation of sensitive missile and nuclear technology, as well as other WMD or advanced conventional weapons to potential regional aggressors such as Iran. The Administration has supported the sovereignty and territorial integrity of the NIS, including through agreement on the adapted CFE Treaty, which was made possible by agreed schedules for the withdrawal of Russian forces from Georgia and Moldova. The integration of Russia, Ukraine, and other NIS with the new Europe and the international community remains a key priority. Despite disagreements over NATO enlargement and the Kosovo conflict, Russian troops serve shoulder-to-shoulder with U.S. and NATO forces in Kosovo and Bosnia. The United States remains committed to further development of the NATO-Russia relationship and the NATO-Ukraine distinctive partnership.

Our engagement with Russia, Ukraine, and other NIS is broad-based and draws upon new ties and partnerships between U.S. and NIS cities, regions, universities, scientists, students, and business people. United States assistance programs have helped these countries begin to develop the laws and legal infrastructure necessary for the rule of law as well as the building blocks of civil society. Still, the challenges ahead in each of these areas are immense. Economic hardship, social dislocation, and rampant crime and corruption threaten the foundations of democratic and law-based governance. Looming environmental problems will complicate NIS governments' ability to develop appropriate and effective responses and policies. Similarly, government pressure on independent media, citizens groups, nongovernmental organizations (NGOs), and religious groups remain a recurring source of concern.

We must continue our efforts to encourage strong and effective property laws and practices in central and Eastern Europe. Such laws are a necessity for a society based on the rule of law, and are a prerequisite for competing in international markets and participating in Western institutions. A starting point is the enactment and enforcement of laws providing for the restitution of property, seized during the Nazi and communist eras, to rightful owners.

Promoting Prosperity

Europe is a key partner in America's global commercial engagement. Europe and the United States produce almost half of all global goods and services; more than 60% of total U.S. investment abroad is in Europe; commerce between us exceeds $1 billion every day; and fourteen million workers on both sides of the Atlantic earn their livelihoods from transatlantic commerce. As part of the New Transatlantic Agenda launched in 1995, the United States and the EU agreed to take concrete steps to reduce barriers to trade and investment through creation of an open New Transatlantic Marketplace and through Mutual Recognition Agreements in goods that eliminate redundant testing and certification requirements. Our governments are also cooperating closely with the civil society dialogues established under the New Transatlantic Agenda: the Transatlantic Business Dialogue, Transatlantic Consumer Dialogue, Transatlantic Environment Dialogue, and Transatlantic Labor Dialogue. These people-to-people dialogues create opportunities for increased communication focusing on best practices, and can help their governments identify and reduce barriers to greater transatlantic interaction. In return, our governments should be committed to listen, learn, and facilitate.

Building on the New Transatlantic Agenda, the United States and the EU launched the Transatlantic Economic Partnership in 1998 to deepen our economic relations, reinforce our political ties and reduce trade frictions. The first element of the initiative is reducing barriers that affect manufacturing, agriculture, and services. In manufacturing, we are focusing on standards and technical barriers that American businesses have identified as the most significant obstacle to expanding trade. In agriculture, we are focusing on regulatory barriers that have inhibited the expansion of agriculture trade, particularly in the biotechnology area. In services, we seek to facilitate trade in specific service sectors, thereby creating new opportunities for the service industries that are already so active in the European market.

The second element of the Transatlantic Economic Partnership is a broader, cooperative approach to addressing a wide range of trade issues. We will continue to refrain from imposing duties on electronic transmissions and develop a work program in the WTO for electronic commerce. We will seek to adopt common positions and effective strategies for accelerating compliance with WTO commitments on intellectual property. We will seek to promote government procurement opportunities, including promoting compatibility of electronic procurement information and government contracting systems. To promote fair competition, we will seek to enhance the compatibility of our procedures with potentially significant reductions in cost for U.S. companies.

The United States strongly supports the process of European integration embodied in the EU. We support EU enlargement, and we are also encouraging bilateral trade and investment in non-EU countries. We recognize that EU nations face significant economic challenges and that periods of economic stagnation have eroded public support for funding outward-looking foreign policies and greater integration. We are working closely with our European partners to expand employment, promote long-term growth, and support the New Transatlantic Agenda.

Within Southeastern Europe, President Clinton and other international leaders launched a relatively new addition to the security architecture of Europe in July 1999. Called the "Stability Pact for Southeastern Europe," the pact is a historic partnership between the international community and the countries of Southeastern Europe, designed to bolster security and advance integration into the European and transatlantic mainstream by accelerating the region's democratic and economic development. By reducing ethnic conflict, promoting democratization and civil society, increasing trade and investment opportunities and supporting regional cooperation, we are promoting stability and prosperity in the region and providing a basis for greater integration into Europe.

Since the inception of the Stability Pact, donors have committed approximately $6 billion in development assistance for the countries of Southeastern Europe. European countries and institutions, together with international financial institutions, are providing over 85% of this assistance. Of this $6 billion, the international community has pledged more than $2.3 billion for over 200 "Quick Start" projects -- many of which are focused on energy, water and transport infrastructure improvements that will have an immediate impact on people's lives. All of the "Quick Start" projects are to be underway by the end of March 2001.

In support of economic development and reform in Southeastern Europe, the U.S. is promoting increased investment throughout the region. OPIC has launched a $150 million equity investment fund that will invest in companies in a range of sectors, including telecommunications, light manufacturing, distribution and consumer goods. The United States and the EBRID have created a $150 million fund to provide technical assistance and lending, in cooperation with local financial institutions, to promote micro, small and medium enterprise development in Southeast Europe. The United States will work with the EBRID to expand the operation of this fund and other activities to Montenegro.

To combat corruption and bureaucratic uncertainty, countries in the region have agreed under the Stability Pact to increase efforts to promote transparency and the rule of law. Under the agreed upon Anti-Corruption Initiative, each member country in the region has committed to make domestic government procurements more transparent, take specific measures to promote public service integrity, and establish a review body to monitor accountability in the administration of foreign aid programs and national anti-corruption efforts.

To promote deeper integration with the rest of Europe and transatlantic institutions, the United States supports EU efforts to play a leading role in the Stability Pact and welcomes closer relations between the EU and the countries of the region. We are urging the EU to strengthen these ties and to act quickly on proposals to open further its markets to Southeastern European products. As the United States' support (in October and November 2000) for FRY admission into the Stability Pact, UN, and OSCE demonstrates, guidelines like those expressed by the Stability Pact serve as worthy benchmarks for inclusiveness into a wider circle of nations.

The United States will continue its strong support for the Stability Pact and broader stabilization efforts. In October 2000, the FRY was formally admitted to join the Stability Pact. The critical challenge for the Stability Pact in the coming months is to persuade the international community and Southeastern Europe that it is in their mutual interests to follow through on important commitments that each has made to the other.

Now that the government in Belgrade has changed, the United States is promoting reintegration of the FRY into regional and international organizations. The energy embargo and travel ban have been lifted, and we are working with the Europeans and other donors to identify priorities for assistance and reconstruction, including Danube River cleanup.

As in other areas in Central and Eastern Europe, as well as the NIS, the United States will continue helping former planned economies integrate into international economic and other institutions and develop healthy business climates. We will continue to promote political and economic reform in Russia, working to create a thriving market economy while guarding against corruption. By supporting historic market reforms in these areas, we help new democracies take root by avoiding conditions, such as corruption and poverty, that can weaken democratic governance and erode the appeal of democratic values.

We are working with many NIS countries to promote their accession to the WTO on commercially fair terms. Building on successful accession of Kyrgyzstan, Latvia, Estonia, Georgia, Albania, Croatia, and Moldova, we have made significant progress on the accession of Armenia and Lithuania. We also have held fruitful discussions on WTO with Russia and Ukraine. We will continue to mobilize the international community to provide assistance to support reform and to help the Central and Eastern European and NIS countries stimulate foreign and domestic private investment. We are also encouraging investment in these countries, especially by U.S. companies.

We focus particular attention on promoting the development of Caspian energy resources and their export to world markets, thereby expanding and diversifying world energy supplies and promoting prosperity in the region.

Getting Caspian energy to world markets will help achieve important goals. It will help enhance prospects for prosperity and independence of the Caspian states. It can help support the development of stable democratic countries, and bolster relationships among the states. Development of Caspian energy resources will improve our energy security, as well as that of Turkey and other allies. It will create commercial opportunities for U.S. companies and other companies around the world. Throughout the region, targeted exchange programs have familiarized key decision makers and opinion molders with the workings of our democracy.

The independence, sovereignty, territorial integrity, and democratic and economic reform of the NIS are important to U.S. interests. To advance these goals, we are utilizing our bilateral relationships and our leadership of international institutions to mobilize governmental and private resources. But the circumstances affecting the smaller countries depend in significant measure on the fate of reform in the largest and most powerful -- Russia. The United States will continue to promote Russian reform and international integration, and to build on the progress that already has been made. Our economic and political support for the Russian government depends on its commitment to internal reform and a responsible foreign policy.

Promoting Democracy and Human Rights

 

Democratic reforms in Central and Eastern Europe and Eurasia are the best measures to avert conditions that could foster ethnic violence and regional conflict. Already, the prospect of joining or rejoining the Western democratic family through NATO, the EU, and other institutions has strengthened the forces of democracy and reform in many countries of the region and encouraged them to settle long-standing disputes over borders and ethnic minorities. Together with our West European partners we are helping these nations build civil societies.

We continue to promote the integration of Southeastern Europe's democracies into the European mainstream by promoting democratic, economic and military reforms, deepening regional cooperation, and supporting regional efforts to fight organized crime. The opening of a Southeast Europe Cooperation Initiative (SECI) information clearinghouse in Bucharest in the spring of 1999 highlighted efforts by SECI to integrate the efforts of national law enforcement agencies in the fight against cross-border crime. The UN, EU, and NATO operations in the area focused on developing professional civil and military institutions that are respectful and promote human rights and respect for civil authority. Landmark democratic elections in Croatia at the beginning of 2000, and important regional elections, such as those held in Montenegro in June 2000, showed promise for the process of democracy. Where the democratic transition is still in progress, or threatened by external influences, the situation bears continued vigilance. In Kosovo, where violence continued to plague efforts to restore stability, promote tolerance, and begin the establishment of a Kosovar capacity for substantial self-rule, we are determined to succeed in the protection of the rights of individual minorities and the implementation of an ambitious democratic framework for the people of Kosovo.

Municipal elections in Kosovo have paved the way for the establishment of local institutions as the international community encourages the creation of a constitutional framework for Kosovar autonomy called for under the Ramboulliet Agreement and UN Security Council Resolution 1244. As local Kosovars accept responsibility for the process of democracy and protection of minority rights, our efforts in Kosovo will shift from a focus on military security and the training of international and indigenous police forces, to deepened support for those civil efforts that promote democracy, the rule of law, and respect for human rights.

We continue to support the efforts of the International Criminal Tribunal for the former Yugoslavia. In 2000, the pace of detention, transfer, and prosecution of indicted war criminals remained brisk, especially as the new government in Croatia reaffirmed that country's support for the implementation of the Dayton Agreements. New opportunities have also opened with the change of government in Belgrade. We and our European allies have made clear to President Kostunica his obligation to cooperate with the ICTY and our expectation that all indicted war criminals, including former President Milosevic, will be held accountable.

East Asia and the Pacific

Our regional strategy is based on the premise that a stable and prosperous East Asia and Pacific is vital to our own national security interests. United States leadership in expanding mutually beneficial economic relationships and U.S. security commitments within the Pacific rim are central to stability, and even more importantly, they foster an environment within which all Asia/Pacific nations can prosper. We continue to advance this vision of the Asia/Pacific by promoting democracy and human rights, advancing economic integration and rules-based trade, and enhancing security. These three pillars of our security strategy for Asia are mutually reinforcing, and provide the framework for our bilateral and multilateral initiatives. Cooperation with our allies and friends in the region to achieve our common goals remains a cornerstone of our strategy.

Enhancing Security

Our military presence and our strong bilateral security ties have been essential to maintaining the peace and security that have enabled most nations in the Asia-Pacific region to build thriving economies for the benefit of all. To deter aggression and secure our own interests, we maintain about 100,000 military personnel in the region in cooperation with our allies and partners. The U.S.-Japan security alliance anchors the U.S. presence in the Asia-Pacific region. Our continuing security role is further reinforced by our bilateral treaty alliances with the Republic of Korea (ROK), Australia, Thailand and the Philippines. We maintain healthy relations with the Association of Southeast Asian Nations (ASEAN) and support regional dialogue -- such as in the ASEAN Regional Forum (ARF) -- on the full range of common security challenges.

Our security strategy in East Asia and the Pacific encompasses a broad range of potential threats, and includes the following priorities: deterring aggression and promoting peaceful resolution of crises; promoting access to and the security of sea lines of communication in cooperation with our allies and partners; actively promoting our nonproliferation goals and safeguarding nuclear technology; strengthening both active and passive counterproliferation capabilities of key allies; combating the spread of transnational threats, including drug-trafficking, piracy, terrorism and the spread of AIDS; fostering bilateral and multilateral security cooperation, with a particular emphasis on combating transnational threats and enhancing future cooperation in peacekeeping operations; and promoting regional dialogue through bilateral talks and multilateral fora.

Japan

The U.S.-Japan alliance remains the cornerstone for achieving common security objectives and maintaining a peaceful and prosperous environment for the Asia Pacific region. The 1997 revised Guidelines for U.S.-Japan Defense Cooperation create a solid basis for more effective and credible U.S.-Japan cooperation in peacetime, in the event of an armed attack on Japan, and in situations in areas surrounding Japan. They provide a general framework for the roles and missions of the two countries, and facilitate coordination in peacetime and contingencies. The revised Guidelines, like the U.S.-Japan security relationship itself, are not directed against any other country; rather, they enable the U.S.-Japan alliance to continue fostering peace and security throughout the region. In April 1998, in order to support the new Guidelines, both governments agreed to a revised Acquisition and Cross-Servicing Agreement (ACSA) that expands the provision of supplies and services to include reciprocal provision of logistics support during situations surrounding Japan that have an important influence on Japan's peace and security. Japan approved implementing legislation for the Guidelines in the spring of 1999. Japan's generous host-nation support for the U.S. overseas presence also serves as a critical strategic contribution to the alliance and to regional security.

Our bilateral security cooperation has broadened as a result of recent agreements to undertake joint research and development on theater missile defense and to cooperate on Japan's indigenous satellite program. Moreover, we work closely with Japan to promote regional peace and stability, seek universal adherence to the Nuclear Nonproliferation Treaty, and address the dangers posed by transfers of destabilizing conventional arms and sensitive dual-use technologies. Japan is providing $1 billion to the Korean Peninsula Energy Development Organization (KEDO), and consults closely with the United States and ROK on issues relating to North Korea.

Korean Peninsula

Tensions on the Korean Peninsula, albeit reduced as a result of the June 2000 North-South Summit, remain the leading threat to peace and stability in East Asia. The Democratic People's Republic of Korea (DPRK) has publicly stated a preference for peaceful reunification, but continues to dedicate a large portion of its dwindling resources to its huge military forces. Renewed military conflict has been prevented since 1953 by a combination of the Armistice Agreement, which brought an end to open hostilities; the United Nations Command, which has visibly represented the will of the UN Security Council to secure peace; the physical presence of U.S. and ROK troops in the Combined Forces Command, which has demonstrated the alliance's resolve; and, increasingly, diplomatic activities of the United States, ROK, and Japan.

President Kim Dae-jung continues to pursue a course toward peace and stability on the Korean peninsula, seeking new channels of dialogue with North Korea and developing areas of cooperation between South and North. During their June 2000 meeting in Tokyo, President Clinton and President Kim affirmed the importance of the North-South Summit for building a more permanent peace, and the indispensability of the strong U.S.-ROK defense alliance as a stabilizing pillar for the region. The United States is working to create conditions of stability by maintaining solidarity with our South Korean and Japanese allies, emphasizing America's commitment to shaping a peaceful and prosperous Korean Peninsula, and ensuring that a struggling North Korea does not opt for a military solution to its political and economic problems.

Peaceful resolution of the Korean conflict with a democratic, non-nuclear, reunified peninsula will enhance peace and security in the East Asian region and is clearly in our strategic interest. We have taken steps to improve bilateral political and economic ties with North Korea -- consistent with the objectives of our alliance with the ROK -- to draw the North into more normal relations with the region and the rest of the world. Secretary Albright furthered that objective during her historic meeting with North Korean leader Kim Jong 11 in late October 2000. The United States has also outlined to the DPRK what steps it must take to cut all ties to terrorism, and be considered for removal from the list of state sponsors of terrorism. But our willingness to continue to improve bilateral relations will continue to be commensurate with the North's cooperation in efforts to reduce tensions on the peninsula and to stem its NBC weapons programs.

South Korea has set an example for nonproliferation by accepting the 1991 Denuclearization Agreement, agreeing to IAEA safeguards, and developing a peaceful nuclear program that brings benefits to the region. We are firm that North Korea must maintain the freeze on production and reprocessing of fissile material, dismantle its graphite-moderated reactors and related facilities, and fully comply with its NPT obligations under the Agreed Framework. The United States, too, must fulfill its obligations under the Agreed Framework, and the Administration will work with the Congress to ensure the success of our efforts to address the North Korean nuclear threat.

Beyond fully implementing the Agreed Framework, we seek to eliminate North Korea's indigenous and export missile program and their weapons of mass destruction through a step-by-step process. Based on U.S.-North Korean discussions, North Korea has undertaken to refrain from flight testing long-range missiles of any kind as we move toward more normal relations. Working closely with our ROK and Japanese allies, we will improve relations with North Korea on the basis of it moving forward on the missile and WMD agendas, and we will take necessary measures in the other direction if the North chooses to go down a different path.

We encourage the North to work with South Korea to implement the agreements reached at the North-South Summit; continue the United Nations Command-Korean People's Army General Officer Dialogue at Panmunjom; participate constructively in the Four Party Talks among the United States, China, and North and South Korea to reduce tensions and negotiate a peace agreement; and continue our efforts to recover the remains of American servicemen missing since the Korean War.

Pyongyang's more recent diplomatic and economic outreach to the rest of the world are encouraging, but as yet no reciprocal confidence-building measures have been forthcoming. It is crucial that the United States and the ROK maintain deterrence during the process of reconciliation and economic integration on the Korean Peninsula. We favor a step by step process of using reciprocal confidence building measures that link economic and diplomatic initiatives to real reductions in the military threat on the peninsula.

China

A stable, open, prosperous People's Republic of China (PRC) that respects the rule of law and assumes its responsibilities for building a more peaceful world is clearly and profoundly in our interests. The prospects for peace and prosperity in Asia depend heavily on China's role as a responsible member of the international community. Our policy toward China is both principled and pragmatic, expanding our areas of cooperation while dealing forthrightly with our differences.

In recent years, the United States and China have taken a number of steps to strengthen cooperation in international affairs: intensive diplomatic work to restore relations damaged by our mistaken bombing of the Chinese Embassy in Belgrade; successful conclusion of a bilateral agreement on Chinese WTO accession; two presidential bilateral meetings in 2000; regular exchanges of visits by cabinet and sub-cabinet officials to consult on political, military, security, nonproliferation, arms control, economic, financial, and human rights issues; cooperating in efforts to account for Americans missing as a result of World War II and the Korean War; establishing a consultation mechanism to strengthen military maritime safety; holding discussions on humanitarian assistance and disaster relief, and environmental security; and establishing working groups on law enforcement cooperation. China is also a participant in science, technology, and health research. Our cooperation in promoting environmental protection and sustainable development is steadily increasing to the benefit of U.S. interests in the Asia-Pacific region.

At the same time, China's rise as a major power presents an array of potential challenges. Many of China's neighbors are closely monitoring China's growing defense expenditures and modernization of the People's Liberation Army (PLA). Given international and regional focus on China's growing military power, China's adherence to multilateral nonproliferation and arms control regimes, as well as increased military transparency, is of growing importance.

United States interests have been advanced in discussions with China on arms control and nonproliferation issues. We have advanced our dialogue on nonproliferation and arms control through exchanges at the Secretary of Defense, Secretary of State, and sub-cabinet level in 1999 and 2000, building on previous accomplishments. The United States and China announced in earlier exchanges that they will not target their strategic nuclear weapons at each other and confirmed their common goal of halting the spread of WMD. Both our nations have signed the Comprehensive Test Ban Treaty. We have consulted on the Missile Technology Control Regime and missile nonproliferation, and we continue to press China to exercise restraint in its missile policies and practices. In November 2000, China publicly announced that it would reinforce its export control system, and that it had no intention to assist any country in the development of ballistic missiles that could be used to deliver nuclear weapons. Both nations have ratified the Chemical Weapons Convention, and China has further strengthened its controls on the export of dual-use chemicals and related production equipment and technology to assure they are not used for production of chemical weapons. Both nations have called for strengthening of the Biological Weapons Convention and early conclusion of a protocol establishing a practical and effective mechanism to enhance compliance and improve transparency. We also reached agreement with China on practices for end-use visits on U.S. high technology exports to China and we will continue a dialogue on implementation of this agreement.

China is working with the United States on important regional security issues. On the Korean Peninsula, the United States and China share an interest in peace and stability and worked together to support the June 2000 North-South Summit. We have both worked to convince North Korea to freeze its dangerous nuclear program, and believe the four-party peace talks are an important tool in working toward establishment of peace and stability in Northeast Asia.

To help maintain peace, security, and stability in the Western Pacific, and to promote our broad foreign policy objectives, we are implementing fully the terms of the Taiwan Relations Act by maintaining unofficial relations between the American people and the people of Taiwan. We are keeping the focus on peaceful resolution by working assiduously to encourage the PRC and Taiwan to reestablish direct dialogue, while maintaining our firm commitment to Taiwan's self-defense by providing defensive arms to Taiwan.

Our key security objectives for the future include: sustaining the strategic dialogue begun by the recent summits and other high-level exchanges; enhancing stability in the Taiwan Strait by maintaining our "one China" policy, promoting peaceful resolution of cross-Strait issues, and encouraging dialogue between Beijing and Taipei; strengthening China's adherence to international nonproliferation norms, particularly with respect to export controls on ballistic missile and dual-use technologies; encouraging China to adopt broader, more effective export control policies; achieving greater openness and transparency in China's military; encouraging a constructive PRC role in international affairs through active cooperation in multilateral fora such as the ASEAN Regional Forum (ARF) and the Asia Pacific Economic Cooperation Forum (APEC); and improving law enforcement cooperation in such areas as counterterrorism, counternarcotics, and migrant trafficking.

Southeast Asia and the Pacific

Our strategic interest in Southeast Asia centers on developing regional, multilateral, and bilateral security and economic relationships that assist in conflict prevention and resolution. United States security objectives in the region are: strengthening our security alliances and partnerships with Australia, Thailand, the Philippines, and Singapore; sustaining facilities access arrangements with these countries and other ASEAN nations; and encouraging effective multilateral cooperation by expanding participation in regional exercises geared toward disaster relief operations and combating such transnational threats as piracy and drug-trafficking. We continue to view ASEAN as the key regional institution for enhancing security and prosperity. We will continue to work on our relationship with ASEAN and enhance our multilateral security dialogue under the ARF. We must also pursue multilateral, or sometimes bilateral, initiatives with ASEAN to address transnational issues such as the spread of infectious disease, alien smuggling, trafficking in women and children, environmental protection, and combating organized crime, particularly the flow of heroin from Burma and other countries in the region.

Promoting Prosperity

A prosperous and open Asia/Pacific is key to the economic health of the United States. Thirty percent of U.S. exports go to Asia, supporting millions of U.S. jobs, and we export more to Asia than Europe. The economic benefits of a strong Asia/Pacific are likely to increase as China and Taiwan enter into the WTO. Our historic decision to grant Permanent Normal Trade Relations to China will enable U.S. businesses to expand into China under a rules-based trading regime.

Our economic objectives in the region include the following: continuing recovery from the financial crisis; furthering progress within APEC toward liberalizing trade and investment; increasing U.S. exports to Asia/Pacific countries through market-opening measures and leveling the playing field for U.S. business; and concluding the WTO accession negotiations for the PRC and Taiwan on satisfactory commercial terms.

Our strategy to meet these objectives has four key elements: support for economic reforms and market liberalization; working with international financial institutions to provide well-targeted economic and technical assistance in support of economic reforms; providing bilateral humanitarian aid and contingency bilateral financial assistance if needed; and urging strong policy actions by Japan and the other major economic powers to promote global growth.

The United States will continue to work with the IMF, the World Bank, other international financial institutions, the governments in the region, and the private sector to strengthen financial markets, bolster investor confidence, and deepen on-going reforms in the region's economies. In doing so, we will remain mindful of the need to promote protection of worker rights. We will continue to encourage South Korea, Thailand, and Indonesia to implement economic reforms to lay a solid basis for long-term economic growth. U.S. initiatives in APEC will open new opportunities for economic cooperation and permit U.S. companies to expand their involvement in substantial infrastructure planning and construction throughout the region. We will continue our efforts to encourage all Asia Pacific nations to pursue open markets.

China

Integrating the PRC more fully into the global trading system is manifestly in our national interest. China is a major potential market for our goods and services. Our exports to China already support hundreds of thousands of jobs across our country and China's WTO entry will significantly expand that number.

An important part of integrating China into the market-based world economic system is opening China's highly protected market through elimination of trade barriers and removal of distorting restraints on economic activity. We have negotiated and vigorously enforced landmark agreements to combat piracy of intellectual property and advance the interests of our creative industries. We have also negotiated -- and vigorously enforced -- agreements on textile trade. We will continue to press China to open its markets as it engages in sweeping economic reform, and to respect and adhere to core labor standards as codified by the ILO. Most recently, the United States reached a market access agreement with China, paving the way for China's accession to the World Trade Organization. The bilateral agreement concluded in November 1999 will create jobs and opportunities for Americans through the opening of Chinese markets, promote economic reform in China, and enhance the understanding of the Chinese people of the rule of law in the development of their domestic civil society in compliance with international obligations. We are now working with other Working Party members to complete the multilateral negotiation of China's WTO accession. Our enactment of Permanent Normal Trade Relations status for China will accelerate and expand these favorable trends.

Japan

Japan has a crucial role to play in Asia's economic health: generating substantial growth to help maintain a growing world economy and absorb a growing share of imports from emerging markets We have urged Japan to reform its financial sector, stimulate domestic demand, deregulate its economy, and further open its markets to foreign goods and services. The Administration continues to make progress on increasing market access in Asia's largest economy. Since the beginning of the first Clinton Administration, the United States and Japan have reached 39 trade agreements designed to open Japanese markets in such key sectors as autos and auto parts, civil aviation, and insurance. In the Enhanced Initiative on Deregulation, Japan agreed to regulatory reforms to promote domestic demand-led growth and also to increase business opportunities for U.S. firms in such vital areas as telecommunications, competition policy enforcement, and medical/pharmaceutical products. Through the Foreign Direct Investment Initiative, Japan agreed to measures to improve the environment for foreign investment. As a result, U.S. firms are increasing their presence in the Japanese market by acquiring Japanese firms, and are thereby contributing to Japan's economic recovery. The Administration also has intensified efforts to monitor and enforce trade agreements with Japan to ensure that they are fully implemented. The United States also uses multilateral venues, such as WTO dispute settlement and negotiation of new multilateral agreements, to further open markets and accomplish our trade objectives with Japan. The U.S.-Japan Common Agenda is a bilateral U.S.-Japan program coordinating scientific and financial resources of the world's two largest economies on more than seventy projects worldwide. The projects focus on eradicating infectious disease, protecting the environment, and promoting scientific and technological cooperation.

Republic of Korea

The United States will continue its strong support for South Korean efforts to reform its economy, liberalize trade and investment, strengthen the banking system, and implement the IMF program. We will also continue to explore concrete steps to promote growth in both our countries, more fully open our markets, and further integrate the Republic of Korea into the global economy.

Southeast Asia and the Pacific

The United States strongly supports efforts to sustain and strengthen economic recovery in the ten nations of ASEAN. We accomplish this by maintaining our open market for Southeast Asian goods and services as well as our support for IMF-led recovery programs for several ASEAN nations. There are challenges ahead. Thailand's economic recovery is continuing, however, high oil prices and the slow pace of banking and corporate sector reforms are impeding Thailand's full economic recovery from the financial crisis. Thais are preparing for elections in January 2001. The survival and vindication of Thailand's new constitution would reflect well on the future of democracy in Southeast Asia, but the Thais worry about political stability ahead. In Indonesia, slow progress on corporate and financial sector restructuring endangers economic recovery. Rapid sale of assets held by the Indonesian Bank Restructuring Agency (IBRA) is the key to alleviating the large public debt burden and improving investor sentiment. IBRA has begun to move ahead, but without stronger support from the government, progress will remain uneven. Privatization of the banking sector, which has been largely under government control since the crisis, is another area of worrying policy drift. With Vietnam, we are working toward completion of a broad commercial agreement that will open that country's markets, promote economic reform, and open the way for congressional approval of Normal Trade Relations for Vietnam. Nearby in Singapore, in November 2000, President Clinton and Prime Minister Goh of Singapore agreed to launch negotiations for a free trade agreement. In addition to the economic benefits both countries would be expected to gain, the two leaders have recognized the importance of continued U.S. engagement in Asia based on economic and security interests. Working with ASEAN members to address environmental degradation -- from forest fires and haze, to fisheries depletion and deforestation -- while striving for sustainable economic growth, is a high priority.

Australia and New Zealand

We will continue to build on our close working relationship with Australia and New Zealand to strengthen our bilateral trade and economic relationships. We will also work with these two key partners to develop international support for further action by APEC and by the World Trade Organization to develop rules-based trade and encourage sector liberalization.

Promoting Democracy and Human Rights

The United States will continue to support the democratic aspirations of Asian/Pacific peoples and to promote respect for human rights. Our strategy is best served through close coordination with our allies and friends in the region, both at the governmental and non-governmental organization level. Our priorities include: progress on human rights, religious freedom and rule of law issues in China; a meaningful political dialogue between the ruling authorities in Burma and the democratic opposition; supporting Indonesia's democratic transition; and contributing to East Timor's transition to independence.

Indonesia

The United States strongly supports a united, prosperous, and democratic Indonesia that plays a positive role in regional security. The October 1999 election was a historic moment for Indonesia, putting it on course to become the world's third largest democracy. We continue to assist Indonesia in managing the considerable challenges of national reconciliation, democratic reform and economic recovery. We have tailored a comprehensive assistance package focused on: economic development; humanitarian assistance and infrastructure development in strife-torn areas; and technical assistance in key government sectors designed to reinforce the democratic process and the rule of law.

Burma

The United States will continue to work with other concerned states to create the conditions for a meaningful dialogue between the regime and the democratic opposition led by Aung San Suu Kyi. Our strategy includes investment and other sanctions to increase pressure on the regime to respect basic human rights. At the same time, we support the efforts of the United Nations Secretary General to use his good offices to promote dialogue leading to a democratic transition.

East Timor

The UN Transitional Authority in East Timor (UNTAET), established in October 1999, followed on the success of the UN-sanctioned International force in East Timor (INTERFET). The UN-Sanctioned International Force in East Timor was an Australian-led mission that deployed in September 1999, with U.S. support, to quell the post-referendum violence in East Timor. The UN Transitional Authority in East Timor took over security responsibilities from INTERFET in February 2000. UNTAET has continued to further the goal of an independent and viable East Timor. Our contributions have a strong impact on UNTAET's success. We are providing long-term development assistance and transitional employment opportunities to the East Timorese people, as well as financial and technical support for the UN transition administration. Our military forces have provided on-going health and infrastructure support directly to the East Timorese people, and have maintained a presence to coordinate humanitarian and civic assistance projects. We remain committed to attaining a durable solution to the plight of East Timorese refugees in Indonesia. A challenge for the future is assisting with the establishment of a small yet viable East Timor Defense Force.

The Western Hemisphere

Our hemisphere enters the 21st century with an unprecedented opportunity to secure a future of stability and prosperity-building on the fact that virtually all nations in the hemisphere are democratic and committed to free market economies. The end of armed conflict in Central America and other improvements in regional security have coincided with remarkable political and economic progress throughout the Americas. The people of the Americas are taking advantage of the vast opportunities being created as emerging markets are connected through electronic commerce and as maturing democracies allow individuals to more fully express their preferences. Sub-regional political, economic, and security cooperation in North America, the Caribbean, Central America, the Andean region, and the Southern Cone have contributed positively to peace and prosperity throughout the hemisphere. Equally important, the people of the Americas have reaffirmed their commitment to combat together the difficult threats posed by drug trafficking and corruption. The United States, which helped shape this new climate in the hemisphere, seeks to secure its benefits while safeguarding our citizens against these threats.

Enhancing Security

Our strategy of engagement in the Western Hemisphere has included strengthening and expanding U.S. defense cooperation with friends throughout the region, and supporting their efforts to institute democratic norms within their defense establishments including civilian control, transparency, and public accountability. As these democratic norms take root, regional confidence builds. The United States also will continue working to strengthen regional and sub-regional cooperative security mechanisms that could serve to deepen regional confidence and foster sustained regional stability. We will continue to offer our strong support for the peaceful resolution of disputes in the region, and will encourage continued dialogue and peaceful engagement among nations of the region to achieve this goal. While respecting sovereignty concerns, we remain committed to promoting cooperative approaches throughout the hemisphere to international peacekeeping threats and humanitarian crises.

The principal threats to hemispheric stability are transnational in nature, such as drug trafficking, money laundering, illegal immigration, firearms trafficking, and terrorism. In addition, our hemisphere is leading the way in recognizing the dangers to national and regional stability produced by corruption and ineffective judicial systems. All of these produce adverse social effects at home and undermine the sovereignty, democracy, and national security of nations in the hemisphere.

Particularly pernicious is the threat of drug trafficking. Working with the OAS and other organizations, we seek to eliminate the scourge of drug trafficking in our hemisphere. Countries of the hemisphere are striving to better organize and coordinate efforts to extradite and prosecute individuals charged with drug trafficking and related crimes; combat money laundering; seize assets used in criminal activity; halt illicit traffic in precursors and essential chemicals; strike at the financial support networks; enhance national drug abuse awareness and treatment programs; and drastically curtail illicit crops through alternative development and eradication programs. In the Caribbean, and bilaterally with Mexico and Colombia, we are working to increase counterdrug and law enforcement cooperation.

At the same time, we recognize linkages between the threats posed to the United States as the principal consumer of illicit drugs and related threats posed to source countries and transit zone states. Accordingly, as we seek to expand regional cooperation in the counterdrug arena, we recognize our obligation to aggressively combat the illegal export of U.S.-origin weapons to criminal and insurgent groups that are engaged in, or benefit from, drug trafficking.

Colombia is of special importance because drug trafficking is fueling the longest running internal conflict in the region. The combination of armed insurgents, growing paramilitary movement, corruption, and economic malaise extends beyond its borders and has implications for regional peace and security. To turn the tide, the United States is providing the Colombian Government assistance to wage a comprehensive effort to promote the mutually reinforcing goals of peace, illicit drug control, economic development, and respect for human rights. The Government of Colombia has developed a comprehensive six-year strategy, Plan Colombia, to revive its economy, strengthen the democratic pillars of society, promote the peace process, and reduce drug production and trafficking. We are providing significant assistance for Plan Colombia in a manner that will concurrently promote U.S. and Colombian interests, and we will encourage our allies and international institutions to do the same.

The extent of bilateral cooperation with Mexico in the fight against drug trafficking is unprecedented. We have created the High-Level Contact Group and a variety of working groups to reach a joint diagnosis and settle on a common strategy. Moreover, the mutually agreed upon Performance Measures of Effectiveness will allow us to better evaluate our counterdrug efforts. We are working together to reduce demand for illegal drugs, combat money laundering, avoid the misuse of precursors and essential chemicals, stop the illegal trafficking of arms or migrants, broaden our ability to intercept drugs, and apprehend those who are involved in drug trafficking.

Promoting Prosperity

Economic growth and integration in the Americas will profoundly affect the prosperity of the United States in the 21st century. This begins with our immediate neighbors, Canada and Mexico. Since the 1989 U.S.-Canada Free Trade Agreement, and subsequently the 1993 North American Free Trade Agreement, our trade with Canada and Mexico has grown rapidly. Canada remains our largest trade partner, and Mexico has become our second largest trading partner. The United States and Mexico have also resolved important trade differences, made progress toward easier access for the relevant products of both nations, and consolidated our trade area as one of the most powerful in the world. In the hemisphere as a whole, our trade initiatives offer a historic opportunity to capitalize on and strengthen the unprecedented trend toward democracy and free market economics.

We seek to advance the goal of an integrated hemisphere of free market democracies by building on NAFTA. Formal negotiations are in progress to initiate the Free Trade Area of the Americas (FTAA) by 2005. The negotiations cover a broad range of important issues, including market access, investment, services, government procurement, dispute settlement, agriculture, intellectual property rights, competition policy, subsidies, anti-dumping, and countervailing duties. We will seek to ensure that the agreement also supports workers' rights, environmental protection and sustainable development. To address the concerns of smaller economies prior to completion of the FTAA, and in light of the increased competition NAFTA presents, we have obtained Congressional approval for enhanced trade preferences offered to Central American and Caribbean countries under the Caribbean Basin Trade Partnership Act.

The United States will continue its effective partnership with the IMF, the World Bank, the Inter-American Development Bank, the governments of Latin America, and the private sector to help the region's countries in their transition to integrated, market economies. A key target of this partnership is assisting the reform and recovery of banking sectors hurt by financial market turmoil over the past several years. We will continue to support financial and economic reform efforts in Brazil and Argentina to reduce their vulnerability to external shocks, as well as help Ecuador on its difficult road to economic recovery and sustainable levels of debt service. Similarly, we will continue to play an active role with our regional partners in facilitating timely responses to, and recovery from natural disasters, such as Hurricane Mitch in Honduras and Nicaragua, Hurricane Keith in Belize, and the adverse economic disruptions throughout the region resulting from El Nino.

Helping countries in the hemisphere to translate economic growth into social progress is critical for promoting sustainable growth and sustaining democracy. Despite recent progress, Latin American and Caribbean countries have the greatest income disparities of any region -- with the poorest 20% of individuals receiving just 4.5% of the total income within the region. We will continue to support investments in human development, particularly the provision of stronger and more efficient basic education and health services. Between the United States and Mexico there has been significant growth in educational programs emphasizing literacy, bilingual education and exchanges between classroom teachers, cultural institutions and artists. In the area of health, we are creating the Border Health Commission to study the epidemiology of the border area in order to battle diseases.

We also view it as essential that economic prosperity in our hemisphere be pursued in an environmentally sustainable manner. From our shared seas and freshwater resources to migratory bird species and transboundary air pollution, the environmental policies of our neighbors can have a direct impact on quality of life at home. Working with Mexico, we have taken concerted action to monitor air quality, intensify research on environmental health issues, follow the cross-border movement of toxic wastes or illegal migrants, coordinate activities that will benefit nature preserves, and use debt relief to further protect tropical forests. United States Government assistance to the region recognizes the vital link between sustainable use of natural resources and long-term prosperity, a key to developing prosperous trading partners in this hemisphere.

Promoting Democracy and Human Rights

Latin American nations have made notable advances over the last several years, with the restoration of democratic institutions in old democracies like Chile and Uruguay, the consolidation of democratic practices in countries like Nicaragua and Guatemala, and the move to a competitive democratic system in Mexico where the freest and most transparent presidential and general elections in the country's history were held in July 2000. Of particular significance has been the growing hemispheric consensus on the importance of defending democracy when threatened. Through the OAS, the nations of the Hemisphere have stood firm in support of constitutionally-elected governments under stress, as in the cases of Ecuador, Guatemala, Paraguay, Haiti, and the Dominican Republic. In Peru, the OAS is playing a critical role in facilitating democratic reforms that are expected to lead to free and fair elections in April 2001. We are committed to working with our partners in the region to further consolidate democratic governance and guard against democratic reversals.

But our ability to sustain the hemispheric agenda crafted through the Summit of the Americas process and the OAS depends in part on meeting the challenges posed by weak democratic institutions, persistently high unemployment and crime rates, and serious income disparities. In some Latin American countries, citizens will not fully realize the benefits of political liberalization and economic growth without regulatory, judicial, law enforcement, and educational reforms, as well as increased efforts to integrate all members of society into the formal economy.

The hemisphere's leaders are committed to strengthening democracy, justice, and human rights. They have pledged to intensify efforts to promote democratic reforms at the regional and local level, protect the rights of migrant workers and their families, improve the capabilities and competence of civil and criminal justice systems, and encourage a strong and active civil society. Specific initiatives have included: ratification of the Inter-American Convention Against Corruption to strengthen the integrity of governmental institutions; creation of a Special Rapporteur for Freedom of Expression as part of the Inter-American Commission for Human Rights; and establishment of an Inter-American Justice Studies Center to facilitate training personnel and exchanging information, and other forms of technical cooperation to improve judicial systems.

Education is at the centerpiece of reforms aimed at making democracy work for all the people of the Americas. The Summit Action Plan adopted at Santiago in 1998 seeks to ensure by the year 2010 primary education for 100% of children and access to quality secondary education for at least 75% of young people.

We are also seeking to strengthen norms for defense establishments that are supportive of democracy, transparency, respect for human rights, and civilian control in defense matters. Through continued engagement with regional security forces and civilian personnel, facilitated by establishment of the Center for Hemispheric Defense Studies, our own modest military activities, and presence in the region, we are helping to increase civilian expertise in defense affairs and reinforce the positive trend in civilian control.

The United States supports the full implementation of enduring political, economic, security, and judicial reforms in Haiti. Recognizing the severe challenges that confront the Haitian people, we will continue to provide humanitarian assistance directly to those in need through non-governmental organizations, while working with civil society and Haitian authorities to encourage development of sustainable democratic institutions. In cooperation with the OAS and international financial institutions, we will maintain pressure on the Haitian regime to adopt credible, free, and fair electoral processes and to privatize state-owned industries as an incentive to foreign investment. Concerned by the continued use of Haiti as a transshipment point for illegal drugs entering the United States, we support the further development of the counterdrug capabilities by the Haitian National Police as well as modernization and reform of judicial institutions.

The United States remains committed to promoting a peaceful transition to democracy in Cuba and forestalling a mass exodus that would endanger the lives of migrants and the security of our borders. While maintaining pressure on the regime to make political and economic reforms, we continue to encourage the emergence of a civil society to assist the transition to democracy when the change comes. As the Cuban people feel greater incentives to take charge of their own future, they are more likely to stay at home and build the informal and formal structures that will make transition easier. Meanwhile, we remain firmly committed to bilateral migration accords that ensure migration in a safe, legal, and orderly manner.

The Middle East, North Africa, Southwest, and South Asia

Enhancing Security

The United States has enduring interests in pursuing a just, lasting and comprehensive Middle East peace, ensuring the security and well-being of Israel, helping our Arab partners provide for their security, and maintaining worldwide access to a critical energy source. Our strategy reflects those interests and the unique characteristics of the region as we work to strengthen peace and stability.

The Middle East Peace Process

A historic transformation has taken place in the political landscape of the Middle East over the last five years. Peace agreements have been reached requiring concerted implementation efforts, and new agreements are possible which hold out the hope of ending the conflict between Israel and its Arab neighbors. The United States -- a key sponsor of the peace process -- has a clear national interest in seeing the process deepen and widen. We will continue our steady, determined leadership; standing with those who take risks for peace, standing against those who would destroy it, lending our good offices where we can make a difference, and helping bring the concrete benefits of peace to people's daily lives.

Before the death of Syrian President Assad, Israel and Syria had narrowed their differences to a remarkable degree. Key differences remained, but the broad features of an agreement -- and many of its details -- were well established. The United States remains determined to continue to assist the two sides to find a way to overcome their final differences and hopeful that we will be able to do so. We also continue to believe that progress in Israeli-Syrian negotiations will allow progress on negotiations between Israel and Lebanon, and we will continue to press forward toward that goal.

On the Palestinian front, Israelis and Palestinians are confronting core issues that have defined their conflict for the past fifty years, seeking to build a lasting peace based on partnership and cooperation. Although the July 2000 summit at Camp David failed to achieve a permanent status agreement and violence has recently erupted in the West Bank and Gaza, the United States will continue its efforts to assist both sides in their search for a lasting and just peace. Our goal remains the normalization of relations between Israel and all Arab states. Through the multilateral working groups on security, refugees, water, and the environment, we are seeking to promote regional cooperation to address transboundary environmental issues that affect all parties.

North Africa

The United States has an interest in the stability and prosperity of North Africa, a region that is undergoing important changes. In particular, we are seeking to strengthen our relations with Morocco, Tunisia, and Algeria, and to encourage democratic development and economic reform. Libya continues to be a country of concern for the national security and foreign policy interests of the United States. Although the government of Libya has taken an important positive step away from its support of terrorism by surrendering the Lockerbie suspects, our policy toward Libya is designed to encourage Libya to completely cease its support of terrorism and to block its efforts to obtain weapons of mass destruction.

Southwest Asia

In Southwest Asia, the United States remains focused on deterring threats to regional stability and energy security, countering threats posed by WMD, and protecting the security of our regional partners, particularly from the threats posed by Iraq and Iran. We will continue to encourage members of the Gulf Cooperation Council (GCC) to work closely on collective defense and security arrangements, help individual GCC states meet their defense requirements, and maintain our bilateral defense relationships. For example, the United States is fostering counterproliferation cooperation with, and among, the GCC states through the Cooperative Defense Initiative.

We will maintain an appropriate military presence in Southwest Asia using a combination of ground, air, and naval forces. The terrorist attack on the USS Cole has not deterred our resolve to maintain a continuous military presence in the Gulf to enhance regional stability and defend against threats to friendly countries. Our forces in the Gulf are backed by our ability to rapidly reinforce the region in time of crisis, which we have demonstrated convincingly. We remain committed to the UN Security Council resolutions and preventing the Iraqi regime from taking large-scale military action against Kuwait or the Kurd and Shia minorities in Iraq.

Our policy toward Iraq is comprised of three central elements: containment to prevent Saddam from again threatening the stability of the vital Gulf region; relief for the Iraqi people via the UN oil-for-food program; and support to those Iraqis seeking to replace Saddam's regime with a government that can live at peace with its neighbors and its people.

Containment of Iraq remains the foundation of our policy toward Saddam Hussein's regime. Until his government can be removed from power, it must be prevented from again threatening the region. In December 1999, the United Nations Security Council passed UNSCR 1284, a new omnibus resolution on Iraq. The United States supports Resolution 1284 because it buttresses the containment of Iraq while maximizing relief for the Iraqi people. The resolution expands the humanitarian aspects of the oil-for-food program to ensure the well being of the Iraqi people. It provides for a robust new inspection and monitoring regime that would finish the work begun by UNSCOM. It would allow for a suspension of the economic sanctions in return for full Iraqi cooperation with UN arms inspections and Iraqi fulfillment of key disarmament tasks. This resolution would also lock in the Security Council's control over Iraqi finances to ensure that Saddam Hussein is never again able to disburse Iraq's resources as he would like.

Although Iraq continues to refuse to implement any of the requirements of Resolution 1284, the United States and other members of the Security Council have already begun to implement those sections of the resolution intended to improve the humanitarian situation of the Iraqi populace. Iraqi oil exports have increased dramatically, making possible the procurement of ever-larger quantities of humanitarian necessities. In addition, the Security Council has greatly expanded the lists of items that Iraq is allowed to import to include educational supplies, building materials, spare parts for the oil industry, infrastructure necessities, and other economic goods.

Nevertheless, we consistently maintain that sanctions on Iraq can only be lifted after it has met its obligations to the international community in full. Saddam's actions over the past decade lead us to conclude that his regime will never comply with the obligations contained in the relevant UN Security Council resolutions. For this reason, we actively support those who seek to bring a new democratic government to power in Baghdad. We recognize that this may be a slow and difficult process, but we believe it is the only solution to the problem of Saddam's regime.

Our policy toward Iran is aimed at changing the practices of the Iranian government in several key areas, including its efforts to obtain WMD and long-range missiles, its support for terrorism and groups that violently oppose the Middle East peace process, and its human rights practices. We view signs of change in Iranian policies with great interest, both with regard to the possibility of Iran assuming its rightful place in the world community and the chance for better bilateral ties. We welcome statements by some Iranian officials that advocate improved relations with the United States.

These positive signs must be balanced against the reality that Iran's support for terrorism has not yet ceased and serious violations of human rights persist. Iran is continuing its efforts to acquire WMD and develop long range missiles (including the 1,300 kilometer-range Shahab-3 it flight-tested in July 1998, July 2000, and again in September 2000). The United States will continue to oppose Iranian efforts to sponsor terrorism and to oppose transfers from any country to Iran of materials and technologies that could be used to develop long-range missiles or WMD. Additionally, the United States will continue to work with Arab allies threatened by WMD to develop a defense through efforts such as the Cooperative Defense Initiative.

The United States has demonstrated that we are ready to explore ways to build mutual confidence and avoid misunderstandings with Iran. In recognition of the positive changes in Iran, in particular the fair and free parliamentary elections of February 2000, we modified our sanctions to allow Iran to export to the United States carpets and foodstuffs -- key exports for small Iranian businesses and to facilitate people to people contact. We would welcome reciprocal steps from Iran, and continue to signal our willingness to engage in an authoritative government-to-government dialogue in which both sides will be able to discuss their issues of concern.

Meanwhile, we will strengthen our cooperation with allies and friends to encourage further positive changes in Iranian practices that threaten our shared interests. If a government-to-government dialogue can be initiated and sustained in a way that addresses the concerns of both sides, then the United States would be willing to develop with the Islamic Republic a road map leading to normal relations. It could be useful to begin a dialogue without preconditions.

South Asia

The President's trip to South Asia in March 2000 reflected the growing importance of the region to U.S. political, economic, and commercial interests. As the President emphasized, our strategy for South Asia is designed to help the peoples of that region by helping resolve long-standing conflicts, encouraging economic development, and assisting social development. Regional stability and improved bilateral ties are also important for U.S. economic interests in a region that contains one-fifth of the world's population and one of its most important emerging markets. In addition, we seek to work closely with regional countries to stem the flow of illegal drugs from South Asia, most notably from Afghanistan.

The President stressed the importance we place on reconciliation between India and Pakistan and our encouragement of direct dialogue between them to resolve all their outstanding problems. He urged also that they respect the Line of Control in Kashmir, reject violence as a means to settle their dispute, and exercise mutual restraint.

We seek to establish relationships with India and Pakistan that are defined in terms of their own individual merits and reflect the full range of U.S. strategic, political and economic interests in each country. After the President's visit to India, we are working to enhance our relationship with India at all levels. We look forward to more frequent high-level contacts including meetings between our heads of government and our cabinet officials. With Pakistan, a long-standing friend with which we seek improved relations, we are constrained by the lack of a democratic government since the October 1999 military coup. We have urged Pakistan's leaders to quickly restore civilian rule and the democratic process. The President's visit to Islamabad signified our intent to stay engaged with Pakistan and work to promote that return to democracy.

We seek, as part of our dialogue with India and Pakistan, to encourage both countries to take steps to prevent further proliferation, reduce the risk of conflict, and exercise restraint in their nuclear and missile programs. The United States does not believe that nuclear weapons have made India or Pakistan more secure. We hope they will abandon their nuclear weapons programs and join the NPT as non-nuclear weapon states. Indian and Pakistani nuclear and long-range missile tests have been dangerously destabilizing and threaten to spark a dangerous arms race in South Asia. Such a race will further undermine the global nonproliferation regime and thus threaten international security.

In concert with the other permanent members of the UN Security Council, the G-8 nations, and many others in the international community, the United States has called on India and Pakistan to take a number of steps that would bring them closer to the international mainstream on nonproliferation. These include: signing and ratifying the Comprehensive Nuclear Test Ban Treaty, joining the clear international consensus in support of a cutoff of fissile material production, strengthening export controls, and refraining from an arms race in nuclear weapons and long-range missiles. We have also urged them to resume their direct dialogue and take decisive steps to reduce tensions in South Asia. In that regard, we have urged India and Pakistan to agree to a multilateral moratorium on the production of fissile material, pending the conclusion of a Fissile Materials Cutoff Treaty (FIVICT).

Afghanistan remains a serious threat to U.S. worldwide interests because of the Taliban's continued sheltering of international terrorists and its increasing export of illicit drugs. Afghanistan remains the primary safehaven for terrorists threatening the United States, including Usama bin Ladin. The United Nations and the United States have levied sanctions against the Taliban for harboring Usama bin Ladin and other terrorists, and will continue to pressure the Taliban until it complies with international requests to bring bin Ladin to justice. The United States remains concerned about those countries, including Pakistan, that support the Taliban and allow it to continue to harbor such radical elements. We are engaged in energetic diplomatic efforts, including through the United Nations and with Russia and other concerned countries, to address these concerns on an urgent basis.

Promoting Prosperity

The United States has two principal economic objectives in the region: to promote regional economic cooperation and development, and to ensure an unrestricted flow of oil from the region. We seek to promote regional trade and cooperation on infrastructure through the peace process and our Qualifying Industrial Zone program, which provides economic benefits for certain countries that enter into business arrangements with Israel. In South Asia, we will continue to work with the region's countries in their efforts to implement market reforms, strengthen educational systems, and end the use of child and sweatshop labor.

Although the United States imports less than 15% of the oil exported from the Persian Gulf, the region will remain of vital strategic importance to U.S. national security due to the global nature of the international oil market. Previous oil shocks and the Gulf War underscore that any blockage of Gulf supplies or sudden changes in price would immediately affect the international market, driving up energy costs everywhere -- ultimately harming the U.S. economy as well as the economies of our key economic partners in Europe and Asia. Appropriate responses to events such as Iraq's invasion of Kuwait can limit the magnitude of a crisis in the Gulf and its impact on world oil markets. Over the longer term, U.S. dependence on access to these and other foreign oil sources will remain important as our reserves are depleted. That is one of many important reasons why the United States must continue to demonstrate commitment and resolve in the Persian Gulf. We will continue our regular dialogue with the oil-producing nations to ensure a safe supply of oil and stable prices.

Promoting Democracy and Human Rights

We encourage the spread of democratic values throughout the Middle East, North Africa and Southwest and South Asia and will pursue this objective aided by constructive dialogue with countries in the region. In Iran, for example, we hope the nation's leaders will carry out the people's mandate for a government that respects and protects the rule of law, both in its internal and external affairs. In Pakistan, we have pressed the new military rulers to provide a detailed roadmap with a timetable for a return to elected civilian government. In India, during the President's visit, we supported the establishment of an Asian Center for Democratic Governance, which would seek to promote the forms and substance of democracy throughout Asia. We will promote responsible indigenous moves toward increasing political participation and enhancing the quality of governance, and we will continue to challenge governments in the region to improve their human rights records. We will work with the governments and human rights organizations of the region to promote tolerance for the diverse religious groups present in the Middle East and South Asia. In particular, we have sought to encourage and end to violence against minority religious groups, and a repeal of "blasphemy laws" which are used to discriminate against minorities.

Respect for human rights also requires rejection of terrorism. If the nations in the region are to safeguard their own citizens from the threat of terror, they cannot tolerate acts of indiscriminate violence against civilians, nor can they offer refuge to those who commit such acts. We will continue to enforce UNSC sanctions against the Taliban for harboring terrorists such as Usama bin Ladin and look for other ways to pressure the Taliban to end its support for such groups.

Our policies are guided by our profound respect for Islam. The Muslim religion is the fastest-growing faith in the United States. We recognize and honor Islam's role as a source of inspiration, instruction, and moral guidance for hundreds of millions of people around the world. United States policy in the region is directed at the actions of governments and terrorist groups, not peoples or faiths.

Sub-Saharan Africa

In recent years, the United States has engaged in a concerted effort to transform our relationship with Africa. We have supported efforts by many African nations to move toward multi-party democracy, hold free and fair elections, promote human rights, allow freedom of the press and association, enhance civil and judicial institutions, and reform their economies. A new, post-Cold War political order is emerging in Africa, with emphasis on democratic and pragmatic approaches to solving political, economic, and environmental problems, and developing human and natural resources. United States-Africa ties are deepening, and U.S.-Africa trade is expanding.

Sustaining these recent successes will require that we identify those issues that most directly affect our interests. We will promote regional stability through engagement with sub-regional organizations and key African states using carefully harmonized U.S. programs and initiatives. We recognize and are sensitive to the challenges many African states face as they move toward multi-party democracy and civil-military relations, and we will work to focus our limited resources on assisting their transition. Our immediate objective is to increase the number of capable states in Africa, that is, nations that are able to define the challenges they face, manage their resources to effectively address those challenges, and build stability and peace within their borders and their sub-regions.

Enhancing Security

Serious transnational security threats emanate from pockets of Africa, including state-sponsored terrorism, drug trafficking and other international crime, environmental degradation, and infectious diseases, especially HIV/AIDS. Since these threats transcend state borders, they are best addressed through effective, sustained sub-regional engagement in Africa. We have already made some progress in countering some of these threats -- such as by investing in efforts to combat environmental degradation and infectious disease, and leading international efforts to remove mines planted in previous conflict areas and halt the proliferation of land mines. We continue efforts to reduce the flow of illegal drugs through Africa and to curtail international organized criminal activity based in Africa. We will improve international intelligence sharing, and train and assist African law enforcement, intelligence, and border control agencies to detect and prevent planned terrorist attacks against U.S. targets in Africa.

We seek to keep Africa free of weapons of mass destruction by supporting South Africa's nuclear disarmament and accession to the NPT as a non-nuclear weapon state, supporting the African Nuclear Weapons Free Zone, and encouraging African nations to join the BWC and CWC.

Nigeria's rapid change from an autocratic, military regime to a civilian, democratically elected government has afforded us the opportunity to build a promising security, political and economic relationship with the most populous country in Africa. With nearly one in six Africans living in Nigeria, the impact of serious cooperative efforts to tackle significant drug trafficking, corruption, and other crime could be enormously beneficial to the United States and a large proportion of Africans. In Sierra Leone, we are working with West Africa -- particularly Nigeria -- the United Kingdom, and the UN to prevent the spread of conflict, promote accountability, and deal with the role of diamonds in financing the rebels. We are also seeking to establish the control of a democratically elected government over the national territory. Additionally, we are addressing the role of diamonds and the proliferation of small arms in fueling conflicts in Angola, the Democratic Republic of the Congo, and elsewhere. In the Democratic Republic of the Congo and Angola, where fighting threatens to destabilize a broad swath of central and southern Africa, we are working closely with the region and the UN to support the Lusaka peace process. Similarly, we have provided significant political support to the Arusha Peace Process to bring a resolution to the ongoing conflict in Burundi. We have also been working closely with the UN and Organization for African Unity (OAU) to attempt to establish a lasting peace between Ethiopia and Eritrea.

Sudan continues to pose a threat to regional stability and the national security interests of the United States. We have moved to counter Sudan's support for international terrorism and regional destabilization by maintaining the sanctions imposed against the Khartoum regime until it takes concrete, verifiable steps to end support for terrorism on Sudanese soil; we continue to press for the regime's isolation through the UN Security Council. We support regional efforts for a just and fair peace and national reconciliation in Sudan based on the Inter-Governmental Authority on Development's Declaration of Principles.

Persistent conflict and continuing political instability in some African countries remain obstacles to Africa's development and to our national security, political and economic interests there, including assured access to oil reserves and other important natural resources. To foster regional stability and peace in Africa, the United States in 1996 launched the African Crisis Response Initiative (ACRI) to train African militaries to conduct effective peacekeeping and humanitarian operations. It will focus on developing a sustainable regional capacity to address the multiple challenges to peace and security on the continent. We are consulting closely on expanded ACRI activity with the UN Department of Peacekeeping Operations, the OAU and its Crisis Management Center, and African sub-regional organizations already pursuing similar capability enhancements. A different effort, Operation Focus Relief, is training and equipping seven West African battalions for peace enforcement missions in Sierra Leone. And finally, another initiative, the Enhanced International Peacekeeping Capabilities (EIPC) program, provides funding to upgrade peacekeeping and training centers, and "train the trainer' in countries around the world in order to make them more interoperable with U.S. and other peacekeeping forces, thereby sharing the burden.

The United States has established the Africa Center for Strategic Studies (ACSS) to promote the exchange of ideas and information tailored specifically for African security concerns. The goal is for ACSS to be a source of academic, yet practical, instruction in promoting civil-military relations and the skills necessary to make effective national security decisions in democratic governments. The curriculum will engage African military and civilian defense leaders in a substantive dialogue about defense policy planning, civil-military relations, and defense resource management in democracies. Our long-term goal is to support the development of regional security arrangements and institutions to prevent and manage armed conflicts and curtail transnational threats to our collective security.

Promoting Prosperity

A stable, democratic, prosperous Africa will be a better economic partner, a better partner for security and peace, and a better partner in the fights against drug trafficking, crime, terrorism, infectious diseases, and environmental degradation. Lasting prosperity for Africa will be possible only when Africa is fully integrated into the global economy.

Further integrating Africa into the global economy will also directly serve U.S. interests by continuing to expand an already important new market for U.S. exports. The approximately 700 million people of sub-Saharan Africa represent one of the world's largest basically untapped markets. Although the United States enjoys only a 7% market share in Africa, already 100,000 American jobs depend on our exports there. Increasing both the U.S. market share and the size of the African market will bring tangible benefits to U.S. workers and increase prosperity and economic opportunity in Africa. Our aim, therefore, is to assist African nations to implement economic reforms, improve public governance and combat corruption, create favorable climates for trade and investment, and achieve sustainable development.

To support the economic transformation underway in Africa, the President in June 1997 launched the Partnership for Economic Growth and Opportunity in Africa Initiative. The Administration has implemented many of the Initiative's objectives and continues to work closely with Congress to implement remaining key elements of this initiative. The enactment of the African Growth and Opportunity Act on May 18, 2000 marked the beginning of a new relationship between the United States and sub-Saharan Africa. This legislation provides the opportunity for substantial preferential market access to the U.S. market for eligible sub-Saharan African countries, and provides an economic, human rights, and civil-judicial benchmark towards which current non-eligible countries can aspire and focus their development efforts.

By significantly broadening market access, spurring growth, and helping the poorest nations eliminate or reduce their bilateral debt, the Initiative and the legislation better enable us to help African nations undertake difficult economic reforms and build better lives for their people through sustainable development. We are working with African governments on shared interests in the world trading system, such as developing electronic commerce, improving WTO capacity-building functions, and eliminating agricultural export subsidies. We also are pursuing initiatives to encourage U.S. trade with and investment in Africa, including targeted technical assistance, enhanced debt forgiveness, and increased bilateral trade ties.

To further our trade objectives in Africa, the Ron Brown Commercial Center was established in Johannesburg, South Africa in 1998. The Center provides support for American companies looking to enter or expand into the sub-Saharan African market, promotes U.S. exports through a range of support programs, and facilitates business contacts and partnerships between African and American businesses. The President's historic March 1998 trip to Africa and the unprecedented March 1999 U.S.-Africa Ministerial further solidified our partnership with African nations across a range of security, economic, and political issues.

Helping Africans generate the food and income necessary to feed themselves is critical for promoting sustainable growth and development. Despite some recent progress, the percentage of malnourished people and lack of diversified sustainable agricultural production in Africa is the highest of any region in the world, and more help is greatly needed. In 1998 we launched the Africa Food Security Initiative (AFSI), a USAID-led effort to help improve agricultural productivity, support research, expand income-generating projects, and address nutritional needs for the rural poor. While maintaining its program focus in the original AFSI countries -- Ethiopia, Mali, Mozambique, Malawi, and Uganda -- the initiative is now being expanded into countries where food security is declining, such as Tanzania and Zambia, as well as Ghana and Kenya, where we can build on other USAID programs to accelerate our goals of improved child nutrition and increased agricultural incomes.

The initial focus under the AFSI involved countries that were either on the fast growth track or countries that had undertaken a degree of structural adjustment that would put them on the right path. Ethiopia, Mali, Mozambique, Malawi, and Uganda, the initial focus countries, have performed reasonably well under the circumstances. Productivity and agriculture incomes had been rising before the floods in southern Africa or the drought in East Africa. All of these countries either met or exceeded their performance targets last year. Food grants production per capita, one of the Initiative's objectives, has continued its upward trend last year. Of these countries, all except Ethiopia -- whose war with Eritrea has continued during this period -- are showing improving food security trends.

However, the picture is less encouraging in much of Africa. Malnutrition accounts for about one-third of all children's deaths in Africa. And although there has been a decline in the percentage of preschoolers in Africa who are stunted, the number is going up -- the only place in the world where this is the case -- from about 35 million in 1980 to a projection of 50 million in 2005.

The Africa Food Security Initiative, while maintaining its program focus in the original AFSI countries, is expanding its program into countries where food security is declining, such as Tanzania and Zambia, as well as Ghana and Kenya, where we can build on USAID program to accelerate our goals of improved child nutrition and increased agriculture incomes.

USAID has been able to make progress on the Initiative by focusing on working with governments to improve agricultural policies, working with farmers and researchers to increase the technologies that allow for yield increases (or cut production costs), and working with farmer groups to improve their ability to market their produce more competitively. We are also working closely with African partners to make available usable technologies such as air traffic control systems and other airfield improvements, as well as introducing the U.S. Army Corps of Engineers to provide training and demonstration projects.

African nations are also engaged in battle with age-old diseases, such as malaria and tuberculosis (TB), which sap economic productivity and development. Worse, the epidemic of HIV/AIDS is devastating the continent, reversing hard-fought gains in development, dramatically reducing life expectancy, decreasing GDPs, and threatening security and stability in the hardest-hit nations. The Administration has made the battle against AIDS and other diseases a priority for international action and investment in Africa. Over the past two years, the President has doubled bilateral assistance for the fight against HIV/AIDS, launched the Millennium Vaccine Initiative to accelerate the search for vaccines against HIV/AIDS, malaria, and TB, and launched a campaign to mobilize new resources from other donors, such as the G-8, and the private sector. We have also begun the Leadership in Fighting an Epidemic (LIFE) initiative, a $100 million effort with legislative backing, which focuses on training and prevention activities for selected sub-Saharan African militaries.

Promoting Democracy and Human Rights

In Africa as elsewhere, democracies have proved to be stronger partners for peace, stability and sustained prosperity. We will continue to support the important progress African nations have achieved and to broaden the growing circle of African democracies.

The restoration of civilian democratic government in Nigeria can help return that country to its place as a leader in Africa. The government and people of Nigeria have succeeded in restoring democratic civilian government, freed political prisoners, lifted onerous restrictions on labor unions, and worked to restore the authority of the judicial system. Nigeria's new civilian government has taken sweeping steps to ensure that the military remains in the barracks and that fighting corruption will be a top priority. The peaceful elections in February 1999 and inauguration of the new civilian government in May 1999 were important steps in this transformation.

As in any democratic transition, Nigeria's new government is facing enormous challenges: creating accountable government, building support within the military for civilian rule, protecting human rights, and rebuilding the economy so it benefits all citizens. President Clinton met with President Obasanjo at the White House in October 1999 and again in Nigeria in August 2000. The discussions reaffirmed our nation's commitment to work with him on the security, economic, political, and social challenges faced by Nigeria. Kenya, which has played a critical role in maintaining regional stability, is also facing an historic transition. President Daniel Moi has announced that he will step down in 2002, after twenty-four years in power. He leaves a country that is suffering from a weak economy and deteriorating social infrastructure. We must continue to actively engage the Government of Kenya on such matters as conflict resolution, regional stability, and economic development as well as encouraging commitment to constitutional reform and human rights.

Democracy assistance has proven to be an effective tool in both Senegal and Zimbabwe. In Senegal, President Abdou Diouf accepted defeat in the March elections and turned power over peacefully to Abdoulaye Wade, the opposition leader. The most recent elections had a record high voter turnout of educated voters despite several complicating factors. In order to help post-apartheid South Africa achieve its economic, political, democratic, and security goals for all its citizens, we will continue to provide substantial bilateral assistance, vigorously promote U.S. trade and investment, and pursue close cooperation and support for our mutual interests.

Ultimately, the prosperity and security of Africa depend on African leadership, strong national institutions, and extensive political and economic reform. The United States will continue to support and promote such national reforms and the evolution of regional arrangements that build cooperation among African states.

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