Press Briefing by Assistant Secretary of State for East Asian and Pacific Affairs Winston Lord; Senior Director for East Asian and Pacific Affairs of the National Security Council Sandy Kristoff; and Senior Director for Economics for the National Security Council Robert Kyle on the President's Upcoming Trip to Asia

The Briefing Room

3:10 P.M. EDT

AMBASSADOR LORD: I'll try to keep this quite brief so we can get to your questions. The Secretary has laid out the major strategic things of this trip, including for the Asia Pacific region. I will just emphasize again with respect to that region, this is another example of the President and this administration elevating this region on our foreign policy agenda and underlining our alliances and the maintenance of our security and economic presence in the region.

The first stop, as already indicated, is Korea. And one way to look at our relations with Korea is to look at it as a very strong bilateral partnership that has successive layers of interaction. It goes back to the '50s on the security layer, where we fought together, of course, in the Korean War, and we've had a strong alliance ever since. That would be a central theme of this stop.

Then Korea took off economically in the '60s and '70s and '80s. It's now our sixth largest trade partner. We had something like $50 billion in two-way trade last year. So you add the economic layer to enrich that partnership.

Then in recent years, you have the democratic layer, shared values with Korea having moved from its economic miracle on to its democratic miracle and success of elections, most recently the ones that are still playing out even as we speak.

I'd like to take this occasion to congratulate the people of South Korea, even as we congratulate the people of Taiwan a couple of weeks ago, on their successful democratic elections which, once again, belies this phony argument that somehow Asian and Western values clash and that Asians don't care about individual liberties.

Finally, in recent years, we've also enriched this bilateral partnership by the way we've worked together in broader forums, not only bilaterally, but regionally, whether it's in APEC, regional economic issues, ASIAN regional forum, and other regional security dialogues. Korea is a member of the U.N. Security Council right now and hopes to be a member of the OECD. So therefore, we've worked in these broader circles as well. So you have the successive of layers.

We've also, of course, worked very hard -- and this will be a focus of the President's talk -- on the peace and stability in the Korean Peninsula. And we believe one of the most successful achievements in foreign policy in recent years has been this agreed framework which has frozen the North Korea nuclear threat in place now for 18 months under international supervision. When we came into office this was seen as the most acute security threat in Asia, if not in the world. It's a dog that has not barked, and it has been frozen and will be dismantled as the agreed framework is carried out in the coming years.

Meanwhile, other aspects of the agreed framework go ahead well, namely, storing and getting rid of the spent fuel in North Korea, and the agreement between North Korea and KADO, the international organization to carry out the light-water reactor agreement, which means that Japanese and South Korean personnel as well as Americans are dealing with the North Koreans and moving around in North Korea.

The one aspect that is missing, however, is the North-South dialogue, which is crucial to the agreed framework, which was agreed upon by the two Koreas in 1991, and which remains to be carried out. So a large part of the President's discussion in Cheju Island will be how to get that North-South dialogue going, how to carry out the agreed framework, and how to deter any conventional threats in the Peninsula, and the fact that this remains a dangerous situation, of course, underscored by the recent tensions in the DMZ. And the Secretary has made the point we expect the Armistice to be upheld.

So those are the main themes of the Korean stop. There also will be some attention to our economic and other dimensions that I've mentioned. But clearly, the reaffirmation of our alliance and how we deal together on the future stability in the region and in that Peninsula will be central. The future must be worked out between North and South Korea. We will not directly deal with North Korea on a peace arrangement, as the Secretary has mentioned. We're prepared to facilitate any such discussions.

On Japan, here I think there's been a time lag in perception publicly about the health of this relationship. Perhaps understandably, the media is focused on trade disputes the last few years; more recently, on the terrible incidents in Okinawa, et cetera. But this masks a very solid relationship, as the Secretary pointed out, and will be richly demonstrated when the President goes to Japan.

First, the overall broad aspect of our partnership in many fields will be highlighted in various ways while the President is there. Secondly, there will be specifically, as indicated, a security declaration that will be signed. Thirdly, Secretary Perry will cap an effort that's going on for several months with -- State and Defense officials have been working with the Japanese officials on security matters and also on the Okinawa problems. I think you will see progress on that issue which will both reflect our sensitivities to the presence of our bases in Okinawa and Japan, which are also in the interests of Japan as well as ourselves. But any outcome of consolidation and reducing intrusiveness of those bases will also be consistent with maintaining our force levels in the region and with maintaining our operational readiness.

We also have rich diplomatic cooperation. Whether it's Korea or Cambodia, other regional security issues, or whether it's global issues where we work together on U.N. peacekeeping missions, and where Japan has been very important in such areas as Bosnia and the Middle East. And of course, we support Japan's admission to the U.N. Security Council as a permanent member. It is one more stepping up to its global responsibilities.

Another aspect that will be highlighted as the Secretary mentioned will be this common agenda where we work together on these global problems like the environment.

And finally, trade remains very important. But the fact is we've made significant progress. There's much implementation and some unfinished business, but there's 20 agreements, the trade figures are moving in the right direction. Our exports are up 85 percent in those areas of negotiated agreements, as the Secretary indicated. It's up about, I think, 30 percent overall to Japan in the last couple of years. And, therefore, we're still going to work on this issue, but the fact is we've made major progress.

Let me just finish and turn to my colleagues now by saying the U.S.-Japan relationship is not only crucial for the two countries, as the Secretary underlined, but it is very important for the stability and prosperity of the entire region. And, therefore, the successful demonstration of that alliance and our broad partnership that will take place when the President's there will be welcome not only in Japan and in the United States, but by all the nations of the region.

Let me go next to my partners here at the White House.

MS. KRISTOFF: I don't think I would add anything to Winston's comments on the trip to Cheju. We would expect the President's discussions with Kim Yong-sam to basically affirm the U.S. commitment to the security of South Korea. Certainly there will be a discussion of recent activities in the DMZ. We would expect a discussion to touch upon other regional security issues in Northeast Asia.

I would expect Kim to ask about the discussions we hope to have in Tokyo with Hashimoto about regional security issues, China, Taiwan. That's about it. It's a very short visit on the way to Tokyo.

I think in Japan the robustness and richness of the U.S.-Japan alliance will be captured in the documents that we put out, and there will be a joint security declaration that reaffirms the alliance, reaffirms Japan's commitment to the centrality of the U.S.-Japan alliance as part of its defense posture. We will certainly reaffirm our East Asia strategy put out in November 1995, as well as our forward force deployment.

There is, I think, as Win and the Secretary suggested, frequently overlooking and perhaps not giving it as much emphasis as we should, the Common Agenda. We have five different categories of activities with Japan, ranging from education to environment to conservation, addressing global concerns on narcotics and terrorism. There are some 20-odd joint projects that we've got going under the Common Agenda. We will highlight two of them, as Win Suggested, in the area of trying to eradicate polio in the world by the year 2000, and establishing this natural disaster watch system for the Asia Pacific. But that is a very rich bilateral agenda that demonstrates the ability of U.S. and Japan to work cooperatively on issues that no one country can solve on their own.

Maybe Bob Kyle would want to talk more specifically about the economic, the macro and the trade items that we expect Hashimoto and Clinton to touch upon.

MR. KYLE: Let me just begin by saying that if it's not warm enough in here for everyone, we can probably manage to turn up the heat if you'd like.

Let me talk a little bit about the economic dimensions of the trip to Japan. The trip to Japan really is a chance from an economic perspective both to review the progress that we've made to date and to continue discussions with the Japanese on issues of concern.

When the administration came into office, there really were three overriding goals that we sought to achieve in terms of our economic relations with Japan. One was to increase market access and remove barriers. The second was to address all the dimensions of the relationship -- the macro, the structural and the sectoral, which previous administrations had not addressed all of those issues comprehensively. And, third, we needed to keep sustained interest on this issue so that we would monitor and enforce those agreements that had already been reached, because that's important to getting results.

I think if you look at the results, as the Secretary was saying, and as Win quickly alluded to, so far there are good results that we have to point to three years into this strategy. First of all, with regard to the macroeconomics, there have been important developments in that Japan's global current account surplus has declined now from 3.2 percent of GDP in 1994 to about 2.2 percent in 1995, and is projected to fall below the two-percent figure in 1996. That's important progress on the macroeconomic front, and something the United States has sought for a long time.

Second of all, in the trade area, as the Secretary alluded to, there have been now 20 agreements with Japan. Our exports to Japan have increased 34 percent overall since the administration took office, and 20 percent last year alone.

In the areas where we've reached agreements with Japan, the framework areas, our exports have increased 85 percent on average, which is 2.5 times faster than other exports to Japan. And last year, the U.S. trade deficit with Japan fell 9.7 percent, the first drop in a number of years.

All of those are significant developments. But the point that we would make beyond this is simply that while there is important progress to point to, while we're gratified by that, we also need to continue to press in areas of unfinished business.

First of all, it's important for us -- we believe it's important to emphasize on this visit the need to continue to enforce the agreements that we've already reached. I don't mean to understate that, but that's a continuing theme that we have emphasized this year particularly.

Second of all, there are obviously outstanding areas of difference between us the Japanese and the President will be discussing these with the Prime Minister. Those include the areas of insurance, film and semiconductors. And he'll be raising those issues and negotiations continue on those, leading up to the summit, and he'll be raising those during the summit.

The point I'd simply finally make, more broadly, is that what we've been trying to do with Japan as part of a broader strategy to restore U.S. competitiveness. And there are also a number of indications that that's occurring. The World Economic Forum has now said for the last two years in a row that the United States is the most competitive economy in the world.

The auto industry retook the world lead in auto production in 1994 for the first time since 1979 -- the world's largest auto producer. And, third, we're once again the world's largest exporter, after falling behind Germany in 1990. All of those are indications that not only with regard to Japan, but also, globally, the U.S. has done a good job of restoring its competitiveness during this administration.

Finally, let me just say that, overall, we're not saying that we've solved every problem with Japan. We think there's still a lot of work to do; they are still problems to overcome, but we do have a good record of progress that we want to build on, on this trip.

Thank you.

Q: This is a question, I guess, for Secretary Lord. You mentioned in passing and Secretary Christopher also mentioned the security declaration, and mentioned that a part of it would be that Japan would note its support for our presence there. I assume he was talking about financial support for troop deployments there. What is the current percentage of the cost of placing troops in Japan, and will that increase as a result of this agreement, and by how much?

AMBASSADOR LORD: Well, actually, this will confirm the agreement that was reached a few months ago in a high-level meeting, first in a long time between defense and foreign ministers of both sides, which Japan contributes roughly $5 billion a year over the next five years. I think it's about 70 percent of the cost of American forces that are borne by Japan.

Q: Now is that a new figure? Is that an increase from where we were a year or two ago, or five years ago?

AMBASSADOR LORD: Well, it's an increase not as of the President's trip, but, I mean, as of this agreement that was reached last fall, yes.

MS. KRISTOFF: The agreement that Ambassador Lord refers to is the renewal of the five-year host nation support agreement. It was a modest increase in the total for the five-year period to about $25 billion, which is about $5 billion a year. A modest increase.

Q: But that 70 percent, is that an increase from the previous five-year period?

MS. KRISTOFF: Yes, but again --

AMBASSADOR LORD: Yes, very modest. Very modest.

MS. KRISTOFF: Because there was a contraction in Japan defense spending in recent years.

Q: Secretary Lord, the incident in Okinawa with the military personnel sort of brought to the surface the situation that had been boiling up over a long period of time. Now it seems to have spread from Okinawa on to Honshu with a group of citizens there for the first time suing the United States government directly over noise and the obtrusiveness of the military base there. Are you concerned that certain anti-U.S. military movement is afoot in Japan?

AMBASSADOR LORD: No, I'm not. It doesn't mean we're complacent. It doesn't mean we're not sensitive to the fact that our base presence, of course, imposes some burdens on the local population as it does in any country in the world. But if you look at recent polls in Japan, for example, just coming out in the last couple of weeks, the support for our alliance and our troop presence is very high, indeed. Of course, there is a desire, particularly in Okinawa to consolidate that presence wherever possible, and we're working hard to do that.

So we will not be complacent. We will continue to be sensitive, whether it's in Japan, any place in Japan, including Okinawa. But we think the government has been speaking out and is very strong on this issue. The Japanese people broadly support it. I think they recognize, and this will be underlined during our visit, that these bases are in Japan's interest as well as ours, and, indeed, in the interest of stability and prosperity in the whole region.

More broadly, let me make this point about our security relationship. If you had said a couple of years ago that the following events would all happen, you'd wonder whether the security relationship would be as solid as we're going to show it during the President's trip.

First, we have had some trade disputes. We've discussed that and how we've made progress. Secondly, you had many sensitive anniversaries of World War II which could have been a problem in either country. Thirdly, you had, up until recently, a socialist-led coalition. And Prime Minister Murayama was a very loyal person. As a head of the coalition, he defended the alliance, but the fact is that his party has essentially been against the alliance for 20 years. Fourth, we had this terrible rape incident in Okinawa. And, fifthly, you have the essential disappearance of the Soviet threat.

You put all that together in a year-and-a-half period and say, by the way, not only are we going to maintain our ties, but we're going to strengthen them and reaffirm them in this declaration signed by the two leaders, people would have thought that was awfully optimistic.

So I think that's a tribute to the basic strength of the relationship. I might add, this was true even as of last fall when the President was originally scheduled to go. I think recent events in Northeast Asia have strengthened the perceptions in Japan, in this country and in the region about the importance of this alliance.

Q: On the hoped-for talks between North and South Korea, what exactly does the President hope to do to get those started? I mean, North Korea's position on this has not changed for 30 or 40 years. They won't deal directly with the South. Do you have specifics in mind to try and change --

AMBASSADOR LORD: Well, we've had ongoing dialogue with this with South Korea. Of course, we keep in close touch with Japan. Nothing specific I can tell you, just that we will underline once again our solidarity with South Korea and the fact that, although the agreed framework is going ahead very well in most respects as I suggested, the missing element is North-South dialogue. So we'll continue to press for that and talk to the South about the best ways that might occur.

Q: Mr. Lord, if the North Koreans resume these violations of the joint security area in the DMZ, what are the United States' options to stop them or to take some action?

AMBASSADOR LORD: Well, I'd rather give you the usual answer in a case like this. We don't address a hypothetical situation.

Q: Well, it's already happened.

AMBASSADOR LORD: Yes, but it stopped happening for several days and that happened, I think, because of world reaction. We weighed in with the North Koreans at appropriate levels. We've been consulting in New York with our South Koreans friends and other members of the United Nations in New York. I think it's fair to say that other countries, perhaps in somewhat more guarded language than ours, but other countries like China and Russia have indicated that the armistice should be maintained and not violated. So we'd like to think that this has stopped.

Now, if it were to start again -- and we have no reason to believe it will, but one has to be on guard against that -- of course, we can resort to diplomatic and other measures to try to head it off. But I'd rather not speculate on something which we trust will not happen.

Q: What is your characterization of the state or the degree of institutional wobblyness in North Korea? We've heard words like implosion, disintegration. How do you see the situation there?

AMBASSADOR LORD: Again, I welcome my colleagues to join me in any of these questions, particularly as they get more and more difficult? (Laughter.)

First, let me say that is one of the opaque societies in the world so that it's not being a coy or cautious bureaucrat to tell you that we don't know exactly what's going on up there. So I do want to put that out in terms of intellectual honesty here.

There's no question, there are serious economic problems in the food area, in the fuel area, and this has been attested to by observers like United Nations agencies, as well as other ways of looking at it. How serious it is, it's very tough to judge. I'm not going to predict anything imminent; it's a serious situation, there's some evidence of malnutrition, but we're not about to predict any imminent developments. I think that would be not only something we couldn't be sure about, would be inappropriate for me to do. But it's a genuine concern. It will be one of the issues the two Presidents will talk about in Cheju.

I'll see if my colleagues would like to add to that.

MS. KRISTOFF: No. In two previous incarnations, I worked for Ambassador Lord and I think he at least signs part of my paycheck now, and so I've learned to agree with him on those kinds of things. (Laughter.)

Q: A question for Mr. Kyle. Do you believe that the insurance dispute right now between the U.S. and Japan will be resolved before the two men meet next week?

MR. KYLE: I think we're going to have to see the negotiations are continuing, and I know USTR is having conversations with the Japanese. But I think it's too early to know right now whether we'll reach that conclusion or not.

Q: Ambassador Mondale said that the U.S. and Japan were going to reaffirm the framework. Is that still on the agenda, and if so, what's the significance of that now that all the trade agreements that were called for under the framework have already been negotiated?

MR. KYLE: Well, I think the framework will be reaffirmed, and Sandy may know a little bit more of the phrasing of that, specifically. But suffice it to say, the framework has been a good organizing vehicle for dealing with a lot of these trade issues, and I think we would see it has having a role in that regard in the future.

MS. KRISTOFF: I would expect the President and the Prime Minister, as they speak about the closeness of the relationship in the political and diplomatic and economic area to point to the framework as a system that allows us to address both sectoral issues in the trade area and macroeconomic issues. It is an ongoing process, it's not that you conclude in one or two or three agreements and then the framework disappears. The whole purpose of putting the framework into place was to give us a systematic way of carrying on a robust economic dialogue with Japan, so I would expect it to be reaffirmed in warm terms.

Q: What will President Clinton tell his counterparts in Korea and Japan to assure them that the dispatch of the two aircraft carriers was not a green light for Taiwan to go ahead now with whatever it hopes to do in terms of independence?

AMBASSADOR LORD: First, let me say that the dispatch of those carriers was warmly received throughout the region. Again, some countries were more euphoric in private than they were in public, but everyone welcomed it.

We made it clear at the time, and we can repeat this, that this was not meant to be provocative on our part; just the opposite. It was meant as a cautionary, prudent move to make sure there were no miscalculations in any part of the region about the seriousness with which the U.S. would respond to resort to the use of force.

We have made clear on both sides of the strait that Beijing and Taipei have to talk to each other directly about the future situation there, and that we would see as a grave development resort to force by Beijing. But we've also made clear to Taiwan that we don't think it's in their interest, let alone ours, that there be undue political provocation which would raise tensions as well.

Obviously, in recent weeks, our emphasis has been in Beijing because of their exercises and so on. But we have repealed to both sides to lower tensions, resume direct dialogue, and as the Secretary mentioned, since the Taiwan elections we are somewhat encouraged so far about the lowering of the rhetoric -- some possible trial balloons that have been set forth -- there's been no basic change in positions, but one would not expect that so quickly.

So we hope that the two sides will get together and talk. They must decide the future. We will welcome whatever they can agree upon. We only insist that the process be peaceful.

Q: Mr. Lord, do you expect a positive reaction from Beijing about the joint security declaration in Tokyo? And the next question is about the Governor of Okinawa wants to have a bilateral meeting with President Clinton during his visit to Tokyo. What is your reaction to that?

AMBASSADOR LORD: I'll let my colleague answer the second one with respect to the White House schedule. On the first, we'll have to see. But we are confident that Beijing should have every reason to welcome a reaffirmation of our alliance. It's not directed at any one country, and Beijing, I think, understands that close U.S.-Japan relations make for stability and predictability in the region. So there's no reason why Beijing would not welcome this reaffirmation.

MS. KRISTOFF: During the process of discussions on Okinawa issues -- you know the Special Action Committee on Okinawa has been meeting almost continuously since it was set up in November, and U.S. forces in Okinawa, as well as Ambassador Mondale and Japanese authorities have kept Governor Ohta informed on a regular basis of our talks and how they are progressing.

I would expect that if Secretary Perry's trip is able to be successful, that certainly Governor Ohta would be debriefed on that.

THE PRESS: Thank you very much.

END 3:40 P.M. EDT