Remarks by Thomas Mclarty at the 25th Washington Conference on the Americas

When I was asked by the President and the Secretary of State earlier this Spring to be their Special Representative to the hemisphere, I was honored, knowing that one of my privileges in this position would be to address organizations like the Council of the Americas that have made a real contribution and made a real difference over the years. I am particularly pleased to be able to address your 25th Washington Conference today. I want to say at the outset that I have only the highest regard for this outstanding organization, and for its mentor and founder David Rockefeller, who has done so much to promote understanding within and throughout the hemisphere.

As the President commented when we were visiting about this this morning, the State of Arkansas has a long and productive history with the Rockefeller family; many of you may recall that Winthrop Rockefeller was governor there for four years in the late 1960's, leaving a rich and lasting legacy. David is someone I admire greatly; it is not an exaggeration to say that his work for many, many years has laid a foundation for the hemispheric architecture which we are in the process of building in a spirit of bipartisanship and mutual respect.

I am also pleased to see so many other familiar faces here today: John Avery, Ambassador Ted Briggs, Susan Kaufman Purcell, Kim Flower, and others. Your long experience in the region and sage advice have brought the Council continued success. Your contributions to the Summit of the Americas last December in Miami were critical. You helped us shape the agenda and provided counsel and insight we simply would not have had without your involvement. I personally appreciate your efforts as do the President and Secretary of State.

Hemispheric Interests Linked to Domestic Interests

From the beginning of his Administration, President Clinton has laid out a series of foreign policy goals: remaining firm in our commitments to building greater security; spreading democracy; and ushering in a new age of open markets and prosperity across the world. These pillars of foreign policy are grounded in the reality that fluctuations in the global economy have direct consequences for the American economy and jobs at home. I'm sure you would agree that in order to project economic and strategic power in the international arena, we must first have a strong and growing economy domestically.

As the President has said time and time again, we are working on the economic fundamentals, just as progressive, reforming governments in the hemisphere are doing. The President's program stresses putting our financial house in order so as not to mortgage our children's futures; highlighting job creation as a means to expand our middle class and allow full participation of our society in ever-higher levels of economic activity; encouraging a longer-term economic perspective through savings and investment, in particular investment in human capital through education and training; and expansion of markets through aggressive pursuit of international trading opportunities.

This hemisphere is a natural ally in our efforts. To this end, the President has devoted considerable energy and demonstrated consistent commitment to improving the economic and political health of countries within our own hemisphere. These goals fit clearly within our broader foreign policy framework: promotion of free markets; increasing economic and political integration; and promotion of democracy.

I believe it is fair to state that our Administration has made significant strides in achieving these goals, three of which I should note.

-- First, we passed the NAFTA, the cornerstone of a new hemispheric policy, which promotes free markets, creates jobs in the United States and elsewhere, and promotes hemispheric stability by linking us more closely with Mexico. NAFTA was a bipartisan effort, which passed with assistance for organizations such as the Council.

-- Second, we passed the GATT Uruguay Round, again bipartisan and with your support. The Uruguay Round is the largest trade agreement in history, which incorporates vast new sectors of heretofore unregulated international trade. Importantly, we have institutionalized Uruguay Round gains by supporting creation of the WTO.

-- And third, we hosted the Summit of the Americas in Miami in December. The Summit, as you know, brought together all of the democratic countries of the hemisphere for the first time. It was an historic event which exceeded expectations, establishing an agenda for the hemisphere based on shared values and common interests.

Implementation of Summit Commitments

These three achievements have really formed much of the basis for our hemispheric relations. Open markets and strong democracies are not mutually exclusive. They are reinforcing. The Summit of the Americas recognized this linkage, and our work program in the implementation of Summit commitments is consistent with that premise.

When the 34 democratically-elected hemispheric leaders gathered together last December in Miami, it was evident then--and it remains evident now- -that we have moved toward a hemispheric consensus of values which was perhaps unthinkable even a few short years ago. Miami charted a course for the hemisphere which is visionary yet achievable, expansive yet practical, dramatic yet fully grounded in the experiences and prerogatives of our individual nations. Just as the United States is in the process now of "reinventing government," so we consider the Summit to have been the beginning of regional efforts to reinvent hemispheric relations in keeping with the foundation you've helped put in place over the years.

Many of the countries in our hemisphere have already taken concrete actions, both individually and collectively, to move forward with the hemispheric agenda. We're encouraged by that. I want to discuss briefly several instances.

Perhaps the best example is Haiti. In less than two weeks, I will travel to Port-au-Prince with the Secretary of State for the annual General Assembly of the Organization of American States. The General Assembly would obviously not be taking place in Haiti had we not taken action--collectively, purposefully, and with resolve--to rid that country of its de facto leadership. Such collective action would not have been possible even a few short years ago. This is a tangible result of our hemispheric cooperative agenda, and an excellent example of the successes that joint cooperation can produce.

Another example is our firm, dedicated response to the recent Mexican peso crisis, which directly or indirectly affected many other countries in the hemisphere and indeed around the world. The health of each of our economies is inextricably intertwined with each other hemisphere- wide; our interests are consonant. Our citizens, our markets, our pensioners, our importers and exporters, our everyday investors--demand confidence in hemispheric finances. When this confidence was threatened soon after the Summit concluded, we worked closely together with international financial institutions and other countries in the hemisphere to provide the leadership necessary to restore confidence. Immediate, unflinching collective action was required to address the problem. In December, it was said the surprises from Mexico were all bad. Since March, the surprises from Mexico have been all good. Although the financial crisis is not yet over, the trend line is better, and indications are good that Mexico is beginning to move forward on a road to recovery. Other affected economies have regained stability and some vibrance.

Last week I attended a dinner in honor of Mexico's Treasury Secretary Guillermo Ortiz; the presentation he made was impressive, providing a realistic assessment of the progress made and steps yet to be taken, especially in the area of employment. The markets are responding. Investment is flowing back into Latin America, much of it brick and mortar investment which will remain even during future financial dislocations. For example, the largest employer in my home state, Wal- Mart Inc, has just announced major investment in Brazil and Argentina. And previously planned investments by General Motors and other major companies are moving ahead on schedule. Other investments have been put on hold, not cancelled. We must maintain steadiness of purpose and resolve in our actions. We must have realistic expectations; that is the right place to be in my view.

Finally, the recent border dispute between Peru and Ecuador was handled- -appropriately--by the Rio Protocol guarantors. Ambassador Watson played an important role in making progress toward resolving a long- outstanding dispute in the region. Under Brazil's valued leadership and with the welcome participation of Argentina and Chile, we remain committed to assisting the Parties to reach a long-term solution on the underlying issues. As we have said time and time again, the Summit did not promise there would no longer be serious problems to contend with in this hemisphere. Rather, the promise of the Summit was that we now have a means to address cooperatively problems which arise in the hemisphere for our collective good. We continue to watch the border situation carefully, and look forward to the day when the matter is not a point of bilateral or multilateral contention.

Building on our successes, the Foreign Ministers of the hemisphere plan to issue a report in Haiti which details significant Summit-related actions which individual governments have taken to date. The report also sets forth a framework for future efforts. It is specific and clear; we have moved the process forward. Included in this report will be specific actions taken on trade, crime prevention, sustainable development, and the reinvigorization of the inter-American system. Progress is seldom easy. There have been and will continue to be problems and complications, but we have achieved a solid beginning after the Summit meeting in Miami.

Trade

We have made progress in promoting prosperity hemisphere-wide. Recognizing the importance of open markets, free trade, and the participation of the private sector to broad based economic prosperity, our leaders in Miami called for negotiation of a Free Trade Area of the Americas by 2005. Ambassador Kantor has said, "I want to clearly state we are committed to pursuing the goal." Trade ministers in the hemisphere have taken up this challenge, committing themselves to two Ministerials in the next ten months. The first one, which will take place in Denver June 30 under Ambassador Kantor's leadership, will discuss steps to be taken as we begin to lay a foundation upon which negotiations can later proceed; the second will occur in March 1996. The Denver Ministerial in June will be followed immediately by the Trade and Commerce Forum, hosted by Ambassador Kantor and Commerce Secretary Ron Brown, a cooperative public and private effort designed to expand hemispheric economic activity.

As you've now heard from Ambassador Barshefsky and others, we are also moving ahead with discussions to admit Chile into the NAFTA, the next critical step of our commitment to regional openness and shared prosperity. We want to move ahead quickly with Chile's accession to the NAFTA to send a positive signal to our hemispheric partners at a critical juncture. President Bush noted this when he recently spoke in Santiago. As Congressman Lee Hamilton has argued, in the end trade is good because it creates markets for the United States and bolsters the economies and stability of the countries we trade with. That's the kind of common-sense approach we seek.

General fast track hearings have already begun, and timely action by Congress is essential. Former Secretary of State Henry Kissinger recently wrote that if we do not seize the opportunities now facing us, there is a real danger the United States will become marginalized, a bystander in our own hemisphere. In reaching out to others, we directly help ourselves. At bottom, we seek a closer economic relationship with our neighbors, based on shared values and mutual objectives, in order to promote what is clearly in the interests of our own citizens.

Crime Prevention

We are also taking a tough stand against crime. Support is growing for the Mexico/United States draft Counter Narcotics Strategy for the 21st Century, which offers a comprehensive plan to eradicate the illegal narcotics trade hemisphere-wide. Already, half the countries in the hemisphere support this strategy. Hemispheric experts on money laundering met in April to shape an agreement on eliminating this activity; other meetings are scheduled in June to put the final touches on the accord. Additionally, the United States plans to increase its drug control budget to almost $15 billion, more than 36 percent of which will be spent for demand reduction.

Steps have also been taken to combat corruption to level the playing field for U.S. business. Of special note: Colombia's recent contract with the Swiss company SWIPCO for the purpose of ensuring that multi- million dollar defense-related purchases will be undertaken with transparency and fairness. This is the kind of concrete action with direct relevence to private sector activities which many Summit initiatives are designed to provide.

Sustainable Development

There are numerous examples of innovative programs to foster economic growth while protecting the environment throughout the hemisphere. The Central American countries have taken an important leadership role in this area through the Central American Alliance for Sustainable Development. The United States is supporting this effort with $5 million through CONCAUSA (Conjunta CentroAmerica-USA), part of a $22.6 million Environmental Initiative for the Americas funded by USAID. We are also moving forward on pollution prevention: various countries in the hemisphere now have plans to reduce dramatically lead--one of the main causes of childhood retardation--in their gasoline.

Inter-American System

A final key achievement is the process now underway for revitalization of the inter-American system. The OAS, under the vigorous leadership of Secretary General Gaviria, is reinventing itself in response to Summit mandates. The Summit leaders proposed a significant increase in the budget of the Unit for Promotion of Democracy, the Inter-American Commission for Human Rights, and the Inter-American Court. They also asked that a trade unit to provide technical studies on trade integration be created. Secretary General Gaviria has been responding to these requests and the United States is proud to have made additional voluntary contributions to the democracy unit and to the human rights bodies. We are also very pleased the Inter-American Development Bank, under the extremely able leadership of Enrique Iglesias, has committed itself to increasing its lending in education and health, two Summit priorities, by some $5 billion over the next five years. And, with First Lady Hillary Rodham Clinton, the Pan-American Health Organization has just launched a program to eradicate measles throughout the hemisphere, forever eliminating fear of this disease from childhood experience.

Next Steps

These are just some of the key activities drawn from an impressive list of tangible actions. Our implementation work program is expansive but focussed.

In closing, however, I must add a word concerning potential stormclouds which are on the horizon. An audience as sophisticated in Latin American and Caribbean affairs as the one here today understands the importance of this hemisphere in calculations of our national interests. Latin American already represents the fastest growing market for U.S. goods and services of any region in the world--$92 billion in exports last year, triple what it was only a decade ago.

Yet legislation now being considered by Congress (H.R. 1561), would have negative effects on our ability to conduct a vigorous hemispheric foreign policy. This legislation would violate the separation of powers, and deny the executive branch adequate resources to defend U.S. foreign policy objectives and U.S. national interests in Latin America and the Caribbean. It would put us on the path toward isolationism.

To advance key foreign policy objectives, including implementation of Summit commitments, we need all instruments of foreign policy available to us. Our ability to help advance the Summit agenda--in key areas including anti-corruption, administration of justice, health, education, and the environment--would be seriously damaged by proposed legislation. This legislation would not only destroy important foreign policy implementing agencies, but it would also cut, at a minimum, 35-40 percent in program resources for Latin America, even though, as you know, we have already cut our funding in the region to the bone. The cuts would also spell an immediate and unjustified end to the Inter- American Foundation.

This legislation should not pass. We need yuour help to substantially modify it or defeat it.

This hemisphere is the second fastest growing economic region in the world. Latin America's infrastructure needs alone will require an estimated $500 billion in investment in the coming decade. The opportunities for U.S. business and industry are immense. But we must work cooperatively both in the United States and region-wide to sustain mutually- beneficial progress. Economic integration is a natural and desired course.

President Clinton and his colleagues in the hemisphere have sketched a visionary blueprint--an architecture if you will--to guide hemispheric relations well into the next century. The President feels strongly about this commitment. As one pundit wrote recently, the President is attacking insecurity by confidently defining the future. Now is not the time to withdraw. The opportunities presented by greater integration in the hemisphere are vast. We will leave our children an expansive legacy if we seize them.