U.S. Asst. Secretary of State for Western Hemisphere Affairs Thomas A. Shannon

Assistant Secretary Shannon: Thank you very much, Susan. I’d like to thank all of you for taking the time to be here with me today. I am looking forward to a discussion on U.S. policy, and conversation mean that I’m not the only one who speaks. I’m looking forward to your questions and to your comments. But again, I’d like to thank you all for taking time this morning to be here today.

If you read my biography I think the most salient point is that I have trouble holding a job. So I’m trying to hold onto this one for as long as possible. But again, it’s great to be here, and it’s an exciting moment, it’s an important moment in the Americas. There’s a lot going on.

What I hope to be able to do today is to run through a couple of broad themes. I wanted to talk a little bit about 2007 in review and kind of walk through what I thought we accomplished last year, now that we’re kind of well into 2008. Kind of briefly lay out what I think our principle challenges are going to be in our policy towards the Americas in the remainder of this administration.

Then talk a little bit about how, based on what we’ve accomplished and what we hope to accomplish this year, how we create what I call an enduring engagement in the Americas. How we make sure that U.S. engagement is sustainable over time and how our engagement has continuity to it.

Then I want to just end briefly with just a few thoughts on the Americas. Some reflections about what I call how you create an authentic diplomacy in the Americas which is really about how you attempt to overcome rhetoric and ideology to focus on shared values and shared interests to build an agenda for the Americas that has broad consensus and that has a potential for success over time.

But I wanted to start briefly by kind of laying out what I consider to be the context in which our diplomacy takes place, and it’s a context that many of you are familiar with. From our point of view this is a region that has gone through enormous transformation which has moved from authoritarian governments to democratic governments, that has moved from closed economies to open economies, that has really begun to engage through trading with global markets, but all of this has had a profound impact. But in many ways the impact is most profound in the deepest and in some ways the most neglected corners of our societies in the sense that the promise of democracy has been embraced by all the peoples of the Americas. The promise of economic integration and the promise of market economies have also been embraced, even though there are still some out there who have differing understandings of what trading relationships are and what they mean.

I think it’s now well understood that we are in a hemisphere which is committed to democracy, and not just committed to democracy in political terms, not just committed to democracy in terms of a mechanism to transfer power or constitutional procedures to manage the relationships between institutions in a government, but also democracy in its social and its economic sense. In other words a society and an economy, a country in which all members of society have access to the prosperity of that society and all members of society feel they are part of a larger national project.

In this sense democracy in the region is really about inclusion. It’s really about inviting people to participate more broadly in their societies. This is profoundly important from our point of view diplomatically, because governments are really being reshaped in a significant way.

What I mean by this is as these societies democratize, and as governments really reach a point where they are reflecting their citizenry, they’re redefining national interests and as they redefine national interests they’re redefining how they engage with each other. And this is a very kind of effervescent period diplomatically. We’ve seen a lot of it recently. Whether it’s investment disputes between Argentina and Uruguay; whether it’s the recent border disputes between Colombia and Ecuador; whether it’s a variety of disputes in the region; they’re all about how democratic governments which really are trying to redefine and represent their national interests engage with partners that are in the same process. And in the process of doing this how there can be confrontation and conflict, but how more importantly I think is that there is a new space for dialogue and a new space for diplomacy in a way that really didn’t exist, I think, in a meaningful way previously.

During the darker days of authoritarian governments in Latin America governments really didn’t speak to each other. They really were isolated in so many ways. But they’re speaking to each other now in an almost constant and continual fashion through all kinds of different mechanisms.

And as you look out across the hemisphere today what’s really striking is all of these integration mechanisms, all of these economic cooperation mechanisms and political dialogue mechanisms, whether it’s Mercosur, whether it’s the larger idea of a South American Union, whether it’s the Andean community, whether it’s the Caribbean single common market, whether it’s CAFTA and the Central American integration system, whether it’s NAFTA, I could go on and on. But these are all kind of creative initiatives all of which are informative stages and all of which still have a lot of work in front of them as they try to identify which of these processes work and which are successful and which are not.

But as we engage in this environment, I think what is most important for the United States is number one, that we be open to the potential of the region; we be open to the potential that these integration processes have; and that we try to make ourselves a useful partner, recognizing that we bring a unique perspective, we bring unique resources, and we also bring unique influence both globally but also within the international financial and elsewhere.

In this regard we are operating diplomatically in a context in which things are effervescent, they’re bubbling. But at the same time we have channels of communication, we have means of dialogue and we have institutional structure, both formally through the Organization of American States and the Inter-American system, but also informally through the Summit of the Americas process and all of the different institutions that have been created over time to talk these problems through. I think ultimately this is going to be to the benefit of the Americas and it’s going to be to the benefit of the United States.

In that regard, as we look back kind of over 2007, from our point of view this was an important year for the United States. 2006, as you’ll recall, was kind of a year of elections. There were something like 17 major elections throughout the hemisphere if you count presidential elections and major legislative elections. That’s half the democracies in the Americas. So really at the end of 2006 the region had worked through an important series of democratic events, had defined its leadership for the next bunch of years, and from our point of view it had defined it in a pretty positive fashion. In other words we came out of 2006 thinking that we were in a good position to work with all the elected governments in the hemisphere if those governments were prepared to work with us.

As we engaged in 2007, we really saw it as what we called a year of engagement or a year of commitment in which we sought to work with our partners in the region to help them be successful and to underscore our understanding first of the big issues that they face. And secondly, our willingness to put our political capital and our economic resources behind those issues so these governments had a good chance of being successful as they engaged the big problems. Recognizing that most of the big challenges this region faces are social. It’s really about poverty, inequality and social exclusion. So we wanted to make clear that we were in a position to address those issues.

Without kind of going into too much of a historical treatise here, all of you are familiar with President Bush’s trip to the region in March of 2007, the speech he gave to the Hispanic Chamber of Commerce just before that trip in which he laid out a social justice agenda for the Americas that we wanted to be part of. And how he used that social justice agenda not just to make it clear to our partners throughout the region that we understood the dramatic social issues and development issues that they faced, but also that we were prepared to work with them. But also as an effort to educate the American people. It was an effort during a period in which the war in Iraq and the war in Afghanistan have absorbed so many people’s attention, to remind Americans that this is our neighborhood. This is where we live, and that the countries of this region have made a commitment to political values and economic understandings that are familiar to us and that we support, and that we need to find a way to make sure these countries are successful and that the social justice agenda directly affects our national security. In other words, how countries in the region address poverty, how they address inequality, and how they address social exclusion affects the well being of the United States and the well being of U.S. citizens.

I think that was a very important message, and a much needed one. We sought through the course of the year to underscore this agenda through the types of actions we took. And aside from the President’s trip, of course, he held a White House Conference on the Americas which was designed to show the flip side of U.S. official assistance in the region, which is significant, but to show how U.S. society is connected to the Americas by bringing together all of the different NGOs, private development groups, corporations, universities, faith-based institutions, all of these working in the Americas, and hook them up with their counterparts working in countries throughout the region.

The conference that the President did in July of last year I think was significant. It was the first regional conference that he has done in his presidency and I think in many ways it was a really successful one. Because it highlighted, I think, the intense level of interconnectedness in the region and also highlighted the fact that in many ways our governments are way behind our societies in terms of how they integrate and how they communicate with each other. And that one of the things we need to be focusing on is how we facilitate this agreement and how we promote it and how we make sure that we don’t get in the way of it or impede it.

But so many of the initiatives that we pursued at that time were designed to highlight this, whether it was in the Free Trade Agreements that we negotiated, whether it was in the nearly $1 billion in Millennium Challenge Corporation monies that we began to disburse throughout the region in compacts with Honduras, El Salvador and Nicaragua, but also in threshold programs with Paraguay, Peru and Guiana. Whether it was the debt relief that we worked on first through the President’s G8 proposal which was incorporated into the World Bank and IMF, but then coming out of the Summit, in Mar del Plata, the President’s proposal to take that agreement and incorporate it into the Inter-American Development Bank which led to about $3.4 billion forgiven for the poorest countries in the region – a significant amount. If you look at the U.S.-Brazil biofuels partnership, the U.S. Treasury effort to promote small businesses and entrepreneurship, our Latin American and Caribbean infrastructure development program, if you look at the deployment of the U.S. hospital ship Comfort which treated over 400,000 patients throughout the Caribbean and northern South America and the Pacific Coast of South America, if you look at the establishment of the Regional Health Care Training Center in Panama done by Health and Human Services Secretary Leavitt along with the Government of Panama which is training rural health care promoters throughout Central America, if you look at our Partnership for Latin American Youth which is a $75 million scholarship program that the President announced, if you look at the Partnership for Breast Cancer Awareness and Research for the Americas that First Lady Laura Bush announced at the White House Conference on the Americas which creates these partnerships in Mexico, Costa Rica and Brazil, if you look at the U.S.-Chile Equal Opportunity Scholarship Program which again puts 100 Chilean graduate students in science, technology and engineering into U.S. universities for the next ten years, if you look at security initiatives that are linked to development like the Merida Initiative or the U.S. strategy to combat gangs or the security dialogue we have with Central America and our Security and Prosperity Partnership with Canada and Mexico and also our continuing engagement with Colombia, we think that 2007 was this incredibly active year as we kind of reached out from top to bottom in this hemisphere, and at all levels of government. Not just with presidential visits, but with a lot of cabinet level visits and a lot of congressional visits to the region.

Again, the point was to show that first, we get it, we know what the problem is. Number two, we want to be part of the solution, not part of the problem. And that we want to build a broad engagement with the hemisphere that is focused on social and economic development and built upon dialogue and cooperation.

As we look forward in 2008 we really want to take this level of commitment and engagement and make it a partnership and make it a partnership that endures.

As we look out over the challenges we face this year, what’s striking is that in some ways the challenges we face aren’t diplomatic, they’re internal to the United States. They have to do with the U.S. Congress and our relationship between the executive branch and the U.S. Congress.

What I mean in that regard is that we have two Free Trade Agreements before our Congress, or will be before our Congress, in the not too distant future. The first is Colombia and the second is Panama. There is also South Korea, but I’ll leave that to my colleague Chris Hill to promote that with our Congress. But obviously we think that successful congressional consideration of the Colombia and the Panama Free Trade Agreement is essential to our broader strategic and economic interests in the hemisphere and also vital to our understanding of what a partnership is and our ability to maintain our influence and presence in the region.

This is going to be a heavy lift in our Congress. All of you are familiar with this. All of you are familiar with the political challenges that we face in this electoral year, but the President has made clear in a variety of statements recently, and the Secretary had made clear in several speeches, that from our point of view the Colombia Free Trade Agreement is an essential piece in a larger strategy for hemispheric engagement so we have strongly urged our Congress to take into consideration both Free Trade Agreements and to pass them quickly so that we can implement them in a timely fashion. I’m happy to talk more about that later in the question and answer session.

But the second issue before our Congress is the Merida Initiative which, as you know, is the security assistance initiative that we’ve built with Mexico and Central America which we envision as a three year program. This administration has put forward two budget requests. It will fall to the next administration to put forward the third, but at this point over two years we’re asking for $1.1 billion in security assistance for Mexico and Central America.

Again, from our point of view this is vital to our ability to show a willingness to help democratic partners in the region that directly affect our broader border security, to fight organized crime and drug trafficking, and to do so in a way that, number one, consolidates democratic institutions and creates a space for economic reform to take root and to bear fruit.

What has been striking about our dialogue with Mexico and Central America in building the Merida Initiative is that the dialogue has, from my point of view, been unique in the sense that this is the first time that Mexico and Central America have approached the United States with a very specific security issue and have been prepared to create regional security strategies themselves -- first a Mexican regional security strategy, then a Central American regional security strategy that are linked, approach us about how they think we can best help the Mexican and Central American governments address security issues, both in terms of equipment and financing, but also institution building, and do so in a cooperative way. In other words, this is not the United States dropping a security model on the region. This is the region coming to us with its own security model.

And what we’re doing in the process of these discussions is building institutional relationships that didn’t exist previously, especially at the level of law enforcement. Building levels of confidence which I think will be very important as we carry our dialogue forward. But also I think sending a very clear political signal that the leaders of these regions, the elected leaders and their people, have understood and recognized that organized crime and drug trafficking is an existential threat and that it has to be dealt with in a serious way. But more importantly, that the United States, Mexico and Central American countries now have a shared security agenda, that the shared security agenda is directly linked to social and economic development and the consolidation of democratic institutions. And that just as there are shared challenges, there are shared responsibilities and we bear a lot of the responsibility because we recognize that we are the major market for drugs moving through the region, we are the major market for people moving through the region, and that weapons coming out of the United States and bulk currency, laundered currency coming out of the United States into Mexico is a huge security issue for the region.

In other words, I think we have been successful in building a security agenda that recognizes that we have shared challenges and shared responsibilities and that we can have a degree of dialogue and cooperation that will actually improve security in the United States, but also security in Mexico and Central America and link it through our Andean Counter-Drug Initiative to the entire region.

Again, this will be before our Congress. There’s a supplemental budget request that it’s looking at right now for 2008 and in 2009 we have an additional request which I think also deserves quick approval by our Congress.

Aside from Colombia and Merida as we look out to our broader diplomatic agenda for the rest of this year, the President this month will be meeting with Prime Minister Harper and President Calderon in New Orleans for the fourth meeting of the Security and Prosperity Partnership. This is a North American effort to take NAFTA, address the remaining friction points in the commercial and trade relationship to ensure that as our economies evolve that our trading relationships evolve and our regulatory regimes evolve so that we can actually facilitate the movement of goods and services across our borders, but also understands North America as a shared economic space and that as a shared economic space we need to protect it, and that we need to understand that we don’t protect this economic space only at our frontiers, that it has to be protected more broadly throughout North America. And as we have worked through the Security and Prosperity Partnership to improve our commercial and trading relationship, we have also worked to improve our security cooperation. To a certain extent, we’re armoring NAFTA. We’re trying to show that this $15 trillion economy can be protected against a threat of terrorism and against a threat of natural disasters and environmental and ecological disasters.

Both Canada and Mexico have gone through political transitions and maintained a commitment to the Security and Prosperity Partnership. We are the only country that has not gone through a political transition yet, but we will shortly. The hope of President Bush is that with this meeting in New Orleans, which will be the fourth meeting of the SPP at a leaders level, that this will effectively institutionalize a U.S. commitment. This was a process that began in Waco, Texas, then moved to Cancun, Mexico, then last year in Montebello, Canada and this year in New Orleans. So it is our hope that with this fourth meeting that we will have built an enduring form of communication and cooperation in North America which is going to be so important to our well being.

The next issue that faces us is laying the groundwork for the 2009 Summit of the Americas. This is a Summit that’s going to be held in Trinidad and Tobago. As you recall, the first major multilateral event that President Bush went to after he was elected was the Summit of the Americas in Quebec City. As in this instance, a vast majority of the initial negotiation and ground work for that Summit was done at the end of the Clinton administration. In the same fashion, this administration will be doing a lot of the ground work for the Summit of the Americas in anticipation for whatever administration comes next.

So it’s been important for us that we work with our partners in the region and build a Summit of the Americas agenda that can enjoy broad support and consensus. We’ve been meeting not only with our colleagues in Trinidad and Tobago but elsewhere through the region, especially countries that have hosted Summits of the Americas to try to determine what lessons we can learn from previous Summits in order to ensure that this Summit is a successful one, not just for the entire region but also for the new President, because this Summit will set a tone, and we want to make sure that it’s a successful one because it will be important for whoever is elected that that President have a positive experience in Trinidad and Tobago.

Also as we move forward we’re going to be focusing on strengthening our strategic partnerships in the region, and these are obvious ones. But our relationship with Canada is incredibly important, and one of the things that has been striking over time is the degree to which Canada is engaging more and more in the Americas, not only through institutions like the Organization of American States but also in its bilateral relationships. The Harper government recently released a broad strategy on Latin America which his I think the first time in a long time Canada has done this. From our point of view it’s a very thoughtful strategy, it’s one that runs parallel to much of what we’re doing in the region, and from our point of view this is an indication that Canada is committed to the Western Hemisphere, is committed to working in the Americas in an important and positive way, and that’s important.

I’ve talked about the Merida Initiative and the importance of Mexico as a strategic partner so I don’t think I have to go into too much detail there, but obviously Mexico is a country that is going through dynamic change right now. This is a country which really is on the verge of a huge breakthrough in terms of its social and economic development. We have to find a way to help them be successful in this regard, because to have a secure, developed neighbor on the southwest border would be a remarkable thing for us, and Mexico is capable of doing it. It’s got the leadership, I think it’s got the broad popular commitment, and it’s got a vision and we want to make sure that we are as helpful as possible in this regard.

And obviously our relationship with Brazil has been very important. This is something that President Bush has been working on since the very beginning of his administration, but especially since the election of President Lula, and our outreach to Brazil has been constant. I think it’s been very fruitful. Brazil is a regional power, it’s a global partner, and we have again sought ways to work with Brazil that highlight our broad commitment to a broader economic and social development agenda such as our Biofuels Partnership. But also most recently Secretary Rice’s visit to Brazil and her focus on working with Brazil to fight racial discrimination and intolerance.

In this regard I would like to just point out, I talked earlier about the economic and social development, our commitment to a broader social agenda in the hemisphere, our understanding of the kinds of challenges that the region faces, and I do think it’s important to note that just a few weeks ago as the region was trying to address the issue that had arisen between Ecuador and Colombia, both the First Lady and Secretary Rice were traveling in the region.

The First Lady went to Haiti and to Mexico. She went to Haiti to highlight our work in fighting HIV/AIDS and promoting education and small businesses through micro credits, and she went to Mexico to launch our Partnership for Breast Cancer Awareness with the government of Mexico and Mexican institutions. Two trips that were all focused on health, education and jobs.

And Secretary Rice traveled to Brazil and Chile. In Brazil she signed the Joint Action Plan against Racial Discrimination and Intolerance with the Brazilian Special Minister for Racial Equality, Edson Santos, in the presence of Foreign Minister Celso Amorim. And in Chile, she along with Foreign Minister Foxley launched the Chile-California Partnership which is an effort to revive a partnership between Chile and California that had existed in the 1960s but which had fallen by the wayside during the Pinochet government years. Originally this was a partnership that was largely focused on education and agriculture. A lot of Chileans went to the University of California schools and a lot of Chile’s agricultural success comes out of places like UC Davis. But we wanted to revive this in some fashion and expand it, not only to include education and agricultural issues, but also tie into California’s high tech sector which is an area that Chile could do well in. But also look at other kinds of exchanges between state and local governments and other social and cultural activities.

So I just think it’s striking that during a period in which the region was grappling with a kind of security/border issue which was the Colombia/Ecuador dispute, we were in the region focusing on social agendas. I think that says a lot about how we see ourselves in the region right now and what it is we’re trying to do in the region.

Then very briefly, I think another thing that we need to kind of tie down by the end of this administration is the achievements that have taken place in Haiti and make sure that we pass off to the new government a broad international commitment to Haiti, a UN commitment to Haiti that will endure over the next bunch of years as Haiti rebuilds its democratic state and creates a democratic government that’s able to address Haiti’s economic challenges and social challenges.

Up to this point I think we’ve been remarkably successful. A lot of the success is due to the incredible work of the Latin American nations that are involved in MINUSTAH, in the broader peacekeeping effort. And it’s broad. It goes everywhere from Guatemala to Bolivia to Paraguay to Brazil to Argentina to Peru to Chile and Canada. It’s really been a remarkable accomplishment for the Latin American countries to play a role in MINUSTAH and not only to play a successful public order role, but to be able to make this transition, this flip from maintaining public order to creating an environment in which economic and social development can take place.

This is one of the biggest challenges, I think, facing UN peacekeeping missions around the world, especially in the developing world, which is how you move from public order to economic and social development. I think under Brazilian leadership MINUSTAH has made that flip successfully.

If we’re able working with our partners to keep this process on track, we might be in a position to hand off a Haiti to the next administration which for the first time in decades doesn’t erupt in some kind of crisis for the new administration and doesn’t become a drag on thousands of U.S. troops, which we just can’t do at this point. So the degree to which we can consolidate what we’ve accomplished in Haiti I think will be hugely successful.

Then I think as we look towards the end of the administration, I think what we are going to be trying to do is finding some way to tie this all together and make sure that we articulate a broader vision for the region that we can also pass off to the next administration. I think we’ve done a lot of it so far in terms of our broader social justice agenda, and the degree to which we’re building our political engagement and our larger economic assistance and political cooperation but if we’re successful in our Congress with the Colombia and Panama Free Trade Agreements, we will effectively have an unbroken line of Free Trade Agreements stretching from Canada to the tip of Chile.

This is a remarkable accomplishment. This administration will have negotiated ten Free Trade Agreements in eight years. Now it’s not a Free Trade Area of the Americas, and regrettably because of problems in the Doha Round and because of the international community’s inability to come to terms on agricultural subsidies in a meaningful way, FTA just isn’t going to get done in this administration. But in the mean time we have constructed a series of Free Trade Agreements that cover about two-thirds of the GDP of the hemisphere. Now there is a huge gap which are the Mercosur countries, obviously, but I think this string of Free Trade Agreements, number one, is an important strategic platform for us to reach across the Pacific to the dynamic economies of Asia and I don’t think it’s a mistake or a coincidence that these Free Trade Agreements are all in the Pacific, number one. But number two, I think it allows a platform from which we can have a very useful conversation with Mercosur countries about the importance of trade.

But in order to do that I think we need to begin to expand the terms of our trade dialogue. Some of this is already taking place in the region. The Peruvians along with partners in South America have launched something called the Arc of the Pacific where the Trade Ministers from Chile, Peru, Mexico, Colombia, and some of the Central American countries are talking about how you begin to take advantage of a common approach to trade and start tying these economies together and looking for ways to see how trading regimes can be compatible and how you can actually take advantage of synergies between these countries. This is an important step and it’s one that we’re looking at very closely. We want to make sure we don’t suffocate it by getting too close too fast, but we think it’s a really positive development. But in this regard, we would also, as this conversation develops, we would like to make sure that it has a social content to it, that is clear as the conversation deepens that we’re talking about not just kind of harmonizing trading regimes, but also what we call connecting pathways to prosperity. And also talking about the broader social consequences of trade, identifying who wins and who loses, and how you compensate losers and how you help them adjust to new aspects of the economy and how through the experiences of individual countries you begin to develop best practices that can be shared throughout the region as they attempt to address the broader consequences of trade, and also how we can understand better how to use trading arrangements to enhance labor and environmental standards which obviously are also an important aspect of our approach to free trade in the region, especially following the agreement that was done between Democratic House leadership and the administration last May.

In this regard we really see the potential of a conversation among free trading governments as a way to really expand the dialogue about development, about economic and social development and the degree to which trade is a major engine of this.

In this regard we have started an economic partnership dialogue with Brazil and the purpose of this, again, is to make sure that as we pursue this broader Free Trade Agreement that it not appear as if we’re ignoring our other important trading partners.

We’ve had two rounds in this economic partnership dialogue. We’ll have a third round before this administration ends. Ultimately we would hope that this dialogue expand to all of Mercosur. That’s one of the reasons why we’re focusing now on making sure that this is a dialogue that is successful, that it identifies areas where we can actually deepen our trading and commercial relationship, and that we can ensure that we have a level of dialogue that does allow an eventual connection between what we’re accomplishing on the Pacific Coast and what the South American countries are accomplishing along the Atlantic Coast.

And very briefly, I talked about the importance of an enduring engagement in the region. As we work through these different initiatives that we consider to be essential to a broader partnership in the Americas, we want to make sure, first of all, that there is broad bipartisan support for it. And secondly, that we are in a position to hand these structures off to whatever administration comes after President Bush. Because we recognize at the end of the day that what is going to determine our success or failure in the region is the continuity of our policy and whether or not our engagement can be sustained.

We have recognized that over time so much of our engagement in the Americas has been driven by crises, whether it is in the Caribbean, whether it’s in Central America, whether it’s in the Andes, whether they are financial crises or political crises or security crises. And while obviously we have to be in a position to respond to crises as they emerge, we also have to make sure that we’ve got a broader strategic approach that is focused on our long term interests and that does ensure a degree of continuity. And we think that we over the past eight years have built a platform from which we can do that. We do believe that for the most part our approach has been bipartisan in nature, that it has been about dialogue and cooperation, and that we are in a position to give the next administration a huge opportunity to deepen its engagement, to use what we’ve established as kind of a base that it can build on. And this will be to our benefit and it will be to the benefit of the region. Because quite frankly, this is a region that has changed in really important ways in a very short period of time. The Americas that President Bush will hand off to his successor in January of 2009 are going to be very different from the Americas he inherited in January of 2001, in so many different ways. Some of them we’ve already talked about.

But because of these changes, because of the democratization and because of the opening of economies and because of the success that Latin America and the Caribbean have had, we are no longer a singular partner. This is a region that has lots of opportunities and options, and it’s a much more competitive environment for us and we have to be prepared to compete. That means that we need to be present and we need to understand that it’s not that our influence has declined, it’s that our influence is changing. We are still, I think, a vital component of success in the region. Political success, and economic and social success. But in order for that success to happen we have to be there.

And we cannot assume that our partners in Latin America and the Caribbean are going to wait for us. Quite the contrary, they face huge demands from their populations, and these demands have to be met in short order. Therefore they’re going to look for anybody who can help them. And we have to recognize that and understand it and not see it as a challenge to us, but actually as an opportunity for us.

So, in this regard, as we look ahead it’s going to be vital for us to maintain the kind of dialogue and cooperation with everybody who wants to have dialogue and cooperation with us.

I’ll just end with kind of a few reflections as we look ahead and as we think about how to build an enduring engagement. I think we’re at a point in time in which the United States and Latin America really can get beyond our recent history, really can begin to see each other not through the light of a security struggle taking place elsewhere in the world, but we can really see ourselves clearly in the light of the Americas, can see ourselves clearly in terms of our shared political values and common understandings about our societies and about our economies, and based on this kind of get beyond the rhetoric and ideology that has really confined or restricted our engagements over time. And use this to build relationships that are lasting.

I don’t know how many of you have spent time in Washington, D.C. and have actually wandered around the city. I highly recommend it because you learn a lot from wandering around a capital, but especially wandering around a capital like Washington which is so focused on monuments and public space, because it says a lot about what we value.

If you were to leave the State Department and start walking in ever-increasing concentric circles, what you would find are, with a few exceptions, a few contemporary exceptions, monuments and buildings all dedicated to the Americas. The exceptions being the Albert Einstein statue that sits out by the National Academy of Sciences and the statue of a discus thrower right next to the State Department which the people of Italy gave the United States after World War II.

But if you were to walk out the back door of the State Department you would run into a statue of Bernard le DeGalves who was a Spanish general who operated in the upper Florida panhandle in the Mississippi delta during our war of independence and effectively denied British access to New Orleans and to the Mississippi River. This was hugely important in our war of independence. In fact if you were to go to Spain the Spanish would tell you that Bernard le DeGalves was much more important than Lafayette or Rochambeau. The French would disagree. [Laughter]. But the Spanish insist it was DeGalves who kept the British out of the Ohio River Valley and effectively kept them out of the ability to create a two-front war against Washington’s armies.

Then if you were to keep walking, you would run into a statue of San Martin, you would run into a statue of Boliva, you would run into a statue of Ortiguez, and if you made the swing all the way around and got by the Kennedy Center you would run into a statue of Benito Juarez.

Of course on Constitution Avenue there is the old Pan-American Secretariat Building which is now an administrative building and a library for the OAS. Then of course the OAS headquarters itself which is a really kind of striking and beautiful piece of architecture.

But the point of all this is that for the longest time in U.S. diplomacy the Americas was really the centerpiece of our diplomacy. It was the centerpiece of our foreign policy. And while we’re a global power and we’re going to continue to face challenges throughout the world, I still believe that the Americas are an important core of our foreign policy and our engagements in the world because they allow us an opportunity to put our best face forward and to engage with partners who are prepared to have a dialogue and to cooperate with us. I think this is something we need to nurture, something we need to build on, because ultimately as we face really tough security challenges elsewhere in the world, living in a neighborhood that’s secure and living in a neighborhood that’s prosperous is going to be vital to our long term security.

I thank you all very much for being so patient and listening to this, and I’m delighted to take your questions or listen to your comments.

[Applause]

Moderator: I want to thank Tom for your insightful comments and for being so frank and honest. We have microphones, if you can just state your name.

Question: Good morning. Alberto Armendariz from the newspaper La Nacion from Argentina and Reforma from Mexico. I wanted to ask you about two subjects that you haven’t touched. One of them is Argentina and the developing tension in the country with the government, especially the government that has been acting in the political and social framework of the old Peronism. How does the State Department see the analysis, what’s going on in Argentina?

And then the other subject is Cuba. What is the administration doing for getting a bipartisan policy on transitional Cuba?

Assistant Secretary Shannon: This is the rest of the day. [Laughter].

In regard to Argentina, I can’t make any comment on current events in Argentina because these are really internal Argentine issues. But what I can do is highlight the fundamental importance of our relationship with Argentina.

We believe that Argentina is an important partner in the region and has been for many years, and we share fundamental interests that we have been able to work I think in important ways, whether they be counter-terrorism, whether they be counter-drugs, whether they be broader non-proliferation issues, or working to enhance the consolidation of democratic institutions and stability in the Americas.

Our purpose and intent is to make sure that our level of dialogue with Argentina is as open and fluid as possible and to make it clear to Argentina that we value their partnership and that we’re prepared to engage with Argentina to the degree that Argentina can engage with us. Again, we’re committed to a successful relationship. The fundamentals are all there. We’re going to make sure that it is successful. We’ve seen, I think, similar attitudes on the Argentine side, and that’s important.

In regard to Cuba, this is obviously a moment of great importance for Cuba, great significance as it kind of slowly, tentatively begins a process of change. I guess the big question is, where does this change lead to? There’s no doubt that in the election of Raul Castro to the Supreme State Council and to the people he selected to be his First Vice President and Second Vice Presidents that this is a regime that is inherently conservative and very focused on control. But as we look ahead, our broader goal, of course, would be a peaceful transition to democracy and a transition that is enduring. We believe there is great desire for change inside of Cuba and that this desire for change will probably be expressed in the first instance in the desire for betterment in their daily lives, which means change on an economic and a social level. But that ultimately for this kind of change to be enduring there has to be change on a political level. And we would just kind of urge the government in Cuba to begin a dialogue with its own people. Because it’s only through this kind of dialogue that this kind of change is going to be enduring.

As we look out over the history of transitions in the region, and not only in the region but in the world, whether it’s South Africa, whether it’s Eastern European countries or Brazil or Portugal or Spain, all of the transitions that have been successful have involved regimes that have established dialogues with interlocutors in their society that the regime itself doesn’t control. Whether it’s Nelson Mandela in South Africa or Lech Walesa in Poland – all of these governments, as they work through change processes, need to have a conversation with their people, one that their people can actually have a degree of confidence in.

This is the one aspect of changing Cuba that we haven’t seen yet. The Cuban regime is still using old structures and mechanisms of control and repression to carry out its dialogue with the Cuban people. I think that is going to have to change if that dialogue is going to be meaningful.

The Cubans don’t listen to us much but they do listen to others. The message that we have when we engage diplomatically with others is first, Cuba’s future should be democratic. Secondly, it should be open enough to allow it to return to the inter-American system and to engage more broadly in global trading systems.

Along with taking steps like allowing people to buy cell phones and stay in hotels and buy fertilizer and seed and buy computers, they might consider another reform, which is releasing political prisoners. Because in the release of political prisoners, number one, you show that you’re no longer going to use your repressive apparatus to manage political dialogue and you’re going to remove fear from the equation. That, from our point of view, is vitally important to the ability for internal dialogue in Cuba to be meaningful. And as we engage diplomatically with our partners around the region, we’ve found that everybody aggress with us. It’s just a question of how you talk to the Cubans and how they’re prepared to listen.

But this is tricky. And at the end of the day the reality of Cuba is that a change in Cuba is going to be driven by the Cuban people. It’s going to be an internal process. It’s not going to be an external process. The most that we can do and others can do is create the right kind of context, and in creating that context I think number one, we need to send clear messages to the Cuban government about the importance of human rights and the importance of democratic change. But they also think we need to send message to the Cuban people. That there is solidarity for them, that people want them to be part of a larger community of democratic nations, that they want Cuba to connect to international trading systems and other economic regimes that will actually allow them to enjoy some degree of prosperity.

Question: Hi, thank you. Bill Horner with Bloomberg News. Just expanding on that a little bit, do you think some of the steps you mentioned regarding cell phones and so forth, do you consider those positive steps or is that something you can build on? Is there some way to respond to those steps, limited though they might be? Is there any sign that Raul Castro is moving in those ways or other ways in the right direction and that gives you sort of an opening, even a little bit of response commensurate with what you see in terms of those moves?

Assistant Secretary Shannon: I guess I would respond to that by saying that Cuba is such a closed society that any opening is a good thing. For those of us who don’t live in this kind of environment, the thought that being able to buy a cell phone or being able to stay in a hotel or being able to go to the store and buy seed and fertilizer is a huge advance. It kind of makes you shake your head for a moment. But that tells you a lot about Cuba and the context in Cuba where these things are considered significant. I would say anything that begins to open Cuban society is a good thing. We just think that it needs to go faster and needs to be bolder.

Question: Thank you for underscoring the main subjects with which your administration has been dealing in the hemisphere. There is a big piece of the puzzle that is missing which is the Farm Bill. It affects, it conditions, it curtails our development and our stability. How do we go about stopping it? We had big hope two years ago when President Bush threw the gauntlet at the UN Assembly, literally challenging the Europeans to come to terms, but it affects us directly and we need to address that issue. How do you do that?

Assistant Secretary Shannon: That’s the big question. I can’t comment on our Farm Bill, but President Bush reiterated kind of this challenge to our developed partners around the world in terms of agricultural subsidies just a few days ago in which he said the United States is prepared to take dramatic steps on subsidies if others in the world who have closed down their markets are prepared to take bigger steps. This is really I think the big issue in Doha right now. Whether the United States and Brazil and the European Union and others are able to find a solution to this is going to determine whether or not Doha is successful and ultimately whether or not we can kind of bring the FTA out of the freezer and warm it up. But I don’t have a good answer to that question because this is being worked through negotiators and ultimately the deal when it’s done will be political and it will be done at the highest levels.

Question: Thank you. I am Jorge [inaudible] from Argentina. Let me first of all, sir, express my agreement with what you have said about our bilateral relationship, the United States and Argentina.

Secondly, I would like to know your opinion about the evolution of the role of Organization of American states, especially taking in account recent episodes. Thank you.

Assistant Secretary Shannon: From our point of view the OAS is a central institution in our broader engagement in the hemisphere. I mean the engagement is not only bilateral, it’s also multilateral. It’s done through a variety of mechanisms, but the most important and the most constant one is the OAS. It’s the only political forum in the hemisphere in which all countries meet. Therefore we need to find ways to promote and strengthen it.

I think the OAS came out strengthened in the aftermath of the Ecuador-Colombia dispute, because I do think it was able to create, first of all, space for dialogue, which is very important. But also a space in which the broader concerns of all countries present could be discussed, and also bring to bear resources that can actually address the fundamental underlying cause of the problem which is the nature of the frontier between Colombia and Ecuador. I think the OAS working with the government of Ecuador, working with the government of Colombia will be in a good position to fashion a series of mechanisms that will allow both countries to express and articulate their security concerns and look for ways to cooperate in a more effective way.

So I think the OAS as an institution emerged from the recent disputes strengthened. And this was one of our broader goals. One thing we need to be careful of is that the region doesn’t fragment and that it doesn’t become a series of sub-regions. And the degree to which we can use processes or institutions that bring everybody back together and remind them that we share a hemisphere. It’s important.

Question: I’m Luis Torez with AFP. France is considering giving some FARC members political asylum status in order to try to release some of the hostages including particularly Ingrid Betancourt. What do you think about that, and do you think it could help the situation for the American hostages?

Assistant Secretary Shannon: We’ve tried to make it clear that we support President Uribe and the government of Colombia in their effort to fashion a humanitarian accord with the FARC in order to win the release of all the hostages and that we also support the role that third parties might play, whether they be individuals or governments or organizations in an effort to fashion a humanitarian accord. We have viewed France’s role in this as an important role and as a positive one, always understanding that at the end of the day this role, to be successful, has to be undertaken in coordination with the blessing of the government of Colombia, obviously, because they’re the ones who are holding these FARC prisoners at this point in time.

But obviously we’re interested in getting the three American hostages out. We are constantly reminding ourselves of them. If you go to the American Embassy in Bogotá, the first thing you do when you come into the lobby of the embassy is you’ll see the photographs of the three hostages, but we have always linked their release to a broader release of all the hostages and have called on the FARC to do that.

Question: Thank you very much. Thank you, Susan for the invitation and thank you very much Thomas Shannon for this excellent dialogue regarding U.S. policy in Latin America. Excellent insights.

You have mentioned that it’s very important for the region to approve Colombia Free Trade Agreement with the USA. We know that President Bush administration has shown to the Congress the positive impact that trade has had in Colombia and addressed their concerns about violence and impunity. He has also shown that the Colombian government is making good progress on human rights protection, is making good progress in moving from a culture of impunity to culture of justice, and the way it has improved trade union rights, human rights, through expanding the authority of the democratic state by creating prosperity, economic growth and opportunity. We know the presidential elections, what do you think for your experience is going to happen this month of April with the Free Trade Agreement in the Congress of your country?

Assistant Secretary Shannon: I’m not sure my experience is much of a guide at this point. But obviously we’re committed to successful consideration of the Free Trade Agreement. It will be submitted to the Congress and we will work very hard to win congressional approval. But obviously so much of this lies in the hands of the Democratic leadership of the House and the Senate, especially in the House. And it is our hope as they engage in negotiations with the administration about this and as they think about the future of the region that first they understand the strategic nature of the FTA. It’s much more than a trade agreement. It’s really the manifestation of an alliance between the United States and Colombia, which is important to us, it’s important to Colombia. But as I mentioned, it is part of a missing piece in a larger free trade, construction of a larger free trade area in the Americas that ultimately will be very important to us strategically. And to have a big hole where Colombia and Panama is would be bad for us.

But I talked about the importance of being present in the region. I talked about the importance of having a continuous, sustainable presence in the region. It’s hard to do that without a Free Trade Agreement with Colombia because for our Congress to back away from Colombia at this point in time sends a very clear message to the region that we’re prepared to be your partner until it becomes internally difficult for us or domestically difficult for us, and then we’ll step away and leave you to your fate. That’s not a good message, especially for a message like the United States.

It is my hope that the Democratic leadership in the House will find a way to reconcile their very real domestic political issues with broader national security concerns and do it in a way that recognizes and supports those national security concerns.

Question: I’m Maria Fernandez Pinosa, Ecuadorian Ambassador to the UN. Thank you Tom, for a very insightful analysis. I know that it is impossible to touch on every single topic regarding Latin America, but perhaps a very short few words on migratory policy, migration reform, and climate change that for us, my country, my government, is of extreme relevance in terms of human security which is climate change policy and U.S. engagement in the climate change debate.

Assistant Secretary Shannon: Thank you. Those are excellent questions. Because they really go to the larger nature of the relationship we’re trying to build in the hemisphere. Obviously achieving comprehensive immigration reform in the United States has been a central goal of the Bush administration and it will almost certainly be a major challenge for whatever government comes next, because there’s no doubt that our immigration law structure no longer reflects the reality of our relationships with the Americas and especially the nature of our economies. So in this regard the ability to reform our immigration law to reflect how our own economies have evolved, the importance of the presence of migrants in our own society is going to be vital to or well being, to our security, but also to our relationships with our partners around the region. For all the reasons you all are familiar with, whether it be remittances or whatever.

So this has to be addressed and it has to be addressed meaningfully. But as we address it here I think we need to understand that migration isn’t just a U.S. phenomenon. It’s a hemispheric phenomenon. There are lots of countries that are facing migration issues, whether they be the transit countries, those countries that send their people north, or those countries that themselves are recipients of immigrants, especially in South America and the Caribbean.

So as we attempt to manage our migratory reform here in the United States, the degree to which we’re able to have a broader hemispheric discussion on the impact of migration and the importance of it that will be, I think, very important.

And I think what you see coming out of Bali is a commitment by the United States government, first if all understanding the importance of climate change, and a commitment to working towards meaningful reform, especially in terms of carbon emissions. And the fact that this is an important issue in our campaign now and the fact that John McCain has also made some very strong statements about the importance of climate change, I think is a strong indicator of what is to come.

I think this is going to be an area where we can have a very good conversation.

Question: Bruce Gelb, Council of the American Ambassadors. Your description of the future sounds very encouraging. There’s one 800 pound gorilla who has not been mentioned so far today and I wonder if you might inject that man into our meeting. I think you know who I’m talking about in Venezuela.

Assistant Secretary Shannon: Actually, there are other 800 pound gorillas, like commodity prices which ultimately I think will have an even bigger impact.

You know, let me start by saying that, by analyzing the context in which we’re operating. If you go back to the beginning of this administration and what was happening in the region, many of the countries in the region were completely inward focused. They were dealing with big crises, whether it be the collapse of the Argentine economy and social and political strife that that produced, whether it was the collapse of the Fujimori government and the beginning of the Toledo government, whether it be the end of the Samper in Colombia and the last months of the Pastrana government and the beginning of Uribe’s democratic security policy, whether it be the end of the Fernando Enrique Cardoso government and the effort by a newly elected Lula to consolidate his power and to articulate a leadership path forward, whether it be the emergence in Mexico of a multi-party government and our involvement in Iraq and Afghanistan created an environment in the Americas in which there was an awful lot of space and nobody was occupying the space. And this created I think a huge opportunity for Venezuela and a huge opportunity for Hugo Chavez to articulate a particular vision for the region and to take the resources that he had and put them against that vision.

But what we’ve seen happening over the last bunch of years is that this large space that he was able to occupy has been shrinking. It’s been shrinking largely because the countries in the region have dealt with their internal issues successfully. Argentina’s economic crisis is well under control. It has a consolidated political base. Brazil and Lula have shown themselves incredibly capable of managing their economy and projecting themselves as a leader in the region. Chile has made a commitment to the region that has been significant. Alan Garcia in Peru has created a new space for Peru in the region. Uribe’s democratic security policy has been successful. Colombia is more outwardly focused than it was previously. President Calderon has decided that Mexico cannot be absent from Latin America so he’s making an important commitment in the region. Canada is involved in the region. And we’re kind of back in the game.

What this means is the space Venezuela has sought to occupy has shrunk and what we’re seeing I think over time is that he’s being confined. And I think this is positive for the region and ultimately positive for Venezuela because it’s requiring Venezuela to focus more on internal issues and weaknesses that are significant and important. I think the results of the December 2nd referendum are important in that regard because they sent a very strong signal that while many many Venezuelans agree with the social vision of President Chavez that they want better implementation. They want better governance. They want security. They want food in their stores. And they’re worried about inflation.

So the degree to which the Venezuelan government focuses on addressing its internal concerns and policies and the degree to which it shows a willingness because of this to engage in a more constructive way with neighbors and with us is going to be really important. And I think that’s kind of our next test. Because as this space confines we need to make it clear to Venezuela that we’re prepared to work with it if it wants to work with us. And we’ve tried to do that, especially on issues of counter-drug activity and commercial activity.

Your question wasn’t about U.S.-Venezuelan relations, but if I could, when you look at the fundamentals of the relationship, they don’t seem to support the rhetoric. We’ve got a $50 billion trade relationship, it’s a huge energy party for us. It is one of the major through-ways for drugs leaving the Andes. Historically it’s been an important counter-terrorism partner, but that’s not true right now. But the fundamentals are there for a strong relationship and the interests are there. We just have to find a way to kind of overcome an instinctive anti-Americanism that is expressed and also overcome the rhetoric. We&a