THE WHITE HOUSE
Office of the Press Secretary
(Vancouver, British Columbia)

---

For Immediate Release

November 23, 1997

PRESS BRIEFING BY
MIKE MCCURRY,
DEPUTY NATIONAL SECURITY ADVISOR JIM STEINBERG,
AND U.S. TRADE REPRESENTATIVE CHARLENE BARSHEFSKY


Waterfront Centre Hotel
Vancouver, British Columbia



11:03 A.M. (L)

MR. MCCURRY: Good morning, Vancouver. President Clinton and Prime Minister Chretien, as you could gather from their news conference, had a very spirited, friendly, useful, productive, warm -- what else do we say at the State Department -- stimulating, textured, fluid -- they had a good bilateral meeting and it lasted about an hour, and they told you much about it. But in the structure of that conversation, both leaders spent a fair amount of time at the beginning talking about the work that's been done in advance of the Asian economic leaders meeting that begins tomorrow.

As you know, President Clinton parachuted in here just after midnight last night, and was delighted to learn that so much productive work had been done at the ministerial level in preparation for the leaders' discussions. The table has been set in a very splendid way for some of the discussions they've had, contrary to what some of the conventional wisdom might have led one to believe.

I think a large part of that work, as the President noted, should be credited to Secretary Rubin, Deputy Secretary Summers, and then the excellent work that was done on trade liberalization in the past several days by Ambassador Barshefsky and her team. He said that, you just missed it.

So I've asked Ambassador Barshefsky to talk a little bit about that, particularly for those of you who arrived with the President late last night might not have followed all the deliberations in advance of our arrival. And then I've asked Deputy National Security Advisor, Mr. Steinberg, to give you a fuller readout on the bilateral meeting, if you need it. I'll tell you, from my impression, the two leaders covered just about everything that they discussed, and then some, in their press conference.

So with that, Ambassador Barshefsky.

MR. STEINBERG: You got the order wrong, Mike. For those of you who don't know, I am not Ambassador Barshefsky.

Let me just say a word or two about the bilateral meeting, and then Charlene can talk about the trade issues that have been discussed by the ministers before the leaders' meeting.

This was another in a long series of very good exchanges between the President and the Prime Minister. They have an unusually close relationship; they talk regularly on the phone so they're able to sort of pick up very quickly into the conversations on issues that they have been discussing regularly.

They began, as Mike said, talking about the financial and economic trade issues that have led up to this meeting, and not only expressed appreciation for the work that had gone before that is going to increase confidence that the leaders are coming effectively to grapple with the issues before them, but also talked a little bit about the synergy between the attempts to deal with the financial issues and the reaffirmation of the importance of open trade and how that will increase confidence about the future.

They had a fairly -- in that connection, I should add that Prime Minister Chretien also said a few words about his focus on infrastructure, which is an important priority for him at the APEC meeting. They then had a fairly extended discussion about the Kyoto negotiations on climate change, which are coming up, beginning next week. They had a fairly good meeting of the minds on the principal issues that still need to be addressed. They spoke briefly about the issues of coming to an agreement on targets and timetables. The Prime Minister indicated that Canada had not come to a final decision on its position, but he thought that we were not -- there were no serious difficulties that he saw there.

They both stressed the importance of involving developing countries both as participants in the climate change regime and also the importance of joint implementation as a way more effectively and cost efficiently to achieve the reductions that we're all seeking.

They both indicated that they would be using their efforts here to talk to particularly the leaders of developing countries about the fact that our strategy is not based on trying to in any way reduce the rate of growth for developing countries, but rather to urge them to take advantage of new technologies, to put them on a more energy efficient path towards growth in which they can avoid dependence on high carbon emission sources, and in the long run have a better prospect for growth.

And they indicated that they would work together both in bilateral discussions and at the discussions that the Prime Minister intends to hold during the leaders' meeting itself, that will focus on the climate change issues. There's no expectation that there will be any particular agreement on this issue, but both of them saw this as a good opportunity to sensitize the leaders to the importance of the developing country role.

They touched on the salmon issue. The President's statement and the Prime Minister's statement I think pretty much covers the subject that was discussed there. They also talked a bit about Haiti. The President gave a very strong statement of appreciation for what Canada has done in terms of its contribution to Haiti. And I think it's fair to say that the Haitians have played a really remarkable -- the Canadians have played a real remarkable role in supporting the multinational efforts in Haiti and have been there every step of the way with the United States.

They also discussed China. The Prime Minister noted that following the APEC meeting President Jiang Zemin is going to be making a visit through Canada and asked the President for his impressions of the visit of the Chinese President to the United States. I think the President felt that the visit of the Chinese leader was an important one not only because it was a chance to further engage on issues of common concern, but that he thought that it gave the Chinese President a chance to really see firsthand how the American people felt about these issues and to see that on issues of concern like human rights, that this was not in any way meant as part of a strategy to contain China, but really a reflection of a deep-felt American view about the importance of these issues.

They talked at some length about Iraq. Prime Minister Chretien asked whether the President felt that the situation was better. The President indicated that we still could not make any final judgments about that, that it was important not only that the inspectors be back in the country, but that they be able to carry out their work. And the President once again stressed the tremendous importance that he attaches to the effective work of UNSCOM and the vital need to uncover not only the nuclear and missile histories, but most particularly on biological and chemical weapons, which not only have we made less progress in terms of uncovering the Iraqi program, but also the danger they pose both to the countries in the region and the danger that, because of the nature of these materials, that they could become available to terrorists and others who could threaten the world. And, therefore, the President indicated that he was determined to make sure that everything was done to make sure that this was dealt with effectively by the UNSCOM and the Security Council.

The Secretary of State also briefed on the current discussions in New York and the very strong statement that Chairman Butler made to the Security Council on the need for additional access and the need for really an unfettered ability to move forward. In that connection, in terms of sort of concerns about dangerous behavior in the region, the Secretary also mentioned our continuing concerns about Iran and urged the Prime Minister to join with us in an effective strategy to discourage Iran from pursuing weapons of mass destruction programs.

Q On Iraq, what do you think will happen if Iraq persists in trying to stop inspectors from --

AMBASSADOR BARSHEFSKY: Let me, if I can, put into context what has been accomplished here on trade under Canada's extraordinarily able chairmanship. You recall that last year at the APEC meetings in Manila the United States pushed very hard to have the APEC countries, or a critical mass of APEC countries, agree that there should be an Information Technology Agreement, called ITA, under which global tariffs on anything connected to the Information Superhighway would be reduced to zero by a date certain. The products covered -- computers, telecom equipment, integrated circuits, semiconductors, the range of products.

We came into APEC, at that time 9 of the 18 countries said they would be interested in pursuing the initiative. We then took that initiative to the WTO, because you need a critical mass of global players to reduce tariffs, or you create a lot of free riding on other people's tariff reductions. Ultimately, Europe came along and we have now in the implementation stage massive reductions in global tariffs on information technology products. Generally, we will be globally at zero tariffs between the year 2000 and the year 2005, depending on country and the particular product. That's about a $500 billion market globally.

Following the Manila meetings, the United States, with Canada as chair, pushed very hard to use this ITA model to choose other large global sectors, particularly infrastructure related, but also technology related, for the same kind of tariff reduction treatment and for a discussion of non-tariff barriers. We, the United States, put our suggestions in a big pot, as did most of the other APEC countries. And we think that the enthusiasm for a new series of initiatives came from the fact that the ITA initiative had been so well received globally in virtually all of our economies.

What we have done here is to achieve agreement on 15 major sectors for ITA-type treatment -- that is to say, sectors where the principal goal will be tariff elimination globally within a relatively short span, generally not exceeded 2005 and, in some instances, earlier. This requires, number one, a critical mass of countries within APEC agreeing that they would like to pursue these initiatives. And then, number two, moving out beyond -- particularly to Europe -- to persuade them to come join us.

Of the 15 sectors on which there was a high degree of consensus within APEC, we have chosen nine for the following action: by June of '98, agreement on the product scope, the tariff phase-out schedule, and a movement then to Geneva to attract other large producers into this agreement and then implementation beginning in 1999.

On these nine sectors, six of which were nominations of the United States, the total global trade involved -- and this is now based on 1995 data -- is $1.5 trillion. U.S. exports in 1995 in the nine areas totaled about $170 billion. The sectors are chemicals, energy-related equipment and services, environmental goods and services, forest products, medical equipment, telecommunications equipment, fish and fish products -- which is very important to the ASEAN countries -- toys -- very important to ASEAN and to China -- and gems and jewelry -- actually quite important to our industry because our international access is quite limited.

In addition to these outcomes -- that is, these nine sectors for treatment in 1998, implementation to begin in 1999 -- there are six remaining sectors that will be further reviewed for action in June, including civil aircraft, oil seeds and a number of other areas.

There are three other outcomes that we've achieved. One, APEC members wish to accelerate a work plan on global electronic commerce. There is a fairly significant education function within the APEC countries which are not as conversant with Internet-related technologies as, for example, our European partners, but there will be an accelerated work plan in that regard, including consideration of the issue of duty-free cyberspace.

Second, an agreed work plan on biotechnology -- that is bio-engineered agriculture, which is an issue of global importance. And, third, a call that all countries further improve their offers in the pending WTO financial services discussions so that we can maximize the chance that those discussions can successfully conclude.

Let me say, fourth, a reaffirmation by APEC that the Information Technology Agreement should be expanded into what is being called ITA-2, to add even more products and more countries, and that those discussions, those negotiations should be concluded this summer.

We are extremely pleased by this outcome. This is a very large outcome, particularly -- it's a large outcome in the absolute, but particularly also when one considers the current economic turmoil. And in this regard, let me say that the mood of the meeting on these issues started from an extremely positive point because our officials have been working on developing these initiatives for the last nine months.

But what I felt did more than anything else to solidify the desire for a very large and commercially meaningful outcome -- and here we're talking $1.7 trillion -- were the statements made in the meeting by Thailand, who made the point that if our outcomes here were anything less than large and dramatic, there would be a further exacerbation of the uncertainty in the Asia Pacific region, and that trade and market opening is a force for stability in the region. And once Thailand came forward with this quite far-reaching statement, the positive mood and comments made by virtually all delegations was essentially put in concrete.

So we're very pleased with the outcome, and again wish in particular to praise our Canadian hosts and the chairmanship of Canadian Trade Minister Sergio Marchi as well as the Canadian Foreign Minister Lloyd Axworthy.

Q We see the Chinese President coming in. I heard two conflicting things -- a real bilateral with him and I also heard -- I think you said yesterday that maybe just a few minutes on the side.

MR. MCCURRY: We're going to do what we call a pull-aside bilateral. It's going to be -- that's as opposed to a golfing bilateral.

Q In that pull-aside bilateral --

MR. MCCURRY: But they are going to sit down and try to get together and do some things.

Q Well, when they do, will the President be influenced at all by the pro-democracy leader's assertion that only confrontation -- he refuses to call himself a dissident; he thinks most Chinese favor democracy -- that confrontation is the way to deal with this and not --

MR. MCCURRY: This was actually -- the President and the Prime Minister had a very good exchange on exactly how we can remain engaged with the Chinese in pursuing the issues that we've discovered, and obviously Prime Minister Chretien was interested in that. Why don't I have Jim answer that, but I think the short answer is that we're confident that being engaged with them is a way in which we can work on these issues and work on them productively, and we certainly will do that.

At times, because it does involve some differences of perspective, it does involve the type of textured conversation that some suggest is necessary. We have those kinds of conversations, but it's in the context of a relationship that's producing benefits because we are engaged.

MR. STEINBERG: Barry, I think one of the things that both the President and the Prime Minister noted when they talked about China in their meetings with President Jiang was that there is more of a explicit and open discussion on the Chinese side now about these issues; that we have regularly brought these up all along, but there is now, although we've not, by any means, reached common agreement about human rights and what we believe is the right course for China to take, that more and more, that this is becoming something that there is a strong engagement in the conversations about.

And both the President and the Prime Minister talked about efforts that they're making in addition to this -- the core human rights issues on the rule of law. The Canadian Foreign Minister briefed on some of the rule of law efforts and their dialogue in terms of helping on legal assistance, for example, and rewriting the laws in China. And the Secretary of State noted that we, too, have a rule of law initiative that we launched this year with China.

So I think that there was a real agreement that this strategy was a very positive one, that there was a long way to go. The President indicated that there was no guarantee that we would ever see in China what we hope to see in terms of human rights, but that the best way to promote that was through in engagement.

Let me just say a word on Iraq before we start. There have been a large number of senior administration spokesmen out today. I will take questions, but we're going to re-covering a lot of ground that's been covered by people of higher pay grade than myself.

Q Just in terms of -- what could happen if Iraq persists in trying to block the commission from inspecting a certain number of sites?

MR. STEINBERG: We've made very clear that we think that having the access is critical to UNSCOM's work. Indeed, part of the reason why we reached the situation that we were in over the last several weeks is precisely because we were dissatisfied, and the Security Council was dissatisfied, with the level of access that was being provided.

If there are difficulties, we will clearly begin with the Security Council, because that -- I think we've demonstrated over the past several weeks, that there is a common commitment to UNSOM and to its work. But, beyond that, the President has a range of options and he is not ruling anything in or out.

Q Just one follow-up. The Iraqis claim that they have an agreement with the U.N. according to which some sites are off-limits to the inspectors. Do you agree that there is --

MR. STEINBERG: There are no agreements that some sites are off limits, that there has been, as Chairman Butler said, that he wants to get greater clarity because he is concerned about how to handle these sites. But certainly there is no agreement that sites are absolutely off limits.

Q For Charlene, while you did get agreement on quite a roster of things, one of the things that we were expecting was an agreement on financial services. Can you either tell me whether you think they might reach an agreement between now and the end of APEC, and, if not, why not?

AMBASSADOR BARSHEFSKY: The financial services discussions are being negotiated in Geneva. It's a global negotiation. There will be no negotiation here with respect to that issue, nor was any contemplated.

The current status presents a rather mixed picture. There are a number of countries that have come forward with what we would view as very good offers with respect to a range of financial services market openings, including rights of establishment and certain ownership rights. There are other countries that have put forward offers that are less complete, and we have urged them to come forward and improve those offers.

And then there are perhaps 10 or 12 countries, some of which are major, that either have not yet put a written offer on the table, although they have orally expressed what the offer would encompass, or who have indicated, again orally, they are going to substantially improve their existing offers, but again have not done so in writing.

The process of these offers being put forward or improved will go on for about the next 10 days in Geneva. At that point, we'll be in a better position to assess whether an agreement can be successfully concluded, or whether we still fall far short. Our hope, obviously, is to do everything we can to ensure that these talks conclude successfully. But in as much as our offer is the best on the table, it really is now for other countries to come forward and make the requisite improvements in their offers.

Q Are you going to put financial services on the same sort of track as ITA here at APEC?

AMBASSADOR BARSHEFSKY: Financial services has its own track as determined by agreements reached two years ago in Geneva. That is to say, the typical formulation of agreements of that sort, as with our WTO telecom agreement, as to which APEC was also critical, is an agreements reached. There's about a year period in which you have to have ratification and national changes to legislation, things of that sort. Then the agreement goes into effect. And depending on the phase-in schedules negotiated, there is a phase-in. And that's the way all of these agreements are done.

That schedule will be determined by the outcome of the negotiations. It's not a pre-determined outcome. As with respect to the particular sectors, we're looking at an APEC for further tariff reduction and elimination.

Q For any of you three, at any of the many levels available here, is the United States telling any of the developing members of APEC that the United States at Kyoto will need something from them to get around the sort of growing discussion in the United States that there can't be any free riding?

MR. STEINBERG: The President has been very clear both publicly and in the discussions that he has had with leaders since he announced our position at National Geographic, and he will in the discussions here, that there can be no solution to global warming that doesn't involve developing countries. Even if we did all of the things that we have indicated that we want to do, by the middle of the next century all of the good would have been eclipsed by the growth in emissions by developing countries.

So developing countries have to be part of the solution. The President has indicated that we are not looking for the identical commitments from developing countries, but they must be part of the overall attempt to deal with this, because otherwise, because of the nature of the global comments, that it will make no difference, that all of the countries of the developed world will have done a lot.

He also believes very strongly that it's in their interest; that they can benefit from Western technology. The strategies that we're urging on them -- including joint implementation and emissions trading will allow them to get better access to more modern, cleaner, more efficient technology that will actually stimulate their growth.

Q And that's being reinforced here?

MR. MCCURRY: Let me add to that, too. The President spoke with some passion with Prime Minister Chretien about that and encouraged the Prime Minister, as the host of the leaders' discussions, to have an opportunity during the sessions coming up where they could really talk about this in a very candid way.

Q How do you think the message is being received and will be acted upon?

MR. STEINBERG: Well, I'm not going to try to predict how it's going to come out. But there have been a number of discussions. When the President was in Argentina we had a good discussion and made some progress with President Menem; when President Zedillo was in Mexico, again a very good statement from the Mexican government. We need more, and that's clearly something that the President is going to be pursuing in his meetings with a number of the leaders here in Vancouver.

Q Those two are this hemisphere. What about the Asians?

MR. STEINBERG: Absolutely. I expect it will be an issue --

Q Have there been similar --

MR. STEINBERG: With President Jiang Zemin -- one of the longest discussion during the bilateral in Washington with President Jiang was on climate change. The President discussed this. President Jiang noted that he was actually an engineer who had been involved in some conservation work. They had a long discussion. And I would be fairly certain that at almost every, and perhaps every bilateral that's held here that the climate change issue will be very much on the minds of President Clinton and the other leaders.

Q Jim, who is going to represent the United States at the Kyoto summit?

MR. STEINBERG: The President has asked Stu Eizenstat to head the U.S. delegation to Kyoto.

Q What about Vice President Al Gore?

MR. STEINBERG: Stu is going to head the delegation. I know of no decisions or anything concerning the Vice President.

Q Was there a decision made that it should be at that level?

MR. STEINBERG: It's a ministerial conference, and was the expectation all along that that would be the level in which the head of the delegation would take place.

Q Are you ruling out an appearance by

Vice President Gore at Kyoto?

MR. STEINBERG: I don't speak for the Vice President. I can just tell you that he certainly made --

Q You speak for the National Security Council.

MR. STEINBERG: He has nothing planned and no decision has been made to do that.

Q Are you ruling out any sort of agreement coming out of APEC from the developing nations saying that they will sign on?

MR. STEINBERG: The issue is an issue for negotiation in Kyoto. This is not a negotiating session. And, in fact, what Prime Minister Chretien and President Clinton both said is we're not looking for outcomes here, we're looking for a better understanding.

I think President Clinton feels very strongly that some of the leaders in the developing countries may have a misapprehension about what it is that we're seeking, a fear that somehow we're trying to hold down their growth or that this is a strategy that would impact their own strategies for development.

The President has a very strong conviction that if these countries early on adopt efficient clean energy technologies, they will actually be on a more efficient growth path and that over time they will have a higher rate of growth, rather than relying on less efficient carbon sources that the United States and other developed countries had used.

Q Let me ask the question a little more precisely then. Do you expect the same of statement to come out of the APEC leadership that we got from Menem in Argentina?

MR. STEINBERG: I don't expect there to be any statement. The Leaders Statement, as you've heard from Prime Minister Chretien with respect to other topics, will focus on the things that are formally on the agenda. I think that it will be important that we have these individual discussions. I know that President Clinton is not looking for any specific statement here now. What we really hope is that as a result of these discussions, that the leaders will give their negotiators in Kyoto direction.

I think part of the problem, too, has been that, as always in these negotiations, that trying to move to a new and fresh area of thinking sometimes takes the impetus from leaders. And I know President Clinton thinks it's very welcome and timely to be here with so many important countries to be able to discuss these issues, to have a really full and frank exchange about the importance of these issues and his vision about how they can be achieved.

Q Jim, has the President gotten through to either Blair or Chirac in this series of phone calls that he wants to make other Security Council leaders?

MR. STEINBERG: He has sent messages to them. I don't believe they've talked by phone.

Q Can you share with us those messages?

MR. STEINBERG: Again, the main message of the messages was that the unanimity of the Security Council, the determination to work together has been very effective thus far, but that we need to retain our vigilance and we need to make sure that UNSCOM has the tools and the authority to get the job done.

Just to fill out, he also sent a message to President Yeltsin, a rather long follow-up to his phone call, in which he further indicated to President Yeltsin the nature of our concerns about the WMD program in Iraq and why we consider it so important that we have a completely effective inspections regime.

Q Jim, you said, in a careful, diplomatic way, that no sites would be absolutely off-limits. Now, twice now we've heard the President imply that the Iraqis are making more headway in getting rid of nuclear material than chemical and biological. Let's turn it around. Are you saying the United States -- of course, with total unanimity -- would go along with the other Security Council members and limit the inspections, would favor limiting the inspections of nuclear sites in Iraq?

MR. STEINBERG: No. What I would say is that Chairman Butler and his UNSCOM inspectors ought to have all the access they feel they need to answer the questions that they need to get answered.

Q Why did you say not absolutely off-limits?

MR. STEINBERG: I think that there is -- that's what I'm saying, that absolutely nothing is off-limits.

Q No, you said no sites would be absolutely off-limits.

MR. STEINBERG: Let me be very clear, Barry. I'm not trying to qualify this in any way. Chairman Butler should have -- and I think if you read his report, it's very clear that that is his concern, that he is not having the access he needs, and that he should determine what he needs, when he needs it and he ought to have it, and the Council ought to support him on that. Q And you're absolutely including the 47 presidential palaces?

MR. STEINBERG: Absolutely.

Q Isn't it at all legitimate for a country to try to protect certain areas from an international inspection? Does the U.S. do that or is Iraq in such a position that it's not tenable for them to do that?

MR. STEINBERG: The situation here is the that Council has enacted some resolutions pursuant to Chapter 7 of the Charter. And under these circumstances, that's what it means to belong to the U.N. and that is the authority of the U.N. When the Council acts pursuant to Chapter 7, that supercedes the authority of individual states and that gives the Council the power to do this. And UNSCOM is the agent of the Council in conducting those inspections.

Q Was there any discussion in the bilaterals with Prime Minister Chretien about the Asian financial markets and the need of finding funds perhaps over and above what the IMF has available --

MR. STEINBERG: They both talked about the understanding that was reached in Manila, both gave their strong support to it, but did not discuss the modalities in any more detail than that.

Q Jim, how detailed was the President's discussion about weapons of mass destruction in his letter to President Yeltsin? Did he go into it in great detail?

MR. STEINBERG: He went into it in quite substantial detail.

Q -- chemical weapons, biological --

MR. STEINBERG: And he also gave a fact sheet -- he sent a fact sheet to go with it -- drawing on the reports of UNSCOM, these were -- what he wanted to do was to bring together in one place, because he thinks it's very important that Yeltsin, himself, sees personally the kinds of conclusions. And in each of the four baskets the fact sheet references what UNSCOM has discovered and what it considers that it has not yet discovered.

Q -- Security Council -- do you need some declaration from the Security Council about these presidential sites?

MR. STEINBERG: No. UNSCOM has, under Resolution 687, UNSCOM has quite clear authority.

Q Then why do we need clarification?

MR. STEINBERG: We don't need clarification. What Butler has done is reported to the Council of where he's had problems and where he wants to strengthen his efforts.

Q Can I ask on trade? Mexico and Chile yesterday at the close of the press conference said they weren't going along with the -- and we do have Japan saying that they only went along because it's voluntary and they can opt out. Isn't that a little optimistic to think that you can actually get tariff reduction starting a year from January, given all that?

AMBASSADOR BARSHEFSKY: No, not at all. We had exactly the same situation in ITA. When we left Manila in ITA, there were only nine APEC countries that expressed an interest, neither of which was Chile or Mexico, who still have not participated in it. And Japan at that time expressed significant reservation. Following Manila from ITA, by the time we reached Singapore we had 23 countries, then 38 countries -- now 43 countries, with China announcing at the U.S.-China summit it would join ITA and now Brazil reconsidering its failure to join.

So that has been the pattern on ITA. APEC is a voluntary organization. One of the reasons the ITA model works is because countries feel they can make their own choice, consistent with their national interest, whether to participate or not.

With respect to every one of the nine sectors and, indeed, with respect to all 15 -- some of which will be handled next year -- we have now within APEC more support among countries by number than we ever did with ITA when we left Manila. To put it another way, if in Manila we had nine countries interested, in ITA there is no sector of the 15 in which we have as few as nine countries interested.

The issue now will be other global participants. You know, we put forward in ITA the notion there has to be a critical mass of countries -- this also governs financial services, it governed our telecom talks. You need a critical mass of countries to ensure you've got broad coverage of global trade in that sector. You don't need a hundred percent, you don't need everybody; but you need a critical mass.

In a number of these sectors that APEC has looked at, which already within APEC has a critical mass, which we did not have when we had ITA out of Manila, we will see that Europe will become an important component of this, as they were in ITA, as they were in telecom, as they are in financial services. So you have a situation here, as with ITA, where APEC is making a decision to move forward, to eliminate tariffs, where we already have in mind an indicative schedule on how that's going to be done, and where we will be in a position of challenging Europe, where they are part of that critical mass, to join in that effort.

Q How many of these sectors require new fast track authority?

AMBASSADOR BARSHEFSKY: There will be some that do and some that don't. We have, coming out of the Uruguay Round Implementation Act, some limited residual authority to cut tariffs. That affects a couple of these sectors. But for larger-ticket items, like environmental goods and services, medical equipment and instruments, energy we will need renewed tariff-cutting authority embodied in fast track.

Q Charlene, the USTR is about to publish a report on the Japan auto trade agreement. Given the current economic crisis in Asia, is this a good time to be pressing Japan on this and other of the niggling trade issues between the two countries?

AMBASSADOR BARSHEFSKY: I don't view the trade issues we have with Japan as niggling. They may be denominated by the name of a particular sector, but the underlying structural problem represented by the variety of bilateral trade disputes is in part what has restricted domestic demand-led growth in Japan, which has prevented deregulation in Japan, and has exacerbated Japan's reliance on exports as a means of stimulating its domestic growth.

Autos is such an example, but there are many, many others. We have impressed upon Japan repeatedly that domestic demand-led growth ought to be the goal, and that domestic demand should be stimulated as soon as possible through a variety of measures, including very substantial deregulation in Japan, leading to increased market access for foreign goods, leading to greater competitive pressures in Japan, bringing down prices in Japan and stimulating purchases in Japan of Japanese-produced and foreign-produced goods.

That's the underlying issue that characterizes the range of trade disputes with Japan and has been characteristic of that range for probably 20 years and is the policy direction that we intend to pursue as we have in the past.

Q On the bilateral this morning, the President and the Prime Minister I believe talked about the long- running U.S.-Canada salmon dispute. A State Department official made headlines up here recently by saying that the United States -- or implying that the United States was losing patience with Canada and that the United States might be best put to go it alone on this issue. Has the United States indicated any time limit for resolving this thing which has dragged on for so long?

MR. MCCURRY: I'd only echo what the President said at the press conference. He said that this has -- this dispute has gone on too long, it has been a source of irritation in what is otherwise a splendid bilateral relationship. And both the President and Prime Minister agreed that the imminent persons who are charged with dealing with this issue and attempting to resolve it within the context of the stakeholders process ought to be encouraged to do so because that is, at this point, the best way to ensure that we can save the advantages of the treaty.

Q Mike, the President expressed confidence that the Congress early next year would pass fast track legislative authority. Was he basing that simply on his own optimism, or does he have any real information now that some Democrats are about to change their position and give him the votes?

MR. MCCURRY: It was based both on his sense of optimism and on his belief that as individual members of Congress judge the type of success and results that we see at conferences like that he is attending here, they'll understand how important it is for the United States to remain firmly engaged in the world economy and committed to bringing the benefits of global prosperity back home to American workers who can see their standard of life improve as we remain engaged in free and open trade around the world.

It is, simply put -- this conference, the results here, the effort to continue to open markets, the kind of results that Ambassador Barshefsky has been discussing is the best possible argument to the United States Congress of why we have to remain engaged. And as that message sinks in, I think we will see a change. And as the President suggested, once you separate out the merits of this argument about the future of the world economy from other extraneous issues that get tied up sometimes in congressional consideration of a difficult issue, you have an opportunity to present the argument in much greater clarity.

Want to add?

AMBASSADOR BARSHEFSKY: Yes. let me just add, if you look at the kind of exercise in which we're involved with APEC, as with ITA, we see the following situation: The U.S. is the most major open market in the world. And our average tariff rates are about 2.5 percent. Many countries consider those nuisance tariffs -- that is to say, of not much economic value. If you look around the world, average tariff rates on many of the products I've just addressed are 10 times higher than ours. The notion of using trade authority to bring down global tariffs in line with ours, and then lower further to zero, has extraordinary and obvious economic benefit to the United States.

It also has benefit to the countries involved with high tariffs, as Thailand was making clear, because tariff reductions -- that is, stop taxing yourself on the infrastructure you buy -- has enormous consequences for increased domestic growth in the economies that open those markets further. But as a relative matter, we are so open already, after 50 years of leadership in global trade, the aim is to have other countries now come forward and reciprocate.

Q Can I follow up on one other thing the President said? He called the financial crisis in Asia "a few little glitches in the road." Given the fact that these countries are now being forced to get their economies bailed out by the IMF and are going to have to undergo all sorts of perhaps even draconian economic policies that will make life more difficult, how can he describe these as simply little glitches on the road?

MR. MCCURRY: I think it's in comparison to the bounty of property a growing world economy can bring that these are hurdles, they are glitches. They are things that need to be dealt with effectively, but in the context of the growth in the world economy over the last decade and in these economies in particular it's a problem that can be managed effectively. I think that's what the President was suggesting?

We need to wrap up and kind of move on.

Q Can you go over the President's schedule for the rest of the day?

MR. MCCURRY: The President is playing golf at the moment with Prime Minister Goh of Singapore and Prime Minister Chretien. Prime Minister Chretien will at least be there for a portion of the game. The President was looking forward to a discussion with Prime Minster Goh on many of these same issues that we've just talked about for almost an hour. And he wanted to talk particularly, I think, about the status of the economies in Asia, probably most likely global climate change as well, and then other regional issues.

Prime Minster Goh has been particularly interested in the future of U.S.-Sino relations. I imagine they'll discuss that. We had planned to give a readout to your pool which will be available later in a pool report. That will give you any more detail, as needed, on the substance of that.

The President for the balance of the day, I think, plans just a private program. He'll probably try to go out and see a little bit of Vancouver. I'm not aware he's got any other plans for any business-related meetings. So we don't plan any further sessions here for the balance of the day. So you can have the rest of the day off.

Let me -- one item of update -- I've been asked from time to time about the President's hearing. And if it seems to you that he seems to be hearing your questions with greater clarity it is because he has now been fitted with the hearing aid devices that were recommended to him at the time of his annual physical.

They were inserted for the first time last week by Dr. Mariano and an audiologist from Bethesda Naval. They're working well. He's wearing them for short periods of time as he gets used to them and gradually will increase the amount of time he has them in, and no doubt they will prove useful during the discussions coming up here in Vancouver in coming days.

Q I should have asked this earlier, but Jim said there was a meeting of the minds between the two leaders today on global warming. Did you mean to say that Canada, you think, is going to support the U.S. position?

MR. STEINBERG: I was quite explicit and I said it, which is that Canada has not taken a position. I said there was a meeting of the minds on the importance of developing countries participating in some forum in a way to deal with the global problem.

Q Do you have any idea which way they're going, the European way or our way?

MR. STEINBERG: The Prime Minister indicated that he was still consulting, that he had had good meetings among the leaders in Canada and that they would be going into the Kyoto discussions taking their counsel.

Q One final question. Where does the President stand on the recess appointment for Bill Lann Lee?

MR. MCCURRY: There has been no change. The President concurs with the statement of Mr. Bowles that he should become assistant attorney general for civil rights. So, one way or another, we continue to assess sentiment in the Senate for the confirmation vote that Mr. Lee surely deserves. In coming days we will assess where we are on that and a recommendation will be made to the President. No recommendation has been made to him, therefore, no decision at this point.

Q Ambassador Barshefsky, given what you just said on the necessity of Japan, that deregulations and so forth stimulate changing its structure, stimulate domestic demand like growth and so forth, is that the communication that the recent stimulus package that the government of Japan has announced is insufficient to meet the objective of strong domestic demand-led growth? And will that be communicated in the foreign ministers meeting today or the leaders' meeting tomorrow?

AMBASSADOR BARSHEFSKY: We've already indicated that while we appreciate the stimulus plan that had been put forward, it is, in our estimation, not sufficient to stimulate domestic demand sufficiently. This will be a topic of discussion generally with Japan. It has been already. I've had a lengthy meeting with my MIDI counterpart, where this was discussed at some length.

We have, as you know, a fairly large deregulation initiative which the President and Prime Minister Hashimoto agreed to at the G-7 -- G-8, G-7 plus -- last year. And we have held a series of meetings under that initiative which covers a variety of sectors of importance. We had recently a vice ministerial meeting on that, chaired by Ambassador Jeff Lang, my deputy. And while again we appreciated the efforts Japan had made thus far with respect to certain deregulatory initiatives encompassed in that plan, on the whole we found the progress unsatisfactory.

Q Mike, were you ever able to find out what the President was doing on his own last night for 20 minutes in the rain?

MR. MCCURRY: Yes, I did. He was talking to the First Lady. He had not been able to connect with her and she managed to reach him at that point, so he was finishing a call with his beloved wife.

Thank you. We will -- have a good rest of your day, and we anticipate our next briefing here probably sometime mid-afternoon tomorrow. And our press staff will be here to take care of whatever needs you have.

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