State of the Union 2000


Benefits of Expanding International Trade
Trade has been crucial to American prosperity. Since World War II, as the U.S. has led eight separate rounds of multilateral trade negotiations and signed hundreds of trade agreements, global trade has increased 15-fold, contributing to the most rapid, sustained economic growth ever recorded. Real production in the United States is up 5-fold and real average American per capita income is up 3-fold over this period. Still, there remains much work to be done. Ninety-six percent of the world's consumers live outside the US, many in countries that are only now achieving the means to become significant purchasers of American products.

Forging a New Consensus on Trade
American leadership over the last 50 years has helped develop a world trading system in which the United States is now the world's largest exporter and importer with over $2 trillion worth of goods and services in trade each year. Since the creation of the General Agreement on Tariffs and Trade in 1948, Democratic and Republican Administrations, working in partnership with Congress, have concluded eight negotiating Rounds, opening markets for American goods, and helping advance basic principles of rule of law, transparency, and fair play in the world economy. Most recently, since the conclusion of the Uruguay Round in 1994, a more open world economy has helped American exports to rise by well over $200 billion. This has contributed significantly to the rapid economic growth we have enjoyed over the past five years, and the continuation of the longest peacetime expansion in America's history. At the same time, it has helped us to gain high-skill, high-wage jobs, reverse a 20-year period of decline in wages, and in fact increase wages by 6% in real terms. Nevertheless, as President Clinton has said, we need to build a new consensus on trade by putting a human face on the global economy. The five years since the WTO was founded as the successor to the General Agreement on Tariffs and Trade (GATT) have revealed areas where the institution can be further strengthened in this regard -- including greater transparency, a greater role in addressing workers' concerns about globalization through the establishment of a Working Group on Trade and Labor, and a commitment to sustainable development, including protection of the environment, as enshrined in the WTO's Preamble.

Trade Agreements Enforcement Initiative
The President is committed to ensuring that trade is free and fair and that American companies and workers benefit fully from our bilateral and multilateral trade agreements. He is proposing in FY 2001 that the Department of Commerce and related agencies have the resources necessary to monitor and enforce international trade agreements.

Child Labor
In his 1999 State of the Union address, President Clinton pledged: "[W]e will lead the international community to conclude a treaty to ban abusive child labor everywhere in the world." In June, he spoke to the ILO before it adopted the new convention and in December, with Senate advice and consent, he signed the convention on behalf of the United States. Now we must do more to help countries around the world make the convention's aspirations a reality, bringing education -- not hard labor -- to millions of children and preventing the loss of future generations of youth to abusive work. In the last two budgets, the United States became the world's largest contributor to the ILO's International Programme for the Elimination of Child Labor (IPEC). This year, the President proposes to expand support for international efforts to eliminate child labor.

African Growth and Opportunity Act
In the State of the Union, President Clinton called upon Congress to pass the African Growth and Opportunity Act (AGOA), an important and groundbreaking piece of legislation, which recognizes African countries' efforts to institute sound economic policies and reform. The House and Senate passed different versions of the legislation last year. The philosophy of the legislation is simple: America stands ready to help those African countries that undertake difficult reforms to build a better future. Effective aid, combined with strong reform and increased trade and investment, will help bring Africa into the global economy and create new markets for U.S. exports. American businesses, farmers, and workers all stand to benefit from expanding our trade with one of the largest underdeveloped markets in the world.

Caribbean Basin Trade Initiative
The President will work with Congress toward swift passage of legislation expanding our Caribbean Basin Initiative (CBI) trading relationship with Caribbean and Central American countries. As part of a package including the Africa Growth and Opportunity Act, the Senate passed legislation last fall similar to that which the Administration has proposed. The President's CBI enhancement legislation will create opportunities for American companies and workers as it provides enhanced market access and economic stimulus for countries devastated by Hurricane Mitch. The Administration is strongly committed to conclude, by 2005, negotiations for a Free Trade Area of the Americas, which will expand U.S. export opportunities throughout Latin America, and views CBI enhancement as a useful bridge to this initiative.

Promoting Democracy and Advancing Human Rights
Promoting democracy and advancing human rights has been a central priority of the Clinton-Gore Administration's foreign policy, one that he will again stress in his State of the Union address. Over the past seven years, the Clinton Administration has succeeded in ending bloodshed and reducing tensions in the Middle East, Northern Ireland, East Timor, Bosnia, Kosovo, Haiti, Sierra Leone and elsewhere has offered new hope for peace, democracy and prosperity. This year the President will reaffirm his commitment to advance this cause by calling for continued support for his efforts to broker peace, promote democracy, protect human rights, defend religious freedom, and fully fund our diplomacy.

Leading the Global Campaign Against AIDS and Other Deadly Diseases
Although much progress has been made in the fight against AIDS and other deadly diseases, much more still needs to be done. To that end, President Clinton and Vice President Gore have stepped up the international battle to prevent, treat, and search for a cure for AIDS, which has disproportionately afflicted our poorest nations. The FY2001 budget that the President will send to Congress next month calls for an additional $100 million investment in AIDS prevention, care, public health infrastructure, and education in the African and Asian countries that have been hit the hardest by the disease. Vice President Gore announced this additional funding during an address to the UN Security Council in early January. The President has also called for a new tax credit for sales of vaccines for malaria, tuberculosis, and AIDS to accelerate the development of these vaccines, creating an incentive for the pharmaceutical industry to invest in the development of vaccines for poor countries, which often cannot afford to buy the vaccines they need. This would build upon a proposed $50 million investment in the vaccine purchase fund of the Global Alliance for Vaccines and Immunization. Finally, the President will call upon the World Bank and other multilateral development banks to dedicate an additional $400 million to $900 million annually of their low-interest-rate loans to expand immunization, prevent and treat common diseases, and build sound delivery systems for other basic health services.

U.S.-China Trade Agreement
Under the terms of the agreement, China has agreed to grant the United States significant new access to its rapidly growing market of over one billion people, while we have agreed simply to maintain the market access policies we already apply to China by granting it permanent Normal Trade Relations (NTR). The agreement slashes Chinese tariffs on our goods, opens China's markets to our services, and contains safeguards against unfair trading practices. The agreement also advances critical national security goals. WTO membership will spur China's economy, adding impetus to reforms there; introduce China to global economic competition and accelerate a process that is removing the government from vast areas of the country's economic life; open China's telecommunications market, including to Internet and satellite services, and thus expose China to information, ideas and debate from around the world; and oblige the government to publish laws and regulations and subject pertinent decisions to review of an international body, all of which will strengthen the rule of law in China and increase the likelihood that it will play by global rules as well. While WTO membership will not by itself or overnight transform China's human rights record, it will move the country in the right direction. The United States must grant China permanent NTR or risk ceding the full benefits of the agreement we negotiated to our Asian and European competitors. For all these reasons, the President will make passage of this historic legislation a high priority in the coming year.

Building Peace in the Middle East
After days of intense negotiations at Wye Plantation in November 1998, President Clinton brokered an historic agreement between Israelis and Palestinians that strengthens Israel's security, expands the area of Palestinian control in the West Bank, and enhances economic opportunities for the Israeli and Palestinian people. And in December of last year, President Clinton ended years of stalemate between Syria and Israel by achieving a resumption of Israeli-Syrian peace talks and hosting the highest level meeting ever between Israel and Syria after months of behind-the-scenes diplomacy. The United States has helped broker agreements between Israel and the Palestinians and between Israel and Jordan, and led the efforts toward a resumption of the Israeli-Syrian talks. The United States has stood firmly by those who have taken risks for peace, providing them with strong political, economic and material support; and demonstrated to the enemies of peace that violence and terror will not succeed in disrupting the peace process. At the same time, the United States has maintained its long-standing commitment to the security of Israel, strengthened its ties with Egypt and Jordan, , and built a new relationship with the Palestinian Authority and the Palestinian people.

Bringing Peace to Northern Ireland
President Clinton's intensive diplomatic efforts helped achieve the landmark Good Friday Accord in April 1998, bringing new governing structures and a new era of cooperation to Northern Ireland. And in December of last year, both sides made historic progress towards implementation of the Accord, forming of an inclusive government in Northern Ireland, accepting the principle of consent with respect to any change in the territorial status of Northern Ireland, launching new institutions for North/South cooperation on the island, and taking the first steps to address the decommissioning of paramilitary weapons. In his State of the Union address, President Clinton reaffirmed his support for full implementation of the agreement, so Northern Ireland can pursue a prosperous, democratic course, free of violence and terror. The United States will also continue to support the International Fund for Ireland, which promotes reconciliation through economic regeneration projects targeting disadvantaged Irish border counties and Northern Ireland.

Reversing Ethnic Cleansing in Kosovo
This past year, President Clinton led the NATO Alliance in a 79-day air war that expelled Serb forces from Kosovo and restored self-government to the province, ending a decade of repression and reversing Slobodan Milosovic's brutal campaign of ethnic cleansing. In the face of Allied unity, American military superiority, and strong Presidential leadership, the Serb dictator capitulated, withdrawing his troops and permitting international peacekeepers to secure the peace for returning refugees. The President is now committed to winning the peace, joining European leaders in strengthening democracy and civil society in Kosovo, enhancing economic development and regional integration through the Stability Pact, and supporting opposition within Serbia to complete the democratization of the Balkans.

Protecting Our Computer Networks from Cyber Attack
In his State of the Union address, President Clinton reaffirmed his commitment to strengthen America's defense against the emerging threats cyber terrorists pose to our critical infrastructure, computer systems, and networks. Earlier this month, he launched the National Plan for Information Systems Protection and announced new budget proposals to protect our computer networks from cyber attack, including $621 million to enhance federal research and development in computer security; $50 million to create a new Institute for Information Infrastructure Protection; $25 million to recruit, train and retain federal information technology experts; and $10 million to design a Federal Intrusion Detection Network (FIDNET) which alerts the federal government to cyber attacks. President Clinton has increased funding on critical infrastructure substantially over the past three years, including a 16% increase in the FY2001 budget proposal to $2.03 billion. He has also developed and funded new initiatives to defend the nation's computer systems from cyber attack. To jumpstart the FY01 program initiatives, the President will also propose a $9 million supplemental this spring.

Combating International Crime
In his State of the Union address, President Clinton highlighted new measures to combat international money laundering, which facilitates illegal money flows, fosters corruption, and undermines democracy. Combating international money laundering has become an increasingly important issue for the United States. The last decade has seen an explosive proliferation of offshore banking centers that facilitate international criminal money flows. This proliferation also works against U.S. developmental goals by allowing easy placement of funds obtained from official corruption. There is also a growing concern that these offshore centers can contribute to significant financial destabilization, by providing new avenues for unregulated capital flight and new opportunities for financial management entities incorporated in these jurisdictions to take advantage of the absence of supervisory authorities to engage in activities that would be prohibited in the United States.

Aiding Colombia to Fight Drugs and Strengthen Democracy
Eighty percent of the cocaine entering the U.S. is either processed, transported, or grown in Colombia. For the first time in years, a new administration, led by President Andres Pastrana, is taking the tough steps necessary to crack down both on narcotics traffickers and human rights violators. The President recently announced his support for a bold new plan developed by President Pastrana to both stem the tide of drugs entering the United States and to strengthen the Colombian economy and democracy. To assist the Colombians in this effort, the President has proposed a total of $1.6 billion in funding over two years to help fight narcotics trafficking, provide economic alternatives for Colombian farmers who now grow coca and poppy plants, improve the judicial system, increase the protection of human rights, and crack down on money laundering. A portion of the investment will go to help train and equip special counter-narcotics battalions and to improve the Colombian capability to interdict traffickers by improving radar, aircraft, airfields, and intelligence-gathering equipment. The Administration will also propose $95 million to purchase equipment to enable the Colombian National Police to eradicate more coca and poppy fields, and $93 million for new programs to help the judicial system and promote the peace process. Most of the effort will be financed from the Colombian government's own resources. The aid from the United States is expected to be supplemented by multilateral agencies and our allies.

International Debt Relief
At their Summit last June, G-7 leaders endorsed a new initiative spearheaded by the President to enable Heavily Indebted Poor Countries (HIPCs) to receive deeper, broader and faster debt relief. Under the so-called Cologne Initiative, international financial institutions are developing a new framework for linking debt relief with poverty reduction. The goal is to boost resources for priority social expenditures, including health, child survival, AIDS prevention and education, as well as improve transparency in government budgeting and consultation with civil society in the development and implementation of economic programs. Together with earlier debt relief commitments, the Cologne Initiative provides for reduction of up to 70 percent of the total debts for these countries, decreasing the stock of debt from about $127 billion today to as low as $37 billion with the cancellation of official development assistance (ODA) debt by G-7 and other bilateral creditors. As part of the initiative, the President announced in September that the U.S. would seek to write off all of the $5.7 billion it is owed by as many as 36 heavily indebted poor countries. Last fall, Congress passed part of the funding and authority necessary for the United State's full participation in the initiative, and the President is seeking approval of the remainder this year.

Leading the Way in Global Non-Proliferation
The Clinton-Gore Administration has led the effort to reduce the international threat of weapons of mass destruction. Over the past six years, the Administration has made unprecedented progress in curbing the proliferation of nuclear, chemical and biological weapons and the missiles that deliver them, in reducing the dangerous legacy of Cold War weapons' stockpiles and in promoting responsible conventional arms transfer policies. President Clinton was the first world leader to sign the Comprehensive Test Ban Treaty (CTBT) and has proposed a bipartisan dialogue this year to build a consensus that will lead to its eventual ratification. The United States has also ratified the Chemical Weapons Convention and is working to strengthen the 1972 treaty outlawing biological weapons and to achieve a positive Non-Proliferation Treaty Review Conference.

Strengthening Military Readiness
President Clinton and Vice President Gore have remained committed to ensuring that America's military remains the best-equipped, best-trained and best-prepared fighting force in the world, ready to face the continuing challenges posed by the post-Cold War world and the challenges of a new century. He has matched new commitments with new resources, requesting and receiving from Congress billions in additional defense spending in 1999, reversing declines that began a decade ago. The FY2000 budget proposed a six-year increase of $112B for military readiness and modernization through a combination of new spending and budgetary savings, assuring the first sustained real (after inflation) increase for defense spending in over a decade. This plan increased military pay by the largest percentage since the early 1980s, and increased the 20-year retirement benefit from 40% to 50% of average base pay over the last three years of service. The President's 2001 Defense budget builds on this plan, ensuring military readiness remains first-rate for years to come. Moreover, significant increases are proposed for weapons modernization to guarantee the continued technological superiority of U.S. forces.

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