DEPUTY NATIONAL SECURITY ADVISOR JAMES STEINBERG
AND ASSISTANT TO THE PRESIDENT FOR INTERNATIONAL ECONOMIC AFFAIRS AT THE NATIONAL ECONOMIC COUNCIL DAN TARULLO, AND PRESS SECRETARY MIKE MCCURRY
The Carlton Hotel The Netherlands
1:13 P.M. (L)
MR. MCCURRY: We'd like to get started with this briefing, which is on the record, except for those portions that one senior administration official will put ON BACKGROUND AT HIS OWN DISCRETION. So our two briefers on the record, James Steinberg, the Deputy National Security Advisor to the President; Dan Tarullo, Assistant to the President for International Economic Affairs at the National Economic Council .
Jim wants to do a little overview and go through some of the aspects of the U.S.-EU Summit that occurred today, and then Dan wants to talk specifically about the Mutual Recognition Agreements, understandings reached in the very wee hours of this morning.
Take it away, James.
MR. STEINBERG: Thank you, sir. Well, we've just concluded another very successful U.S.-EU Summit. The effort that this represents sort of comes out of the agreements that the President reached with the EU in Madrid about a year and a half ago to try to strengthen the range of our cooperation with the EU, and it really is a parallel to a number of the other efforts that are taking place as a part of both strengthening the U.S. link to Europe and also building the structures for cooperation
for the 21st century.
The tradition in these summits since Madrid has been to divide the discussions into four broad baskets: foreign policy issues, the first; global and transnational challenges; the economic issues and the new transatlantic marketplace; and
finally, cultural, social, educational contacts and ties. And today there was a lot of discussion in each of these four areas. I think the most important thing coming out of today's summit was the sense that the cooperation and the interaction that takes place in these summits now is not limited to or even necessarily focused solely on bilateral issues between the United States and the EU, but rather on how the United States and the European Union and the European Union countries can cooperate on broader global and international issues. And that was really reflected in the two agreements that were signed today -- the agreement on chemical precursors and the customs agreement, which really represent an attempt to deal with some of these new security challenges.
Indeed, the President said at the meeting today that one of the things that we were engaged in here at the U.S.-EU Summit, in the NATO-Russia event yesterday, and leading up towards Madrid, is creating the organization and the structure to deal with the real security challenges that were going to be facing in the 21st century.
And so a considerable part of the discussion focused on cooperation on issues like drugs, international crime, terrorism, and the like. In addition to the two agreements that were announced, the President and the EU leaders talked about strengthening ties between Europol and the United States as the Europeans themselves are strengthening the role of Europol in between the member nations.
You heard the President talk about on the international crime front a particular interest in dealing with the problem of traffic in women. They had a long discussion about -- as a preview to some upcoming events on environmental issues, particularly climate change, looking forward to the Denver summit, the U.N. General Assembly Special Session, and the Kyoto meeting on climate change.
As another example of the kind of international cooperation that comes out of these meetings was the decision by the EU to join the Korean Peninsula Energy Development Organization and to contribute $100 million over the next five years, really shows again, coming out of this, working on global proliferation issues, not just bilateral issues.
As always is the case in these meetings, there was a discussion of a number of the more important foreign policy issues that we're all facing. The leaders reviewed the results of the NATO-Russia summit and had a brief discussion of the events coming up in Madrid. They had a discussion of the status of the Middle East peace process; in particular the President was able to review for them a little bit about the meetings between Prime Minister Netanyahu and President Mubarak yesterday. They had a discussion about Iran and also about the Aegean; in
particular, the President expressing appreciation to the Dutch for their leadership in making sure that the association and the links between Turkey and the EU would remain open.
They discussed in some length a number of issues related to China, including the reversion of Hong Kong on July 1St, and the continued and shared interest that the United States and the EU countries have in a successful reversion of Hong Kong, and the respect for the Basic Agreement of 1984 that provided the terms for that reversion.
They discussed human rights and nonproliferation issues. They also discussed WTO and MFN, and Dan will have a word or two more on that in his part of the briefing.
They had a discussion on Helms-Burton. In particular, the President stressed the need for the European Union countries to maintain the momentum on their efforts to support and promote democracy in Cuba. And they had a brief discussion on Bosnia, although they agreed to defer most of that discussion to the meetings that the EU leaders and Secretary Albright will be having in connection with the Bosnian ministerial that's going to be taking place in Portugal in two days' time.
As you can see, it was a fairly broad-ranging discussion. And as I say, I think the most significant from our point of view was this renewed commitment by the EU to work with us on these transnational issues. We now have a new forum that's very important for trying to address these things by countries which are deeply affected by them.
Q Jim, can we ask a question?
MR. STEINBERG: Sure.
Q This is the second reference to traffic in women, you and the President, but I still have no idea what happened here so far as that subject is concerned.
MR. STEINBERG: It's a very serious subject, Barry, and I think you should --
Q Right, what are they going to do about it?
MR. STEINBERG: What they talked about was the fact that one of the concerns that they have both in terms of the impact on Western Europe but also in terms of Central and Eastern Europe is the impact of organized crime groups, sort of taking advantage of some of the uncertainties -- the economic uncertainties and the law enforcement uncertainties -- in the new democracies where, as a result of the transition, there is a lot of dislocation and there is very weak law enforcement links in those countries. And as a result, you're seeing international
organized crime groups in the Central European countries in Russia which are beginning to exploit the situation and traffic in women, largely focused on Western Europe. But it is sort of part of the more corrosive impact that really undermines confidences of those societies in the democratic and economic transformation.
And so as part of their general effort to increase their cooperation on international organized crime, this is one area that they thought was a particularly important area for focus.
Q What exactly is going on?
MR. STEINBERG: In terms of the trafficking? I mean, what you have is you have international organized crime groups in Russia and in some of the Central European countries which are in effect running prostitution rings, taking advantage of the fact that there is a lot of economic and social dislocation in these countries, and peddling and running these rings into Western Europe, and to some extent in Asia as well.
And this is, as I say -- I mean, it's both of a concern in the countries where these women are being sent to, because it creates social problems here, but also in terms of the impact on those countries in the sense that one of the adverse consequences of change is this kind of sense that people can be preyed on. And the same rackets that are involved in these things are often involved in drug-trafficking, in arms-trafficking and the like. It's a way of both getting at one particular law enforcement and social problem, but also as a part of the broader effort to coordinate, as I say, talking about greater U.S. police cooperation with Europol and a whole strategy to deal with international organized crime.
Q Did they agree to exchange information, or what?
MR. STEINBERG: Right, exchange information, to understand better what the networks are, and to work with the Central and East Europeans to strengthen their law enforcement efforts. The President recounted how, during his trip to Latvia right after the Russian troops left Latvia that the first request that he got from the Latvian authorities was for the United States to help establish an FBI office there. And there's a real sense that one of the things that we could do to help those societies -- you've heard a lot about the problems, obviously, of the crime and corruption in Russia and some of these other countries -- is to work with them to strengthen their own law enforcement so that their own citizens sense that they're not being preyed on.
Q Well, which countries in particular are you referring to, and are they taking women from other countries into these countries? You make it sound like there's some sort of
changing movement here.
MR. STEINBERG: No, I think the largest concern is women coming out of the Central and East European countries, including parts of the former Soviet Union. Some focus on Western Europe, but there is also some evidence of that kind of trafficking going on in Asia as well.
So as I say, it's both a way of strengthening law enforcement and protection of women here in the West, but also making sure that they are not being exploited as part of the development of these new economies in the East.
MR. TARULLO: The economic discussion in the meetings themselves actually was more focused on the subject of mutual recognition agreements which, as you know, was not an announced outcome of the summit. However, in discussions yesterday between Ambassador Barshefsky and Sir Leon Briton of the European Union, there was a breakthrough in what had been rather elongated negotiations over the course of the last year, and we now have in negotiations resolved all the major outstanding issues and expect that an agreement will be finalized hopefully within the next few days.
For those of you who haven't followed this sometimes arcane but in dollar terms big stakes issue, mutual recognition agreement allows a product or a manufacturing process to be assessed for conformity under the laws and regulations of one country based on the laws and regulations of another. So in practical terms, what that means here is that a piece of European telecommunications equipment that undergoes the relevant testing in Europe would be certified as conforming to any relevant standards in the United States as well.
It's important to indicate that this is not the approval of the product or the pharmaceutical itself, it's the approval of the process by which it's produced and the testing that's done to make sure that the product conforms to its stated standards.
The agreements, if they are finalized, will be in five sectors: telecommunications equipment, information technology products, pharmaceuticals, medical devices and recreational boats. The total value of two-way trade between the United States and Europe in this area is close to $50 billion a year. The businesses that produce these things on both sides of the Atlantic suggest that up to 10 percent of the cost of their product in one market can be attributable to duplicative testing and certification requirements, so the consumer savings can be quite significant.
As I say, we don't have an agreement yet, but I
think it's important to emphasize a couple of things here. One, that this in no way undermines the capacity of U.S. regulatory agencies to inspect or test where they feel the health or safety of the American people is concerned. What it does do is to create a set of mutual procedures whereby testing results and testing procedures and approaches are understood better on both sides of the Atlantic and thus recognized by one-another's testing authorities.
The discussion on economics was far ranging in a sense that it touched a number of topics, although most of them just for a couple of minutes both Presidents and the Prime Minister recounted the efforts that have been made to conclude the information technology agreement and the telecommunications agreements, both of which the U.S. and E.U., a year and a half ago, had undertaken to work together multilaterally to achieve.
The President also raised with his European counterparts the bananas case, which was a subject of discussion during his recent trip to the Caribbean. As you may know, the United States has won a WTO case against the European regime. It gives preferences on imports of certain bananas. The President indicated to his European counterparts that we would like to resolve the case in such a way that protects the interests of the Caribbean exporters while eliminating discrimination against other exporters. And he proposed that our trade authorities get together and over the course of the next month or month and a half before the Denver summit try to resolve the issue amicably.
There was also some talk about China MFN, as Jim mentioned. Here, there is an agreement between the two sides that the admission of China to the WTO is desirable, but that it must take place on terms that are consistent with commercial considerations, which is to say China meeting the normal rules of the game and providing meaningful market access.
The President also indicated in connection with some of the transatlantic bridging activities his interest in moving forward the transatlantic labor dialogue, and in that context perhaps trying to extend the sweatshops initiative that we've begun domestically to Europeans as well. And I think the European side indicated some interest in exploring that and will probably do so over the course -- between now and the next summit.
Finally, the President mentioned our continuing concern with biotechnology items and the hope that decisions on the importation or regulation of biotechnology items will be made in accordance with principles of sound science. This is a matter which, as you may know, has occasioned some dispute between the U.S. and Europe in recent months, with respect to some of our agricultural commodities. Most of those specific problems have been resolved, but it has made clear the need for broader talks to try to determine exactly what the framework for dealing with
these problems is.
Q In this labor dialogue, where is or was or has been or continues to be the emphasis? Are you talking about minimum wage standards?
MR. TARULLO: No, here, as you may know, from the outset of the new transatlantic agenda, the businesses on both sides of the Atlantic have been pushing very strongly. They organized themselves before the governments organized. Once the new transatlantic agenda began, the AFL-CIO in the United States indicated some interest in having a similar labor dialogue, and we worked them and with our European counterparts to set that up.
The agenda would be determined, obviously, by what the labor leaders on both sides are interested in. They have shown some interest in discussing changes in labor markets, maybe minimum wages, although I suspect more the ways in which workers need to respond in the more globalized economy to changes in the labor markets.
The President brought this up in connection with our own initiative domestically. It need not fit specifically into the labor dialogue.
Q That doesn't mix in with the corporations, which, of course, are enjoying the cheap labor they get in various parts of Europe. There is no --
MR. TARULLO: In various parts of Europe? In the European Union?
Q Yes, when you get into Central Europe, if they can get these goods manufactured in Central Europe they don't have to pay living wages, pretty much.
MR. TARULLO: Well, I'm not going to comment --
Q Forget the aside -- are the corporations part of this dialogue?
MR. TARULLO: In the United States, they most certainly are. The sweatshops initiative the President has initiated in the United States involves the companies themselves setting up voluntary methods for monitoring where their goods come from and the labor conditions in the places where they market. And that would be extended to Europe as well.
Q Can you give us a specific example of the MRAs, a real-world example how that could save money to American consumers?
MR. TARULLO: Let me take a hypothetical example. Assume the agreements are in place and assume we have a medical
device, a diagnostic device, which is manufactured by a European company. The device itself is approved for use in the United States, but of course it has to be tested to be sure that it complies with any health and safety standards and also to make sure that it performs as it's supposed to, obviously. Reliability is extremely important in these cases.
Historically, different countries have developed different ways of testing, different kinds of standards, different approaches. You'd find one approach in Britain, another approach in Germany, another in Sweden, and another in the United States. They're not necessarily more or less rigorous than one another, but in technical terms they're different.
If you as the manufacturer have to comply with each of those four testing approaches, then you need to run your product through four different kinds of laboratory tests and submit four different kinds of results. Under what Europe has already done internally and what, with these agreements in place, we would be doing together, is in essence to say, any one set of testing approaches which indicates that the product is reliable and safe can be accepted on both sides of the Atlantic. And that means that companies don't have to pay the extra money for what should be redundant testing.
I just make the point again in passing, the FDA would retain the capacity whenever it felt necessary to conduct an on-site inspection on its own. But I think their expectation and our expectation is that in most cases, this will work very smoothly because of understandings between the regulatory authorities on both sides of the Atlantic.
Q You're saying --
Q -- to harmonize the testing --
MR. TARULLO: No, the idea is not harmonize the testing, but the idea is to recognize the testing methods and certification methods in the other country subject always to the domestic statutory duties of the regulatory authorities.
Q You're saying they can use the other testing standards, but they don't necessarily have to?
MR. TARULLO: The expectation is that they will, but if the FDA had a question about whether those were adequate to meet public health and safety standards, then they could, on their own, inspect to make sure that the product was being produced adequately.
Q As a matter of practice, will we expect all of the signatories to then accept one set of standards or any other set of standards?
MR. TARULLO: That the mutual recognition will evolve over time. And, really, the purpose of this in a lot of ways is confidence-building that the testing procedures in one country meet, achieve the same health and safety and public protection effects that the testing standards in another country do.
Did you have a question ma'am?
Q I'm just wondering if that means they would most likely just undergo one set of tests in whichever country they were manufactured in, or if they would still be tested in the United States.
MR. TARULLO: Remember, the product itself still --if it requires certification like a new drug, it would still have to meet the normal FDA standards. The question of how it's manufactured once it's approved for usage is what this would apply to.
Any other questions?
Q Did you guys discuss Boeing/McDonnell-Douglas?
MR. TARULLO: No. Boeing/McDonnell-Douglas was not discussed in the sessions themselves. I think our position on this is well-known, which is that the United States does not want to politicize an antitrust or competition policy decision-making process. We don't want to see it politicized in the European Union; it certainly won't be politicized in the United States. We just would hope that the decision will be made on the competition law merits.
Q Was it discussed privately then? Is that what you're trying to --
MR. TARULLO: Privately in this session? No, it wasn't discussed in the small meeting, either. I'm saying there have been numerous contacts between U.S. authorities and EU authorities over the course of the last several weeks in which the concern I just mentioned has been expressed.
Q Do you know when this may be signed? You say it will take a few more days. You've got your breakthrough. You have an event coming up that could provide for a signing --
MR. TARULLO: I don't know of any event specifically in tow, but I assume that we'll go ahead -- we won't wait artificially for something; we'll sign it and get going when we can get going.
Q Can you tell me if Helms-Burton was discussed?
MR. TARULLO: Yes, Helms-Burton was discussed, I
think, as Jim mentioned earlier, and the President reiterated the need for continued dialogue, continued activities by the European Union a they have said they would do to promote democracy in Cuba.
MR. MCCURRY: We're going to take a break in the transcript at this point. For purposes of transcript we're going to move into a BACKGROUND session. A senior administration official has one or two observations to make ON BACKGROUND. Everyone understand that? Any confusion about the term BACKGROUND by anyone in the room? All right, it's a senior administration official briefing ON BACKGROUND.
SENIOR ADMINISTRATION OFFICIAL: I just wanted to say a couple more things about the process that led to the MRAs, and this is, as Mike said, on BACKGROUND.
This has essentially been stuck for several months now, almost six months -- really, since the last U.S.-EU summit in Washington. And we came to the conclusion that we really needed to push this thing forward, that we couldn't allow either internal EU issues between members states and the Commission or just bureaucratic inertia to get in the way of either completing these things or determine that we weren't going to be able to do it.
And the one additional point I'd make for you ON BACKGROUND is that Secretary Albright last week called President Santer of the European Commission and indicated to him her sense that the time had come to resolve the remaining issues, that she thought it could be done consistent with both the interests of companies in trading and with proper health and safety concerns, and that she very much hoped to see the agreements concluded this week. I don't know what kind of clausal link one can or cannot draw, but I'll tell you the negotiations on Monday and Tuesday were very productive. We only regret that this wasn't done early enough to be really be able to wrap the whole thing up.
That's all ON BACKGROUND.
Q What were the issues that were opened -- the main issues, sticking points and how they compromised?
SENIOR ADMINISTRATION OFFICIAL: One of them was the capacity of our regulatory agencies always to take action if they thought they needed to in order to protect the health and safety of the American people, and that was preserved.
MR. MCCURRY: All right, we're back on the record. Any other subjects, any other issues? Okay, thanks.
Q The President touched on what could almost be called a Marshall Plan for Eastern and Central Europe. Will we hear more on that today?
MR. MCCURRY: We're going to have -- Barry's question was about the President's remarks today. He talked a little bit about an idea that originates out of the Dutch government for a discussion about further efforts on their reconstruction and recovery of Central Eastern European countries.
The President will talk generally about that today in remarks that we think we'll have for you in prepared form pretty shortly. We're going to try to put out something of an advanced text on this, although the President reserves the right to deviate, as he usually does. But that should be coming within an hour or so, if we can get it.
Q Can I ask you one basic, general question about his remarks or just a few? Is he speaking in terms of investment or investment and assistance? Because the Marshall Plan was assistance as well.
MR. MCCURRY: Well, we have a combination of both investment and assistance programs. We have pursued multilateral lending through the multilateral lending banks that are available. We also have some direct assistance programs that grew out of the old Support for Eastern European Democracy Act programs, the so-called SEED act programs. I don't -- maybe Jim or David can get you some of the specific assistance levels that we've expended. But the President's rough calculation on the amounts that have been expended and then the comparison to what in real dollars would be the Marshall Plan today people told me held up pretty well, that the calculations were roughly correct.
Q That seems kind of a counterintuitive argument to be coming out and saying we need to have another Marshall Plan and then saying, well, it looks like the dollars stack up. Is he planning on any additional aid or additional --
MR. MCCURRY: Well, we're not -- the President is not -- I mean, he's not calling for a new Marshall Plan today; he's saying that the Marshall Plan created something important, an architecture of a continent at peace and able to resist a threat from the East during the years of the Cold War.
What we need to do today is to expand on the general theory of how you construct an architecture that deals with the challenges and realities of the world we live in -- which are new and different and many of them we've been dealing with during the course of this briefing -- the transnational threats of organized crime, drug trafficking, social pathologies that continue to exist that we need to deal with in a world in which approximate threat is not one that is strategic in nature or military security oriented.
Q -- Europe need to do more or --
MR. MCCURRY: We'll get you the prepared speech and I think you'll see how he intends to address those remarks.
Q Mike, can you talk a bit about how you would address the concerns of people who say that everything that's being done here in NATO and the EU are, in fact, excluding Russia, and it's Russia which is the real problem?
MR. MCCURRY: Well, I mean, to the contrary; we see an inclusive future for Europe that extends the peaceful, undivided architecture of this continent all the way from the United Kingdom to the Urals. I mean, we see Russia as a part of that future. And, indeed, nothing is exclusive about any of the arrangements that have been under discussion here.
In theory, NATO membership itself is one day open to Russia. Russia is currently a valued participant in the Partnership for Peace program. And as the President noted, they are participating with us in Bosnia, in the S-FOR deployment there. So that is within the realm of the considerable in the structure that we now have for the future adaptation of NATO.
Q Mike, getting back to the Marshall Plan, you said that the former communist countries had received more money than was in Europe during the Marshall Plan. But it seems --
MR. MCCURRY: No, he made very specifically the opposite point. I mean, it's less than the real dollar investment would have been in the Marshall Plan; but I think he was pointing out it was a significant investment .
Q Yes, but he seemed to say that the problem was not the amount invested, but the way to make sure this money reaches the places that it should reach, to make sure that the money was used properly. Is it correct to say that?
MR. MCCURRY: Dan may want to jump on this, too. One feature of our assistance to all of the emerging states coming out of totalitarianism and communism has been an effort to push this money to the place where it does the best -- at the grass roots, to eliminate as much as possible the administrative diversion of funds or to ensure, as best we can, as methodically as we can, that there's any inappropriate diversion of this funding, and we are pretty scrupulous in the way we administer that.
Q Do you think that the European Bank or the World Bank or the IMF should provide more money for these countries on top of what they have done already?
MR. TARULLO: He was not making reference to that issue. What he was saying in quoting the figures was, I think, an indication that in today's world, development generally,
whether in the economies in transition or in the developing countries is much more driven by private capital and private capital flows than was the case 50 years ago.
And as Mike says, our aim both in our bilateral assistance and in our work with the multilateral lending institutions has been to get them to put money in that gives the countries the capacity to run economies efficiently, to give them the institutions that are necessary to operate market economies, but as the President indicated, more private investment both generated domestically and from abroad are going to be necessary.
And I think our view is that if for the economies to function effectively and to grow in a sustained basis, they need to develop savings domestically and be an attractive place for investment in general.
Q Can you give a quick rundown on money comparisons that the President made and how much of that comes from U.S. sources -- the $88 billion?
MR. TARULLO: You mean the combined official development assistance plus the private capital flows? I don't know, John.
MR. MCCURRY: Eighty-eight billion was the estimated real dollar value of the Marshall Plan.
MR. TARULLO: That was Marshall Plan in today's dollars. Fifty billion in official assistance that's been put in.
Q And $45 billion in private assistance?
MR. TARULLO: Not private assistance, but private investment, and that gets to the point I just made, that --
Q -- billion in U.S. money?
MR. TARULLO: Well, it depends on how you calculate it. There are several billions that are direct assistance, but in addition to that, we have the fact that we contribute to the multilateral lending institutions. I couldn't divide that and break it down for you precisely; we can have somebody try to do it for you.
Q Can you get more specific on --
MR. TARULLO: I can't offhand and aggregate it to all of the countries; I'm sorry.
Q Can you get it to us later on?
MR. TARULLO: Yes, absolutely.
MR. MCCURRY: Okay, the toasts are about to begin momentarily.
Q Any reaction to how the Supreme Court decision yesterday is impacting on the President and the fact that it's having in detracting from some of his achievements here back in the United States?
MR. MCCURRY: It's not. The President, aside from just a phone call with his lawyer last night to understand better what the opinion said and a discussion of how to deal with the questions that we inevitably knew would arise today, hasn't spent any time on the issue at all.
Q How long was the phone call?
MR. MCCURRY: Probably about five or 10 minutes.
Q And what was sort of the issue -- I mean, telling about it, or what went on?
MR. MCCURRY: The President heard about the decision just prior to his meeting with President Yeltsin and said, well, what did the decision say. That was his reaction. He wanted to know what the opinion said. We didn't know at that point. We said we would try to get a hold of Mr. Bennett, and the President talked to Mr. Bennett later just to get a better understanding of what was in the opinion. And Mr. Bennett's commented on it, the President's commented on it and that's all we have to say on it.
Q -- The New York Times assessment, at least on the Internet says, "sense of siege deepens," meaning of the White House. Is that a fair assessment?
MR. MCCURRY: I don't see any sense of siege around here. I haven't heard of any back at the White House.
Q What about the 9-0 decision? Was that a surprise that it was unanimous?
MR. MCCURRY: I'd really -- Mr. Bennett commented on all of those questions yesterday.
Q Texas tornadoes --
MR. MCCURRY: We are concerned about the devastating tornadoes in Texas. We have had -- federal emergency officials have been in contact with their state counterparts who are monitoring the situation. We don't have any request as of yet
from the state for any disaster assistance, but our folks will continue to be in contact with Texas state authorities.
The President was concerned, saw some of the television coverage even here in the Netherlands, about the impacts of the storm.
Q Did he have any comment, Mike?
MR. MCCURRY: He was concerned about it. He said it looked like it had been a very devastating storm, just based on some of the television coverage, and the staff they would get him any updates as we have them later in the day.
Okay, we're starting in with the toast. That's it for today. We don't intend to do any more briefing. Later on, you'll get, as I say, probably an advanced text of the speech to help you out if we can do that in the next half-hour or so.
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