Transcript: Assistant Secretary Roth at Australia National Press Club
(Regional fora such as APEC, ARF promote stability)

In general, a regional organization such as the Asia-Pacific Economic Cooperation (APEC) forum, the Association of Southeast Asian Nations (ASEAN), or the ASEAN Regional Forum (ARF) is "a confidence building measure at a minimum and a vehicle for promoting peace and stability over the longer term," according to Stanley Roth, assistant secretary of state for East Asian and Pacific affairs.

"I think that the ARF and the whole ASEAN set of institutions are really misunderstood," Roth said in an August 26 address at the National Press Club in Australia.

While the Asian financial crisis had hampered the progress of regional organizations, Roth said, it is still impressive to see one-time foes gather at meetings such as the ASEAN Regional Forum and discuss issues of common concern. Such meetings and their follow-on activities are important in building a Pacific community, Roth said.

"You're actually physically constructing the Pacific community that we all talk about so glibly but you now find the military and security types catching up to the economic types who've been way ahead ... on regional integration," Roth said.

"We are not at the point where the ASEAN Regional Forum is going to solve the South China Sea, or mediate a dispute on the Korean Peninsula, or anything like that," Roth said, but "that doesn't mean that the institution should be dismissed either for what it is accomplishing now or for what it could accomplish in the future."

Turning to APEC, Roth noted how people "take it for granted" that the leaders of the member economies will meet. "The notion of a leaders' meeting where the leaders know that they're going to be meeting annually ... has been tremendously useful in getting a greater sense of community established on either side of the Pacific," he said.

According to Roth, APEC will be extremely important in setting the stage for the World Trade Organization (WTO) round later this year in Seattle. "A strong statement of support for a new round of global trade liberalization coming out of this region will be very important," he said.

Regional fora such as APEC also provide opportunities to work on bilateral relations, Roth said, noting that President Clinton and Chinese President Jiang will be meeting at APEC in Auckland.

"When President Clinton proposed it, President Jiang accepted immediately. There is a real desire on both sides to make this a success," Roth said.

"There is a big picture going on even as we wrestle with our county-specific problems whether it's China, North Korea, or Indonesia," Roth said. "There's a trend underway in the region, an integrating trend, which even if slowed down temporarily by the financial crisis, has not been derailed and one to which, speaking at least for my country, remains a very high priority."

Following is a transcript of Roth's remarks:

(begin transcript)

NATIONAL PRESS CLUB ADDRESS

ASSISTANT SECRETARY OF STATE
STANLEY O. ROTH
BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS
DEPARTMENT OF STATE

THURSDAY, AUGUST 26, 1999

Introduction by Ken Randall, President of the National Press Club.

RANDALL: Ladies and gentlemen. Welcome to today's National Press Club Telstra Address. We're particularly pleased to welcome Stanley Roth, the Assistant Secretary of State in the U.S. State Department, as our guest today. He's been as you would undoubtedly know very heavily involved in policy regarding this part of the world, particularly in recent times, Indonesia and East Timor, and given the timing of events there, it could hardly be a more timely visit. He's also keenly interested in the overall operations of the American Foreign Service, and that's another reason for his visit to this part of the world. He's actually been on leave for a little while. I never think of people at his level actually having holidays, but, he's managed to see a few parts of Australia, including in recent days the Whitsundays threat he tells me, where the wind was so strong it even blew away the telephone calls, which is a blessing that we can't advertise on a regular basis. But he's back at work today, and I'd like to have you all welcome Stanley Roth. ROTH: Thank you very much, Ken, and let me thank the National Press Club and Telstra for organizing this event. It's extremely useful for me when I come to a country to have an opportunity to address a lot of people in one fell swoop rather than individually.

I'm afraid that Ken has already scooped my opening gambit. Only 24 hours ago at this time I was on vacation working on my tan, so if I'm a little bit creaky today getting back into the groove, please forgive me. When I first got the invitation back in Washington to speak here my inclination actually was not to accept. The reason was because U.S.-Australian bilateral relations are so good that I couldn't possibly figure out what I was going to fill up 20 to 30 minutes talking about besides lamb, a subject I don't intend to talk about. But the sponsor, the National Press Club, was kind enough to permit me to talk about Asia more broadly and I picked about as broad a topic as you could, specifically "The United States and Asia, an American Perspective." I thought it would be good not to focus on one issue like the bilateral relationship, or on an even more narrow issue like East Timor, but rather to lay out for you a tour d'horizon of how the United States with one year left in the Clinton Administration looks at the Asia-Pacific region.

What I propose to do today is break up my remarks into three bites. We'll see if we get through all of it, since I've committed not to speak more than 30 minutes.

First, I actually want to talk not about individual countries but about regional institutions. Not enough is said about regional institutions, ARF and APEC in particular. Then I want to talk about three of the key U.S. bilateral relationships in the region even though they are in Northeast Asia rather than Southeast Asia, meaning Japan, China, and the Korean Peninsula. I thought I would leave best for last: Indonesia and East Timor, partially because I know that if I run out of time, the questions will undoubtedly pick up on Indonesia, whereas you might not ask about some of the other subjects. So, without further ado, let me begin.

If I had to pick one area where there was not continuity between the Clinton Administration and its predecessors in Asian policy, I would pick regional institutions. Our predecessors were almost entirely focused on the bilateral security relationships, the five treaty allies that we have in the Asia/Pacific region, and basically did not accord regional institutions a high priority. When the Clinton Administration came in the first term there was a real risk that we were going to find ourselves left out; that ASEAN was rapidly organizing itself pushing towards the ASEAN Regional Forum which had its initial meeting in Bangkok in 1994. APEC was acquiring more gravitas and becoming a more significant organization with thought being given to elevating its role. The entire region was talking about regional institutions except for the United States. One of the things that we did, and I don't by any means want to give the United States credit for what the Asians were doing themselves, but one of the things that we did was recognize that we could embrace both, that one could maintain and indeed strengthen the five bilateral security relationships, our treaty allies in the region, but at the same time embrace -- and even robustly embrace -- regional security institutions. We recognized that regional organizations in general are a confidence building measure at a minimum and a vehicle for promoting peace and stability over the longer term.

It's a little odd for me to start at this point because we're coming off a stretch when the regional institutions haven't been doing so well. I think since the Asian financial crisis hit the scene in July of 1997 and going all throughout 1998 and a bit of this year, has been a rough stretch for regional institutions as countries have necessarily turned inwards to deal with their own problems particularly the economic problems. And so it's been harder to get the kind of sense of dynamism that you had in the early years of the ASEAN Regional Forum or even in the years after President Clinton established the leaders meeting at APEC in 1993 at Blake Islet. But I would argue that 1999 has already been something of a comeback. I've just come from the ASEAN meeting in Singapore last month in July and I think without in any way overstating what happened, that one can say that there was a very healthy and useful discussion of real security issues, the South China Sea and North Korea being the two that received the most attention although, interestingly, there was a fair amount of discussion of Burma as well.

But in addition, there was also talk about more conceptually trying to move the organization into a more fulfilling mandate to try to get past confidence building measures which usually tend to mean meetings and having people get together for seminars and workshops and to try to move towards preventive diplomacy, and the Thais were given the mandate as the chair for next year to try to push this agenda along further. But the main point I want to make is I think that the ARF and the whole ASEAN set of institutions are really misunderstood. It is often criticized as a talkfest, and I think what people fail to recognize when you sit at that table and look around and you see countries, many of which used to be enemies, some of whom had challenged each other on the battlefield, many of whom had never talked to each other, and suddenly you see they're all there for this meeting on a common agenda talking the same language and having a fairly active schedule in between the annual meetings at lower levels. You're actually physically constructing the Pacific community that we all talk about so glibly but you now find the military and security types catching up to the economic types who've been way ahead, I think, on regional integration.

Of course, we're a long way off from any kind of European type regional institution. This is not NATO, this is not CSCE, we are not at the point where the ASEAN Regional Forum is going to solve the South China Sea, or mediate a dispute on the Korean Peninsula, or anything like that. That doesn't mean that the institution should be dismissed either for what it is accomplishing now or for what it could accomplish in the future. The Singaporeans deserve a tremendous amount of credit for having organized what I think all the participants felt was a successful meeting this year.

Turning to APEC, which this year is early in September rather than November, I think that in the sense it has been doing exactly the same thing on the economic side that ARF has intended to do on the security side. We now take it for granted because it's in year six but the notion of a leaders' meeting where the leaders know that they're going to be meeting annually and that this is going to be in a sense a bit of a club and that they're going to be talking about the same issues, I think has been tremendously useful in getting a greater sense of community established on either side of the Pacific. And so you're doing this institution building even as you're making concrete progress on economic issues.

APEC has a particular problem because its initial progress, once the leaders' meetings were established in 1993, was so dramatic. You had the progress through the vision statement and then the agreement on trade and investment liberalization by 2010/2020. All that came early and then you have the long implementation period until you get to 2010, 2020, and the immediate tendency not just for journalists but even policy makers is to ask, Well what do you do in the meantime? I think the answer is "Plenty", and it's gone in several directions, one of which is try to work more closely with the international business community both from within and without the region to try to promote trade and investment in the region. There is no shortage of projects that are being worked on: a natural gas grid; a model customs port; agreement on civil aviation; there's a major Y2K project. There's a lot of work which goes under such boring terms as facilitation, harmonization, standardization, the type of things which would tend to put you to sleep, but if you're a businessman, are very real. APEC has been a good venue for making that kind of progress even while it has not been able to come up with the sensational type of achievement that characterized the initial years of the leaders meetings.

But at the same time there is very real dramatic work to be accomplished this year. APEC will be extremely important in setting the stage for the WTO round later this year in Seattle. A strong statement of support for a new round of global trade liberalization coming out of this region will be very important. We're all fortunate to have New Zealand, one of the most liberal trading economies in the world, heading the APEC effort this year. I think it will be a very successful meeting next month.

This overall perspective is designed to give a sense that there is a big picture going on even as we wrestle with our county-specific problems whether it's China, North Korea, or Indonesia. There's a trend underway in the region, an integrating trend, which even if slowed down temporarily by the financial crisis, has not been derailed and one to which, speaking at least for my country, remains a very high priority.

Moving to our bilateral relationships, perhaps I'll surprise you if I start with Japan. I happen to be one of those people who believe that words should have meaning. Since we say that Japan is our most important bilateral relationship bar none, a phrase that goes back to Mike Mansfield, I think we ought to begin and look at that relationship. The interesting thing here is to think about the situation now compared to four or five years ago. I suspect that if I didn't raise Japan, I would not have gotten a single question from the audience today about U.S.-Japan relations, because in fact it's fairly boring, since things are going quite well. The security relationship is good, we're cooperating on foreign policy quite well, the economic issues are difficult but certainly not the type of confrontational trade issues that had people worried back then.

It's a mark of success that we have managed to do a couple of things. We have demonstrated that there is relevance to the security relationship in the post-Cold War period. Before coming here, I went and looked at some of my old speeches from '93 and '94, I used to spend a lot of time trying to persuade people that there was still a reason for a U.S.-Japan security relationship. Today I think the point is obvious; North Korea alone makes the point, not to mention the uncertainties in terms of the China relationship and the Russia relationship. It seems quite apparent why we have a security relationship with Japan, and that's reflected in the fact that we've had a lot of accomplishments recently. The guidelines about moving from a Cold War-oriented security relationship to a post-Cold War relationship in dealing with contingencies, the progress on Okinawa now that there is a new governor (I think we'll make dramatic progress before and during the G8 meeting), the work we're doing together on research on theater missile defense, the very generous support that Japan continues to give the United States on host nation support which many of the pundits predicted would be terminated in the post-Cold War period and hasn't been. All of that I think is a very successful record.

The foreign policy side is equally successful. A year ago, if you go back and read the press, at least in the United States, people were saying the U.S. and Japan were at odds on North Korea, on Indonesia, on Cambodia. In fact, I would say that the cooperation on all three of those issues are extremely good right now and our governments are working together very closely on all of those issues.

Even on the economic side, where we obviously still have problems, we are not facing the type of cataclysmic clashes that people were predicting only a few years ago. That the security relationship was going to be replaced by trade wars that didn't materialize. Instead we're working together to try to help Japan get out of the recession which has basically bedeviled it for most of the '90s and trying to get Japan on a path towards sustainable growth. When I think back to President Clinton's trip last November, at that time people were worried literally about the collapse of the Japanese economy. Would it drag Asia down into recession? Would the banking system go under and take others with it? Japan has done very well in meeting those challenges to make sure that hasn't happened.

It hasn't done quite as well in getting the economy beyond that point into fundamental reform and towards higher levels of sustainable growth. Once again we find Japan now debating a stimulus. But at least the U.S.-Japanese interaction on economic issues is more now at the realm of ideas, what can be done to try to help Japan get out of its current economic doldrums rather than as a U.S./Japan confrontation. That's healthy for the entire region.

Turning to the Korean Peninsula, any time one is trying to make an assessment there, it helps to be a bit schizophrenic. On the one hand there is always room for pessimism when you're talking about North Korea. It's undoubtedly the most dangerous flash point in the Asia-Pacific region, leaving aside the Indian sub-continent, which isn't in my area of responsibility. We saw recently in the West Sea just how easily latent conflicts can be turned into actual violence. I must say, speaking almost literally on the anniversary of the missile test last August, one can't be completely confident in saying that there will not be another North Korean missile test. So there are always reasons for concern or even pessimism.

But on the other hand, I must say that in the 19 years that I've been working on Korean issues, I've rarely seen more negotiations and diplomatic activity in a single 12 month period. You have the U.S. and North Korea vigorously engaged on nuclear negotiations. Negotiations on the suspect site, the Perry mission, trying to get missile talks restarted. You have North Korea-South Korea negotiations, the Hyundai project, the fertilizer agreement, very dramatic change under Kim Dae Jung with his policy of engagement, which is an historic break from the past. You have Japan trying to improve its relationship with North Korea, albeit with some difficulties. There's been a high level North Korean trip to the PRC after a long term hiatus. You have South Korea-Japan high-level visits. You have a major reconciliation between South Korea and Japan. At the multilateral level, you have the Four Party Talks, and you have the activities of KEDO, the nuclear organization. That is an extraordinary amount of activity that you could not find five years ago, much less 10 or 15. So on balance, where does it net out?

Obviously I can't speak for the DPRK. But I hope that the North Koreans will seize the moment, that they will take advantage of the new approach in the Republic of Korea under President Kim Dae Jung for peaceful co-existence and engagement. I hope they'll accept the willingness of the United States to get along and improve its relationship with North Korea as expressed in the Perry mission. But the choice is up to them. We've seen some recent hints of flexibility including the interview with one of your colleagues, Mike Chinoy from CNN, when he went to North Korea recently. North Korea came up with the strange statement that if we offered cake, they would offer cake. Which is rather different from their usual language on threats: if we threaten force, they'll use force. So perhaps we'll see some progress on the issues of concern starting with missiles. It's never safe to make a prediction with the North Koreans. We've certainly made clear the consequences on the negative side but let's see if the positive agenda works.

Let me turn to China. I suspect I'm not being too daring if I assert that this is the bilateral relationship about which the people in the Asia-Pacific region are most concerned at the moment. Despite my reputation as something of a relentless optimist, I have to concede that '99 has been a tough year for U.S.-China relations thus far. I don't need to dwell on the litany of events, you're all familiar with it: The human rights crackdown that followed President Clinton's trip to China last year; all the allegations associated with espionage and the Cox report; the failure to reach agreement on WTO during Premier Zhu's visit; and, of course, the consequences first of our actions in Kosovo and then the tragic embassy bombing and its aftermath. That's a pretty heavy plate. But for all the difficulties, I think it would be wrong, even egregiously wrong, to assume that U.S.-China relations have been permanently disrupted or derailed and that we're now condemned to strategic rivalry at best or enmity at worst. The rationale for U.S.-China relations and for engagement remains as firm today as it was at the time of the exchange of state visits in '97-98. The kind of bilateral relationship that the U.S. and China have is going to have a lot to do with the state of peace and stability in the Asia-Pacific region in the next century. So we, on our part, are determined to try to press ahead and get back on track with our engagement policy and move towards the constructive strategic partnership that Presidents Clinton and Jiang talked about in the fall of 1997.

We've worked hard to overcome the consequences of the bombing. You're familiar with the high-level apologies that were made, the investigation conducted, sending of Under Secretary Pickering as a Presidential emissary to present a written report with the findings, the negotiation of payments involving the individuals who were injured or those who lost their lives. We have ongoing negotiations now concerning the property, the damage to their embassy and the damage to our properties. All of these efforts are starting to bear fruit.

At the same time it's also clear that China is increasingly refocusing its attention away from the embassy bombing and more towards events cross-straits, particularly since the Lee Teng-hui statement in early July. This is another reason for China to get the relationship back on track bilaterally with the United States. There are some indications that this is indeed happening. Secretary Albright had a rather cordial meeting with Foreign Minister Tang in Singapore at the ASEAN meeting. Some of our diplomatic dialogues and negotiations have been resumed, although not yet some of the more crucial ones. More importantly, Presidents Jiang and Clinton will be meeting at APEC in Auckland. When President Clinton proposed it, President Jiang accepted immediately. There is a real desire on both sides to make this a success. Obviously, we hope that this meeting can be the occasion for significant progress on WTO. The ideal outcome, of course, is to reach an agreement at that time or before but at a minimum to use the meeting to get the negotiations restarted on an urgent basis.

Having mentioned Taiwan, let me just say a few words about the cross-strait situation. It's important to make sure you understand the three pillars of U.S. policy on this issue. First, the United States has made very clear its continued strong support for a one-China policy. There has been absolutely no change in U.S. policy. We, of course, can only speak for the United States.

Second, we continue to emphasize the importance of direct negotiations between the parties. It is not up to the United States to be an intermediary or a mediator. We do attach great importance to the cross-straits dialogue and we hope that the Wang-Kao talks, the high-level political talks that were originally scheduled for this fall will take place. We have seen a lot of indications from the Chinese that they will find it hard, in light of what President Lee said back in July, to proceed with the talks. But it strikes the United States that precisely at a time when relations are difficult is when you most need dialogue. We continue to urge both sides to try to revive with cross-straits dialogue.

The third, crucial pillar, is the abiding interest that the United States has in a peaceful resolution of this issue to make sure that force is not used.

Let me now make the transition and I've allowed myself five minutes to deal with Indonesia and East Timor (laughter). Perhaps it is useful to start with the bigger perspective rather than what happens next Monday. If you go back and think about a year ago May when President Suharto stepped down, and you look at what was being predicted then, or what was being feared, people were predicting revolutions, students taking to the streets, military coups, the economy heading towards famine, that Indonesia was going to fall off the cliff. In fact what happened is dramatically different. You saw the Habibie government able to create a political process which had the support of the major opposition parties and even the students. It is extraordinary that the students put their energies into being election observers rather than into trying to change the system or to change the political timetable; that we saw a peaceful election campaign. We saw the opposition win the plurality in the elections that took place; we have seen some very dramatic progress on human rights.

One reads the Indonesian press now and marvels at it compared to what it's been the past 20 years that I've been traveling to Indonesia. We've seen the release of many long-term political prisoners. We've seen a very dramatic change in East Timor, with a political process that I think for the first time since the initial Indonesian occupation is real. This is the first time that I have believed that a political settlement of East Timor is possible.

Now despite this rosy picture, there are still huge challenges and I don't mean to understate them. Those challenges are fairly obvious. I select just three of the ones that worry me the most. It is not an exhaustive list. First I'd say completing the electoral process, selecting the President and the Vice President and the constituent assembly, the MPR, this November is key. However well the first phase of the election went, it is the final result that matters. The outcome has to be perceived as legitimate by the Indonesian people. The whole purpose of the exercise is to get a government accepted by the Indonesian people so that reforms can be carried out in economic and other areas.

The key issue now is the selection process for the appointees, the two hundred appointed seats to this constitutional assembly as well as the thirty-eight military seats. That appointment process has to be transparent, it has to be credible, not to the advantage of any one party. One can sit and play with the numbers and easily create dire scenarios, but I would just mention that thus far all the dire scenarios on the election have been wrong. The people who predicted we'd never get to the election, that the military would intervene and that there would be violence, that Suharto and Habibie would use money to buy the vote, the so-called influence of money politics, that the count would be stolen, have all been wrong thus far.

We have to go into the final phase both cognizant of the dangers, particularly the appointed individuals that I just mentioned, but also the opportunities. We should give Indonesia credit thus far for having pulled off a fairly remarkable move towards democratic government. But in the final analysis it is going to be the ultimate outcome that counts.

The American position is identical with the Australian position. We don't have a Presidential candidate; this is not up to us, this is an internal Indonesian matter. We will accept whoever wins, provided the process is fair and that the result is accepted by the Indonesian people.

The second issue, and I'll put it second, just so that I can finish on East Timor, is Aceh. For all our focus on East Timor we have to recognize that there are huge stakes in Aceh as well, a place with a very different history, more resources and a different set of implications for Indonesia. The United States has been greatly concerned by the major increase in violence and polarization in Aceh over the past few months. The situation appears to be getting worse not better, not only from a human rights term, in terms of loss of lives, but also in political terms, the prospects for a peaceful resolution. It is extremely important that the Indonesian government try, as it is actually doing, to get this situation under control now, before further deterioration takes place. I gather that President Habibie and some of his ministers will be visiting Aceh this weekend. I understand that General Wiranto while I was off in the Whitsundays was making a major statement about ending military operations and not sending additional troops.

These could, if handled right, be positive developments. But one has to be very clear that this is going to be a huge issue in terms of preserving the territorial integrity of Indonesia on the one hand, but also persuading the international community that Indonesia now does business differently than it did all these past years, where repression and brute force were the ways by which these issues were resolved.

This is a challenge that is going to take up increasing amounts of time for both Australia and the United States, not to mention Indonesia, in the months ahead.

Finally on East Timor, I could hardly be speaking at a more critical point, just a few days before the consultation, or referendum of vote, choose your word of choice. Again, before looking at the problems, it is useful to look at what has been achieved. It is the first time since the invasion that there has been a real political process. I am not convinced that President Suharto was ever prepared to make any concessions on the political status of East Timor. We have a United Nations agreement and a large international presence on East Timor pursuant to that agreement and a recent agreement to extend that presence beyond its current phase into the transition phase regardless of the result of the referendum.

That is a major change on the part of Indonesia, to permit such a presence. We have had a surprisingly successful registration process. If you go back two months and predict that four hundred and fifty thousand people would have registered, with over four hundred thousand of those on Timor itself, I think people would have been dubious. The UN would have declared success at three hundred thousand people. And so we have had this process that for all the violence and the intimidation and the difficulties, has still managed to register an incredible percentage of the Timorese population, which in turn suggests a desire on the part of the Timorese to vote and to express their views on the political status.

Now, of course for all that, the challenges are formidable. We have been reminded of that this week by the U.S. congressional delegation led by Senator Harkin and by the statement of the electoral commission, the letter they sent in. Obviously, we have to get through the referendum and the count itself beginning next Monday. The count will probably take a fair amount of the week.

But that is just the first step. Managing that situation will of course be crucial if the election day itself is violent and people are not allowed to vote. That would undermine all the progress that had been achieved to date. But I am cautiously optimistic that with the large international presence, with the tremendous amount of attention focused on this, not only do you have the more than 900 UNAMET or UN people there, but you also have, I am told, over 2000 NGO and election observers there. I am hopeful that the referendum will be conducted fairly and peacefully.

After getting through that phase however, there's the question of what happens post election period, regardless of the outcome. Here the United States has been distressed by many predictions of violence both from the Indonesian government but also from some of the militia leaders in East Timor. We have warned of the danger of self-fulfilling prophecy if you create the expectation that there will be violence after the referendum, the chances of the violence happening are greater. We believe that Indonesia took an obligation under the UN agreement by choice, didn't have to, but it asked to be responsible for security, not only before the election, but afterwards. That responsibility was given to it and the obligation of Indonesia is not to bemoan violence, not to predict violence, but to prevent violence. That is what we expect, and there have been many communications to this effect in recent days to the Indonesians.

I am not going to try to predict the outcome. I just want to highlight the key points. First, Indonesia has to take the responsibility for security. Second, a continued international presence is crucial. Indonesia has agreed to this. This is not something that has to be forced down Indonesia's throat. There is a recent agreement to increase the number of civilian police, and what we are calling MLOs, a new acronym, Military Liaison Officers. And most importantly there needs to be a genuine reconciliation process between the different parties on East Timor itself. The greatest disappointment for me in the process thus far is that the whole referendum period has seen further polarization and violence rather than reconciliation.

Now a mechanism has been announced for the establishment of a commission the day after the referendum. We'll see if it gets off the ground. Indonesia has said after the referendum it will release Xanana, and we'll see if that happens. There are many positive opportunities, but they have to be made to work.

Then finally we come to what's been called phase three. What happens after the transition, whether towards independence, if that's the selection, or towards integration. Again the key issue here is having a sufficient international presence during this period so that there will be a deterrence to violence, and so that the transition can take place smoothly.

The scenarios differ quite dramatically depending on what outcome the people of East Timor select, so it is difficult for me to get very specific. It is obviously radically different if it is independence versus integration. I think if it is what the Indonesians call separation, we call independence, the scenario will be that the MPR will have to vote to approve this, to release East Timor as the twenty-seventh province, the UN will have to accept it back, it will then revert to Portuguese control as the former colonial power under UN auspices and arrangements will have to be negotiated with the East Timorese to provide for their political status, and a timetable will have to be worked out.

That's a fairly ambitious program, but it can only take place if the situation on the ground is peaceful and there isn't large scale violence. The current objective of U.S. policy is working closely with colleagues in the United Nations, obviously with Australia and other interested parties, while we try make sure that peaceful environment happens.

Why don't I stop at this point and open it up to questions.

MODERATOR: Thank-you.

(Applause)

MODERATOR: I should have mentioned at the outset that the Ambassador of the United States had to leave to catch a plane for another engagement. She's not making a statement about anything at all the Assistant Secretary has just said.

As Mr. Roth has just mentioned, it's time for our usual period of questions, and the first one today is from Peter Cole-Adams.

Q: Given your documented difference with Dr. Ashton Calvert six months ago, can you now give some indication on this matter of peace keeping, in phase three, of what sort of numbers you think will be necessary to maintain order, and one assumes that will include some military presence in the Indonesian corner. I mean some sort of indication of the phase three situation. Secondly, do you, are you concerned that most of the recent problems have been in that western border area of East Timor, that there is some real danger after Monday of some move to affect partition of East Timor? Thank you.

ROTH: On the first, let me say that what you refer to as a documented difference between Ashton Calvert is utter drivel. It didn't happen and doesn't exist, and in fact the situation is the complete opposite. I've been somewhat bewildered by this whole flap over here. The whole reason we had this meeting is because the United States and Australia are working so well together and trying to coordinate policy on East Timor. The entire purpose of his trip to the U.S. was for us to brainstorm, and I choose that phrase advisedly, brainstorm about what might work. If you recall the timing of that meeting in February, it was months before the UN agreement was reached. It was not at all clear if there would be an agreement, or if an agreement, if reached, would provide for any type of international presence. So we were sitting down and working our way through different scenarios and trying to think what happens in different situations. The main point we both agreed on at that meeting was that this situation was unlikely to resolve itself simply by virtue of the efforts of Timorese, and that some type of international presence would be necessary. We were very careful at that meeting not to get hung up on the word peacekeeping. Peacekeeping is, not in common sense, but in diplomatic parlance, a very specific term. We are generally talking about UN-sanctioned peacekeeping efforts requiring a vote of the Security Council and then decisions on contributions both of money and of personnel, and with obvious limits on the ability of the UN to manage multiple peacekeeping operations simultaneously, not to mention some countries on the Security Council not welcoming new ones. At the same time both Ashton and I recognize that there was a hell of a lot that could be done far short of a UN Security Council-sanctified peacekeeping operation. And in fact a lot of our discussion revolved around what ultimately took place, which was a very significant international presence with the approval of the Indonesian government under international auspices that would involve both our countries. So I don't understand what this flap is about, that there really weren't any significant differences, this was really more of a way of trying to think through where we would get to.

Now in terms of your question, I really can't give you much of an answer about phase three, because we are still in the early stages of thinking about it. It is quite apparent that an awful lot depends on scenarios, what happens in terms of the outcome of the referendum, and the subsequent decisions of the Indonesian government, what happens on the ground, how does the militia behave, how does the Indonesian military behave vis-a-vis the militia, is there a decision to withdraw the Indonesian military, under what timetable and what scenarios. All these require very different responses, and so to suggest at this point that there is one peacekeeping option is simply not realistic. So we are going to have to work our way through this and we are having lots of discussions. I spent a lot of today, this morning, having precisely those type of discussions, but we are far short of a decision on these matters.

In terms of your second question, I would consider it a failure of policy if we ended up with a further partition of the Island of Timor, which is already partitioned. As we sometimes forget, East Timor is only a portion of the island and a relatively small entity, and to further partition that into a third entity between the two existing entities I think would be an unstable arrangement. It is hard to see the economic justification. It would just seem to me to be inviting trouble. I think far more important is what I referred to in my remarks; a reconciliation process that makes such a partition unnecessary. The continued international presence during this transition period could give such a reconciliation process a chance to work.

Q: I wonder if I could ask you to comment on a perception that seems widely shared in foreign affairs and defense communities in this town. It is that despite your remarks today, that the present U.S. administration is not as deeply focused on the Asia-Pacific region as some earlier administrations were, and that its interest tends to fade in the absence of a hot security crisis. It's further argued that the U.S. has allowed as a result, China to increase its strategic influence through the region, of potential disadvantage of United States, Australia and even perhaps Japanese interests. Now I was wondering how far you would agree with that analysis, whether the U.S. would have any plans to do anything about addressing that sort of analysis?

ROTH: I think the analysis is way off the mark. Let me try to explain why. First, I think it is the curse of many Assistant Secretary for East Asian Affairs to hear that the United States is not engaged enough in the region. It always comes from the region, for a very obvious reason. The region is focused on the region, whereas the United States is a global superpower and we have to deal with every major situation around the world. So any time the United States is working on a situation, whether it be Saddam Hussein, whether it be Bosnia, whether it be Kosovo, the immediate charge comes up that we are not involved in the rest of Asia.

But we are a big country with a lot of resources, and I can tell you we can do more than one thing at a time, and we do. People frequently seem surprised when I tell them that Secretary Albright made not one, not two, but four visits to Asia in 1998, which is a pretty robust presence; that her first trip as Secretary of State deliberately included stops in Asia, which was not something that Secretaries generally do, and that in fact we have given a great deal of priority to the Asia-Pacific region, despite the fact that we have other situations to take care of.

But if you look at the program the Secretary had last month in Singapore, she did thirteen bilateral meetings in two and a half days. I think you'll find us quite engaged across the board, not just on the front tier issues I've mentioned today, the big four. You would find we were talking about Cambodia, we were talking about Burma, we were talking about U.S.-Thai relations in the wake of the WTO issue, we were talking about the social implications of the Asia financial crisis. There are an awful lot of issues on the plate, so I think one is just condemned in my job to listen to the allegations that we are not engaged enough in Asia, but I don't think there is any real substance to that at all.

Now in terms of your second question. What is so interesting about it, is it is almost the mirror image of what I hear when I go to China. When I go to China, I hear about U.S. resurgence, you hear about global NATO, marginalization of Russia, expansion of U.S. alliances in the Asia-Pacific, Japanese guidelines, Visiting Forces Agreement, U.S. statements on South China Sea, Congressional requirements on TMD sales looking at regional architecture. And so from their point of view, they say, what in the world are you talking about, that the United States is trying to throw its weight around in the Asia Pacific region and be the sole hegemon.

So it is always a bit amusing to come and find out from other peoples' perspective that it looks like we are letting China take over. I think the reality obviously is not in either extreme, the one you described or the one I described. I think the reality is that the United States has worked very hard to do several different things simultaneously. On the one hand we have not only maintained but we have tried to strengthen our bilateral security relationships in the region, including with Australia, most recently perhaps with the Philippines with the ratification of the Visiting Forces Agreement. Obviously before that the Japanese Defense guidelines. But this has really not been an isolated effort. This has been a consistent policy of the Administration.

At the same time, with no contradiction whatsoever, we have worked very hard to try to integrate China into regional and global institutions. We have really been anxious to work with China at APEC and China at the ASEAN Regional Forum, and I think it is a major accomplishment that China plays in both those institutions, and I can tell you I see vast differences in China's behavior. I attended the first ARF in '94, and this one, and how China plays in the game and how it is working with other countries in the region, is already significantly altered.

So, we are trying to do things simultaneously and not make it an either or situation, that either we are leaving the region militarily and therefore open to a vacuum with Chinese influence, or that we are simply trying to encircle China and trying to contain it militarily. Neither extreme is accurate.

Q: You said at the end of your speech that during phase three, if there is a vote for independence, the U.S. policy would be to try to make a peaceful environment happen. Is there a difference between you and Australia in terms of how the international community would make a peaceful environment happen? Have you believed in recent times, the last six or twelve months that Australia has been taking a defeatist attitude on East Timor? And finally, if there is an upsurge in violence next week, far greater than at this stage you hope will happen, what will be the U.S. response?

ROTH: First, I'm not sure where this myth arose of me accusing Australia of a defeatist attitude, but it is attributed to me personally, and the words were never uttered from my lips. So it is simply wrong. But more importantly, I think that the theme I've been trying to emphasize is just how closely the U.S. and Australia have worked, are working and will work, every step of the way on the East Timor issue. I didn't have to come to Canberra on this trip. I was basically coming to Australia for the Leadership Dialogue in Sydney. But I deliberately carved a day off my vacation to come here because I wanted to consult with a range of government officials in several different ministries on the East Timor situation about next steps. This has really been a cooperative endeavor in which I must say that the United States, and me personally, have benefited enormously from Australia's expertise on East Timor.

I consistently receive the best, most detailed and most timely information on East Timor from Australian sources. If I go into academic life after government and want to pick an example of allies working together towards a common goal, I think I would pick the U.S. and Australia on East Timor -- it's that good a relationship.

So, I don't think there are any differences whatsoever. And as I have tried to indicate, I don't think either of our governments at this point has a firm view on what phase three will look like because there are many different scenarios and we have to think through many of them, and be prepared to do different things depending on what happens on the ground. So, there isn't a hard and fast answer yet on phase three, but I can sure tell you that we are working together to try to get there and it's not a matter of differences between one country or the other.

The third piece was...? (McGrath inaudible)

Obviously, my highest priority is deterrence, trying to do everything we can to ensure that it doesn't happen, and I think there has been an incredible amount of diplomatic activity this week. I can't go into all of the details, but high level representations from multiple people to the Indonesian government to make sure the government understands the consequences if such violence occurs. I'm encouraged by some of the steps the Indonesian government has taken. Not just words, but steps in the fact that a very large rally of all told about 10,000 people actually took place, of pro-independence groups with no violence.

Other than that, I really think we would have to respond to any situation that occurs depending on the particulars. But you could be sure that there would be two aspects to a response. One would be on the ground in East Timor. We all have people there. You have your people, we have ours, and there would be a desire to protect their safety, and very strong actions on the their behalf to make sure that those people are safe. In addition to which trying to make sure that the people of East Timor are safe, so we would be working with Ian Martin and UNAMET and back at the UN with Secretary General Kofi Annan to try to re-establish a secure environment if it happened. I can't really be any more specific.

On a hypothetical, back in Jakarta we would go back again to make sure they understand the consequences of what is happening. But I emphasize, we are really looking forward to try to prevent this type of deterioration and I must say that thus far, the activities have been quite successful of UNAMET in preventing the wide scale violence that had been predicted at many stages in the past.

Q: If the Timor ballot on Monday is relatively peaceful, if it does lead to a relatively peaceful separation between East Timor and Indonesia, what justification could there then not be for having similar processes in Aceh or West Irian or other areas where there is a very strong move by at least sections of the population to also separate from Indonesia. And could this set in train the complete disestablishment of the whole of the Indonesian archipelago?

ROTH: I think that in fact, most Indonesians see a major difference between East Timor and any of the other provinces of Indonesia. It didn't come into the country by the same means, doesn't have the same history, doesn't have the same language, doesn't have the same religion, doesn't have the same colonial tradition, wasn't part of the revolution. It is tiny in size, resource poor, and has an international dimension to it. So in many ways the differences are more striking than the similarities. There is no inevitability about it that if East Timor goes that that is the end of Indonesia. I find when I talk to Indonesians, most of them don't believe that either. Many people believe this is simply a means to resolve an international situation that has bedeviled the Indonesian reputation for almost a quarter of a century now.

Q: On another matter, from a U.S. perspective, the Asian economies, a lot of them are looking far healthier at the moment. Just wondering if the U.S. thinks (inaudible) has been undertaken to ensure that there's going to be long term economic growth in the region.

ROTH: Well, the interesting aspect is that a lot of countries in the region are saying this themselves rather than waiting for an American pronouncement or an IMF pronouncement or a World Bank pronouncement. But ranging from the normally outspoken Senior Minister of Singapore and Prime Minister, both of whom have made statements about maybe recovery is happening ahead of reform, to similar statements expressed in Korea, to discussion of this in the Thai press. There is a very common theme that the momentum cannot be lost, that while the recovery is welcome, it may not be enduring or sufficient if it is not accompanied by continuation of the reform process.

It's awfully difficult to generalize because each country's situation is somewhat different, and one would rate the effectiveness of their programs differently. But there is a danger of complacency. If the crisis came unseen, and perhaps the recovery came quicker than foreseen, that the next round could equally be a surprise unless this reform process is carried out further.

Q: Mr. Roth. I would like to ask you about Taiwan. Back in 1972 when Nixon and Kissinger formulated the Shanghai Communique, the geopolitical picture was quite clear, the enormous Red China and a tiny little outpost of democracy. Many people would see the situation to be quite similar now, except that instead of being the last gasp of Chinese democracy, Taiwan can in fact, might be seen as the first step for the Chinese democracy. Doesn't that make the Taiwan situation much more complicated than it was a generation ago, and what would the U.S. expect from Australia as an ally if it came to conflict with China over the Taiwan issue?

ROTH: I rarely resort to the standard bureaucratic line of refusing to speculate about hypothetical situations. But I really don't think that it's particularly useful to talk about that latter scenario. The more important point is to emphasize the success of the fundamental policy which both Australia, the United States, and I should say every major country on the planet, has done with respect to a one-China policy. What is absent from the question, I think, is a recognition that everybody has benefited from normalization of relations including particularly the people of Taiwan, that you've had three sets of winning bilateral relationships.

In 1979 when normalization occurred, there was still firing of artillery shells between Taiwan and China. You've had an unbroken strand of peace that took place really until the Lee Teng-hui visit in 1995; essentially, the one-China policy has worked and is still working in preserving the peace. It has certainly facilitated a major improvement in U.S.-Taiwan relations even if that's now an unofficial relationship. I can recall when I began my career when Taiwan was one of the human rights violators on my list, and we had Congressional resolutions and hearings, allegations of murders of opposition figures in the United States, martial law on the island, and Taiwan was a pretty dismal place. As opposed to the flourishing of democracy that has taken place in the peaceful environment that resulted from normalization and the prosperity of the economy that has taken place. The transformation of Taiwan over this twenty years is nothing short of extraordinary. So Taiwan has benefited, and obviously U.S.-China relations has benefited, and that is good, not just for the United States and China, but for the peace and stability of the entire Asia-Pacific region. So, I don't think a one-China policy should be viewed from a negative prism. I think it needs to be viewed from a positive prism of what it has accomplished. I think Australia and the U.S. are right to seek to maintain that one-China policy.

Q: When people talk about the outcome of the election and they talk about the fear of violence breaking out, one of the scenarios that is starting to emerge is, the kind of violence that's not directed at people, rather it is directed at the infrastructure as it exists on East Timor, that those that oppose independence or those with interests from Indonesia in East Timor and ongoing interest in it being part of Indonesia would attack the infrastructure of that country, would destroy bridges, would destroy roads, would destroy the ability to produce electricity, what have you. What sort of contingencies are in place to prevent that happening. What sort of economic contingencies are available to take into account that happening and to redress that if it does happen, or is it in fact something that has been discarded, that is not likely to happen at all?

ROTH: Well, one can unfortunately all too easily invent negative scenarios for East Timor, of which that is one. I could create many more. But I'm not sure that one can come up and draw contingency plans on each conceivable nightmare. I think instead, what we need to do is focus on trying to prevent the nightmares from occurring, and what I have tried to do today is sketch the broad outlines of what we're doing to try to block any of these worst case scenarios from coming about. And the keys there again are the physical international presence in East Timor itself. I don't think one should underestimate that presence and its effect.

I went back to East Timor last month. I hadn't been there in 18-19 years, and I must say, that when I left Washington, I had the impression, gee, how effective can 900 United Nations people really be on East Timor. When I got there, I started seeing some very interesting statistics, that UNAMET had 400 vehicles, whereas the Indonesian police had 50. You started to get a sense of the small scale of things on East Timor and the magnitude of the UN presence. And as I traveled around the island and started seeing those, not blue helmets but blue berets, in fairly remote villages with a permanent presence, you realize that the United Nations presence there was really quite broad and quite effective and was working. That it was having an effect on diminishing the violence. So, I think that maintaining that UN presence, at significant levels is an exceedingly important deterrent.

The other part of the process is political, what I've talked about in terms of the international communities dealings with the government in Jakarta, and making it clear that East Timor is on the one hand an opportunity, if handled well by Indonesia. It has the potential, if accompanied by the completion of the democratic elections, to radically change Indonesia's image from one as a country that was bad on human rights, that didn't have fully normal relationships with a lot of countries because of the human rights difficulties, to a country that would get a lot of credit for what it had done resolving East Timor, having free and fair elections and therefore would presumably have a special claim on international help in resolving some of its post election problems, not the least of which is reconstructing its economy.

So you have the positive side, the opportunity, and you have the negative side, the consequences if it's not done right, and the notion that it won't be business as usual with Indonesia, and that they will pay a price if this is not managed well. But I think the combination of diplomacy and deterrence on the ground through international presence are the two keys to try to avoid all of the worst case scenarios that one could sit down and devise.

Q: You've mentioned the efforts to try and ensure that there is a peaceful vote next Monday, and that the aftermath is peaceful, but the omens are at best mixed. There is certainly some worrying signs about the possibilities of violence breaking out. You've also mentioned that if that does occur, of course you have contingencies to protect U.S. citizens. You also mention that one hopes that the Indonesians will make every effort to ensure the protection of East Timorese. If the worst comes to the worst, are there circumstances in which the United States and the international community should say to Jakarta, that an international peacekeeping presence of some kind is needed immediately in phase two and that we can't wait until phase three to think about those options?

ROTH: Again, I don't want to get into too many hypothetical scenarios. One can also be too rigid in talking about phase two and phase three as if these are preordained periods of time. What we're basically talking about is the period after the election, and what is needed. And I think first we'll have to see the outcome and then the Indonesian response before we can formulate what we, the international community, want to do in response to that. But I would not want to be anymore specific than that.

Q: This weekend, our trade Minister Vaile is meeting with U.S. Secretary of Agriculture Dan Glickman, and I know that you don't want to talk about the inconsistency of the decision on lamb or the huge 7 billion dollar aid package to U.S. farmers being considered in Congress. But in the lead up to APEC, is there a chance that the U.S. government could align its policy on agriculture to the stance that is being taken by the Cairns group?

ROTH: I'm afraid you've exceeded my own expertise, and I just don't know the answer to that question. I know that we are meeting with the Cairns group, that there is another meeting scheduled focused on the agricultural policy but I'm not briefed on the specifics of the issue, and I don't want to mislead you.

Q: Australia and the United States have taken very different approaches to what both agree are continuing human rights problems in China. Have you any criticism of the approach Australia has been taking. That is engagement. Let's talk it through. Let's not criticize?

ROTH: The difference isn't as sharp as you portray it. There is no difference in values on human rights issues between the United States and Australia, and in fact that most countries, United States included, have engagement policies with China to varying degrees. So, I don't think that one would say that Australia is in any way an apologist for human rights abuses in China. All of us, all the countries of the world, engage with China to differing degrees in trying to manage this and a host of other issues. But this has not been a particularly contentious point between our two countries.

Q: I agree with you that it's hard to see on the ASEAN Regional Forum who has moved the furthest, the United States or China, that both have moved a long way in their approach to the ARF. Do you accept that China has committed to the ideas of multilateralism and regional cooperation that the ARF is talking about? Or is China using the ARF against the United States, it's language about old fashioned cold war thinking and that U.S. commitment to the five bilateral defense relationships? Is the ARF being used by China against the U.S., and more generally, can the ASEAN Regional Forum deliver the sort of new security architecture you were talking about, or is eventually there going to have to be a north east Asian version that specifically looks at the very different problems now with East Asia?

ROTH: Well, there were a lot of different questions within that one question. First, in terms of China's involvement with the ARF, it's a process. China is moving along in that process but you really can't say how far they are going to end up. When I went to that first ASEAN meeting or ARF meeting, I should say, in 1994, China was opposed to everything. China didn't want working groups. China didn't want intermediate sessions. We had to come up with some ridiculous phraseology, inter-sessional groups, a new one in my experience, in order to have what in any other place would have been called a working group, simply to get around the Chinese position because clearly just one meeting a year wasn't going to have the impact on doing the work or building the Pacific community that I was talking about. China is now an extremely active participant in these intersessional groups, has co-hosted some of them. China now produces a White Paper on defense more or less annually, something that it refused to do prior to that. Even if we don't always like what it says, nevertheless that is progress. China has participated in some of the confidence building measures that have been addressed by the ARF so far, and so to me, that is a very major change.

Obviously, it is not the whole story. China is not looking for an international organization to physically mediate disputes or take any action. It strenuously opposed, for example, the discussion of the South China Sea at the ARF meeting, despite the fact, that from any common sense standard, the South China Sea is a regional security issue of the very nature that has to be discussed at the ARF. That gets me to the second part of your question.

I think far from the ASEAN Regional Forum being used as a venue for China, I think it's more that the ASEAN Regional Forum is an opportunity to bring China closer to the common values of the rest of countries in the region. For example, in the debate on the South China Sea, China was the only country at the ASEAN Regional Forum which said that this issue was not a regional security issue, that it was getting better, and that it shouldn't be discussed. That is clearly ridiculous and it was rejected by the group. And there was discussion and there was mention of the issue in the Chairman's statement. So there is no real danger of this being used as an anti-U.S. venue by China.

And the last piece of it was? (inaudible)

I hate to give profound answers like "it depends," but I think that's the correct answer. One of Singapore's accomplishments this year, was to have a very real discussion of Korean peninsular affairs at the ASEAN Regional Forum. One of the criticisms in the past, is that this has been an ASEAN club, and that other security issues really didn't make the cut and got only lip service of one or two sentences in the Chairman's statement, and therefore there was a need to take care of North East Asia because it wasn't being addressed. It was done much better this year, and one got a sense you could have a good discussion involving a lot of countries from the region on the Korean peninsula. At the same time, on the other side of equation, it isn't clear, one, that you're going to get a Northeast Asian security organization until the two Koreas talk to each other more successfully. I think China and Japan need to make some more progress in their bilateral relationship before they necessarily sit at the same table on the Northeast Asia regional security organization. So, for the moment, I think the prospects for a Northeast Asia security organization are slight, and ASEAN is doing a better job at the ARF at addressing the issues.

But that's not necessarily locked in concrete for all time. Depending on what happens in North East Asia, one might want to revisit the idea of whether one could carve out a separate entity or do it within the ARF context. I could come up with multiple venues, but that's going to depend on the relationships between the countries in North East Asia.

(end transcript)


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