TEXT: SPERO REMARKS TO AMERICAN CHAMBER OF COMMERCE, MANILA
(APEC can serve as catalyst for ITA, telecom services)

Manila -- APEC has served as a catalyst for liberalizing the world trading system in the past and can do so again, according to Joan Spero, under secretary of state for economic, business and agriculture affairs.

In remarks before the American Chamber of Commerce in Manila November 21, Spero said: "In 1993, the first APEC Leaders meeting hosted by President Clinton in Seattle helped spur the successful conclusion of the Uruguay Round. This year, we hope APEC can play a similar role in advancing two initiatives: the Information Technology Agreement -- ITA -- and the WTO telecommunications services negotiations."

"We expect APEC Leaders to urge completion of an Information Technology Agreement in the WTO that would eliminate all tariffs in the high-tech sectors of the future by the year 2000," Spero said. "An information technology agreement -- covering products ranging from computer hardware and software to telecommunications equipment -- would certainly benefit American companies as well as producers and consumers on both sides of the Pacific, and elsewhere."

"We also expect APEC Leaders to press for maximum coverage in the WTO telecommunications services talks, which are scheduled to conclude in February," she said. "Telecommunications services are a natural complement to information technology products. A services agreement would open telecommunications markets and raise economic competitiveness and productivity worldwide."

Following is the official text of Spero's remarks:

(begin text)

Remarks by Joan E. Spero
Under Secretary of State for Economic,
Business and Agricultural Affairs

American Chamber of Commerce
Manila
November 21, 1996

Good afternoon. It is a pleasure to be here with you today. I and all of us at the State Department value these opportunities to meet with representatives of the business community, to describe our policy objectives, and to hear your views. I am especially pleased to be here with a group of businessmen and women who have contributed so significantly to the dynamism of the Asia-Pacific, a region which -- as this group knows very well -- is vital to America's economic future.

Today, I would like to talk to you about how the State Department supports U.S. business abroad -- and how our policies in the Asia-Pacific generally, and in the Asia-Pacific Economic Cooperation (APEC) forum in particular, contribute to that effort.

President Clinton's foreign policy has a simple, powerful objective. to assure the security and prosperity of the American people. Support for the American business community abroad is an essential component of that foreign policy objective.

We live today in a world without a clear common enemy, a world with pressing global problems like terrorism, health and the environment, and a world where national borders are blurred by economic interdependence. Our foreign policy challenge is to adapt our enduring objectives of peace and prosperity to this new global world. U.S. foreign economic policy plays an increasingly integral role in meeting this challenge. We pursue economic objectives for their own sake -- because they benefit U.S. business, U.S. workers and the U.S. economy.

We also use economic tools to project U.S. leadership and influence abroad. Historically, military alliances like NATO and the Japan security alliance have been the core vehicles for projecting America's power. Today, economic relationships and the new economic institutions they have spawned -- from the WTO to APEC -- are equally important pillars of American influence around the world.

A key principle of our foreign economic policy is to support U.S. competitiveness in the global economy. The Clinton Administration has recognized from day one that our ability to create jobs and growth at home depends on our ability to open markets abroad and to promote exports and overseas investment. We are firmly committed to providing American business and labor with the tools they need to compete and succeed in the global economy.

Secretary Christopher has made support for U.S. business a core function of the modern State Department. At the beginning of his tenure, he inaugurated an "America Desk." Let me explain what the America Desk means as a practical matter for business.

Our embassies around the world are working harder than ever to help U.S. companies identify opportunities, make deals, safeguard investments and generally ensure that our companies are able to capitalize on the opportunities created by open markets. I describe our embassies as the distribution network for our services. We engage foreign governments daily on issues such as tariffs and non-tariff barriers, investment policies, currency and tax regimes, and intellectual property rights protection. And we press them for legal and regulatory regimes favorable to U.S. economic interests. I am sure many of you have worked closely with Ambassador Hubbard, Deputy Chief of Mission Martin, Economic Counselor Derse, Commercial Counselor D'Aloisio, and others at Embassy Manila.

Second, we play an important role in negotiating international economic agreements. For example, the State Department has led U.S. efforts to combat international business corruption, achieving agreements to combat bribery in the

OECD and to proscribe the practice in the OAS countries. It was a meeting such as this with the American Chamber of Commerce in Singapore four years ago that galvanized Secretary Christopher into action on the foreign corruption issue. We also negotiate and implement bilateral investment treaties to protect U.S. investments abroad, and our officers also negotiate agreements to provide market access for our highly competitive commercial air carriers.

Third, we play an advocacy role for U.S. business. In concert with the Foreign Commercial Service, our officers employ their well-established local contacts and their expertise on host country economies and regulations to help business resolve problems and to create new opportunities for U.S. firms.

The positive feedback we are getting indicates that we have been making a difference. Our goal now is to consult more regularly with business in Washington on a broad range of subjects as we develop policies that affect your interests. To this end, Secretary Christopher established a new office of the Coordinator of Business Affairs to consult with business on such issues as export controls, sanctions policy and investment principles -- and to help business access the services our embassies provide. We have also recently established a business advisory group to enable us to have a regular dialogue with business. If we are truly to succeed in bringing economics to the center of our foreign policy, we must consistently bring business into the policy-making process and ensure that your views are heard and taken into account.

The second principal avenue through which we are promoting U.S. global competitiveness is by building and modernizing a new economic architecture for the post-Cold War world. The President's National Security Advisor Tony Lake recently described our foreign policy as operating on two levels -- the first is managing crises as they arise; the second is laying the foundations for a secure and prosperous future, which Lake described as our long-term construction projects. The regional economic arrangements like the Free Trade Area of the Americas, the New Transatlantic Agenda with Europe and, of course, APEC, are prime examples of our construction projects. As you all know, Secretary Christopher arrives here this evening, and President Clinton will be arriving Saturday, to attend this -- the fourth annual -- APEC Leaders meeting. It is significant, I think, that President Clinton's first foreign trip following his re-election, just like his first foreign trip as President back in 1993, brings him to the Asia Pacific.

Asia is critical to U.S. foreign policy. Already two-thirds of our trade worldwide is with APEC member economies. Excluding Canada and Mexico, APEC accounts for half of our total trade worldwide. It is, as you well know, the fastest growing region of the world. Our participation in APEC ensures that the United States contributes to and benefits from the dynamic economic growth of the Asia-Pacific region.

In addition to its very important role in anchoring the U.S. in the Asia-Pacific region, APEC has also served as a catalyst for liberalizing the world trading system. In 1993, the first APEC Leaders meeting hosted by President Clinton in Seattle helped spur the successful conclusion of the Uruguay Round. This year, we hope APEC can play a similar role in advancing two initiatives: the Information Technology Agreement -- ITA -- and the WTO telecommunications services negotiations.

We expect APEC Leaders to urge completion of an Information Technology Agreement in the WTO that would eliminate all tariffs in the high-tech sectors of the future by the year 2000. As you know, it's hard to overstate the importance of the information technology sector -- a $1.7 trillion sector worldwide. An information technology agreement -- covering products ranging from computer hardware and software to telecommunications equipment -- would certainly benefit American companies as well as producers and consumers on both sides of the Pacific, and elsewhere.

We also expect APEC Leaders to press for maximum coverage in the WTO telecommunications services talks, which are scheduled to conclude in February. Telecommunications services are a natural complement to information technology products. A services agreement would open telecommunications markets and raise economic competitiveness and productivity worldwide. I don't need to tell this group that U.S. companies are in the best position to benefit from such agreements.

Advancing the information technology revolution is an appropriate role for the dynamic economies of the Asia-Pacific. But neither the U.S. Government nor APEC can do this alone. We need your help to convince other governments, and the business leaders they listen to, to eliminate the tariffs and restrictive regulations that serve, in effect, as taxes on virtually every sector of modern society. They need to know that restricting the free trade of information technology products and telecommunications services hinders their own competitive advantages. As you do your part, we will do ours by working to advance the ITA and telecommunications services initiatives in APEC and the WTO. Our actions in these areas will signal to the rest of the world that the APEC economies are moving forward with trade and investment liberalization, and that others need to keep up -- or risk failing behind.

This year APEC's 18 member-economies will take another significant step toward achieving the Bogor commitment of free trade and investment in the region by presenting their Individual Action Plans -- the IAPs. These IAPs will detail the measures each member economy will employ to meet the Bogor and Osaka commitments to achieve free trade and investment by 2010 and 2020. When this process is completed, APEC will be the only forum in the world to have developed a transparent mechanism for comparing liberalization progress made by diverse economies.

We are also looking into ways to focus the work of APEC to break down structural impediments, and provide new opportunities for business to benefit from APEC's trade and investment efforts.

The test of APEC's success ultimately must be its practical relevance to business.

It was no accident that the Pacific Economic Cooperation Council -- PECC -- an organization that combines business, academia and government, was one of the first groups of any kind to be granted APEC observer status. In 1993, at their first meeting, the APEC Leaders created the Pacific Business Forum. And last year at Osaka, the Leaders established the APEC Business Advisory Council -- ABAC -- to institutionalize business' critical role in APEC. ABAC released its first report to APEC Leaders last month -- entitled "APEC Means Business: Building Prosperity for Our Community." The report challenges us with detailed recommendations in five key areas: finance and investment., infrastructure; cross-border flows; small and medium enterprises; and regional economic and technical cooperation.

Economic cooperation, broadly defined, has always been key to APEC's mission. In past years, we concentrated on economic cooperation as it related to opening markets. This year we are developing ways to bolster the links throughout the region that are important to maintaining growth -- links with immediate returns like telecommunications, transportation, infrastructure, and safe and efficient capital markets. We are also promoting policies that promote environmentally-sound growth, human resource development, and the development and absorption of new technologies. These links are the lifelines of your businesses, and you will have a crucial role in shaping them.

So, APEC has come a long way since its inception seven years ago as a loose consultative organization. Through APEC we have laid the foundation upon which we will build a Pacific community of common values and shared security and prosperity. With your help, we can seize the remarkable opportunities that APEC has to offer -- opportunities which are so critical to America's economic prowess and to our continued leadership in the global economy.

Thank you and I look forward to your questions.

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