TRANSCRIPT: 12/10 AMB. WOLF WORLDNET ON VANCOUVER APEC RESULTS
(Message of Vancouver APEC meetings is "optimism")

Washington -- The message that came out of the recent APEC meetings in Vancouver is one of optimism, according to U.S. APEC Coordinator John S. Wolf, "optimism that adjustment will take place, optimism that the region's strong growth can be restored."

"Vancouver," he said, "was a reflection of the willingness of Asia-Pacific economies to work together as a community and to fend off protectionist pressures, to fend off as well the siren-like ideas for quick fixes and for bail-out funds. They are attractive ideas, but they are not real and they are not realistic. And difficult though the turnabout will be, I think the message from Vancouver is a lot more attractive than economic myopia and turning inward."

In opening remarks during a USIA Worldnet broadcast to Bangkok, Jakarta and Kuala Lumpur December 10, Wolf said the United States saw two major sets of issues for the meeting. "The first is restoring financial stability and the second is securing economic growth. In fact, those subjects dominated the proceedings, both at the senior officials' meeting and the ministerial, and certainly at the Leaders' retreat."

To restore stability, Wolf said, APEC Leaders endorsed a program that had been discussed the week before in Manila by Asia-Pacific finance and central bank officials. "At the core of that agreement," he said, "is agreement that national efforts must come first, and that where international help is needed for adjustment that the IMF should be at the center of those efforts."

Wolf said the Leaders also endorsed the idea that, where supplemental resources are required, regional cooperation can materially help with an IMF-led program. "The most eloquent proponent of this doctrine at Vancouver was actually President Zedillo, followed by Thailand's new prime minister, Prime Minister Chuan," he said.

Although financial issues dominated Vancouver, significant progress was made in other areas, Wolf said. "Leaders adopted the trade ministers' recommendations on early voluntary sectoral liberalization, proposals that covered nine sectors and covered global trade of nearly $1.5 trillion," he said. "The decision sent just the right signal to the market. The Asia-Pacific is not going to lapse into a beggar-thy-neighbor trade policy war; instead it is going to move forward on increased liberalization."

APEC also reached agreement, he said, on a number of measures that will help facilitate trade and investment in the region; things like electronic commerce, improving port infrastructure and accelerating efforts to remove impediments for natural gas infrastructure.

Wolf said APEC didn't do as well in investment. "We are still mired down talking about the 1994 non-binding investment principles, and countries are busy asking, 'What's it going to take to get more foreign direct investment to reopen the foreign direct investment tap?' I think the answer is out there. It's greater transparency and improved investor protections," he said.

"We still have a lot of work to do," he said.

Wolf said the way that APEC operates is going to be different as a result of Vancouver. "There are two reasons for this," he said. "One is that the Leaders' agenda went far beyond trade this year. ... I think the expectations will be that next year Leaders will want to discuss the same kind of set of real issues as those that we did this year, and the issues that are affecting the region."

"Secondly," he said, "APEC Leaders also agreed to invite in new members. Peru, Vietnam and Russia will join in 1998. Well, as we expand I suppose it's inevitable that there may be some changes."

Wolf dismissed concerns over Malaysia's chairmanship of APEC in the coming year. "Malaysia has said it wants a solid, results-oriented program for the year," he said. "And for our part, we in the United States are looking forward to working with Malaysia on exactly that basis."

Following is a transcript of the program:

(begin transcript)

WORLDNET "DIALOGUE"
UNITED STATES INFORMATION AGENCY
Television and Film Service of Washington, D.C.

GUEST: John Wolf, Coordinator for APEC, Department of State

TOPIC: APEC Issues

POSTS: Bangkok, Jakarta, Kuala Lumpur

HOST: Doris McMillon

DATE: December 10, 1997
TIME: 20:00 - 21:00 EST

MS. MCMILLON: Hello, and welcome to Worldnet's "Dialogue," I'm your host, Doris McMillon. Our program today will look at the issues discussed at this year's APEC meeting that took place last month in Vancouver, Canada. The Asia-Pacific Economic Cooperation was formed in 1989 in response to the growing interdependence among Asia-Pacific economies. Begun as an informal group, APEC today includes all the major economies of the region.

This year the focus of the annual meetings included trade and investment liberalization, APEC support for the programs of the World Trade Organization, building a better business environment ,and sustainable growth and equitable development. On today's program we will discuss these issues, as well as the current financial situation. Joining us to lead our discussion is Ambassador John Wolf. Ambassador Wolf, who has spent over 25 years in the Department of State, is currently the coordinator for APEC, a position he assumed in January of 1996. Ambassador Wolf, welcome back to Worldnet's "Dialogue."

AMB. WOLF: Thank you very much.

MS. MCMILLON: Before we move to our guests in Bangkok and Jakarta and Kuala Lumpur, I would like to invite Ambassador Wolf to make some opening remarks. Ambassador?

AMB. WOLF: Thank you. Well, the week before Vancouver I said on Worldnet that the U.S. saw two major sets of issues for the meeting. The first is restoring financial stability and the second is securing economic growth. In fact, those subjects dominated the proceedings, both at the senior officials' meeting and the ministerial, and certainly at the Leaders' retreat.

The situation at Vancouver was complicated by the fact that the financial crisis in Asia revealed itself as a regional crisis, involving at least Japan and Korea, and even suspicions about China. There were reverberations in markets as far away as Latin America and Russia -- Russia is now APEC's newest member.

But the message that I got from Vancouver I believe is one of optimism -- optimism that adjustment will take place, optimism that the region's strong growth can be restored. Vancouver I think was a reflection of the willingness of Asia-Pacific economies to work together as a community and to fend off protectionist pressures, to fend off as well the siren-like ideas for quick fixes and for bail-out funds. They are attractive ideas, but they are not real and they are not realistic. And difficult though the turnabout will be, I think the message from Vancouver is a lot more attractive than economic myopia and turning inward.

To restore stability the Leaders endorsed a program that had been discussed the week before in Manila by Asia-Pacific finance and central bank officials. This was discussed last week in Kuala Lumpur. And at the core of that agreement is agreement that national efforts must come first, and that where international help is needed for adjustment that the IMF should be at the center of those efforts.

But the Leaders also endorsed the idea that where supplemental resources are required regional cooperation can materially help with an IMF-led program. The most eloquent proponent of this doctrine at Vancouver was actually President Zedillo, followed by Thailand's new prime minister, Prime Minister Chuan. President Zedillo offered Mexico as a case in point. And with the exception of just a couple of Leaders I think he won broad agreement on that.

But I guess while the financial issues dominated at Vancouver, it was by no means the only issue that was discussed. Leaders adopted the trade ministers' recommendations on early voluntary sectoral liberalization, proposals that covered nine sectors and covered global trade of nearly $1.5 trillion. The decision sent just the right signal to the market. The Asia-Pacific is not going to lapse into a beggar-thy-neighbor trade policy war; instead it is going to move forward on increased liberalization.

At Vancouver there were many questions to the United States about where we stood with our new trade negotiating authority. And I think from the president on down we made clear that achieving this in early 1998 will be and has to be one of our highest priorities.

APEC reached agreement, as well, on a number of measures that will help facilitate trade and investment in the region. And, for the longer term, it reached agreement on things like improving port infrastructure and accelerating efforts to remove impediments for natural gas infrastructure. We also teed up work for the important area of electronic commerce, and there was an excellent dialogue among Leaders with the private sector, the APEC Business Advisory Council. A number of their proposals are going to be proposals that will be an important part of setting our agenda for 1998.

I suppose we didn't do as well in investment. We are still mired down talking about the 1994 non-binding investment principles, and countries are busy asking, "What's it going to take to get more foreign direct investment to reopen the foreign direct investment tap?" I think the answer is out there. It's greater transparency and improved investor protections.

When I was in the area last month, a senior Indonesian economic official told me that bad times make for good policy. Well, we'll see.

We still have a lot of work to do. I think the way that APEC operates is going to be different as a result of Vancouver. There are two reasons for this. One is that the Leaders' agenda went far beyond trade this year. And there was a good deal of discussion, for instance, about climate change. I can't say it was all like-minded, but it was a good discussion.

So, given the substance at this year's Leaders' Meeting, I think the expectations will be that next year Leaders will want to discuss the same kind of set of real issues as those that we did this year, and the issues that are affecting the region.

Secondly, APEC Leaders also agreed to invite in new members. Peru, Vietnam and Russia will join in 1998. Well, as we expand I suppose it's inevitable that there may be some changes.

One final word. Next year is Malaysia's year. And I've heard several commentators say, "Oh, I wonder what's going to happen in 1998." Well, Malaysia has said it wants a solid, results-oriented program for the year. And for our part, we in the United States are looking forward to working with Malaysia on exactly that basis.

MS. MCMILLON: Thank you, Ambassador Wolf. We know now that to begin our dialogue with our friends in Bangkok -- you all are waiting and we'd like to go ahead. So, Bangkok, please go ahead with your questions.

Q: Ambassador Wolf, I would like to ask you do you think that it's necessary for APEC members to come up with its own regional financial arrangement to help restore the confidence of foreign investors back to this region?

AMB. WOLF: Well, the Leaders discussed the broad set of financial issues, and there were a number of ideas out there about financial arrangements. But what the Leaders agreed was to go forward to agree and to elaborate the framework that had been worked out at Manila. That framework included several elements: improved surveillance, technical cooperation, increasing the flexibility with which the IMF is able to disburse its resources; and also the idea that while the IMF will be the center -- needs to be at the center of international assistance efforts when international assistance is necessary -- and I'll go back to the point I made in my opening remarks that in the first instance it must be national efforts that go first. But what the Leaders said is that where supplemental resources for the IMF are necessary that they would provide supplemental resources. But I think the idea of a separate fund, something that stands alone from the IMF, was not something that found a lot of support among APEC Leaders, and we don't think it's a good idea now either.

Q: My second question is about electronic commerce liberalization agreement. I think the response from the Asian countries appeared to be quite cautious. Can you elaborate exactly what is to be included in the electronic commerce agreement?

AMB. WOLF: It is true that there was some caution among several Asian economies, although there was widespread support for the remarks that Secretary of Commerce Daley made to the plenary about economic commerce. It was an issue that we injected into the APEC process in the late summer, early fall. I guess it reflects the fact that it's such a new area, here in the United States, in Europe, in Latin America and Asia as well. I think what we were hearing from several APEC economies was the idea that they wanted to understand the situation better. And I understand that. But there is an important point I would make about electronic commerce, which is that it is growing and it is growing very rapidly. I saw in the newspaper just this morning that where commerce on the Internet maybe is in the tens of billions of dollars now. It will be multiples ten times as large in just three or four years, and it's going to be business between economies all around the world. Small countries, small companies have great advantages because it levels the playing field, and work is going on.

Just last Friday, the U.S. and the European Union agreed to a broad statement of principles in a very substantial work program. Well, as that work elaborates itself, then the private sector is going to take the results of that and they're going to develop the software. They are going to develop the applications. And our hope is that APEC moves forward very rapidly to join in the discussions that are taking place, because the alternative will be that what there is will develop around the countries that weren't participating. So we will look forward to very active discussions when we return to the APEC setting in February and hope that APEC is well involved in the work that is taking place all around the world.

Q: Recently the U.S. commerce secretary, Mr. Daley, expressed concern that the economic crisis in this region may prompt some countries in Asia to back off from the liberalization plan. Do you share his view?

AMB. WOLF: I would never contradict our secretary of commerce. And I suppose there is always the risk. But the message of Vancouver, which was just two weeks ago, is a very clear message. Rather than back away, what the 18 APEC Leaders did was point the direction forward. The agreement to move forward on early voluntary sectoral liberalization -- nine sectors, $1.5 trillion of liberalization in very important sectors -- was a very important signal from APEC economies, that the way is forward, not backwards, not inwards. And so we are going to work on that basis.

Q: I think in the past the context of the APEC discussion is about the United States and developed countries with the five growing economies in Asia. But now the situation has changed and we are facing a financial crisis. Do you think that the crisis will now have any implications on the U.S. policy toward Asia?

AMB. WOLF: Well, our policy with Asia is a very active policy of participating in what goes on in the region. Asia is of absolute importance to the United States. You are on one of our two doorsteps, and so for a variety of reasons -- economic, political and security -- the presence of so many Americans of Asian descent, the number of students who are here -- just for a variety of reasons Asia is important to us.

Yes, there is economic turmoil in the region. But the fundamentals are still good. And we believe that with concerted action by countries and by the region working together that the region will get by this, get by the turmoil that is being experienced now. We are confident that this region can make a turnaround. And we would hope that the message that comes for instance from the Leaders' Meeting next year in Kuala Lumpur is we are on the road back, and we are on the road forward.

Q: For Asia we are interested in the technical cooperation that it would seem to me the meeting did not sufficiently discuss about this issue. Can you tell me the prospects of the economic cooperation?

AMB. WOLF: Economic cooperation is what APEC is all about. Economic cooperation in my view has two parts, and each is mutually reinforcing. One part is opening up the marketplace and one place is building the marketplace. Well, this year a fundamental part of building the marketplace is providing a stable macroeconomic environment and sound financial institutions. And there was a lot of discussion at the ministerial and the Leaders' Meeting about those fundamental pieces.

I think there was also in the discussions, including by the business community that was also meeting in Vancouver -- there is a clear message out there that people are not going to now just turn away from Asia. They want to be involved. The fundamentals are good, but there are things that need to be done to put in place the sound macroeconomic foundations, the sustainable and strengthened financial systems. That's an absolutely essential part of economic and technical cooperation.

Now, this year APEC has given attention to economic and technical cooperation. We have worked on things like we have started to discuss things like economic commerce, which is an important part of economic cooperation and economic infrastructure. We have talked about transportation infrastructure, telecommunications infrastructure, energy infrastructure. I think an important part of what the Canadians did this year in fact was to concentrate a lot of attention earlier in the year on these issues. Now, at the Leaders' Meeting and at the ministerial itself it is true that the financial situation took first priority, and that's as it should be. We have got to get the fundamentals right in order to get back to the broader economic cooperation questions.

Q: And you mentioned about the new members of APEC, Peru, Vietnam and Russia. How long do you think the moratorium should be for the next round of accession of new membership?

AMB. WOLF: In this case, what the Leaders decided was that we would take in three new members at the meetings in Kuala Lumpur. I would expect that they might observers for instance during the course of 1998, but they would formally join APEC at the ministerial in Kuala Lumpur. The Leaders also decided that once those three economies had joined APEC that there would be a 10-year moratorium.

Q: I don't know whether you attended the bilateral meeting between our prime minister, Chuan Leekpai, and President Bill Clinton. And if you did, please brief us. What is the context of the meeting?

AMB. WOLF: No, I didn't attend the bilateral, and I think maybe it took place on the side of the retreat. But I know that Prime Minister Chuan, like your deputy prime minister and your foreign minister, were actually stars of the show, because they made very strong commitments to the point that it was for Thailand to take steps now to put in place sound macroeconomic policies, to strengthen its financial institutions and that was a strong commitment that was made at both the ministerial and the Leaders' meeting. It was part of the discussion that took place when the president had breakfast with ASEAN heads of government.

We are, of course, quite heartened by the recent move that the Thai government has taken. The step back to full recovery is not one single move. It is a series of moves, I think as the finance minister said in his remarks on Monday. And so it is important to keep moving forward. But I think the moves just this week were a very good step.

Q: When the crisis that broke out in Thailand there was some criticism that the U.S. administration appeared to step in quite late compared to the Japanese. What do you think?

AMB. WOLF: Well, certainly we are aware of the concern that there is in the region. And I think the message that the president put forward at Vancouver was the determination that if there are questions they should not linger on, that the United States is engaged in the Asia-Pacific -- we have provided leadership in a variety of ways in the region, or we have been involved in the region, and we have worked very closely with, for instance, the countries of ASEAN in Southeast Asia. We look forward to continuing that very close cooperation. It is imminently in your interests and our interests that that happen, and we are determined to build on the very positive meeting that the president had at Vancouver with ASEAN heads of government.

Q: Could you please brief us about the relations that the APEC and the WTO financial agreement, future agreement on trade liberalization? Is there any relation on how the APEC would work to urge the WTO member (conquer ?) the future agreements?

AMB. WOLF: Well, I think that's one of the things that APEC is really very strong on. And the idea that APEC can galvanize action in the world, in world trade, and to push the World Trade Organization. Last year it was through the Information Technology Agreement. This year it is through deciding on sectors that we have identified for early action next year.

On financial services, there was a strong call by Leaders for a successful conclusion of the financial services negotiations that are taking place right now in Geneva. The idea was that we needed to have materially improved offers. Several countries have done that. There is probably a little further it has to go before agreement is possible, but we are really quite hopeful that the message from Geneva on Friday will be success, and that that message will send another signal to watching marketplaces that the Asia-Pacific is determined to do the things to put the fundamentals in place for sustainable growth over time.

Q: I would like to ask you whether do you feel optimistic that the liberalization process implemented within the APEC member countries for 2010, 2020, will be implemented very smoothly, as some of the APEC member countries are facing some long financial problems?

AMB. WOLF: Well, it's obvious from the last six months that the process of moving forward to 2010 and 2020 is going to have some jolts and curves and turns. But I am hopeful that we will continue to move towards the Leaders' commitments of free and open trade and investment in the Asia-Pacific by 2010 for developed countries and 2020 for developing countries. And I think that was certainly the message that Leaders wanted to convey after Vancouver. They conveyed a strong interest in restoring financial stability, and they had a long discussion of that. And they also sent a strong signal of their intention to move forward on securing the basis for sustainable growth over time by agreeing to continuing the process of liberalization.

The nine sectors that were identified were not just sort of picked randomly. They actually have a meaning in the region. Several of the sectors, like environmental goods and services, telecommunications, energy -- these are part and parcel of putting in place infrastructure for the next century. Chemicals are very important, and liberalization is very important there, because chemicals are a major input into production. It's one of the largest traded sectors in the world. It's very important to continue to move forward. So I don't think these sectors were chosen randomly. And I think this is a strong signal that Leaders and ministers are determined to continue to move forward. We have a lot of work to do in 1998 before we realize what we have planted this year, but I am very hopeful that we will continue to do that.

Q: From the previous about the liberalization in 2010 and 2020, I would like to know how far is the equality and justice in making and doing business between the Asia-Pacific be guaranteed in that. As we see that from the Vancouver Declaration, it is launched with a spirit of correcting the APEC community. But up to now the APEC members, the APEC still gives limitation to the member, and for us that if you want to join with that I say all the countries in the Asia-Pacific should join with the APEC. What do you think about that? Thank you.

AMB. WOLF: Well, you know, APEC has 18 economies now, and they account for roughly half the world's gross domestic product. We have probably half or more of the world's population. And we have just taken in three new members, or we will take in three new members in 1998. So that will sort of increase the size and spread of APEC. You have to balance I suppose the idea of moving forward to -- in a common way -- with the idea of universality. But what APEC has is this concept of open regionalism. That is, what we do is made available to everybody in the world. Indeed, when you look at the liberalization proposals, like the Information Technology Agreement last year, or the early voluntary sectoral liberalization agreements this year, they are going to go to the WTO and they will be bound on a global basis so that everybody can benefit from them. There is nothing that says that countries that are not members of APEC can't do the same things that APEC economies are doing.

I mean, the best practices that we discuss and the practices that we put in place for instance for expedited air express delivery, the things that make it easier to move small packages around -- move packages around the region, or the things that we do in terms of customs reform -- there is no reason why non-APEC members shouldn't do the same. In fact, I think that's a message to countries' economies in the Asia-Pacific, that in this world after the conclusion of the Uruguay Round competition is fierce.

If the countries of the Asia-Pacific look at Latin America, they will see a number of countries there that are moving boldly to liberalize and open up their economies. They're trying to make themselves attractive for foreign investment, and they want to be very active in the global trading community. So for those of us who are in APEC, sometimes we run faster, but sometimes we don't run as fast as countries in the rest of the world.

So I don't think it's necessarily a problem that APEC has 18 members now, 21 at the end of 1998. There is still a powerful lot that we can do, and do among ourselves, and do with the rest of the world as well.

Q: The APEC member countries would like to see that an open market will be implemented not only in the APEC member countries but throughout the world. Why APEC member countries who met in Vancouver just accept three member countries, as we believe dozens of perspective members of APEC also would like to join APEC?

AMB. WOLF: I think, as I said in the previous question, it's a question of balancing the needs to broaden -- to deepen APEC, to build APEC, and to move towards that commitment that our Leaders made and need to deepen, versus the desirability of broadening. And, as I say, there is nothing that keeps non-APEC members from doing the same kinds of things that we're doing in APEC. And that's to the greater good.

But I think there are some advantages. And there are certainly advantages in parts of APEC, like the Leaders' dialogue or the ministerial dialogues that take place. I mean, there is an advantage to keeping the number of countries that are there in the room discussing the issues to a manageable amount. That means that the large countries get a say and the small countries get a say. I know that was the way it was at Vancouver, that it wasn't just three or four large countries that dominated the discussions. Everybody had a chance to speak and to speak seriously about the issues that the Leaders were discussing.

If APEC became like ESCAP, the Asian economic forum of the U.N., or if it became like the General Assembly, it would be very unlikely that APEC would attract Leaders to come every year to discuss the issues that are relevant to the region, and I think that would be a real loss.

Q: Also in Vancouver APEC decided to choose the U.S. president to lead the meeting on the APEC ministers of finance on the monetary crisis. Could you tell us what your mechanism or concept is on this? Thank you.

AMB. WOLF: I'm not sure I exactly know what that means. I think there was clearly a good deal of discussion that must have been directed at President Clinton about the importance of the United States being actively involved and showing leadership. And I think the president said we would be actively involved, we are actively involved. We have worked very closely with countries in the IMF -- countries in the region and with the IMF. And we are determined to do that. There will be additional meetings that will take place, some of which may include countries from outside the Asia-Pacific region. And we will be actively involved in that as well. We take our responsibilities at the IMF for instance, and at the World Bank, very, very seriously. They're critical institutions and they're critically important now.

So we'll continue to be actively involved. I think that's the commitment that came from President Clinton and Secretary Albright and others who were asked, "Well, is the United States going to be involved or detached?" Well, the question should be answered. We will be involved. We cannot afford to be detached.

Q: Yes, the meeting in Vancouver was a sign for Mr. Clinton to find some ways to tackle the financial crisis in some of the member Asian countries. But up till now, when the situation is becoming worse, we don't see any action taken by the APEC. And do you have any idea what kind of action taken by APEC, especially Mr. Clinton to tackle all these problems in a very short time?

AMB. WOLF: I think as I said in my opening remarks that the message from the Leaders was not that the United States would solve all the problems of the region, but rather that the message that was discussed, and it didn't actually -- the first speakers were not -- was not -- and the first speaker was not President Clinton but I think President Zedillo -- that the first responsibility for dealing with the economic problems that are present in the region, the first responsibility starts at home.

Each economy has to put in place sound macroeconomic policies. They have to strengthen their financial institutions. Those are major sources of problems I think over the last six months. And the message from President Zedillo was to look at the Mexican example. But I think that others talked about it. I think that President Ramos may have talked about the idea that, you know, the Philippines had postponed adjustment for too long. Prime Minister Chuan talked about the need for the Thai government to be actively engaged in taking its own affairs in order. So the first effort must be done at home, and not enough has been done throughout the region.

Where international assistance is necessary, the Leaders agree that the IMF needs to be the institution at the center. It's the IMF that has both the expertise and the resources to help support and to support adjustment and to mobilize international support.

And finally, where supplemental assistance may be necessary to supplement the IMF resources, the regional cooperation could help. And that's been the case with the Korean IMF program, although I think frankly there are some Asia-Pacific economies which did not participate in the Korean program that might consider the importance of doing it as part of the kind of commitment that Leaders gave at Vancouver.

Q: I would like to know what is the real obstacle of that in handling the economic cooperation within the Asia-Pacific? I hope that APEC can make a real action on that, as we see from Blake Island and Bogor, and also Osaka and Subic Bay -- until Vancouver -- felt that the APEC declaration has not find the kind of message. We still need something -- a real action on that. Could you tell us what is the obstacle of that? Thank you.

AMB. WOLF: Well, I think if I understand the question it is how is APEC going to make a real impact in terms of economic cooperation.

I think in the last two years we have increasingly moved towards the idea that we have to have very focused and specific outcomes that we pursue -- not just on the trade side, like the Information Technology Agreement, or this year on early voluntary sectoral liberalization. But we have to get past just having meetings to discuss our problems. We can't just create Web sites or we can't just create databases, but we have to have specific things. And so we are working on very focused type activities -- better air express delivery procedures, better customs clearance procedures, improvements in business mobility. This is a very important issue, and it's an issue in a number of APEC economies, including several that are on this Worldnet tonight. The idea that people can come, do a job and leave, and that they don't have to go through tons and tons of paperwork and a long tedious process waiting for approval of a work permit -- these are important contributions that we can make, and we can do it through APEC, and we ought to figure out what the practice is and put it in place. And we ought to do that by next year so that on a number of these issues when we get together in Kuala Lumpur we can show an even larger results list than we had this year. And I think that's what the Malaysians have in mind -- solid, results-oriented work across the APEC work program, and we are prepared to work with them on that.

Q: What I would like to begin with is to ask you that when the meeting was convened in Vancouver, the APEC meeting, it ended with a very what you call optimistic statement of a healthy, long-term economic outlook for the Asia-Pacific region. I would like to ask of you what your views -- when do you think there will be light at the end of the tunnel for that segment of the Asia-Pacific economies which are currently undergoing a type of economic and financial turbulence?

AMB. WOLF: I'm not sure whether you want the date or the date and the time, but this is a difficult process, seriously. This is a difficult process. The problems that have built up are problems that build up in some cases unnoticed, but in many cases noticed but ignored. And they've built up over time. And so unwinding these problems is going to take some time. Restoring confidence is going to take some time.

But clearly as governments take the hard-headed kinds of steps that are necessary to put in place sound macroeconomic fundamentals and to strengthen domestic financial institutions, to end the kinds of credit practices or credit allocation that may have led to misallocation of scarce capital, as investor protection is improved and transparency is increased -- as those things happen then I think the very strong fundamentals that are in place all around the region, and certainly including in Malaysia, I think those fundamentals are going to reexert themselves. And, as I said, I hope that when we get to Kuala Lumpur that we are not somehow lamenting a year of opportunity lost but celebrating a year in which we have taken advantage of the opportunities, we are back on the road, and the message to the world is APEC is back on the road and we are headed forward.

Q: Ambassador Wolf, I would like to follow up on a small query on the WTO. In many of the APEC documents there is a very strong expression of commitment to the WTO, and also for the necessity to have the agreement on the liberalization of financial services to be signed by the 12th of December. Did you notice in the Vancouver meeting any erosion really in the level of commitment among the APEC economies to this deadline, in terms of signing on the financial liberalization agreement by the 12th of December?

AMB. WOLF: Well, I am not sure that every single one of the 18 members of APEC agreed that we need to reach agreement by December 12th and that it needs to be on the basis of substantially improved offers. We certainly believe that, and that was the strong message of -- in the Leaders' Declaration.

I think that there was a lot of support for the idea, and I think there is a growing recognition around the region. And I know I've read it from a number of ASEAN capitals about the importance, the recognized importance of strengthening domestic financial institutions, opening them up -- opening them up to competition, including foreign competition, and making them operate on a sustainable basis. And that's what the financial services negotiations are really about. Do we continue to have secluded and protected financial sectors, or do we open them up? Not open them up tomorrow, although in some cases it's necessary to move quicker. But there is a recognition in Geneva that some of this will need to be staged over time, and it's important.

I think the message from the marketplace has underscored the importance of coming up with a good agreement -- a good agreement at Geneva that really enables the countries not only of the Asia-Pacific but globally to develop strong and sustainable domestic financial systems.

Q: Hi, John, I'm -- (inaudible) -- here from MITI. You are looking suave as you are in this little monitor in front of me. Thank you for the good work and the assurances of cooperation when we meet in Kuala Lumpur. I have always enjoyed working with you.

Now, let me just say perhaps as an introduction that we are very satisfied with Vancouver. I think we have made a lot of progress. We covered a lot of ground in liberalization, trade investment, as well as in terms of facilitation, and some progress in EcoTech. But I think Vancouver particularly showed that APEC needs and APEC can respond to regional issues. As you said, you know the currency issue and it was not in the agenda but it was topical since July, and we all addressed that.

I think what the response from the Leaders and the ministers reflected was that there was a strong resolve to cooperate.

Now, over the weekend here, this coming weekend, I think ASEAN and Japan and Korea and China are going to meet, and I suppose the currency issues will also surface. Do you think that, you know, the discussions in Kuala Lumpur would have a contribution to the process of APEC?

Now, the other question is you know what we have mentioned in terms of our plans for Kuala Lumpur we are talking about capacity building, because I think we must not forget that we can embark on or even implement liberalization as we have in APEC. But we have to not forget that there is still the development gap that exists between the member economies, and that needs to be addressed in terms of APEC cooperation. So, John, there you are -- just some general questions for you.

AMB. WOLF: Well, Mr. Chairman, as the senior officials chairman, I will obviously be led by you, and I look forward to working with you, Razak (sp) as we go forward in the year.

On the currency question, as you know that was a question that was discussed. It was discussed at Manila before APEC. It was discussed by Leaders at APEC at Vancouver, and it was discussed again last week in Kuala Lumpur at a meeting that you all hosted. And there are no silver bullets out there. I know the IMF is doing a study of what has gone on in the currency markets over time, and we obviously look forward to seeing that.

At Manila, the Manila Framework that was agreed to by Leaders' talks about the importance both of dealing with surveillance, and also the issue of technical cooperation to increase -- to improve the operation of institutions. And we think that works should certainly go forward, and the group that has met at Manila and Kuala Lumpur should certainly get on not only with dealing with the crises at hand but with the medium-term issues that revolve around improved surveillance among Asia-Pacific economies and increased technical assistance to help countries to put in place the kinds of regulations and the kinds of supervisory capabilities that will hopefully avoid future kinds of setbacks like we are now experiencing.

I certainly think that that's an important part of what APEC can do in terms of your capacity building. I look at capacity building in a variety of ways. I think if we can find very specific outcomes that improve our transportation infrastructure or our ability to move energy, or our telecommunications systems, and if we improve our telecommunications systems enough maybe you'll not only be able to see me, but by this time next year I'll be able to see you. But capacity building can have to do with the infrastructure that's necessary to support growth, and I think capacity building can also have to do with improved education, using the education foundation or whatever, and actually doing specific things.

What I think we need to avoid, though, is situations in which we think we are accomplishing something when we simply have bureaucrats talking to bureaucrats and say that now we have trained a lot of people. I think we need to find out what the key issues are that can help move economic cooperation forward, can help the private sector. We need to bring them in, deal with issues -- let's say clean production technology -- how can we put modern, clean equipment and procedures in place in our manufacturing plants so that there's a cleaner and a safer workplace? That's capacity building, and I hope those are the things that we can work on, as well as the parts of the agenda that are fairly fully elaborated things, like coming up with final proposals on early voluntary sectoral liberalization by the June trade ministers meeting in Kuching.

Q: A follow-on, John. In terms of liberalization, trade liberalization, under the early voluntary sectoral liberalization, let me just say also that when we carry the process next year we are committed to bringing the A-plus list to maturity to whatever (stage ?) they can. And of course in terms of the whole process we would like to see a result in our year too.

Now, at the same time I think you will recall that at Vancouver, although we are facing this financial situation, there is still a strong resolve for liberalization. But I think as we see things moving in its proper perspective now, I would hope that we do not have a situation where liberalization becomes a burden. But certainly we would need to (cater ?) for any kind of eventuality that may come. But let me just say this way -- our aim in the EVSL was also to spur the multilateral process in terms of bringing some of these things in the WTO, perhaps talking about -- people are talking about the next round of negotiations. But on the other hand also you will recall from our side of the world we are talking about looking at the next round that we have maybe for the WTO to look at this issue of currency trading, because the kind of -- the magnitude and the volume of currency trading in the world is much bigger than world trade. And there has been the suggestion of course from our side that the WTO looks into this. Now, I am putting this across to you to see what your views are and do you think these are the kinds -- this is something that maybe the APEC process could also look into? I am trying to be provocative, John.

AMB. WOLF: You have been. I think that when you talk about "next round," our preference is of course to look at some very specific things. The WTO has a whole long built-in agenda. That's a big work program out for the next number of years to reach a conclusion. First of all we should conclude our work on financial services by Friday, and Malaysia can help. Second of all, we need to look at the built-in agenda. Third of all, you are right that the backbone of the early voluntary sectoral liberalization is the idea that we can take these proposals and push the global trading community, and we think that is good. We don't see EVSL, the early voluntary sectoral liberalization as the stocking horse for a new global round, but we do see that there is substantial benefit and substantial rationale for Asia, the Asia-Pacific, in moving forward with these proposals. And you know I am just delighted to hear your commitment to see this process through by June in Kuching.

Now, on the question of currency trading and the WTO. Again, I am not sure that I'm an expert, but I have a feeling that this was discussed last week for instance at last week's Kuala Lumpur meeting, and I think I remember that there was not wide consensus in the group that the WTO was an appropriate place to look at currency trading.

Q: Ambassador Wolf, since next year the APEC meeting will be organized in Kuala Lumpur, I would like to ask you about the EAEC. How has -- (inaudible) -- be accommodated into APEC?

AMB. WOLF: Maybe we should go back to Razak (sp). No, and I didn't want to move away from him just because we got to a tough question, and I'll look forward to discussing with you, Razak (sp), further those questions.

The East Asian Economic Caucus -- I haven't heard that term in a little bit, and I do APEC, Asia-Pacific Economic Cooperation. And I think one of the values of APEC, certainly a value from the United States' point of view, is the fact that APEC ensures that the United States is linked into what goes on in the Asia-Pacific. It's not only for our benefit, but as any number of Leaders told us -- told President Clinton at the Leaders' Meeting and then as we heard at the ministerial, Asians and people of the Asia-Pacific see a great importance in having the United States involved in the region for a variety of reasons. And involvement is not separable. So I think that APEC has proved its merits and, you know, APEC is the thing that in 1997 has shown a clear benefit for peoples on both sides of the Asia-Pacific. So I probably will focus most of my attention on how can we build the economic cooperation. How can we build the Pacific community, community with a small "c," that our Leaders envisioned at Blake Island.

Q: Ambassador Wolf, I am still curious about the settlement front. You say about the IMF, and you said that it's not a good idea. But the developing countries still need that in solving the crisis before the IMF came. Could you comment on that? Thank you.

AMB. WOLF: I think the message from Vancouver was that it is important to have the fundamentals right, that resources are not the -- the amount of resources out there -- resources without commitment, resources without policy, coherence, resources without attention to economic fundamentals and strong domestic financial institutions are just resources that will disappear in a matter of seconds, minutes, days. So what the Leaders agreed was that national effort was first and had to be the most important, that where in international adjustment was necessary it should center on the IMF. The IMF has the expertise and resources to provide that kind of assistance. But that where additional help was needed, where additional funding might be necessary to supplement what the IMF was doing, that the countries of the Asia-Pacific or a wider group could be involved in supporting the IMF, and we certainly think that's the way to go.

Q: Thank you. Ambassador Wolf, I have a very long question actually but I'll make it short. Nineteen ninety-seven has been termed as a year of action. How do you term 1998?

AMB. WOLF: The year of opportunity -- the opportunity to show that we are back on the road and moving forward.

MS. MCMILLON: That was very brief. As we end today's program, I would like to extend our thanks to Ambassador Wolf for joining us. I would also like to thank our guests in Bangkok, Jakarta and Kuala Lumpur, as well as our entire international audience. In Washington, I'm Doris McMillon for Worldnet's "Dialogue." Good day.

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