Special Press Briefing by Ambassador Elizabeth Frawley Bagley

Office of the Spokesman

Washington, DC

November 6, 2009

Special Representative for Global Partnerships Ambassador Elizabeth Frawley Bagley will brief the press on the Shanghai 2010 World Expo on Monday, November 9, 2009 at 12:30 p.m. in the Carl T. Rowan Press Briefing Room (Room 2209) of the Department of State.

Ambassador Bagley will brief the press on the State Department’s involvement with the Shanghai Expo and will provide an update on the progress of the USA National Pavilion.

This event is open to the press.

Media representatives may attend this event upon presentation of one of the following: (1) a U.S. Government-issued identification card (Department of State, White House, Congress, Department of Defense or Foreign Press Center), (2) a media-issued photo identification card, or (3) a letter from their employer on letterhead verifying their employment as a journalist, accompanied by an official photo identification card (driver's license, passport).

Press should allow adequate time to process through security and be in the press briefing room 15 minutes prior to the scheduled event.

PRESS CONTACTS:

Office of Press Relations
U.S. Department of State
(202) 647-2492

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Remarks Upon Departure from Chulalongkorn University

Scot Marciel
Deputy Assistant Secretary, Bureau of East Asian and Pacific Affairs

Bangkok, Thailand

November 5, 2009

Question: (Inaudible). What are the most important things she said to you?

Ambassador Marciel: Really, particularly since she isn’t able to speak to the press, I don’t really want to try to speak on her behalf or comment on what she said. I would just say we had a very full and meaningful conversation with her about a wide range of issues on Burma. But I want to be careful not to characterize what she said.

Question: What would be a realistic timeframe for the election. And you mentioned that the government, you are waiting to see if the government (inaudible). What would you consider to be the single moment (inaudible) complete (inaudible)?

Ambassador Marciel: I don’t want to sort of speculate on the timeframe for the election. We didn’t get any indication of when they would be other than next year sometime. It would seem that if there’s going to be any hope of elections that actually produce progress, there needs to be plenty of time ahead for this dialogue to sort of create the conditions. Beyond that, I don’t know. In terms of what they could do, I mean frankly, there are a whole lot of things that we would like them to do.

Question: (Inaudible)?

Ambassador Marciel: Well, they can do a lot of things. They can release political prisoners, all the political prisoners including Aung San Suu Kyi. They can stop attacks against ethnic groups. They can begin this dialogue. There’s a whole host of things that we would like them to do. I don’t want to pick one over the other.

Question: The U.S., (inaudible) the U.S. facilitator meeting with Aung San Suu Kyi and with members of the Committee of the NLD, she actually rejected this. Is that correct? (Inaudible)?

Ambassador Marciel: What we have been urging, as have others for some time, is that the government allow her to meet with the NLD Central Executive Committee. So I wouldn’t say we facilitated. I would say we’ve been urging that. We understand there was some discussion between the government and her about that, but I don’t know all the details.

QUESTION: If she’s turning down these rare opportunities to meet with her party, that’s not pushing this dialogue that you're pulling for, it’s not much progress towards that. This must be a setback.

Ambassador Marciel: Again, I think it’s important to talk to the NLD about this. I don’t want to speak for her or the NLD on this. I think it was more complicated than that.

Question: (Inaudible) from Myanmar, (inaudible) will be released?

Ambassador Marciel: They didn’t make any promises like that.

Question: (Inaudible) release after (inaudible). They used to release a few prisoners.

Ambassador Marciel: First, they did not make any such promises. And let me stress, it’s very important that there be sustained progress. We’re not looking to take a trip, they release five prisoners and then arrest five more the next week. That’s not the kind of progress we’re looking for. What real progress would mean would be release of all political prisoners, beginning a dialogue, these sorts of things. That’s why I stress, we’re being very clear here. We want to move forward, but we will be looking for real, sustained progress.

Question: (Inaudible)?

Ambassador Marciel: I think there are a lot of things we could do to improve the relationship, and we’re not going to do a sort of tit for tat, if you do this, we’ll do that. I think you have to look at sort of objectively what’s happening in Burma and come to some conclusion as to whether there’s progress, then there are things we can do in terms of more on a diplomatic side and other steps, a whole range of things we can do.

Question: (Inaudible)?

Ambassador Marciel: We’re talking about a whole range of things we can do. As I said, we’re not saying if you do X, we’ll do Y. More if you make progress, these are the sorts of areas where we can move in.

Question: Are there any prerequisites? Does Suu Kyi have to be released before the election? Or suppose they just let her have a dialogue with NLD? Is that sufficient?

Ambassador Marciel: I think, as I said, we need to see sustained progress. I want to be careful not to say if they just do X, that’s good enough, because there are a lot of scenarios where they make progress in one area and backtrack in another. So I think what we want to see is broad progress. Certainly release of Aung San Suu Kyi and other political prisoners we think is critical to that. Release of Aung San Suu Kyi no matter, while it would be very important and very positive, does not solve all the problems.

Question: Why do you think Senator Jim Webb was allowed to meet (inaudible)?

Ambassador Marciel: You’d have to ask the Burmese government that. I don’t know.

Question: How much of a setback --

Question: I have two questions. One about Thailand. Because the situation along the border is very, very serious, and more and more refugees are expected to flood into Thailand. So how what is your concern, comment? Also did you mention this with the Burmese authorities?

Second question. Are you concerned that the nuclear issue, but would you like to ask the issue directly to North Korea, (inaudible), and also from other players? I think it is, (inaudible) didn’t want to mention the company name, China, so what do you think China feedback on this (inaudible) in Burma?

Ambassador Marciel: First on the refugee issue. We appreciate the fact that Thailand has taken and hosted a significant number of refugees. It’s unfortunate that those refugees have to leave their country because of conflict, but we appreciate what Thailand has done and want to keep working with the Thai authorities.

We hope that there are not more refugees. Of course, should there be, we’re confident that Thai authorities will handle them and treat them in a humanitarian way, and if we can be helpful, we certainly will.

On the nuclear issue, you have a lot of issues here, but fundamentally there’s a UN Security Council resolution on what North Korea is allowed to do, and I think all the members of the Security Council and the UN have an interest in working together on that.

I would just, on your very last point about a growing U.S. presence in Burma, there actually isn’t a growing U.S. presence in Burma. We have an embassy, as we’ve had, and now we’ve had a meeting, a set of meetings there, but I wouldn’t characterize it as a growing presence.

Question: You mentioned many times about the dialogue. (Inaudible) sustained and what the role of the U.S. in the dialogue? Mediator or (inaudible)?

Ambassador Marciel: Of course, I did stress too many times probably for you the importance of a dialogue. Obviously it’s not enough that there just be meetings that don’t make progress. The whole point of a dialogue is to see if there can be some common ground among the various key players, including the government, the opposition, and the ethnic minority groups. And of course what we would like to see is a dialogue that leads to progress.

It’s not for us, I think, to define that progress but rather for the people inside the country. And if they were to have a dialogue and they’d say there’s significant progress, we would certainly welcome that.

Question: Can an election without Aung San Suu Kyi participating (inaudible)?

Ambassador Marciel: I think an election without Aung San Suu Kyi and NLD would be, it would be very hard to see that as credible. But in the end, I think it’s up for Aung San Suu Kyi and the NLD to make that call, too.

Question: (Inaudible) of Aung San Suu Kyi and NLD. The U.S. sanctions (inaudible).

Ambassador Marciel: There are a lot of scenarios going ahead. I don’t want to say if this happens we’ll do this, or if something doesn’t happen we won’t, because there are a lot of scenarios.

The bottom line, I think, is that if the political process -- it’s not just about the elections, it’s about the entire political process, before the elections, during, and after. If that is not a fully inclusive process that includes the participation of the party and the parties that won the vast majority of the votes in the last election, it’s very hard for me to see how it would be credible.

Now there are lots of details associated with that, but the fundamental point is if the key parties that won the majority in the last election do not participate, I think you can draw your own conclusions. It’s very hard for me to see how that’s credible.

Question: So did you discuss about the release of all political prisoners and the need for any, any message from (inaudible)? And another thing is, what did you know about American-Burmese (inaudible) trial (inaudible)?

Ambassador Marciel: We have repeatedly and consistently called for the release of all political prisoners, and so we continue to do that. And again, rather than talking about what people said to us, I think the question is will they release political prisoners, and we’ll wait for that.

Question: (Inaudible)?

Ambassador Marciel: I want to be very careful here not to put adjectives next to these meetings. We went for an initial set of meetings. We were very focused on being able to have access to a wide range of people, particularly the opposition and the ethnic minority groups. And this is early in the process so I don’t want to really characterize it.

# # #

Burma: Policy Review

Scot Marciel
Deputy Assistant Secretary, Bureau of East Asian and Pacific Affairs

Chulalongkorn University

Bangkok, Thailand

November 5, 2009

AMBASSADOR MARCIEL: Thank you very much, and thank you all for coming. Assistant Secretary Campbell and I just returned last night from a two-day visit to Burma. It was an exploratory mission. The main purpose of the visit was really to explain to the key parties there, and I don’t just mean political parties, but the stakeholders in the country - government, political parties, opposition, ethnic minority groups, et cetera - to kind of explain the context of our recently concluded policy review, but also to hear from them, their views and their ideas.

Let me begin by talking a little bit about the policy review. As you know, Secretary Clinton announced in Jakarta in February that we would begin this policy review and she stated quite clearly at the outset that the reason for the policy review was that our previous approach, which relied heavily on sanctions, had not achieved the desired results. That’s a factual statement.

She also said that the ASEAN approach of engagement had not achieved the results. So the purpose of the review was not really to question the fundamental goals of our approach, but rather to see if there was a more effective way that we could try to bring about positive developments in the country.

So we undertook that review. It went on for quite some time. It was recently concluded a few months ago. The results of that review were first, to reaffirm our fundamental goals for Burma. That we want to see a Burma that is at peace, unified, prosperous, stable, respects the rights of all of its citizens, and is democratic. That hasn’t changed.

What we said, what we concluded in terms of approach, was that we were going to maintain our existing sanctions, even though sanctions by themselves had not worked sufficiently - they were still a valid tool of our policy, so we’re maintaining the existing sanctions pending progress; that we would begin pragmatic engagement with the government; that we would continue our humanitarian assistance to help the people of the country as long as we were confident that that assistance was actually reaching the people and doing what it was intended to do. And we also committed to talk to the Burmese authorities about our concerns about non-proliferation, particularly related to North Korea.

So as part of our pragmatic engagement piece we agreed to begin a dialogue - a senior level dialogue with the government - but also with opposition groups, ethnic minority groups, all of the people who have an important role to play in the country’s future.

We had an introductory meeting in New York, I believe it was late September, where we met with the Burmese Minister of Science and Technology who the government had designated to meet with us, and we sort of laid out where we were and what we hoped to achieve. Then, as I said, we took this trip the last two days to meet with the government, to meet with others.

We spent a day in Naypyidaw where we met with several government officials, government ministers, including the Minister of Science and Technology; the Minister of Information; and then yesterday morning, with the Prime Minister as well as with some others.

Then we were in Rangoon most of the day yesterday where we met with representatives from several of the ethnic minority groups. We met with the Central Executive Committee of the National League for Democracy. We met with Aung San Suu Kyi, and we met with some other people who had views on both the political and the economic situation in Burma.

In all of these meetings we explained the results of our policy review, where we were. There’s been some, I think, misunderstanding or misinterpretation about some elements of it so we tried to clarify what we were doing and what we were not doing. We reaffirmed our commitment in all the meetings to a peaceful, prosperous, democratic Burma.

We stressed in our view the importance of a beginning genuine dialogue within the country, between the government, the opposition, and ethnic minority groups which we really see as critical. There’s a lot of talk about elections, there’s a lot of talk about sanctions, but fundamentally the main problem there is the lack of an inclusive political process, and we think that a dialogue among the key players is the best way forward.

And of course we’re not alone. The international community, the United Nations, have long been calling for that kind of dialogue.

We stressed that in our view the purpose of a dialogue should be to move toward national reconciliation and a fully inclusive political process. And toward that end, we again urged the government to allow Aung San Suu Kyi to have regular access and engagement with her NLD colleagues as well as with others.

We highlighted the importance and the concerns about a wide range of human rights issues including but not limited to political prisoners, treatment of ethnic minorities, et cetera.

In our meetings with the government we underscored, as we’ve said publicly, our willingness to move toward better relations, to take steps on our part to improve relations with the country of Burma, but also that this would only be possible to the extent that there was progress inside the country. This is very important. We’re willing to move ahead, but there needs to be progress inside the country.

So we had, as I said, significant serious meetings with a wide range of people. We laid out our views. We listened a lot to people both in the government and the ethnic minority groups and in the opposition.

Let me stress again that this was an exploratory mission. I read yesterday Bertil Lintner’s good article warning of past failures of diplomatic efforts. I think we’re aware of that. It’s useful to be reminded of that.

My own view is that when you look at the record, these past efforts haven’t succeeded. You can draw two conclusions from that. One is don’t try. Two is to try but to be aware of just how difficult this is. We go into this knowing full well how difficult this is going to be. We’re not under any illusions. But we feel that there are 50-55 million people in the country who deserve the efforts of the international community to try to help bring about progress and we’re very committed to that.

So let me stop there, and I look forward to your questions.

MODERATOR: Thank you, Ambassador Marciel. We have a good chunk of time, about 45 minutes. I would like to do this in rounds. Let’s take the first round. The first round perhaps by diplomats, academics, members of the public; and then the second round we’ll go to the media maybe.

AMBASSADOR MARCIEL: If there are no questions, I’ll go ahead and…(laughter).

MODERATOR: Go to the airport.

QUESTION: (Inaudible). The first question is do you anticipate any (inaudible) to come up with an inclusive dialogue within the country of Burma? The second question is after you have been explaining this to the people you met, the partners, the stakeholders, what is their response?
Thank you.

AMBASSADOR MARCIEL: On your first question, I won’t, to be honest, try to anticipate. I don’t know what’s going to happen. We don’t know what’s going to happen. We will have to see. I’ve seen in the past people suggesting that they think this or that is going to happen inside Burma. I just don’t know.

We certainly hope there will be a dialogue. I don’t frankly see how there can be a credible election that brings legitimacy without inclusive participation, and I don’t see how that can happen without a dialogue. So if there is to be a credible election that fundamentally changes the dynamics in the country, I think there needs to be dialogue and there needs to be participation.

In terms of the reaction, what I would say is I think many of the opposition groups and the ethnic minority groups have been very clear publicly for some time that they support a dialogue, an internal dialogue, and would look forward to participating in that. We’ll have to see where the government comes out on that.

QUESTION: Mr. Marciel, you mentioned that during these discussions you have also touched on the issue of nuclear proliferation and the contacts between the regime and North Korea. Would you be able in any way to elaborate on that? Thank you.

AMBASSADOR MARCIEL: What I can say is that there have been reports of cooperation and closer relations between Burma and North Korea, including on the military side. There have been things in the press you’ve seen speculating about nuclear cooperation. And I think the situation we’re in is we want to, I think the international community wants to work with the Burmese authorities to find out what the facts are and to impress upon the government the importance particularly of honoring and abiding by UN Security Council Resolution 1874.

So I think there is a need for information sharing and dialogue.

QUESTION: Thank you for a very clear message to hear from you. We hope also that you received our open letter that we have tried to reach to you before the eve of your trip. My first question is already addressed by my colleague from the Thai Action Committee for Democracy in Burma.

My second question is actually, when we look at since the review of the U.S. policy, many key players both internationally and in the region have looked up to what is coming from the U.S. We have also observed, there are some positive steps being taken, particularly by the ASEAN, such as calling for the release of Aung San Suu Kyi. (Inaudible) particularly after looking to the new policy of the U.S. and saying that it looks to us like on one hand first of all is that we would like to see the Burma democracy movement, Burma’s movement for democracy and rights of ethnic nationalities. We see the new policy is in line with our call, and we really appreciate and we are very encouraged to see that.

But on the other hand we also would like to get more clarification from you because we observe that there seems to be a misinterpretation by some of the key ASEAN players of the new policy of the U.S., with the aims to follow the ASEAN’s, I would say highly problematic brand of constructive engagement. I would like to her the comment from you. Thank you very much.

AMBASSADOR MARCIEL: Thank you. It’s a very good question. Various countries have taken various approaches to Burma. None of us have succeeded so I think we all should be very humble and not assume that we have the answers until we actually produce some results.

For there to be progress in Burma there are two things that have to happen. One, there has to be the primary effort inside the country. The international community by itself cannot do this. It has to happen from within the country. But second, the international community has to work in support of that, including ASEAN. We talk about this with our ASEAN colleagues a lot, as well as with others. I think the message from all of us ought to be very clear.

There is an opportunity for progress not for the first time in Burma. The elections could be, could be an opportunity, but they will only be an opportunity if they’re done right and that means involving everybody in a way, starting with a dialogue so that all sides can agree to the conditions. There can be a real campaign, real elections.

I think the message from the international community, including ASEAN, needs to be that the first step has to be a dialogue inside the country. I think it’s critical that all of us reiterate that message. Because if there’s not, and if the so-called seven step road map goes ahead without the broader participation and inclusiveness, it doesn’t solve any problems.

QUESTION: (Inaudible).

MODERATOR: Let me repeat the question. The question has to do with the fear and intimidation from the SPDC, from the military regime, and whether the U.S. is mindful of this.

AMBASSADOR MARCIEL: If I understood correctly, it’s also whether we’re taking steps to address the regime’s potential fear that they may suffer if they lose power.

QUESTION: The real (inaudible), is why would they give up power? Why wouldn’t they resist? (Inaudible) very afraid that if they do they’re going to get retribution (inaudible), so it seems to me that the (inaudible) policy (inaudible) take into account their paranoia, which is legitimate. What I’m asking is, is the U.S. government discussing with the other side, so to speak, what they think about this issue, how they would handle it.

AMBASSADOR MARCIEL: I understand. This is, again, why there needs to be a dialogue. I don’t want to speak for the opposition, the NLD, but my understanding is that the opposition has said they’re asking for a dialogue -- dialogue to find a way ahead. I think in that dialogue it would be for the participants on the Burmese side to address all of these issues. I don’t think it’s for the United States to address those issues.

To the extent that people in the government are concerned, I think sooner or later there’s going to be change in the country. Much better for many reasons, much, much better for that to be change that’s worked out over in a meeting, a series of meetings, over a table, for a smooth process. I think my view is that actually reduces the risks and should reduce the fears.

QUESTION: Ambassador, you’ve laid out the issues that you spoke about, the American positions on a range of issues. What is the sense you got from the SPDC, from the people you met from the government? What are their issues? What are their concerns? And have they taken on board -- to what extent have they taken on board some of the issues that you spoke about from the American point of view? Thank you.

AMBASSADOR MARCIEL: They listened. We listened a lot as well to them. Much of what they talked about was explaining their view of their political process. We, as I said, highlighted what we thought was essential. As I said, this is early days. It’s the first time we’ve met most of these people, so I think it’s going to take some time to see how they respond.

QUESTION: Ambassador Marciel, Assistant Secretary Campbell recently testified to the Congress that the United States priorities on Burma are, and I quote, “The unconditional release of Aung San Suu Kyi and all political prisoners, an end to conflicts with ethnic minority groups, accountability to those responsible for human rights violations, and the initiation of a genuine dialogue among the Burmese government, democratic opposition, and the ethnic minorities on a shared vision for the way forward in Burma.”

So in your view, my first question is how much closer is Burma to the achievement of these priorities now that you have had a chance to visit the SPDC and Aung San Suu Kyi in Burma? My second question is, in view of the escalating military threats against ethnic communities, what will be the catalyst for the United States to push harder on accountability of those responsible for human rights violations? Thank you.

AMBASSADOR MARCIEL: How much closer is Burma to meeting these goals? I think it’s really important in these situations not to anticipate progress, but to wait and see if there is tangible progress. If there is, we will see it and we will all know it. Until that happens I don’t want to predict progress. My view is it’s quite clear: we will see progress if and when it happens. I’m not sure we’re there yet.

In terms of the second question on the ethnic minorities we again, Secretary Campbell and I highlighted our concerns about the treatment of ethnic minorities and we’ll continue to raise those concerns.

To the extent that the government continues to, if it pursues more military attacks against the ethnic minorities, obviously that’s a step in the wrong direction and it’s not helpful. I’m sorry for stating the obvious, but I’m not sure I can say much more than that.

QUESTION: Two questions. In your meetings with the Burmese officials, could you describe the body language? (Laughter). Because they are known for nodding, listening, and ignoring what envoys say. My second question is, in your encounter with Aung San Suu Kyi, is she interested in participating in the elections? Or do you think in the spirit of compromise she might settle for stepping out of the equation to let the process go forward?

AMBASSADOR MARCIEL: We have the term body English. I speak English so I can do that, but I don’t speak Burmese. I really wouldn’t try to comment on the body language. I can say that in our meetings with Burmese officials they were, both sides spoke, both sides listened. There was nothing, I just don’t want to comment too much on that. As to whether they ignored us, I think time will tell.

On Aung San Suu Kyi, I am definitely not going to speak on behalf of Aung San Suu Kyi or speculate as to what she and others in NLD may decide. That’s really their decision. One thing that would certainly help and I think is essential is for her to be able to have a regular opportunity to interact with her NLD colleagues so that they as a party can decide how they want to proceed.

Question: Thank you and apologies, in a way. I think my question has already recently been asked and answered. What I was going to ask, I guess in brief, is what next? What will keep this process going? Obviously progress, broadly defined, was your answer. But in terms of in whose court the ball is, what steps might you anticipate happening next, what will help sustain the process to another iteration, perhaps a further meeting. Again, as I say, apologies, because in a way the question has already been asked, but I wanted to take the opportunity to ask it in another way.

Ambassador Marciel: Thanks, I think I can add a little bit to what I said earlier. We did not anticipate that one trip to Burma by us would solve all the problems that so many able people over many years have not been able to solve. So I think we understood from the beginning that this was going to be a process and not simply a matter of a meeting or two.

On the other hand, we’re very well aware that there is a time concern because you have the Burmese political process moving ahead, and if it moves ahead in a way that’s not inclusive, that doesn’t promote national reconciliation, then the Burmese government will have lost a huge opportunity.

So it’s one of those situations where on the one hand it takes time to achieve progress. On the other hand, time is finite. So we’re very well aware of that. We certainly expect to continue working and talking to all the stakeholders, including the government, but also others trying to find a way forward. But obviously the key question is will the government be willing to take some positive steps. We just have to wait and see.

QUESTION: I have two questions. One is about your engagement policies. You have alluded to some of the principal issues like a dialogue and then the release of political prisoners and also the inclusive process. But apart from these principal issues, can you describe what are the benchmarks for (inaudible) diplomacy? What are the next steps that you would like to follow in the few months? And in that strategy, to what extent will you also repeat what you did in 2007 with support of government of China?

My second question has to do with humanitarian assistance. You have emphasized that you will continue providing humanitarian assistance. So my question is to what extent do you have any discussions with the Burmese authorities with regard to the modality of increasing humanitarian assistance with the country, and whether that assistance might be also used in promoting the civil society involvement in the humanitarian space? And to what extent that could also become a tool for exempting the sanction regime - which I understood that there are humanitarian exemptions in the sanction policies - to what extent that can be also used.

AMBASSADOR MARCIEL: First, your question about benchmarks. Again, the goal here is for there to be a genuine sustained dialogue inside the country as I’d say a medium term step. Obviously there are long term goals that I outlined earlier about democracy and increased prosperity and peace and all those sorts of things, but we think a dialogue, sustained dialogue is an essential benchmark.

There’s any number of things that the Burmese government could do to create the conditions for that. Certainly, releasing political prisoners, allowing more interaction by Aung San Suu Kyi with her counterparts, these sorts of things. And there’s a whole host of things they could do to improve the human rights situation. I won’t try to list them here, but mostly stop doing a number of things that are very problematic. And I think we’re going to be very clear about this, that we certainly want to see progress. We’re willing to move in terms of the bilateral relationship, but we’re only going to do that if there’s real progress. We’re not going to do it absent that.

In terms of 2007, the one-time dialogue that took place in Beijing, my predecessor and current ambassador to Thailand, Eric John, met with Burmese officials in Beijing in June of 2007. We were prepared to meet following that. That Burmese government showed no interest. And subsequently there was the crackdown. That happened then, we’re taking a different approach now.

On humanitarian assistance, we did have discussions in Naypyidaw with Kyaw Thu, the Chairman of the Tripartheid core group who briefed us on relief efforts. We reiterated our willingness to continue to provide assistance as long as we were confident that we had access and that assistance was getting to the right people. We highlighted the importance of continuing to allow NGOs to work.

In terms of the effect on civil society, we’re providing humanitarian assistance because we think it’s helping people. Any other derivatives from that may or may not happen, but that’s not our intent. Our focus is that it’s not the reason that we’re doing it. We’re actually trying to provide humanitarian assistance for the obvious humanitarian reasons.

QUESTION: I have two questions. One is where does the process go from here? The logistics? I understood that there was going to be appointment of special envoys on both sides. Is Kurt Campbell going to remain the envoy as far as America’s concerned? And U Thaung, the Burmese counterpart? What kinds of meetings might there be from now on? Are we going to see Hillary Clinton meet (inaudible) in the sidelines of APEC or the U.S.-ASEAN Summit?

Secondly, one of the things that has failed has been the UN efforts to bring about dialogue and facilitate progress. Since the American policy shift was announced there’s been a hiatus within the UN as to what they can do and one suspects that the Burmese only want to deal with one person or with one country and that they’re no longer happy or interested in the UN. What does the U.S. see as the UN’s role, given that in some ways you’ve big-footed them?

AMBASSADOR MARCIEL: Big-footed is your term, Larry, not mine. (Laughter).
Logistics. Look, we expect that we’ll have a series of conversations both with Burmese officials and with others in Burma, and of course we have an embassy in Rangoon that interacts regularly with a wide range of people both in and out of the government, so I think there will be a whole series of conversations that continue to take place.

In terms of special envoys, the JADE ACT mandates that we name a special envoy. We are in the process of moving to name a special envoy. Meanwhile, Kurt Campbell and to some extent I are working on that. Once a special envoy is named I think all of us will work together. Exactly how we’ll divide things up is to be seen. On the Burmese side, we understand the Burmese have asked Minister U Thaung to be our counterpart. I haven’t heard anything different and of course that’s up to them.

Next steps in terms of anything in Singapore, I don’t anticipate a meeting at a level that you’re talking about but there could be lower level conversations. We just don’t know.

UN efforts. Again, as I said earlier, I think it’s important that all elements of the international community, including the United Nations, work together. We have been in close touch with the United Nations. I met with Ibrahim Gambari before we went out. Because it’s essential that the international community speak as much as possible with one voice here, I think we all have roles to play. So no big-footing on our part.

QUESTION: The constitution that the Burmese rulers have drawn up last year has been widely dismissed as perpetuating military rule irrespective of what happens with the elections, reconciliation, dialogue, et cetera. Did you raise this issue specifically during your meetings? And the NLD has called for a constitutional review. Are you going to specifically back that?

AMBASSADOR MARCIEL: We heard a lot from people about the constitution. I think when the constitution was being drafted we spoke out very clearly that we thought the process was seriously flawed. It was not inclusive.

When the referendum took place in the immediate aftermath of Cyclone Nargis, I think we spoke out very clearly, I don’t remember our exact language, but we made it very clear that we did not think that was a credible referendum by any stretch of the imagination. So we do agree that the constitution is significantly flawed.

I think you have a situation where the way ahead that we can see goes back to the point about a dialogue where the NLD, ethnic minority groups - many of whom also have strong views about the constitution - and the government have to sit down and try to find a way ahead. I think we have to leave it to them to decide on the details of that, but I don’t see any way forward without that kind of dialogue.

QUESTION: Ambassador, I wonder whether you could discuss - let me go back to talk about election next year - whether the ambassador talked with the government, the military, and stakeholders about next year free and fair elections. I wonder whether how they can have free elections when the media have been controlled totally in Burma like that. That is the first part.

The second part is about independent election commission. Are they going to have this kind of independent institution that we have in other countries in Asia? And also have you talked about whether they will allow the international community to observe their election next year or even the international media to make the news about the election next year? Thank you very much.

AMBASSADOR MARCIEL: I think the best way to answer that is we have not taken a position on the elections at this point. I think there are sort of two stages here potentially. Before you get to questions in our mind about whether there will be an independent electoral commission and media allowed to participate and that sort of thing, I think you have to go back to the question about whether these elections are going to be managed - that’s the wrong word. Whether the government is going to create conditions leading up to the election that make it possible at all for them to be credible, let alone free or fair.

So before getting into the details about the election process itself, I think you first have to answer the question about whether the government is going to allow -- have this dialogue that I keep stressing with the opposition and the ethnic minority groups.

But let’s be honest. If the government moves ahead with its election without participation by the parties and the groups that won substantial majority in the last election, it doesn’t matter what electoral commission they have or how much media there is. It’s not going to be credible.

So the first question, and I think we have to keep focused on this - you can have an election day in which people observe and the votes are counted freely, but if in the lead-up to that you have not created the conditions for full participation by everybody under agreed upon rules, it doesn’t really solve the problem. So again, it’s important that the first step take place before the second step.

QUESTION: A question about the ethnic groups. Can you tell us which ones you met with? I presume, for instance, not the Wa. Can you tell us what the reading was, what the Burmese officials told you about the stand-off in the north? And how you would like to see better treatment for the ethnic groups, and you’d also like to see crackdown on a lot of the drugs that are produced by these ethnic groups. How do you reconcile those two positions given that a crackdown on the drug producers would probably, by the Burmese army and they’re incapable of acting without, in the past they have, inflicting human rights abuses.

AMBASSADOR MARCIEL: We met with seven or eight representatives of ethnic minority groups. I’m not going to say who specifically, but I would say we met with representatives from several of the largest ethnic groups in Rangoon. We met in Rangoon with them.

They offered their views on a whole range of issues. The constitution, elections, the question of the government’s effort to agree to transform into border guards, et cetera. They had a variety of views obviously representing different groups. We were mostly listening to their views. Obviously [they have] big concerns about the upcoming elections as well as the government’s concerns about how the government will deal with them militarily.

In terms of better treatment of the ethnic groups and squaring that with drug trade, it’s obviously very complicated. I think, again, I know I’m repeating myself here, but in the end there needs to be a dialogue that works out an agreement here on the military side of things. And I think that’s very separate from the issue of drugs. Certainly we’re opposed to drug trafficking but certainly don’t want the military to go in and attack people and create human rights violations as they have in the past. So it’s very complicated, I agree with you.

QUESTION: Mr. Ambassador, you touched a lot on the issue of the international community speaking with one voice. We didn’t talk about the EU yet. Have you been in touch with EU officials prior to this trip? Do you think it’s desirable to have coordination? Have you tried? Has it failed? Do you think it’s okay if the U.S. and Europe may have their own approaches which may differ?

AMBASSADOR MARCIEL: Yes, we have been in touch with the EU before we came out here, and we’re in regular conversation with them. I think generally we have quite similar approaches.

I think it’s possible for the international community to have slightly different approaches, but to agree on some key points. I think that’s where we are with the EU. I think we’re in general agreement on the key essential points. We might have slightly different approaches, and that’s fine. So we’re very comfortable with where we are with the EU and appreciate their role.

QUESTION: There are a variety of reasons I guess why America is keen to be involved in trying to help the situation in Burma at the moment. Can you tell us why do you think the Burmese government, the military generals, are so keen to be involved in this process of dialogue at the moment? What do you think?

AMBASSADOR MARCIEL: I don’t know. (Laughter). We’ve asked them. I don’t know. I mean you can speculate, but I don’t want to try to speculate on behalf of them.

QUESTION: No theories?

AMBASSADOR MARCIEL: Speculation, which I think I’ll avoid.

QUESTION: Ambassador Marciel, you have mentioned you have discussed with the Burmese government about the human rights issue. There are a lot of Muslims in Western Burma (inaudible), they are fleeing their land to (inaudible) due to the religious suppression and human rights violations. Have you discussed with the Burmese government about this issue? And how do you solve the problem? Thank you.

AMBASSADOR MARCIEL: We agree; we’re very aware of the situation. It’s terrible. It’s a big problem. It’s one of unfortunately many very serious human rights problems. I can say that we’ve talked with the Burmese government in general about our concerns about the treatment of different ethnic groups and sometimes that treatment is different as in the case of the Rohingya.

How it’s solved, it will be solved when the Burmese government decides to treat them better. I don’t mean to be flip, but it’s not something, I think it’s something that the international community needs to push the Burmese government to address because the treatment is quite bad. There’s no easy answer other than the Burmese authorities, I hope, by talking to people, listening to people in their own country, will see that there’s a better way to manage this.

QUESTION: I just wanted to ask, I know the sanctions remain in place, and we continue to be engaged in humanitarian efforts in Myanmar. But how should or should we be engaged in trying to help ensure that the elections next year are as free and fair as possible? Or should we, the international community, be stepping back and waiting to see what the government in Burma does?

AMBASSADOR MARCIEL: As I said earlier, you can see a scenario under which the elections could be a step forward, but as I said, that would require well before the elections a serious and sustained dialogue among all the players to see if there could be agreement on the way forward. That would have to address the constitutional issues among many others.

Our view is that it’s important for the international community to focus first on trying to create that basic dialogue toward national reconciliation so that the political process can be broadened and be inclusive. If that happens, then I think there’s a potential to look at the elections more hopefully. Absent that, it’s quite hard to be optimistic.

QUESTION: Mr. Ambassador, a couple of questions. When you asked for the freedom of Aung San Suu Kyi, what specifically was the government response? On the constitution, it guarantees 25 percent of the seats to the military. Does State believe that it is possible to have a free and fair election while that still stands?

Also, since you announced your policy review in February, the government has locked up Aung San Suu Kyi for 18 months, launched offensives against two ethnic minorities, and recently conducted another crackdown against political opponents. What lessons do you draw from those series of events, and how hopeful does it make you about the process?

AMBASSADOR MARCIEL: Let me take your last question first.

As I said earlier, when we began this process we were not under any illusions that this was going to be easy and that our announcement of a new approach was suddenly going to change things. This is very difficult, and we certainly see and are concerned about the actions that you mentioned. Again, we have been very clear going into this that we did not think this was going to be easy and there are going to be setbacks and we’ll have to see whether there can be progress over time.

In terms of the first question about Aung San Suu Kyi, we’ve been asking repeatedly for her release. My view is that it really doesn’t matter what the Burmese government says so much as what it does. They release her or they don’t. The point here is that there has been talk about them hinting here and there. That’s not particularly useful. Either they release her or they don’t, so we’re looking for them to release her.

On the constitution and the seats reserved for the military and the impact on the elections, I think there are two separate issues. We’ve talked already about the flaws in the constitution and key groups inside the country that don’t accept that constitution. So for the elections to be free and fair, there needs to be some process that would make all the groups, the key groups, feel that they had confidence in the elections, and that goes back to the point about dialogue including about possibly the terms of the constitution.

QUESTION: I’d just like to, first of all, I applaud your efforts of the U.S .government to engage constructively and to have dialogue, but I would like to take a devil’s advocate position right now since it’s only five days after Halloween. (Laughter). And three days after Loy Krathong.

Anyway, the fact is that exactly almost a year ago President Obama was elected on a platform of change. But a year since, if you look at just some of the domestic legislation that’s in the Congress and so forth, there’s quite a lot of resistance to change, and now here we are even talking about a democratic country.

So if we switch to our neighboring country here, which I would characterize as rather impervious to change up to now it seems, how do you think whether the U.S. policy on Myanmar would be able to succeed? Taking into consideration not so much in this case resistance maybe domestically, but perhaps from some of the countries that are still supporting Burma. Thank you.

AMBASSADOR MARCIEL: It’s no question that change is difficult in most places, and certainly in Burma as we’ve seen over the last 20 years. I guess what I would say is I do think that the Burmese will make their own decisions. I don’t think it will be because if they want to change I don’t think they’re going to let another country stop them.

The key here, I think, is for all of us in the international community to work to try to persuade the people inside the country that there is a way ahead that doesn’t have to be threatening to them, and that could put the country on a much better path, not only in terms of democracy and human rights, but in terms of economic progress, et cetera.

If you look at Burma, it has fallen dramatically relative to all of its neighbors in terms of a wide range of measures - everything from infant mortality, maternal health, prevalence of serious diseases, quality of education, et cetera. This is a country that’s been moving steadily backwards, unfortunately, for a long time.

I do think that there are a lot of people in the country who care about their country and want to see it move ahead.

The whole point here is that there is a way ahead and it will involve change. There cannot be progress without change. It will not be easy. There will be people who will resist, obviously. But the alternative is for the country to continue to move backwards. It’s not just about politics, it’s much broader than that. So the key is for the international community to sort of point out that there is a way ahead. There really is, and it would have to involve working with people throughout the country. The opposition has reached out and called for a dialogue. I think this is an opportunity that I hope the government will take.

QUESTION: Thank you for giving us a briefing on what took place a few days ago and yesterday.

You mentioned that many before you have failed, and I’m curious, again, following the devil’s advocate, if I can be a little bit of a pessimist, how is the State Department, how is the policy adjusting itself to the possibility that having linked progress internally to diplomatic progress of the possibility that it will fail, the possibility that the dialogue that you talked about as being crucial for it to be a fair and free election won’t take place?

And I’m wondering if the U.S. State Department is considering other possibilities of the stick to follow the carrot and if those would include Security Council. There has been a movement for ICC, ICJ, to examine war crimes taking place in Eastern Burma and other places in Arakhine state, and if the U.S. is open to supporting those efforts. Thank you.

AMBASSADOR MARCIEL: As I said, we’re going into this with eyes wide open. I’ve been working on Burma for five years, others much longer. So we’re not under any illusions and we’re aware that success is far from guaranteed. I think though, before we sort of come to any conclusions about what we do next, we’re going to proceed for a while. Then if it doesn’t work, we’ll try something different.

QUESTION: You mentioned earlier that you reviewed the policy of sanctions and decided it wasn’t achieving its goals, in which case what do you plan to do about this? Do you plan to tweak them? Are there some sanctions which are more effective than others? Are there things you could do with the sanctions regime which would have a better effect? Or is there an argument for lifting them as an incentive for further progress?

My follow-up question would be what you’re here to see, to meet with Thai officials during your trip to Thailand. Can you just tell us what role, if any, Thailand will have beyond the "it would be nice if they could help". Is there something that Thailand can do given its trading role, the fact that you’ve got millions of Burmese here?

And also the military-to-military links between Thailand and Burma. Is there something that, some avenue you could work there? Thank you.

AMBASSADOR MARCIEL: On sanctions, what I said was the policy that relied heavily on sanctions but without dialogue had not succeeded, but that sanctions were still, in our view, a useful tool and they remain part of what we’re trying to use as a policy instrument.

We do not think it’s appropriate or wise to lift sanctions now absent progress, but certainly we’d be looking at sanctions if there is progress. The purpose of the sanctions is not just for the satisfaction of having them, but rather to try to achieve an end, and if we begin to see progress then obviously we can look at a whole range of issues in terms of improving the bilateral relationship, and if there’s sufficient progress we can start talking to our congress about sanctions. So I continue to think they’re a useful part of the policy, but by themselves not sufficient.

In terms of Thailand’s role, I think we consult closely and regularly with our very good friends here in Thailand on a whole range of issues including on Burma. They have a lot of knowledge and history. I think and we hope that Thailand, as it has done, will continue to urge for progress, use its diplomatic engagement with its neighbor to encourage progress, to encourage dialogue. I think that’s the most helpful things they can do.

QUESTION: There seems to be a deeply set historically rooted paranoia in Burma that is reflecting the sense that there’s a fear of national disintegration and of external interference from great powers that we know about from history. I wonder if you can comment on how that’s influenced your thinking and engagement with them.

AMBASSADOR MARCIEL: First, we’ve been very clear that we support a unified nation of Burma. That’s always been true and we’ve highlighted that and made it clear that we certainly have no intention of any kind of intervention.

In terms of the fear of national disintegration, that’s certainly clear. But again, when you have problems like this, for us the best approach is to talk to people and see if you can work out your differences. That’s fundamentally what we’re suggesting here. I realize there’s a difference in culture, political culture and so on, and we recognize that, but I think we come back to that conclusion still, that that’s our advice as a country that wants to see a unified and prosperous and successful Burma.

QUESTION: Ambassador, you stressed many times, emphasized importance of engaging with international community. I wonder what’s the extent of U.S. Government to engage with ASEAN community in this case.

AMBASSADOR MARCIEL: One of my hats is Ambassador for ASEAN Affairs, so I spend a lot of my time in doing just that. Not just to talk about Burma, of course. We have a whole range of issues to work with ASEAN on.

But we have for a long time and continue to consult very closely with all ASEAN countries to try to hear ideas and find areas where we can work together to promote progress in Burma and we’ll certainly continue to do that. We value ASEAN’s role.

MODERATOR: Ambassador Marciel has been frank, wide ranging, and expansive. I also want to thank the audience and those who raised questions for keeping them brief. Please join me in thanking Ambassador Scot Marciel for his remarks today and for his time. Thank you.

# # # #

Preview of the November APEC Meetings in Singapore

Kurt Tong
Senior Official for APEC , Bureau of East Asian and Pacific Affairs

Foreign Press Center

Washington, DC

November 3, 2009

MODERATOR: Good afternoon. Welcome to the Foreign Press Center. I believe Mr. Kurt Tong is known to many of you from his days on the Korean desk or in Beijing or in Tokyo. We are very lucky to have such a distinguished person knowledgeable on the whole of Asia, and he is now the U.S. senior official for the Asia Pacific Economic Cooperation summit, talks, negotiations. And this is the topic of his briefing here today. He would like to stick to the topic of the APEC meetings coming up. Unfortunately, there are many other topics, I know, but he is not going to address those topics. I wanted to be clear beforehand.

And with that, I will – oh, when we ask the – when you have the questions, I’d like you to please identify yourself and wait for the microphone before you ask the question. Thank you.

MR. TONG: Hi. Well, good afternoon, everybody. It’s nice to see you all. Did I set that off? I would like to talk to you briefly – am I doing that?

MODERATOR: I don’t know.

MR. TONG: Okay. I’d like to open up with a few comments about the U.S. view about the upcoming APEC meetings and what we hope to achieve in Singapore together with all of our colleagues in the other 20 member economies of APEC. In about two weeks, President Obama will make his first trip to Asia since taking office and participate in his first APEC leaders meeting in Singapore. There will be quite a raft of senior U.S. Government officials going to Singapore. Secretary Clinton is going to and participate in the annual ministerial meeting. U.S. Trade Representative Ron Kirk will be going to participate in that same meeting. Secretary – Treasury Secretary Geithner will go to participate in the finance ministers meeting, and Commerce Secretary Locke will also go to Singapore for meetings with business officials and to participate in the CEO – APEC CEO summit which takes place on the edges of the official government-oriented APEC meetings.

So we have quite a large presence going. We may even have some members of Congress joining us for the APEC fiesta. So it’s really quite a concerted and very enthusiastic embrace of the APEC meetings and APEC as an institution by the United States, as evidenced by that participation.

This meeting this year will mark the 20^th anniversary of APEC. The organization started 20 years ago with a ministerial meeting in Australia. It’s also the beginning of an important two-year period for APEC which starts next year, with our good friends and allies in Japan hosting APEC in 2010 and the United States hosting here in 2011. We have high hopes for what APEC will achieve in those two years. We’re cooperating extremely closely with our counterparts in Tokyo to try and arrange a very concerted and coordinated and effective two-year approach to achieving the best possible outcomes in APEC in 2010 and 2011.

Hosting APEC in 2011, I think will be a tremendous opportunity for us to promote U.S. business and investment opportunities which will benefit American workers, farmers, and businesses of all sizes. I think it will also be an important opportunity for the United States to define a new 21^st century economic policy agenda for the Asia Pacific region.

And what I’d like to do today is just give you very briefly a sense of the major themes that you’ll be hearing about coming out of the various meetings in Singapore. There’s a senior officials meeting which takes place on Sunday and Monday, followed by the annual ministerial meeting, which is a meeting of both Secretary Clinton and USTR Kirk and their counterparts from the other 20 economies, and then the leaders meeting on the 14^th and 15^th. There’s also a finance ministers meeting on the 12^th in Singapore, which will be contributing a lot, particularly this year, to the APEC dialogue and outcomes.

But some of the major themes which you can expect to hear a lot about coming out of the APEC meetings in Singapore include the following:

Economic recovery. Now, clearly, given where the global macro economy stands in these days, it’s a very pressing issue for everyone to discuss the ways that we can achieve economic recovery and growth. There was, in the U.S. opinion, an extremely productive G-20 meeting in Pittsburgh which we hosted, and we hope to have the outcomes of that G-20 session and its focus on economic recovery and growth reflected in the discussions in APEC and the outcomes in Singapore. There are, by my count, nine G-20 members who are also members of APEC, so there’s a good opportunity here for some back and forth between the two groupings, the G-20 discussing issues, APEC discussing issues, and pushing it forward and having the ideas which, for example, in this case, the ideas which are discussed and endorsed in the G-20 context then endorsed by the broader APEC grouping, and then giving feedback into the G-20 process.

A second very important theme, which was also a major theme in Pittsburgh, will be resisting protectionism. This is something that’s been discussed throughout the year intensively. The track record, we believe, is quite good, and that’s in large part because of the intense discussions which the major economies of the world have had over the past year to make sure that we don’t slip down into the road of protectionism in a negative macroeconomic environment.

Undoubtedly, the trade ministers will discuss the Doha round of trade negotiations in their retreat on the 11^th. I expect that discussion to be intensive and hopefully productive.

Another extremely important theme, an APEC specific theme, is that of regional economic integration. In some ways, regional economic integration, or REI, as we affectionately call it, is the core agenda for APEC. What that refers to is the work that is done within APEC to try and accelerate trade and investment liberalization among the APEC economies so that the economies will have fewer barriers between them as they trade with each other and invest in each other. The APEC year by year has made important contributions to this regional economic integration agenda, and we hope that this year will be no different. In particular, we’re hoping for some progress in the area of environmental goods and services, and services. We’re hoping that there will be a consensus among the APEC members that we can push forward in those areas as an organization and as a region and improve our level of integration in that area.

I’d like to mention three more themes which are conceptual in nature but very important and hopefully will be reflected in the APEC work program going forward. The first is balanced growth. It was a major theme at the Pittsburgh meetings and a very important one as we think about the challenge of economic and recovery and growth going forward. We really see APEC as having an opportunity to reinforce the G-20’s pledge to establish a pattern of global growth that is more balanced by region and less prone to destabilizing booms and busts.

A second theme is sustainable growth. There’s a real opportunity within APEC to push – and particularly in capacity building, to help the economies of the APEC region develop in ways that have less of an impact on the environment and in particular on climate change worldwide. I expect that in 2010 in particular there will be quite a strong emphasis on finding ways that we can make sure that all of the APEC economies are participating in constructive ways in a green growth agenda.

And finally, inclusive growth. This is a relatively new theme within APEC, but quite an important one. The concept behind inclusive growth – and this probably takes just a minute to explain – is that as economies have gone about liberalizing the rules governing trade and investment, they’ve come to the realization that they also need to give concerted attention to the question about how to assist workers or businesses which have not yet had an opportunity to participate in the growth that results from liberalization in that growth. So that means that as an organization and as governments within APEC, there are ways that we can do more to create opportunities for those participants that have not been able to take advantage of growth yet. That means that, in practical terms within APEC, we’re going to try and reinforce and expand our work program in areas like education, worker retraining, microfinance, and small and medium enterprise development, as well as creating opportunities for women.

Just as a final note about APEC in general, it’s an organization which the U.S. finds extremely valuable. For one, we’re a participant in it, which makes it, from our perspective, extremely important. But more – beyond that, there are – it’s quite a powerful alignment of economies. If you add up the size of the APEC economies, it comes over to well over one half of global GDP, well over one half of the trade which takes place on the planet. And so when APEC works together in a concerted fashion, it can have a real, very significant impact on global rules of engagement in trade and investment and on global growth. So the lineup is a good one.

And second, there’s a proper balance or a useful balance within APEC between the policy work and the capacity building work. We have found that together with the other economies that working through APEC by emphasizing both policy dialogue and encouraging – through peer pressure, through mutual encouragement – getting economies to take steps which open up their economies and leave them to the more open economic structures which advantage all the economies is useful, but it also needs to be matched with the capacity-building work. And the United States has made funds available. We intend to continue to do that, to try and spur the kind of very specific and pragmatic capacity-building work that allows all the economies to actually follow-through with commitments that they're making in the policy dialogues.

So that is – as an opening discussion, I am happy to take your questions.

MODERATOR: Okay, we'll start here in the front.

QUESTION: Hi. Thanks for agreeing to talk to us today.

MR. TONG: Sure.

QUESTION: Daniel Ryntjes from Channel News Asia. I wanted to ask you about sort of concrete free trade agreements. There is, it appears, some pressure from Asia to see the American side come up with something concrete in terms of free trade agreements, but also concern that there isn't the political will in Washington to be able to do that. If this issue comes up, what sort of message do you have for your Asian partners?

MR. TONG: Well, the United States believes that there are a number of ways to pursue trade investment liberalization. Obviously, the most important is the Doha round and multilateral trade negotiations. There are also bilateral and multilateral approaches which can be envisioned and that the United States could participate in.

I don't want to send today any specific signals about any specific agreement. That's one of my main goals for this session today, because I don't want you to misread anything I say as saying one thing or another about either the pending FTAs that we have or any possible arrangements that we might participate in in the future.

But just let me state as a general principle, that if these agreements are high standard and have – and reach real market opening outcomes, which we believe is possible, then they are of value to the United States and they're of value to our partners. And so that is our objective is to see not only, as the United States participates in these kinds of arrangements, but as other economies do so among themselves, that they do so with ambition.

MODERATOR: Okay. The gentleman in the back.

QUESTION: Kemsam Kim from Voice of America. Could you elaborate a little bit about how will you work with APEC member-countries and utilize these opportunities in the meeting to make North Korea get back to the Six-Party Talks and abide by its previous commitment of denuclearization? Thank you.

MR. TONG: The APEC is – the E in APEC stands for economic. And so the discussions within the APEC forum themselves generally concentrate on the economic agenda that the APEC economies want to talk about amongst each other. Now, there are – as particularly the leaders and foreign ministers gather, they – these people obviously have agendas and areas of responsibility that extend well beyond the economic realm. And so there are opportunities which happen on the sidelines of the main APEC meetings for discussions between leaders, between foreign ministers to talk about issues like the very important question of how to achieve denuclearization of the Korean Peninsula. But I don’t anticipate that it’s going to be a specific topic for discussion within the APEC meetings themselves.

MODERATOR: Here – the center.

QUESTION: Okay. Yeah. Thank you. Jim Berger from Washington Trade Daily. Just getting back to the themes for the APEC meeting. You mentioned an economic – regional economic integration. You mentioned environmental goods and services. I assume those are two initiatives that the United States will pursue. Could you give a little bit more meat on that?

MR. TONG: I’d like to refer you to USTR for the details on those. These are – because I don’t want to get it wrong, and they’re in charge of these initiatives, but the idea is to try and push forward in an APEC context on – in an ambitious way to get economies to sign up for further services, liberalization, and action on environmental goods and services.

The – a word about APEC commitments. The – APEC is a non-binding voluntary organization that operates on consensus. There are real benefits to that and the ability then to set what – set the agenda within APEC. Economies are less resistant to a broad agenda, precisely because APEC operates according to those principles. On the other hand, it doesn’t often result in legally binding commitments in and of themselves, but rather, decisions to then take back the outcomes of APEC and implement them on a sustained and voluntary basis. It tends to work, but it also tends to be a gradual process. So these are a couple of areas that we’re making a particular push on this year. We’ll see what the specific outcomes are.

MODERATOR: Okay. This gentleman here. There. No. No, this one. (Laughter.)

QUESTION: My name is Vincent Chang (ph) with the United Daily News. I’d like to follow up on that – on the previous FTA question. Well, it seems to me that you did not want to talk about that issue, especially the creation of the – of a Free Trade Agreement in the Asia Pacific region. But for the past two or three years, the United States has been pushing very hard to try to form an FTA in the Asia Pacific region. Does – you know, judging from what you have just said, does that mean that – did that imply that the United States has given up the kind of idea of forming an FTA in the Asia Pacific region?

MR. TONG: No, I don’t think that’s right. The free trade area of the Asia Pacific is – and it’s not really an FTA of the Asia Pacific, it’s a free trade area of the Asia Pacific – is an aspirational, long-term objective. And the leaders of APEC have agreed amongst themselves to consider and work towards it as a – quote, unquote – “long-term prospect.” What that means is that the FTAAP, or FTAAP, is a – is kind of a guide, if you will, that – or an objective, a long-term objective that we’re working toward and figuring out how to get to as an organization. Obviously, an actual FTA, signed, sealed, delivered free trade agreement of all 21 APEC economies would be an enormous undertaking and a very, very large project.

But what we can do year to year is figure out – is two things. One is to sort of map out how might we get to that tactically, organizationally. And there’s discussion among the senior officials within APEC about what will be the best strategies to try and get to that goal as a long-term prospect. And the other thing we can do is to keep – continue making progress year by year in trade and investment liberalization which gets us, in practical terms, in pragmatic terms, closer to that objective, that aspirational goal.

Now, there’s another set of goals which I haven’t mentioned yet, which are extremely important to APEC. And that is the Bogor goals of – the leaders in 1994 in Bogor, Indonesia set for themselves the objective of free and open trade and investment in the region by 2010 for the developed economies, and 2020 for the developing economies.

Now, how exactly you define free and open trade and investment is something that we’re going to be discussing and evaluating over the course of this coming year. But that – this is kind of the Bogor – the point that I want to make is that the Bogor goals and the FTAAP are both similar in the sense of pulling APEC as a group in the same direction towards a higher standard of trade and investment liberalization to the benefit of all the economies and citizens of the economies in the region.

MODERATOR: And now the – now your turn.

QUESTION: Thank you. John Zang with CTI-TV of Taiwan. Will there be opportunities for bilateral talks on bilateral trade issues? I’m asking this because the United States and Taiwan have recently signed a beef import agreement, which has generated a lot of controversy in Taiwan. Will there be opportunities for the two sides to revisit the issue during – on the sidelines of the APEC? Thank you.

MR. TONG: Well, on that specific issue, I don’t know whether the right personalities, the right officials will be in Singapore or not to discuss that specific issue. Generally every time that I participate in APEC meetings as a senior official, I always meet with my counterparts from Chinese – Taipei. And we review the entire range of issues related to APEC. And so there will probably be opportunities for the U.S. to meet with a number of economies bilaterally in Singapore and have a chance for discussions. That takes place sometimes in a formal setting, sometimes an informal setting. Sometimes you’re walking down the hall and a counterpart from some economy comes up and says, hey, what about this. So there’s lots of opportunities for people to bounce ideas off each other.

MODERATOR: Thank you. This gentleman.

QUESTION: Thank you. Donghui Yu with China Press. You are talking about a leadership that the United States and Japan will play in the next couple of years to define the evolutions of APEC. But in G-20 summit, I know many people actually are talking about the United States and China, that is, even the concepts of G-2. So I just wonder what do you think that – what role China will play in the process of the APEC evolution. Thank you.

MR. TONG: Well, think China has an extremely important role in APEC. As a very large economy, certainly the most populous economy in APEC – it’s also depending upon your method of calculation – the third-largest economy in APEC and in the world. The – and it’s – it gets a very good – because of that, people are obviously very interested in working with China bilaterally in expanding their trade and investment relations with China. It also – but China’s pure size as well as the high caliber of its officials who participate in APEC, give it quite a voice within the discussions, and so we – I personally consider China to be a real leader within APEC and absolutely embrace that. It's one of the real valuable aspects. As I said at the beginning, one of the real valuable aspects of APEC is the importance and the significance of the economies that are – that participate in the organization, and China is certainly one of the leading members.

MODERATOR: Back here. Yeah.

QUESTION: Thank you. Zengxin from Caijin magazine. Just talking about recovery and sustainable growth, will there be new stance by the United States in this meeting? I mean, in the short term we see that U.S. GDP is coming to growth in the third quarter. But also we see that Australia, Brazil, once they raise their interest rates (inaudible) money is coming to flow in. So for countries – they are afraid of exit, taking their exit strategy before the United States in the shorter term. In the longer term, about this sustained balance to growth, will that time – say exchange rates come back to the table again?

MR. TONG: Well, a lot of what you've asked is not in – within my purview. There's a finance minister's process within APEC that – and I have a counterpart in the Treasury Department who manages that. The – and also, just as a general rule, don't comment on anything that has any remote connection to currencies or interest rates or any of that sort of thing.

But I would say that I – precisely because of where the position that the global economy is in this year, you can definitely expect that recovery and growth will be a major topic of discussion for the leaders, and I would imagine also for the finance ministers when they gather in Singapore.

MODERATOR: Come down here and to the front for a change.

QUESTION: I'm Toshihiko with the Asahi, a Japanese newspaper. I have two questions. One is about APEC significance. So it seems to me United States is now trying to put more and more priority on APEC than it did before. So I'm just wondering why at this time. Does it have something to do with the fact – recent trend that – after the financial crisis, Asia originally had – is coming out of (inaudible) and also people are now talking about the economic power shift is now occurring – power of the Asian region. So maybe U.S. is now thinking about U.S. should be more involved in the Asian region framework.

And second question is about the trade issue, you touched on the trade – they're going to talk about trade. But we haven't heard anything from major initiative from this Administration when it comes to the trade issue. So is the Administration is thinking about they're laying out those initiative before APEC or at APEC?

MR. TONG: On the second question, I don't really want to preview in any detail the exact positions, which will be outlined by USTR Kirk or by President Obama in APEC at this time. Just let you hear it from them directly.

The – on the question of your perception that the U.S. is ramping up its attention paid to APEC, I'd welcome that perception. That's certainly the perception which we wish to convey. I think that you've actually hit on one of the principal reasons of it, is that because the Asia Pacific region is one that is experiencing rather consistent economic growth, creating enormous opportunities for the United States, that we see it as a region that we very much want to be in. We want to be in it as traders, as exporters, and as beneficiaries of the growth which takes place in that region. So from that perspective, APEC is extremely important to us. It's been important to us for quite a while.

I'd remind you that the United States was the first to host a leaders in APEC back in Blake Island in 1993, raising the organization up to the leaders level, and it's been something that we've given consistent attention to over the years.

QUESTION: Why are you changing the priority or it has stayed the same for APEC?

MR. TONG: I think it's been a consistent priority, but I certainly welcome your perception that we're giving it a lot of attention.

QUESTION: But how about your view on that?

MR. TONG: Well, I'm relatively new to my job, so I, of course, think that we're doing a great job. (Laughter.)

MODERATOR: Okay, here in the middle.

QUESTION: Hi. Xiong Min from 21^st Century Business Herald China. It seems that the U.S. wants to also among all the – aside from all the agenda you just mentioned, U.S. also helps to use the Singapore APEC as a platform to prepare yourself for the 2011 APEC in the U.S. I wonder if you can elaborate more about what you're going to do on this occasion in Singapore to prepare for that.

MR. TONG: Well, I think that thematically the themes which I outlined to you at the start are ones that I believe that we'll pursue through Japan's leadership in 2010 and the U.S. leadership in 2011. And our goal in this effort that we – we've actually for some time been doing coordination among Singapore, Japan, and the United States, thinking about, a sort of, three-year progression and how we can achieve good outcomes in areas that are important to APEC. And I think we're on track to do so. It requires a lot of coordination and a lot of discussion to achieve that.

MODERATOR: Okay.

QUESTION: Hiro Watanabe from Japanese newspaper Sankei Shimbun. You said APEC is the only organization in Asia Pacific, U.S. participating. And also you might say it is crucial that the U.S. remain leader for further (inaudible) in Asia Pacific. But Japan has currently launched another framework, so-called East Asian economic community to (inaudible) further economic integration in Asia. So I want to confirm your stance to that idea. Do you think it's compatible with U.S. policy in Asia Pacific region?

MR. TONG: The – well, I want to clarify one thing. APEC is not the only institution in the Asia Pacific region that the U.S. participates in. We have a lot of interaction with ASEAN in a bilateral context – the Association of Southeast Asian Nations, in a bilateral context. We also are regular participants in the ASEAN Regional Forum, which is another important regional institution which is not economic – primarily economic in nature. But APEC – we view APEC as the premier economic organization in the Asia Pacific region, and we're very enthusiastic participants in it.

Now, you spoke about Japan's priorities. I've had myself, and others, have had extensive discussions with our Japanese colleagues about APEC, and we think that we really have a shared view about the importance of the organization and of our two-year effort in 2010, 2011 to achieve strong outcomes within APEC.

QUESTION: What is it about (inaudible) to create East Asian economic community? Could you comment on that?

MR. TONG: I'd like to say that the – it's an interesting idea and address it kind of at the level of general principle. The United States understands that there are good reasons for the Asia Pacific – East Asian economies and governments to associate with one another in a number of different ways, so there's the Association of Southeast Asian Nations, there's the ASEAN Plus Three, there's the ASEAN Plus Six, which is sort of an economic approach. There's the East Asia Summit. There's the Plus Three Group. Recently there was a meeting amongst Japan, China, and the Republic of Korea in sort of plus-three format. And so there's a lot of different groupings. And similarly, the United States participates in a lot of organizations with our own hemisphere or with Europe.

But the – I think the point to take home is that transpacific organizations like APEC are crucially important. They add to the prosperity of the region. They result in higher-level outcomes in specific economic policy work, and by nature, they tend to stabilize the Asia Pacific region in extremely valuable ways.

MODERATOR: Okay.

QUESTION: Hi. Sandra Sun from China Business News. Will climate change and clean energy in Copenhagen – will it be on the U.S. Government agenda?

MR. TONG: Climate change is always on our agenda. It's a critical challenge. The approach that's being taken within APEC to address climate change is largely one of capacity building and, again, peer pressure. Peer pressure is not the right word – peer encouragement – (laughter) – to do a – to take on and do a good job in trying to mitigate the effects of climate change.

So one of the things – just to give you a practical example, within APEC there's something called the peer review mechanism for energy efficiency, and economies can volunteer to participate in this and have the other economies of the region sort of look at their policies on energy efficiency and suggest changes, or suggest improvements to those. That's a very practical way that APEC can contribute. There's also within the energy working group within APEC there are a number of very specific projects in the capacity building area to help economies learn more about efficient transportation technology, it even gets – it gets down to the very specific level – like what – how should we make sure that people are producing the most energy efficient refrigerators. I mean, it gets quite specific in the various working groups within APEC, and that capacity building work is really quite valuable to the economies.

MODERATOR: One last question. No? If not, then thank you very much.

MR. TONG: Great. Thank you all.

Remarks at the Japanese Ministry of Foreign Affairs

Kurt M. Campbell
Assistant Secretary, Bureau of East Asian and Pacific Affairs

Ministry of Foreign Affairs

Tokyo, Japan

November 5, 2009

ASSISTANT SECRETARY CAMPBELL: Good afternoon. Just a brief comment if I might, please. First of all, I just have come from very good meetings with Foreign Minister Okada and my colleagues at the Defense Ministry and the Ministry of Foreign Affairs. Ambassador Roos and myself this morning had excellent discussions with Washington – with the White House – and we passed on to our Japanese colleagues the very best wishes from the President and the Secretary of State. The President is very much looking forward to his visit to Japan next week, and we went through what we hope to accomplish during this historic visit. I think we are extraordinarily pleased with the preparations, excited about this next phase in our relationship, and we are making plans to commemorate the 50 year anniversary of our alliance and also to look at new areas where we can work closely together.

We are fully committed to this alliance. We think that we’re working very well together and everyone is excited to be back in Japan next week. I think that’s all I’m going to say today. I know you’d like for me to get into more details, but all I can tell you is that the United States and Japan are feeling very good about our preparation.

Thank you very much.

Remarks With Singapore Minister Mentor Lee Kuan Yew Before Their Meeting

Hillary Rodham Clinton
Secretary of State

Treaty Room

Washington, DC

October 26, 2009

SECRETARY CLINTON: Good afternoon, everyone. I’m delighted to welcome the Minister Mentor here today. He is no stranger to our country. Singapore is a long and valued partner on so many important issues. And I think it is fair to say, sir, that you have a great many admirers. You’re here to accept an important award that is given for lifetime achievement, and I join in the many Americans who thank you for your service.

MINISTER MENTOR LEE: Thank you very much, Secretary of State. I have come at a very important moment in America. It’s a time for renewal and resumption of the engagement of America, and particularly Southeast Asia and East Asia. It is a part of the world that will alter the shape of the 21^st century.

SECRETARY CLINTON: And so we have our work cut out for us here. (Laughter.) Thank you.

Ian Kelly

Department Spokesman
Daily Press Briefing

Washington, DC

1:34 p.m. EDT

MR. KELLY: Good afternoon. I’d like to, first of all, make a few remarks at the top about Honduras, to give you an update. As you know, we’ve been working very hard with our partners in the hemisphere to reach our goal of restoring democratic and constitutional order in Honduras, and we continue to believe that the best solution to this is the San Jose Accord. As you know, President Zelaya is in Washington this week. He has meetings at the Organization of American States today. I’d refer you to them for further details on that. And on Thursday, Secretary Clinton plans to meet with him to discuss the best way forward on the situation in Honduras.

And with that, I’ll turn it over to you.

QUESTION: Does she expect to make the determination at that point?

MR. KELLY: Well, we still haven’t made the determination. I think you know the issues that are being considered here, but I can’t give you an exact time when that determination will be --

QUESTION: I understand the issues that are being considered.

QUESTION: It’s been more than two months now --

MR. KELLY: Yeah.

QUESTION: -- since the events transpired --

QUESTION: Right.

QUESTION: -- so one would – would think that one would have had enough time to judge whether it was a military coup.

MR. KELLY: Right. Well, we have taken the actions that we would be required to take if that determination is made, and that is that we have suspended assistance that goes directly to support the Government of Honduras. And you know what the issue at hand is a – it’s a provision of the Foreign Operations and Related Programs Appropriations Act of 2009.

QUESTION: Before you launch into the whole explanation of what exact – we already know what it --

MR. KELLY: Yeah.

QUESTION: -- exactly it is. What is the holdup?

MR. KELLY: We – as I said – as I’ve said many times, we have – there are a number of diplomatic activities going on. We are – we have done what we have to do under the law, and that is not to provide assistance to the Government of Honduras if the Secretary decides to make this determination. But she hasn’t made the determination yet.

QUESTION: Can you follow up on that? I mean, one big exception to that, as I understand it, is the grant money from the Millennium Challenge Corporation, which would also be – could be implicated in such a decision.

QUESTION: And it’s my understanding that the MCC has so-called notwithstanding authority, so their aid is not automatically cut off? Their board has to make --

MR. KELLY: Right.

QUESTION: -- an affirmative decision to do so.

MR. KELLY: I think that’s right, Arshad.

QUESTION: And that’s more than a hundred – I think it’s something like 111 – well, it’s more. But it’s more than $100 million that would have to be scrutinized and that’s much bigger than the 18 – about 18.4, I think, that’s already been suspended. So in a way, there’s a big, big chunk of money out there that’s going to have to be – on which decisions are going to have to be made.

MR. KELLY: Yeah. You’re right. I mean, in the case of the Millennium money and the Challenge Corporation, it is something that will have to be decided by the board. Of course, Secretary Clinton is a member of that board, and so we’ll see about what exactly we have to do with both the USAID – with the USAID programs, military programs, and the Millennium Challenge Corporation programs.

QUESTION: One other thing on this. I mean when, in response to Matt’s question, you said that there are a number of diplomatic activities that are underway, are we to understand it is the case that it is solely a question of the diplomacy, that – in other words, the hope that you can find a diplomatic solution, that is holding off the determination? Or are there other factors, perhaps within the U.S. Government, that are holding it up?

MR. KELLY: As I’ve already suggested, of course, it is a – it’s not just a decision that affects the Department of State and the Agency for International Development. There’s a number of other – another – a number of other avenues that we have to go down, including briefing Congress. We need to – we have to coordinate with the Department of Defense. All along, in this whole conflict that we’ve had around Honduras, we’ve had to, as well, coordinate with the Organization of American States and with our partners in the region. So there is quite a bit of coordination that has to go on.

QUESTION: And regarding the DOD, would this affect Soto Cano Air Base – Soto Cano Air Base, excuse me – would such a cutoff have any effect on that air base and U.S. use of it?

MR. KELLY: Well, obviously, the Department of Defense is best positioned to answer that question. As I understand it, it will – I mean, the military – I shouldn’t say that the determination will affect programs. The suspension has already affected a number of programs that the U.S. military runs. Soto Cano is a – it’s not our base. It’s a Honduran base. Again, you really should – you should get the nitty-gritty details on this from the Department of Defense, but I think that they have suspended their programs except for the kind of activities that you would need to support a base – guarding the perimeter and provisions and activities like that. But please do try and get those kinds of details from DOD.

Yeah.

QUESTION: Can you walk us through what this meeting on Thursday will look like, what kind of access we’ll have to it, what kind of readout there will be?

MR. KELLY: Well, we haven’t determined the arrangements yet for the press. I am – I feel confident that there will be some kind of – that there will be – it will be closed to the press. I mean, there will be some – you will have some kind of engagement with the two principals, but --

QUESTION: But will we be able to --

MR. KELLY: -- it hasn’t been determined. In terms of readout, of course we’ll be happy to give you a readout.

QUESTION: Will we be able to actually ask them questions?

MR. KELLY: That hasn’t been determined yet, so I can’t give you an answer to that yet.

QUESTION: New topic?

MR. KELLY: Yeah.

QUESTION: Can I ask you about a report by the Project of Government Oversight about the Embassy in Kabul that lists, among other things, incredible understaffing, long hours, extreme long hours of guards, improper training, a language barrier between the guards and the staff at the Embassy, and also hazing of new recruits of guards, which has been – some of which has been listed in letters from the State Department to the contractor complaining about some of this behavior over the last two years?

MR. KELLY: Yeah. Well, Elise, we have received a long letter from the Project On Government Oversight with quite a few documents attached. You make reference to some of them. Let me just say that these are very serious allegations, and we are treating them that way. As soon as we received the documents, they were turned over immediately to our Office of the Inspector General. Secretary Clinton has been apprised of the allegations in these documents and has directed the Department and the Office of the Inspector General to take appropriate action.

And let me just say that the Secretary and the Department have made it clear that we will have zero tolerance for the type of conduct that is alleged in these documents.

QUESTION: If I might, I’d like to quote from a letter from the State Department to the contractor in June of 2007. So this was two years ago that you recognized that some of these deficiencies exist and you said these deficiencies endanger the performance of the contract to such a degree that the security of the U.S. Embassy in Kabul is in jeopardy, and that you threatened to terminate the contract.

Yet over the last two years, there are about 11 letters that have been released not just by the project, but by Senator McCaskill’s office, who is in charge of the Subcommittee on Government Oversight, that you continued to warn the contractor about these deficiencies and that you said that the security of the Embassy is in jeopardy, yet why did you continue to extend the contract?

MR. KELLY: Well, as I say, these are serious allegations. What you just read me, I would – I think they’re very serious too.

QUESTION: These aren’t allegations. These are your own words. These are your own words.

MR. KELLY: Well, I – let’s --

QUESTION: I mean, if this report came out today, yes.

MR. KELLY: Yeah.

QUESTION: But over the last two years, you’ve been continuing to warn this contractor about its performance. So does it take an independent nongovernment organization to cast light on what you’ve been kind of overlooking for the last two years?

MR. KELLY: Yeah. I mean, look, as I understand it, we have – we’ve been investigating this organization for some time now. We understand that we have made some – we have pointed out to them some of the deficiencies. And I can’t answer right now from this podium exactly what they have done in response to this letter.

QUESTION: Well, in your letters, it says that they’ve continued to let them go unaddressed.

MR. KELLY: Well, let me see if I can get you more information. But I just don’t have the information right now. And the matter is also under investigation.

QUESTION: Can I follow up with that, though?

MR. KELLY: Sure.

QUESTION: In June when Senator McCaskill held hearings, the Assistant Secretary of – Deputy Assistant Secretary of State for Management William Moser told the hearing that these problems have been looked at, and that since January, they had been addressed. So on what basis did he give that testimony when, according to the POGO report, this behavior, this whole pattern that Elise just sketched out, this --

MR. KELLY: Yeah.

QUESTION: -- whole pattern has continued up to the present day, up to August?

MR. KELLY: Yeah. Well, I’ll have to ask Mr. Moser. I’m not exactly sure what he was basing his determination on when he did tell Congress that these issues have been addressed.

QUESTION: Can you tell us if, up till now, the State Department has been satisfied with the performance of ArmorGroup in providing security for the Embassy in Kabul?

MR. KELLY: I’m just not prepared to say that right now. I mean, let me just see what we can say about this congressional testimony that you --

QUESTION: The letter says Secretary Clinton says that the contract – it says the management of the contract to protect the U.S. Embassy Kabul is grossly deficient, posing a significant threat to the security of the Embassy and its personnel.

MR. KELLY: Yeah.

QUESTION: And this is a now question. Is this the case? Are you worried about how well your staff is protected?

MR. KELLY: Well, we always worry about our staff and how well they’re protected. There is no higher priority for us than the safety and well-being of our people, especially our people who are serving in a dangerous environment, like Kabul.

QUESTION: And the question of language was raised, which is that many of the staff on this security contract don’t speak English, and indeed, the State Department was made aware of that. If there are lots of security staff, something like two-thirds, who don’t speak proper English, how can you make that assurance?

MR. KELLY: Well, you’re asking a lot of good questions. But I just – I can’t comment on them. One, I don’t have the answers to them right now at this moment from this podium. And two, the matter is under investigation. I can’t comment on it.

QUESTION: Well, why is this matter under investigation, Ian? It looks like it’s been under investigation for the past two years.

MR. KELLY: I’m sorry, Elise. I can’t answer it. I’m sorry.

QUESTION: Can you answer one other matter raised in the letter, which is that POGO is saying essentially the State Department has a pattern of ineffectual oversight, and that Congress or somebody ought to give the oversight of embassy security, when you’re in a war zone to the military? Now what’s the State Department’s position on that?

MR. KELLY: Well, again, these are very serious allegations. This is – these particular recommendations are from this particular organization. We’re happy to consider them. But these are extremely serious questions that you’re asking. And I want to make sure that you get a good answer to it, because as I say, the security of our colleagues serving overseas is an extremely serious matter.

QUESTION: When did this stuff, this material, get turned over to the IG?

MR. KELLY: I don’t have an exact time, but it was – as I said when I was first asked this question, they were turned over as soon as we got them.

QUESTION: Well, which was when?

MR. KELLY: Well, I think we got the material in the last week or so. But I don’t have any --

QUESTION: Well, if you got it in the last week or so – they’re talking about letters that go back two years.

MR. KELLY: Oh – well, I mean, it’s a matter --

QUESTION: You’re saying that the IG – the IG has not been looking in --

MR. KELLY: -- a lot of this is a matter of public record --

QUESTION: -- the IG has not been looking --

MR. KELLY: -- because we testified in June.

QUESTION: -- the IG has not been looking into this since 2007? Is that --

MR. KELLY: Matt, I don’t --

QUESTION: And it’s only since you got this stuff from POGO that you’ve looked into this?

MR. KELLY: I think that we’ve been looking into – separate from some of these very serious allegations of a more recent nature in the POGO documents, I mean, we have been – as I say, we have been communicating with Congress. I know that Congress does have concerns. And we’ve also been talking to the contractors too asking them to redress some of these deficiencies.

QUESTION: Well, has the IG been looking into it since 2007, since the --

MR. KELLY: That I don’t know.

QUESTION: Well, because if they have, and it’s been two years and nothing has been done, that would suggest that you have a problem.

MR. KELLY: Yeah. Well, I just don’t know the answer to the question of when they actually started investigating.

QUESTION: That’s –

QUESTION: Well, you know, can I just make – this is unwarranted advice, but you know, you have all this stuff, you know it’s coming out, the briefing gets delayed by an hour.

MR. KELLY: Right. Well --

QUESTION: One would think that someone in the IG’s office or in a legal office or somewhere that come up – you had to anticipate these questions coming.

MR. KELLY: I – Matt, I have told you what I know. And I’ve talked to the IG Office, I’ve talked to the Office of Diplomatic Security. I understand that they have been looking into certain deficiencies in their performance. And then as soon as we got these documents relating to – the documents that you see in the POGO report, those were turned over as well.

QUESTION: They’ve been on a congressman – they’ve been on Senator McCaskill’s website for months, since June.

MR. KELLY: All of these documents?

QUESTION: Yeah.

MR. KELLY: Yeah. Sorry, I wasn’t aware of that.

QUESTION: No, I mean, not the photos of these – of this lewd – not the photos of the lewd behavior. But I mean, all of these complaints that are in the report, you’ve been --

MR. KELLY: Yeah.

QUESTION: -- making to the contractor yourself over the past two years.

MR. KELLY: All right, all right. I really – I’ve told you really all that I know, and then – and I can’t really address a lot of these issue because they’re under investigation.

QUESTION: Just back to the issue of contract – of oversight of contractors, I mean, obviously, there was a huge issue of oversight over Blackwater.

MR. KELLY: Right.

QUESTION: And there were major revisions to the procedures and all of that stuff. Didn’t at that time, considering this was going on concurrently, I mean, isn’t there a need to kind of reevaluate all of contractor oversight of the State Department, not just in particular instances where there’s a – where there’s a case of abuse?

MR. KELLY: Yeah. Well, I – I don’t know if you recall, but the Secretary herself, and I think in one of her town halls, has said that it is her view that we have to lessen our reliance on contractors for security of our embassies. And so she’s asked for a review of the whole system. Whether or not we can move to banning them, I mean, I would highly, highly doubt that. There are contracts involved, and there’s also the whole issue, as I said before, of the importance of protecting our people. And this is not something that we can do overnight.

QUESTION: Could you explain – just a factual matter – what part of the security ArmorGroup is responsible for, where their responsibility ends and DS begins?

MR. KELLY: Yeah.

QUESTION: Whether the U.S. military has any role in protecting that compound.

MR. KELLY: Yeah, yeah.

QUESTION: And of course, there are also Afghan military forces --

MR. KELLY: Right, right.

QUESTION: -- on the perimeter as well.

MR. KELLY: Yeah, yeah. I can only address that in a very general way from my own experience as a Foreign Service officer serving overseas, and I haven’t served in Kabul. But I know that the – it’s the Regional Security Office which is in charge of security basically of our perimeter, and that is usually local guards that provide that. There’s also, of course, the Marine security guard program, and they – they’re more responsible for protection of classified information and also protection of the chancery. There’s also, of course, protection of Americans themselves. A number of embassies, including at least one I served at, had a residential security program as well, where you had local guards at our residences.

So that’s just kind of a general overview. But obviously, in a place like Kabul, it has its own challenges, to put it mildly. And there’s also coordination with the military as well.

QUESTION: Could you take that question and give us an outline of what they do there, their area of --

QUESTION: Specifically what their area --

MR. KELLY: Can you repeat the exact question that I’m taking?

QUESTION: Well, the exact question is exactly what is ArmorGroup responsible for?

MR. KELLY: Okay.

QUESTION: We were told it’s what they call static security and they don’t do the so-called close protection --

MR. KELLY: Yeah.

QUESTION: -- of moving around with the ambassador.

MR. KELLY: Right.

QUESTION: But that they are fairly – that they are in charge of, except for the most outer entry point, but really all the entry points, checking cars and all that.

MR. KELLY: Okay.

QUESTION: But if you could just describe that and what is DS’s role.

MR. KELLY: Sure. I mean, DS’s role, I think, is mainly to over – the oversight of the guard program. But that’s a good question, and we’ll get you the info on it.

QUESTION: And what is the oversight of this particular contractor? Does DS have an oversight of that contractor? Because in the whole Blackwater situation there was a lot of complaints that DS didn’t have enough oversight over the contractors. So who specifically --

MR. KELLY: Well, I do have a specific answer to that question.

QUESTION: Okay.

MR. KELLY: The contracting officer is assigned here in Washington, D.C., and that person has overall responsibility for oversight of the contract and participates in weekly meetings between the program office and AGNA, or the ArmorGroup. And this person is also the one who has interactions on a more frequent basis --

QUESTION: From here?

MR. KELLY: From here in Washington.

QUESTION: So there’s no adult supervision of this contractor on the ground?

MR. KELLY: I’m getting to that.

QUESTION: Okay.

MR. KELLY: In Kabul, there are two assistant Regional Security Officers designated as the contracting officer’s representative and assistant contracting officer representative, respectively. There is also always a duty RSO who deals with the routine guard force matters such as access requests and on-compound events.

So that’s – I guess that goes some way to answer your question. Right? It does appear that they do have the guard force responsibility.

QUESTION: Meaning the Armour Guard force?

MR. KELLY: Well, I mean, it’s an embassy guard force, and Armour has the contract for it.

Can we --

QUESTION: To guard the perimeter of the embassy? Is that what they do?

MR. KELLY: Well, let’s find out exactly.

QUESTION: Okay.

MR. KELLY: New subject?

QUESTION: (Inaudible.)

MR. KELLY: Okay.

QUESTION: In Pakistan, the nuclear scientist A.Q. Khan said he has been set free from the court. Do you have any comment on that?

MR. KELLY: Just a moment. Our concern over the potential for proliferation activities by Mr. Khan are well known to the Pakistani Government. We believe that he remains a proliferation risk. We’re following this closely, and of course, the Pakistani Government, as I say, is well aware of our concerns about Mr. Khan.

QUESTION: So why do you think he still remains a proliferation risk? Has been something come to your notice about this?

MR. KELLY: I’m sorry, say that one more time.

QUESTION: Why do you think so he still remains a risk to the international community?

MR. KELLY: Well, I just – his activities, I think, are well known. And we have concerns about them, and we’ve made those concerns known to the Pakistani Government.

QUESTION: When was the last time that you raised this with the Pakistanis?

MR. KELLY: I’m not sure of the answer to that.

QUESTION: Well, has it – I mean, this popped up last week or --

MR. KELLY: I think it popped up on Friday.

QUESTION: Friday. Exactly.

MR. KELLY: Yeah. I just – I don’t have an exact answer to that question. I’m sure we’ve had frequent contact with the government through our Embassy in Islamabad.

QUESTION: Related?

QUESTION: Do you believe that he’s just under house arrest and that he is still now in a position where he is not a proliferation risk given the measures that have been taken about his movement and his access to information?

MR. KELLY: Yeah. Arshad, I just don’t have the information to be able to answer that question.

QUESTION: Related?

MR. KELLY: Related? Okay.

QUESTION: Yeah. The Bureau of Atomic Scientists confirms that Pakistan’s nuclear arsenal is increasing 60 to somewhere to 70 to 90, and yesterday in Geneva, they refused to discuss disarmament, saying their national security is not being respected. Do you have a response to that?

MR. KELLY: I’m not aware of that report, so I don’t have a response to it. Yeah.

QUESTION: New topic?

MR. KELLY: Okay.

QUESTION: Can I go back to Pakistan?

QUESTION: Yeah.

QUESTION: Have you ever discussed with – State Department ever discussed with the Justice Department attempts to prosecute him? Isn’t there enough evidence in some countries, even in the U.S., to have him prosecuted for violation of various laws?

MR. KELLY: I’m not aware of that either. I’m afraid I don’t have an answer to that question.

QUESTION: One more on –

QUESTION: On Iran?

MR. KELLY: Iran?

QUESTION: Yeah.

QUESTION: No. One more on –

MR. KELLY: One more on A.Q. Khan?

QUESTION: There are some reports also in Pakistan that recently Pakistan has upgraded its missiles, and maybe A.Q. Khan has a hand, which was sold by the U.S. And is there any reaction from India to the State Department?

MR. KELLY: Well, I don’t – yeah, I think you’ll have to talk to the Government of India if they’ve had any reaction to these press reports. I mean, we’re – we’ve seen these reports in The New York Times. We take the possibility of any potential violations of obligations entered into pursuant to the Arms Export Control Act – we take these allegations very seriously. We have engaged the Government of Pakistan at the highest levels. We recently negotiated an agreement in principle to establish mutually agreed inspections to address possible modifications to any arms that we’ve transferred, and we’ve notified Congress of potential violations of obligations entered in pursuant to the Arms Control Export Control Act to ensure that key leaders are provided information on U.S. efforts to address them.

QUESTION: I’m sorry. Before the press – I mean, in the press in The New York Times, did Ambassador Holbrooke during his trip to Pakistan raise these questions with the Pakistani authorities?

MR. KELLY: Well, first of all, I’m not – I’m just – I’m talking in very general terms. I’m not addressing these – this particular allegation. And I’m not aware of any representations by Ambassador Holbrooke.

QUESTION: On Iran?

MR. KELLY: Mm-hmm.

QUESTION: Iran says that it has prepared a counter-offer to your offer. I’m wondering if you’ve heard – if anyone in the P-5+1 has heard from the Iranians. Will this offer be discussed tomorrow at the political directors meeting, and will there be an Iranian representative there?

MR. KELLY: Well --

QUESTION: Were you expecting one?

MR. KELLY: First of all, we’re not expecting any Iranian representative tomorrow in Frankfurt. There is a – as you know, this is a meeting of the six political directors from the P-5+1 countries. And of course, the main item on the agenda is Iran’s nuclear program.

We’ve seen these press reports that they’re developing a new proposal. We have not received any proposal. We would review any proposal that they give us seriously, and in the spirit of mutual respect we would welcome the Iranian Government’s constructive response to the P-5+1 to their April 2009 invitation to meet face-to-face.

Moving forward with these discussions could begin to bring Iran into compliance with its international obligations and create confidence in the exclusively peaceful nature of its nuclear programs.

QUESTION: But just to be clear, you haven’t seen an offer or --

MR. KELLY: No, we have not.

QUESTION: Okay.

QUESTION: And none of the other members of the P-5+1 --

MR. KELLY: Not to my knowledge.

QUESTION: Okay.

QUESTION: Can I ask you about al-Megrahi’s return to Libya?

MR. KELLY: Any other on Iran?

QUESTION: Yeah.

QUESTION: Yeah.

MR. KELLY: Yeah.

QUESTION: What is your sense about – from their – what they’ve said? Are they willing to meet, or it’s just that they’re saying that they have a package to offer? Because --

MR. KELLY: We don’t have any understanding of that. I mean, all we’ve seen is what you’ve seen, is that there is one Iranian press report that purported to quote their Iranian – the Iranian nuclear negotiator that there was a new proposal. But we haven’t seen any new proposal and we haven’t received any answer to our proposals, the P-5+1 – the issues outlined in their declaration of April and our proposal to engage with them and talk about these issues, the nuclear issues.

QUESTION: When Jalili made his announcement, he blamed --

MR. KELLY: I don’t think he – did he make an announcement, though? I --

QUESTION: To the press in Iran.

MR. KELLY: Okay. Okay.

QUESTION: He blamed the West for the talks when they stopped last year, saying that the West did not want to go further because of what was going on in the world, the financial crisis, the Georgian war, and so on and so forth. So they basically put the blame on the suspension of the talks on the West.

MR. KELLY: Yeah.

QUESTION: Would you agree with that?

MR. KELLY: No. Look, I mean, we’re prepared to respond to some kind of meaningful response. We’re not going to respond to something that’s made through the media. The offer of the P-5+1 remains on the table, and we’re – we can respond to that when they respond officially. In the meantime, as we saw in the most recent IAEA report, they are not complying with their obligations to the international community and their behavior remains a matter of deep concern to us. And I’ll just say what I’ve said before, that we provided a path whereby they can become a full and respected member of the international community, and it’s up to them as to whether or not they want to choose that path.

QUESTION: One last one --

QUESTION: This is Iran-related. Have you – are you going to be on the nuclear issue?

QUESTION: Yeah. Still on the nuclear stuff, yeah.

QUESTION: Go ahead.

QUESTION: Thank you. Look, Ian, why shouldn’t one regard these reports of a new proposal that just happened to surface on the eve of a P-5+1 meeting and about three weeks in advance of the UN General Assembly when this is going to be a major subject of --

MR. KELLY: Yeah.

QUESTION: -- topic of conversation, why shouldn’t one regard this as something other than an effort by the Iranians to blunt the U.S. push to consider additional sanctions?

MR. KELLY: It may well be, but it’s just nothing that we can respond to because it’s not done – they still haven’t officially responded to our various initiatives.

QUESTION: And they haven’t given you anything, just not – not just they haven’t responded officially?

MR. KELLY: Well, to the best of my knowledge --

QUESTION: Yeah.

MR. KELLY: -- we have not received a response.

QUESTION: What would you consider a meaningful response?

MR. KELLY: A response that said we understand that we have certain obligations that we have to adhere to, and that they welcome a reengagement with us in the P-5+1 context to try and address some of these concerns that we have.

QUESTION: Have you heard anything from the Russians and the Chinese yet about what they --

MR. KELLY: Regarding the most recent press reports, you mean?

QUESTION: Yeah.

MR. KELLY: I’m not aware that we have received anything from the Russians (inaudible).

QUESTION: Because, related to Arshad’s question, it seems that, you know, oftentimes in the past on the cusp of big meetings or events, the Iranians have come out with statements like this talking about proposals which appear to be designed entirely to isolate the Russians and the China – or to keep the Chinese and the Russians from getting – from getting on board with the rest of the group on sanctions.

MR. KELLY: Yeah, yeah.

QUESTION: You don’t see that this --

MR. KELLY: You’re asking me to speculate on what their motives might be for this one statement being made to the media. It may well be, but it would be just speculation on my part.

QUESTION: Why do you keep – why do you keep referring to this as, you know, made to the media or press reports or some kind of --

MR. KELLY: Because we’re still waiting for an official response. They’re not talking to us. They’re talking to the media.

QUESTION: Well, you don’t think when Jalili gets up there as the chief negotiator and makes it – like what you’re doing right now, what you’re – you’ve given us the official --

MR. KELLY: I’m not a negotiator.

QUESTION: You gave the official U.S. – you gave the official State Department response to us about these allegations of the Afghan Embassy.

MR. KELLY: That’s my job.

QUESTION: Why isn’t Jalili?

MR. KELLY: Well, Mr. Jalili is their representative?

QUESTION: He’s a representative of the Iranian Government.

MR. KELLY: Right.

QUESTION: He’s a spokesman for the government.

MR. KELLY: Yeah, but I’m a spokesman. This is what I do. I talk to you guys. We’re waiting for him to respond officially to our --

QUESTION: Fair enough. Well, fair enough. But you get Bill Burns down here and tell us something, we’re going to report it as you said this, and the Iranians aren’t going to say, “Well, that’s just a press report.” They’ll take it as coming from – it’s coming from the government.

QUESTION: You said – you said from this podium – or not you, but previous spokesmen have said from the podium that we’ve present – we’re getting ready to present an offer to the Iranians. I mean, how do we know?

MR. KELLY: Yeah. We have made an offer to the Iranians and we made them --

QUESTION: I know, but – but before you did it, you told – you announced that you were doing it.

MR. KELLY: All right, look. This is very simple. They – all they need to do is respond to our proposal in some serious and official way.

QUESTION: Through what channel would you expect that to come through?

MR. KELLY: The – we don’t have an embassy in Tehran, but our partners in the P-5+1 have embassies.

QUESTION: Another one on Iran, if --

MR. KELLY: Yeah.

QUESTION: The Iranian president has apparently decided to come to the UNGA, participate there. Has he applied for a visa? And if so, is it anywhere close?

MR. KELLY: Actually, I’m not aware that he has. I understand that he does plan to come. He’s come in years past. I mean, I would have every expectation that he would receive a visa under our obligations, under our agreement with the UN.

QUESTION: On Iran again.

MR. KELLY: Yeah.

QUESTION: Anything new on the three Americans held there?

MR. KELLY: No, I’m afraid I don’t. I’m sorry to say I don’t have any --

QUESTION: This was – nothing from the --

MR. KELLY: -- further information on consular access or information on their welfare or whereabouts, which is, of course, very distressing to their families and of great concern to us.

QUESTION: Can we go back to powerful world leaders who plan to come to the UN? (Laughter.) Is there any movement on Qadhafi yet?

MR. KELLY: Not that I’m aware of, Matt.

QUESTION: All right. And then the segue into that is what do you make of these – the release of these letters in Britain about al-Megrahi --

MR. KELLY: Well, this is – as I said --

QUESTION: -- release?

MR. KELLY: As I said yesterday, this is a – this has been a matter for the UK Government and the Scottish authorities to make. They consulted with us with respect to the release of certain documents relating to the U.S. view. And our views, of course, are well known. I mean, the – those views are that we strongly oppose any outcome that would result in the transfer of Mr. Megrahi to Libya.

QUESTION: Did the U.S. Government believe that the – they had – it had a commitment from the British Government that Megrahi would not be released?

MR. KELLY: I think we’ve said all along that we understood that this was a matter for the Scottish executive to decide. The – our interlocutors in London made it clear that this was a matter for their justice officials to --

QUESTION: Did you seek such a commitment?

MR. KELLY: Well, we’ve told you that we – on many different occasions --

QUESTION: Well, you said you didn’t want him released.

MR. KELLY: -- on many different occasions at very high levels have made our views known to the Scottish authorities, including Secretary Clinton.

QUESTION: We understand that there was, if not a written, then at least a reasonably solemn, informal agreement between the then-Foreign Secretary Robin Cook and the then-Deputy Attorney General Eric Holder that he would not be released.

MR. KELLY: That I’m not sure about. I’m not sure of any kind of agreement in the past between our Department of Justice and the British authorities.

QUESTION: We understand that there was such an agreement. If we can accept that there is no written document --

MR. KELLY: I think there was an understanding that he would serve out his sentence in Scotland. But --

QUESTION: Is the Department --

MR. KELLY: -- I don’t know if I would characterize that as an agreement. If you’re talking about some specific agreement relating to a previous attorney general, I think you have to ask the Department of Justice.

QUESTION: A previous deputy attorney general who is now the attorney general, by coincidence. But is the Department comfortable with the fact that even if a – there is no written agreement that has been broken, nonetheless, a significant agreement between two close allies has been broken?

MR. KELLY: Well, we’ve said many times that we disagreed strenuously with the decision of the Scottish authorities to release him and allow him to return to Libya. And it won’t be the first disagreement we’ve had with a close ally and it won’t be the last. But this is – but whether or not it’s – I don’t know if I’d characterize it as an agreement. There was an understanding that we had that he would serve out his sentence. But the British Government has also let us know that because of their policy of devolution and allowing Scotland to be responsible for its own home affairs, that it was a decision for the Scottish Executive to make. So there’s been complete transparency throughout.

QUESTION: Well, it was their decision to make. I mean, yes it was a Scottish decision to make, but as we’ve seen from all these documents that are coming out, that the British intervene to the Scots to --

MR. KELLY: I have to refer you to the British authorities.

QUESTION: You don’t feel like the Brits sold you out?

MR. KELLY: No, I don’t feel like the Brits sold me out.

QUESTION: Even though it’s (inaudible) that under the terms of the devolution that foreign policy remains a matter for the UK Government as opposed to the Scottish authorities?

MR. KELLY: I just have to refer you to the Government of Britain for issues like that.

QUESTION: Of course, it’s up to them in the end how they play this. But how does the Department feel?

MR. KELLY: Well, it’s been very clear how we feel. We – this was a – we just think it was the wrong decision. I mean, that – nobody’s trying to hide that.

Yeah, go ahead, Michel.

QUESTION: Different subject. Do you have any time and date for Senator Mitchell’s meeting with the Israeli delegation?

MR. KELLY: Yes, I do. Just a moment. All right. I know what – I know what the answer is. It’s not in here. But the answer is that they’re going to meet tomorrow in New York. The Israeli side will be represented by the deputy chief – is it the deputy chief?

STAFF: Defense ministry chief of staff.

MR. KELLY: Defense ministry chief of staff, Michael Herzog. And we hope to have further details on the meeting and whatever media arrangements there are, I hope, later today.

QUESTION: Is Molcho, Zitzhas Molcho, who is Prime Minister Netanyahu – one of his key aides, coming as well?

MR. KELLY: That I don’t know, Arshad. You’ll have to ask --

QUESTION: You don’t have the time and place?

MR. KELLY: The place is – well, the place is in New York. But the exact --

QUESTION: It’s a big state, Ian.

MR. KELLY: Yeah, I know it is. New York City.

QUESTION: That’s a big city – (laughter) – I hear.

MR. KELLY: It’s a great city, too.

QUESTION: Near the UN?

MR. KELLY: Not as good as Chicago, but it’s a great city.

QUESTION: Is it going to be at USUN?

MR. KELLY: That I don’t know. But we’ll find out. You know in the past that they have had a camera spray and statements afterwards, so I would expect that – that model to be followed.

QUESTION: You expect they will have statements afterwards?

MR. KELLY: I do expect that.

QUESTION: You expect that to be coming from here or coming from them up there?

MR. KELLY: Both.

QUESTION: You mean a written statement?

MR. KELLY: Yeah. Maybe I should stop right there and say that we’ll get you further information.

QUESTION: That leaves me – I’m a little concerned about that, because from what I understand, this meeting is not going to be on the early side; it’s going to be on the late side. And that means --

MR. KELLY: That’s probably right.

QUESTION: Yeah. And that means that – are we going to be waiting around until 2 o’clock in the morning for it?

MR. KELLY: No, you won’t, Matt.

QUESTION: And is it --

MR. KELLY: I will call you personally when I have --

QUESTION: Before 2 o’clock?

QUESTION: If you would --

MR. KELLY: I’m not staying up that late.

QUESTION: You can call me and I’ll call Matt. (Laughter.) I promise. But --

MR. KELLY: That’s one of the better lines I’ve heard. (Laughter.)

QUESTION: I’m not sure you’re on camera here. (Laughter.)

QUESTION: Listen, what do – when you said statements, you meant a written statement. You don’t expect anybody to come out and talk in front of a camera?

MR. KELLY: No, I don’t. I --

QUESTION: Okay.

MR. KELLY: And again, these are my personal expectations. I don’t know this for a fact. But we’ll get you --

QUESTION: Okay. And this meeting’s in preparation for another Mitchell trip to Jerusalem and a meeting with Ehud Barak. Is that right?

MR. KELLY: We’ll have more information about regional travel very soon.

QUESTION: Thank you.

QUESTION: Do you have any more information as a follow-up to the story last night on CBS about the Afghan ministry of defense being in contact with one of the Afghans arrested in an incident earlier this week in which a U.S. soldier was killed and a journalist injured?

MR. KELLY: No. I really – I don’t have any information on that. I’ll take one more question.

QUESTION: Bosworth?

QUESTION: Quick one.

MR. KELLY: Bosworth. I don’t have any information on, but we will have information about his travel soon as well.

QUESTION: A quick one --

QUESTION: One on Syria/Iraq. How do you view the escalation in tension between the two countries after August 19^th bombs in Baghdad?

MR. KELLY: You’re asking about Syria?

QUESTION: Syria and Iraq, yeah.

MR. KELLY: Yeah, okay. And this will be the last one, okay, and then we can talk – we can talk afterwards.

QUESTION: Can I have one more, please?

MR. KELLY: Sorry?

QUESTION: Can I have one more, please?

MR. KELLY: I am such a softie.

QUESTION: There’s a lot going on.

MR. KELLY: I know there’s a lot going on. Uh-oh. Yeah, I’m afraid I don’t have that information on Syria.

Okay, go ahead. We’ll get you the information. I know I have it. It’s just not --

QUESTION: Japanese new government, DPJ, says they will reexamine the role of U.S. military bases and U.S. military forces. And what is U.S. current position on that?

MR. KELLY: Yeah. I have really nothing to add from what I said yesterday. Our relationship with Japan is a – one of the cornerstones of peace and security in Asia. It’s one of the most important relationships that we have. We’re going to welcome the opportunity to work with the new government and we’ve – with the view to building on our past successes and developing very productive relations for the future. But beyond that --

QUESTION: How about Futenma issues?

MR. KELLY: Sorry?

QUESTION: Futenma issues.

MR. KELLY: Oh, as I say, I don’t have anything to add to what I said yesterday.

QUESTION: Well, wait a minute.

MR. KELLY: Thanks.

QUESTION: Can you give us a little bit of an idea of what your involvement was in the agreement between Armenia and Turkey to start talks to establish diplomatic relations?

MR. KELLY: That was, I think, mostly worked out bilaterally between the two governments through the facilitation of the Swiss. Of course, we took a great interest in the talks.

QUESTION: Thank you.

(The briefing was concluded at 2:18 p.m.)

DPB # 148

# # #

Background Note: Taiwan

Bureau of East Asian and Pacific Affairs

PROFILE

OFFICIAL NAME:
Taiwan

Geography
Area: 36,189 sq. km. (13,973 sq. mi.).
Cities (2009): Capital--Taipei (pop. 2.6 million). Other cities--(Kaohsiung 1.5 million), Taichung (1.07 million).
Terrain: Two thirds of the island is largely mountainous with 100 peaks over 3,000 meters (9,843 ft.).
Climate: Maritime subtropical.

People
Population (Feb. 2009): 23.0 million.
Annual growth rate (2008): 0.34%.
Languages: Mandarin Chinese (official), Taiwanese, Hakka.
Education: Years compulsory--9. Attendance (2007)--99.30%. Literacy (2008)--97.78%.
Health: Infant mortality rate (2007)--0.47%. Life expectancy (2008)--78.57 yrs; male 75.59 yrs.; female 81.94 yrs.
Work force (August 2009): 10.96 million.

Political Establishment
Type: Multi-party democracy.
Constitution: December 25, 1946; last amended 2005.
Branches (Yuan): Executive, Legislative, Judicial, Control, Examination.
Major political parties: Kuomintang (KMT or Nationalist Party); Democratic Progressive Party (DPP); several small parties.
Suffrage: Universal over 20 years of age.
Central budget proposed (FY 2009): $56.8 billion.
Defense proposed (2009): 17.2% of entire budget.

Economy
GDP (2008): $391 billion.
Real annual growth rate (2008): 0.06%.
Per capita GDP (2008): $17,083.
Unemployment (Aug. 2009) 6.13%.
Natural resources: Small deposits of coal, natural gas, limestone, marble, and asbestos.
Agriculture (1.69% of GDP): Major products--pork, rice, fruit and vegetables, sugarcane, poultry, shrimp, eel.
Services: (73.27% of GDP).
Industry (25.04% of GDP): Types--electronics and flat panel products, chemicals and petrochemicals, basic metals, machinery, textiles, transport equipment, plastics, machinery.
Trade (2008): Exports--$255.6 billion: electronics, optical and precision instruments, information and communications products, textile products, basic metals, plastic and rubber products. Major markets--P.R.C. and Hong Kong $99.6 billion, U.S. $30.8 billion, Japan $17.6 billion. Imports--$240.5 billion: electronics, optical and precision instruments, information and communications products, machinery and electrical products, chemicals, basic metals, transport equipment, crude oil. Major suppliers--Japan $46.5 billion, P.R.C. and Hong Kong $32.9 billion, U.S. $26.3 billion.

PEOPLE
Taiwan has a population of 23 million. More than 18 million, the "native" Taiwanese, are descendants of Chinese who migrated from Fujian and Guangdong Provinces on the mainland, primarily in the 18th and 19th centuries. The "mainlanders," who arrived in Taiwan after 1945, came from all parts of mainland China. About half a million indigenous peoples inhabit the mountainous central and eastern parts of the island and are believed to be of Malayo-Polynesian origin. Of Taiwan's total population, approximately one million, or 4.4%, currently reside in mainland China.

Education
Since 1979, six years of elementary school and three years of junior high have been compulsory for all children. About 95% of junior high graduates continue their studies in either a senior high or vocational school. Taiwan has an extensive higher education system with 162 institutions of higher learning. In 2008, about 156,213 students took the entrance examinations to enter universities and colleges; about 73% of the candidates were accepted by a college or university. Opportunities for graduate education are expanding in Taiwan, but many students travel abroad for advanced education. In FY 2008, over 19,400 U.S. student visas were issued to Taiwan passport holders.

Languages
A large majority of people in Taiwan speak Mandarin Chinese, which has been the medium of instruction in the schools for more than five decades. Native Taiwanese and many others also speak one of the Southern Fujianese dialects, Min-nan, also known as Taiwanese. Recently there has been a growing use of Taiwanese in the broadcast media. The Hakka, who are concentrated in several counties throughout Taiwan, have their own distinct dialect. As a result of the half-century of Japanese rule, many older people also can speak Japanese. The method of Chinese romanization most commonly used in Taiwan is the Wade-Giles system. In 2002, Taiwan authorities announced adoption of the pinyin system used on the mainland to replace the Wade-Giles system, but its use is not consistent throughout society, often resulting in two or more romanizations for the same place or person.

Religions
According to Taiwan's Interior Ministry figures, there are about 11.2 million religious believers in Taiwan, with more than 75% identifying themselves as Buddhists or Taoists. At the same time, there is also a strong belief in traditional folk religion throughout the island. These are not mutually exclusive, and many people practice a combination of the three. Confucianism also is an honored school of thought and ethical code. Christian churches have been active on Taiwan for many years, and today, the population includes a small but significant percentage of Christians.

Culture
Taiwan's culture is a blend of its distinctive Chinese, Japanese, and Western influences. Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and Western motifs. One of Taiwan's greatest attractions is the Palace Museum, which houses over 650,000 pieces of Chinese bronze, jade, calligraphy, painting, and porcelain. This collection was moved from the mainland in 1949 when Chiang Kai-shek's Nationalist Party (KMT) fled to Taiwan. The collection is so extensive that only 1% is on display at any one time.

HISTORY
Taiwan's indigenous peoples, who originated in Austronesia and southern Asia, have lived on Taiwan for 12,000 to 15,000 years. Significant migration to Taiwan from the Chinese mainland began as early as A.D. 500. Dutch traders first claimed the island in 1624 as a base for Dutch commerce with Japan and the China coast. Two years later, the Spanish established a settlement on the northwest coast of Taiwan, which they occupied until 1642 when they were driven out by the Dutch. Dutch colonists administered the island and its predominantly aboriginal population until 1661. The first major influx of migrants from the Chinese mainland came during the Dutch period, sparked by the political and economic chaos on the China coast during the Manchu invasion and the end of the Ming Dynasty.

In 1664, a fleet led by the Ming loyalist Cheng Ch'eng-kung (Zheng Chenggong, known in the West as Koxinga) retreated from the mainland and occupied Taiwan. Cheng expelled the Dutch and established Taiwan as a base in his attempt to restore the Ming Dynasty. He died shortly thereafter, and in 1683, his successors submitted to Manchu (Qing Dynasty) control. From 1680, the Qing Dynasty ruled Taiwan as a prefecture and, in 1875, divided the island into two prefectures, north and south. In 1887 the island was made into a separate Chinese province.

During the 18th and 19th centuries, migration from Fujian and Guangdong provinces steadily increased, and Chinese supplanted indigenous peoples as the dominant population group. In 1895, a weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki following the first Sino-Japanese war.

During its 50 years (1895-1945) of rule, Japan expended considerable effort in developing Taiwan's economy. At the same time, Japanese rule led to the "Japanization" of the island, including compulsory Japanese education and pressuring residents of Taiwan to adopt Japanese names.

At the end of World War II in 1945, Taiwan reverted to Chinese rule. During the immediate postwar period, the Nationalist Chinese (KMT) administration on Taiwan was repressive and corrupt, leading to local discontent. Anti-mainlander violence flared on February 28, 1947, prompted by an incident in which a cigarette seller was injured and a passerby was shot to death by Nationalist authorities. The island-wide rioting was brutally put down by Nationalist Chinese troops, who killed thousands of people. As a result of the February 28 Incident, the native Taiwanese felt a deep-seated bitterness toward the mainlanders. For 50 years the KMT authorities suppressed accounts of this episode in Taiwan history. In 1995 a monument was dedicated to the victims of the "2-28 Incident," and for the first time, Taiwan's leader, President Lee Teng-hui, publicly apologized for the Nationalists' brutality.

Starting before World War II and continuing afterwards, a civil war was fought on the mainland between Chiang Kai-shek's KMT government and the Chinese Communist Party led by Mao Zedong. When the civil war ended in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, fled to Taiwan. In October 1949 the People's Republic of China (P.R.C.) was founded on the mainland by the victorious communists. Chiang Kai-shek established a "provisional" Republic of China (R.O.C.) capital in Taipei in December 1949. During the 1950s, the KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan's first industrial capitalists. Together with refugee businessmen from the mainland, they managed Taiwan's transition from an agricultural to a commercial, industrial economy.

Taiwan has developed steadily into a major international trading power with $496 billion in two-way trade (2008). Taiwan's accession to the World Trade Organization in 2002 has expanded its trade opportunities and further strengthened its standing in the global economy. Tremendous prosperity on the island has been accompanied by economic and social stability. Chiang Kai-shek's successor, his son Chiang Ching-kuo, began to liberalize Taiwan's political system, a process that accelerated when President Lee Teng-hui took office in 1988. The direct election of Lee Teng-hui as president in 1996 was followed by opposition Democratic Progressive Party (DPP) candidate Chen Shui-bian's election victory in March 2000. Chen was re-elected in March 2004 in a tightly contested election. The KMT's Ma Ying-jeou won the March 2008 presidential election by a substantial majority and took office on May 20, 2008.

ADMINISTRATION
The authorities in Taipei exercise control over Taiwan, Kinmen, Matsu, Penghu (Pescadores) and several other smaller islands. Taiwan is divided into counties, provincial municipalities, and two special municipalities, Taipei and Kaohsiung. At the end of 1998, the Constitution was amended to make all counties and cities directly administered by the Executive Yuan. From 1949 until 1991, the authorities on Taiwan claimed to be the sole legitimate government of all of China, including the mainland. In keeping with that claim, when the Kuomintang retreated to Taiwan in 1949, they re-established the full array of central political bodies, which had existed on the mainland. While much of this structure remains in place, the authorities on Taiwan in 1991 abandoned their claim of governing mainland China, stating that they do not "dispute the fact that the P.R.C. controls mainland China."

The first National Assembly, elected on the mainland in 1947 to carry out the duties of choosing the President and amending the constitution, was re-established on Taiwan when the KMT moved. Because it was impossible to hold subsequent elections to represent constituencies on the mainland, representatives elected in 1947-48 held these seats "indefinitely." In June 1990, however, the Council of Grand Justices mandated the retirement, effective December 1991, of all remaining "indefinitely" elected members of the National Assembly and other bodies.

The second National Assembly, elected in 1991, was composed of 325 members. The majority were elected directly, while 100 were chosen from party slates in proportion to the popular vote. This National Assembly amended the Constitution in 1994, paving the way for the direct election of the President and Vice President the first of which was held in March 1996. In April 2000, the members of the National Assembly voted to permit their terms of office to expire without holding new elections. The National Assembly elected in May 2005 voted to abolish itself the following month, leaving Taiwan with a unicameral legislature. The President is both leader of Taiwan and Commander-in-Chief of its armed forces. The President has authority over four of the five administrative branches (Yuan): Executive, Control, Judicial, and Examination. The President appoints the President of the Executive Yuan, who also serves as the Premier. The Premier and the cabinet members are responsible for government policy and administration.

The main lawmaking body, the Legislative Yuan (LY), was originally elected in the late 1940s in parallel with the National Assembly. The first LY had 773 seats and was viewed as a "rubber stamp" institution. The second LY was not elected until 1992. The third LY, elected in 1995, had 157 members serving 3-year terms, while the fourth LY, elected in 1998, was enlarged to 225 members. The LY has greatly enhanced its standing in relation to the Executive Yuan and has established itself as a major player on the central level. With increasing strength, size, and complexity, the LY now mirrors Taiwan's recently liberalized political system. In the 1992 and 1995 elections, the main opposition party--the Democratic Progressive Party (DPP)--challenged the half-century of Kuomintang (KMT) dominance of the Legislature. In both elections, the DPP won a significant share of the LY seats, leaving only half of the LY seats in the hands of the KMT. In 2001, the DPP won a plurality of LY seats--88 to the KMT's 66, the People First Party's 45, the Taiwan Solidarity Union's 13, and 13 won by other parties and independents. In the December 2004 LY election, the Pan-Blue coalition won a slender majority of 114 of the 225 seats compared to the Pan-Green coalition's 101. The LY was halved in size from 225 to 113 seats by constitutional amendments in 2005. In the January 2008 LY election, the first to be held under this new structure, the KMT won an absolute majority of 81 seats to the DPP's 27 seats, with the remaining five seats going to independent and small party candidates.

In 1994, when the National Assembly voted to allow direct popular election of the President, the LY passed legislation allowing for the direct election of the Governor of Taiwan Province and the mayors of Taipei and Kaohsiung Special Municipalities. These elections were first held in December 1994. In a move to streamline administration, the position of elected Governor was abolished at the end of 1998, and most other elements of the Taiwan Provincial Government have been eliminated.

The Control Yuan (CY) monitors the efficiency of public service and investigates instances of corruption. The 29 Control Yuan members are appointed by the President and approved by the Legislative Yuan; they serve 6-year terms. In recent years, the Control Yuan has become more activist, and it has conducted several major investigations and impeachments. From January 2005 to August 2008 the Control Yuan was inactive because the Pan-Blue dominated LY has refused to approve the new slate of CY members proposed by President Chen. The new Control Yuan members appointed by President Ma took office on August 1, 2008.

The Judicial Yuan (JY) administers Taiwan's court system. It includes a 16-member Council of Grand Justices (COGJ) that interprets the constitution. Grand Justices are appointed by the President, with the consent of the National Assembly, to 9-year terms.

The Examination Yuan (EY) functions as a civil service commission and includes two ministries: the Ministry of Examination, which recruits officials through competitive examination, and the Ministry of Personnel, which manages the civil service. The President appoints the President and members of the Examination Yuan.

Principal Leaders
President--Ma Ying-jeou
Vice President--Vincent Siew (Siew Wan-chang)
Premier--Wu Den-yih
Vice Premier--Eric Chu (Chu Li-luan)
Legislative Yuan President--Wang Jin-pyng
Judicial Yuan President--Lai In-jaw
Defense Minister--Kao Hua-chu
Foreign Minister--Timothy Yang (Yang Chin-tien)
Minister of Justice--Wang Ching-feng
Mainland Affairs Council Chairman--Lai Shin-yuan
Government Information Office Minister--Su Jun-pin
Cabinet Spokesperson--Su Jun-pin

POLITICAL CONDITIONS
Until 1986, Taiwan's political system was controlled by one party, the Kuomintang (KMT), the chairman of which was also Taiwan's top leader. As the ruling party, the KMT was able to fill appointed positions with its members and maintain political control of the island.

Before the 1986 island-wide elections, many "nonpartisans" grouped together to create Taiwan's first new opposition political party, the Democratic Progressive Party (DPP). Despite an official ban on forming new political parties, Taiwan authorities did not prohibit the DPP from operating, and DPP and independent candidates captured more than 20% of the vote in the 1986 elections. In 1987, President Chiang Ching-kuo ended the nearly four decades of martial law under which dissent had been suppressed. Since then, Taiwan has taken dramatic steps to improve respect for human rights and create a democratic political system, including ending almost all restrictions on the press. Vice President Lee Teng-hui succeeded Chiang Ching-kuo as president upon Chiang's death in 1988, and in 1990 the National Assembly (NA) elected Lee to a six-year term as President, the final indirect presidential election conducted by the NA. Under President Lee, the Legislative Yuan (LY) passed the Civic Organizations Law in 1989, which allowed for the formation of new political parties, thereby legalizing the DPP. In 1992, the DPP won 51 seats in the 161-seat LY, increasing the DPP's influence on legislative decisions. Chen Shui-bian's victory in the Taipei mayoral election in December 1994 further enhanced the profile of the DPP, which won 45 of the 157 seats in the 1995 LY elections.

In 1996, the KMT's Lee Teng-hui was elected President and Lien Chan Vice President in the first direct presidential election by Taiwan's voters. In the November 1997 local elections, the DPP won 12 of the 23 county magistrate and city mayor contests to the KMT's 8, outpolling the KMT for the first time in a major election. In a three-way contest in March 2000, DPP candidate Chen Shui-bian became the first opposition party candidate to win the presidency. His victory resulted in the first-ever transition of the presidency from one political party to another, validating Taiwan's democratic political system. President Chen was re-elected by 50.1% of the popular vote to a second term in a very tight contest on March 20, 2004. The election was marred by a shooting incident the day before the election during which President Chen and his running mate Vice President Annette Lu were slightly wounded. While the opposition contested the results, it was the first time that the DPP had won an outright majority in an island-wide election. Taiwan's second democratic transition of ruling party followed the March 22, 2008, presidential election, which went decisively (58%) to KMT candidate Ma Ying-jeou. Together with the KMT legislative victory two months earlier, Taiwan now had a unified government under KMT control.

The March 2004 election also included two "defensive referenda." Historically, referenda have been closely tied to the question of Taiwan independence, and thus a highly sensitive issue in cross-Strait relations. Both referenda in 2004 failed to meet the required participation threshold of 50% of eligible voters, as did four more referenda held in conjunction with the 2008 legislative and presidential elections. The 2008 DPP referendum on joining the UN under the name Taiwan was especially controversial.

The final National Assembly passed a set of constitutional amendments in June 2005 that halved the number of LY seats from 225 to 113 and created single-member legislative election districts beginning with the January 2008 legislative election. The constitutional revisions also abolished the National Assembly and provided for the public to confirm or reject future constitutional amendments passed by the Legislative Yuan. President Chen's controversial efforts to promote a second round of constitutional revisions focused on changing the government structure were unsuccessful. The P.R.C. accused him of using the constitution issue to move Taiwan toward independence. While not entirely ruling out future constitutional changes, President Ma has stressed the need to implement rather than revise the constitution.

In the December 2004 legislative elections, the ruling DPP won a plurality with 89 of the 225 seats, gaining 2 seats more than it did in 2001, but the opposition KMT and its Pan-Blue allies continued to hold a narrow majority in the Legislative Yuan. The ruling DPP's inability to form a majority coalition led to gridlock in the LY until 2008. Following a landslide victory in December 2005 local elections, the KMT won the 2006 mayoral election in Taipei City, while the DPP won in Kaohsiung City. In the January 2008 elections for the downsized 113-seat LY, the KMT won 81 seats and KMT allies won a further five seats, giving them a three-quarters majority over the DPP, which won just 27 seats. As of October 2009, seven KMT legislators had vacated their seats because of election violations, new positions, and other reasons.

Political Parties
In addition to the Kuomintang (KMT) (described above in 'History' and 'Political Conditions'), the other major political party is the DPP, whose membership is made up largely of native Taiwanese, and whose platform includes outspoken positions on some of the most sensitive issues in Taiwan politics. For example, the DPP maintains that Taiwan is an entity separate from mainland China, in contrast to the KMT position that Taiwan and the mainland, though currently divided, are both part of "one China." In sharp contrast to the tenets of both KMT and P.R.C. policy, a number of prominent DPP politicians openly advocate independence for Taiwan.

There are a number of small political parties, including the Taiwan Solidarity Union (TSU), the People First Party (PFP), and the New Party (NP). After the 2000 presidential election, former KMT President Lee Teng-hui broke with the KMT and in 2001 formed the pro-independence Taiwan Solidarity Union (TSU), which allied itself with the DPP, an alliance that largely fell apart over time. The TSU failed to elect any members to the LY in January 2008. The People First Party (PFP) was formed in the wake of the March 2000 presidential election by disgruntled KMT members who supported the presidential bid of former KMT Taiwan Provincial Governor James Soong, who did not receive the KMT nomination. The PFP and KMT subsequently formed the "Pan-Blue" Alliance to oppose the DPP government. The PFP, however, gradually shrank and it largely merged with the KMT in the runup to the January 2008 LY elections, although one PFP candidate did win election to the LY under the name PFP. The New Party, which also split from the KMT, holds several seats on the Taipei City Council, but has no legislators at this point. In addition, there are more than 100 other registered small political parties, such as the Hakka Party, the Green Party, and the Constitution Party. None of these small parties received more than 1% or 2% of votes in the January 2008 LY election.

Taiwan and the Mainland
Over the past several years, Taiwan has relaxed restrictions on unofficial contacts with the P.R.C., and cross-Strait interaction has mushroomed. In January 2001, Taiwan formally allowed the "three mini-links" (direct trade, travel, and postal links) from Kinmen (Quemoy) and Matsu Islands to Fujian Province and permitted direct cross-Strait trade in February 2002. Cross-Strait trade has grown rapidly over the past 10 years. China is Taiwan's largest trading partner, and Taiwan is China's fifth-largest. Estimates of Taiwan investment on the mainland, both officially approved by Taiwan authorities and investment made by Taiwan firms through third parties, range from $150 billion to over $300 billion, making Taiwan and Hong Kong by some measures the two largest investors in the P.R.C. This trade generally runs in Taiwan's favor and continues to grow, providing another engine for the island's economy.

In February 2003, Taiwan and the P.R.C. agreed to allow Taiwan carriers to fly non-stop (although routed via Hong Kong or Macau airspace) to bring Taiwan residents on the mainland home for the Lunar New Year holiday. The two sides agreed to conduct Lunar New Year charter flights again in 2005, with flights operated by both Taiwan and P.R.C. carriers flying over, but not having to land in, Hong Kong or Macau. Over time these flights were expanded to cover three other major holidays. In July 2008, Taiwan and P.R.C. carriers began operating cross-Strait charter flights every weekend. These flights are open to mainland tourists, as well as Taiwan and foreign travelers. Daily direct cross-Strait charter flight service began in December 2008, and the two sides have also begun cargo charter flights, direct shipping, direct postal service, and cooperation on food safety issues. To meet rapidly increasing air transport demand, in April 2009 both parties agreed to increase the number of passenger and cargo flights to 270 per week; carriers from each side operate 135 flights per week. Under the terms of the April agreement, certain charter flights were changed to regularly scheduled flights. In addition, Taiwan and the P.R.C. agreed to establish two new civil aviation routes across the Taiwan Strait. These changes took effect on August 31, 2009.

The development of semiofficial cross-Strait relations has had ups and downs. In April 1993, the first round of high-level cross-Strait talks was held in Singapore between the heads of two private intermediary organizations--Taiwan's Straits Exchange Foundation (SEF) and the P.R.C.'s Association for Relations Across the Taiwan Strait (ARATS). These talks primarily addressed technical issues relating to cross-Strait interactions. Beijing suspended lower-level talks from 1995-97 following President Lee's U.S. visit. SEF Chairman Koo Chen-fu visited the mainland in October 1998 for the second round of high-level talks. In 1999 Beijing once again suspended the cross-Strait dialogue, canceling plans for a visit by ARATS Chairman Wang Daohan to Taiwan, because of statements by President Lee that relations between the P.R.C. and Taiwan should be conducted as "state-to-state" or at least as "special state-to-state relations." Since his May 20, 2000 inauguration, President Chen called for resuming the cross-Strait dialogue without any preconditions, but the P.R.C. insisted President Chen must first acknowledge what it claimed was the "1992 consensus" on one China reached by the two sides. The cross-Strait dialogue remained suspended for the entire eight years of President Chen's two terms. Nonetheless, economic and social ties continued to develop rapidly despite the "one China" obstacle and Taiwan's resentment over the P.R.C.'s March 2005 "Anti-Secession Law," and the two sides were able through intermediary organizations to reach agreements on holiday cross-Strait charter flights. The KMT began its own dialogue with Beijing in 2005. President Ma has moved quickly to resume the SEF-ARATS dialogue, expand charter flights, and take other steps to enhance cross-Strait relations. The United States has welcomed and encouraged the regular cross-Strait dialogue as a process which contributes to a reduction of tension and to an environment conducive to the eventual peaceful resolution of the outstanding differences between the two sides. The United States believes that differences between Taipei and Beijing should be resolved peacefully in a manner acceptable to people on both sides of the Taiwan Strait.

ECONOMY
Through decades of hard work and sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. At the same time, the appreciation of the New Taiwan dollar (NTD), rising labor costs, and increasing environmental consciousness in Taiwan caused many labor-intensive industries, such as shoe manufacturing, to move to China and Southeast Asia. Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is now a creditor economy, holding the world's fourth-largest stock of foreign exchange reserves ($332 billion as of Sept. 2009). Although Taiwan enjoyed sustained economic growth, full employment, and low inflation for many years, in 2001, Taiwan joined other regional economies in its first recession since 1949. From 2002-2007, Taiwan's economic growth ranged from 3.5% to 6.2% per year. With the current global economic downturn, Taiwan's economy slumped into recession in the second half of 2008. Its real GDP, following growth of 5.7% in 2007, rose 0.06% in 2008 and is expected to contract in 2009. The official forecast anticipates a decline of 4.04% in 2009, although the economy is beginning to recover and most forecasts project 3%-4% growth for 2010.

Foreign Trade
Foreign trade has been the engine of Taiwan's rapid growth during the past 50 years. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to fluctuations in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly ten-fold in the 1970s, doubled in the 1980s, and nearly doubled again in the 1990s. In the first half of this decade, exports grew 60%. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as a special customs territory in January 2002.

Taiwan firms are the world's largest suppliers of computer monitors and leaders in PC manufacturing, although now much of the final assembly of these products occurs overseas, typically in China. Textile and apparel production continues to move to lower-cost locations overseas, but is still a major industrial export sector and employs about 200,000 people. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports coal, oil and gas to meet most of its energy needs. Reflecting the large Taiwan investment in China, it supplanted the United States as Taiwan's largest trade partner in 2003. In 2008, China (including Hong Kong) accounted for over 26% of Taiwan's total trade and almost 40% of Taiwan's exports. Japan was Taiwan's second-largest trading partner with 13% of total trade, including 19% of Taiwan's imports. The U.S. is now Taiwan's third-largest trade partner, taking 12% of Taiwan's exports and supplying 11% of its imports. Taiwan is the United States' 11th-largest trading partner; Taiwan's two-way trade with the United States amounted to $61.6 billion in 2008. Imports from the United States consist mostly of agricultural and industrial raw materials as well as machinery and equipment. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong, China, and Japan account for 58% of Taiwan's exports, and the United States, Japan, and China provide almost 44% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased. The U.S. trade deficit with Taiwan in 2008 was $11 billion, down 8.3% from $12 billion in 2007. Even though Taiwan maintains formal diplomatic relations with about a score of its trading partners, Taiwan maintains trade offices in nearly 100 countries. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the Organization for Economic Cooperation and Development (OECD). In 2009, Taiwan acceded to the WTO Government Procurement Agreement. These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.

Agriculture
Although only about one-quarter of Taiwan's land area is arable, virtually all farmland is intensely cultivated, with some areas suitable for two and even three crops a year. Agriculture comprises only about 1.7% of Taiwan's GDP. Taiwan's main crops are rice, sugarcane, fruit, and vegetables. While largely self-sufficient in rice production, Taiwan imports large amounts of wheat, corn, and soybeans, mostly from the United States. Poultry and pork production are mainstays of the livestock sector and the major demand drivers for imported corn and soybeans. Rising standards of living have led to increased demand for a wide variety of high-quality food products, much of it imported. Overall, U.S. agricultural and food products account for more than 30% of Taiwan's agricultural import demand. U.S. food and agricultural exports total about $2.5 billion annually, making Taiwan the United States' sixth-largest agricultural export destination. Taiwan's agricultural exports include frozen fish, aquaculture and sea products, canned and frozen vegetables, and grain products. Taiwan's imports of agricultural products have increased since its WTO accession in 2002, and it is slowly liberalizing previously protected agricultural markets.

Economic Outlook
Taiwan faces many of the same economic issues as other developed economies. As labor-intensive industries have relocated to countries with low-cost labor, Taiwan's future development will rely on further transformation to a high technology and service-oriented economy and carving out its niche in the global supply chain. Taiwan's economy has become increasingly linked with China, and the Ma administration is expected to further develop these links and liberalize cross-Strait economic relations, particularly through the negotiation of an Economic Cooperation Framework Agreement (ECFA). Taiwan official statistics indicate that Taiwan firms had invested about U.S. $75.6 billion in China through 2008, which is more than half of Taiwan's stock of direct foreign investment. Many unofficial estimates put the actual number at between U.S. $150 and over $300 billion. Exact figures are difficult to obtain, as much Taiwan investment in the P.R.C. is via Hong Kong and other third-party jurisdictions. More than one million Taiwan people are estimated to be residing in China, and more than 70,000 Taiwan companies have operations there. Taiwan firms are increasingly acting as management centers that take in orders, produce them in Taiwan, the mainland, or Southeast Asia and then ship the final products to the U.S. and other markets.

DEFENSE
In proportion to its population, Taiwan still maintains a large military establishment. Defense expenditures for 2008 were NTD 334 billion (approximately U.S. $10.5 billion), which accounted for 2.94% of GDP. For 2009, the Legislative Yuan allocated NTD 395.3 billion (approximately U.S. $12.35 billion) for defense, which accounts for 3.05% of GDP. The military's primary mission is the defense of Taiwan against the P.R.C., which is seen as the predominant threat and which has not renounced the use of force against Taiwan. Taiwan's armed forces were reduced as part of a reform initiative from 1997 to 2001, going from about 450,000 to 385,000, with further reductions planned by the current administration to reduce the total force to just under 215,000. Registered reservists reportedly totaled 2,900,000 in 2008. Conscription remains universal for qualified males between the ages of 18 and 30. In 2007 the length of conscription service was dropped from 16 to 12 months, with a view to moving toward an all-volunteer force over the next several years. For qualified applicants, alternative service is available in police and fire departments and public clinics, as well as through teaching in some rural schools. Applicants with advanced degrees may qualify for National Defense Service, consisting of reserve officer training followed by four years of work in a government or academic research institution.

Taiwan's armed forces are equipped with weapons obtained primarily from the United States. In recent years, however, Taiwan also has procured some weapons from other Western nations and has stressed military "self-reliance," which has resulted in the growth of indigenous military production in certain fields. In October 2008, President George W. Bush notified Congress for the sale of PAC-3 systems, Apache helicopters, Harpoon missiles, and Javelin missiles, along with the upgrade of the E-2T aircraft. The procurement of these systems is ongoing. Taiwan adheres to the principles of the nuclear Non-Proliferation Treaty and has stated that it does not intend to produce nuclear weapons.

FOREIGN RELATIONS
The People's Republic of China replaced Taiwan at the United Nations in 1971, and Taiwan's diplomatic position has continued to erode, as many countries changed their official recognition from Taipei to Beijing. As of September 2008, Taiwan had formal diplomatic ties with 23 countries. At the same time, Taiwan has cultivated informal ties with most countries to offset its diplomatic isolation and to expand its economic relations. Many nations have set up unofficial organizations to carry out commercial and other relations with Taiwan. Including its official overseas missions and its unofficial representative and/or trade offices, Taiwan is represented in 122 countries. During the administration of President Chen, Taiwan lobbied strongly for admission into the United Nations and other international organizations, such as the World Health Organization (WHO). The P.R.C. opposes Taiwan's membership in such organizations, most of which require statehood for membership, because it considers Taiwan to be a part of its territory, not a separate sovereign state. The administration of President Ma has called for a "diplomatic truce" with Beijing, under which Taiwan would retain its existing diplomatic allies but not seek to win over countries that recognize the P.R.C. The Ma administration also hopes to expand Taiwan's "international space," increasing its participation in international organizations, such as the WHO.

U.S.-TAIWAN RELATIONS
On January 1, 1979, the United States changed its diplomatic recognition from Taipei to Beijing. In the U.S.-P.R.C. Joint Communiqué that announced the change, the United States recognized the Government of the People's Republic of China as the sole legal government of China and acknowledged the Chinese position that there is but one China and Taiwan is part of China. The Joint Communiqué also stated that within this context the people of the United States will maintain cultural, commercial, and other unofficial relations with the people on Taiwan.

On April 10, 1979, President Carter signed into law the Taiwan Relations Act (TRA), which created domestic legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial, cultural, and other interaction with the people on Taiwan is facilitated through the American Institute in Taiwan (AIT), a private nonprofit corporation. The Institute has its headquarters in the Washington, DC area and has offices in Taipei and Kaohsiung. It is authorized to issue visas, accept passport applications, and provide assistance to U.S. citizens in Taiwan. A counterpart organization, the Taipei Economic and Cultural Representative Office in the United States (TECRO), has been established by the Taiwan authorities. It has its headquarters in Taipei, the representative branch office in Washington, DC, and 12 other Taipei Economic and Cultural Offices (TECO) in the continental U.S. and Guam. The Taiwan Relations Act (TRA) continues to provide the legal basis for the unofficial relationship between the U.S. and Taiwan, and enshrines the U.S. commitment to assisting Taiwan maintain its defensive capability.

Following de-recognition, the United States terminated its Mutual Defense Treaty with Taiwan. However, the United States has continued the sale of appropriate defensive military equipment to Taiwan in accordance with the Taiwan Relations Act, which provides for such sales and which declares that peace and stability in the area are in U.S. interests. Sales of defensive military equipment are also consistent with the 1982 U.S.-P.R.C. Joint Communiqué.

The United States position on Taiwan is reflected in the Three Communiqués and the Taiwan Relations Act (TRA). The U.S. insists on the peaceful resolution of cross-Strait differences and encourages dialogue to help advance such an outcome. The U.S. does not support Taiwan independence. President Bush stated on December 9, 2003 that the United States is opposed to any attempt by either side to unilaterally alter the status quo in the Taiwan Strait. While the United States welcomes recent exchanges that enhance channels of communication between leaders in Beijing and Taipei, the United States urges Beijing and Taipei to further advance cross-Strait cooperation and dialogue, including direct discussions between the authorities in Beijing and elected leaders in Taipei.

U.S. commercial ties with Taiwan have been maintained and have expanded since 1979. Taiwan continues to enjoy Export-Import Bank financing, Overseas Private Investment Corporation guarantees, normal trade relations (NTR) status, and ready access to U.S. markets. In recent years, AIT commercial dealings with Taiwan have focused on expanding market access for American goods and services. AIT has been engaged in a series of trade discussions, which have focused on protection of intellectual property rights and market access for U.S. goods and services.

Maintaining diplomatic relations with the P.R.C. has been recognized to be in the long-term interest of the United States by seven consecutive administrations; however, maintaining strong, unofficial relations with Taiwan also a major U.S. goal, in line with our desire to further peace and stability in Asia. In keeping with our one China policy, the U.S. does not support Taiwan independence, but it does support Taiwan's membership in appropriate international organizations, such as the World Trade Organization, Asia-Pacific Economic Cooperation (APEC) forum, and the Asian Development Bank, where statehood is not a requirement for membership. In addition, the U.S. supports Taiwan's meaningful participation in appropriate international organizations where its membership is not possible.

U.S. Representative Offices
American Institute in Taiwan
Washington Headquarters
Suite 1700, 1700 North Moore Street
Arlington, VA 22209
Tel: 703-525-8474
Fax: 703-841-1385

American Institute in Taiwan
Taipei Office
No. 7, Lane 134, Hsin Yi Road
Section 3, Taipei, Taiwan
Tel: 011-886-2-2162-2000
Fax: 011-886-2-2162-2239

American Institute in Taiwan
Kaohsiung Office
5F, No. 2, Chung Cheng 3rd Road
Kaohsiung, Taiwan 800
Tel: 011-886-7-238-7744
Fax: 011-886-7-238-5237

Taiwan Representative Office
Taipei Economic and Cultural Representative Office (TECRO)
4201 Wisconsin Avenue, NW
Washington, DC 20016-2137
Tel: 202-895-1800
Fax: 202-895-0825

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.