For Immediate Release
Office of the Press Secretary
November 5, 2005

Press Gaggle by National Security Advisor Steve Hadley and Senior Administration Official
Aboard Air Force One
En route Brasilia, Brazil

      Trip to Latin America
     

5:51 P.M. (Local)

MR. HADLEY: Continued to be two additional plenary sessions today. The theme continued, of course, to be jobs. Jobs is a - job creation is key to prosperity and prosperity is key to stable democracies.

I think one of the themes that emerged was the notion that obviously you need to have growth in order to have jobs and prosperity, but at the same time, growth needs to be coupled with a set of social policies that allows people to take advantage of those jobs and take advantage of prosperity - and that's, of course, education, people talked about education; health care; good housing; and I think a general consensus that you need to have both economic growth and sound social policies.

A lot of good intervention. The President, as you know, stayed throughout; did a lot of listening; had a couple interventions, himself. But one of the things he wanted to do was obviously give a lot of countries a chance - there were a lot of countries sitting around that table, 34 - and wanted to make sure everyone had a chance to speak. He did leave the session once to take care of some professional things he needed to do, and a second time to meet with President Saca of El Salvador - a good conversation there, talking about, obviously, moving forward with CAFTA-DR, which the implementation of which will begin December-January timeframe; talk about some bilateral issues. The President emphasized the importance of MCA and the importance of El Salvador trying to find a way to take advantage of MCA. A good conversation between two countries who are close allies and individual Presidents who are good friends.

But the President sat in the sessions, as I say, did a lot of listening. The issue that began to, in some sense, had been present throughout the last day-and-a-half, but took more prominence later in the afternoon, was the issue of what to say in the declaration about the Free Trade Agreement for the Americas. Most of the other issues in the declaration and action plan are largely resolved; that issue was unresolved. And discussions continue. I just talked to our folks on the ground. The President, as you know, has a commitment to go to Brazil and then to Panama, so we made clear from the very beginning that he would have to leave at 3:30 p.m. And President Kirchner understood that and graciously took that into account. A lot of other leaders had left and had other prior appointments, since the sessions, of course, are going much beyond what was projected and what was scheduled. There are, obviously, people still in the chairs, but my understanding is a large number of t he leaders have left and they're still going to try and continue to see if they can close on a declaration.

* * * * *

SENIOR ADMINISTRATION OFFICIAL: This issue clearly was going to be on the dock from the beginning. There are a number of people who wrote that this summit was going to be an opportunity by some, including Chavez, to try and bury FTAA. As the President acknowledged, it has not moved as fast as people had hoped. The President believes, as you know, that while we need to proceed with bilateral and multilateral - sorry - bilateral, regional and multilateral arrangements, Doha, of course, coming up is a very significant event and we'll be able to see if we can find some progress forward toward the successful completion of the Doha Round in Hong Kong in December.

So the President has been emphasizing that fact. But we do, of course, still think the regional arrangements in general, and FTAA in particular, are important in order to ensure jobs, growth and stable democracy, because, obviously, trade is the way you get jobs and growth and prosperity.

So we knew this was going to be an issue. Some people had thought that this might be an opportunity by some to end or put a spike in the FTAA. There was also some discussion that maybe FTAA - there would be some criticism of the FTAA or maybe at - so there was a phase of, will it kill FTAA; then there was a phase where people said, well, let's show some of the problems with FTAA: and then there was a phase where people thought, well - and some argued, the critics of FTAA argued to leave it out of the declaration altogether. What became clear in the discussions today is that the overwhelming majority of the countries believe in free trade, believe in bilateral trade agreements - because, as you know, a number of those countries have bilateral trade agreements with us and are in the process of negotiating bilateral trade agreements with the EU and other countries.

It also became pretty clear - and, of course, CAFTA-DR is just the latest where the Central American countries have all entered into free trade agreements with us, the United States. So it became clear that for the overwhelming majority of the countries, trade - the enhancement of trade was critical to job, growth and prosperity, and they remain committed to free trade as a principle, and the FTAA, in particular. And that began to be clear over the course of the afternoon.

What emerged was basically two approaches. The first approach was an approach put down by a number of countries - Panama in the lead - which basically took the approach that's saying that - and I want to just look at a couple notes here - indicated a continuing commitment to the FTAA, recognizing, however, that there are challenges to the FTAA to make sure it's balanced, comprehensive, takes into account the needs of various countries, takes into account their different situations and their different sizes, takes into account the needs to reduce tariffs and some trade-distorting subsidies. But the basic approach was yes, those are the challenges to an FTAA, but we remain committed to them and the need to resume a discussion over the course of 2006 to try and solve those problems. That was the approach that emerged from Panama. And over the course of the day, it was clear that it was the approach of the Central American countries, the Caribbean countries - indeed, all the countries in the region, except for Mercosur and Venezuela. So if you want to get it - sort of 29 on one side, including, of course, the United States, and five on the other.

What happened was then the Mercosur and Venezuela came out with a text, which was interesting in that they cited, in some sense, the same - though in somewhat different language - the same set of challenges that had to be addressed in getting an FTAA. But their conclusion, rather than saying, we remain committed and let's get on to solving those problems, was to a conclusion that said, because of these problems, conditions are not yet present for the conclusion of an FTAA. And so in some sense, the two positions that emerged were a continuing support for the FTAA, no longer any effort to kill it or bury it - continuing support for the FTAA, and in some sense, agreement of the challenges that had to be overcome. And the difference was saying, well, let's get after it and start solving those challenges and use the Doha Round to try and help that process, recognizing that it would have a big impact, and the other group saying, well, because of the challenges, we're not yet ready. It's not a major difference; it's an important difference. And what also became clear was that 29 countries were in favor of the first approach and five countries were in favor of the second. That's really where we left it.

What was interesting was there were some very strong statements on both sides. The statements in favor of what became the Panamanian text were pretty strong and pretty articulate. What you saw was countries like Peru, Chile, Brazil, the Central American and Caribbean countries, in many instances testifying to the importance that trade liberalization had played in their own job growth, in their own overall economic growth and in the reduction of the percentage of their population living in poverty. And you had people like Toledo and Lagos, from Chile, saying, look, we've got the numbers and we can testify to that experience.

The President weighed in at a critical point and made it clear that he thought since a majority of the countries wanted to go forward with FTAA, that position deserved to be reflected in the outcome of the conference, that he of course reaffirmed the close connection between jobs, prosperity and trade liberalization. And he had spoken earlier to the point that, of course, in addition to growth and trade liberalization you need social policies that focus, as you've heard him many times say, good governance, anti-corruption, investing in people, education, health care and those sorts of things. And he indicated his support for going forward with the FTAA.

That's really where we left it. Obviously, we would have liked to have stayed longer, but other leaders were leaving and the President had the prior schedule. What they're struggling with now - is how to square the circle between these two positions and put it in - and include it in the document coming from the summit. And that's really a work in progress. We left behind Tom Shannon, who has been working the summit declaration from the very beginning, who is Assistant Secretary. He's got John Maisto with him, who is our OAS representative. John Simon, from the NSC staff has been doing the economics, is there. Our Ambassador is there. So we have a good team on the ground. And, as I say, we're trying to work with other delegations. But whether they will be able to reach agreement, we will have to see. It's disadvantaged by the fact that, of course, most of the leaders have left and in the end of the day, the whole point of these summits is to be a summit of the leaders.

I think our view is the summit declaration in a way is a lot less important. What's important is the leaders got together, they had this good conversation, they all agree that you need job growth, you need economic growth, you need trade - can make a contribution to that - and that we need the right social policies. And, secondly, they've had this good discussion on the issue of the FTAA and the positions of the parties are pretty clear and the overwhelming majority want to go forward and want to find a way to go forward, taking into account, of course, taking advantage, hopefully, of what will be progress in the Doha Round.

So from our standpoint, we think the objectives of the summit have largely been accomplished because the leaders have had the exchange they need to have and the issue of the summit declaration is, in some sense, you know, it's nice to have, but the summit's objectives have been largely achieved.

* * * * *

MR. McCLELLAN: Let's go with on the record questions for our National Security Advisor; if the senior administration official needs to weigh in or you have questions of the senior administration official, we can do that, too.

Q Is the summit over with?

MR. HADLEY: I just called and it was still going on, the session was still - even though it was supposed to have adjourned about three hours ago.

It's still going on. But as I say, one of the difficulties is most of the leaders have left and that, of course, makes it hard because the whole point of the summit is get leaders together, exchange views and reflect their views. But the delegations are trying to work, I'm sure trying to stay in touch with their leaders the same way we are; we'll just have to see. But as of 10 minutes ago, it was still going on.

Q How many were left and does the last man out the door shut off the light? I mean, how does this work?

MR. HADLEY: Well, people - delegations are still represented, but as I say, most - as I understand it, most of the heads of state and government have gone. In some sense, it's moving down to sort of what it was in the preparations of trying to develop the summit statement, where individuals - kind of assistant secretaries or under secretaries or maybe foreign minister level - are trying to struggle to find a consensus using the instructions that their principles left them with. It's -

Q At some point, someone will declare this over with, though?

MR. HADLEY: At some point, someone will declare it over. And we'll see - we'll see whether there's a declaration or not. But the whole point of this, the success of the summit is not measured by the declaration. I think everyone would say the success of the summit is measured by the interchange among the leaders and whether they got greater clarity on to the way forward. And I think they did, and we think it was a positive in that respect. So I think people will sort of - should not over-emphasize the whole issue of the declaration.

Q But are you downplaying the declaration because you're not expecting to get -

MR. HADLEY: I'm not downplaying it; I'm not up-playing it. I'm trying to give you a description of what matters in these summits, that's what I'm trying to do.

Q And will the United States, you know, sign off on a declaration if it does not include what it wants on FTAA?

MR. HADLEY: We'll see. Look, we're trying to work with every other country to try and get a consensus that nonetheless reflects the views of the member countries, because - there was a lot of discussion and a number of leaders made the point that every country's views deserved to be heard and they ought to be reflected in the process of the summit and what comes out of the summit, and we hope that would be the case, and that t summit document would reflect where countries were in some way -

Q What were the views -

MR. HADLEY: -- to find a way to do that.

Q What were the views of Brazil and Argentina, some of the two biggest trade heavyweights in South America, on FTAA?

MR. HADLEY: Of course, the Mercosur includes Brazil and Argentina, Paraguay, Uruguay and they were joined in this case by Venezuela. So that was defined. And I tried on background to give you some idea of what their views were and how those views changed over time.

Q Was there any thought to - and President Fox talked about this - going ahead with 29, let's get moving on FTAA, negotiate by next year - was there ever any thought to those folks going ahead and leaving the others behind?

MR. HADLEY: There were comments that were made. Another comment that was made in some sense was, you know, we're already moving towards an FTAA and we've also made a lot of progress. And those people who made that comment cited CAFTA-DR, for example, cited the fact that we have a trade agreement now with Chile and other countries, that we're in negotiations with one with Panama; that individual countries are also doing other negotiations. So in some sense people said, look, if the goal is free trade and greater access and reducing of trade barriers and enhanced free trade, we're already on the road to a Free Trade Agreement of the Americas because of these regional agreements I described, because of bilateral agreements and because, of course, everybody is committed and participating in the Doha Round. And the Doha Round, if it is successful, will establish a framework which in many ways will make it easier to deal with some of these regional agreements, like FTAA.

So, for example, elimination of trade distorting subsidies, something that's hard to do on a regional basis when we've basically got global markets. So if we can address that issue as the President has called for in the Doha Round, that will in some sense address one of the conditions that people want to achieve in achieving an FTAA. So there' s an interaction between these bilateral, regional and global approaches and we're making progress, we think, on all of them and that all lead in the direction of the same thing we're trying to achieve with the FTAA.

Q Didn't you just kick the can down the road?

MR. HADLEY: No, I don't think so, because what we did was we reaffirmed the fact that 29 of the 34 want to re-energize the FTAA discussions and they talk about doing that through 2006. People decided not to put a specific date, and they did that largely because they recognize the impact that progress in the Doha Round could have on the FTAA and they wanted to give some flexibility so that in the process of deciding how to go forward, people could take into account both these bilateral agreements, but also in particular what progress we achieve on the Doha Round. It's a sensible approach.

Q I don't understand how you measure progress, though. There's no date for jump-starting talks. I mean, that was the -

MR. HADLEY: The Panama text talks about resuming discussions in 2006.

Q Do you have a specific date or anything --

MR. HADLEY: Not a specific date.

Q -- Doha?

MR. HADLEY: Well, there are a lot of factors they're going to take into account. One is where we are on the bilateral agreements. Another, of course, is where we are in Doha. But that is basically - for the 29 it was, we need to re-engage, we remain committed to FTAA, and they talked about a process for resuming conversations on it during 2006 at a sensible time. And in determining what is a sensible time, obviously part of it is trying to encourage - everybody would like to move forward rather than 29, so see if we can in the process in the weeks going forward bring all 34 on board. Another consideration is where are we in terms of Doha and the progress that might be made, particularly on getting the United States, Europe, and other countries signed on to the kind of initiative we're making in agriculture.

So this is a complicated business. There are a lot of factors. I think what's significant was 29 of 34 said, we remain committed and we need to move forward. It's a good thing.

Q If you have 29 countries - Brazil, though, is a huge part of that; they have t he largest economy in Latin America. Looking forward to the meeting tomorrow, what is President Bush going to be saying to President Lula? Is he going to be trying to change his mind out this?

MR. HADLEY: Well, we'll see. I mean, one of the questions will be, what does President Lula say about the FTAA? His comments today were very supportive of trade; he understands the contribution that good trade made.

So we'll see. Remember, there are 34 countries and there are, for example, some big countries like Canada, the United States and Mexico that are already in NAFTA. Again, NAFTA could be viewed as, in many ways, a building block for the FTAA. So when people say we're already on the road and making progress toward an FTAA, they look at NAFTA, they look at CAFTA-DR, they look at these bilateral agreements.

So, you know, we'll have to see. I think everybody would like to see if we can forward at 34, but to answer you're question, progress is already being made both at bilateral, regional and global levels.

Q So your answer to my question was yes and no?

MR. HADLEY: How do you mean?

Q In terms of moving forward with 29 alone or not moving -

MR. HADLEY: Some people would like to move forward at 29 alone, other people say, well, we're already moving forward in pieces of the 29, and other people would say, well, let's see if over the coming weeks we can bring the five in line with the 29 so we can do it at 34.

Q So you're leaving - you know, the President left this summit and there is no agreement on a text. How is this not deadlock?

MR. HADLEY: It's not deadlock because, A, this text is still being negotiated. For all I know, they've reached agreement. Secondly, the - as I said, what matters is the exchange among the leaders and their understanding of their variety of positions. And we went from a summit which was supposed to bury FTAA to a summit in which all 34 countries actually talk in terms of enhanced trade and an FTAA, recognizing there are challenges. And the only difference is, do we start working now on the challenges in order to reach an agreement, which is the position of the 29, or the position of the five that, oh, this is too hard right now. That's not a big difference. I would say that is some real progress.

And the third thing, there's nothing in stone that says every time leaders get together you have to have a summit communiqué. We meet bilaterally with leaders all the time - sometimes we have a joint document, sometimes we don't. The joint documents tend to be the provinces of the professionals - you know, the permanent governments. That's fine. They're a useful purpose.

We obviously think they're useful, we tried to get one. But the point is, the reason you have these summits - you know, those guys, (inaudible) governments can talk about this stuff all the time. The reason you have summits is to get leaders together and to take on the kind of issues about job growth and how you get prosperity and how you get growth and how you get new jobs and how - and the role that trade can provide.

And there is a lot of question about, you know, do most of the countries in the hemisphere continue to support FTAA. You were all writing those stories. We actually know the answer now in pretty clear terms.

Q But, you know, we didn't hear President Bush speak about FTAA at all while we were down there. We heard a lot from President Fox. How involved was President Bush in these negotiations?

MR. HADLEY: You didn't hear President Bush much talk about anything.

Q Right. (Laughter.)

Q How involved was President Bush in those negotiations on FTAA, directly, himself?

MR. HADLEY: In the discussions on FTAA he made an opening - he made an intervention where he talked about the importance of trade for job growth and prosperity. And when the time came to declare on the two approaches that I described, he made it very clear, as I indicated to you, which one he favored and why he favored it. And he did that at, I think, a very important time in the conversations.

But, again, the President, as I said to you, thought one of the important things about the summit is, as you know, not - his view is what's important is the exchange among the leaders, and he thinks it's important to have a free flow exchange among the leaders and that all the leaders have an opportunity to speak. So his approach is not to try and dominate, but to participate as one of equals and listen. And that's what he did. And at critical times he made his views obviously clear.

MR. McCLELLAN: We really probably want to wrap this up, I know everybody's deadlines are late, so we can get the transcript done and get it out. So let's try to wrap it up here with this question.

Q When you were talking about the position of the five represented by Venezuela, you said that they said that's sort of the same list of challenges, but then said, conditions are not yet present. Is that where that position ended? Did it not go - what was their proposal about? What did it do, did it just say, let's abandon talks, let's abandon the entire idea of moving forward or how did that document end?

MR. HADLEY: It sort of basically said that view, conditions are not yet present - not clear where we went. And that's one of the things that's being talked about now, where do we go from here. And in effort to articulate where do we go at 34, because everybody would like to go forward at 34. so that's what they're talking about now.

Q So he didn't propose more discussions, any sort of timetable, 2006, keep talking? It jus sort of ended with, conditions not yet present?

MR. HADLEY: There were conversations where people, I'm sure, talked about that, but in terms of the kind of formal proposals they talked about that's where it ended.

Q President Chavez, did he not say, I'm here to bury it, over my dead body? What did he say? That's very different from his number two position you're describing.

MR. HADLEY: It was. And what I - the story I'm trying to say is that the process moved fairly dramatically from what was billed the summit would be about to what it ended up being about.

Q So did he say, okay, let's go along with this second position, forget about burying FTAA?

MR. HADLEY: He joined the Mercosur, so it was Mercosur plus Venezuela.

Q So he communicated what he said before?

MR. HADLEY: No, you're trying to put words in my mouth. What I said was that the position - and, again, I'm trying to stay away from who said what in these meetings, because that's a sensitive issue when you want to encourage candid discussions - what I did say was that the position ended up to be Mercosur plus Venezuela.

Q Did Chavez and Bush ever have any interactions? Did they ever -

MR. HADLEY: They did not. They did not. Their paths did not cross. Okay. Thanks, guys.

Q Interventions, can I just ask you how you define that?

MR. HADLEY: You raise your hand and you say, I'd like to speak. So the chair then recognizes you and you speak, and the chair says, thank you very much and recognizes somebody else.

Q Thank you.

Q Do you anticipate any resolution yet tonight on this?

MR. HADLEY: No, I don't. We left them with instructions to phone home and I'll call them every hour.

END 6:22 P.M. (Local)

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