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For Immediate Release
Office of the Press Secretary
November 19, 2006

Press Briefing by David McCormick, Deputy National Security Advisor for International Economic Affairs
The National Conference Center
Hanoi, Vietnam

      APEC 2006

12:36 P.M. (Local)

MR. McCORMICK: Good afternoon, everybody. My name is Dave McCormick and I am here to give you a quick readout of the sessions over the last couple of days. Really, I'll talk about three sessions very quickly and maybe give you also a quick readout of the President Hu meeting this morning.

The APEC forum kicked off yesterday with the first session. The first session was devoted to really a focus around the free trade agenda, trade liberalization. There were three main topics, as I mentioned to you in our previous brief: Doha, regional trade agreements and the Bogor goals, and the realization of those and where APEC was in that realization.

The leaders' discussion was a very, very constructive one. A couple things that jumped out was the unanimity of commentary and enthusiasm for a successful Doha round. That really came through, large countries and small, in terms of the comments they made. The second thing that jumped out of that discussion was a fairly universal level of enthusiasm and support for considering, exploring a free trade agreement of the Asia Pacific and recognizing that that would be challenging to do -- but I think also recognizing that the benefits of doing so for the region -- a region that's already benefited greatly from free trade -- were significant.

The President in his comments also made the point that those two are not in contradiction with one another. In other words, he voiced his very, very strong commitment for a successful Doha round, America's willingness and commitment to playing a leadership role. He highlighted something that he's highlighted in a number of public comments recently, which is his concerns over protectionist tendencies in the United States. And he reaffirmed his commitment to the free trade agenda -- his commitment to a successful Doha round.

He highlighted the need for market access. And market access really being a critical, critical requirement -- and it's not market access for a single potential member of the WTO, but really market access across the board, between developed, large economies and developing countries alike. So a very constructive discussion of Doha.

In the free trade agreement of the Asia Pacific the President again reinforced his interest and enthusiasm for pursing this idea; acknowledged that there were challenges associated with it, but again highlighted the benefits and was very focused on getting past words, both in the context of Doha and our progress within APEC and moving on to actions.

There was a number of other topics brought up in the discussion. The one that the President highlighted as a key area of interest and priority for the United States is intellectual property protection, intellectual property rights. And consistent with this broader theme of trade liberalization, this broader theme of open markets, highlighting the fact that successful economies are absolutely going to have to have effective intellectual property protection and highlighting the fact that that's not only in the interest in the United States as a major exporting economy, but also in the interest of all the other economies that are members of APEC that are trying to grow and develop their technology capabilities and their economic well being.

That is the short summary of APEC one. Why don't I go through all three of the sessions and then open it for questions.

The President also then attended, after the first session, the ABAC meeting. And I'll just give a quick summary of that. As you know, ABAC is the business council for APEC. There were 18 or 20 folks seated at the President's table; three other world leaders -- the President of the Philippines, Hong Kong and Peru, those were the three at his table.

He had a very good discussion with the business leaders. And, again, the focus, as all of you know from probably your understanding of ABAC, they had in the past recommended free trade agreement within Asia Pacific and had highlighted in past statements and this year the importance of Doha. So the conversation focused primarily on that. And the President encouraged them to play a very active role within their countries on the topics that I already mentioned from APEC one: open market access, intellectual property rights and really the benefits of free trade for all, and also the risk associate with a failed Doha round.

APEC session two we just concluded. This agenda, as you probably all know, began to focus on the other proponents of prosperity within APEC that are crucial to economic development, but not solely economic development: so the human security aspect of APEC and the APEC agenda, as well as the developing societies capability, so the institutional reforms within societies.

There were a number of topics that were discussed -- really, a wide range of things that were mentioned by a variety of leaders. A couple key themes that really rose out from those many topics was the focus on supply chain security and the risk associated with counter-terrorism -- or terrorism, rather, against the global supply chain. That was a topic that was highlighted by a number of leaders. A great deal of discussion and focus on pandemic diseases and the risk associated with avian influenza and others. And on the security front also a very common set of concerns and priorities placed on the North Korea situation -- I'll come back to that in a minute.

In addition there was a good bit of focus on the sustainable development. And this was defined as different things by a number of different folks, but the conversation focused primarily on the interplay between energy security and the environment. And a number of leaders made the point, as did the President, that the discussion around global warming and what the risk and impact are is really behind us and the focus now is on how we can develop new technologies that achieve energy security as well as are more environmentally friendly, to include nuclear technology and biofuels and so forth. So a very good discussion on that front.

And then there was a good bit of unanimity again around APEC reform and the benefits of APEC continuing to become more robust from a capabilities standpoint to promote and support the agenda.

The President highlighted, in particular, his concerns around North Korea, the need for the uniform implementation of U.N. Security Council 1718, and the importance of the PSI initiative as a way to fulfill this. He also highlighted and gave a very insightful overview of what the United States is doing in the area of energy security and some of the new initiatives, some of the investment in alternative fuels, and made an impassioned case for this being an important topic for APEC countries to consider, as well.

And, finally, the President concluded with his own thoughts on APEC reform and the fact that APEC remained in his mind the leading Asia Pacific forum and an important one and one that needs to continue to evolve. He voiced the United States' commitment for that and highlighted the fact that the United States is going to increase its investment in APEC, beginning in 2007 and beyond.

So that was the quick readout. The session ended with the President of Vietnam highlighting and then reading a specific statement that the members of APEC had agreed on, on North Korea -- essentially highlighting the need for the successful implementation of the U.N. Security Council voicing common concerns about the recent weapons testing and reaffirming their commitment to a non-nuclear Korean Peninsula.

Why don't I stop there and open up for any questions you might have.

Q Is this on the record?

MR. McCORMICK: It was not published as a written statement, it was an oral statement --

Q Are you on the record, are you speaking on the record?


Q I have a question about the statement on North Korea. Steven Hadley said yesterday that the only thing left to be resolved were matter of the form of the statement, as opposed to the substance. What was the debate around the form of the statement? Why would it not be issued on paper? And how were those issues resolved?

MR. McCORMICK: Well, ultimately, the parties resolved it by having a written statement, which I think was universally agreed to, in terms of the points that I made. I honestly don't know the specifics of --

Q You just said it was an oral statement, and then you just said it was a written statement.

MR. McCORMICK: It was an oral statement; I'm sorry if I mis-spoke. It's an oral statement that was read by the President of Vietnam.

Q It's not something they're going to put out, it was read there, and that's that?

MR. McCORMICK: Yes. It's not the leaders' statement, which is going to be published.

Q And how firm were they on the subject of enforcing the resolution or just even more broadly trying to get North Korea to stop nuclear weapons development?

MR. McCORMICK: The statement was very firm in the need for full implementation of Security Council Resolutions Number 1695 and 1718. The statement also emphasized the importance of and the continued support for the six-party talks.

Q Isn't this a setback? You didn't get -- did you get is an oral statement, rather than a written statement? I mean, it's not part of the record really, I mean --

MR. McCORMICK: Well, I think what was important was that the members of APEC kind of came together on a common statement and, you know, as we've had in many of the bilateral meetings as well, there's been I think coming out of those a very common view on the importance of successful implementation of the resolution -- most recently this morning, with the meeting with President Hu, where both leaders agreed again on the significance of successful implementation of the resolution and the need for North Korea to really get a clear message on this point.

Q You talked about the challenges associated with creating the FTA. What specific challenges were people talking about?

MR. McCORMICK: Well, people weren't talking about the challenges in specific terms. I think as has been acknowledged in previous discussions, there is already existing bilateral agreements in the region. There is varying levels of rigor in some of the existing free trade agreements. And so as we embark on a discussion of what a future APEC-wide FTA might look like, thinking about how to rationalize those existing agreements and thinking about what the right level of rigor would be for the future are obviously important questions.

Q Can I ask you again about the North Korea statement? Do you have the statement? Could you read it to us?

MR. McCORMICK: I sort of gave you the overview of what was in it.

Q Did the U.S. want it to be published?

MR. McCORMICK: Did the U.S. want it to be published?

Q How do we know what's in the statement, if -- was it read publicly?

MR. McCORMICK: It was read within the forum by the President of the Vietnam -- by the chairman.

Q Does the U.S. want the statement to be published?

MR. McCORMICK: Yes. I mean, certainly I can kind of reaffirm what the statement was. The members reiterated their commitment to peace and security on the Korean Peninsula and in northeast Asia, and their resolve towards a peaceful resolution of the North Korean nuclear issue. They expressed strong concerns over the July 4th and 5th missile launches and the October 9th nuclear test conducted by North Korea, and that it posed a clear threat to the shared interest of peace and security and the shared goal of achieving a nuclear weapons-free Korean Peninsula.

The group also stressed the need for a full implementation of Secretary Resolution Number 1695 and 1718, and emphasized their strong support for the six-party talks, and was encouraged by recent progress on resuming those talks. The members also called for concrete and effective steps towards full implementation of the September 19th joint statement, and early resumption of the six-party talks.

Q That's not the actual text -- you were just reading the U.S.'s take on it?

MR. McCORMICK: No, well, that's a variation of the actual text. It wasn't actually verbatim, but that was more or less the statement that was made.

Q This is not public, then. I mean, you read it with a room and it didn't actually -- it's not actually going to be spread out for public dissemination --

MR. McCORMICK: -- is not going to be passed out in a public way.

Q Isn't that a setback at least in your efforts? You guys wanted -- everything else is coming out -- avian flu, AIDS, free trade, but not North Korea?

MR. McCORMICK: Well, I guess I would focus on the substance of the question, which is have the members, have the leader countries, have the leaders agreed to a common view and a common approach on North Korea, and I think the answer is, yes.

Q What's really changed in terms of the Doha round, in terms of real progress this week?

MR. McCORMICK: Well, I think there was a number of very clear statements, and there is also within the leaders' statement a strong affirmation of the importance of Doha. So as you probably know, Doha is not going to be defined by the success that happens in any given day or any given week. But I think what was encouraging here was what appeared to be a uniform view that Doha was of enormous significance to the members of APEC and the international economy more broadly, and that the cost of failure was significant and the benefits of getting Doha restarted in an effective way is very significant.

Q Can I ask about the China meeting earlier today? Since they talked only at the top, it was, you know, obviously they were kind of giving broad opening statements that wouldn't necessarily reflect how their conversations went. So can you describe how much they got into North Korea, vis- -vis some of the trade difficulties that are always a topic of conversation? Can you just give a little bit of a read-out?

MR. McCORMICK: Yes. There was actually a very lengthy and very positive discussion on North Korea between the two; an expression of views on both sides, a back and forth, an agreement on direction and next steps. So it was a very specific and very positive discussion on North Korea.

There was also a discussion of the strategic economic dialogue that has been initiated and is led on the U.S. side by Secretary Paulson. And both leaders expressed their commitment to that dialogue as a way to continue to think about how our two economies might evolve and how our cooperation between our two economies might evolve.

There was also a fairly lengthy discussion around President Hu's priority on a harmonious society, and really his commitment to bringing more even a distribution of income across the Chinese economy and really trying to address those parts of the Chinese economy that suffer most from poverty. And the President was very supportive of his comments and voiced admiration for the commitment that President Hu brings to that priority and that endeavor.

Q On North Korea, was there something -- I mean, China has been fairly helpful over these recent weeks, in terms of trying to get the talks started again, participating at least somewhat in trying to enforce the sanctions. Is there something specific that the President wanted out of this meeting on North Korea?

MR. McCORMICK: No. As you know, President Bush and President Hu have developed over the years a very close relationship, a very solid relationship, and one that they've met a number of times recently and regularly. So this was just another opportunity for them to come together and talk about key topics and share views.

Q It sort of sounds like, from the way you describe the economic conversation, it's a little bit of kicking it down the road, letting the conversations that are being had by others at different levels kind of take the lead on that.

MR. McCORMICK: No, I wouldn't mis-read it like that. I think it was just a -- the strategic economic dialogue is relatively new, as you know, and this was just an acknowledgement of that dialogue and a recognition that it's important and that both leaders remain committed to it.

Q You talked about having an agreement on the direction of the next steps with the Chinese. Can you characterize what sort of issues are being talked about, in terms of next steps on North Korea?

MR. McCORMICK: No, not in any specific terms. I think the bottom line was there was a good exchange of views and I think an agreement on the path ahead and that both leaders, I think, are in a very similar position, in terms of their views on this issue and next steps.

Q I have basically two questions, really, to trade. Did the issue of China's currency come up, and whether China is moving more quickly to a flexible exchange rate?

MR. McCORMICK: That was not discussed in any specific way.

Q Did the U.S. offer anything -- any additional concessions to move Doha forward? Anything in addition to what you've already offered on agricultural subsidies?

MR. McCORMICK: No. No, there were no specific discussions around offers on Doha. There was actually a fairly -- I think, really, an encouraging discussion that came out of a number of leaders -- not from the United States -- in yesterday's session. And there were sort of two key points that came up on that. A number of leaders reaffirmed the importance of market access, and that market access was a really critical, critical point that was going to be necessary for the round to move forward; real trade flows generated by the next round of discussions. And a number of leaders highlighted the risk of restarting the round without having a vision on how it would be successful.

So that was one key point, and that was made by a number of leaders. There was also a reference made by several to President Bush being at APEC last year, having just made a very significant overture on trying to get Doha to the next successful phase, and how we hadn't the success -- or made the progress we had hoped, and that that was an acknowledgement that the rest of the world hadn't necessarily stepped up in some important ways.

The second point that came out of the discussions was really the acknowledgement that there was going to be market access both within the developing and also the developed world, and that this was a necessary component of success. So it was very reaffirming, I think, to listen to this group of leaders from big and small, developing and developed countries I think uniformly acknowledging the importance of Doha, and also recognizing that this was going to require all countries involved to really step up in a meaningful way.

END 12:56 P.M. (Local)

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