A NATIONAL SECURITY STRATEGY FOR A GLOBAL AU

A NATIONALSECURITYSTRATEGYFORAGLOBAL AGE

THE WHITE HOUSEDECEMBER 2000

Contents

Preface ... iii

I. Fundamentals of the Strategy. 1

Goals of the Engagement Strategy... 1

Elements of the Strategy... 1

Guiding Principles of Engagement... 4

The Efficacy of Engagement. .. 5

II. Implementing the Strategy... 9

Enhancing Security at Home and Abroad

Shaping the International Environment. .. 9

Responding to Threats and Crises... 19

Preparing for an Uncertain Future... 29

Promoting Prosperity

Strengthening Financial Coordination... 31

Promoting an Open Trading System... 31

Enhancing American Competitiveness... 32

Providing for Energy Security. .. 34

Promoting Sustainable Development... 35

Promoting Democracy and Human Rights

Emerging Democracies... 36

Adherence to Universal Human Rightsand Democratic Principles... 36

Humanitarian Activities... 38

III. Integrated RegionalApproaches... 39

Europe and Eurasia... 39

East Asia and the Pacific... 48

The Western Hemisphere... 54

Middle East, North Africa, Southwest andSouth Asia... 58

Sub-Saharan Africa... 61

IV. Conclusions... 67

Preface

As we enter the new millennium, we are blessedto be citizens of a country enjoying recordprosperity, with no deep divisions at home, nooverriding external threats abroad, and history'smost powerful military ready to defend ourinterests around the world. Americans of earliereras may have hoped one day to live in a nationthat could claim just one of these blessings.Probably few expected to experience them all;fewer still all at once.

Our success is cause for pride in what we'vedone, and gratitude for what we have inherited.But the most important matter is what we nowmake of this moment. Some may be tempted tobelieve that open markets and societies willinevitably spread in an era of expanding globaltrade and communications, or assume that ourwealth and power alone will protect us from thetroubles of the outside world. But that approachfalls for the old myth of an "outside" world, andignores the defining features of our age: the riseof interdependence. More than ever, prosperityand security in America depend on prosperityand security around the globe. In this age,America can advance its interests and idealsonly by leading efforts to meet commonchallenges. We must deploy America'sfinancial, diplomatic and military resources tostand up for peace and security, promote globalprosperity, and advance democracy and humanrights around the world.

This demands strengthening our alliances withEurope and Asia, and adapting them to meetemerging challenges. Our alliances in Europeand Asia are stronger because they areorganized to advance a permanent set of sharedinterests, rather than to defeat a single threat.We must continue working with our alliestowards a peaceful, democratic, undividedEurope, with NATO as a deterrent to newconflict and a magnet for new democracies. InAsia, we must build on strategic alliance withJapan to define new approaches to post-ColdWar threats. And, we must enhancecooperation with South Korea as we encourage

North Korea's emergence from isolation andcontinue to diminish the missile threat.

Just as we strengthen our alliances, we mustbuild principled, constructive, clear-eyedrelations with our former adversaries Russia andChina. We must be mindful of threats to peacewhile also maximizing chances that both Russiaand China move toward greater internalopenness, stability and prosperity, seizing on thedesire of both countries to participate in theglobal economy and global institutions, insistingthat both accept the obligations as well as thebenefits of integration. With Russia, that meanscontinuing our work to reduce the nucleardanger, to assure strategic stability, and todefine its future role in Europe, while supportingthe emergence of democratic institutions and therule of law. With China, that means continuingto press for adherence to nonproliferationstandards and peaceful dialogue with Taiwan,while holding Chinese leaders to the conditionsof entry into the WTO, which offer the best hopeof internal reform.

To protect the peace and promote security, wemust work to resolve conflicts before theyescalate and harm vital U.S. interests. In the1990s, the United States has been activelyengaged in seeking peace in the Middle East, inthe Balkans, between Greece and Turkey,between India and Pakistan, in Northern Ireland,between Peru and Ecuador, and Eritrea andEthiopia. These efforts, undertaken inpartnership with friends and allies, help to avertwider conflicts that might endanger globalstability, ease humanitarian catastrophes, whileadding moral authority to America's might in theworld. American overwhelming power andinfluence is far less likely to breed resentment ifit is used to advance the cause of peace.

We also must identify and address new nationalsecurity challenges, accentuated by newtechnology and open borders. We haveidentified a new security agenda that addressescontemporary threats such as the proliferation of

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nuclear, chemical and biological weapons,terrorism, and international crime. New effortsmust continue to build on initiatives such as theextension of the Nonproliferation Treaty, thecontainment of nations seeking to acqUire anduse weapons of mass destruction, increasedantiterrorism cooperation, stepped up efforts tocombat trafficking in drugs, arms, and human­beings, and our first-ever national strategy forcybersecurity. Our new security agendarecognizes that in a global age, threats toAmerica do not simply come from determinedenemies and deadly weapons. Our efforts tocurb global warming through the Kyoto protocolare vital to protect America from a future ofrising sea levels and economic disruption. Ourleadership in the international fight againstinfectious diseases, especially HIV/AIDS, iscritical to defeat a threat that kills massively,crosses frontiers and destabilizes wholeregions.

Finally, there can be no security where there isno hope of prosperity. We must continue topromote the spread of global markets in waysthat advance economic growth, honor ourvalues, and help alleviate economic disparity.We must build on the creation of the WTO, andof NAFTA, on the passage of PNTR for China,on extending trade preferences to nations inAfrica and the Caribbean Basin, and on thenearly 300 trade agreements we have signed

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that have contributed to the longest U.S.economic expansion in history. At the sametime, we must understand that trade, by itself, isnot enough to lift the most desperate nations outof poverty or prevent the world from becomingbitterly divided between haves and have nots.That's why we have led in promoting the HIPCinitiative to prOVide deeper debt reduction forcountries with unsustainable debt burdens, andplaced global development issues at theforefront of the international agenda.

More than 50 years ago, Harry Truman said:"We are in a position now of making the worldsafe for democracy, if we don't crawl in a shelland act selfish and foolish." He believed that inthe wake of our triumph in World War II, Americahad the ability and a responsibility to shapeworld events, so that we would not be shaped bythem. Truman was right, and the historicalforces he saw then have only intensified sincethe Cold War.

The ability to assure global security, sharedprosperity and freedom is beyond the power ofanyone nation. But the actions of many nationsoften follow from the actions of one. Americatoday has power and authority never seenbefore in the history of the world. We mustcontinue use it, in partnership with those whoshare our values, to seize the opportunities andmeet the challenges of a global age.

I. Fundamentals of the Strategy

Goals of theEngagement Strategy

Since the end of the Cold War, the United States andits allies have developed a position of extraordinarystrength. As the last decade of the 20th centuryunfolded, the United States sought to use thatstrength wisely and in a manner consistent with thefundamental values and ideals on which our republicwas founded. The world is undergoing anaccelerating process of globalization in whichtechnology is developing exponentially; information isexchanged around the globe cheaply. andinstantaneously; economies are increasinglyinterdependent; borders are more porous; peopleseek political and economic freedoms; and groupsseek expression of their ethnic identity. Some ofthese trends add to our strength and security. Otherspresent new challenges. All entail greattransformation and prescribe new imperatives fordefining our Nation's role in this rapidly changing era.

In a democracy, a nation's foreign policy and securitystrategy must serve the needs of the people. At thedawn of the 21 51 century, our world is very differentfrom that of our Founding Fathers, yet the basicobjectives in the preamble to the Constitution remaintimeless:

provide for the common defence, promote thegeneral welfare, and secure the blessings of libertyto ourselves and our posterity.

The changes we have seen in the last decade do notalter these fundamental purposes. They merely blurthe dividing line between domestic and foreign policyand heighten the imperative for a cohesive set ofactive U.S. efforts, both at home and abroad, topursue three modern day goals derived from thepreamble's objectives: enhancing security at homeand abroad, promoting prosperity, and promoting

democracy and human rights. To accomplishthese three goals in an ever-shrinking world, we havedeveloped a series of policies, now recognized as theelements of our strategy for engagement.

Elements of the Strategy

Shaping the InternationalEnvironment

A primary element of our strategy of engagement hasbeen to help fashion a new international system thatpromotes peace, stability, and prosperity. This hasinvolved remolding and shaping both sides of theCold War bipolar system. It has meant bothadapting our alliances and encouraging thereorientation of other states, including formeradversaries.

The United States has led the transformation of whatwere defensive entities into proactive instruments formeeting post-Cold War challenges. Under U.S.leadership, NATO -- our most important Cold Waralliance -- has formally revised its strategic concept,successfully ended aggression in Bosnia and Kosovo,and brought new members into the Alliance whileholding out the prospect of further enlargement. Ithas increasingly pursued new initiatives and missionssuch as the Partnership for Peace (PFP) andpeacekeeping operations with partners to helpstabilize the continent. New dialogue betweenhistoric adversaries interested in joining NATO hashelped to reconcile several long-standing disputesamong countries in the region. Further challengesexist, but the signs of progress and nature of thechanges are encouraging.

Other important security arrangements we forged inthe Cold War remain strong in the post-Cold War

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world. For instance, in 1997 the United States andJapan revised their guidelines for defensecooperation. Our security commitments to theRepublic of Korea and Australia also remain strong,as do our defense relations with Thailand and thePhilippines, and new security cooperation exists withour friends in the Persian Gulf region.

Nations with whom we had been philosophicallyopposed during much of the Cold War are in theprocess of tremendous political and economicchange. Our engagement with these states over thelast eight years has been focused on encouragingthem to undertake important political and economicreforms while at the same time dissuading them fromregressing into confrontational relationships. Ourefforts with the most populous of these nations -­China and Russia -- have been intended to offeropportunities and incentives for proactiveparticipation, while also encouraging them to beresponsible members of the world community. Thismeans progress in respecting the rights of individualsand nations in areas as diverse as the environment,humanitarian issues, the rule of law, and economicfairness. While the outcome of transformation inthese nations is not altogether certain, ourengagement has had a positive impact on bothregional and global stability.

The United States has sought to strengthen the post­Cold War international system by encouragingdemocratization, open markets, free trade, andsustainable development. These efforts haveproduced measurable results. The number ofdemocracies, as a percentage of world states, hasincreased by 14% since 1992. For the first time inhistory, over half of the world's population lives underdemocratic governance. Our national security is adirect beneficiary of democracy's spread, asdemocracies are less likely to go to war with oneanother, more likely to become partners for peaceand security, and more likely to pursue peacefulmeans of internal conflict resolution that promote bothintrastate and regional stability.

The globalization of trade and investment, spurred bynew technologies, open borders, and increasinglyopen societies, is a critical aspect of the 21st centuryworld. United States efforts to expand trade andinvestment with both traditional and new tradingpartners fuel growth in our economy. United Statesefforts to extend market reforms to formeradversaries and neutrals also enhance our security

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by increasing economic cooperation, empoweringreformers, and promoting openness and democracyoverseas. Economic freedoms routinely facilitatepolitical freedoms. In addition to these opportunities,economic globalization also presents its proponentswith tough challenges, such as assisting countriesthat embrace but are nonetheless left behind by thedynamics of globalization or working with countriesthat reject these dynamics for fear of losing theircultural or national identity.

Preventing conflict has been a hallmark of U.S.foreign policy under a strategy of engagement. Allover the world, the United States has selectively useddiplomatic means, economic aid, military presence,and deterrence as tools for promoting peace. Wealso assist other countries to develop their owndefense capabilities through our foreign assistanceand security assistance programs. In doing so, wehave focused on the threats and opportunities mostrelevant to our interests as well as our values, andapplied our resources where we can make thegreatest difference.

Responding to Threats andCrises

The persistence of major interstate conflict hasrequired us to maintain the means for counteringpotential regional aggressors. Long-standingtensions and territorial division on the Koreanpeninsula and territorial ambitions in the Persian Gulfcurrently define the main tenets of this requirement.For the foreseeable future, the United States,preferably in concert with allies, must have thecapability to deter -- and if that fails, to defeat -- large­scale, cross-border aggression in two distant theatersin overlapping time frames.

Globally, as a result of more porous borders, rapidchanges in technology, greater information flow, andthe potential destructive power within the reach ofsmall states, groups, and individuals, the UnitedStates finds itself confronting new threats that posestrategic challenges to our interests and values.These include the potential use and continuedproliferation of weapons of mass destruction (WMD)and their means of delivery, proliferation of smallarms and light weapons, threats to ourinformation/cyber security, international migrantsmuggling and trafficking in persons, and the ability to

disrupt our critical infrastructure. As a result, defenseof the homeland against WMD terrorism has taken ona new importance, making coordinated Federal, state,and local government efforts imperative. TheDomestic Preparedness Program has receivedsignificant resources to address immediate threats toour security. Ongoing efforts on National MissileDefense are developing the capability to defend thefifty states against a limited missile attack from statesthat threaten international peace and security.Prevention remains our first line of defense to lessenthe availability of weapons of mass destruction beingsought by such aggressor nations. To that end, wecontinue to work with Russia to control possibleleakage of former Soviet nuclear, chemical, andbiological weapons materials and expertise toproliferant states.

We are also vigorously pursuing a strengthening ofthe Nuclear Non-Proliferation Treaty, the Chemicaland Biological Weapons Conventions, the MissileTechnology Control Regime, and entry into force ofthe Comprehensive Nuclear Test Ban Treaty at theearliest possible time. Other persistent threats to oursecurity in peacetime include international terrorism,drug trafficking, other organized crime, andenvironmental degradation. The United States hasmade great strides in restructuring its nationalsecurity apparatus to address new threats withdiplomatic, economic, and military tools.

Fragmentation of a number of states, which helpedlead to the collapse of the Cold War's bipolaralignment, has caused turmoil within several regionsof the world. This turmoil, a result of re-awakenedethnic and religious divisions and territorial ambitions,has reignited old conflicts and resulted in substantialbloodshed. U.S. leadership in steering internationalpeace and stability operations has restored andmaintained peace in a number of locations. We havebeen more inclined to act where our interests andvalues are both at stake and where our resources canaffect tangible improvement, as in Bosnia andKosovo. In each of these instances, atrocitiesagainst, and the expUlsion of, people in the heart ofEurope undermined the very values over which wehad fought two World Wars and the Cold War. Leftunchecked, they could have spread elsewherethroughout Europe and harmed the NATO alliance.We thus saw that our interests and values wereaffected to a sufficient degree to warrant U.S. militaryintervention in both Bosnia and Kosovo.

As we look to the future, our strategy must thereforebe sufficiently robust so that when we choose toengage, we can do so to prevent conflict, assistfailing states, or counter potential regional aggressorsas necessary.

Preparing for an UncertainFuture

Meeting this widening array of new threats to oursecurity will require us to transform our capabilitiesand organizations. Within our military, thistransformation has taken several forms: focusedscience and technology efforts; concept developmentand experimentation by the Services, combatantcommands, and the Joint Staff; robust processes toimplement change; and new approaches to foster aculture of bold innovation and dynamic leadership.

The process of transformation must not end solelywith defense. Preparation must also includediplomatic, intelligence, law enforcement, andeconomic efforts if we are to meet the new threatsthat rapidity of technological change brings to thehands of adversaries, potential and actual. Ourgovernment is therefore implementing interagencyapproaches to formulate, and then execute, policyand plans for dealing with potential contingencies. Inaddition, preventative diplomacy, often undergirdedby the deterrence of our full military capabilities, mayhelp contain or resolve problems before they eruptinto crises or contingency operations.

Summary

The elements of engagement -- adapting alliances;encouraging the reorientation of other states,inclUding former adversaries; encouragingdemocratization, open markets, free trade, andsustainable development preventing conflict;countering potential regional aggressors; confrontingnew threats; and steering international peace andstability operations -- define the Nation's blueprint fora strategy of engagement. These elements supportthree strategic concepts for engagement: shapingthe international environment, responding to threatsand crises, and preparing for an uncertain future.The blueprint and the concepts it supports haveserved the United States well in a rapidly changing

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world. Refined by experience, the strategy is a wiseroadmap for national security in the 21 st century.

Guiding Principles ofEngagement

Both our goals, and the policies we pursue to achievethese goals, must reflect two guiding principles thatinfluence both our national character and legacy:protecting our national interests and advancingour values. Throughout history, all sovereign nationshave been guided by protection of their nationalinterests, even if they have defined these interestsquite differently. Many countries have also beenguided by a desire to advance their values. Few,however, have chosen to advance those valuesprincipally through the power of their example insteadof the might of their military. Historically, the UnitedStates has chosen to let our example be thestrongest voice of our values. Both our goals and thepolicies we pursue to achieve these goals reflectthese guiding principles.

Protecting our NationalInterests

Our national interests are wide-ranging. They coverthose requirements essential to the survival and wellbeing of our Nation as well as the desire to see us,and others, abide by principles such as the rule oflaw, upon which our republic was founded.

We divide our national interests into three categories:vital, important, and humanitarian. Vital interests arethose directly connected to the survival, safety, andvitality of our nation. Among these are the physicalsecurity of our territory and that of our allies, thesafety of our citizens both at home and abroad,protection against WMD proliferation, the economicwell-being of our society, and the protection of ourcritical infrastructures -- including energy, bankingand finance, telecommunications, transportation,water systems, vital human services, and governmentservices -- from disruption intended to cripple theiroperation. We will do what we must to defend theseinterests. This may involve the use of military force,

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including unilateral action, where deemed necessaryor appropriate.

The second category, important national interests,affects our national well being or that of the world inwhich we live. Principally, this may includedevelopments in regions where America holds asignificant economic or political stake, issues withsignificant global environmental impact, infrastructuredisruptions that destabilize but do not cripple smootheconomic activity, and crises that could causedestabilizing economic turmoil or humanitarianmovement. Examples of when we have acted toprotect important national interests include oursuccessful efforts to end the brutal conflict andrestore peace in Kosovo, or our assistance to ourAsian and Pacific allies and friends in support of therestoration of order and transition to nationhood inEast Timor.

The third category is humanitarian and other longer­term interests. Examples include reacting to naturaland manmade disasters; acting to halt grossviolations of human rights; supporting emergingdemocracies; encouraging adherence to the rule oflaw and civilian control of the military; conductingJoint Recovery Operations worldwide to account forour country's war dead; promoting sustainabledevelopment and environmental protection; orfacilitating humanitarian demining.

Threats or challenges to our national interests couldrequire a range of responses. Wherever possible, weseek to avert conflict or relieve humanitarian disastersthrough diplomacy and cooperation with a wide rangeof partners, including other governments,international institutions, and non-governmentalorganizations. Prevention of crises, through theproactive use of such diplomatic, economic, politicaland military presence tools, will not only save lives butalso will prevent a much greater drain of fiscalresources than its alternative -- managing conflict.

Advancing American Values

The protection of national interests is not the solefactor behind the various expressions of U.S. nationalresolve. Since the beginning of our democracy, ourpolicies and actions have also been guided by ourcore values -- political and economic freedom,respect for human rights, and the rule of law. In

keeping with these values, we have lent ourencouragement, support, and assistance to thosenations and peoples that freely desire to achievethose same blessings of liberty. Pursuing policiesthat are guided by these values, and the openeconomic and political processes through which theyare typically manifested, will in the long termstrengthen international peace and stability, andreinforce the positive aspects of globalization.

Where Interests Meet Values

There are times when the nexus of our interests andvalues exists in a compelling combination thatdemands action -- diplomatic, economic, or military.At times throughout our history, our survival as anation has been at stake and military action was theonly possible recourse. On other occasions, oursurvival as a nation has not been at stake but ournational interests have nonetheless been challenged.When such challenges to our interests occur inconcert with morally compelling challenges to ourvalues, the American people expect their governmentto take action. During the course ofthisAdministration, we have employed military force onlyin circumstances in which our national interests wereat stake and our values were challenged.

Preserving our interests and values has never beenwithout cost, and every generation has been asked tobear a portion of the price of freedom. From a bridgeat Concord over two centuries ago to the air overKosovo last year, on numerous occasions Americanshave been called upon to stand up for their interests,interests which are often inextricably linked with theirvalues.

Today, 250,000 U.S. forces are stationed or deployedoverseas to protect and advance our nation'sinterests and values -- down from a Cold War peak of500,000. Of this, we maintain a continuous overseaspresence of over 200,000 in places like Germany,Japan, and South Korea, while about 30,000 arecurrently involved in operations. These include nearly20,000 stationed around the Persian Gulf to containIraq, roughly 10,000 in Bosnia and Kosovo, and 1,000in the Sinai. Other forces, such as those rotationallydeployed to the Mediterranean, the Pacific Ocean andthe Arabian Gulf, remain involved in routineoperations. Our diplomatic corps -- the Civil andForeign Services -- also bear an important part of

protecting and advancing our interests, often in thefurthest reaches of the globe, through embassies,consulates, and missions worldwide.

The Efficacy ofEngagement

Our strategy of engagement has allowed us to accruea range of benefits, including sustained, relativepeace, expanded trade and investment opportunitiesbrought by globalization, and a large increase in thenumber of states that share our democratic values.We have exercised strong leadership in theinternational community to shape the internationalsecurity environment in ways that promote peace,stability, prosperity, and democratic governance. Wehave transformed our alliances and reinvigoratedrelationships with friends and partners; forged broadrelationships with former adversaries; fostered newrelations with transitional states; and deterred majorhostilities.

Enhancing Our Security atHome and Abroad

There are clear indicators that engagement isachieving our national security goals in this rapidlychanging world. First, engagement has producedmany benefits that enhance our security at home andabroad. The overseas presence of our military forceshelps deter or even prevent conflict. It assures ourallies of our support and displays our resolve topotential enemies. It allows for maximum militarycooperation with our allies and therefore encouragesburdensharing. Forward-deployed forces permit us toidentify emerging security problems, and thenfacilitate a swift response, if necessary. Ongoingoperations in Southwest Asia and SoutheasternEurope have improved the current securityenvironment by ensuring that a return to peace issustained. Our new embassies in the countries of theformer Soviet Union, and in some 140 othercountries, allow the U.S. to advance America'sinterests and values in real time, and to immediatelydetect opportunities and challenges to theseinterests. Other aspects of our engagement policies,

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such as non-proliferation programs like the ExpandedThreat Reduction Initiative (ETRI), have, within theframework of START I, stabilized the securityenvironment. Over 5,000 nuclear warheads, 600missile launchers, 540 land-based and submarinelaunched inter-continental ballistic missiles, 64 heavybombers, and 15 missile submarines have beendeactivated and potential proliferation of WMD ortheir delivery means averted. These efforts havemade the world a much safer place.

We have also seen international engagementenhance our ability to address asymmetric threats toour security, such as acts of terrorism and the desiredprocurement and use of WMD by potential regionalaggressors. International counterterrorismcooperation, for example, led to the pre-emptivearrest of individuals planning to terrorize Americans athome and abroad celebrating the Millennium.Engagement efforts have already assembled animpressive record of international cooperation toharmonize legislation on terrorist offenses, conductresearch and development, and create databases onterrorism. Strong U.S. overseas presence andengagement, enhanced by a network of multilateralagreements and arrangements, has enabled us tocontain the proliferation of nuclear, biological, andchemical weapons and their means of delivery bypotential regional aggressors. Inspections done atpoint of origin for goods destined for the U.S.improves our nonproliferation and border securityefforts and even enhances cargo throughput. In othercases, it has actually interrupted the flow of sensitivegoods to those countries. Robust engagement insupport of law enforcement efforts of partner nationshas resulted in the dismantling of a number of majordrug trafficking organizations and the interdiction ofsignificant quantities of elicit drugs that wouldotherwise have reached U.S. or other consumermarkets. Together, efforts that focus on asymmetricthreats to our security will reduce our potentialvulnerability despite an increasingly inter-connectedworld.

Economic Benefits thatPromote Prosperity

Engagement has had clear economic benefits thatpromote prosperity around the globe. This strategyprovides stability to the world economic system onwhich the U.S. economy depends. Our involvement

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in international economic organizations like the G-8,G-20, World Trade Organization (WTO) andOrganization for Economic Cooperation andDevelopment (OECD) has helped build stable,resilient global economic and financial systems thatpromote strong, global prosperity. The U.S. - ChinaBilateral WTO agreement, for example, will reduceChina's tariffs on U.S. priority agricultural productsfrom an average of 31 % to 14%. It will reduce similartariffs on U.S. industrial products from 24.6% to 9.4%.Such agreements expand U.S. market access andbring new goods and services to these markets atlower cost. Overall, the Administration has concluded304 trade agreements, and created a series of newfora for economic dialogue, that now include the AsiaPacific Economic Cooperation (APEC) forum, theTransatlantic Economic Partnership, and the ongoingdevelopment work on the Free Trade Area of theAmericas (FTAA). This has led to numerouseconomic and financial agreements/reforms ininternational institutions that bring stability to theglobal marketplace that is so essential for America'seconomic health and economic security. As a result,total U.S. exports of goods and services have grownby over 75% since 1992. Measures to strengthen thearchitecture of the international financial system,inclUding through increased transparency and reformof the International Monetary Fund (IMF) and WorldBank, have helped put the international economy on asound footing after recent financial crises and build astronger global financial system. In addition, WTOagreements to strengthen and expand trade ininformation technology goods, financial services,basic telecommunications services, and electroniccommerce have secured open markets in sectors keyto American economic vitality, and laid thegroundwork for future liberalization in agriculture,services, and other areas.

Military presence and engagement activities can alsoprovide similar economic stability. Our navalpresence ensures that international waters, the sealines of communication, and ports remain open tocommercial shipping, and our ground, air, and navalforces in Southwest Asia deter threats to the free flowof Middle East oil. The clearest and longest standingexample of what overseas presence can do foreconomic stability is found in the sizeable U.S.military force found on the Korean peninsula since1953. Currently 37,000 strong, U.S. forces havehelped the South Koreans rebuild and grow, and nowboth sides support the continued presence of U.S.forces as a measure of stability. U.S. actions that

protect the free flow of natural resources and finishedgoods provide an environment for sustainedeconomic productivity. Engagement, through military,diplomatic, or other governmental entities, alsoenables rapid response to computer networkincidents and attacks that harm our economy.International government-to-government cooperation,for example, led to the law enforcement action thatdefinitively determined the source of some of thedistributed, denial of service attacks in February2000.

Promoting Democracy andHuman Rights

Finally, engagement has had political and diplomaticbenefits that promote democracy and human rights.Our policies bring our country's strengths directly tointernational publics, governments, and militaries,with the hope that this exposure may inspire others topromote democracy and the free market. Whetherwe're advising foreign governments on the conduct offree elections, teaching foreign troops about theimportance of civilian control of the military, aidinginternational relief agencies in the wake of naturaldisasters, or in the diplomatic day-to-day efforts of ourdiplomats in 273 missions around the world, anengaged America brings its values to the world'sdoorstep. For example, the multi-faceted program forengagement in Africa is having a clear impact on the

cultivation of democracy on the continent. FromKampala to Cape Town, from Dakar to Dar-es­Salaam, Africans have new hopes for democracy,peace, and prosperity. Although many challenges yetremain, visible change is occurring. Through ourdiplomatic missions, over 20 nations across Africahave requested and are receiving assistance todevelop judiciary, legal, media, and civil societysystems to build necessary institutions to sustaindemocratic ideals. We are assisting democratictransitions in Nigeria and South Africa.

In our own hemisphere, our engagement efforts havepromoted free and fair elections throughout thehemisphere. In Southeast Europe, the DaytonAccords have sustained the peace in Bosnia,permitted a civil society with opposition parties andnon-governmental organizations to take root, begunreforms of police and court systems, and allowednational and local elections to take place. Thetransformation is not complete and progress is notirreversible, but it is unmistakable. The best rolemodel is a visible one.

In summary, a strategy of engagement reapssignificant benefits for our Nation -- benefits thatactively support our goals of security, prosperity anddemocracy, yet always remain in consonance withour principles of protecting our national interests andadvancing our values. Indeed, there is no otherviable policy choice in this global era.

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II. Implementing the Strategy

Into the 21 51 century, the United States must continueto adapt to changes brought by globalization such thatwe foster close cooperative relations with the world'smost influential nations while preserving our ability toshape those nations capable of having an adverseeffect upon our well-being and way of life. A stable,peaceful international security environment is thedesired endstate -- one in which our nation, citizensand interests are not threatened. It is important thatwe work to enhance the health and safety of ourcitizens by promoting a cleaner global environmentand effective strategies to combat infectious disease.We must work to ensure that the United Statescontinues to prosper through increasingly openinternational markets and sustainable growth in theglobal economy, and that democratic values, respectfor human rights, and the rule of law are increasinglyaccepted.

Chapter II describes how we intend to utilize theinstruments at our disposal to implement our strategyfor engagement and, in the process, achieve thegoals of security, prosperity, and democracy - ourvision for ourselves and others in the 21 51 century.

Enhancing Security atHome and Abroad

Our strategy for enhancing U.S. security has threeprincipal elements: shaping the international securityenvironment, responding to threats and crises, andpreparing for an uncertain future.

Shaping the InternationalEnvironment

The United States seeks to shape the internationalenvironment through a variety of means, including

diplomacy, economic cooperation, internationalassistance, arms control and nonproliferation efforts,military presence and engagement activities, andglobal health initiatives. These activities enhanceU.S. security by promoting regional security;enhancing economic progress; supporting militaryactivities abroad, international law enforcementcooperation, and environmental efforts; andpreventing, reducing or deterring the diverse threatswe face today. These measures adapt andstrengthen alliances and friendships, maintain U.S.influence in key regions, and encourage adherence tointernational norms.

The U.S. intelligence community provides variousFederal agencies with critical support for the fullrange of our involvement abroad. Comprehensivecollection and analytic capabilities are needed toprovide warning of threats to U.S. national security,give analytical support to the policy, law enforcement,and military communities, enable near-real timeintelligence while retaining global perspective, identifyopportunities for advancing our national interests, andmaintain our information advantage in theinternational arena. We place the highest priority onmonitoring the most serious threats to U.S. security.These include countries or other entities potentiallyhostile to the United States; proliferation of nuclear,biological, and chemical weapons and their means ofdelivery; other transnational threats, inclUdingterrorism,drug trafficking, proliferation of small armsand light weapons, other international crime, andpotential threats to our critical infrastructure such ascomputer network attack; potential regional conflictsthat might affect U.S. national security interests;illegal economic or uncontrolled refugee migration;and threats to U.S. forces and citizens abroad.

Diplomacy

Active diplomacy is critical to advancing our nationalsecurity. The work of our missions and

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representatives around the world serves a number ofshaping functions. Examples include adaptingalliances, as the State and Defense Departments dowhen they work to ensure that NATO "candidate"militaries will be interoperable with those of currentNATO members; deterring aggression, mediatingdisputes, and resolving conflicts as shown by ourefforts to dampen the momentum to conflict in SouthAsia and the Middle East; promoting the trade andinvestment opportunities that increase U.S. economicprosperity; and confronting new threats.

While crisis management is an important foreignpolicy function, crisis prevention is far preferable.Throughout the 1990s, the United States has mostfrequently chosen a policy of preventive diplomacy toavert conflict as well as humanitarian and otheremergencies. Bringing disputing parties to the tableis less costly in lives and resources than separatingwarring parties; helping failing states is lessburdensome than rebuilding failed states; and feedingthe hungry is far more effective and easier thantreating victims of diseases wrought by malnutrition.

Our diplomatic efforts are often multilateral.Consistent with our global leadership role, it isincumbent upon the United States to maintain itsfinancial and political support for internationalinstitutions such as the United Nations, theInternational Monetary Fund, the World Bank, and theWorld Trade Organization. We must continue towork to ensure we meet our financial obligations tointernational organizations.

Likewise, domestically, we must remain committed tosupporting the State Department, the U.S. Agency forInternational Development, the Peace Corps, andother vehicles of U.S. diplomacy. Our diplomaticinfrastructure must be updated to meet criticalproductivity and information age requirements toeffectively serve our diplomatic and consular effortsworldwide. Modernization of embassies, consulates,and our diplomatic telecommunications andinformation infrastructure is essential to advancingand protecting vital national interests overseas. Ourembassies and consulates host critical elements ofpeacetime power: diplomatic personnel, commercial,defense, and legal attaches, and consular andsecurity officers dedicated to protecting Americans athome and abroad. Our commitment in properlyresourcing these modernization plans is essential ifwe are to have the future diplomatic infrastructure

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capable of supporting and enhancing our leadershiprole worldwide.

Such enhancements to our diplomatic infrastructurewill also help attract a new generation ofprofessionals whose skill, dedication, and creativityare at the heart of our ability to use diplomacy toprotect American interests. To both attract and retainthese individuals, we must take every measure tokeep our personnel safe overseas. The StateDepartment is therefore implementing a broadprogram of security enhancements in response tocontinued threats of terrorism directed at U.S.diplomatic and consular facilities overseas. Theinvestment is warranted. The cost to sustain andprotect the diplomatic components of our peacetimepower is a tiny fraction of the price associated withthe crises averted by their presence.

Public Diplomacy

We have an obligation and opportunity to harness thetools of public diplomacy to advance U.S. leadershiparound the world by engaging international publics onU.S. principles and policies. The global advance ofindividual freedom and information technologies likethe Internet has increased the ability of citizens andorganizations to influence the policies of governmentsto an unprecedented extent. This makes our publicdiplomacy -- efforts to transmit information andmessages to peoples around the world -- anincreasingly vital component of our national securitystrategy. Our programs enhance our nation's abilityto inform and influence foreign publics in support ofour national interests, and broaden the dialoguebetween U.S. citizens and institutions and theircounterparts abroad. Some even improve mutualunderstanding by reaching out to future leaders andinform the opinions of current leaders throughacademic, professional, and cultural exchanges.Successful diplomatic relations between the UnitedStates and other countries depend upon establishingtrust and creating credible partnerships based on thistrust.

Effective use of our nation's information capabilities tocounter misinformation and incitement, mitigate inter­ethnic conflict, promote independent mediaorganizations and the free flow of information, andsupport democratic participation helps advance U.S.interests abroad. International Public Informationactivities, as defined by Presidential Decision

Directive 68 (PDD-68), are designed to improve ourcapability to coordinate independent public diplomacy,public affairs and other national security information­related efforts to ensure they are more successfullyintegrated into foreign and national security policymaking and execution.

International Assistance

The United States has a history of providing generousforeign assistance in an effort to promote globalstability. From the Marshall Plan to the present, ourforeign assistance has expanded free markets,promoted democracy and human rights, containedmajor health threats, encouraged sustainable globalpopulation growth, promoted environmentalprotection, and defused humanitarian crises.

Expanding debt relief is a key element of ourinternational assistance agenda. In 1999, the G-8agreed to a reduction in bilateral debt betweenmember countries and Heavily Indebted PoorCountries (HIPC). This effort encouragesinternational financial institutions to link debt reductionto other efforts to alleviate poverty, promote economicdevelopment, and thereby create stronger partnersaround the world for trade and investment, security,and democracy. To show our commitment to thisagreement we have stood firmly behind efforts toprovide 100% debt relief in countries where the fundsbeing used to service bilateral debt will finance thebasic human needs of a population.

The United States intends that these nations not beleft behind, instead joining in the positive economicprosperity made possible through participation in theinternational economic community. Our role in theWorld Bank and other multilateral development bankssupports mutual goals to provide developingcountries with the financial and technical assistancenecessary to assimilate them into the globaleconomy. Such efforts lift peoples out of poverty, andtypically result in substantial growth of U.S. exports tothe aided countries.

Finally, our philanthropic history is such that weroutinely act to mitigate human suffering in the wakeof both natural and man-made disasters. From theU.S. Agency for International Development's disasterassistance and food aid, to the State Department'srefugee assistance, to grants to non-governmentalrelief organizations, to the Defense Department's

Humanitarian Assistance Program, the United Stateshas found multiple avenues to relieve the suffering ofdisaster victims worldwide with coordinated targetedrelief efforts.

Arms Control and Nonproliferation

Arms control and nonproliferation initiatives are anessential element of our national security strategy ofenhancing security at home and abroad. Theyclosely complement and strengthen our efforts todefend our nation through our own military strengthwhile seeking to make the world a less dangerousplace. We pursue verifiable arms control andnonproliferation agreements that support our effortsto prevent the spread and use of NBC weapons,materials, expertise, and means of delivery; halt theuse of conventional weapons that cause unnecessarysuffering; and contribute to regional stability at lowerlevels of armaments. In addition, by increasingtransparency in the size, structure and operations ofmilitary forces and building confidence in theintentions of other countries, arms controlagreements and confidence-building measuresconstrain inventories of dangerous weapons, reduceincentives and opportunities to initiate an attack,reduce the mutual suspicions that arise from and spuron armaments competition, and help provide theassurance of security necessary to strengthencooperative relationships and direct resources tosafer, more productive endeavors.

Verifiable reductions in strategic offensive arms andthe steady shift toward less destabilizing systemsremain essential to our strategy. The START ITreaty's entry into force in December 1994 chartedthe course for reductions in the deployed strategicnuclear forces of the United States and the formerSoviet Union. The other countries of the formerSoviet Union, besides Russia, that had nuclearweapons on their soil -- Belarus, Kazakhstan andUkraine -- have become non-nuclear weapons statesunder the Nuclear Nonproliferation Treaty (NPT). Ifthe START II Treaty enters into force, the UnitedStates and Russia will each be limited to 3,000 to3,500 strategic nuclear weapons. START II also willprohibit land-based missiles from being deployed withmore than one warhead and eliminate heavy land­based missiles entirely. On September 26, 1997, theUnited States and Russia signed a START II Protocolextending the end date for reductions to 2007, andexchanged letters on early deactivation by 2003 of

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those strategic nuclear delivery systems to beeliminated by 2007. The Senate approved theratification of START II in January 1996; the Dumaratified the START II Treaty and the 1997 START IIProtocol in April 2000.

At the Helsinki Summit in March 1997, PresidentsClinton and Yeltsin agreed to START III guidelinesthat, if adopted, will cap the number of strategicnuclear warheads deployed in each country at 2,000­2,500 by the end of 2007 -- reducing both ourarsenals by 80% from Cold War heights. They alsoagreed that, in order to promote the irreversibility ofdeep reductions, a START III agreement will includemeasures relating to the transparency of strategicnuclear warhead inventories and the destruction ofstrategic nuclear warheads. In addition, thePresidents agreed to explore possible confidence­building and transparency measures relating tonuclear long-range, sea-launched cruise missiles andtactical nuclear systems.

The Anti-Ballistic Missile (ABM) Treaty remains acornerstone of strategic stability, and the UnitedStates is committed to continue efforts to enhancethe Treaty's viability and effectiveness. OnSeptember 26, 1997, representatives of the UnitedStates, Russia, Belarus, Kazakhstan and Ukrainesigned or initialed five agreements relating to theABM Treaty. At the Cologne G-8 Summit in June1999 Presidents Clinton and Yeltsin reiterated theirdeter~ination to achieve earliest possible ratificationand entry into force of those agreements. The twopresidents also reaffirmed at Cologne their existingobligations under Article XIII of the ABM Treaty toconsider possible changes in the strategic situationthat have a bearing on the ABM Treaty and, asappropriate, possible proposals for further increasingthe viability of the Treaty. They also agreed to begindiscussions on the ABM Treaty in parallel withdiscussions on START III. The United States hasproposed that the ABM Treaty be modified toaccommodate possible deployment of a limitedNational Missile Defense (NMD) system that wouldcounter new threats by states that threateninternational peace and security while preservingstrategic stability.

At the June 4, 2000, Moscow summit, PresidentsClinton and Putin signed a Joint Statement ofPrinciples on Strategic Stability. The Principles statethat the international community faces a dangerousand growing threat of proliferation of weapons of

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mass destruction and their means of delivery,including missiles and missile technologies, and thatthere is a need to address these threats. ThePrinciples recalled the existing provisions of the ABMTreaty, to consider changes in the strategic situationthat have a bearing on the provisions of the treaty,and, as appropriate, to consider possible proposalsfor further increasing the viability of the Treaty. ThePrinciples also record agreement to intensifydiscussions on both ABM issues and START III.

The United States has also made clear to Russia thatwe are prepared to engage in serious cooperation toaddress the emerging ballistic missile threat, and wehave identified a number of specific ideas fordiscussion. At the same June 4, 2000, Moscow

..Summit, Presidents Clinton and Putin signed anagreement to establish a Joint Center for exchangingearly warning data on ballistic missile launches. Theagreement will significantly reduce the danger thatballistic missiles could be launched inadvertently onfalse warning of attack. It will also promote increasedmutual confidence in the capabilities of the ballisticmissile early warning systems of both sides. The

.. Presidents also agreed to explore more far-reachingcooperation to address missile threats.

On July 21,2000, in Okinawa, Presidents Clinton andPutin issued a Joint Statement on Cooperation onStrategic Stability, which identifies specific areas andprojects for cooperation to control the spread ofmissiles, missile technology, and weapons of massdestruction. On September 6,2000, in New York,Presidents Clinton and Putin signed a Joint Statementon the Strategic Stability Cooperation Initiative andImplementation Plan, which provides further detailand an agreed timetable for pursuing cooperation inthese areas, inclUding the establishment of a ballisticmissile and space launch vehicle pre-launchnotification regime in which other states would beinvited to participate. Most recently, the United Statesand Russia signed a bilateral pre-launch notificationagreement on December 16, 2000.

To be secure, we must not only have a strongmilitary; we must also take the lead in building asafer, more responsible world. We have afundamental responsibility to limit the spread ofnuclear weapons and reduce the danger of nuclearwar. To this end, the United States remainscommitted to bringing the Comprehensive NuclearTest Ban Treaty (CTBT) into force.

To date, 160 countries have signed -- and 68 haveratified -- the Treaty prohibiting all nuclear explosions.The 68 include 31 of the 44 countries named in theTreaty whose ratification is necessary for entry intoforce. The CTBT will, in effect, constrain nuclearweapons development. The United States endednuclear testing eight years ago; upon entry into force,the CTBT will require other state entities to alsorefrain from testing. We are confident in the safetyand reliability of the U.S. nuclear stockpile, and weare confident that a fully supported and sustainedstockpile stewardship program will enable us tocontinue to maintain America's nuclear deterrentcapability. However, if we find we cannot, we wouldhave the option of using our supreme national interestwithdrawal rights under the Treaty in order to conductwhatever nuclear testing is necessary.

The CTBT will put in place a worldwide network ofsensors for detecting nuclear explosions. With over300 stations around the globe -- including 31 inRussia, 11 in China, and 17 in the Middle East -- thisinternational monitoring system will improve our abilityto monitor nuclear explosions and catch cheaters.The United States already has dozens of monitoringstations of its own; the CTBT will allow us to takeadvantage of other countries' stations, while alsocreating new ones. The Treaty also will give us theright to request on-site inspections of sites in othercountries where nuclear tests are suspected to havetaken place.

As a matter of policy, the United States will maintainits moratorium on nuclear testing, pending entry intoforce of the CTBT, and we are encouraging all otherstates to do the same. We are also encouraging allstates that have not signed and ratified the CTBT todo so. Despite the unfortunate rejection of the CTBTby the U.S. Senate, we remain committed to obtainingSenate advice and consent for ratification of thistreaty. United States ratification will encourage otherstates to ratify, enable the United States to lead theinternational effort to gain CTBT entry into force, andstrengthen international norms against nucleartesting. Simply stated, the United States must beprepared to lead by example.

The NPT, the cornerstone of international nuclearnonproliferation regime, reinforces regional andglobal security by creating and sustaining confidencein the non-nuclear commitments of its parties. It wasan indispensable precondition for the denuclearization

of Ukraine, Kazakhstan, Belarus and South Africa.We seek to ensure that the NPT remains a strongand vital element of global security by achievinguniversal adherence and full compliance by its partieswith their Treaty obligations. A Review Conferenceheld in May 2000, the first in fifteen years with aconsensus document, strengthened the globalnuclear nonproliferation norm and demonstrated thatsupport for this critical Treaty is broad and deep. Wewon our case by vigorously promoting the value of theNPT in preventing the spread of nuclear weaponswhile continuing policies designed to reduce U.S.reliance on nuclear weapons and to work for theirultimate elimination.

The safeguards system of the International AtomicEnergy Agency (IAEA) is an essential component ofthe nuclear nonproliferation regime. We seekwidespread adoption of the IAEA's strengthenedsafeguards system and to ensure that the IAEA hasthe resources necessary to fulfill its obligations. Weare working to amend the Convention on the PhysicalProtection of Nuclear Material to ensure that itsstandards cover national activities as well asinternational transfers of nuclear material, whichcomplements our effort to enhance IAEA safeguards.We also seek the immediate commencement ofnegotiations to achieve a Fissile Material CutoffTreaty at the Geneva Conference on Disarmament.Halting production of fissile materials for nuclearexplosions would cap the supply of nuclear materialsavailable worldwide for weapons, a key step in haltingthe spread of nuclear weapons. A coordinated effortby the intelligence community and law enforcementagencies to detect, prevent, and deter illegaltrafficking in fissile materials is essential to ourcounterproliferation efforts. So is the MaterialProtection, Control and Accounting program, whichenhances security for former Soviet nuclear materialsand helps prevent them from ending up in the handsof terrorists or proliferant states. We also recognizethat nuclear weapon free zone treaties and protocolsthat conform with long-standing U.S. criteria can alsoadvance nuclear nonproliferation goals.

Through the Nunn-Lugar Cooperative ThreatReduction (CTR) Program and other initiatives, weaim to strengthen controls over weapons-usablefissile material and prevent the theft or diversion ofNBC weapons and related material and technologyfrom the former Soviet Union. The CTR Program haseffectively supported enhanced safety, security,accounting, and centralized control measures for

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nuclear weapons and fissile materials in the formerSoviet Union. It has assisted Ukraine, Kazakhstanand Belarus in becoming non-nuclear weapons statesand will continue to assist Russia in meeting itsSTART obligations. The CTR Program is alsosupporting measures to eliminate and prevent theproliferation of chemical weapons and biologicalweapon-related capabilities, and it has supportedmany ongoing military reductions and reformmeasures in the former Soviet Union.

The Nonproliferation and Disarmament Fund (NDF) isa sharply focused fund to permit rapid response tounanticipated, high priority requirements oropportunities to: 1) halt the spread of WMD, theirdelivery systems, and related technology; 2) limit thespread of advanced conventional weapons andrelated technology; and 3) eliminate existingweapons. NDF activities in Central Europe and theNIS have included the elimination of SCUD and SS­23 missiles, the procurement of HEU, thedevelopment and deployment of automated systemsto license and track sensitive technologies, and theacquisition of nuclear material detection equipment.

In 1999, the President launched the Expanded ThreatReduction Initiative (ETRI). This effort is designed toaddress the new security challenges in Russia andthe other Newly Independent States (NIS) caused bythat year's financial crisis, including preventing theproliferation of NBC weapons, reducing the threatposed by residual NBC weapons, and stabilizing themilitary. This initiative builds on the success ofexisting programs, such as the CTR program, theMaterial Protection, Control and Accounting program,and the Science Centers. A new component of ournuclear security program will greatly enhance thesecurity of fissile material by concentrating it at fewer,well-protected sites, and new programs will increasethe security of facilities and experts formerlyassociated with the Soviet Union's biological weaponseffort.

At the June 4, 2000, Clinton-Putin summit, the UnitedStates and Russia reached agreement on themanagement and disposition of plutonium designatedas no longer required for defense purposes. Theagreement entered into force after Prime MinisterKasyanov and Vice President Gore signed it onSeptember 1, 2000. Under the agreement, eachgovernment commits to irreversibly transform 34metric tons of excess weapon-grade plutonium to aform that will be unusable for weapons. The

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agreement establishes the goals, timelines, andconditions for ensuring that this plutonium can neveragain be used for weapons or any other militarypurposes.

Implementation of the Plutonium Management andDisposition Agreement is contingent on sufficientinternational assistance for the Russian program. Atthe Okinawa G-8 Summit in July 2000, leaders tookan additional step to this end. The final communiquestated that their goal for the next summit is to developan international financing plan for plutoniummanagement and disposition based on a detailedproject plan, and a multilateral framework tocoordinate this cooperation. They also committed toexpand cooperation to other interested countriesbeyond the G-8 in order to gain the widest possibleinternational support, and to explore the potential forboth public and private funding.

Over the past year, the United States Governmentprovided leadership for the multilateral cooperationeffort, particularly in the context of an informal G-8working group, which coordinated with the G-8Nonproliferation Experts Group (NPEG).Preparations for the Genoa summit will be under theauspices of a formally established PlutoniumDisposition Planning Group to be co-chaired by theUnited States and the Russian Federation. We arepurchasing tons of highly enriched uranium fromdismantled Russian nuclear weapons for conversioninto commercial reactor fuel. We are helping redirectdozens of former Soviet NBC facilities and tens ofthousands of former NBC scientists in Eurasia frommilitary activities to beneficial civilian research.

In support of U.S. efforts to prevent proliferation ofNBC expertise and materials in the NIS, EasternEurope, and across borders, the Departments ofDefense, Energy, and Commerce, the U.S. CustomsService, and the FBI are engaging in programs thatassist governments in developing effective exportcontrol systems and in developing capabilities toprevent, deter, or detect such proliferation. Theseprograms provide training, equipment, advice, andservices to law enforcement and border securityagencies in these countries.

We seek to strengthen the Biological WeaponsConvention (BWC) with a new international regime toenhance compliance. We are also working hard toimplement and enforce the Chemical WeaponsConvention (CWC). The United States Congress

underscored the importance of these efforts inOctober 1998 by passing implementing legislation. Inlate 1999, the Executive Order (EO 13128),Presidential Decision Directive (PDD-70), and twonew regulations were completed, enabling the UnitedStates to submit commercial declarations andcommence commercial facility inspections in themiddle of 2000.

The Administration also seeks to prevent destabilizingbuildups of conventional arms and to limit access tosensitive technical information, equipment, andtechnologies by strengthening international regimes,including the Wassenaar Arrangement on ExportControls for Conventional Arms and Dual-Use Goodsand Technologies, the Australia Group (for chemicaland biological weapons), the Missile TechnologyControl Regime, the Nuclear Suppliers Group (NSG),and the Zangger Committee (NSG and Zanggerensure that IAEA safeguards are applied to nuclearexports). At the NATO 50th Anniversary Summit,Allied leaders agreed to enhance NATO's ability todeal both politically and militarily with the proliferationof WMD and the means of their delivery. To this end,we have worked with our Alliance partners toestablish the NATO WMD Center and to promoteinvigorated discussions of nonproliferation issues inthe NATO Senior Political Military and DefenseGroups on Proliferation.

Regional nonproliferation efforts are particularlyimportant in three critical proliferation zones: theKorean Peninsula, Southwest Asia, and South Asia.On the Korean Peninsula, we are implementing the1994 Agreed Framework, which requires fullcompliance by North Korea to live up to its nuclearnonproliferation obligations. We also seek toconvince North Korea to halt its indigenous missileprogram and exports of missile systems andtechnologies; something emphasized during aNovember 2000 visit to Pyongyang by the Secretaryof State. In the Middle East and Southwest Asia, weencourage regional confidence-building measuresand arms control agreements that address thelegitimate security concerns of all parties. Wecontinue efforts to thwart and roll back both Iran'sdevelopment of NBC weapons and long-rangemissiles, and also Iraq's efforts to reconstitute itsNBC programs. In South Asia, we seek to persuadeIndia and Pakistan to refrain from weaponizing ordeploying nuclear weapons, testing or deployingmissiles capable of delivering nuclear weapons, andfurther producing fissile material for nuclear weapons.

We also urge India and Pakistan to adhere fully tointernational nonproliferation standards and to signand ratify the CTBT.

Over the past three years, the United States hasworked to ensure that the landmark 1990Conventional Armed Forces in Europe (CFE) Treatyremains a cornerstone of European peace, securityand stability into the 21 st century. On November 19,1999, we joined the other 29 CFE States Parties insigning an Adaptation Agreement that eliminatesobsolete bloc-to-bloc limits and replaces them with asystem of national and territorial ceilings. It will alsoenhance transparency through more information andinspections, strengthen requirements for host nationconsent to the presence of foreign forces, and openthe treaty to accession by other European nations.The accompanying CFE Final Act reflects a numberof important political commitments, includingagreements on the complete withdrawal of Russianarmed forces from Moldova and partial withdrawal ofRussian forces from Georgia.

The United States is a world leader in the effort tocurb the harmful proliferation and destabiliZingaccumulation of small arms and light weapons(SAlLW) such as automatic rifles, machine guns,rocket-propelled grenades, light mortars and man­portable anti-aircraft missiles. Inexpensive, widelyavailable, and easy to use, these weaponsexacerbate regional conflicts, expand casualties,increase crime, and hinder economic development.They can jeopardize the safety of peacekeepers,potentially putting U.S. Forces at risk.

To reduce this threat, the United States is urgingcountries to adopt effective export controls, brokeringregulations, permanent marking, anti-smugglingmeasures, and embargo enforcement. Global effortsfocus on securing a Firearms Protocol to the UNTransnational Organized Crime Convention andseeking international agreement through the UN 2001Conference on Illicit Trafficking in SAiLW. TheUnited States also works with regional partners in theOSCE, NATO/EAPC, OAS, OAU, the ASEANRegional Forum, and elsewhere. The United Statesprovides some technical assistance to countriestrying to prevent SAlLW trafficking and activelysupports efforts to destroy excess stocks of SAlLWworldwide, often partnering with like-minded countriessuch as Norway.

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The United States is also committed to ending thethreat to innocent civilians from anti-personnellandmines (APLs). We have already taken majorsteps toward this goal while ensuring our ability tomeet international obligations and provide for thesafety and security of our men and women in uniform.President Clinton has directed the DefenseDepartment to end the use of all APLs, including self­destructing APLs, outside Korea by 2003 and topursue aggressively the objective of having APLalternatives ready for Korea by 2006. We are alsoaggressively pursuing alternatives to our mixed anti-tank systems that contain anti-personnel .submunitions. We have made clear that the UnitedStates will sign the Ottawa Convention by 2006 if bythen we have succeeded in identifying and fieldingsuitable alternatives to our self-destructing APLs andmixed anti-tank systems.

In May 1999, we gained Senate advice and consentto ratification of the Amended Mines Protocol to theConvention on Conventional Weapons. Thisagreement addresses the worldwide humanitarianproblem caused by APLs by banning the use of non­detectable APLs and severely limiting the use of long­duration APLs to clearly marked and monitored fieldsthat effectively keep out civilians. We haveestablished a permanent ban on APL exports and areseeking to universalize an export ban through theConference on Disarmament in Geneva. We aresupporting humanitarian demining programsworldwide through engagement with mine-afflictednations and the international community. We havetaken a lead role in establishing the International Testand Evaluation Program, through which nations willdevelop agreed standards and test procedures forvarious pieces of demining equipment and will thentest against those standards. To date, the UnitedStates has provided over $400 million through theU.S. Humanitarian Demining Program. TheDemining 2010 Initiative, which is independent of theHumanitarian Demining Program, advocatesincreased efforts in the United States and abroad anddevelops public-private partnerships to support theseprograms.

The effectiveness of the panoply of arms controlagreements described above, as well ~s t~~t of ournonproliferation activities, rests on maintaining andenhancing our monitoring capabilities. We must keepahead of potential attempts by others at denial anddeception. To do so, we must maintain currentmonitoring assets and have a vigorous research and

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development program that will translate newtechnologies into enhanced capabilities. Theseefforts will increase our confidence in the viability ofexisting agreements and enable us to conclude newones to further decrease the risks of armed conflicts.

Military Activities

The U.S. military is a very visible and critical pillar ofour effort to shape the international securityenvironment in ways that protect and promote U.S.interests. It is not, however, a substitute for otherforms of engagement, such as diplomatic, economic,scientific, technological, cultural, and educationalactivities. We must always be mindful that theprimary mission of our Armed Forces is to deter and,if necessary, to fight and win conflicts in which ourvital interests are threatened. Through overseaspresence and peacetime engagement activities, suchas defense cooperation, security assistance, regionalcenters for security studies, training, and exerciseswith allies and friends, our Armed Forces help todeter aggression and coercion, build coalitions,promote regional stability, support the developm.~~t ofindigenous counterdrug law enforcement capabilities,and serve as role models for militaries in emergingdemocracies. With countries that are neither staunchfriends nor known foes, military cooperation canserve as a positive means of building bridgesbetween the military leaderships of different nations.These links enhance security relationships betweenthe nations today and will contribute to improvedrelations tomorrow. At the same time, we alsoremain firmly committed to human rights and we willensure our military forces do not knowingly train orassist units that have committed a gross violation ofhuman rights.

Maintaining our overseas presence enhances ourunderstanding of the military developments withinvarious regions of the world. Relevant observationsadd to our larger geo-political understanding ofpotential areas for instability or threats to our nationalinterests and help select our optimal avenue ofresponse; diplomatic, economic, or military. Itreassures our allies and promotes regional stability. Itgives substance to our security commitments, helpsprevent the development of power vacuums andinstability, and contributes to deterrence bydemonstrating our determination to defend U.S.,allied, and friendly interests in critical regions. Havingcredible combat forces forward deployed in

peacetime also better positions the United States torespond rapidly to crises, permitting them to be firston the scene. Equally essential is effective globalpower projection, which is key to the flexibilitydemanded of our forces and provides options forresponding to potential crises and conflicts evenwhen we have no permanent presence or a limitedinfrastructure in a region.

Just as U.S. engagement overall must be selective-­focusing on the threats and opportunities mostrelevant to our interests and applying our resourceswhere we can make the greatest difference -- so toomust our use of the Armed Forces for engagementbe equally discerning. Engagement activities must becarefully managed to prevent erosion of our military'scurrent and long-term readiness for larger-scalecontingencies. The Defense Department's theaterengagement planning process, which was approvedby the President in 1997, helps ensure that militaryengagement activities are prioritized within theaters,and balanced against available resources. In short,we must prioritize military engagement activities toensure the readiness of our Armed Forces to carryout crisis response and warfighting missions, as wellas to ensure that we can sustain an appropriate levelof engagement activities over the long term.

Our ability to deter potential adversaries in peacetimerests on several factors, particularly on ourdemonstrated will and ability to uphold our securitycommitments when they are challenged. We haveearned this reputation through both our declaratorypolicy, which clearly communicates costs to potentialadversaries, and our credible warfighting capabilityacross the full spectrum of conflict. This capability isembodied in four ways; ready forces and equipmentstrategically stationed or deployed forward, forces inthe United States at the appropriate level of readinessto deploy when needed, our ability to maintain accessto critical regions and infrastructure overseas, and ourdemonstrated ability to form and lead effectivemilitary coalitions.

We must continue to improve our program to combatterrorism in the areas of antiterrorism,counterterrorism, consequence management, andintelligence support to deter terrorism. We will deterterrorism through the increased antiterrorismreadiness of our installations and forward forces,enhanced training and awareness of militarypersonnel, and the development of comprehensivetheater engagement plans. In counterterrorism,

because terrorist organizations may not be deterredby traditional means, we must ensure a robustcapability to accurately attribute the source of attacksagainst the United States or its citizens, and torespond effectively and decisively to protect ournational interests. U.S. armed forces possess atailored range of options to respond to terrorismdirected at U.S. citizens, interests, and property. Inthe event of a terrorist incident, our consequencemanagement ability to significantly mitigate injury anddamage may likely deter future attacks. Finally, wewill continue to improve the timeliness and accuracyof intelligence support to commanders, which will alsoenhance our ability to deter terrorism.

Our nuclear deterrent posture is one example of howU.S. military capabilities are used effectively to deteraggression and coercion against U.S. interests.Nuclear weapons serve as a guarantor of our securitycommitments to allies and a disincentive to those whowould contemplate developing or otherwise acquiringtheir own WMD capability. Those who threaten theUnited States or its allies with WMD should have nodoubt that any such attack would meet anoverwhelming and devastating response. Our militaryplanning for the possible employment of U.S.strategic nuclear weapons is focused on deterring anuclear war and it emphasizes the survivability of ournuclear systems, infrastructure, and command,control, and communications systems necessary toendure a preemptive attack yet still deliver anoverwhelming response. Another key element of theU.S. nuclear deterrent strategy is ensuring theNational Command Authorities have a survivable andendurable command, control, and communicationscapability through which to execute the mission anddirect nuclear forces during all phases of a nuclearwar. The United States will continue to maintain arobust triad of strategic nuclear forces sufficient todeter any potential adversaries who may have orseek access to nuclear forces -- to convince themthat seeking a nuclear advantage or resorting tonuclear weapons would be futile. In addition, someU.S. non-strategic nuclear forces are forwarddeployed in NATO to demonstrate the politicalcommitment of the United States to the long-termviability of NATO and European security. We mustalso ensure the continued viability of the infrastructurethat supports U.S. nuclear forces and weapons. TheStockpile Stewardship Program will provide highconfidence in the safety and reliability of our nuclearweapons under the Comprehensive Nuclear Test BanTreaty.

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The Department of Defense's CounterproliferationInitiative provides another example of how U.S.military capabilities are used effectively to deteraggression and coercion against U.S. interests.Under this initiative, we are preparing our own forcesand working with allies to ensure that we can prevailon the battlefield despite the threatened or actual useof NBC weapons by adversaries.

The United States is committed to preservinginternationally recognized freedom of navigation on -­and overflight of -- the world's oceans, which arecritical to the future strength of our nation and themaintenance of global stability. Freedom ofnavigation and overflight are essential to oureconomic security and for the worldwide movementand sustainment of U.S. military forces. Thesefreedoms are codified in the United NationsConvention on the Law of the Sea, which thePresident submitted to the Senate in 1994 for adviceand consent to ratification. In addition to lending thecertainty of the rule of law to an area critical to ournational security, the Convention preserves ourleadership in global ocean policy. Thus, the Law ofthe Sea Convention buttresses the strategicadvantages that the United States gains from being aglobal power, and ratification of the Conventionremains a high priority.

Quality people -- civilian and military -- are our mostcritical asset in implementing our defense activities.The quality of our men and women in uniform will bethe deciding factor in future military operations wherethe operation and maintenance of informationsystems and advanced technology become evermore important. We must ensure that we remain themost fully prepared and best trained military force inthe world. Accordingly, we will continue to place thehighest priority and bear the costs associated withprograms that support recruiting, retention, quality oflife, training, equipping and educating our personnel.

International Law EnforcementCooperation

Certain criminal threats to our national security areinternational in nature. Transnational threats includeterrorism, drug and migrant smuggling, and otherinternational crime. The rise in the frequency andintensity of these threats makes it incumbent upon

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U.S. and foreign law enforcement and judicialauthorities to cooperate in an innovative manner.The President's International Crime Control Strategyprescribes the role of overseas law enforcementpresence in establishing and sustaining workingrelationships with foreign law enforcement agencies;keeping crime away from our shores; enablingextradition; and solving serious U.S. crimes.

The Department of State and U.S. federal lawenforcement agencies continue to assist lawenforcement agencies in Central and Eastern Europeand East Asia through cooperative centersestablished in Hungary and Thailand known as theInternational Law Enforcement Academies (ILEAs).The ILEA initiative is a multinational effort organizedby the United States, the host nations, and otherinternational training partners to provide mutualassistance and law enforcement training.

Environmental and HealthInitiatives

The President has said, "Our natural security must beseen as part of our national security." Decisionstoday regarding the environment and naturalresources can affect our security for generations.Environmental threats do not heed national borders;environmental perils overseas and environmentalcrime pose long-term dangers to U.S. security andwell being. Natural resource scarcities can triggerand exacerbate conflict, and phenomena such asclimate change, toxic pollution, ocean dumping, andozone depletion directly threaten the health and well­being of Americans and all other individuals on Earth.

Responding firmly to environmental threats remains apart of mainstream American foreign policy.America's leadership was essential for agreement onthe Kyoto Protocol -- the first binding agreementamong the world's industrialized nations to reducegreenhouse gas emissions. America also brokeredkey international agreements on toxic chemicals -­such as persistent organic pOllutants, environmentalaspects of biotechnology, the ozone layer, andendangered marine life. America's insistence on highenvironmental standards in its own trade agreements,in international financial institutions, and in bilateralexport credit and development assistance programssimilarly demonstrates to the rest of the internationalcommunity that growing economies and clean

environments do go hand-in-hand. America alsoprovided leadership in the Global Environment Facilityand in bilateral programs for clean energydevelopment, as well as conservation of biologicaldiversity and endangered ecosystems such astropical forests.

With globalization, the free flow of people and goodsacross national borders continues to increase rapidlywith each passing year. This interdependence hascaused diseases and health risks around the world tobecome matters of both U.S. national andinternational security. The United States promotesinternational cooperation on health issues because itreduces the threat of diseases to Americans, andbecause global international economic development,democratization, and political stability are predicatedin part on the health of populations worldwide.

Beyond these general concerns, a number of specificinternational health issues are critical for our nationalsecurity. Because a growing proportion of ournational food supply is coming from internationalsources, assuring the safety of the food we consumemust be a priority. The Administration hasannounced new and stronger programs to ensure thesafety of imported as well as domestic foods, to beoverseen by the President's Council on Food Safety.New and emerging infections such as drug-resistanttuberculosis and the Ebola virus can move with thespeed of jet travel. We are actively engaged with theinternational health community as well as the WorldHealth Organization to stop the spread of thesedangerous diseases.

Combating the global epidemic of HIV/AIDS has beena top international health priority in recent years.AIDS is now the number one cause of death on thecontinent of Africa. The United States led the UnitedNations Security Council in holding its first-eversession on AIDS in Africa and has committed toefforts to accelerate the development and delivery ofvaccines for AIDS and other diseases thatdisproportionately affect the developing world. Wealso have promoted efforts by African nationalgovernments to provide AIDS awareness educationto their military members who travel widely around thecontinent; and led the G-8's decision to link debt reliefto HIV/AIDS prevention and other such programs.

Population issues have also been a health prioritygarnering renewed focus internationally. TheAdministration has re-established U.S. leadership on

international population issues by expanding qualityreproductive health care. This includes voluntaryfamily planning services for women and men aroundthe world; improving the political, economic, andsocial status of women; and enhancing educationalopportunities for women and girls.

Responding to Threats andCrises

Because our efforts to shape the internationalenvironment alone cannot guarantee the security weseek, the United States must be able to respond athome and abroad to the full spectrum of threats andcrises that may arise. Since our resources are finite,we must be selective in our responses, focusing onchallenges that most directly affect our interests andengaging when and where we can have the greatestpositive impact. We must use the most appropriatetool or combination of tools -- diplomacy, publicdiplomacy, economic measures, law enforcement,intelligence, military operations, and others. We actin alliance or partnership when others share ourinterests, but will act unilaterally when compellingnational interests so demand.

Efforts to deter an adversary -- be it an aggressornation, terrorist group or criminal organization -- canbecome the leading edge of crisis response. In thissense, deterrence straddles the line between shapingthe international environment and responding tocrises. Deterrence in crisis generally involvesdemonstrating the United States' commitment to aparticular country or interest by enhancing ourwarfighting capability in the theater. Our forward androtationally deployed forces are the embodiment ofour continuous commitment to our overseas partnersand act as the first line of deterrence, providing thenecessary inroads to access and influence to helpdefuse crisis situations.

Our ability to respond to the full spectrum of threatsrequires that we have the best-trained, best­equipped, most effective armed forces in the world.Our strategy requires that we have highly capableground, air, naval, special operations, and spaceforces supported by a range of enabling capabilitiesincluding strategic mobility and Command, Control,Communications, Computers, Intelligence,Surveillance, and Reconnaissance (C4ISR).Maintaining our superior forces requires developing

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superior technology, and exploiting it to the fullestextent.

Strategic mobility is critical to our ability to augmentforces already present in the region with theprojection of additional forces for both domestic andinternational crisis response. This agility in responseis key to successful American leadership andengagement. Access to sufficient fleets of aircraft,ships, vehicles, and trains, as well as bases, ports,pre-positioned equipment, and other infrastructure willof course be an imperative if we are to deploy andsustain U.S. and multinational forces in regions ofinterest to us.

We are committed to maintaining U.S. preeminencein space. Unimpeded access to and use of space isa vital national interest -- essential for protecting U.S.national security, promoting our prosperity, andensuring our well-being. Consistent with ourinternational obligations, we will deter threats to ourinterests in space, counter hostile efforts against U.S.access to and use of space, and maintain the abilityto counter space systems and services that could beused for hostile purposes against our military forces,command and control systems, or other criticalcapabilities. We will maintain our technologicalsuperiority in space systems, and sustain a robustU.S. space industry and a strong, forward-lookingresearch base. We also will continue efforts toprevent the spread of weapons of mass destruction tospace, and will continue to pursue global partnershipsaddressing space-related scientific, economic,environmental, and security issues.

We also are committed to maintaining informationsuperiority -- the capability to collect, process, anddisseminate an uninterrupted flow of information whileexploiting and/or denying an adversary's ability to dothe same. Operational readiness, as well as thecommand and control of forces, relies increasingly oninformation systems and technology. We must keeppace with rapidly evolving information technology sothat we can cultivate and harvest the promise of theknowledge that comes from this informationsuperiority, sharing that knowledge among U.S.forces and coalition partners while exploiting theshortfalls in our adversaries' information capabilities.

Protecting the Homeland

Emerging threats to our homeland by both state andnon-state actors may be more likely in the future as

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our potential adversaries strike against vulnerablecivilian targets in the United States to avoid directconfrontation with our military forces. Such actsrepresent a new dimension of asymmetric threats toour national security. Easier access to the criticaltechnical expertise and technologies enables bothstate and non-state actors to harness increasinglydestructive power with greater ease. In response tosuch threats, the United States has embarked on acomprehensive strategy to prevent, deter, disrupt,and when necessary, effectively respond to themyriad of threats to our homeland that we will face.

National Missile Defense

The Clinton Administration is committed to thedevelopment of a limited National Missile Defense(NMD) system designed to counter the emergingballistic missile threat from states that threateninternational peace and security. On September 1,2000, the President announced that while thetechnology for NMD was promising, the system as awhole is not yet proven, and thus he was notprepared to proceed with the deployment of a limitedNMD system. The President has instead asked theSecretary of Defense to continue a robust program ofdevelopment and testing. The Administrationrecognizes the relationship among the ABM Treaty,strategic stability, and the START process, and iscommitted to working with Russia on anymodifications to the ABM Treaty required to deploy alimited NMD. An NMD system, if deployed, would bepart of a larger strategy to preserve and enhancepeace and security.

In making this decision, the President considered thethreat, cost, technical feasibility and impact overall onour national security of proceeding with NMD,including the impact on arms control and relationswith Russia, China, and our allies. He considered athorough technical review by the Department ofDefense as well as the advice of his top nationalsecurity advisors.

The Pentagon has made progress on developing asystem that can address the emerging missile threat.But, at this time, we do not have sufficient informationto conclude that it can work reliably under realisticconditions. Critical elements of the program, such asthe booster rocket for the missile interceptor, havenot been tested; and there are also questions to be

resolved about the ability of the system to deal withcountermeasures. The President made clear that weshould not move forward until we have furtherconfidence that the system will work and until wehave made every reasonable diplomatic effort tominimize the international consequences. In theinterim, the Pentagon will continue the developmentand testing of the NMD system. That effort is still atan early stage: three of the nineteen, plannedintercept tests have been held so far. Additionalground tests and simulations will also take place.

The development of our NMD is part of theAdministration's comprehensive national securitystrategy to prevent potential adversaries fromacquiring and/or threatening the United States withsuch weapons. Arms control agreements with Russiaare an important part of this strategy because theyensure stability and predictability between the UnitedStates and Russia, promote the dismantling ofnuclear weapons, and help complete the transitionfrom confrontation to cooperation with Russia. The1972 Anti-Ballistic Missile (ABM) Treaty limits anti­missile defenses according to the f~llowing principle:neither side should deploy defenses that wouldundermine the other's nuclear deterrent, and thustempt the other to strike first in a crisis or takecountermeasures that would make both our countriesless secure. The President's decision not to deploy alimited NMD system will provide additional time topursue with Russia the goal of adapting the ABMTreaty to permit the deployment of a limited NMD thatwould not undermine strategic stability. The UnitedStates will also continue to consult with allies and holddialogues with other states.

In August 1999, President Clinton decided that theinitial NMD architecture would include: 100 ground­based interceptors deployed in Alaska, one ABMradar in Alaska, and five upgraded early warningradar. This approach is the fastest, most affordable,and most technologically mature approach to fieldingan NMD system capable of protecting all 50 statesagainst projected emerging threats.

On July 23,1999, President Clinton signed H.R. 4,the "National Missile Defense Act of 1999," statingthat it is the policy of the United States to deploy aneffective NMD system as soon as technologicallypossible. The legislation includes two amendmentssupported by the Administration. The first makes

clear that any NMD deployment must be subject tothe authorization and appropriations process, andthus that no decision on deployment has been made.The second amendment states that it is the policy ofthe United States to seek continued negotiatedreductions in Russian nuclear forces, puttingCongress on record as continuing to supportnegotiated reductions in strategic nuclear arms,reaffirming the Administration's position that missiledefense policy must take into account important armscontrol and nuclear nonproliferation objectives.

Countering Foreign IntelligenceCollection

The United States is a primary target of foreignintelligence services due to our military, scientific,technological and economic preeminence. Foreignintelligence services aggressively seek informationabout U.S. political and military intentions andcapabilities. As the rapidity of global technologicalchange accelerates and the gap with some nationshas widened, these countries' foreign intelligenceagencies are stepping up their efforts to collectclassified or sensitive information on U.S. weaponssystems, U.S. intelligence collection methods,emerging technologies with military applications, andrelated technical methods. Such information enablespotential adversaries to counter U.S. political andmilitary objectives, develop sophisticated weaponsmore quickly and efficiently, and developcountermeasures against U.S. weapons and relatedtechnical methods. Intelligence collection againstU.S. economic, commercial, and proprietaryinformation enables foreign states and corporations toobtain shortcuts to industrial development andimprove their competitiveness against U.S.corporations in global markets. Although difficult toquantify, economic and industrial espionage results inthe loss of millions of dollars and thousands of jobsannually.

To protect sensitive national security information, it iscritical for us to effectively counter the collectionefforts of foreign intelligence services and non-stateactors through vigorous counterintelligence effortsand security programs. Over the last six years, wehave created new counterintelligence mechanisms toaddress economic and industrial espionage and haveimplemented procedures to improve coordinationamong intelligence, counterintelligence and law

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enforcement agencies. These measures haveconsiderably strengthened our ability to counter theforeign intelligence collection threat. We will continueto refine and enhance our counterintelligencecapabilities as we enter the 21 st century.

Dramatic geopolitical changes that continue into thefirst decade of the 21 sl century increase rather thanlessen the need to protect sensitive national securityinformation. Some of this information is classifiedwhile some is unclassified but sensitive due to itsrelationship to, or impact upon, our criticalinfrastructure. Increased threats to our cyber securityand the inadvertent or deliberate disclosure ofsensitive information underscore the necessity for theNational Security Community to have reliable, timely,and trusted information available to those who bothneed it and are authorized to have it. During the lastfive years we have established a set of securitycountermeasures policies, practices, procedures, andprograms for a rational, fair, forward looking, andcost-effective security system. More needs to bedone, however, and efforts will continue in providing abetter synchronized, integrated and interoperableprograms for personnel security, physical security,technical security, operational security, education andawareness, information assurance, classificationmanagement, industrial security, andcounterintelligence.

Combating Terrorism

The United States has mounted an aggressiveresponse to terrorism. Our strategy pressuresterrorists, deters attacks, and responds forcefully toterrorist acts. It combines enhanced law enforcementand intelligence efforts; vigorous diplomacy andeconomic sanctions; and, when necessary, militaryforce. Domestically, we seek to stop terrorists beforethey act, and eliminate their support networks andfinancing. Overseas, we seek to eliminate terroristsanctuaries; counter state and non-governmentalsupport for terrorism; help other governmentsimprove their physical and political counterterrorism,antiterrorism, and consequence management efforts;tighten embassy and military facility security; andprotect U.S. citizens living and traveling abroad.Whether at home or abroad, we will respond toterrorism through defensive readiness of our facilitiesand personnel, and the ability of our terrorismconsequence management efforts to mitigate injuryand damage.

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Our strategy requires us to both prevent and, ifnecessary, respond to terrorism. Prevention -- whichincludes intelligence collection, breaking up cells, andlimiting the movement, planning, and organization ofterrorists -- entails more unknowns and itseffectiveness will never be fully proven orappreciated, but it is certainly the preferable path.For example, as a result of the quiet cooperation withsome of our allies and among federal authorities,agencies, and local law enforcement, plannedterrorist attacks within the United States and againstU.S. interests abroad during the millenniumcelebration were thwarted. A major aspect of ourprevention efforts is bolstering the political will andsecurity capabilities of those states that are on thefront lines to terrorist threats and that aredisproportionately impacted by the expanding threat.This coalition of nations is imperative to theinternational effort to contain and fight the terrorismthat threatens American interests.

Avenues of international trade provide a highway forthe tools and weapons of international terrorists. Thesame sophisticated transportation network that canefficiently, safely, and reliably move people and goodsis also equally attractive to those whose motives maybe hostile, dangerous, or criminal. Systems thatpromote efficiency, volume and speed, fuelingeconomic prosperity, create new challenges in thebalance between policing and facilitating thetransnational movements of people and goods.Globalization and electronic commerce transcendconventional borders, fast rendering traditional bordersecurity measures at air, land, and sea ports of entryineffective or obsolete. Despite the challenges, weare developing tools to close off this avenue forterrorists. In this new environment, prudent,reasonable, and affordable security measures willrequire an approach transcending any particulartransportation node or sector. The InternationalTrade Data System (ITDS), already in initialimplementation pilot testing, was created to foster anintegrated system to electronically collect, use, anddisseminate international trade and transportationdata. By transcending transportation nodes andsectors, efforts like the ITDS project will forecloseopportunities terrorists may believe are emerging withglobal ization.

When terrorism occurs, despite our best efforts, wecan neither forget the crime nor ever give up onbringing its perpetrators to justice. We make noconcessions to terrorists. Since 1993, a dozen

terrorist fugitives have been apprehended overseasand rendered, formally or informally, to the UnitedStates to answer for their crimes. These include theperpetrators of the World Trade Center bombing, theattack outside CIA headquarters, and an attack on aPan Am flight more than 18 years ago. In 1998, theU.S. Armed Forces carried out strikes against achemical weapons target and an active terrorist baseoperated by Usama bin Ladin, whose terror networkhad carried out bombings of American embassies inNairobi and Dar es Salaam and planned still otherattacks against Americans. We will likewise pursuethe criminals responsible for the attack on the USSCole in Yemen.

Whenever possible, we use law enforcement,diplomatic, and economic tools to wage the fightagainst terrorism. But there have been, and will be,times when those tools are not enough. As long asterrorists continue to target American citizens, wereserve the right to act in self-defense by striking attheir bases and those who sponsor, assist, or activelysupport them, as we have done over the years indifferent countries.

Fighting terrorism requires a substantial commitmentof financial, human, and political resources. Since1993, both the FBI's counterterrorism budget and thenumber of FBI agents assigned to counterterrorismhave more than doubled. The President has alsocreated and filled the post of National Coordinator forSecurity, Infrastructure Protection, andCounterterrorism. Three presidential directives nowcoordinate the efforts of senior counterterrorismpersonnel from various government agencies indealing with WMD and other threats at home. TheFBI and the State Department, respectively, operateRapid Deployment Teams and interagency ForeignEmergency Support Teams to deploy quickly toscenes of terrorist incidents worldwide.

However, it is not only the response capabilities thatneed significant resources. It is our preventiveefforts, such as active diplomatic and militaryengagement, political pressure, economic sanctions,and bolstering allies' political and security capabilities,that also require strong financial support in order tosqueeze terrorists before they act. Providing politicalsupport and economic assistance to front line statesand other allies impacted by this threat expands thecircle of nations fighting against threats to the United

States. These preventive measures are an importantpartner to our counterterrorism response efforts.

We must continue to devote the necessary resourcesfor America's strategy to combat terrorism, whichintegrates preventive and responsive measures andencompasses a graduated scale of enhanced lawenforcement and intelligence gathering, vigorousdiplomacy, and, where needed, military action.

Domestic Preparedness AgainstWeapons of Mass Destruction

Defending the United States against weapons ofmass destruction is a top national security priority. InOctober 1998, the President signed into lawlegislation criminalizing the unjustified accumulationof dangerous chemicals, thereby enhancing the abilityof law enforcement to prevent potentially catastrophicterrorist acts by allowing enforcement action beforethe chemicals are weaponized. Additionally,concerted efforts have been undertaken to mitigatethe consequences of a WMD attack.

The Federal Government, in coordination with stateand local authorities, will respond rapidly anddecisively to any terrorist incident in the United Statesinvolving WMD. Increased preparedness at home iscritical to defending against, and responding to, suchunconventional threats. The Administrationdeveloped a Five-Year Interagency Counterterrorismand Technology Crime Plan to address these issues.

Established in 1998, a standing Weapons of MassDestruction Preparedness Interagency WorkingGroup, chaired by the National Coordinator,addresses current and future requirements of local,state, and federal authorities that are directlyresponsible for the WMD crisis and consequencemanagement efforts. In coordinating the interagencyprocess and cooperation between these three levelsof government, several initiatives are now in place tobetter prepare the United States against a WMDincident. These initiatives include equipping andtraining first responders in the 157 largestmetropolitan areas across the nation to prepare for,and defend against, chemical, biological, or nuclearweapons of mass destruction attacks; renovating thepublic health surveillance system; and establishingcivilian medical stockpiles of vaccines and antibiotics.

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Critical Infrastructure Protection

An extraordinarily sophisticated informationtechnology (IT) infrastructure fuels America'seconomy and national security. Criticalinfrastructures, including telecommunications, energy,finance, transportation, water, and emergencyservices, form a bedrock upon which the success ofall our endeavors -- economic, social, and military -­depend. These infrastructures are highlyinterconnected, both physically and by the manner inwhich they rely upon information technology and thenational information infrastructure. This trend towardincreasing interdependence has accelerated in recentyears with the advent of the Information Age.

At the same time that the IT revolution has led tosubstantially more interconnected infrastructures withgenerally greater centralized control, the advent of"just in time" business practices has reduced marginsfor error for infrastructure owners and operators. Inaddition, the trend toward deregulation and growth ofcompetition in key infrastructures has understandablyeroded the willingness of owners and operators topay for spare capacity that traditionally served auseful "shock absorber" role in cushioning keyinfrastructures from failures. Finally, the increase inthe number of mergers among infrastructureproviders has increased the pressure for furtherreductions in spare capacity as managers seek toreduce overhead and wring "excess" costs out ofmerged companies.

As with the 1993 World Trade Center bombing,ongoing hostile hacker attacks, and cyber conflictsbetween China and Taiwan have shown, asymmetricwarfare against the United States will likely grow. Wemust understand the vulnerabilities andinterdependencies of our infrastructures, accept thatsuch attacks know no international boundaries, andwork to mitigate potential problems.

In January 2000, the President launched the NationalPlan for Information Systems Protection andannounced new budget proposals for criticalinfrastructure protection. Specific new proposalsincluded the Federal Cyber Systems Training andEducation program to offer IT education in exchangefor federal service; an intrusion detection network forthe Department of Defense and for federal civilianagencies; and the Institute for InformationInfrastructure Protection, an innovative public/privatepartnership to fill key gaps in critical infrastructure

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protection R&D. The Institute represented part of a32% increase that were proposed for computersecurity research and development efforts for theFY 2001 budget.

Implementing the proposals of the National Plan, aswell as other future projects, will contribute to oureconomic competitiveness, military strength, andgeneral public health and safety. These proposalswill also protect the ability of state and localgovernments to maintain order and deliver minimumessential public services while also working with theprivate sector to ensure the orderly functioning of theeconomy and the delivery of vital services.

The National Infrastructure Protection Center (NIPC),founded in 1998 under Presidential Decision Directive63, is the national focal point for warning, analysis,and response regarding threats to the infrastructures.Over the past two years it has provided warnings tothe private sector, federal, state, and localgovernments regarding infrastructure threats. It hasalso coordinated numerous investigations ofdestructive computer viruses, computer intrusionsagainst United States Government and private ITsystems, and denial of service attacks both in theUnited States and overseas.

Some aspects of our critical infrastructure, such asthe various transportation systems, are not commonlyassociated with the trends of globalization andtechnological change, but nonetheless are beingdramatically affected by them. For example, theMarine Transportation System, which consists ofwaterways, ports, and their intermodal connections,vessels, vehicles and system users, providesAmerican businesses with critical competitive accessto suppliers and markets that will be key tomaintaining our nation's role as a global power.Threats to this and other transportation systems willdrive new security imperatives that we must continueto balance with the need for speed and efficiency. Inany case, ensuring the long-term health of thesetraditional aspects of our critical infrastructure mustremain a priority even as we look to new technologiesto improve other aspects of our infrastructures andprovide other competitive advantages.

Most importantly, the Federal Government cannotprotect critical infrastructures alone. The privatesector owns and operates the vast majority of theseinfrastructures. Protecting critical infrastructure,therefore, requires the Federal Government to build

partnerships with the private sector in all areas -- frombusiness and higher education, to law enforcement,to R&D. The Secretary of Commerce and industryleaders -- mostly from Fortune 500 companies -- areleading the Partnership for Critical InfrastructureSecurity. The Attorney General has teamed up withthe Information Technology Association of America topromote industry-government cooperation againstcyber crime through the Cyber Citizen project. TheNIPC, meanwhile, is establishing cooperativerelationships between industry and law enforcementthrough its InfraGard initiative.

Some segments of our critical infrastructures havenot historically devoted significant resources toprotection from threats other than those caused bynatural means. As a result, we are building a strongfoundation for continued protection of our criticalinfrastructures. The public and private sectors mustwork together to conduct R&D in infrastructureprotection and interdependencies, increaseinvestment in training and educating cyber-securitypractitioners (to include building an adequate base ofresearchers in this new discipline), and find innovativetechnical, policy, and legal solutions.that protect ourinfrastructures and preserve our civil rights.

National Security EmergencyPreparedness

U.S. Continuity of Government and Continuity ofOperations programs remain a top national securitypriority into the 21 51 century. They preserve thecapability to govern, lead, and perform essentialfunctions and services to meet essential defense andcivilian needs. Together with other security, criticalinfrastructure protection, and counterterrorismprograms, Continuity of Government and Continuity ofOperations programs remain an important hedgeagainst current and emerging threats, and futureuncertainties.

We will do all we can to deter and prevent destructiveand threatening forces such as terrorism, NBCweapons use, disruption of our critical infrastructures,and regional or state-centered threats fromendangering our citizens. But if an emergencyoccurs, we must be prepared to respond effectively athome and abroad to protect lives and property,mobilize the personnel, resources, and capabilitiesnecessary to effectively handle the emergency, andensure the survival of our institutions and

infrastructures. To this end, comprehensive, all­hazard emergency planning by Federal departments,agencies and the military, as well as a strong andresponsive industrial and technology base, will bemaintained as crucial national security emergencypreparedness requirements.

Fighting Drug Trafficking and OtherInternational Crime

Broad ranges of criminal activities that originateoverseas threaten the safety and well being of theAmerican people.

Drug Trafficking. Drug use and its damagingconsequences cost our society over $110 billion peryear and poison the schools and neighborhoodswhere our youth learn and play. Aggressive lawenforcement is dramatically weakening the domesticperpetrators of organized crime who have controlledAmerica's drug trade for much of the past century.Today, international drug syndicates based abroadchallenge us. The criminals who run the internationaldrug trade continue to diversify and seek newmarkets in the United States -- moving beyond largecities into smaller communities and even rural towns.All Americans, regardless of economic, geographic,or other position in society, feel the effects of druguse.

The National Drug Control Strategy, both at homeand abroad, integrates prevention and treatment withlaw enforcement and interdiction efforts. We aim tocut illegal drug use and availability in the UnitedStates by 50% by 2007, and reduce the health andsocial consequences of drug use and trafficking by25% over the same period.

Domestically, we have engaged in a wide range oftreatment and prevention efforts. We seek toeducate and enable our youth to reject illegal drugs,increase the safety of U.S. citizens by substantiallyreducing drug-related crime and violence; reducehealth and social costs to the public of illegal druguse; reduce domestic cultivation of cannabis andproduction of methamphetamines and other syntheticdrugs; and shield America's air, land, and seafrontiers from the drug threat.

The Drug-Free Community Support program and theDrug-Free Schools and Communities programpromote citizen participation in anti-drug efforts and

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help to provide drug-free learning environments forour children. The Office of National Drug ControlPolicy is leading the implementation of a $2 billion,multi-year, science-based, national media campaignon the consequences of youth drug use. In the lawenforcement arena, we have assisted communities intheir law enforcement efforts; are committed tostemming the flow of drugs into our country; and haveenhanced coordination among Federal, state, andlocal law enforcement agencies to arrest andprosecute drug traffickers and abusers. Concertedefforts by the public, all levels of government, and theprivate sector, together with other governments,private groups, and international organizations will berequired for our strategy to succeed.

Internationally, our strategy recognizes that the mosteffective counterdrug operations are mounted at thesource where illegal drugs are grown and produced.Our efforts therefore center on supply reduction inmajor drug exporting countries. In these "sourcenations," we act to bolster the capabilities ofgovernments to help them reduce cultivation byeradicating drug crops, develop alternative crops,destroy drug labs, and control chemicals used inillegal drug production. As a second line of defense,in the transit zone between source regions and theU.S. border, we detect, monitor, and communicatewith partner nations on the movement of suspicioussurface, sea, and air traffic outside the United States.We support interdiction programs to halt the shipmentof illicit drugs. In concert with allies abroad, wepursue prosecution of major drug traffickers,dismantling drug trafficking organizations, preventionof money laundering, and elimination of criminalfinancial support networks.

In an example of such cooperative effort, the UnitedStates is providing $1.3 billion in support for PlanColombia, President Andres Pastrana's effort to fightColombian drug trafficking and strengthendemocracy, as well as promote legitimate economicendeavors in Colombia. Since Colombian drugtraffickers supply approximately 90% of the cocaineused in the United States, U.S. assistance to PlanColombia's interdiction, eradication, and alternativecrop development efforts will be necessary if we areto stem this deadly drug's flow into the United States.As an additional measure, we continue to stronglysupport interdiction programs to halt the flow of drugsacross the U.S. border either by independent meansor exploiting the U.S. transportation system.

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Other International Crime. Economic globalizationincreasingly makes all nations and peoples vulnerableto various unlawful activities that impede rationalbusiness decisions and fair competition in a marketeconomy. Such activities include, but are not limitedto, extortion, corruption, migrant smuggling, traffickingin persons, money laundering, counterfeiting, creditcard and other financial fraud, and intellectualproperty theft. Many of these activities tend toimpede or disrupt the safe and secure internationalmovement of passengers and goods acrossinternational lines. They also attack the integrity andreliability of international financial systems.Corruption and extortion activities by organized crimegroups can even undermine the integrity ofgovernment and imperil fragile democracies. And,the failure of governments to effectively controlinternational crime rings within their borders -- or theirwillingness to harbor international criminals -­endangers global stability. There must be no safehaven where criminals can roam free, beyond thereach of our extradition and legal assistance treaties.

Open markets must be preserved, laws andregulations governing financial institutions must bestandardized, and international law enforcementcooperation in the financial sector must be improvedfor the benefits of economic globalization to bepreserved.

The United States is implementing a number ofinitiatives and strategies tailored to combat variousforms of international crime. For example, welaunched the National Money Laundering Strategy,under which the Departments of Treasury and Justicework to disrupt illegal profit flows to organized crimegroups. The Presidential Decision Directive onInternational Organized Crime directs closecoordination among Federal agencies to identify,target, and disrupt the activities of criminal groups,and the President's International Crime ControlStrategy establishes the broad goals andimplementing objectives for this effort. Finally, inDecember 2000, the United States published its first­ever comprehensive International Crime ThreatAssessment detailing criminal activities around theglobe that impact our national security.

The United States is pursuing efforts to combatinternational crimes that are economic in origin, butthe effects of which transcend economics. Theyinclude crimes that result in the contamination of theenvironment, such as the illegal international

movement of chloro-fluorocarbons (CFCs) that attackthe ozone layer, thereby endangering all life on earth.They also include crimes that threaten the world'sdiversity through illegal trafficking in endangered andthreatened species of flora and fauna. The UnitedStates continues to work with nations around theworld to counter these crimes.

Smaller-Scale Contingencies

Smaller-scale contingency (SSC) operationsencompass the full range of military operations shortof major theater warfare, including peacekeepingoperations, enforcing embargoes and no-fly zones,evacuating U.S. citizens, reinforcing key allies,neutralizing NBC weapons facilities, supportingcounterdrug operations, protecting freedom ofnavigation in international waters, providing disasterrelief and humanitarian assistance, coping with massmigration, and engaging in information operations.These challenging operations are likely to arisefrequently and require significant commitments ofhuman and fiscal resources over time. Theseoperations also put a premium on the ability of theU.S. military to work closely and effectively with otherUnited States Government agencies, non­governmental organizations, regional andinternational security organizations and coalitionpartners.

In general, SSC operations are aimed at checkingaggression and addressing local and regional crisesbefore they escalate or spread. Thus, while SSCsmay involve other than "vital" national securityinterests, resolving SSCs gives us the chance toprevent greater and costlier conflicts that might wellthreaten U.S. vital interests.

The United States need not take on sole responsibilityfor operations and expenditures in SSCs. In fact, wehave encouraged and supported friends and allies'assumption of both participatory and leadership rolesin regional conflicts. Such encouragement, in theory,constitutes a fruitful middle ground between inactionand conflict. In practice, the United States hasrecently played a role in a number of successfulcoalition operations. These include participating inNATO-led Bosnia and Kosovo operations withpredominantly European troop participation; providinglogistical, intelligence, and other support to operationsin East Timor; and supporting the United Nations' and

Economic Community of West African States'leadership roles in seeking peace for Sierra Leone.

Coalition efforts in SSCs raise the critical question ofcommand and control. Under no circumstances willthe President ever relinquish his constitutionalcommand authority over U.S. forces. However, theremay be times in the future, just as in the past, when itis in our interest to place U.S. forces under thetemporary operational control of a competent allied orUnited Nations commander.

There is an important role for the United Nations as atool in managing conflict. UN peacekeepingoperations can be a very effective alternative to directintervention by the United States. The Brahimi reporton peacekeeping reform offers many goodrecommendations that, if implemented, can make thistool even more effective as an instrument of policy.

As in regional conflict, conducting smaller-scalecontingencies means confronting new threats such asterrorism, information attack, computer networkoperations, and the use or threat of use of weaponsof mass destruction. United States forces must alsoremain prepared to withdraw from contingencyoperations if they are needed in the event of a majortheater war. Accordingly, we must continue to train,equip, and organize U.S. forces to be capable ofperforming multiple missions at any given time.

Major Theater Warfare

Fighting and winning major theater wars is theultimate test of our Armed Forces -- a test at whichthey must always succeed. For the foreseeablefuture, the United States, preferably in concert withallies, must have the capability to deter and, ifdeterrence fails, defeat large-scale, cross-borderaggression in two distant theaters in overlapping timeframes. Maintaining a two major theater warcapability reassures our friends and allies and makescoalition relationships with the United States moreattractive. It deters opportunism elsewhere when weare heavily involved in deterring or defeatingaggression in one theater, or while conductingmultiple smaller-scale contingencies and engagementactivities in other theaters. It also provides a hedgeagainst the possibility that we might encounter threatslarger or more difficult than expected. A strategy fordeterring and defeating aggression in two theatersensures that we maintain the capability and flexibility

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to meet unknown future threats, while continuedglobal engagement helps preclude such threats fromdeveloping.

Fighting and winning major theater wars entails threechallenging requirements. First, we must maintainthe ability to rapidly defeat initial enemy advancesshort of the enemy's objectives in two theaters, inclose succession. We must maintain this ability toensure that we can seize the initiative, minimizeterritory lost before an invasion is halted, and ensurethe integrity of our warfighting coalitions. Failure todefeat initial enemy advances rapidly would make thesubsequent campaign to evict enemy forces fromcaptured territory more difficult, lengthy and costly,and could undermine U.S. credibility and increase therisk of conflict elsewhere.

Second, the United States must be prepared to fightand win under conditions where an adversary mayuse asymmetric means against us -- unconventionalapproaches that avoid or undermine our strengthswhile exploiting our vulnerabilities. Because of ourconventional military dominance, adversaries arelikely to use asymmetric means, such as NBCweapons, information operations, attacks on ourcritical infrastructure, or terrorism. Such asymmetricattacks could be used to disrupt the critical logisticspipeline -- from its origins in the United States, alongsea and air routes, at in-transit refueling and stagingbases, to its termination at airfields, seaports, andsupply depots in theater -- as well as our forcesdeployed in the field. The threat of NBC attacksagainst U.S. forces in theater or U.S. territory couldbe used in an attempt to deter U.S. military action indefense of its allies and other security interests.

We are enhancing the preparedness of our ArmedForces to effectively conduct sustained operationsdespite the presence, threat, or use of NBC weapons.These efforts include development, procurement, anddeployment of theater missile defense systems toprotect forward-deployed military personnel, as wellas enhanced passive defenses against chemical andbiological weapons, improved intelligence collectionand counterforce capabilities, heightened securityawareness and force protection measures worldwide.We are also enhancing our ability to defend againsthostile information operations, which could, in thefuture, take the form of a full-scale, strategicinformation attack against our critical nationalinfrastructures, government, and economy -- as wellas attacks directed against our military forces.

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Third, our military must also be able to transition tofighting major theater wars from a posture of globalengagement -- from substantial levels of peacetimeengagement overseas as well as multiple concurrentsmaller-scale contingency operations. Withdrawingfrom such operations would pose significant politicaland operational challenges. Options available to theNational Command Authorities (NCA) may includebackfilling those forces withdrawn from contingencyoperations or substituting for forces committed tosuch operations. Ultimately, however, the UnitedStates must accept a degree of risk associated withwithdrawing from contingency operations andengagement activities in order to reduce the greaterrisk incurred if we failed to respond adequately tomajor theater wars.

The Decision to Employ MilitaryForces

The decision whether to use force is dictated first andforemost by our national interests. In those specificareas where our vital interests are at stake, our useof force will be decisive and, if necessary, unilateral.

In situations posing a threat to important nationalinterests, military forces should only be used if theyare likely to accomplish their objectives, the costs andrisks of their employment are commensurate with theinterests at stake, and other non-military means areincapable of achieving our objectives. Such uses ofmilitary forces should be selective and limited,reflecting the importance of the interests at stake.We act in concert with the international communitywhenever possible, but do not hesitate to actunilaterally when necessary.

The decision to employ military forces to support ourhumanitarian and other interests focuses on theunique capabilities and resources the military canbring to bear, rather than on its combat power.Generally, the military is not the best tool forhumanitarian concerns, but under certain conditionsuse of our Armed Forces may be appropriate. Thoseconditions exist when the scale of a humanitariancatastrophe dwarfs the ability of civilian reliefagencies to respond, when the need for relief isurgent and only the military has the ability to providean immediate response, when the military is neededto establish the preconditions necessary for effective

application of other instruments of national power,when a humanitarian crisis could affect U.S. combatoperations, or when a response otherwise requiresunique military resources. Such efforts by the UnitedStates, preferably in conjunction with other membersof the international community, will be limited induration, have a clearly defined mission and endstate, entail minimal risk to U.S. lives, and bedesigned to give the affected country the opportunityto restore its own basic services.

In all cases, the costs and risks of U.S. militaryinvolvement must be commensurate with theinterests at stake. We will be more inclined to actwhere there is reason to believe that our action willbring lasting improvement. Our involvement will bemore circumscribed when regional states ororganizations are better positioned to act than we are.Even in these cases, however, the United States willbe actively engaged with appropriate diplomatic,economic, and military tools.

In every case, we will consider several criticalquestions before committing military force: have weexplored or exhausted non-military means that offer areasonable chance of achieving our. goals? Is there aclearly defined, achievable mission? What is thethreat environment and what risks will our forcesface? What level of effort will be needed to achieveour goals? What is the potential cost -- human andfinancial -- of the operation? What is the opportunitycost in terms of maintaining our capability to respondto higher-priority contingencies? Do we havemilestones and a desired end state to guide adecision on terminating the mission? Is there aninteragency or multinational political-military plan toensure that hard-won achievements are sustainedand continued in the mission area after the withdrawalof U.S. forces?

Having decided that use of military forces isappropriate, the decision on how they will beemployed is based on two guidelines. First, ourforces will have a clear mission and the means toachieve their objectives decisively. Second, as muchas possible, we will seek the support and participationof our allies, friends, and relevant internationalinstitutions. When our vital interests are at stake, weare prepared to act alone. But in most situations,working with other nations increases theeffectiveness of each nation's actions and lessenseveryone's burden.

Sustaining our engagement abroad over the longterm will require the support of the American peopleand the Congress to bear the costs of defending U.S.interests -- including the risk of losing U.S. lives.Some decisions to engage abroad with our militaryforces could well face popular opposition, but mustultimately be judged by whether they advance theinterests of our nation in the long run. When wejudge it to be in our interest to intervene, we mustremain clear in our purposes and resolute in ouractions. We must also ensure that protection of thatforce is a critical priority and that our protection effortsvisibly dissuade potential adversaries.

Preparing for an UncertainFuture

We must prepare for an uncertain future, even as weaddress today's security problems. We need to lookclosely at our national security apparatus to ensure itseffectiveness by adapting its institutions to meet newchallenges. This means we must transform ourcapabilities and organizations -- diplomatic, defense,intelligence, law enforcement, and economic -- to actswiftly and to anticipate new opportunities and threatsin today's continually evolving, highly complexinternational security environment. We must alsohave a strong, competitive, technologically superior,innovative, and responsive industrial and researchand development base and a national transportationsystem with the resources and capacity to supportdisaster response and recovery efforts if nationalmobilization is required.

Strategically, our transformation within the militaryrequires integrating activities in six areas: serviceconcept development and experimentation; jointconcept development and experimentation; robustprocesses to implement changes in the Services andjoint community; focused science and technologyefforts; international transformation activities; andnew approaches to personnel development that fostera culture of bold innovation and dynamic leadership.

The military's transformation requires striking abalance among three critical funding priorities:maintaining the ability of our forces to shape andrespond today; modernizing to protect the long-termreadiness of the force; and exploiting the revolution inmilitary affairs to ensure we maintain our unparalleledcapabilities to shape and respond effectively in the

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...1.

future. Transformation also means taking prudentsteps to position us to effectively counter unlikely butsignificant future threats -- particularly asymmetricthreats.

Investment in research and development is anessential element of our transformation effort. Itpermits us to do what we do best: innovate, not copy.Revolutionary, not evolutionary, leaps will happen inan economy where new ideas can be pursued andquickly translated from vision to reality. It is acompetitive advantage that leverages ourtechnological breakthroughs into sustained militarysuperiority. This requires support not only for bringingpromising technologies out of the labs for insertion inweapons platforms, but also for fundamentalresearch that will produce the as-yet-unknowntechnologies that will give the United States therevolutionary advantages we will need in the future.Ultimately, our development efforts must be practicaland founded in war-fighting objectives tested throughaggressive experimentation.

At the same time we push technological frontiers andtransform our military, we also must address futureinteroperability with multinational partners. Since theywill have varying levels of technology, a tailoredapproach to interoperability that accommodates awide range of needs and capabilities is necessary.We must encourage our more technically advancedfriends and allies to build the capabilities that areparticularly important for interoperability, including thecommand, control, and communication capabilitiesthat form the backbone of combined operations. Wemust help them bridge technological gaps, supportinginternational defense cooperation and multinationalventures where they enhance our mutual support andinteroperability.

In May 2000, the United States spearheaded aDefense Trade Security Initiative (DTSI); a packageof 17 measures designed to enhance alliedinteroperability and coalition warfighting capabilitiesby facilitating the transfer of critical U.S.-origindefense items to our allies. At the same time, DTSIpromotes a strong and robust allied transnationaldefense industrial base that can provide innovativeand affordable products needed to meet alliedwarfighting requirements for the 21 st century.

Transformation extends well beyond the acquisition ofnew military systems -- we seek to leverageadvanced technological, doctrinal, operational and

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organizational innovations both within governmentand in the commercial sector to give U.S. forcesgreater capabilities and fleXibility. Joint ForcesCommand and the Armed Services are pursuing anaggressive, wide-ranging innovation andexperimentation program to achieve thattransformation. The Service programs focus on theircore competencies and are organized to explorecapability improvements in the near-, mid-, and far­term. The Joint Forces Command program ensuresa strong joint perspective while also complementingefforts by the Services. A multilateral program hasalso been developed. NATO's Defense CapabilitiesInitiative now includes both a NATO-centered andnation-centered concept development andexperimentation program, which Joint ForcesCommand complements with a joint experimentationprogram to include allies, coalition partners andfriends. A recently inaugurated interagency processon Contingency Planning offers the promise ofimproving the coordination among governmentagencies well before a crisis is at hand.

The on-going integration of the Active and Reservecomponents into a Total Force is another importantelement of the transformation. Despite the rapidpace of technological innovation, the humandimension of warfare remains timeless. In this era ofmultinational operations and complex threatsinvolving ethnic, religious, and cultural strife, regionalexpertise, language proficiency, and cross-culturalcommunications skills have never been moreimportant to the U.S. military. We will continue totransform and modernize our forces by recruiting,training, and retaining quality people at all levels ofthe military and among its civilian personnel whobring broad skills, an innovative spirit, and goodjudgement to lead dynamic change into the 21 st

century.

To support the readiness, modernization andtransformation of our military forces, we will work withthe Congress to enact legislation to implement theDefense Reform Initiative, which will free upresources through a revolution in business affairs.This effort includes competitive sourcing, acquisitionreform, transformation of logistics, and elimination ofexcess infrastructure through two additional rounds ofbase realignment and closure. The Administration, inpartnership with the Congress, will continue to ensurethat we maintain the best-trained, best-equipped andbest-led military force in the world for the 21 5 century.

In the area of law enforcement, the United States isalready facing criminal threats that are much broaderin scope and much more sophisticated than those wehave confronted in the past. We must prepare for thelaw enforcement challenges arising from emergingtechnology, globalization of trade and finance, andother international dynamics. Our strategy for thefuture calls for the development of new investigativetools and approaches as well as increased integrationof effort among law enforcement agencies at alllevels of government, both in the United States andabroad.

We will continue efforts to construct appropriate 21 sl

century national security programs and structuresgovernment-wide. We will continue to fosterinnovative approaches and organizational structuresto better protect American lives, property andinterests at home and abroad.

Promoting Prosperity

Globalization, which has drawn our economic andsecurity interests closely together, is an inexorabletrend in the post-Cold War international system. It islogical, then, for the United States to capture itspositive energy and to limit its negative outcomes,where they exist. In doing both we will be able topromote shared prosperity, the second core objectiveof our national security strategy.

Strengthening FinancialCoordination

As a result of economic globalization, prosperity forthe United States and others is inextricably linked toforeign economic developments. Interdependence ofthis degree makes it incumbent upon the UnitedStates to be a cooperative leader and partner in theglobal financial system. This means doing our part toprOVide economic and political support to internationalfinancial institutions; working to reform them;equipping them with the tools necessary to react tofuture financial crises; and expanding them toembrace sustainable development efforts in emergingmarket economies.

Our objective is to build a stable, resilient globalfinancial system that promotes strong globaleconomic growth while providing broad benefits in allcountries. Throughout the past seven years,Congress and the President have worked together toenhance funding for international economicinstitutions and programs. Promoting our prosperityrequires us to sustain these commitments in theyears and decades ahead.

Drawing on the lessons of the Mexican peso crisis in1994 and the Asian crises in 1997 and 1998, theUnited States took the lead in advocating steps tostrengthen the architecture of the internationalfinancial system so that it more effectively promotesstronger policies in emerging market economies,works to prevent crises, and is better equipped tohandle crises when they do occur. As part of aproactive effort to retool the system, the United Statesproposed creation of the Contingent Credit Line in theIMF to encourage countries to avoid crises. Inaddition to providing external incentives, it assiststhese countries to also improve their own debtmanagement. The United States has also taken theinitiative in 1999 and 2000, once financial stability wasrestored, to advocate a series of reforms in theInternational Monetary Fund (IMF) and the WorldBank. These include restructuring lendinginstruments, introducing greater transparency andaccountability into their operations, increasing effortsto reduce vulnerability in advance of crisis, andinvolving private sector creditors in crisis resolution.

Some developing countries face particularly difficultchallenges in their efforts to achieve sustainabledevelopment. The HIPC Initiative, as both aninternational assistance and development tool,provides multilateral debt reduction to countriesfacing unmanageable debt burdens. In addition toproviding $1 billion in support to the HIPC, the UnitedStates has led the IMF, World Bank, and otherfinancial institutions to focus attention and resourceson the health, education, environment, and povertyissues that surround sustainable development.

Promoting an Open TradingSystem

In a world where over 96% of the world's consumerslive outside the United States, the Nation's domestic

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economic growth is predicated on our success inexpanding trade with other nations.

Since 1993, the President has negotiated over 300distinct trade agreements. Prominent among thesehave been the following, which have resulted indeclining unemployment, rising standards of living,and robust economic growth in the United States:

• The North American Free Trade Agreement(NAFTA), which institutionalized our tradingrelationship with Mexico and Canada. NAFTAcreated the world's largest free trade zone,expanded trade among its three signatories byover 85%, and generated increased U.S. exportsto both Mexico and Canada. Mexico and Canadanow take nearly 40% of U.S. exports.

• The Uruguay Round of the General Agreementon Tariffs and Trade, which created the WTO andcreated, or sUbstantially expanded, multilateraltrade rules and commitments to cover agriculture,services, and intellectual property rights. TheWTO has been instrumental in assistingtransition economies to progress from centrallyplanned to market economies and promotinggrowth and development in poor countries. TheUnited States continuously leads accessionnegotiations with countries who are seeking WTOmembership and who are willing to meet its highstandards of market access and rules-basedtrading.

• Permanent Normal Trade Relations with China,which will provide American farmers, businesses,and industries with market access to the world'smost populous nation.

We have consistently advocated trade liberalizationwith our values in mind, ensuring that increased tradeadvances, rather than weakens, the rights of workersand the health of the environment.

NAFTA was historic because it mandatedenvironmental and labor protections; it was the firsttrade agreement to explicitly create the link betweentrade liberalization and the protection of labor rightsand the environment. History was again made thisyear when the United States entered into a FreeTrade Agreement with the Hashemite Kingdom ofJordan. Language in the agreement ensures thatliberalization of trade between both nations, theprotection of labor rights, and safeguarding theenvironment are mutually supportive.

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The United States ensured that the WTO preambleestablished environmental protection as an overallobjective of the parties to the agreement. InNovember of 1999, the President issued an executiveorder on Environmental Reviews of TradeAgreements, an order requiring careful environmentalanalysis of major new trade agreements. The Officeof the United States Trade Representative and theCouncil on Environmental Quality oversee theimplementation of the order, ensuring that promotingtrade and protecting the environment go hand-in­hand.

Numerous regional economic partnerships alsofacilitate global trade. In addition to NAFTA, the AsiaPacific Economic Cooperation Forum (APEC), thePresident's trade and investment initiative in Africa,the Transatlantic Economic Partnership, andnegotiations to create the Free Trade Area of theAmericas (FTAA) by 2005 promote open trade inother economic trading regions critical to our nationalsecurity. With the enactment of the U.S.-CaribbeanBasin Trade Partnership Act of 2000 and the AfricaGrowth and Opportunity Act of 2000, the UnitedStates set out to deepen and widen its regionaleconomic relationships.

A Congressional grant of "fast track" authority to thePresident would enhance his ability to break downforeign trade barriers in a timely manner. "Fast track"promotes American prosperity, just as it expeditesdomestic job creation and economic growth.

Enhancing AmericanCompetitiveness

Gaining the full benefit of more open markets requiresan integrated strategy that maintains our technologicaladvantages, promotes American exports abroad, andensures that export controls intended to protect ournational security do not unnecessarily make U.S. high

technology companies less competitive globally.

Technological advantage

We will continue to support a vigorous science andtechnology base that promotes economic growth,creates high-wage jobs, sustains a healthy, educatedcitizenry, and provides the basis for our future military

systems. We will continue to foster the openinterchange of people and ideas that underpins ourscientific and technological enterprise. We will invest ineducation and training to develop a workplace capableof participating in our rapidly changing economy. And,we will invest in world-class transportation, information,and space infrastructures for the 21 st century.

Export Advocacy

The Administration created America's first nationalexport strategy, working with the private sector toreform the way government and business cooperate toexpand exports. The Trade Promotion CoordinationCommittee has been instrumental in improving exportpromotion efforts, coordinating our export financing,implementing a government-wide advocacy initiative,and updating market information systems and productstandards education.

This export strategy is working, and the United Stateshas regained its position as the world's largestexporter. While our strong export performance hassupported millions of new, export-related jobs, we mustexport more in the years ahead if we are to furtherstrengthen our trade balance position and raise livingstandards with high-wage jobs.

Enhanced Export Control

The United States is a world leader in high technologyexports, including satellites, cellular phones,computers, information security, and commercialaircraft. Some of this technology has direct or indirectmilitary applications, or may otherwise be used bystates or transnational organizations to threaten ournational security. For that reason, the United StatesGovernment carefully·controls high technology exportsby placing appropriate restrictions on the sale of goodsand technologies that could impair our security.Imposing these controls recognizes that, in anincreasingly competitive global economy, where thereare many non-U.S. suppliers, excessive restrictions willnot limit the availability of high technology goods.Rather, they serve only to make U.S. high technologycompanies less competitive globally, thus losingmarket share and becoming less able to producecutting-edge products for the U.S. military and ourallies.

Our current export control policy recognizes that wemust balance a variety of factors. On the one hand,our policies must promote and encourage the sale ofour most competitive goods abroad, while on the other,they must ensure that technologies that facilitateproliferation of WMD do not end up in the wronghands. Our policies therefore promote high technologyexports by making dual-use license decisions moretransparent, predictable, and timely through a rigorouslicensing process administered by the Department ofCommerce at the same time that we ensure athorough review of dual-use applications by theDepartments of Defense, State, and Energy. Anyagency that disagrees with a proposed export canenter the issue into a dispute resolution process that, ifnecessary, may ultimately rise to the President foradjudication. As a result, reviews of dual-use licensesare today more thorough than ever before. In the caseof munitions exports, we are committed to a policy ofresponsible restraint in the transfer of conventionalarms and technologies. A key goal in the years aheadis to strengthen worldwide controls in this area, whilefacilitating exports of items that we wish to go to ourallies and coalition partners. The DTSI, which we lookto enhance our future interoperability with our friendsand allies, is one such effort that will streamline U.S.munitions export control processes while also devotingadditional resources to increasing the security scrutinyapplied to munitions exports. The President's decisionto seek agreements with close allies that would permitextension of Canada-like exemptions to the ITAR forlow risk exports will significantly enhance U.S.competitiveness while also enhancing export controls.

Encryption is an example of a specific teChnology thatrequires careful balance. Export controls on encryptionmust be a part of an overall policy that balancesseveral important national interests, includingpromoting secure electronic commerce, protectingprivacy rights, supporting public safety and nationalsecurity interests, and maintaining U.S. industryleadership. After reviewing its encryption policy andconsulting with industry, privacy and civil libertiesgroups, the Administration implemented significantupdates to encryption export controls in January 2000and concluded a second update in October 2000. Thenew policy continues a balanced approach bystreamlining export controls while protecting criticalnational security interests. U.S. companies now havenew opportunities to sell their software and hardwareproducts containing encryption, without limits on keylength, to global businesses, commercial organizationsand individuals. Most U.S. mass-market software

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products, previously limited to 56 and 64 bit keys, areapproved for export to any end user.

In October 2000, the Administration finished anotherreview of its policy to ensure that it maintains balancewhile taking into account advances in technology andchanges in foreign and domestic markets. The mostsignificant change is that the U.S. encryption industrymay now export encryption items and technologylicense-free to the European Union and amongseveral countries (including major trading partnersoutside of Western Europe). The update isconsistent with recent regulations adopted by theEuropean Union; thus assuring continuedcompetitiveness of U.S. industry in internationalmarkets. Other policy provisions implemented tofacilitate technological development includestreamlined export provisions for beta test software,products that implement short-range wirelessencryption technologies, products that enable non­U.S.-sourced products to operate together, andtechnology for standards development. Post-exportreporting is also streamlined to increase the relief toU.S. companies of these requirements. Reporting willno longer be required for products exported by U.S.­owned subsidiaries overseas, or for generallyavailable software pre-loaded on computers orhandheld devices. These initiatives will assure thecontinuing competitiveness of U.S. companies ininternational markets, consistent with the nationalinterest in areas such as electronic commerce,national security, and support to law enforcement.

Similarly, computer technology is an area where theapplication of export controls must balance our nationalsecurity concerns with efforts to promote andstrengthen America's competitiveness. It is likely wewill continue to face extraordinarily rapid technologicalchanges that demand a regular review of exportcontrols. Maintaining outdated controls on commodity­level computers would hurt U.S. companies withoutbenefiting our national security. For these reasons, inFebruary 2000, the Administration announced reformsto computer export controls; the reforms permit salesof higher-level computer technology to countriesfriendly to the United States. Export control agencieswill also review advances in computer technology onan ongoing basis and provide the President withrecommendations for updating computer exportcontrols every six months.

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U.S. efforts to stem proliferation cannot be effectivewithout the cooperation of other countries. We havestrengthened cooperation through a host ofinternational WMD nonproliferation regimes, and wewill continue to actively seek greater transparency inconventional arms transfers. These efforts enlist theworld community in the battle against the proliferationof WMD, advanced conventional weapons andsensitive technologies, while at the same timeproducing a level playing field for U.S. business byensuring that our competitors face correspondingexport controls.

Providing for Energy Security

The United States depends on oil for about 40% of itsprimary energy needs, and roughly half of our oil needsare met with imports. And although we import lessthan 15% of the oil exported from the Persian Gulf, ourallies in Europe and Asia account for about 80% ofthose exports. For some years, the United States hasbeen undergoing a fundamental shift away fromreliance on Middle East oil. Venezuela is consistentlyone of our top foreign suppliers, and Africa nowsupplies 15% of our imported oil. Canada, Mexico, andVenezuela combined supply almost twice as much oilto the United States as the Arab OPEC countries. TheCaspian Basin, with potential oil reserves of 160 billionbarrels, also promises to play an increasingly importantrole in meeting rising world energy demand in comingdecades.

Conservation measures and research leading togreater energy efficiency and alternative fuels are acritical element of the U.S. strategy for energysecurity. Our research must continue to focus ondeveloping highly energy-efficient buildings,appliances, and transportation and industrial systems,shifting them where possible to alternative orrenewable fuels, such as hydrogen, fuel celltechnology, ethanol, or methanol from biomass.

Conservation and energy research notwithstanding, theUnited States will continue to have a vital interest inensuring access to foreign oil sources. We mustcontinue to be mindful of the need for regional stabilityand security in key producing areas, as well as ourability to use our naval power, if necessary, to ensureour access to, and the free flow of, these resources.

Efforts by the United States to foster sustainabledevelopment include:

Promoting SustainableDevelopment

True and lasting social and economic progress mustoccur in a sustainable fashion, that meets the humanand environmental needs for enduring growth.Common but reparable impediments to sustainabledevelopment include:

""I -

Promoting Democracyand Human Rights

In consonance with our values, when a nation thatembraces globalization gets left behind, the UnitedStates and other proponents of globalization shouldreach out a hand. Doing so in a manner thatpromotes not just development, but sustainabledevelopment, enhances regional stability, steadilyexpands the economic growth on which demand forour exports depends, and honors our values, whichencourage us to share our wealth with others andinspire growth for more than just ourselves.

• Human capacity development assistance forbasic education and literacy programs, job skillstraining, and other programs specifically designedto protect women's health, provide educationalopportunity, and promote women'sempowerment.

• Leadership in the G-8 and OECD to raiseenvironmental standards for export creditagencies and international financial institutions.

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The third goal of our national security strategy is topromote democracy, human rights, and respect forthe rule of law. Since the founding of the republic, ouractions as a Nation have always been guided by ourbelief that individuals should control their owndestinies: economically, politically, and spiritually.Our core values -- political and economic freedomrespect for human rights, and the rule of law -- 'support this belief, guiding the conduct of ourgovernment at home as well as in its dealings withothers outside our borders. Much as John Winthropset a standard for early colonists that we "be as a cityupon a hill," nearly four centuries later we still seek todemonstrate the power of our democratic ideals andvalues by our example. This does not make us turninward or isolationist, nor should it be interpreted as abid for hegemony. Rather, in keeping with our values,we have lent our encouragement, support, andassistance to those nations and peoples that freelydesire to achieve the same benefits of liberty. Theextraordinary movement of nations away fromrepressive governance and toward democratic andpublicly accountable institutions over the last decadereflects how these ideals, when allowed to be freely

Promoting sound development policies that helpbuild the economic and social framework neededto encourage economic growth and povertyreduction and facilitate the effective use ofexternal assistance.Debt relief to free up developing countries'resources for meeting the basic needs of theirpeople. The United States led the G-7 inadopting the Cologne Debt Initiative for reducingdebts owed them by those of the world's poorestcountries committed to sound policies thatpromote economic growth and poverty reduction.The resulting plan is embodied in the HIPCInitiative.Public health assistance consisting of grants,loans, and tax incentives for the prevention andtreatment of epidemics such as AIDS, malaria,and tuberculosis, as well as the training ofindividuals to continue providing public healthservices.

• Lack of education, which shuts people out fromparticipation in technological advance.

• Disease and malnutrition, which stifleproductivity.

• Pollution, environmental degradation, andunsustained population growth, the remediationof which is much more costly than pre-emptiveaction.

• Uncontrolled exploitation of natural resources(e.g., overhunting or overfishing of species forfood, overcutting of timber for firewood,overgrazing of grasslands by cattle), which canbe serious impediments to sustainabledevelopment.

• Unsustainable foreign debt obligations, whichencourage currency devaluations and capitalflight, and can absorb a substantial share ofsmall economies' resources.

•

•

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shared, can spread widely and rapidly, enhancing thesecurity of all nations. Despite some minor setbacksfor a few of the newer democracies in the last severalyears, the trend continues. Since the success of manyof those changes is by no means assured, our strategymust focus on strengthening the commitment andcapacity of nations to implement democratic reforms,protect human rights, fight corruption and increasetransparency in government. For this reason, we joinwith other nations in creating the community ofdemocracies. In June 2000, 106 countries meeting inWarsaw, Poland endorsed the Warsaw Declarationlaying out criteria for democracy and pledging to helpeach other remain on the democratic path.

Emerging Democracies

The United States works to strengthen democratic andfree market institutions and norms in all countries,particularly those making the transition from closed toopen societies. This commitment to see freedom andrespect for human rights take hold is not only just, butpragmatic. Our security depends upon the protectionand expansion of democracy worldwide, without whichrepression, corruption and instability could engulf anumber of countries and threaten the stability of entireregions.

The sometimes difficult road for new democracies inthe 1990's demonstrates that free elections are notenough. Genuine, lasting democracy also requiresrespect for human rights, including the right to politicaldissent; freedom of religion and belief; an independentmedia capable of engaging an informed citizenry; arobust civil society and strong Non-governmentalOrganization (NGO) structures; the rule of law and anindependent judiciary; open and competitive economicstructures; mechanisms to safeguard minorities fromoppressive rule by the majority; full respect forwomen's and workers' rights; and civilian control of themilitary.

The United States is helping consolidate democraticand market reforms in Central and Eastern Europeand the newly independent states of the former SovietUnion. Integrating new democracies in Europe intoEuropean political, economic and securityorganizations, such as NATO, OSCE, the EU, andthe Council of Europe, will help lock in and preservethe impressive progress these nations have made ininstituting democratic and market-economic reforms.Consolidating advances in democracy and free

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markets in our own hemisphere remains a high priority.In the Asia Pacific region, economic dynamism isincreasingly associated with political modernization,democratic evolution, and the widening of the rule oflaw. Indonesia's October 1999 election was asignificant step toward democracy and we will do ourpart to help Indonesia continue on that path. In Africa,we are particUlarly attentive to states, such as SouthAfrica and Nigeria, whose entry into the community ofmarket democracies may influence the future directionof an entire region.

The methods for assisting emerging democracies areas varied as the nations involved. Our publicdiplomacy programs are designed to share ourdemocratic experience in both government and civilsociety with the publics in emerging democracies. Wemust continue leading efforts to mobilize internationaleconomic and political resources, as we have withRussia, Ukraine, and other countries in Eastern Europeand Eurasia, and with Southeast Europe. We musttake firm action to help counter attempts to reversedemocracy, as has happened in Fiji, Haiti, Pakistan,Paraguay, and Peru.

We must help democratizing nations strengthen thepillars of civil society by supporting administration ofjustice and rule of law programs; promoting theprinciple of civilian control of the military; and trainingforeign police and security forces to solve crimes andmaintain order without violating the basic humanrights of their citizens. And we must seek to improvetheir market and educational institutions, fightcorruption and political discontent by encouraging goodgovernance practices, and encourage a free andindependent local media that may promote theseprinciples without fear of reprisal.

Adherence to Universal HumanRights and DemocraticPrinciples

We must sustain our efforts to press for adherence todemocratic principles, and respect for basic humanrights and the rule of law worldwide, including incountries that continue to defy democratic advances.Working bilaterally and through internationalinstitutions, the United States promotes universaladherence to democratic principles and internationalstandards of human rights. Our efforts in the United

Nations, the Community of Democracies, and otherorganizations continue to make these principles thegoverning standards for acceptable internationalbehavior.

Ethnic conflict represents a great challenge to ourvalues and our security. When it erupts in ethniccleansing or genocide, ethnic conflict becomes agrave violation of universal human rights. We find itclearly opposed to our national belief that innocentcivilians should never be subject to forcible relocationor slaughter because of their religious, ethnic, racial,or tribal heritage. Ethnic conflict can also threatenregional stability and may well give rise to potentiallyserious national security concerns. When thisoccurs, the intersection of our values and nationalinterests make it imperative that we take action toprevent -- and whenever possible stop -- outbreaks ofmass killing and displacement.

At other times the imperative for action will be muchless clear. The United States and other nationscannot respond to every humanitarian crisis in theworld. But when the world community has the powerto stop genocide and ethnic cleansing, we will workwith our allies and partners, and with the UnitedNations, to mobilize against such violence -- as wedid in Bosnia and Kosovo.

Our response will not be the same in every case.Sometimes concerted economic and politicalpressure, combined with diplomacy, is the bestanswer. At other times, collective military action isappropriate, feasible, and necessary. The way theinternational community responds will depend uponthe capacity of countries to act, and on theirperception of their national interests.

Events in the Bosnia conflict and preceding the 1994genocide in Rwanda demonstrate the pernicious powerof inaccurate and malicious information in conflict­prone situations. This made apparent our need toeffectively use our information capabilities to countermisinformation and incitement, prevent and mitigateethnic conflict, promote independent mediaorganizations and the free flow of information, andsupport democratic participation. As a result, in thespring of 1999, the President directed that all publicdiplomacy and international information efforts becoordinated and integrated into our foreign and nationalsecurity policy-making process.

We will also continue to work -- bilaterally and withinternational institutions -- to ensure that international

human rights principles protect the most vulnerable ortraditionally oppressed groups in the world -- women,children, indigenous people, workers, refugees, andother persecuted persons. To this end, we will seekto strengthen international mechanisms that promotehuman rights and address violations of internationalhumanitarian law, such as the UN Commission onHuman Rights and the international war crimestribunals for the former Yugoslavia and Rwanda. Westrongly support wide ratification of the ILO Conventionon the Worst Forms of Child Labor. We also aim toimplement fUlly those international human rightstreaties to which we are a party.

It is our aim to ensure protection for persons fleeingsituations of armed conflict or generalized human rightsabuses by encouraging governments not to returnrefugees to countries where they face persecution ortorture. We also seek to focus additional attention onthe more vulnerable or traditionally oppressed peopleby spearheading new international initiatives to combatthe sexual exploitation of minors, child labor, use ofchild soldiers, and homelessness among children.

Violence against, and trafficking in, women andchildren are international problems with nationalimplications. We have seen cases of trafficking in theUnited States for purposes of forced prostitution,sweatshop labor, and domestic servitude. Our effortshave expanded to combat this problem, bothnationally and internationally, by increasingawareness, focusing on prevention, providing victimassistance and protection, and enhancing lawenforcement. The President continues to call uponthe Senate to give its advice and consent toratification to the Convention on the Elimination of allForms of Discrimination Against Women, which willenhance our efforts to combat violence againstwomen, reform unfair inheritance and property rights,and strengthen women's access to fair employmentand economic opportunity.

Promotion of religious freedom is one of the highestconcerns in our foreign policy. Freedom of thought,conscience and religion is a bedrock issue for theAmerican people. To that end, the President signedthe International Religious Freedom Act of 1998, whichprovides the flexibility needed to advance religiousfreedom and to counter religious persecution. InSeptember 1999, we completed the first phase outlinedin the Act with publication of the first annual report onthe status of religious freedom worldwide, a 1,100 pagedocument covering the status of religious freedom in

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----,'-'----------------194 countries. In October, we designated andsanctioned the Taliban regime in Afghanistan, Burma,China, Iran, Iraq, Sudan, and the Milosevic regime inSerbia as "countries of particular concern" for havingengaged in or tolerated particularly severe violations ofreligious freedom. The United States is activethroughout the world assisting those who arepersecuted because of their religion and promotingfreedom of religious belief and practice. We willcontinue to work with individual nations and withinternational institutions to combat religiouspersecution and promote religious freedom.

The United States will continue to speak out againsthuman rights abuses and it will continue to carry onhuman rights dialogues with countries willing to engageus constructively. Because police and internalsecurity services can be a source of human rightsviolations, we use training and contacts between U.S.law enforcement and their foreign counterparts tohelp address these problems. We do not providetraining to police or military units implicated in humanrights abuses. When appropriate, we are prepared totake strong measures against human rights violators.These include economic sanctions, visa restrictions,and restricting sales of arms and police equipment thatmay be used to commit human rights abuses. TheAdministration proposed legislation to prevent theUnited States from becoming a safe haven for humanrights violators. Both the Immigration andNaturalization Service and the Federal Bureau ofInvestigation are coordinating investigative efforts oncases involving allegations of human rights abuse topursue criminal prosecution or administrative removalproceedings in appropriate instances.

In the 1990s, the United States took the lead in seekingcompensation for Holocaust survivors, many of whomare impoverished. Over a million individuals areeligible to apply for benefits under agreementsconcluded with Germany, Austria, and Switzerland.We must now be certain that these agreements arecarried out in a fair and equitable manner, and thatsteps are taken to complete the work we havecommenced in the areas of Holocaust education, thepayment of Holocaust era insurance policies, and therestitution of art and other property.

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Humanitarian Activities

Our efforts to promote democracy and human rightsare complemented by our humanitarian programs,which are designed to alleviate human suffering,address resource and economic crises that couldhave global implications, and pursue appropriatestrategies for economic development.

We also must seek to promote reconciliation in statesexperiencing civil conflict and to address migration andrefugee crises. To this end, the United States willprovide appropriate financial support and work withother nations and international bodies, such as theInternational Committee of the Red Cross and the UNHigh Commissioner for Refugees. We also will assistefforts to protect the rights of refugees and displacedpersons and to address the economic and social rootcauses of internal displacement and internationalflight.

Private firms and NGOs that principally addresshuman rights issues or democratic principles oftenbecome natural allies in assisting in the relief ofhumanitarian crises. We frequently find we havenat~ral partners in labor unions, human rights groups,environmental advocates, and chambers ofcommerce in providing international humanitarianassistance. In providing this often life savingassistance, these private and non-governmentalgroups visibly demonstrate another aspect of, andcomplement to, our democratic values -- one ofhelping others in need. All of these values are thusseen by the individuals and governments helped bythese organizations, and they underscore why oursupport of the humanitarian assistance efforts ofprivate and non-governmental groups is in keepingwith our values and objective of promoting democracyand human rights.

Supporting the global movement toward democracyrequires a pragmatic, long-term effort focused on bothvalues and institutions. Our goal is a broadening of thecommunity of free-market democracies, and strongerinstitutions and international non-governmentalmovements committed to human rights anddemocratization.

III. Integrated Regional Approaches

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Elsewhere in Southeastern Europe, elections inCroatia this year saw the victory of a pro-Western,pro-reform government that has become aconstructive and stabilizing force in the region.Reform-minded leaders in Macedonia, Albania, andSlovenia continue to press forward with difficulteconomic reforms. Croatia and Albania both became

Promotion of the return of refugees and displacedpersons to their homes to undo the perniciousconsequences of ethnic cleansing;Economic reform and revitalization, leading tosustainable economic growth;Democratic government based on the rule of lawand full respect for human rights;Support for the nascent democratic governmentin the Federal Republic of Yugoslavia (FRY) as ameans for advancing its return to the internationalcommunity;A peaceful resolution of the status of Montenegroand Kosovo through arrangements acceptable toall sides;Strengthening regional cooperation as a basis forthe region's revitalization and eventual integrationwith the rest of Europe;Adherence to international agreements such asthe Dayton Accords, especially in recognition ofinternational boundaries.

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We are making progress towards our objectives.With the toppling of the Milosevic regime and theascension of President Kostunica and hisgovernment, the process of transition fromauthoritarian rule to democratic governance isunderway in the FRY. The United States and theinternational community support democratization andeconomic reform in the FRY to ensure long-lastingchange, the removal of impediments to positivesocial, political, and economic change, and thestability and growth of the entire region ofSoutheastern Europe. Democratic consolidation andWestern integration of the FRY will not be easy, butthe United States stands ready to contribute to theachievement of these long-awaited goals.

Europe and Eurasia

Our policies toward different regions reflect our overallstrategy and guiding principles but must be tailored tothe unique challenges and opportunities of each region.Thus, each uses a different application of the elementsof engagement and does so in differing degrees. Eachregion may have its own focused strategic objectives,but, in the end, enhancing our own and the region'ssecurity while promoting prosperity, democracy, andhuman rights are still the ultimate goals.

European stability is vital to our own security. TheUnited States has three strategic goals in Europe:integration of the region, a cooperative transatlanticrelationship with Europe on global issues, andfostering opportunities while minimizing proliferationrisks posed by collapse of the Soviet Union. The firstgoal, building a Europe that is truly integrated,democratic, prosperous, and at peace, would realizea vision the United States launched more than 50years ago with the Marshall Plan and NATO. Thegreatest challenge to that remains the integration ofSoutheastern Europe into the rest of Europe, astrategic objective the United States shares with itsNATO allies and the EU. The United States, its allies,and the EU recognize that continued instability, ethnicconflict, and potentially open warfare in SoutheasternEurope would adversely affect European security andset back the process of creating a Europe that is trulywhole and free. Accordingly, our strategy involves aseries of interlocking building blocks, the progressiveand interactive implementation of which will achievestep-by-step shared objectives. The building blocksidentified below define our common priorities forSoutheastern Europe, and -- more importantly -- thepursuit of each helps the attainment of all:

• Coexistence among ethnic groups and therebuilding of civic society;

WTO members this year, on the basis ofcommercially meaningful commitments that bolstertheir economic reform programs. Moderate pro­Dayton elements share political power in Bosnia.Kosovars had the opportunity to choose local leadersfor the first time this year in Kosovo's democraticelections, and relatively moderate candidates wereelected by large majorities. The FRY's newdemocratic leadership is moving quickly to integratetheir nation into Europe and restore constructivecooperation with its neighbors. But much workremains. Economic and political reforms that willallow Southeastern European nations to moveforward towards European integration must beaccelerated. While Milosevic is out of power in theFRY, democratic change has not yet beenconsolidated and the new government faces a difficultwinter. Greater ethnic reconciliation in Bosnia andKosovo remains elusive. Security conditions allowingeventual withdrawal of U.S. troops from the regionhave still not been fully realized. Without a broadstrategy of engagement and strong U.S. leadership,our vision of a stable, democratic, and prosperousEurope will not be realized.

Our second goal is to work with our allies andpartners across the Atlantic to meet the globalchallenges no nation can meet alone. This meansworking together to consolidate this region's historictransition in favor of democracy and free markets;supporting peace efforts in troubled areas both withinand outside the region; tackling global threats such asthe potential use and continued proliferation of NBCweapons, terrorism, drug trafficking, internationalorganized crime, environmental, problems, or healthcrises; mass uncontrolled migration of refugees, andbuilding a more open world economy without barriersto transatlantic trade and investment.

Our third goal is to develop the opportunities openedby the collapse of the Soviet Union while minimizingthe associated proliferation risks. Russia, Ukraine,and the other New Independent States (NIS) todayare undergoing fundamental changes to their political,economic, and social systems -- the outcome willhave a profound impact on our own future andsecurity. Core U S. security interests are beingadvanced through our engagement with thesecountries, such as through U.S. efforts to help secureand dismantle the former Soviet arsenal of weaponsof mass destruction. Our engagement also helpsframe the key choices that only the peoples of theformer Soviet Union and their leaders can make

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about their future, their role in world affairs, and theshape of their domestic political and economicinstitutions. Our strategy utilizes a long-term visionfor the region, recognizing that this unprecedentedperiod of transition will take decades, if notgenerations to complete.

Enhancing Security

NATO remains the anchor of U.S. engagement inEuropean security matters, the foundation forassuring collective defense of Alliance members, andthe linchpin of transatlantic security. As the leadingguarantor of European security and a force forEuropean stability, NATO must playa leading role inpromoting a more integrated and secure Europe; oneprepared to respond to new challenges. At the sametime, the United States actively supports the efforts ofour European partners to develop their own EuropeanSecurity and Defense Policy (ESDP). We furthersupport European efforts to increase and improvecapabilities for collective defense and crisis responseoperations, including the capability to act militarilyunder the EU when NATO, as a whole, is not engaged.We seek a relationship that will benefit current, and thepotential future, members of both organizations, and,:,e intend to remain fully engaged in European securityIssues, both politically and militarily. The United Stateshas maintained approximately 100,000 militarypersonnel in Europe to fulfill our commitments toNATO. They provide a visible deterrent againstaggression and coercion, contribute to regionalstability, respond to crises, sustain our vital trans­atlantic ties, and preserve U.S. leadership in NATO.

NATO is pursuing several initiatives to enhance itsability to respond to the new challenges it will face inthe 21 51 century. At NATO's Fiftieth AnniversarySummit in April 1999, Alliance leaders adopted anexpansive agenda to adapt and prepare NATO forcurrent and future challenges. This included anupdated Strategic Concept, which envisions a larger,more capable and more flexible Alliance, committedto collective defense and able to undertake newmissions. The Defense Capabilities Initiative (DCI)aims to improve defense capabilities andinteroperability among NATO military forces, thusbolstering the effectiveness of multinationaloperations across the full spectrum of Alliancemissions, to include Partner forces whereappropriate. NATO and the EU are also forging astrategic partnership that will further reinforce

European capabilities and contributions totransatlantic security. NATO's WMD Initiative, theother activities of NATO's senior groups onproliferation, and U.S. bilateral NBC defensecooperation with key allies, will increase the ability ofthe Alliance to counter the threat of NBC weaponsand their means of delivery.

NATO enlargement has been a crucial element of theU.S. and Allied strategy to build an undivided,peaceful Europe. At the April 1999 NATO Summit,the alliance welcomed the entry of Poland, Hungaryand the Czech Republic as new members. Theaccession of these three nations has made theAlliance stronger and has reinforced Europe's zone ofdemocratic stability.

Together with our allies, we are pursuing efforts tohelp other countries that aspire to membershipbecome the best possible candidates. These effortsinclude the NATO Membership Action Plan and thePartnership for Peace. We are also continuingbilateral programs to advance this agenda, such asthe President's Warsaw Initiative, which is playing acritical role in promoting Western-style reform of thearmed forces of Central and Eastern Europe, andEurasia and helping them become more interoperablewith NATO. Some European nations do not desireNATO membership, but do desire strengthened tieswith the Alliance. The Partnership for Peace providesan ideal vehicle for such relationships. It formalizesrelations, provides a mechanism for mutual beneficialinteraction, and establishes a sound basis forcombined action, should that be desired. This can beseen in the major contributions some Partnership forPeace members have made to NATO missions in theBalkans. Also, on a bilateral basis, the United Stateshas concluded security of classified informationagreements with all former Warsaw Pact countries.

NATO is pursuing several other initiatives to enhanceits ability to respond to new challenges and deepen

. ties between the Alliance and Partner countries.NATO's Euro-Atlantic Partnership Council continuesto strengthen political dialogue and practicalcooperation with all partners, and the Alliance valuesits distinctive partnership with Ukraine, which providesa framework for enhanced relations and practicalcooperation. We welcome Russia's re-engagementwith NATO and Permanent Joint Council on the basisof the 1997 NATO-Russia Founding Act. Our sharedgoal remains to deepen and expand constructive

Russian participation in the European securitysystem.

The Organization for Security and Cooperation inEurope (OSCE) has a key role to play in enhancingEurope's stability. It provides the United States with avenue for developing Europe's security architecture ina manner that complements our NATO strategy. Inmany instances, cooperating through the OSCE tosecure peace, deter aggression, and prevent, defuseand manage crises, broadens international supportfor the resolution of a particular security issue, andgives regional actors greater latitude to develop theirown stability mechanisms. The Charter alsorecognizes that European security in the 21st centuryincreasingly depends on building security withinsocieties as well as security between states. InIstanbul, President Clinton joined the other 29 partiesto the Treaty on Conventional Armed Forces inEurope (CFE) in signing the CFE AdaptationAgreement, which will replace obsolete bloc-to-blocforce limitations with nationally-based ceilings andprovide for enhanced transparency of military forcesthrough increased information and more inspections.The United States will continue to give strong supportto the OSCE as our best choice to engage all thecountries of Europe, the Caucasus, and Central Asiain an effort to advance democracy, human rights andthe rule of law, and to encourage them to support oneanother when instability, insecurity, and human rightsviolations threaten peace in the region.

Kosovo- Securing the Peace

On March 24,1999, after repeated attempts atdiplomatic solutions had failed, NATO intervenedmilitarily to end a vicious campaign of ethniccleansing launched by the Milosevic regime inBelgrade against the ethnic Albanian community inKosovo. During the eleven-week air campaign thatcomprised Operation Allied Force, fourteen of theAlliance's nineteen members participated in morethan 38,000 combat sorties, almost one third thenumber flown during the 1991 Desert Stormcampaign. In the end, due to the application of forcein concert with continued international pressure,Milosevic capitulated, agreeing to NATO's conditionsincluding the return of all refugees, the withdrawal ofhis military and police forces, and the deployment ofan international civil and military presence. Thisunprecedented display of alliance solidarity endedBelgrade's reign of terror and prevented the real risk

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nations of the former Soviet Union and the Middle East,as well as to contain Iran and Iraq. The President's tripto Turkey and Greece in November 1999 highlightedencouraging signs of progress for reconciliation in theregion, including talks on the Cyprus dispute that arebeing held under the auspices of the UN in New Yorkand Geneva. The EU's historic decision in December1999 at its Helsinki Summit to grant candidate status toTurkey -- which the United States strongly encouraged-- reinforced the development of Greek-Turkishrapprochement, while encouraging Turkey to expandits democracy and observance of human rights for allits citizens.

The Baltic States

The special nature of our relationship with Estonia,Latvia, and Lithuania is recognized in the 1998Charter of Partnership, which clarifies the principlesupon which U.S. relations with the Baltic States arebased and provides a framework for strengtheningties and pursuing common goals. These goalsinclude integration of Latvia, Lithuania, and Estoniainto the transatlantic community and development ofclose, cooperative relationships among all the statesin Northeastern Europe. Through the NorthernEuropean Initiative we seek to strengthen regionalcooperation, enhance regional security and stability,and promote the growth of Western institutions, tradeand investment by bringing together the governmentsand private sector interests in the Baltic and Nordiccountries, Poland, Germany, and Russia.

Northern Ireland

Historic progress was achieved in implementing theGood Friday Accord when, on December 2, 1999, aninclusive power-sharing government was formed inNorthern Ireland, the principle of consent wasaccepted with respect to any change in the territorialstatus of Northern Ireland, new institutions werelaunched for North-South cooperation on the island ofIreland, and the Irish Republican Army named arepresentative to the Independent InternationalCommission on Decommissioning (IICD) ofparamilitary weapons (loyalist paramilitaries namedtheir representatives to the IICD soon thereafter).Although differences over the arms decommissioningissue led to suspension of the new institutions onFebruary 11,2000, the institutions were restored onMay 27 following agreement between the British and

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Irish governments and political leaders. On June 25,the IICD reported that international inspectors visitedseveral IRA arms dumps and concluded that theweapons were secure and could not be used withoutthe IICD becoming aware that this happened. TheIRA announced on June 26 that it had reestablishedcontact with the IICD. These developments followedcontinued progress in promoting human rights andequality in Northern Ireland, including the introductionof legislation to implement the importantrecommendations put forward for police reform in thePatten Report issued on September 9, 1999.Disagreements over progress on decommissioning ofarms have affected progress.

The United States continues to work with the Britishand Irish governments and the political leaders inNorthern Ireland to achieve full implementation of theGood Friday Accord. Working through theInternational Fund for Ireland and the private sector,we will help the people seize the opportunities thatpeace will bring to attract new investment and bridgethe community divide, create new factories,workplaces, and jobs, and establish new centers oflearning for the 21 51 century.

Russia and the Newly IndependentStates (NIS)·

There is no historical precedent for the transitionunderway in Russia, Ukraine, and other NIS. TheUnited States has core national interests at stake inthose endeavors and has acted quickly to help peopleacross the NIS to break the back of the Communistsystem. But the USSR's collapse created newchallenges. In Russia, for example, rigidity oftengave way to laxness and disorder -- too many ruleswere replaced by too few. The United States'engagement with each of the NIS recognizes thattheir transformation will be a long-term endeavor, withfar-reaching implications for regional and globalstability, as well as disappointments and setbacksalong the way.

Open elections are now commonplace in Russia,Ukraine, and most other NIS. We will continue toengage with all these countries to improve theirelectoral processes and help strengthen civil societyby working with grassroots organization, independentmedia, and emerging entrepreneurs. Though thetransition from communism to market democracy isfar from complete, the NIS have reduced state

controls over their economies and instituted basicprotections for private property. It is in our nationalinterest to help them develop the laws, institutions,and skills needed for a market democracy, to fightcrime and corruption, and to advance human rightsand the rule of law. The conflict in Chechnyarepresents a major problem in Russia's post­Communist development and relationship with theinternational community; the means Russia is using inChechnya are undermining its legitimate objective ofupholding its territorial integrity and protecting citizensfrom terrorism and lawlessness.

The United States strategy toward Russia and theNIS has made every American safer. Threatreduction programs have assisted in the deactivationof former Soviet nuclear warheads and greatlydecreased the possibility of sensitive materials,technology, expertise, or equipment falling into thewrong hands. We are working aggressively tostrengthen export controls in Russia and the otherNIS and to stem proliferation of sensitive missile andnuclear technology, as well as other WMD oradvanced conventional weapons to potential regionalaggressors such as Iran. The Administration hassupported the sovereignty and territorial integrity ofthe NIS, including through agreement on the adaptedCFE Treaty, which was made possible by agreedschedules for the withdrawal of Russian forces fromGeorgia and Moldova. The integration of Russia,Ukraine, and other NIS with the new Europe and theinternational community remains a key priority.Despite disagreements over NATO enlargement andthe Kosovo conflict, Russian troops serve shoulder­to-shoulder with U.S. and NATO forces in Kosovoand Bosnia. The United States remains committed tofurther development of the NATO-Russia relationshipand the NATO-Ukraine distinctive partnership.

Our engagement with Russia, Ukraine, and other NISis broad-based and draws upon new ties andpartnerships between U.S. and NIS cities, regions,universities, scientists, students, and businesspeople. United States assistance programs havehelped these countries begin to develop the laws andlegal infrastructure necessary for the rule of law aswell as the building blocks of civil society. Still, thechallenges ahead in each of these areas areimmense. Economic hardship, social dislocation, andrampant crime and corruption threaten thefoundations of democratic and law-basedgovernance. Looming environmental problems willcomplicate NIS governments' ability to develop

appropriate and effective responses and policies.Similarly, government pressure on independentmedia, citizens groups, nongovernmentalorganizations (NGOs), and religious groups remain arecurring source of concern.

We must continue our efforts to encourage strongand effective property laws and practices in centraland Eastern Europe. Such laws are a necessity for asociety based on the rule of law, and are aprereqUisite for competing in international marketsand participating in Western institutions. A startingpoint is the enactment and enforcement of lawsproviding for the restitution of property, seized duringthe Nazi and communist eras, to rightfUl owners.

Promoting Prosperity

Europe is a key partner in America's global commercialengagement. Europe and the United States producealmost half of all global goods and services; more than60% of total U.S. investment abroad is in Europe;commerce between us exceeds $1 billion every day;and fourteen million workers on both sides of theAtlantic earn their livelihoods from transatlanticcommerce. As part of the New Transatlantic Agendalaunched in 1995, the United States and the EU agreedto take concrete steps to reduce barriers to trade andinvestment through creation of an open NewTransatlantic Marketplace and through MutualRecognition Agreements in goods that eliminateredundant testing and certification requirements. Ourgovernments are also cooperating closely with the civilsociety dialogues established under the NewTransatlantic Agenda: the Transatlantic BusinessDialogue, Transatlantic Consumer Dialogue,Transatlantic Environment Dialogue, and TransatlanticLabor Dialogue. These people-to-people dialoguescreate opportunities for increased communicationfocusing on best practices, and can help theirgovernments identify and reduce barriers to greatertransatlantic interaction. In return, our governmentsshould be committed to listen, learn, and facilitate.

Building on the New Transatlantic Agenda, the UnitedStates and the EU launched the TransatlanticEconomic Partnership in 1998 to deepen oureconomic relations, reinforce our political ties andreduce trade frictions. The first element of theinitiative is reducing barriers that affectmanufacturing, agriculture, and services. In

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manufacturing, we are focusing on standards andtechnical barriers that American businesses haveidentified as the most significant obstacle toexpanding trade. In agriculture, we are focusing onregulatory barriers that have inhibited the expansionof agriculture trade, particularly in the biotechnologyarea. In services, we seek to facilitate trade inspecific service sectors, thereby creating newopportunities for the service industries that arealready so active in the European market.

The second element of the Transatlantic EconomicPartnership is a broader, cooperative approach toaddressing a wide range of trade issues. We willcontinue to refrain from imposing duties on electronictransmissions and develop a work program in theWTO for electronic commerce. We will seek to adoptcommon positions and effective strategies foraccelerating compliance with WTO commitments onintellectual property. We will seek to promotegovernment procurement opportunities, includingpromoting compatibility of electronic procurementinformation and government contracting systems. Topromote fair competition, we will seek to enhance thecompatibility of our procedures with potentiallysignificant reductions in cost for U.S. companies.

The United States strongly supports the process ofEuropean integration embodied in the EU. We supportEU enlargement, and we are also encouraging bilateraltrade and investment in non-EU countries. Werecognize that EU nations face significant economicchallenges and that periods of economic stagnationhave eroded public support for fundingoutward-looking foreign policies and greaterintegration. We are working closely with ourEuropean partners to expand employment, promotelong-term growth, and support the New TransatlanticAgenda.

Within Southeastern Europe, President Clinton andother international leaders launched a relatively newaddition to the security architecture of Europe in July1999. Called the "Stability Pact for SoutheasternEurope," the pact is a historic partnership betweenthe international community and the countries ofSoutheastern Europe, designed to bolster securityand advance integration into the European andtransatlantic mainstream by accelerating the region'sdemocratic and economic development. By reducingethnic conflict, promoting democratization and civilsociety, increasing trade and investment opportunitiesand supporting regional cooperation, we are

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promoting stability and prosperity in the region andproviding a basis for greater integration into Europe.

Since the inception of the Stability Pact, donors havecommitted approximately $6 billion in developmentassistance for the countries of Southeastern Europe.European countries and institutions, together withinternational financial institutions, are providing over85% of this assistance. Of this $6 billion, theinternational community has pledged more than$2.3 billion for over 200 "Quick Start" projects - manyof which are focused on energy, water and transportinfrastructure improvements that will have animmediate impact on people's lives. All of the "QuickStart" projects are to be underway by the end ofMarch 2001.

In support of economic development and reform inSoutheastern Europe, the U.S. is promotingincreased investment throughout the region. OPIChas launched a $150 million equity investment fundthat will invest in companies in a range of sectors,including telecommunications, light manufacturing,distribution and consumer goods. The United Statesand the EBRD have created a $150 million fund toprovide technical assistance and lending, incooperation with local financial institutions, to promotemicro, small and medium enterprise development inSoutheast Europe. The United States will work withthe EBRD to expand the operation of this fund andother activities to Montenegro.

To combat corruption and bureaucratic uncertainty,countries in the region have agreed under the StabilityPact to increase efforts to promote transparency andthe rule of law. Under the agreed upon Anti­Corruption Initiative, each member country in theregion has committed to make domestic governmentprocurements more transparent, take specificmeasures to promote public service integrity, andestablish a review body to monitor accountability inthe administration of foreign aid programs andnational anti-corruption efforts.

To promote deeper integration with the rest of Europeand transatlantic institutions, the United Statessupports EU efforts to playa leading role in theStability Pact and welcomes closer relations betweenthe EU and the countries of the region. We areurging the EU to strengthen these ties and to actquickly on proposals to open further its markets toSoutheastern European products. As the UnitedStates' support (in October and November 2000) for

FRY admission into the Stability Pact, UN, and OSCEdemonstrates, guidelines like those expressed by theStability Pact serve as worthy benchmarks forinclusiveness into a wider circle of nations.

The United States will continue its strong support forthe Stability Pact and broader stabilization efforts. InOctober 2000, the FRY was formally admitted to jointhe Stability Pact. The critical challenge for theStability Pact in the coming months is to persuade theinternational community and Southeastern Europethat it is in their mutual interests to follow through onimportant commitments that each has made to theother.

Now that the government in Belgrade has changed,the United States is promoting reintegration of theFRY into regional and international organizations.The energy embargo and travel ban have been lifted,and we are working with the Europeans and otherdonors to identify priorities for assistance andreconstruction, including Danube River cleanup.

As in other areas in Central and Eastern Europe, aswell as the NIS, the United States wUl continue helpingformer planned economies integrate into internationaleconomic and other institutions and develop healthybusiness climates. We will continue to promotepolitical and economic reform in Russia, working tocreate a thriving market economy while guardingagainst corruption. By supporting historic marketreforms in these areas, we help new democraciestake root by avoiding conditions, such as corruptionand poverty, that can weaken democratic governanceand erode the appeal of democratic values.

We are working with many NIS countries to promotetheir accession to the WTO on commercially fair terms.Building on successful accession of Kyrgyzstan, Latvia,Estonia, Georgia, Albania, Croatia, and Moldova, wehave made significant progress on the accession ofArmenia and Lithuania. We also have held fruitfuldiscussions on WTO with Russia and Ukraine. We willcontinue to mobilize the international community toprovide assistance to support reform and to help theCentral and Eastern European and NIS countriesstimulate foreign and domestic private investment.We are also encouraging investment in thesecountries, especially by U.S. companies.

We focus particular attention on promoting thedevelopment of Caspian energy resources and theirexport to world markets, thereby expanding and

diversifying world energy supplies and promotingprosperity in the region.

Getting Caspian energy to world markets will helpachieve important goals. It will help enhanceprospects for prosperity and independence of theCaspian states. It can help support the developmentof stable democratic countries, and bolsterrelationships among the states. Development ofCaspian energy resources will improve our energysecurity, as well as that of Turkey and other allies. Itwill create commercial opportunities for U.S.companies and other companies around the world.Throughout the region, targeted exchange programshave familiarized key decision makers and opinionmolders with the workings of our democracy.

The independence, sovereignty, territorial integrity, anddemocratic and economic reform of the NIS areimportant to U.S. interests. To advance these goals,we are utilizing our bilateral relationships and ourleadership of international institutions to mobilizegovernmental and private resources. But thecircumstances affecting the smaller countries dependin significant measure on the fate of reform in thelargest and most powerful -- Russia. The UnitedStates will continue to promote Russian reform andinternational integration, and to build on the progressthat already has been made. Our economic andpolitical support for the Russian government dependson its commitment to internal reform and a responsibleforeign policy.

Promoting Democracy andHuman Rights

Democratic reforms in Central and Eastern Europeand Eurasia are the best measures to avert conditionsthat could foster ethnic violence and regional conflict.Already, the prospect of joining or rejoining theWestern democratic family through NATO, the EU, andother institutions has strengthened the forces ofdemocracy and reform in many countries of the regionand encouraged them to settle long-standing disputesover borders and ethnic minorities. Together with ourWest European partners we are helping these nationsbuild civil societies.

We continue to promote the integration ofSoutheastern Europe's democracies into theEuropean mainstream by promoting democratic,

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economic and military reforms, deepening regionalcooperation, and supporting regional efforts to fightorganized crime. The opening of a Southeast EuropeCooperation Initiative (SECI) informationclearinghouse in Bucharest in the spring of 1999highlighted efforts by SECI to integrate the efforts ofnational law enforcement agencies in the fight againstcross-border crime. The UN, EU, and NATOoperations in the area focused on developingprofessional civil and military institutions that arerespectful and promote human rights and respect forcivil authority. Landmark democratic elections inCroatia at the beginning of 2000, and importantregional elections, such as those held in Montenegroin June 2000, showed promise for the process ofdemocracy. Where the democratic transition is still inprogress, or threatened by external influences, thesituation bears continued vigilance. In Kosovo, whereviolence continued to plague efforts to restorestability, promote tolerance, and begin theestablishment of a Kosovar capacity for substantialself-rule, we are determined to succeed in theprotection of the rights of individual minorities and theimplementation of an ambitious democraticframework for the people of Kosovo.

Municipal elections in Kosovo have paved the way forthe establishment of local institutions as theinternational community encourages the creation of aconstitutional framework for Kosovar autonomy calledfor under the Ramboulliet Agreement and UNSecurity Council Resolution 1244. As local Kosovarsaccept responsibility for the process of democracyand protection of minority rights, our efforts in Kosovowill shift from a focus on military security and thetraining of international and indigenous police forces,to deepened support for those civil efforts thatpromote democracy, the rule of law, and respect forhuman rights.

We continue to support the efforts of the InternationalCriminal Tribunal for the former Yugoslavia. In 2000,the pace of detention, transfer, and prosecution ofindicted war criminals remained brisk, especially as thenew government in Croatia reaffirmed that country'ssupport for the implementation of the DaytonAgreements. New opportunities have also openedwith the change of government in Belgrade. We andour European allies have made clear to PresidentKostunica his obligation to cooperate with the ICTYand our expectation that all indicted war criminals,inclUding former President Milosevic, will be heldaccountable.

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East Asia and the Pacific

Our regional strategy is based on the premise that astable and prosperous East Asia and Pacific is vital toour own national security interests. United Statesleadership in expanding mutually beneficial economicrelationships and U.S. security commitments within thePacific rim are central to stability, and even moreimportantly, they foster an environment within which allAsia/Pacific nations can prosper. We continue toadvance this vision of the Asia/Pacific by promotingdemocracy and human rights, advancing economicintegration and rules-based trade, and enhancingsecurity. These three pillars of our security strategy forAsia are mutually reinforcing, and provide theframework for our bilateral and multilateral initiatives.Cooperation with our allies and friends in the region toachieve our common goals remains a cornerstone ofour strategy.

Enhancing Security

Our military presence and our strong bilateral securityties have been essential to maintaining the peace andsecurity that have enabled most nations in the Asia­Pacific region to build thriving economies for the benefitof all. To deter aggression and secure our owninterests, we maintain about 100,000 military personnelin the region in cooperation with our allies and partners.The U.S.-Japan security alliance anchors the U.S.presence in the Asia-Pacific region. Our continuingsecurity role is further reinforced by our bilateral treatyalliances with the Republic of Korea (ROK), Australia,Thailand and the Philippines. We maintain healthyrelations with the Association of Southeast AsianNations (ASEAN) and support regional dialogue -­such as in the ASEAN Regional Forum (ARF) -- onthe full range of common security challenges.

Our security strategy in East Asia and the Pacificencompasses a broad range of potential threats, andincludes the following priorities: deterring aggressionand promoting peaceful resolution of crises;promoting access to and the security of sea lines ofcommunication in cooperation with our allies andpartners; actively promoting our nonproliferation goalsand safeguarding nuclear technology; strengtheningboth active and passive counterproliferationcapabilities of key allies; combating the spread oftransnational threats, including drug-trafficking,

piracy, terrorism and the spread of AIDS; fosteringbilateral and multilateral security cooperation, with aparticular emphasis on combating transnationalthreats and enhancing future cooperation inpeacekeeping operations; and promoting regionaldialogue through bilateral talks and multilateral fora.

Japan

The U.S.-Japan alliance remains the cornerstone forachieving common security objectives andmaintaining a peaceful and prosperous environmentfor the Asia Pacific region. The 1997 revisedGuidelines for U.S.-Japan Defense Cooperationcreate a solid basis for more effective and credibleU.S.-Japan cooperation in peacetime, in the event ofan armed attack on Japan, and in situations in areassurrounding Japan. They provide a generalframework for the roles and missions of the twocountries, and facilitate coordination in peacetime andcontingencies. The revised Guidelines, like the U.S.­Japan security relationship itself, are not directedagainst any other country; rather, they enable theU.S.-Japan alliance to continue fostering peace andsecurity throughout the region. In April 1998, in orderto support the new Guidelines, both governmentsagreed to a revised Acquisition and Cross-ServicingAgreement (ACSA) that expands the provision ofsupplies and services to include reciprocal provisionof logistics support during situations surroundingJapan that have an important influence on Japan'speace and security. Japan approved implementinglegislation for the Guidelines in the spring of 1999.Japan's generous host-nation support for the U.S.overseas presence also serves as a critical strategiccontribution to the alliance and to regional security.

Our bilateral security cooperation has broadened as aresult of recent agreements to undertake jointresearch and development on theater missile defenseand to cooperate on Japan's indigenous satelliteprogram. Moreover, we work closely with Japan topromote regional peace and stability, seek universaladherence to the Nuclear Nonproliferation Treaty, andaddress the dangers posed by transfers ofdestabilizing conventional arms and sensitive dual­use technologies. Japan is providing $1 billion to theKorean Peninsula Energy Development Organization(KEDO), and consults closely with the United Statesand ROK on issues relating to North Korea.

Korean Peninsula

Tensions on the Korean Peninsula, albeit reduced asa result of the June 2000 North-South Summit,remain the leading threat to peace and stability inEast Asia. The Democratic People's Republic ofKorea (DPRK) has publicly stated a preference forpeaceful reunification, but continues to dedicate alarge portion of its dwindling resources to its hugemilitary forces. Renewed military conflict has beenprevented since 1953 by a combination of theArmistice Agreement, which brought an end to openhostilities; the United Nations Command, which hasvisibly represented the will of the UN Security Councilto secure peace; the physical presence of U.S. andROK troops in the Combined Forces Command,which has demonstrated the alliance's resolve; and,increasingly, diplomatic activities of the United States,ROK, and Japan.

President Kim Dae-jung continues to pursue a coursetoward peace and stability on the Korean peninsula,seeking new channels of dialogue with North Koreaand developing areas of cooperation between Southand North. During their June 2000 meeting in Tokyo,President Clinton and President Kim affirmed theimportance of the North-South Summit for building amore permanent peace, and the indispensability ofthe strong U.S.-ROK defense alliance as a stabilizingpillar for the region. The United States is working tocreate conditions of stability by maintaining solidaritywith our South Korean and Japanese allies,emphasizing America's commitment to shaping apeaceful and prosperous Korean Peninsula, andensuring that a struggling North Korea does not optfor a military solution to its political and economicproblems.

Peaceful resolution of the Korean conflict with ademocratic, non-nuclear, reunified peninsula willenhance peace and security in the East Asian regionand is clearly in our strategic interest. We have takensteps to improve bilateral political and economic tieswith North Korea -- consistent with the objectives of ouralliance with the ROK -- to draw the North into morenormal relations with the region and the rest of theworld. Secretary Albright furthered that objectiveduring her historic meeting with North Korean leaderKim Jong II in late October 2000. The United Stateshas also outlined to the DPRK what steps it must taketo cut all ties to terrorism, and be considered for

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removal from the list of state sponsors of terrorism.But our willingness to continue to improve bilateralrelations will continue to be commensurate with theNorth's cooperation in efforts to reduce tensions on thepeninsula and to stem its NBC weapons programs.

South Korea has set an example for nonproliferationby accepting the 1991 Denuclearization Agreement,agreeing to IAEA safeguards, and developing apeaceful nuclear program that brings benefits to theregion. We are firm that North Korea must maintainthe freeze on production and reprocessing of fissilematerial, dismantle its graphite-moderated reactorsand related facilities, and fully comply with its NPTobligations under the Agreed Framework. The UnitedStates, too, must fulfill its obligations under the AgreedFramework, and the Administration will work with theCongress to ensure the success of our efforts toaddress the North Korean nuclear threat.

Beyond fully implementing the Agreed Framework, weseek to eliminate North Korea's indigenous and exportmissile program and their weapons of massdestruction through a step-by-step process. Based onU.S.-North Korean discussions, North Korea hasundertaken to refrain from flight testing long-rangemissiles of any kind as we move toward more normalrelations. Working closely with our ROK and Japaneseallies, we will improve relations with North Korea on thebasis of it moving forward on the missile and WMDagendas, and we will take necessary measures in theother direction if the North chooses to go down adifferent path.

We encourage the North to work with South Korea toimplement the agreements reached at the North­South Summit; continue the United NationsCommand-Korean People's Army General OfficerDialogue at Panmunjom; participate constructively inthe Four Party Talks among the United States, China,and North and South Korea to reduce tensions andnegotiate a peace agreement; and continue ourefforts to recover the remains of Americanservicemen missing since the Korean War.

Pyongyang's more recent diplomatic and economicoutreach to the rest of the world are encouraging, butas yet no reciprocal confidence-building measureshave been forthcoming. It is crucial that the UnitedStates and the ROK maintain deterrence during theprocess of reconciliation and economic integration onthe Korean Peninsula. We favor a step by stepprocess of using reciprocal confidence building

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measures that link economic and diplomatic initiativesto real reductions in the military threat on the peninsula.

China

A stable, open, prosperous People's Republic ofChina (PRC) that respects the rule of law andassumes its responsibilities for building a morepeaceful world is clearly and profoundly in ourinterests. The prospects for peace and prosperity inAsia depend heavily on China's role as a responsiblemember of the international community. Our policytoward China is both principled and pragmatic,expanding our areas of cooperation while dealingforthrightly with our differences.

In recent years, the United States and China havetaken a number of steps to strengthen cooperation ininternational affairs: intensive diplomatic work torestore relations damaged by our mistaken bombingof the Chinese Embassy in Belgrade; successfulconclusion of a bilateral agreement on Chinese WTOaccession; two presidential bilateral meetings in 2000;regular exchanges of visits by cabinet and sub­cabinet officials to consult on political, military,security, nonproliferation, arms control, economic,financial, and human rights issues; cooperating inefforts to account for Americans missing as a resultof World War II and the Korean War; establishing aconsultation mechanism to strengthen militarymaritime safety; holding discussions on humanitarianassistance and disaster relief, and environmentalsecurity; and establishing working groups on lawenforcement cooperation. China is also a participantin science, technology, and health research. Ourcooperation in promoting environmental protectionand sustainable development is steadily increasing tothe benefit of U.S. interests in the Asia-Pacific region.

At the same time, China's rise as a major powerpresents an array of potential challenges. Many ofChina's neighbors are closely monitoring China'sgrowing defense expenditures and modernization ofthe People's Liberation Army (PLA). Giveninternational and regional focus on China's growingmilitary power, China's adherence to multilateralnonproliferation and arms control regimes, as well asincreased military transparency, is of growingimportance.

United States interests have been advanced indiscussions with China on arms control and

nonproliferation issues. We have advanced ourdialogue on nonproliferation and arms control throughexchanges at the Secretary of Defense, Secretary ofState, and sub-cabinet level in 1999 and 2000,building on previous accomplishments. The UnitedStates and China announced in earlier exchangesthat they will not target their strategic nuclearweapons at each other and confirmed their commongoal of halting the spread of WMD. Both our nationshave signed the Comprehensive Test Ban Treaty.We have consulted on the Missile Technology ControlRegime and missile nonproliferation, and we continueto press China to exercise restraint in its missilepolicies and practices. In November 2000, ChinapUblicly announced that it would reinforce its exportcontrol system, and that it had no intention to assistany country in the development of ballistic missilesthat could be used to deliver nuclear weapons. Bothnations have ratified the Chemical WeaponsConvention, and China has further strengthened itscontrols on the export of dual-use chemicals andrelated production equipment and technology toassure they are not used for production of chemicalweapons. Both nations have called for strengtheningof the Biological Weapons Convention and earlyconclusion of a protocol establishing a practical andeffective mechanism to enhance compliance andimprove transparency. We also reached agreementwith China on practices for end-use visits on U.S.high technology exports to China and we will continuea dialogue on implementation of this agreement.

China is working with the United States on importantregional security issues. On the Korean Peninsula,the United States and China share an interest inpeace and stability and worked together to supportthe June 2000 North-South Summit. We have bothworked to convince North Korea to freeze itsdangerous nuclear program, and believe the four­party peace talks are an important tool in workingtoward establishment of peace and stability inNortheast Asia.

To help maintain peace, security, and stability in theWestern Pacific, and to promote our broad foreignpolicy objectives, we are implementing fully the termsof the Taiwan Relations Act by maintaining unofficialrelations between the American people and thepeople of Taiwan. We are keeping the focus onpeaceful resolution by working assiduously toencourage the PRC and Taiwan to reestablish directdialogue, while maintaining our firm commitment to

Taiwan's self-defense by providing defensive arms toTaiwan.

Our key security objectives for the future include:sustaining the strategic dialogue begun by the recentsummits and other high-level exchanges; enhancingstability in the Taiwan Strait by maintaining our "oneChina" policy, promoting peaceful resolution of cross­Strait issues, and encouraging dialogue betweenBeijing and Taipei; strengthening China's adherenceto international nonproliferation norms, particularlywith respect to export controls on ballistic missile anddual-use technologies; encouraging China to adoptbroader, more effective export control policies;achieving greater openness and transparency inChina's military; encouraging a constructive PRC rolein international affairs through active cooperation inmultilateral fora such as the ASEAN Regional Forum(ARF) and the Asia Pacific Economic CooperationForum (APEC); and improving law enforcementcooperation in such areas as counterterrorism,counternarcotics, and migrant trafficking.

Southeast Asia and the Pacific

Our strategic interest in Southeast Asia centers ondeveloping regional, multilateral, and bilateral securityand economic relationships that assist in conflictprevention and resolution. United States securityobjectives in the region are: strengthening oursecurity alliances and partnerships with Australia,Thailat:1d, the Philippines, and Singapore; sustainingfacilities access arrangements with these countriesand other ASEAN nations; and encouraging effectivemultilateral cooperation by expanding participation inregional exercises geared toward disaster reliefoperations and combating such transnational threatsas piracy and drug-trafficking. We continue to viewASEAN as the key regional institution for enhancingsecurity and prosperity. We will continue to work onour relationship with ASEAN and enhance ourmultilateral security dialogue under the ARF. Wemust also pursue multilateral, or sometimes bilateral,initiatives with ASEAN to address transnational issuessuch as the spread of infectious disease, aliensmuggling, trafficking in women and children,environmental protection, and combating organizedcrime, particularly the flow of heroin from Burma andother countries in the region.

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Promoting Prosperity

A prosperous and open Asia/Pacific is key to theeconomic health of the United States. Thirty percentof U.S. exports go to Asia, supporting millions of U.S.jobs, and we export more to Asia than Europe. Theeconomic benefits of a strong Asia/Pacific are likely toincrease as China and Taiwan enter into the WTO.Our historic decision to grant Permanent NormalTrade Relations to China will enable U.S. businessesto expand into China under a rules-based tradingregime.

Our economic objectives in the region include thefollowing: continuing recovery from the financialcrisis; furthering progress within APEC towardliberalizing trade and investment; increasing U.S.exports to Asia/Pacific countries through market­opening measures and leveling the playing field forU.S. business; and concluding the WTO accessionnegotiations for the PRC and Taiwan on satisfactorycommercial terms.

Our strategy to meet these objectives has four keyelements: support for economic reforms and marketliberalization; working with international financialinstitutions to provide well-targeted economic andtechnical assistance in support of economic reforms;providing bilateral humanitarian aid and contingencybilateral financial assistance if needed; and urgingstrong policy actions by Japan and the other majoreconomic powers to promote global growth.

The United States will continue to work with the IMFthe World Bank, other international financial 'institutions, the governments in the region, and theprivate sector to strengthen financial markets bolsterinvestor confidence, and deepen on-going reforms inthe region's economies. In doing so, we will remainmindful of the need to promote protection of workerrights. We will continue to encourage South Korea,Thailand, and Indonesia to implement economicreforms to lay a solid basis for long-term economicgrowth. U.S. initiatives in APEC will open newopportunities for economic cooperation and permit U.S.companies to expand their involvement in substantialinfrastructure planning and construction throughout theregion. We will continue our efforts to encourage allAsia Pacific nations to pursue open markets.

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China

Integrating the PRC more fully into the global tradingsystem is manifestly in our national interest. China isa major potential market for our goods and services.Our exports to China already support hundreds ofthousands of jobs across our country and China'sWTO entry will significantly expand that number.

An important part of integrating China into the market­based world economic system is opening China'shighly protected market through elimination of tradebarriers and removal of distorting restraints oneconomic activity. We have negotiated and vigorously~nforced landmark agreements to combat piracy ofIntellectual property and advance the interests of ourcreative industries. We have also negotiated -- andvigorously enforced -- agreements on textile trade. Wewill continue to press China to open its markets as itengages in sweeping economic reform, and torespect and adhere to core labor standards ascodified by the ILO. Most recently, the United Statesrea~hed a market access agreement with China,paving the way for China's accession to the WorldTrade Organization. The bilateral agreementconcluded in November 1999 will create jobs andopportunities for Americans through the opening ofChinese markets, promote economic reform in Chinaand enhance the'understanding of the Chinese 'people of the rule of law in the development of theirdomestic civil society in compliance with internationalobligations. We are now working with other WorkingParty members to complete the multilateralnegotiation of China's WTO accession. Ourenactment of Permanent Normal Trade Relationsstatus for China will accelerate and expand thesefavorable trends.

Japan

Japan has a crucial role to play in Asia's economichealth: generating substantial growth to helpmaintain a growing world economy and absorb agrowing share of imports from emerging marketsWe have urged Japan to reform its financial sectorstimulate domestic demand, deregulate its econo~y,and further open its markets to foreign goods andservices. The Administration continues to makeprogress on increasing market access in Asia'slargest economy. Since the beginning of the first

Clinton Administration, the United States and Japanhave reached 39 trade agreements designed to openJapanese markets in such key sectors as autos andauto parts, civil aviation, and insurance. In theEnhanced Initiative on Deregulation, Japan agreed toregulatory reforms to promote domestic demand-ledgrowth and also to increase business opportunitiesfor U.S. firms in such vital areas astelecommunications, competition policy enforcement,and medical/pharmaceutical products. Through theForeign Direct Investment Initiative, Japan agreed tomeasures to improve the environment for foreigninvestment. As a result, U.S. firms are increasingtheir presence in the Japanese market by acquiringJapanese firms, and are thereby contributing toJapan's economic recovery. The Administration alsohas intensified efforts to monitor and enforce tradeagreements with Japan to ensure that they are fullyimplemented. The United States also usesmultilateral venues, such as WTO dispute settlementand negotiation of new multilateral agreements, tofurther open markets and accomplish our tradeobjectives with Japan. The U.S.-Japan CommonAgenda is a bilateral U.S.-Japan programcoordinating scientific and financial. resources of theworld's two largest economies on more than seventyprojects worldwide. The projects focus on eradicatinginfectious disease, protecting the environment, andpromoting scientific and technological cooperation.

Republic of Korea

The United States will continue its strong support forSouth Korean efforts to reform its economy, liberalizetrade and investment, strengthen the banking system,and implement the IMF program. We will alsocontinue to explore concrete steps to promote growthin both our countries, more fully open our markets,and further integrate the Republic of Korea into theglobal economy.

Southeast Asia and the Pacific

The United States strongly supports efforts to sustainand strengthen economic recovery in the ten nationsof ASEAN. We accomplish this by maintaining ouropen market for Southeast Asian goods and servicesas well as our support for IMF-Ied recovery programsfor several ASEAN nations. There are challengesahead. Thailand's economic recovery is continuing,however, high oil prices and the slow pace of banking

and corporate sector reforms are impeding Thailand'sfull economic recovery from the financial crisis. Thaisare preparing for elections in January 2001. Thesurvival and vindication of Thailand's new constitutionwould reflect well on the future of democracy inSoutheast Asia, but the Thais worry about politicalstability ahead. In Indonesia, slow progress oncorporate and financial sector restructuringendangers economic recovery. Rapid sale of assetsheld by the Indonesian Bank Restructuring Agency(IBRA) is the key to alleviating the large public debtburden and improving investor sentiment. IBRA hasbegun to move ahead, but without stronger supportfrom the government, progress will remain uneven.Privatization of the banking sector, which has beenlargely under government control since the crisis, isanother area of worrying policy drift. With Vietnam,we are working toward completion of a broadcommercial agreement that will open that country'smarkets, promote economic reform, and open theway for congressional approval of Normal TradeRelations for Vietnam. Nearby in Singapore, inNovember 2000, President Clinton and PrimeMinister Goh of Singapore agreed to launchnegotiations for a free trade agreement. In addition tothe economic benefits both countries would beexpected to gain, the two leaders have recognizedthe importance of continued U.S. engagement in Asiabased on economic and security interests. Workingwith ASEAN members to address environmentaldegradation -- from forest fires and haze, to fisheriesdepletion and deforestation -- while striving forsustainable economic growth, is a high priority.

Australia and New Zealand

We will continue to build on our close workingrelationship with Australia and New Zealand tostrengthen our bilateral trade and economicrelationships. We will also work with these two keypartners to develop international support for furtheraction by APEC and by the World Trade Organizationto develop rules-based trade and encourage sectorliberalization.

Promoting Democracy andHuman Rights

The United States will continue to support thedemocratic aspirations of Asian/Pacific peoples and

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to promote respect for human rights. Our strategy isbest served through close coordination with our alliesand friends in the region, both at the governmentaland non-governmental organization level. Ourpriorities include: progress on human rights, religiousfreedom and rule of law issues in China; a meaningfulpolitical dialogue between the ruling authorities inBurma and the democratic opposition; supportingIndonesia's democratic transition; and contributing toEast Timor's transition to independence.

Indonesia

The United States strongly supports a united,prosperous, and democratic Indonesia that plays apositive role in regional security. The October 1999election was a historic moment for Indonesia, puttingit on course to become the world's third largestdemocracy. We continue to assist Indonesia inmanaging the considerable challenges of nationalreconciliation, democratic reform and economicrecovery. We have tailored a comprehensiveassistance package focused on: economicdevelopment; humanitarian assistance andinfrastructure development in strife-torn areas; andtechnical assistance in key government sectorsdesigned to reinforce the democratic process and therule of law.

Burma

The United States will continue to work with otherconcerned states to create the conditions for ameaningful dialogue between the regime and thedemocratic opposition led by Aung San Suu Kyi. Ourstrategy includes investment and other sanctions toincrease pressure on the regime to respect basichuman rights. At the same time, we support theefforts of the United Nations Secretary General to usehis good offices to promote dialogue leading to ademocratic transition.

East Timor

The UN Transitional Authority in East Timor(UNTAET), established in October 1999, followed onthe success of the UN-sanctioned International forcein East Timor (INTERFET). The UN-SanctionedInternational Force in East Timor was an Australian­led mission that deployed in September 1999, with

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U.S. support, to quell the post-referendum violence inEast Timor. The UN Transitional Authority in EastTimor took over security responsibilities fromINTERFET in February 2000. UNTAET hascontinued to further the goal of an independent andviable East Timor. Our contributions have a strongimpact on UNTAET's success. We are providinglong-term development assistance and transitionalemployment opportunities to the East Timoresepeople, as well as financial and technical support forthe UN transition administration. Our military forceshave provided on-going health and infrastructuresupport directly to the East Timorese people, andhave maintained a presence to coordinatehumanitarian and civic assistance projects. Weremain committed to attaining a durable solution tothe plight of East Timorese refugees in Indonesia. Achallenge for the future is assisting with theestablishment of a small yet viable East TimorDefense Force.

The WesternHemisphere

Our hemisphere enters the 21 51 century with anunprecedented opportunity to secure a future ofstability and prosperity - building on the fact thatvirtually all nations in the hemisphere are democraticand committed to free market economies. The end ofarmed conflict in Central America and otherimprovements in regional security have coincided withremarkable political and economic progress throughoutthe Americas. The people of the Americas are takingadvantage of the vast opportunities being created asemerging markets are connected through electroniccommerce and as maturing democracies allowindividuals to more fully express their preferences.Sub-regional political, economic, and securitycooperation in North America, the Caribbean, CentralAmerica, the Andean region, and the Southern Conehave contributed positively to peace and prosperitythroughout the hemisphere. Equally important, thepeople of the Americas have reaffirmed theircommitment to combat together the difficult threatsposed by drug trafficking and corruption. The UnitedStates, which helped shape this new climate in thehemisphere, seeks to secure its benefits whilesafeguarding our citizens against these threats.

Enhancing Security

Our strategy of engagement in the WesternHemisphere has included strengthening andexpanding U.S. defense cooperation with friendsthroughout the region, and supporting their efforts toinstitute democratic norms within their defenseestablishments including civilian control,transparency, and public accountability. As thesedemocratic norms take root, regional confidencebuilds. The United States also will continue workingto strengthen regional and sub-regional cooperativesecurity mechanisms that could serve to deepenregional confidence and foster sustained regionalstability. We will continue to offer our strong supportfor the peaceful resolution of disputes in the region,and will encourage continued dialogue and peacefulengagement among nations of the region to achievethis goal. While respecting sovereignty concerns, weremain committed to promoting cooperativeapproaches throughout the hemisphere tointernational peacekeeping threats and humanitariancrises.

The principal threats to hemispheric stability aretransnational in nature, such as drug trafficking,money laundering, illegal immigration, firearmstrafficking, and terrorism. In addition, our hemisphereis leading the way in recognizing the dangers tonational and regional stability produced by corruptionand ineffective judicial systems. All of these produceadverse social effects at home and undermine thesovereignty, democracy, and national security ofnations in the hemisphere.

Particularly pernicious is the threat of drug trafficking.Working with the OAS and other organizations, weseek to eliminate the scourge of drug trafficking in ourhemisphere. Countries of the hemisphere are strivingto better organize and coordinate efforts to extraditeand prosecute individuals charged with drugtrafficking and related crimes; combat moneylaundering; seize assets used in criminal activity; haltillicit traffic in precursors and essential chemicals;strike at the financial support networks; enhancenational drug abuse awareness and treatmentprograms; and drastically curtail illicit crops throughalternative development and eradication programs.In the Caribbean, and bilaterally with Mexico andColombia, we are working to increase counterdrug andlaw enforcement cooperation.

At the same time, we recognize linkages between thethreats posed to the United States as the principalconsumer of illicit drugs and related threats posed tosource countries and transit zone states.Accordingly, as we seek to expand regionalcooperation in the counterdrug arena, we recognizeour obligation to aggressively combat the illegalexport of U.S.-origin weapons to criminal andinsurgent groups that are engaged in, or benefit from,drug trafficking.

Colombia is of special importance because drugtrafficking is fueling the longest running internalconflict in the region. The combination of armedinsurgents, growing paramilitary movement,corruption, and economic malaise extends beyond itsborders and has implications for regional peace andsecurity. To turn the tide, the United States isproviding the Colombian Government assistance towage a comprehensive effort to promote the mutuallyreinforcing goals of peace, illicit drug control,economic development, and respect for humanrights. The Government of Colombia has developeda comprehensive six-year strategy, Plan Colombia, torevive its economy, strengthen the democratic pillarsof society, promote the peace process, and reducedrug production and trafficking. We are providingsignificant assistance for Plan Colombia in a mannerthat will concurrently promote U.S. and Colombianinterests, and we will encourage our allies andinternational institutions to do the same.

The extent of bilateral cooperation with Mexico in thefight against drug trafficking is unprecedented. Wehave created the High-Level Contact Group and avariety of working groups to reach a joint diagnosis andsettle on a common strategy. Moreover, the mutuallyagreed upon Performance Measures of Effectivenesswill allow us to better evaluate our counterdrug efforts.We are working together to reduce demand for illegaldrugs, combat money laundering, avoid the misuse ofprecursors and essential chemicals, stop the illegaltrafficking of arms or migrants, broaden our ability tointercept drugs, and apprehend those who are involvedin drug trafficking.

Promoting Prosperity

Economic growth and integration in the Americas willprofoundly affect the prosperity of the United States inthe 21 sl century. This begins with our immediate

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r;t

I,I

I

neighbors, Canada and Mexico. Since the 1989 U.S.­Canada Free Trade Agreement, and subsequently the1993 North American Free Trade Agreement, our tradewith Canada and Mexico has grown rapidly. Canadaremains our largest trade partner, and Mexico hasbecome our second largest trading partner. TheUnited States and Mexico have also resolved importanttrade differences, made progress toward easier accessfor the relevant products of both nations, andconsolidated our trade area as one of the mostpowerful in the world. In the hemisphere as a whole,our trade initiatives offer a historic opportunity tocapitalize on and strengthen the unprecedented trendtoward democracy and free market economics.

We seek to advance the goal of an integratedhemisphere of free market democracies by buildingon NAFTA. Formal negotiations are in progress toinitiate the Free Trade Area of the Americas (FTAA)by 2005. The negotiations cover a broad range ofimportant issues, including market access,investment, services, government procurement,dispute settlement, agriculture, intellectual propertyrights, competition policy, subsidies, anti-dumping,and countervailing duties. We will seek to ensure thatthe agreement also supports workers' rights,environmental protection and sustainabledevelopment. To address the concerns of smallereconomies prior to completion of the FTAA, and inlight of the increased competition NAFTA presents,we have obtained Congressional approval forenhanced trade preferences offered to CentralAmerican and Caribbean countries under theCaribbean Basin Trade Partnership Act.

The United States will continue its effectivepartnership with the IMF, the World Bank, the Inter­American Development Bank, the governments ofLatin America, and the private sector to help theregion's countries in their transition to integrated,market economies. A key target of this partnership isassisting the reform and recovery of banking sectorshurt by financial market turmoil over the past severalyears. We will continue to support financial andeconomic reform efforts in Brazil and Argentina toreduce their vulnerability to external shocks, as wellas help Ecuador on its difficult road to economicrecovery and sustainable levels of debt service.Similarly, we will continue to play an active role withour regional partners in facilitating timely responsesto, and recovery from natural disasters, such asHurricane Mitch in Honduras and Nicaragua,Hurricane Keith in Belize, and the adverse economic

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disruptions throughout the region resulting from EINino.

Helping countries in the hemisphere to translateeconomic growth into social progress is critical forpromoting sustainable growth and sustainingdemocracy. Despite recent progress, Latin Americanand Caribbean countries have the greatest incomedisparities of any region -- with the poorest 20% ofindividuals receiving just 4.5% of the total incomewithin the region. We will continue to supportinvestments in human development, particularly theprovision of stronger and more efficient basiceducation and health services. Between the UnitedStates and Mexico there has been significant growthin educational programs emphasizing literacy,bilingual education and exchanges betweenclassroom teachers, cultural institutions and artists.In the area of health, we are creating the BorderHealth Commission to study the epidemiology of theborder area in order to battle diseases.

We also view it as essential that economic prosperityin our hemisphere be pursued in an environmentallysustainable manner. From our shared seas andfreshwater resources to migratory bird species andtransboundary air pollution, the environmental policiesof our neighbors. can have a direct impact on qualityof life at home. Working with Mexico, we have takenconcerted action to monitor air quality, intensifyresearch on environmental health issues, follow thecross-border movement of toxic wastes or illegalmigrants, coordinate activities that will benefit naturepreserves, and use debt relief to further protecttropical forests. United States Governmentassistance to the region recognizes the vital linkbetween sustainable use of natural resources andlong-term prosperity, a key to developing prosperoustrading partners in this hemisphere.

Promoting Democracy andHuman Rights

Latin American nations have made notable advancesover the last several years. with the restoration ofdemocratic institutions in old democracies like Chileand Uruguay, the consolidation of democraticpractices in countries like Nicaragua and Guatemala,and the move to a competitive democratic system inMexico where the freest and most transparentpresidential and general elections in the country's

history were held in July 2000. Of particularsignificance has been the growing hemisphericconsensus on the importance of defendingdemocracy when threatened. Through the OAS, thenations of the Hemisphere have stood firm in supportof constitutionally-elected governments under stress,as in the cases of Ecuador, Guatemala, Paraguay,Haiti, and the Dominican Republic. In Peru, the OASis playing a critical role in facilitating democraticreforms that are expected to lead to free and fairelections in April 2001. We are committed to workingwith our partners in the region to further consolidatedemocratic governance and guard againstdemocratic reversals.

But our ability to sustain the hemispheric agendacrafted through the Summit of the Americas processand the OAS depends in part on meeting thechallenges posed by weak democratic institutions,persistently high unemployment and crime rates, andserious income disparities. In some Latin Americancountries, citizens will not fUlly realize the benefits ofpolitical liberalization and economic growth withoutregulatory, judicial, law enforcement, and educationalreforms, as well as increased efforts to integrate allmembers of society into the formal economy.

The hemisphere's leaders are committed tostrengthening democracy, justice, and human rights.They have pledged to intensify efforts to promotedemocratic reforms at the regional and local level,protect the rights of migrant workers and theirfamilies, improve the capabilities and competence ofcivil and criminal justice systems, and encourage astrong and active civil society. Specific initiativeshave included: ratification of the Inter-AmericanConvention Against Corruption to strengthen theintegrity of governmental institutions; creation of aSpecial Rapporteur for Freedom of Expression aspart of the Inter-American Commission for HumanRights; and establishment of an Inter-AmericanJustice Studies Center to facilitate training personneland exchanging information, and other forms oftechnical cooperation to improve judicial systems.

Education is at the centerpiece of reforms aimed atmaking democracy work for all the people of theAmericas. The Summit Action Plan adopted atSantiago in 1998 seeks to ensure by the year 2010

primary education for 100% of children and access toquality secondary education for at least 75% of youngpeople.

We are also seeking to strengthen norms for defenseestablishments that are supportive of democracy,transparency, respect for human rights, and civiliancontrol in defense matters. Through continuedengagement with regional security forces and civilianpersonnel, facilitated by establishment of the Center forHemispheric Defense Studies, our own modest militaryactivities, and presence in the region, we are helping toincrease civilian expertise in defense affairs andreinforce the positive trend in civilian control.

The United States supports the full implementation ofenduring political, economic, security, and judicialreforms in Haiti. Recognizing the severe challengesthat confront the Haitian people, we will continue toprovide humanitarian assistance directly to those inneed through non-governmental organizations, whileworking with civil society and Haitian authorities toencourage development of sustainable democraticinstitutions. In cooperation with the OAS andinternational financial institutions, we will maintainpressure on the Haitian regime to adopt credible, free,and fair electoral processes and to privatize state­owned industries as an incentive to foreign investment.Concerned by the continued use of Haiti as atransshipment point for illegal drugs entering the UnitedStates, we support the further development of thecounterdrug capabilities by the Haitian National Police

.as well as modernization and reform of judicialinstitutions.

The United States remains committed to promoting apeaceful transition to democracy in Cuba andforestalling a mass exodus that would endanger thelives of migrants and the security of our borders. Whilemaintaining pressure on the regime to make politicaland economic reforms, we continue to encourage theemergence of a civil society to assist the transition todemocracy when the change comes. As the Cubanpeople feel greater incentives to take charge of theirown future, they are more likely to stay at home andbuild the informal and formal structures that will maketransition easier. Meanwhile, we remain firmlycommitted to bilateral migration accords that ensuremigration in a safe, legal, and orderly manner.

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II.

The Middle East, NorthAfrica, Southwest, andSouth Asia

Enhancing Security

The United States has enduring interests in pursuing ajust, lasting and comprehensive Middle East peace,ensuring the security and well-being of Israel, helpingour Arab partners provide for their security, andmaintaining worldwide access to a critical energysource. Our strategy reflects those interests and theunique characteristics of the region as we work tostrengthen peace and stability.

The Middle East Peace Process

A historic transformation has taken place in the politicallandscape of the Middle East over the last five years.Peace agreements have been reached requiringconcerted implementation efforts, and new agreementsare possible which hold out the hope of ending theconflict between Israel and its Arab neighbors. TheUnited States -- a key sponsor of the peace process -­has a clear national interest in seeing the processdeepen and widen. We will continue our steady,determined leadership; standing with those who takerisks for peace, standing against those who woulddestroy it, lending our good offices where we can makea difference, and helping bring the concrete benefits ofpeace to people's daily lives.

Before the death of Syrian President Assad, Israeland Syria had narrowed their differences to aremarkable degree. Key differences remained, butthe broad features of an agreement -- and many of itsdetails -- were well established. The United Statesremains determined to continue to assist the twosides to find a way to overcome their final differencesand hopeful that we will be able to do so. We alsocontinue to believe that progress in Israeli-Syriannegotiations will allow progress on negotiationsbetween Israel and Lebanon, and we will continue topress forward toward that goal.

On the Palestinian front, Israelis and Palestinians areconfronting core issues that have defined their conflictfor the past fifty years, seeking to build a lasting peacebased on partnership and cooperation. Although the

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JUly 2000 summit at Camp David failed to achieve apermanent status agreement and violence has recentlyerupted in the West Bank and Gaza, the United Stateswill continue its efforts to assist both sides in theirsearch for a lasting and just peace. Our goal remainsthe normalization of relations between Israel and allArab states. Through the multilateral working groupson security, refugees, water, and the environment, weare seeking to promote regional cooperation toaddress transboundary environmental issues thataffect all parties.

North Africa

The United States has an interest in the stability andprosperity of North Africa, a region that is undergoingimportant changes. In particular, we are seeking tostrengthen our relations with Morocco, Tunisia, andAlgeria, and to encourage democratic developmentand economic reform. Libya continues to be acountry of concern for the national security andforeign policy interests of the United States. Althoughthe government of Libya has taken an importantpositive step away from its support of terrorism bysurrendering the Lockerbie suspects, our policytoward Libya is designed to encourage Libya tocompletely cease its support of terrorism and to blockits efforts to obtain weapons of mass destruction.

Southwest Asia

In Southwest Asia, the United States remains focusedon deterring threats to regional stability and energysecurity, countering threats posed by WMD, andprotecting the security of our regional partners,particularly from the threats posed by Iraq and Iran.We will continue to encourage members of the GulfCooperation Council (GCC) to work closely oncollective defense and security arrangements, helpindividual GCC states meet their defenserequirements, and maintain our bilateral defenserelationships. For example, the United States isfostering counterproliferation cooperation with, andamong, the GCC states through the CooperativeDefense Initiative.

We will maintain an appropriate military presence inSouthwest Asia using a combination of ground, air,and naval forces. The terrorist attack on the USSCole has not deterred our resolve to maintain acontinuous military presence in the Gulf to enhance

regional stability and defend against threats to friendlycountries. Our forces in the Gulf are backed by ourability to rapidly reinforce the region in time of crisis,which we have demonstrated convincingly. Weremain committed to the UN Security Councilresolutions and preventing the Iraqi regime fromtaking large-scale military action against Kuwait or theKurd and Shia minorities in Iraq.

Our policy toward Iraq is comprised of three centralelements: containment to prevent Saddam fromagain threatening the stability of the vital Gulf region;relief for the Iraqi people via the UN oil-for-foodprogram; and support to those Iraqis seeking toreplace Saddam's regime with a government that canlive at peace with its neighbors and its people.

Containment of Iraq remains the foundation of ourpolicy toward Saddam Hussein's regime. Until hisgovernment can be removed from power, it must beprevented from again threatening the region. InDecember 1999, the United Nations Security Councilpassed UNSCR 1284, a new omnibus resolution onIraq. The United States supports Resolution 1284because it buttresses the containment of Iraq whilemaximizing relief for the Iraqi people. The resolutionexpands the humanitarian aspects of the oil-for-foodprogram to ensure the well being of the Iraqi people.It provides for a robust new inspection and monitoringregime that would finish the work begun byUNSCOM. It would allow for a suspension of theeconomic sanctions in return for full Iraqi cooperationwith UN arms inspections and Iraqi fulfillment of keydisarmament tasks. This resolution would also lockin the Security Council's control over Iraqi finances toensure that Saddam Hussein is never again able todisburse Iraq's resources as he would like.

Although Iraq continues to refuse to implement any ofthe requirements of Resolution 1284, the UnitedStates and other members of the Security Councilhave already begun to implement those sections ofthe resolution intended to improve the humanitariansituation of the Iraqi populace. Iraqi oil exports haveincreased dramatically, making possible theprocurement of ever-larger quantities of humanitariannecessities. In addition, the Security Council hasgreatly expanded the lists of items that Iraq is allowedto import to include educational supplies, buildingmaterials, spare parts for the oil industry,infrastructure necessities, and other economic goods.

Nevertheless, we consistently maintain that sanctionson Iraq can only be lifted after it has met itsobligations to the international community in full.Saddam's actions over the past decade lead us toconclude that his regime will never comply with theobligations contained in the relevant UN SecurityCouncil resolutions. For this reason, we activelysupport those who seek to bring a new democraticgovernment to power in Baghdad. We recognize thatthis may be a slow and difficult process, but webelieve it is the only solution to the problem ofSaddam's regime.

Our policy toward Iran is aimed at changing thepractices of the Iranian government in several keyareas, inclUding its efforts to obtain WMD and long­range missiles, its support for terrorism and groupsthat violently oppose the Middle East peace process,and its human rights practices. We view signs ofchange in Iranian policies with great interest, bothwith regard to the possibility of Iran assuming itsrightfUl place in the world community and the chancefor better bilateral ties. We welcome statements bysome Iranian officials that advocate improvedrelations with the United States.

These positive signs must be balanced against thereality that Iran's support for terrorism has not yetceased and serious violations of human rights persist.Iran is continuing its efforts to acquire WMD anddevelop long range missiles (including the 1,300kilometer-range Shahab-3 it flight-tested in July 1998,July 2000, and again in September 2000). TheUnited States will continue to oppose Iranian efforts tosponsor terrorism and to oppose transfers from anycountry to Iran of materials and technologies thatcould be used to develop long-range missiles orWMD. Additionally, the United States will continue towork with Arab allies threatened by WMD to developa defense through efforts such as the CooperativeDefense Initiative.

The United States has demonstrated that we areready to explore ways to build mutual confidence andavoid misunderstandings with Iran. In recognition ofthe positive changes in Iran, in particular the fair andfree parliamentary elections of February 2000, wemodified our sanctions to allow Iran to export to theUnited States carpets and foodstuffs -- key exportsfor small Iranian businesses and to facilitate people topeople contact. We would welcome reciprocal stepsfrom Iran, and continue to signal our willingness toengage in an authoritative government-to-government

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dialogue in which both sides will be able to discusstheir issues of concern.

Meanwhile, we will strengthen our cooperation withallies and friends to encourage further positivechanges in Iranian practices that threaten our sharedinterests. If a government-to-government dialoguecan be initiated and sustained in a way thataddresses the concerns of both sides, then theUnited States would be willing to develop with theIslamic Republic a road map leading to normalrelations. It could be useful to begin a dialoguewithout preconditions.

South Asia

The President's trip to South Asia in March 2000reflected the growing importance of the region to U.S.political, economic, and commercial interests. As thePresident emphasized, our strategy for South Asia isdesigned to help the peoples of that region by helpingresolve long-standing conflicts, encouraging economicdevelopment, and assisting social development.Regional stability and improved bilateral ties are alsoimportant for U.S. economic interests in a region thatcontains one-fifth of the world's population and one ofits most important emerging markets. In addition, weseek to work closely with regional countries to stem theflow of illegal drugs from South Asia, most notably fromAfghanistan.

The President stressed the importance we place onreconciliation between India and Pakistan and ourencouragement of direct dialogue between them toresolve all their outstanding problems. He urged alsothat they respect the Line of Control in Kashmir, rejectviolence as a means to settle their dispute, andexercise mutual restraint.

We seek to establish relationships with India andPakistan that are defined in terms of their ownindividual merits and reflect the full range of U.S.strategic, political and economic interests in eachcountry. After the President's visit to India, we areworking to enhance our relationship with India at alllevels. We look forward to more frequent high-levelcontacts including meetings between our heads ofgovernment and our cabinet officials. With Pakistan, along-standing friend with which we seek improvedrelations, we are constrained by the lack of ademocratic government since the October 1999military coup. We have urged Pakistan's leaders to

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quickly restore civilian rule and the democratic process.The President's visit to Islamabad signified our intent tostay engaged with Pakistan and work to promote thatreturn to democracy.

We seek, as part of our dialogue with India andPakistan, to encourage both countries to take steps toprevent further proliferation, reduce the risk of conflict,and exercise restraint in their nuclear and missileprograms. The United States does not believe thatnuclear weapons have made India or Pakistan moresecure. We hope they will abandon their nuclearweapons programs and join the NPT as non-nuclearweapon states. Indian and Pakistani nuclear andlong-range missile tests have been dangerouslydestabilizing and threaten to spark a dangerous armsrace in South Asia. Such a race will furtherundermine the global nonproliferation regime andthus threaten international security.

In concert with the other permanent members of theUN Security Council, the G-8 nations, and manyothers in the international community, the UnitedStates has called on India and Pakistan to take anumber of steps that would ·bring them closer to theinternational mainstream on nonproliferation. Theseinclude: signing and ratifying the ComprehensiveNuclear Test Ban Treaty, joining the clearinternational consensus in support of a cutoff of fissilematerial production, strengthening export controls,and refraining from an arms race in nuclear weaponsand long-range missiles. We have also urged themto resume their direct dialogue and take decisivesteps to reduce tensions in South Asia. In thatregard, we have urged India and Pakistan to agree toa multilateral moratorium on the production of fissilematerial, pending the conclusion of a Fissile MaterialsCutoff Treaty (FMCT).

Afghanistan remains a serious threat to U.S.worldwide interests because of the Taliban'scontinued sheltering of international terrorists and itsincreasing export of illicit drugs. Afghanistan remainsthe primary safehaven for terrorists threatening theUnited States, including Usama bin Ladin. TheUnited Nations and the United States have leviedsanctions against the Taliban for harboring Usamabin Ladin and other terrorists, and will continue topressure the Taliban until it complies withinternational requests to bring bin Ladin to justice.The United States remains concerned about thosecountries, including Pakistan, that support the Talibanand allow it to continue to harbor such radical

elements. We are engaged in energetic diplomaticefforts, including through the United Nations and withRussia and other concerned countries, to addressthese concerns on an urgent basis.

Promoting Prosperity

The United States has two principal economicobjectives in the region: to promote regional economiccooperation and development, and to ensure anunrestricted flow of oil from the region. We seek topromote regional trade and cooperation oninfrastructure through the peace process and ourQualifying Industrial Zone program, which provideseconomic benefits for certain countries that enter intobusiness arrangements with Israel. In South Asia, wewill continue to work with the region's countries in theirefforts to implement market reforms, strengtheneducational systems, and end the use of child andsweatshop labor.

Although the United States imports less than 15% ofthe oil exported from the Persian Gulf, the region willremain of vital strategic importance to U.S. nationalsecurity due to the global nature of the international oilmarket. Previous oil shocks and the Gulf Warunderscore that any blockage of Gulf supplies orsudden changes in price would immediately affect theinternational market, driving up energy costseverywhere -- ultimately harming the U.S. economy aswell as the economies of our key economic partners inEurope and Asia. Appropriate responses to eventssuch as Iraq's invasion of Kuwait can limit themagnitude of a crisis in the Gulf and its impact on worldoil markets. Over the longer term, U.S. dependenceon access to these and other foreign oil sources willremain important as our reserves are depleted. Thatis one of many important reasons why the UnitedStates must continue to demonstrate commitment andresolve in the Persian Gulf. We will continue ourregular dialogue with the oil-producing nations toensure a safe supply of oil and stable prices.

Promoting Democracy andHuman Rights

We encourage the spread of democratic valuesthroughout the Middle East, North Africa andSouthwest and South Asia and will pursue this

objective aided by constructive dialogue withcountries in the region. In Iran, for example, we hopethe nation's leaders will carry out the people'smandate for a government that respects and protectsthe rule of law, both in its internal and external affairs.In Pakistan, we have pressed the new military rulersto provide a detailed roadmap with a timetable for areturn to elected civilian government. In India, duringthe President's visit, we supported the establishmentof an Asian Center for Democratic Governance,which would seek to promote the forms andsubstance of democracy throughout Asia. We willpromote responsible indigenous moves towardincreasing political participation and enhancing thequality of governance, and we will continue tochallenge governments in the region to improve theirhuman rights records. We will work with thegovernments and human rights organizations of theregion to promote tolerance for the diverse religiousgroups present in the Middle East and South Asia. Inparticular, we have sought to encourage and end toviolence against minority religious groups, and arepeal of "blasphemy laws" which are used todiscriminate against minorities.

Respect for human rights also requires rejection ofterrorism. If the nations in the region are to safeguardtheir own citizens from the threat of terror, theycannot tolerate acts of indiscriminate violence againstcivilians, nor can they offer refuge to those whocommit such acts. We will continue to enforce UNSCsanctions against the Taliban for harboring terroristssuch as Usama bin Ladin and look for other ways topressure the Taliban to end its support for suchgroups.

Our policies are guided by our profound respect forIslam. The Muslim religion is the fastest-growing faithin the United States. We recognize and honor Islam'srole as a source of inspiration, instruction, and moralguidance for hundreds of millions of people aroundthe world. United States policy in the region isdirected at the actions of governments and terroristgroups, not peoples or faiths.

Sub-Saharan Africa

In recent years, the United States has engaged in aconcerted effort to transform our relationship with

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Africa. We have supported efforts by many Africannations to move toward multi-party democracy, holdfree and fair elections, promote human rights, allowfreedom of the press and association, enhance civiland judicial institutions, and reform their economies.A new, post-Cold War political order is emerging inAfrica, with emphasis on democratic and pragmaticapproaches to solving political, economic, andenvironmental problems, and developing human andnatural resources. United States-Africa ties aredeepening, and U.S.-Africa trade is expanding.

Sustaining these recent successes will require thatwe identify those issues that most directly affect ourinterests. We will promote regional stability throughengagement with sub-regional organizations and keyAfrican states using carefully harmonized U.S.programs and initiatives. We recognize and aresensitive to the challenges many African states faceas they move toward multi-party democracy and civil­military relations, and we will work to focus our limitedresources on assisting their transition. Ourimmediate objective is to increase the number ofcapable states in Africa, that is, nations that are ableto define the challenges they face, manage theirresources to effectively address those challenges,and build stability and peace within their borders andtheir sub-regions.

Enhancing Security

Serious transnational security threats emanate frompockets of Africa, including state-sponsoredterrorism, drug trafficking and other internationalcrime, environmental degradation, and infectiousdiseases, especially HIV/AIDS. Since these threatstranscend state borders, they are best addressedthrough effective, sustained sub-regional engagementin Africa. We have already made some progress incountering some of these threats -- such as byinvesting in efforts to combat environmentaldegradation and infectious disease, and leadinginternational efforts to remove mines planted inprevious conflict areas and halt the proliferation ofland mines. We continue efforts to reduce the flow ofillegal drugs through Africa and to curtail internationalorganized criminal activity based in Africa. We willimprove international intelligence sharing, and trainand assist African law enforcement, intelligence, andborder control agencies to detect and preventplanned terrorist attacks against U.S. targets inAfrica.

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We seek to keep Africa free of weapons of massdestruction by supporting South Africa's nucleardisarmament and accession to the NPT as a non­nuclear weapon state, supporting the African NuclearWeapons Free Zone, and encouraging Africannations to join the BWC and CWC.

Nigeria's rapid change from an autocratic, militaryregime to a civilian, democratically electedgovernment has afforded us the opportunity to build apromising security, political and economic relationshipwith the most populous country in Africa. With nearlyone in six Africans living in Nigeria, the impact ofserious cooperative efforts to tackle significant drugtrafficking, corruption, and other crime could beenormously beneficial to the United States and alarge proportion of Africans. In Sierra Leone, we areworking with West Africa -- particularly Nigeria -- theUnited Kingdom, and the UN to prevent the spread ofconflict, promote accountability, and deal with the roleof diamonds in financing the rebels. We are alsoseeking to establish the control of a democraticallyelected government over the national territory.Additionally, we are addressing the role of diamondsand the proliferation of small arms in fueling conflictsin Angola, the Democratic Republic of the Congo, andelsewhere. In the Democratic Republic of the Congoand Angola, where fighting threatens to destabilize abroad swath of central and southern Africa, we areworking closely with the region and the UN to supportthe Lusaka peace process. Similarly, we haveprovided significant political support to the ArushaPeace Process to bring a resolution to the ongoingconflict in Burundi. We have also been workingclosely with the UN and Organization for African Unity(OAU) to attempt to establish a lasting peacebetween Ethiopia and Eritrea.

Sudan continues to pose a threat to regional stabilityand the national security interests of the UnitedStates. We have moved to counter Sudan's supportfor international terrorism and regional destabilizationby maintaining the sanctions imposed against theKhartoum regime until it takes concrete, verifiablesteps to end support for terrorism on Sudanese soil;we continue to press for the regime's isolationthrough the UN Security Council. We supportregional efforts for a just and fair peace and nationalreconciliation in Sudan based on the Inter­Governmental Authority on Development'sDeclaration of Principles.

Persistent conflict and continuing political instability insome African countries remain obstacles to Africa'sdevelopment and to our national security, political andeconomic interests there, including assured access tooil reserves and other important natural resources.To foster regional stability and peace in Africa, theUnited States in 1996 launched the African CrisisResponse Initiative (ACRI) to train African militaries toconduct effective peacekeeping and humanitarianoperations. It will focus on developing a sustainableregional capacity to address the multiple challengesto peace and security on the continent. We areconsulting closely on expanded ACRI activity with theUN Department of Peacekeeping Operations, theOAU and its Crisis Management Center, and Africansub-regional organizations already pursuing similarcapability enhancements. A different effort,Operation Focus Relief, is training and equippingseven West African battalions for peace enforcementmissions in Sierra Leone. And finally, anotherinitiative, the Enhanced International PeacekeepingCapabilities (EIPC) program, provides funding toupgrade peacekeeping and training centers, and"train the trainer" in countries around the world inorder to make them more interoperable with U.S. andother peacekeeping forces, thereby sharing theburden.

The United States has established the Africa Centerfor Strategic Studies (ACSS) to promote theexchange of ideas and information tailoredspecifically for African security concerns. The goal isfor ACSS to be a source of academic, yet practical,instruction in promoting civil-military relations and theskills necessary to make effective national securitydecisions in democratic governments. Thecurriculum will engage African military and civiliandefense leaders in a substantive dialogue aboutdefense policy planning, civil-military relations, anddefense resource management in democracies. Ourlong-term goal is to support the development ofregional security arrangements and institutions toprevent and manage armed conflicts and curtailtransnational threats to our collective security.

Promoting Prosperity

A stable, democratic, prosperous Africa will be abetter economic partner, a better partner for securityand peace, and a better partner in the fights againstdrug trafficking, crime, terrorism, infectious diseases,and environmental degradation. Lasting prosperity

for Africa will be possible only when Africa is fullyintegrated into the global economy.

Further integrating Africa into the global economy willalso directly serve U.S. interests by continuing toexpand an already important new market for U.S.exports. The approximately 700 million people ofsub-Saharan Africa represent one of the world'slargest basically untapped markets. Although theUnited States enjoys only a 7% market share inAfrica, already 100,000 American jobs depend on ourexports there. Increasing both the U.S. market shareand the size of the African market will bring tangiblebenefits to U.S. workers and increase prosperity andeconomic opportunity in Africa. Our aim, therefore, isto assist African nations to implement economicreforms, improve public governance and combatcorruption, create favorable climates for trade andinvestment, and achieve sustainable development.

To support the economic transformation underway inAfrica, the President in June 1997 launched thePartnership for Economic Growth and Opportunity inAfrica Initiative. The Administration has implementedmany of the Initiative's objectives and continues towork closely with Congress to implement remainingkey elements of this initiative. The enactment of theAfrican Growth and Opportunity Act on May 18, 2000marked the beginning of a new relationship betweenthe United States and sub-Saharan Africa. Thislegislation provides the opportunity for substantialpreferential market access to the U.S. market foreligible sub-Saharan African countries, and providesan economic, human rights, and civil-judicialbenchmark towards which current non-eligiblecountries can aspire and focus their developmentefforts.

By significantly broadening market access, spurringgrowth, and helping the poorest nations eliminate orreduce their bilateral debt, the Initiative and thelegislation better enable us to help African nationsundertake difficult economic reforms and build betterlives for their people through sustainabledevelopment. We are working with Africangovernments on shared interests in the world tradingsystem, such as developing electronic commerce,improving WTO capacity-bUilding functions, andeliminating agriCUltural export subsidies. We also arepursuing initiatives to encourage U.S. trade with andinvestment in Africa, including targeted technicalassistance, enhanced debt forgiveness, andincreased bilateral trade ties.

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To further our trade objectives in Africa, the RonBrown Commercial Center was established inJohannesburg, South Africa in 1998. The Centerprovides support for American companies looking toenter or expand into the sub-Saharan African market,promotes U.S. exports through a range of supportprograms, and facilitates business contacts andpartnerships between African and Americanbusinesses. The President's historic March 1998 tripto Africa and the unprecedented March 1999 U.S.­Africa Ministerial further solidified our partnership withAfrican nations across a range of security, economic,and political issues.

Helping Africans generate the food and incomenecessary to feed themselves is critical for promotingsustainable growth and development. Despite somerecent progress, the percentage of malnourishedpeople and lack of diversified sustainable agriculturalproduction in Africa is the highest of any region in theworld, and more help is greatly needed. In 1998 welaunched the Africa Food Security Initiative (AFSI), aUSAID-Ied effort to help improve agriculturalproductivity, support research, expand income­generating projects, and address nutritional needs forthe rural poor. While maintaining its program focus inthe original AFSI countries -- Ethiopia, Mali,Mozambique, Malawi, and Uganda -- the initiative isnow being expanded into countries where foodsecurity is declining, such as Tanzania and Zambia,as well as Ghana and Kenya, where we can build onother USAID programs to accelerate our goals ofimproved child nutrition and increased agriculturalincomes.

The initial focus under the AFSI involved countriesthat were either on the fast growth track or countriesthat had undertaken a degree of structural adjustmentthat would put them on the right path. Ethiopia, Mali,Mozambique, Malawi, and Uganda, the initial focuscountries, have performed reasonably well under thecircumstances. Productivity and agriculture incomeshad been rising before the floods in southern Africa orthe drought in East Africa. All of these countrieseither met or exceeded their performance targets lastyear. Food grants production per capita, one of theInitiative's objectives, has continued its upward trendlast year. Of these countries, all except Ethiopia -­whose war with Eritrea has continued during thisperiod -- are showing improving food security trends.

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However, the picture is less encouraging in much ofAfrica. Malnutrition accounts for about one-third of allchildren's deaths in Africa. And although there hasbeen a decline in the percentage of preschoolers inAfrica who are stunted, the number is going up -- theonly place in the world where this is the case -- fromabout 35 million in 1980 to a projection of 50 million in2005.

The Africa Food Security Initiative, while maintainingits program focus in the original AFSI countries, isexpanding its program into countries where foodsecurity is declining, such as Tanzania and Zambia,as well as Ghana and Kenya, where we can build onUSAID program to accelerate our goals of improvedchild nutrition and increased agriculture incomes.

USAID has been able to make progress on theInitiative by focusing on working with governments toimprove agricultural policies, working with farmersand researchers to increase the technologies thatallow for yield increases (or cut production costs), andworking with farmer groups to improve their ability tomarket their produce more competitively. We arealso working closely with African partners to makeavailable usable technologies such as air trafficcontrol systems and other airfield improvements, aswell as introducing the U.S. Army Corps of Engineersto provide training and demonstration projects.

African nations are also engaged in battle with age­old diseases, such as malaria and tuberculosis (TB),which sap economic productivity and development.Worse, the epidemic of HIV/AIDS is devastating thecontinent, reversing hard-fought gains indevelopment, dramatically reducing life expectancy,decreasing GDPs, and threatening security andstability in the hardest-hit nations. The Administrationhas made the battle against AIDS and other diseasesa priority for international action and investment inAfrica. Over the past two years, the President hasdoubled bilateral assistance for the fight againstHIV/AIDS, launched the Millennium Vaccine Initiativeto accelerate the search for vaccines againstHIV/AIDS, malaria, and TB, and launched acampaign to mobilize new resources from otherdonors, such as the G-8, and the private sector. Wehave also begun the Leadership in Fighting anEpidemic (LIFE) initiative, a $100 million effort withlegislative backing, which focuses on training andprevention activities for selected sub-Saharan Africanmilitaries.

Promoting Democracy andHuman Rights

In Africa as elsewhere, democracies have proved tobe stronger partners for peace, stability and sustainedprosperity. We will continue to support the importantprogress African nations have achieved and tobroaden the growing circle of African democracies.

The restoration of civilian democratic government inNigeria can help return that country to its place as aleader in Africa. The government and people ofNigeria have succeeded in restoring democraticcivilian government, freed political prisoners, liftedonerous restrictions on labor unions, and worked torestore the authority of the judicial system. Nigeria'snew civilian government has taken sweeping steps toensure that the military remains in the barracks andthat fighting corruption will be a top priority. Thepeaceful elections in February 1999 and inaugurationof the new civilian government in May 1999 wereimportant steps in this transformation.

As in any democratic transition, Nigeria's newgovernment is facing enormous challenges: creatingaccountable government, building support within themilitary for civilian rule, protecting human rights, andrebuilding the economy so it benefits all citizens.President Clinton met with President Obasanjo at theWhite House in October 1999 and again in Nigeria inAugust 2000. The discussions reaffirmed ournation's commitment to work with him on the security,economic, political, and social challenges faced byNigeria.

Kenya, which has played a critical role in maintainingregional stability, is also facing an historic transition.President Daniel Moi has announced that he will stepdown in 2002, after twenty-four years in power. Heleaves a country that is suffering from a weakeconomy and deteriorating social infrastructure. Wemust continue to actively engage the Government ofKenya on such matters as conflict resolution, regionalstability, and economic development as well asencouraging commitment to constitutional reform andhuman rights.

Democracy assistance has proven to be an effectivetool in both Senegal and Zimbabwe. In Senegal,President Abdou Diouf accepted defeat in the Marchelections and turned power over peacefully toAbdoulaye Wade, the opposition leader. The mostrecent elections had a record high voter turnout ofeducated voters despite several complicating factors.In order to help post-apartheid South Africa achieveits economic, political, democratic, and security goalsfor all its citizens, we will continue to providesubstantial bilateral assistance, vigorously promoteU.S. trade and investment, and pursue closecooperation and support for our mutual interests.

Ultimately, the prosperity and security of Africadepend on African leadership, strong nationalinstitutions, and extensive political and economicreform. The United States will continue to supportand promote such national reforms and the evolutionof regional arrangements that build cooperationamong African states.

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IV. Conclusions

Over the last eight years, we have once againmustered the creative energies of our Nation toreestablish the United States' military and economicstrength within the world community. This leadershipposition has been achieved in a manner in which ourforefathers would likely have been pleased; a nationleading by the authority that comes from theattractiveness of its values and force of its example,rather than the power of its military might to compel byforce or sanction. As a result, the world now looks tothe United States to be not just a broker of peace, but acatalyst of coalitions, and a guarantor of global financialstability. It has been achieved in spite of a period oftumultuous change in the strategic landscape. Yet, ithas been realized because we have Il.laintained asteadfast focus on simple goals -- peace, sharedprosperity, and freedom -- that lift the condition of allnations and people that choose to join us.

Our strategy for engagement is comprised of manydifferent policies, the key elements of which include:

• Adapting our alliances• Encouraging the reorientation of other states,

including former adversaries• Encouraging democratization, open markets, free

trade, and sustainable development• Preventing conflict• Countering potential regional aggressors• Confronting new threats• Steering international peace and stability

operations.

These elements are building blocks within a strategicarchitecture that describe a foreign policy for a globalage. They are not easily summed up in a single

phrase but they have all been guided by two simpleprinciples -- protecting our interests and advancing ourvalues. Together, the sum of these goals, elements,and principles represent the blueprint for our strategy ofengagement, and we believe that strategy will bestachieve our vision for the future.

But we must not be too sanguine about the future.New challenges to the sustainability of our currenteconomic, political, and national security successeswill arise. The true question is what will best ensureour leadership in the years ahead. It took great visionalmost a decade ago to realize that strength abroadwould depend not only on maintaining aninternationalist philosophy but also on reestablishingstrength at home. Putting our economic house inorder, while not retreating into isolationism proved awise course and validated the mutual linkagebetween disparate goals of peace, shared prosperity,and democracy. Any other policy choice might wellhave permitted the world to fall into a series ofregional conflicts in the aftermath of the Cold Warand possibly have precluded opportunity for the U.S.economic recovery of the 1990s. Although past is notnecessarily prologue, the inexorable trend ofglobalization supports the continued viability of astrategy of engagement. We must not, in reaction tothe real or perceived costs of engagement, retreatinto a policy of "Fortress America". To do so wouldlead us down a path that would dishonor ourcommitments, ignore our friends, and discount beliefin our values. The result would be a global loss of ourauthority and with it ultimately our power. A strategyof engagement, however, is the surest way toenhance not only our power but also our authority,and thus our leadership, into the 21 51 century.

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