Harnessing big ideas key to world progress

This is and edited transcript of President Bill Clinton's remarks to the Apes CEO Summit breakfast in Auckland yesterday.



I am delighted to be here for the last gathering of Asia Pacific leaders in the 20th century. We primarily deal with economic issues, but I'd like to begin with a few comments about security issues.

The eyes of the world today are on East Timor, where the people voted overwhelmingly for independence. I believe Indonesia's government did the right thing in supporting the vote, just as it did the right thing in holding its own free elections earlier this year.

Now it is clear, however, that the Indonesian military has aided and abetted militia violence in East Timor, in violation of the commitment to the international community. This has allowed the militias to murder innocent people, to send thousands fleeing for their lives, to attack the United Nations compound.

The United States has suspended all military cooperation, assistance and sales to Indonesia. I have made clear that my willingness to support future economic assistance from the international community will depend upon how Indonesia handles the situation from today.

The Indonesian Government and military must halt the violence. They must permit humanitarian assistance and let the UN mission do its job. They must allow the East Timorese who have been pushed from their homes to return safely.

They must implement the results of the balloting, and they must allow an international force to help to restore security. We are ready to support an effort led by Australia to mobilise a multinational force to help to bring security to East Timor under UN auspices.

Because the UN helped to organise the vote in East Timor we have a special responsibility to help to see it through. We must help both the people of East Timor and the democratic process in Indonesia because the world community seeks to have the integrity of democracy protected everywhere.

I will also meet here with President Kim and Prime Minister Obuchi to discuss peace and reconciliation on the Korean Peninsula. The people of North Korea need food and opportunities. They need engagement with the south and the chance for a brighter future. They do not need new weaponry that threatens the security of the region and the world.

I would also like to say a word about China and the present tensions between China and Taiwan. Our policy has been rooted in our commitment to one China, our commitment to a peaceful resolution of the differences between China and Taiwan, our commitment to continuously expanding the cross-strait dialogue.

I reaffirmed to President Jiang yesterday that their people have too much at stake to let the preent difficulties deteriorate into a confrontation in which all would suffer.

This is a much happier occasion than the last Apec meeting. Economies that were going downhill then now seem to be clearly on the road to recovery.

This is not a time for complacency. There is still hard work to be done. Here in Auckland, we should put Apec's weight behind the new trade round to be launched at the WTO meeting in Seattle. We should continue to reform the global financial architecture. We must work together to promote stability, as well as peace.

We, in the United States, knew when this crisis started that we had to work in all these ways. We have worked on the global financial architecture. We have worked to try to promote a new round of world trade. We also, remembering the awful experience of the Great Depression, worked hard to keep our markets open. For the first half of 1999, our trade deficit was more than double what it was in the first half of 1997.

But I think it is clear that that decision, even though it's somewhat controversial in the United States, was the right decision for American workers and for American businesses because we always need to be looking at the long-term and the prospects of creating a global economy in which there is more trade, not less.

Our Apec ministers already have backed an ambitious trade agenda; now it's time for the leaders to follow suit.

When we get to Seattle, we should then try to make Apec's agenda the world's agenda. We should be committed strongly to dramatic increase of market access in agricultural, industrial, and service areas.

We should be committed to reaching other agreements along the way during the process of the trade round - for example, to keep the Information Superhighway free of tolls, with a permanent moratorium on electronic commerce duties - to improve openness in government procurement, to speed up tariff liberalisation in all the key areas we've identified.

And I also believe we should be committed to completing the entire round within three years. Our citizens shouldn't have to wait any longer for governments to get a job like this done.

A strong world trading system is good for all the nations of the region. It is certainly good for the United States, where about a third of our economic growth came from expanded trade until the Asian financial crisis.

Over one third of our agricultural products are exported. One in 10 of our jobs depends on exports; millions more depend on our ability to import. In our country, we have had remarkable growth with low inflation, thanks in no small measure to greater competition.

The world trading system will be even more beneficial as more nations commit to play by its rules. Yesterday, I had a very good meeting with President Jiang. And China and the United States reaffirmed our commitment to China's entry into the WTO on commercially viable terms. I hope we can make it happen soon. I want to assure you all that we are working hard to make it happen soon.

I also believe strongly that our world trading system will grow in popular support if it supports our values. And I mean values that are generally shared by civilised nations across cultural, religious and regional lines.

Twice in the past year or so, I have gone to Geneva to talk about a world trading system for the 21st century, and the importance of honouring our values when it comes to labour, when it comes to the environment, when it comes to the openness with which powerful bodies make their decisions.

Just as we will continue to enforce our trade laws at home to ensure fair competition, we will continue to address what I believe are commitments all of our people really want us to embrace - to decent working conditions and to the health of the global environment.

This will not be, however, about erecting new barriers, but about lifting the lives of all people. I am very pleased, for example, that the delegates at the International Labour Organisation unanimously adopted a convention banning the worst forms of child labour.

I am encouraged by our common commitment to address the challenge of global warming. This is still a contentious issue. There are many developing countries that honestly believe that developed countries will use the whole climate change debate as a way of slowing economic opportunity for people in developing countries.

I completely disagree with that. Those who hold this view believe that the only way to grow an economy in the 21st century is with the same energy use patterns we saw in the 20th century.

Jack Smith (chief executive of General Motors) says there are three dramatic changes going on in the automobile industry. One is in commerce - GM sells its first car in Taiwan over the Internet. Two is that cars are becoming automated information, communications, and entertainment systems, self-contained. And three is that the internal combustion engine is being changed in fundamental ways.

And before we know it, there will be both blended-fuel and alternative-fuel vehicles which will be emitting far less greenhouse gases into the atmosphere, in ways that accelerate economic growth rather than diminish it.

The world works by adherence to our departure from big ideas. And we organise ourselves around them, and then people like you do real well when you figure out how to improve on them, modify them, find a little niche in which to move.

But if we stay with a big idea that's wrong too long, no matter how good the rest of our creativity is, we all get in trouble. And no matter how hard we work, we get in trouble because we work harder and harder and harder at the wrong things.

One of the big ideas the world has to abandon is the idea that the only way to build a modern prosperous economy is with the industrial energy use patterns of a former era. It is not true.

And when you look at the future of China, when you look at the future of India, when you look at all the other developing economies, and you imagine what you can do with the cellphone, with the Internet and with alternative energy development, a lot of poor places in Africa and Asia and other parts of the world can skip a whole generation of economic development unless we stay in chains to a big idea that is no longer true.

I am grateful that there is a growing recognition that the world trading system and the WTO itself should be more open and accountable. This is very, very important. There's a lot of controversy about it from time to time on the specifics, but in the end, greater accountability and greater openness and greater involvement of all elements of society in these decision-makings will build greater support for a global economic system.

In global economic architecture, I sense more people saying things are fine now; we don't need to continue to do anything about the economic or financial architecture. I think that's a mistake.

The Asian financial crisis came after a high tide of capital washed into the region, often highly leveraged, flowing quickly into countries without adequate risk assessment. When the tide receded just as rapidly, if not more rapidly, it left behind a legacy of mounting debt, devaluation and severe dislocation.

For us in the United States, the crisis underscored our tremendous stake in the stability and success of Asia. It demonstrated how closely tied our economies had become. And as our Asian markets dried up, our companies, our banks, our workers, our farmers clearly felt the effects.

We've been seeking new ways to help the international system to moderate the cycle of boom and bust in much the way that individual economies have learned to do since the Great Depression. We are working more closely to make sure that all, including the developing economies, have a seat at the table, through new mechanisms like the financial stability forum. I urge you all to keep this progress on course.

Emerging economies, of course, have work to do - they must continue to restructure their banking systems, make their corporations more accountable, reduce reliance on short-term loans, encourage greater direct investment. Creditor nations must improve our own financial supervision and regulation so investors will assess risks more carefully and banks will lend more wisely.

The IMF now has special financing available to help a country head off a financial contagion - something we in the United States worked hard to set up - provided the country has maintained responsible economic policies. We must continue to develop such tools.

Working with the World Bank and the Asian Development Bank, we must also strengthen safety nets so people have unemployment insurance and job training, so that impoverished children are not the first and hardest-hit victims of an economic downturn.

We must, in short, continue our efforts to put a human face on the global economy - not because it is charity, but because it is the right thing to do from a humane, as well as from an economic standpoint. An active role for government is important, not to restrain competition or to dictate the flow of investment, but to ensure fair dealing and a level playing field.

Our economies will work even better when we have stronger standards of disclosure by business and governments. More openness, more honesty, more responsibility in business dealings gives us a more supportive political system and therefore better economic results.

I think entrepreneurs and investors will flee nations where the most lucrative deals are made in secret, where contracts aren't honoured, where courts aren't fair, where creativity is stifled, where there are grievous worker complaints.

I think they will be drawn to countries where there's fairness and openness and freedom, good educatioon and broad participation in the prosperity of the nation.

There is still a great deal for us to do together to expand trade, to strengthen the financial architecture, to strengthen the conditions among and within nations for success of the global economy with a human face, and to provide the basic framework of security without which economies cannot grow freely.

I think one would have to be quite optimistic but I think we also would have to be quite sober in the price we will pay if any of us should fail to fulfill our responsibility. If we work hard at the right things, our children will live in a much better world.

This is an edited transcript of President Clinton's remarks

to the Apec CEO Summit

breakfast in Auckland yesterday.

United States President

'The Indonesian Government and military must not only stop what they are doing, but reverse course. They must halt violence.'