THE WHITE HOUSE Office of the Press Secretary _____________________________________________________________________ For Immediate Release August 30, 1993 BACKGROUND BRIEFING BY SENIOR ADMINISTRATION OFFICIAL August 30, 1993 The Briefing Room 3:05 P.M. EDT MR. CLARKE: We will now have a BACKGROUND briefing on the President's meeting with the Caribbean leaders. It is not for sound and camera, and can be attributed to senior administration officials. Our two briefers are (names deleted). SENIOR ADMINISTRATION OFFICIAL: Thank you very much. As you know, the President met with the five leaders. It was a very much of a working lunch, intensive conversation throughout. The luncheon ran on about 20 minutes longer that originally anticipated so there was altogether I think about 95 minutes or so over the luncheon. With regard to the major topics discussed, one could say in a way, the meeting was the message, and that the President wanted to indicate that despite the end of the Cold War he remains very concerned and engaged with the problems of the Caribbean. This is only -- with regard to meetings that the President has had with hemispheric leaders, he's met, as you know, twice with President Aristide. He met with President Menem from Argentina, and with former Prime Minister Mulroney from Canada. So with those exceptions, then, this was the first group of countries that he's met with in the Western Hemisphere, so this shows a sense of emphasis and priority on the region. There was an emphasis on the United States itself being a Caribbean nation, this being then a sense of shared interest and shared problems. Strong focus on trade issues. On the NAFTA, the Caribbean indicated themselves that they were very interested and supportive of the NAFTA. On the other hand, they were concerned that their margins of preferences would be diluted possibly -- would be diluted by the NAFTA. And, as you know from the President's statement, he asked Mickey Kantor to look into this to see if, in fact, there would be diversions. And then, if so, what might be done to increase regional trade between the United States and the Caribbean. With regard to political issues -- Q Excuse me. Could you, for those unlettered in -- SENIOR ADMINISTRATION OFFICIAL: Excuse me? Q in trade, could you explain what margins of preference and dilution of same would be? SENIOR ADMINISTRATION OFFICIAL: Okay. The Caribbean -- well, in general, the Caribbean Basin Initiative gives duty-free entry into the United States for a number of products. So right now, the Caribbean has an advantage -- a margin of preference -- an advantage vis-a-vis Mexico. With the NAFTA, when the duties between Mexico and the United States are removed gradually over the 15-year period, then that advantage that the Caribbean had enjoyed would be diminished perhaps to zero. With regard to political issues, a strong emphasis on the importance of sustaining democracy through good governance, fighting corruption. The Caribbean countries mentioned that CARICOM is working on a code for civil society which, among other things, will deal with issues of governance, codes of ethics for government officials, as well as rights of workers and environmental rights. And Americans express considerable interest in that initiative. In the context of democracy, also the question of Haiti was discussed; a sense that tremendous progress had been made, although, of course, there was still a lot of work to be done between now and October 30th when President Aristide will return to Haiti according to the Governors Island Agreement. And then thereafter, these countries in the Caribbean, who have already been cooperating and have been a major source of support for the international efforts to return President Aristide -- that all of us should continue to cooperate in the technical assistance area, and in the security area. And then, finally, as you heard discussed just now in the East Room, the issue of Cuba came up. The President indicated that, of course, the Cuban democracy act was a centerpiece of our policy. He expressed interest within that context of the Cuban democracy act. He expressed interest in the approach that the Caribbean countries might have. Throughout that exchange, there was a strong emphasis on the shared ultimate objective on the part of the United States and of the Caribbean countries to bring democracy and respect for human rights to the island of Cuba. The Caribbeans also reassured us that they plan to do nothing with regard to Cuba that would be inimicable to U.S. interests vis-a-vis Cuba. Anything else? SENIOR ADMINISTRATION OFFICIAL: Well, just that a couple of the Prime Ministers devoted some attention to the narcotics issue, talking about how it continues to be a problem for the countries of the region, both as consumers and also as transit countries. Talked about the cooperation we've had with them up until now and urged that that cooperation be continued and strengthened. Particularly Barbados and the Bahamas mentioned. I thought that on the question of NAFTA, Ambassador Kantor was following the President's instructions quite forthcoming in trying to look into ways to take the parts of NAFTA that are most relevant to the Caribbean and shape them to the Caribbean Basin Initiative, the other kinds of special privileges that the Caribbean countries have at this point and GSP so that they are not damaged by NAFTA. The particular issue there of the most immediate concern mentioned by several of the prime ministers was textiles. A lot of textiles are partially made in the United States, sent there, finished there and come back into the United States. There are duties on such textiles from Mexico, there are none in the Caribbean. When NAFTA comes in, these duties will disappear, completely making Mexico have an advantage over the Caribbean countries and we'll have to take a look at how to do that. So Mickey Kantor will be chairing a group to look at that right away -- and in consultation with those governments. Q Just to make sure I understand you, when you say "shape NAFTA," do you mean take things that are in NAFTA and also apply them to the Caribbean countries, but not -- SENIOR ADMINISTRATION OFFICIAL: Shapes the provisions of NAFTA which are most relevant to the Caribbean and try to -- Q But not actually change NAFTA? SENIOR ADMINISTRATION OFFICIAL: No, no, it wouldn't change NAFTA, it would change our relationship with the Caribbean countries. And it's not clear at all yet how other countries will exceed to NAFTA. But the idea was to take a look and see how NAFTA does not -- whatever negative impact NAFTA may have on a Caribbean country can be dealt with in relatively short order. Q Would that be by extending provisions within NAFTA to Caribbean countries? SENIOR ADMINISTRATION OFFICIAL: None of that is clear yet, really. That's what has to be looked at. Q Was there any discussion about jobs, because there's so much unemployment in those islands. What did they decide to do about getting jobs for those people? SENIOR ADMINISTRATION OFFICIAL: Yes, there was a great deal of discussion because, as is obvious, there's been tremendous out migration from those islands to the United States, Canada, and Great Britain -- the former colonial powers. The President emphasized that economic growth in the region was important both in order to create jobs for the people in the area, but also to create jobs in the United States through exports. That, as he said in the East Room, U.S. exports of $2 billion a year generate roughly 40,000 jobs in the United States. So an economic growth in the region has that double benefit. Q But jobs are so uncertain -- the name job, what does it actually mean specifically? What jobs? SENIOR ADMINISTRATION OFFICIAL: The Caribbean countries expressed a very clear awareness that they had to adapt to changing global realities, and that, therefore, the composition of jobs in the Caribbean would also change. That they do have to gradually wean themselves from dependence on a couple of commodities, particularly sugar and bananas, and diversify into a whole series of other products. Their concern, of course, is that as they diversify into other products, that they then have markets for their products. And hence, the creation of jobs in the region and investment patterns and diversification inevitably takes us back to trade relations with the United States. And we are their overwhelming trade partner. Something between 40 percent and 50 percent of the trade of these countries is with the United States. SENIOR ADMINISTRATION OFFICIAL: Could I just add a couple of things there? I think it's worth noting that all of these countries are really making a strenuous effort to rationalize and modernize and liberalize their economies. Some of them are further along the line than others, but this is very important. On jobs, several of the prime ministers stressed the importance of tourism. And the Bahamas -- I think they said something -- one out of every three jobs is related to tourism. And Secretary Brown indicated a willingness to work more closely with these countries in developing the tourist industry. Q I want to be clear -- when you're talking about reshaping the Caribbean agreement to match NAFTA, is this something that Mickey Kantor is looking into, or did they reassure the Caribbean governments that this would be done? SENIOR ADMINISTRATION OFFICIAL: No. The President asked Mickey Kantor to look into the question of the impact of the NAFTA on U.S.-Caribbean trade. And then, based upon that analysis, and is working with the countries in the Caribbean to see what, if anything, could be done to increase trade flows in the region. So there was no agreement on any specific plan -- Q And there's no commitment that the United States will, however -- through extra duties on Mexican products or any other way -- make whole the Caribbean trade situation? SENIOR ADMINISTRATION OFFICIAL: The only commitment was to carefully examine the issue, to work with the countries in the Caribbean, and to see what could be done to increase regional trade and trade with the United States. Q Sir, will you be clear on this tariff matter how the Caribbean loses and Mexico gains? Is that going to create a lot of unemployment in the Caribbean? SENIOR ADMINISTRATION OFFICIAL: Well, it could potentially create unemployment in the Caribbean, which is precisely why -- one reason why the United States has an interest in continued growth, in job creation in the Caribbean, which is why we have an interest in taking a look at this. As was mentioned, under the NAFTA, Mexico will have -- garments, apparel produced in Mexico will have easier access to the U.S. market than is currently the case. Hence, the Caribbean is concerned that garment makers currently located on their islands will take their machines literally -- pick them up and move them to Mexico, hence creating jobs in Mexico, but dissembling jobs -- ending jobs in the Caribbean. And so that's the cause of concern. So that's one of the issues that has to be looked at. Q Would that make a glut on the market of production of textiles in Mexico? If the Caribbean textile industry moves to Mexico, is that going to make a glut on the market in Mexico? SENIOR ADMINISTRATION OFFICIAL: By itself, no, because the amounts are not large enough to produce such an effect. Q Let me ask you all about Haiti, which was, of course, mentioned in great detail. I think your colleague was present this morning at the swearing-in of Mr. Malval. Jesse Jackson brought up the subject of an economic reconstruction plan for Haiti. Haiti, we all know, is an economic basket case. Are there any provisions in the case of political settlement to follow through until the end October 30th when Aristide is returned to power? Are there plans to economic jump-start Haiti and to have a plan in place? SENIOR ADMINISTRATION OFFICIAL: Absolutely. The Inter- American Bank and the World Bank and even the IMF and the UNDP and bilateral donors, including the United States, have been working on this for quite a while now. And we're quite confident that the -- especially in international financial institutions that have large amounts of assistance to provide in the next -- beginning in the next few months. They have a large pipeline -- both the IDB and the World Bank -- of projects for Haiti which they have not been implementing, for obvious reasons, over the last couple of years. So they've got quite a lot they can move forward. In the very short run, the bilateral donors will move in there with employment-generating programs immediately. One question that is bedeviling everyone and we're working hard on is clearing up the Haitian -- Haiti's arrearages to the international financial institutions so that these other flows can take place. But this has been a cardinal point from the very beginning of the Clinton administration's involvement in this issue -- is to make sure that once they've got a political settlement that looks like it will hold, they move forward very quickly with solid development programs that will produce employment and give a sense of dynamism. And also, I should add, the World Bank is particularly interested, as are we, in programs that will try to restore that devastated environment in Haiti. Q How much money would they give them? Q Back to NAFTA if I could just for a second? Did the President ask these leaders to support him, either publicly or otherwise, on NAFTA? SENIOR ADMINISTRATION OFFICIAL: I don't believe that he did, as such. I think the leaders from the Caribbean themselves indicated that they, themselves, supported the NAFTA concept. But -- and from their point of view an important, but -- it's important that the NAFTA does not prejudice their direct interest. Q Did they raise the subject, or did the President? Do you recall? SENIOR ADMINISTRATION OFFICIAL: At the beginning of the luncheon, the President first raised the subject of the NAFTA. Q And -- SENIOR ADMINISTRATION OFFICIAL: Because -- not to ask for their support, actually. But to indicate that he understood that they were concerned about the potential diversionary effects and he wanted to discuss that issue with them. Q What about extending NAFTA provisions to the Caribbean Basin -- the Graham and Gibbons bills? Was there any discussion -- SENIOR ADMINISTRATION OFFICIAL: The NAFTA parity issue. Well, of course, the Caribbean countries mentioned that, but the discussion did not focus on any particular proposal. And there was no -- certainly from the U.S. side, there was no endorsement. Nor was there a turn-down. But there was no position -- clear position, final position was taken on any specific proposal. Again, there's a recognition of a potential problem and a commitment to investigate that problem and see what might be done. Q How much money is being given by the World Bank to each country? SENIOR ADMINISTRATION OFFICIAL: I don't have the figures, but we can look into that. Q Was there any discussion -- for the Caribbean, was there any discussion of economic strategy, economic investment strategy? SENIOR ADMINISTRATION OFFICIAL: Yes. There was a great deal of discussion, particularly from the side of the countries in the Caribbean about economic development strategies. As I was suggesting, they all emphasize that they're all struggling to adjust in the context of global economic change, just as, of course, is the United States in terms of our budget deficit and other parts of the President's economic program. It's not only the Caribbean, it's also the United States. Every country in the world, which is adjusting to global change very rapidly. They talked about the importance of sustainability, a great deal of emphasis on environmental sustainability as part of adjustment, in part -- not only, but in part because of the concern of tourism, after all. And tourists like to see clean beaches and nice resorts. So the tourist issue blends very much with the sustainable development issue in a positive way. And as the President mentioned in the East Room, he did commit himself to sending a distinguished, high-level delegation to the U.N. Conference on Sustainable Development for Small Island States, which will be held in Barbados, I believe in April of '94. Q Can you tell the Caribbean a little more about Ambassador Kantor? SENIOR ADMINISTRATION OFFICIAL: About Ambassador Kantor? Well, he is very aware of their concerns with regard to the potential diversionary effect of the NAFTA on trade and investment flows, and he, of course, is the logical person within the U.S. government to head up this interagency task force that will be set up within the U.S. government to look at this issue, and to consult closely with leaders from the Caribbean with regard to their concerns. Q Is there any indication that this controversy will be settled before this NAFTA is brought to a vote in Congress? SENIOR ADMINISTRATION OFFICIAL: Certainly with regard to our effort to study the issue, the intention is to do this on a fast track -- yes, to work on it rapidly. Q So you don't give them any relief, and then it's already passed Congress, and then -- SENIOR ADMINISTRATION OFFICIAL: We're well aware of the congressional timetable, and we'll work within that context. Q I wonder if you have any knowledge that Haiti has started to be a conduit of drug-trafficking to the United States, and if do you believe that some arrangement can be done in order to accommodate the interest for the Caribbean nations in view of the United States-American initiative and the Caribbean and the NAFTA? How do you respond? SENIOR ADMINISTRATION OFFICIAL: I understood the question on the narcotics point. There has been concern and some evidence that Haiti has been a transshipment point for narcotics coming up from South America into the United States. The best information I have is that it has not been a major transshipment point, but it is a transshipment point. And, obviously, that is one of the areas that we will want to work very closely with the government of Prime Minister Robert Malval in the next few months, and President Aristide as soon as he's back there, to make sure that if that is happening, that it is stopped. SENIOR ADMINISTRATION OFFICIAL: This will have to be the last question. Yes, ma'am? Q If I could move back to Haiti for a moment. I've been hearing before this today that the U.S. had been leaning on CARICOM to back off of its collective agreement to improve relations with Cuba. Today, I sort of saw a live-and-let-live attitude --well, you know, as long as the trade is not subsidized, Caribbean trade with Cuba doesn't bother us. What's your take on that, and did I characterize that correctly? SENIOR ADMINISTRATION OFFICIAL: No, I would say this, that the President did say that the Caribbean -- at the luncheon that the Cuban Democracy Act sets the framework for our policy, and within that framework he expressed an interest in seeing to what extent the United States and the Caribbean countries could work jointly toward the common objective of democracy and restoring human rights in Cuba. And in that context, the Caribbean countries responded that whatever they did with Cuba, including this agreement, this technical agreement, which is not yet finalized, would not in any way be inimicable to U.S. interests in the Caribbean, or to the shared objective with regard to democracy and human rights in Cuba. Q Can I ask one final question? President Jagan --the U.S. has got a structured relationship between the Soviet Union and China, but it seems as if President Jagan has to continuously prove that, apart from fighting a real strong campaign and got elected as President of Guyana, he has to prove from time to time that he has somehow got a democratic government -- you had to send two high-level delegations to the State Department and the World Bank. And so I'm just wondering what it is that he has to do to really keep in the minds of the U.S., as well as those agencies of the U.S. government and the international agencies that, in fact, he is trying to run a country with difficult circumstances, and he's been democratically elected? SENIOR ADMINISTRATION OFFICIAL: I wouldn't agree with your interpretation of what he might -- of what he has to prove. I mean, from our point of view, I can assure you President Carter -- Q I only ask the question because you were quoted on Canada a couple of weeks ago, answering questions with respect to something similar to this structure -- was the question you responded to. SENIOR ADMINISTRATION OFFICIAL: A couple of weeks ago? Q Maybe a week ago, or last week. SENIOR ADMINISTRATION OFFICIAL: I didn't give any interviews to Canada. I don't know what that's a reference to. Q I've listened to your response. SENIOR ADMINISTRATION OFFICIAL: In any case, there's no question in my mind that he was democratically elected. Those elections were internationally monitored, including by President Carter and other delegations from the international area, nor do we have any questions about the basic democratic purposes of the current government in Guyana, and we have very good relations with it. THE PRESS: Thank you. END 3:30 P.M. EDT