REMARKS BY OTTO REICH, ASSISTANT SECRETARY OF STATE FOR WESTERN HEMISPHERE AFFAIRS, AT THE CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES

TOPIC: U.S. FOREIGN POLICY IN THE WESTERN HEMISPHERE

LOCATION: WILLARD INTERCONTINENTAL HOTEL, WASHINGTON, D.C.

TIME: 8:35 A.M. EST

DATE: TUESDAY, MARCH 12, 2002

(Applause.)

MR. REICH: Well, I didn't expect quite this many people either, but it's nice to see so many friends, former colleagues, unindicted coconspirators. (Laughter.) That was supposed to get a better laugh than that. (Laughter.) That was a joke. (Laughter.)

It is good to be back at CSIS. As John Hamre said, I go back quite a ways at CSIS -- actually 1971. I was getting my masters at Georgetown University, and the late Jim Theberge (ph) was director of the Latin American program at CSIS, which was, at that time, still associated with Georgetown. And there was a contest or requests for proposals, or whatever you want to call it, for two Ph.D. theses and one masters thesis. And not being a scholar, frankly, I didn't think I had much of a chance. But somebody said, "Look, you might as well apply, submit a masters thesis proposal, and you get a fellowship if you are selected."

Well, I was selected. And, frankly, I think that changed my career considerably, because I did spend a little bit more time studying than I had been. I had to give up a little tennis in the process. But as a result of that and many other very fortunate turns in the road, I am now in this position, and I get to speak to a group of people who know more about this subject than I do. Anyway, I'm grateful to CSIS for that important moment in my career and for this invitation here today.

I also want to thank -- well, a number of people who have already been singled out, like Mike, George Forreol (ph), who had the position of director of Latin-American studies program at CSIS for a very long time and who did a very good job. And I think the kind of audience here today is an indication of George's work.

I want to thank Mike Zarin (ph), who helped me with these remarks. If you like what I'm going to say, you can thank Mike. If you don't, Mike's -- it's his fault. (Laughter.) He helped put my thoughts together, frankly, much more coherently and cohesively than I could have.

Well, I want to -- I do want to leave some time for questions and answers, because, with an audience like this, I think it would be, frankly, not a good use of my time to just talk to you -- or not a good use of your time. I want to try to engage in a conversation, to the extent that we have time.

Let me just tell you briefly how the Bush administration feels about this region. From the very first days of the administration, President Bush and Secretary Powell have given a high priority to Latin America and the Caribbean and Canada, the entire western hemisphere. The president truly believes that our future is inextricably tied to that of our hemispheric neighbors, having been a governor of a border state, having a sister-in-law from Mexico. His brother, Jeb, is the governor of another border state, a sea border, and has lived for two years in Venezuela and speaks Spanish fluently.

President Bush's first trip was to Mexico. In the first eight months of the administration, the president met with half a dozen hemispheric counterparts. His second trip was to Canada. He energetically led the U.S. participation in the April 2001 Summit of the Americas in Quebec City, where he affirmed his belief that this will be the century of the Americas. President Bush hosted President Fox at this White House's first and only state dinner so far, because it happened five days before September 11.

This is a president who feels at home in this hemisphere, who feels comfortable with its leaders, who is knowledgeable of its people, its challenges, and its opportunities. And Secretary Powell shares that priority. The president and the secretary have given me the mandate and responsibility to boldly and creatively pursue this administration's highest priorities in the region. It is an honor for me to be a part of this grand endeavor, to serve this president and secretary in the noble pursuit of freedom in our home hemisphere.

As he has often said himself, Secretary Powell forged an enduring relationship with many of his foreign minister colleagues, first in Quebec and then again, most dramatically, in that extremely difficult and uncertain time after the terrorists struck our great country on September 11.

The secretary was in Lima, Peru, that day to sign the OAS Inter- American Democratic Charter. He often speaks of the incredible outpourings of grief and sympathy, of the pledges of support and solidarity, of the concrete steps that have resulted from those pledges, both bilaterally and collectively, via the Rio Treaty and any number of other special OAS commissions.

In the aftermath of September 11, however, we began to hear some rumblings from various corners, both here at home and in the region, that the administration's commitment to the hemisphere was little more than rhetorical. There were those who expressed great uncertainty about when or even if the administration would turn its attention back to the region, and, if so, how.

Let me assure that that critique of waning interest was wide of the mark. In the months immediately following that tragic day in September, this administration, from the most senior levels on down, quite rightly focused its attention and energies on the most immediate task, the safety and security of our people and our homeland. It was as inevitable as it was appropriate that prosecuting the war on terrorism would take center stage.

On top of all that, there was the calamity of the president and secretary not having their nominee for assistant secretary for Western Hemisphere Affairs in place. That's me. (Laughter.) That added another challenge to boldly and creatively pursuing the president's and secretary's goal for the region.

But early in the new year, as the first phase of the war on terrorism was well underway, and yours truly finally arrived in office, the administration began looking for ways to reinvigorate our Latin-American agenda, looking for ways to regain the momentum that was slowed as a result of September 11.

And why? Precisely because this administration believes our future and those of our neighbors are bound together and that only through sustained and collaborative engagement can we together strengthen freedom, create and spread prosperity, and ensure every citizen of the Americas has a chance to live in peace and security.

It is hard to exaggerate all that we have at stake here. Democratic, political, and economic stability in our home region reduces the scale of illegal migration, drug trafficking, terrorism, and economic turmoil and allows us to concentrate greater efforts and resources on exploiting positive opportunities, both closer to home and farther afield.

It also promotes expanded trade and investment. We already sell more to Latin America and the Caribbean than to the European Union. Our trade within NAFTA is greater than that with the EU and Japan combined. We sell more to Mercosur than to China. Latin America and the Caribbean is our fastest- growing export market.

But ours is also a troubled region, one that is experiencing an array of challenges. It is a region that is hurting economically, suffering the effects of the U.S. and global economic slowdown, a sharp drop in coffee and other commodity prices, natural disasters, and the post-September 11 decline in tourism and remittances. It is a region in which many citizens and some leaders are beginning to question the wisdom of the political and economic reforms on which they have embarked during the past 10 to 15 years.

At a more fundamental level, however, it is a region that is experiencing the consequences of poor governance and incomplete reforms. Latin Americans, in growing numbers, are expressing discontent, not so much with democracy or the economic model their countries are pursuing, but rather with the quality of the democracy and the perceived inability of freer markets to deliver economic growth and higher standards of living.

Although the region, broadly, is experiencing multiple challenges, there are bright spots, too. After a decade of reforms, the hemisphere has become increasingly integrated into the world economy. The need to trade and attract foreign investment and capital helps dissuade those tempted to pursue anti-liberal policies.

Those countries -- Chile and El Salvador, just to name two - - that have stayed the course on reform -- maintaining fiscal discipline, liberalizing trade regimes, privatizing inefficient state industries, deregulating internal markets, and investing in their own people -- are weathering the economic downturn better than most. For their parts, Uruguay and Costa Rica are islands of relative political, social, and economic stability.

Although many challenges to market economics and representative democracy will persist and could get more difficult as the global economy continues to sputter, there are no credible alternative models on the horizon. Our challenge is to work with Latin-American leaders and their citizens to improve the quality of their democracy and the ability of freer markets to deliver on reform's promises.

The president's trip to Mexico, Peru, and El Salvador next week is a concrete manifestation of the administration's commitment to the region. It will be a great opportunity for the president to highlight our multilayered approach to addressing the region's challenges and opportunities. More of that in a few moments, but first let me tell you a little about the president's trip.

In Monterrey, Mexico, the president will participate in a United Nations Financing for Development Conference hosted by the government of Mexico. There the president will emphasize the imperative of market-oriented and creative strategies to promote and sustain economic development and prosperity.

In Peru and El Salvador, the president will have trade and development, democracy, and security very much on his mind. In Lima, the president will have a chance to highlight Peru's democratic success story and to reaffirm the U.S. commitment to political and economic reform in the region. Although bilateral issues are the main theme, the president will also have an invaluable opportunity to meet collectively with the presidents of Peru, Bolivia, Colombia, and Ecuador, the ATPA countries -- the Andean Trade Preferences Act countries. Trade will certainly be on everyone's mind, but so will security, counter-terrorism, counter-narcotics, and the growing challenges Colombia and her neighbors face.

In San Salvador, the president will draw attention to El Salvador's success in fully implementing the peace accords signed 10 years ago and creating a market-oriented political system in which competition not only is tolerated, but encouraged, and in aggressively pursuing free-market economic policies and reforms that have allowed that country to weather simultaneous multiple storms of natural disasters, repressed commodity prices, and a slumping world economy.

As in Lima, bilateral issues will predominate, but regional trade will also feature prominently. President Bush will meet together with his counterparts from El Salvador, Costa Rica, Guatemala, Honduras, and Nicaragua to discuss -- and Panama, I should add -- to discuss their shared commitment to pursue a U.S./Central America Free Trade Agreement. Panama is not part of the Central American regional economic integration scheme, but we're having separate talks with Panama. This visit to the region provides just the kind of opportunity we need right now for the president and the secretary to highlight the broad vision that infuses our policy and philosophy toward Latin America.

Our policy basically is based on four pillars: democracy, development, governmental integrity, and security. Freedom underscores and bolsters those pillars, all of which are interrelated and mutually reinforcing. Freedom -- in politics, economics, and trade -- is the thread woven throughout the fabric of our hemispheric policy. Representative democracy and free markets are the paths to follow. Governing well, ending corruption, and fully implementing necessary reforms are the checkpoints along the way. Education is the essential building block for a solid, longer-term foundation. Security is the umbrella under which everything else becomes possible.

We get to freedom through democracy, to prosperity through trade, and to security through a concerted, multiple-layered effort to combat the scourges of terrorism, narcotics trafficking, criminality and lawlessness, and other transnational threats.

Responsible government stewardship is essential to achieving each of these goals. The United States needs to highlight and promote policies that are crucial to reform's success, such as investing in primary education, healthcare, basic sanitation, and productive infrastructure, reducing corruption, strengthening the rule of law, and developing modern tax, pension, and regulatory regimes, as well as labor- and property-rights laws. Such reform is essential if publics are not to turn on their governments and embrace the siren song of populism during the inevitable periods of economic downturn.

I'd like to turn my attention now to a few of the higher-profile current challenges confronting the hemisphere. I can't deal with all of them, but let me just mention four: Colombia, Argentina, Haiti, and Cuba.

In Colombia, the democratically elected government faces a threat to its survival. Three well- armed, independently financed, extremely violent terrorist organizations are chipping away at the foundations of the state. We have a solemn obligation to assist our brothers and sisters in Colombia in their efforts to protect and defend their democracy and to create the conditions in which they can effectively address the myriad challenges that country faces.

Security is a precondition that makes possible every subsidiary objective we share: ending the armed and illicit narcotics production and trafficking; strengthening the rule of law; respect for human rights and the government's ability to exercise its legitimate authority; reducing corruption; environment degradation; lawlessness and criminality, and further developing the economy.

Heretofore, our policy has primarily focused on a counter- narcotics mission. That mission remains as important today as ever, but we are closely reviewing that policy with an eye toward other forms of support that we can usefully provide to the government of Colombia.

Argentina. Argentina is a close friend and ally. It is experiencing an economic and financial crisis. The social upheaval is painful and difficult, and the risk of political and economic contagion, while diminished in recent months, is not fully under control. The United States stands ready to assist Argentina through international financial institutions in facilitating the implementation of a sound economic recovery plan.

But let me emphasize, as Undersecretary of State Marc Grossman, did last week in Buenos Aires, that our relations with Argentina continue to be based on shared values and commitments to freedom and democracy. As we have for several years now, we will continue collaborating with our Argentine friends on a broad spectrum of issues of mutual concern that include the situation in Colombia, terrorism and other security concerns, peacekeeping operations, peace -- sorry, free trade, democracy, and a host of other issues.

Haiti. In many ways, this is the most vexing challenge in the hemisphere. It is a country that is suffering the cumulative effects of 200 years of bad leadership commanding a predatory state. The current regime in power is only the most recent manifestation of that 200-year history. Breaking this cycle is Haiti's biggest challenge.

Our policy in the short-to-medium run is focused on supporting the Organization of American States' efforts to help the government and the opposition reach an accord to break the most recent political impasse, which is now almost two years old. We are constantly seeking ways to encourage both sides to negotiate seriously and in good faith. Reaching an agreement is only part of the answer, though. Ensuring compliance with any arrangement the parties arrive at will be essential. It will be a major determinant of success.

Mitigating humanitarian distress is another immediate priority of ours in Haiti. We will continue providing generous amounts of humanitarian assistance through non-governmental organizations. In the longer run, we hope to help the Haitian people create a democratically competitive political environment in which human and civil rights are respected and in which economic growth becomes possible.

Cuba. You knew I couldn't give a speech on Latin America without talking about Cuba. (Laughter.) In so many ways, Cuba is a special case. It is the only non-democratic government in the hemisphere. It is ruled by a regime that makes a mockery of freedom, that imposes tyranny on its people, that imprisons its own citizens for the crime of independent thought. Cuba is not exempt from our fundamental commitment to freedom. The Cuban people are no different than anyone else in Latin America and, indeed, the world over. They just want to be free.

President Bush and Secretary Powell have a positive vision for the future of Cuba. It includes one in which Cuba's people share in the opportunities that freedom offers, one in which the people of Cuba can freely choose their leaders, can freely speak their minds, can freely practice their faith and obtain an education not twisted by a failed ideology, one in which the people of Cuba, like free people everywhere, can pursue their hopes and dreams for a better life. It is a vision of a free Cuba that respects the civil and human rights of its people and is a good neighbor to the other countries of our hemisphere.

We have made and will stand by a moral, political, and legal commitment to promote a rapid, peaceful transition to democracy in Cuba. We will vigorously use the tools available to us, including the assisting the growing pro-freedom movement inside Cuba, to lay the foundations for the future freedom.

There are a lot of other challenges facing the United States in Latin America. I just want to conclude by saying I -- personally, I am extremely grateful for the opportunity the president and the secretary of State have given me to have this job. The president sent my nomination again for a third time to the Senate two weeks ago. And as Secretary of State Powell said yesterday, "We await the action of the Senate." We believe that our Constitution provides the power of each senator to speak his or her mind on a nomination, and they should be given that right.

In the meantime, I have been sworn in -- a couple of times now -- and I intend to continue doing this job as long as the president and the secretary want me to do the job.

We have great challenges in the hemisphere, but I have to tell you, I think -- I know I'm with a team, a foreign-policy team -- the secretary of State, national security advisor, Vice President Cheney, President Bush, Defense Department, other agencies of the government, headed by people who have incredible experience. They are calm. They're strong. And, as I said yesterday in the State Department, if you all sat in on a meeting, as I have, with the president or the secretary of State and foreign heads of state, or foreign ministers, and saw them operate, you would sleep well at night. I don't sleep well at night, because I get interrupted by the State Department because of this crisis or another, but I hope that you do.

Thank you very much.

(Applause.)

MR. REICH: If you want me to answer any questions --

(Laughter.)

MODERATOR: Yeah. Line up behind the mikes, and I'll try to alternate so it's fairly fair. Go ahead.

Q Thank you.

MODERATOR: Let me just say, please give your name and identify any affiliation.

Q Henry Ramont (ph). I'm a syndicated columnist. Mr. Reich, you -- in another forum, you mentioned specifically your commitment to combating corruption. And, in fact, you had some practical advice which had to do with having embassies -- I don't know if you've issued this order -- embassies across the hemisphere advise you of people who -- public figures who might be suspected of corruption, and you will do something about having their visas revoked or impeded.

MR. REICH: Yes, Henry, thank you for that question, because it allows me to elaborate on one of the points that I made here.

One of the reasons -- and by the way, those of you have known me for a long time know that I usually don't have short answers, so please bear with me -- but one of the reasons why I'm so happy to have this job and to work for this team is that this is not a group of people who dwells on rhetoric, who says, "We're going to try to do something about poverty or corruption," and then they sort of leave it at that.

I think the best example of that is what we have seen from President Bush since September 11. When he said, "We're going to smoke them out," we went in there, and we're smoking them out. Now, it's costly. We're losing people. But we're saving probably millions of lives in the process.

In this hemisphere, when we say we're going after corruption, we're going after corruption. And I'll tell you why I feel this is so important. I have a master's degree from Georgetown in economic development -- in Latin-American studies with concentration in economic development. And as Sidney Weintraub mentioned in the introduction, I was head of AID for Latin America and the Caribbean. I've got a little bit of experience in the region and in the area of economic development. My private-sector -- my 10 or 12 years of consulting in the private sector also reinforced my feeling that corruption is the single biggest obstacle to economic development in the developing world. The developing world has all the resources necessary to achieve levels of development of the developed world. Why hasn't it? It hasn't, because it hasn't followed the right economic policies in many cases, and, frankly, because the wealth of the countries, the wealth of the people, has been stolen by too many people in power.

Now, we are not the world's policeman. We will go after those who come and attack us, but we cannot be in every place all the time policing morals. It is immoral to steal from the public purse, as a lot of people, frankly, in our region do. And I'm -- I know I'm making a generalization, and I hope that people won't believe that I am accusing everyone of being corrupt, but the fact is that there is a lot of corruption in many countries in the region. And what we're going to do is be 100 percent sure that we have the facts. But when we are sure that there's an individual or individuals who have stolen from the public treasury of their country, we are not going to let them into the United States of America.

They are not going to retire in Key Biscayne, and they're not going to go to Disney World, and their spouse is not going to shop on Fifth Avenue. And if they're sick, they're not going to go to Houston to have their hearts examined. They can do all that in their home countries and face the wrath of their fellow citizens. We don't want corrupt people here. I don't want them as my neighbors any more than I want criminals or drug traffickers -- you know, war criminals or drug traffickers.

So we have -- I've asked -- we've already begun this process. There's -- more than one has already had his visa revoked. And it's interesting, by the way. It was one case where this individual who had allegedly, according the laws of his country, taken a lot of money. He was called to the American embassy, told that his visa was revoked for money laundering. And just as we couldn't get -- as we couldn't get Al Capone many years ago for racketeering because there were no anti-racketeering laws, he was, instead -- if you have a cell phone, if you don't mind turning it off - - thank you very much. George Bush doesn't like that, and I work for George Bush, so. (Laughter.) We got Al Capone on tax-evasion charges. That's an example. We're going to use every law -- every legal method at our disposal -- to get these people.

Anyway, this person went and had his visa revoked, and he was so arrogant after having gotten away with so much, that he went to the airport directly to buy a ticket on an American airline to fly to Miami, where he was told, "Sorry, you can't get on this airplane, because you don't have a visa for the United States." And he says, "Well, you're going to hear from my lawyers." Well, we're still waiting to hear from his lawyers. (Laughter.) We're looking forward to hearing from his lawyers. (Applause.)

MODERATOR: Why don't you all go to the back mike and just keeping doing it. I don't have to come up each time.

Q Jesus Esquivel from the Mexican news agency. I have a question regarding what is suffering the hemisphere right now. You said the region is suffering from poor governments and incomplete reforms. And I think the best example of that is Argentina, a government -- the past government of that country was well supported by the United States. And right now that country is suffering a lot, and the United States is well behind all the efforts to repair the situation. Why the American government has been too late to help Argentina? Don't you think it's going to be late to help Argentina later on?

And my second question, on Cuba, do you think this administration will do something finally to change the regime in Cuba, or we're going to wait another long time of years? Do you think you're going to find out?

MR. REICH: Well, there's a common denominator to your questions. And I think that it is that the solutions to the problems of the hemisphere, whether they be the financial crisis in Argentina or the lack of political freedom, lies within the borders of those regions -- of those countries, I should say.

I don't know why it is the United States that should bear the blame for the lack of efficient economic policies followed by a succession of governments in Argentina. I'm not a great expert on Argentina -- there are many in the room -- but I believe that you can trace the problems today in Argentina -- at least for 40, 50, 60 years back perhaps, to Peron, maybe even before that. There are myriad reasons why Argentina is in the condition it's in, and in spite of the assistance of the United States and the world community and the international financial institutions, not because of that. It is because of mismanagement and a lot of corruption over many, many decades.

And I think when Latin America understands -- Latin Americans understand -- as they are, I believe, understanding -- that they are the architects of their own problems and solutions, then I think the recoveries will begin more quickly. We can help. But we can only help a little bit. We can only help those who want to help themselves.

Argentina, exactly 100 years ago, at the beginning of the last century, had the fifth-largest gross- domestic product in the world. I don't know who's fifth today. It must be -- I don't know -- Italy or Great Britain or -- you know, I mean, a really big, prosperous country. That's where Argentina should be.

Why isn't it? I think it's for one of the -- the reasons that I mentioned earlier. The resources of the country were not utilized properly. In many cases, they were squandered. In many cases, they were stolen.

We didn't do it. We contributed. We contributed with transfers of capital, with technology, management, a number of other things. My conscience is completely clear, as far as Argentina. But we will help. We will help Argentina, because the people of Argentina are suffering. It's a friend. It's a member of this hemisphere. And the president of the United States wants us to do something to help.

He's been on the phone. He's talked to at least 10 different heads of state in the region to try to find a regional solution for Argentina. A foreign solution imposed from the outside is not -- probably not going to be well received, may not even work.

But there are countries in the region -- Brazil, Mexico, Chile, for example -- that have experienced similar financial crises and have come out of them. And they probably have a lot of lessons to contribute to Argentina.

On Cuba, once again, the Cuban people -- I think the solution to the Cuban problem is inside Cuba. We can help. We can help from the outside. One way we can help, by the way, is not throwing a lifeline to a failed, corrupt, dictatorial, murderous regime. We're not going to do it. We are not going to help Fidel Castro stay in power by opening up our markets to Cuba.

We are also going to try to help, as we helped many other countries, many other peaceful opposition -- in Chile, under Pinochet; in South Africa, under the apartheid regime; in Eastern Europe, under communism -- we're going to help the people who want freedom for Cuba. And I think that that's, frankly, part of our heritage, and we would not be true to our history and our own heritage if we didn't do that.

Q Al Milliken, Washington Independent Writers. What has been your observation on the loosening up of religious freedom in Cuba in recent years? Should this give real or true hope for other freedoms?

MR. REICH: Well, I don't know what you mean by "loosening up of religious freedom," because the Vatican is very unhappy with the Cuban government's promises that they made three years ago, prior to the Pope's visit. They do not believe the Cuban government has complied with the promises it made in exchange for the Pope's visit. But it's very difficult for the church to publicly -- they don't like to publicly criticize any government, because they know that they're going to survive any government. They've been around for 2,000 years, and there very few governments that have. So --

Q It's been legal to celebrate Christmas, for instance.

MR. REICH: Well, should we be very -- should we be grateful that after 43 years it is now legal to have a Christmas tree in your house, when for 40 years it was illegal? I mean, this is why -- why is Cuba treated differently than other countries?

Q Pastors that were in jail are no longer in jail, and they are able to minister.

MR. REICH: Right, and the pastors who were not in jail are now in jail. I mean, this is --

MODERATOR: (Off mike.)

MR. REICH: Yeah, the -- Castro's -- you know, Castro's strategy is really very clear. I mean, it's clear to me, and it's clear to a lot of other people. He frees -- you know, he controls the entire country. It's a totalitarian regime. He frees a few people when it's in his interests, and he arrests others. That way he sends the signal that everybody is under control. But then there's a few people who come from the outside and say, "Gee, isn't this nice? Look, he freed a few people." But they don't know that, in the meantime, others are being arrested. That's not progress.

Q I have two issues. One, impunity of the judicial system in most countries in Latin America.

MODERATOR: Please identify yourself.

Q I'm sorry. My name is Victor Pinson (ph), president of The Americas Foundation and host of Hemispheric -- (inaudible).

The issue of impunity and that judicial systems in Latin America do not work. Participative democracy is not working. Yes, all countries in Latin America except Cuba have democratic-elected governments, yet those democracies are not working. What are your specific suggestions on helping that issue of participative democracy?

And just one more point, and that is trade. How do you suggest to help free trade in Latin America when high tariff trades from products from various countries, especially Brazil, citrus, that pay more than 50 percent in duty, steel now has been affected with the new decision of President Bush, which -- on Brazil and the consumers of the United States are the victims of the process. Would you comment, please?

MR. REICH: Sure, I'll try. On the judicial system, my experience, both in government and in the private sector, frankly, is that the judicial systems in Latin America -- let's just put it this way -- leave a lot to be desired. There are friends of mine in the audience that I saw on the way in that were clients in the private sector, and I tried to help -- in some cases, successfully; in other cases, unsuccessfully -- tried to help them overcome incredibly corrupt judicial systems.

As long as that exists, there can't be real economic progress. You have to have a level playing field so that the most humble peasant or worker can go to a court and obtain the same fair judgment from the court as the richest or most powerful industrialist or newspaper publisher or general. That's, unfortunately, the exception in Latin America. That's not the case in too many areas.

The U.S. has tried, in other countries, to provide judicial reform assistance -- or assistance in the area of judicial reform to many countries. In some, they have accepted it well. In others, they haven't. And I think part of the problem is the legal code -- I'm not a lawyer -- the legal code that exists, that is, in my opinion, antiquated. It needs to be modernized.

In some countries, I am told -- and once again, not being a lawyer, I'm not sure that what I'm saying is correct -- but I'm told that countries such as Chile, which have led the way in terms of reform and opening to the world, are adapting more of a common-law system than the Napoleonic code. I just think it works a little better. I'm not telling people how to -- you know, to change their laws or their constitutions.

But even -- you know, even without changing laws, they're not being applied properly in many countries. There are laws in every country against corruption, and yet there's still corruption. There are laws against pollution, and yet there's enormous pollution.

I was having dinner one night in a country -- I will not mention the name, because I'll get in trouble -- but I was having dinner one night, and we were talking. It was a very polluted country -- city. And we were having this conversation about the laws. And this very acerbic executive of one of their major government-owned companies said, "Well, in my country, we don't have pollution, because we have the best anti-pollution laws in the world." Obviously, he was being sarcastic. All you had to do was look out the window. But they had the laws. But nobody obeyed them.

I think the one way to start, frankly, is to start enforcing the laws that already exist in the books. And a lot of progress can be made.

The other question -- I don't know if that answers your question or not -- but the other is on trade. Look, our objective is a free- trade area of the Americas. The reason why some of these distortions that you refer to exist is because we don't have a free-trade regime. Look what happened in North America when the North American Free Trade Agreement finally went into effect. Millions of jobs have been created in the United States, Canada, and Mexico. When there's a recession, the countries that have the most open borders are better able to withstand the effects of the recession.

I was just in Mexico last week, and you can see the change. And it isn't just because of trade. It's because of the disciplines that are required by these countries in order to be able to participate in a free- trade regime with more-developed countries. They have to have more transparency in their government regulations, for example, or finances, in just simple things like the publishing of statistics. They have to lower -- not only lower trade barriers. They have to try to reduce artificial barriers -- non-tariff barriers to trade.

When I happened to be in Honduras for the inauguration of President Maduro a few days after President Bush gave his speech at the OAS announcing the beginning of the exploration of talks with the five Central American countries for an FTA. And they were incredibly excited, not just because they would participate in this free-trade agreement, which they know is going to take a long time, but because the five Central American countries have been talking about regional integration for 150 years -- you know, since independence -- but they have never accomplished it.

For the first time, they have an external goal to reach for that is bringing them together on an equal footing -- like on a level playing field, if you want me to use that term again -- to negotiate together, as equals, with the world's largest market, the United States. And it's forcing them -- or allowing them to deal with some of those problems that they have set aside and that had divided them for a long time.

I'll give you an example. Not economic problems. The Gulf of Fonseca -- this is a body of water that borders on El Salvador, Honduras, and Nicaragua -- this has been the object of border disputes and even firefights between those countries for over a hundred years. We have tried -- you know, I remember -- you know, part of being back in the government after 20 years is I realize that Yogi Berra was right, "It's deja vu all over again," because you see the same problems that you were dealing with 20 years ago, and they keep coming back -- Haiti, Cuba, the Gulf of Fonseca.

In any event, shortly after President Madura took office, he and the president of El Salvador and the new-installed president of Nicaragua, Enrique Bolanos, all three very modern-thinking -- in the case of two of them, young; in the case of Bolanos, very young- thinking. He's 72, but he's an entrepreneur, he's a problem-solver. They got together, and they said, "Look, we've got to resolve this problem in the Gulf of Fonseca. It's a divisive issue. And we -- if we're going to be able to sit down with the Americans and talk about really important things, like how to raise the economic and social and educational and health levels of our people, we have to deal with these issues." And they sat down over a weekend with their ministers of defense and they found a solution to the Gulf of Fonseca. Now, they have to implement it. But they found a local formula.

The U.S. wasn't sitting there. And I'm glad we weren't sitting there. They didn't ask us to sit. But they know that we will help. Once they come up with a solution, and they tell us they have, of a way of resolving this issue, we will do whatever we can to help them enforce it or implement it.

The same thing is happening between Costa Rica and Nicaragua over the San Juan River border dispute. Belize and Guatemala. And this is not an accident. This is -- frankly, this is a result of 20 years of, first, war, revolution, counterrevolution, violence, and the recognition by these people that that is not going to solve their problems, that they had to sit down and talk.

And the U.S. was involved, and we did help a great deal. We helped with economic assistance. We helped with military assistance, with political support, diplomatic support, as the case required. I'm very proud of what we did 20 years ago and 15 years ago in Central America, of everything we did in Central America, because the result today is that they have peace -- they have a lot of problems, but they are ruled by democratic presidents, freely elected, who think in terms of solving problems for the people and are friends of the United States. And I think the future augers well for them.

This is a very long answer, once again, to a question that started out on trade. But since I have the privilege of standing up here and I have the -- as Ronald Reagan says, "I bought this microphone" -- actually, I didn't buy it, but I'm using it. Thank you. That's all I wanted to say about that.

Q Hi, I'm Pete Casper (ph) with Cuba Trader. Just a few things on Cuba. In a few weeks, a number of members of Congress will announce their plan to -- you know, "Here's what we want to do to liberalize trade and travel regime with Cuba." And then almost simultaneously, the White House is expected to have its own blueprint for how you want to, you know, tighten sanctions and help the dissident groups. I guess I'm just wondering if you could predict for us a little bit how this clash might work out and if there are any areas for -- where the two sides could compromise.

And then, on a related point, because of the way you got into office, there's -- people are wondering if you are recused form any Cuba issues, given your lobbying past. And I wonder if you could just let us know about that.

Thanks. (Laughter.)

MR. REICH: Well, let me answer the last one first, because otherwise I couldn't answer the first one. (Laughter; applause.)

The answer to the last one is, no, I am not recused from the Cuba issue, in spite of what one congressional staff member, often unnamed -- often quoted, but never named -- or very seldom named -- may want to believe. The Office of Government Ethics, the Office of White House Counsel, and the State Department Legal Advisor's Office all advise me that I am not recused on Cuba issues. I'm only recused from issues where I had a client -- a client matter. And there are a few of those. They're commercial matters, and they have to do with other countries with very specific issues.

I don't know about a clash, because I don't know that the U.S. had -- what the U.S. will decide in its policy review on Cuba. I can tell you what the objective is. As I said, the objective, as President Bush has said and has told me, is a free and democratic Cuba, as rapidly and peacefully as possible.

I do not believe that providing economic succor to a government that controls all the means of production brings about democracy. I don't know of a case of a totalitarian regime that has opened up due to economic engagement.

Authoritarian regimes, yes, in many cases -- South Korea, South Africa, Chile, others. But even those, by the way -- South Africa, Chile -- there were sanctions on those, as well. Sanctions are a legitimate element of a foreign policy. We've used them many, many times -- some successfully, some not successfully. But they're one element of what should be a balanced policy.

We have based our entire Cuba policy for the last 30, 35 years -- say, since the mid '60s, late '60s -- on only one component of one -- or one element of one component of what should be a broad policy, and that's the embargo.

If I could trade -- if I could recommend to the president and the secretary of State -- that we trade the embargo today for a free election, internationally supervised, and a free trade union, and a free newspaper -- one, just one -- one television station, one radio station, I would probably made that recommendation.

What I don't understand is how the media, who are so concerned rightfully, about the violation of the slightest -- or the slightest violation of media rights in any country hardly ever mention that there is no freedom of the press in Cuba, not one free outlet.

I also don't understand how some members of Congress can ignore the recessions and the lost commercial opportunities in the rest of this hemisphere due to some of the things we've been discussing here today -- you know, the drop in commodity prices or just the plain inability of American companies to go and do business in huge countries like Brazil or Mexico or Chile, Argentina. And yet every winter, somehow, between January and April, there's this constant -- I wouldn't accuse them of being concerned with the weather, but -- it happens to be coincidental, perhaps -- but every winter, you have this constant stream of people going to Cuba saying that they want to open up this market.

The average per-capita income in Cuba is $20 a month. Now, you tell me how many tons of anything are going to be bought by the Cubans. First of all, everything is bought by the Cuban government. And the most recent purchases they made, they made in cash. And I have two ambassadors from other countries, European countries, in my office complaining to me that their companies are owed money by Castro. And they said, "He's paying you in cash." And I say, "That's your problem, buddy. That's not my problem. If you gave him credit, you go collect. We're not giving him credit."

So, as you can see, I'm not recused. (Laughter.)

MODERATOR: Let me know when you have to break.

MR. REICH: I'm okay. Another five minutes. Alright.

Q Josh Chapman with Free Speech Radio News on the Pacifica Network. Rumor is -- or it sounds like the nature of our aid to the Colombia may be changing from a role of counter-narcotics to some kind of counter-insurgency role. How big a factor is protection of the biggest oil pipeline in that decision?

And how about forgiving the debt to Argentina? Would you support that idea?

MR. REICH: I'm sorry, I didn't hear the question about Argentina.

Q Forgiving the debt to Argentina.

MR. REICH: Oh. Let me deal with Colombia first, because it is important. First of all, we're not going to engage in counter- insurgency in Colombia, because there is no insurgency in Colombia. What you have is three terrorist groups that operate as organized- crime families, except they wear combat fatigues and they have a lot of people and some very high-powered weapons. They engage in kidnappings, assassinations, sabotage. They attack civilian targets. They bomb restaurants.

They bomb a pipeline which costs the Colombia government $40 million a month, and which, in the last 15 years -- and for those of you who are environmentalists, and I am an environmentalist; I'm a Teddy Roosevelt environmentalist -- there have been -- there has been enough oil spilled from that pipeline in Colombia to fill seven Exxon Valdez tankers. This is an environmental disaster of major proportions -- seven Exxon Valdez tankers-worth of oil spilled by hundreds -- hundreds of bombings of this pipeline -- mostly by the ELN, because it happens to be in their territory, but others, as well.

The ELN, by the way, is one of those groups supported by the government of Cuba. I don't care what the government of Cuba says. They're probably just saying that they're not engaged in terrorism. This is terrorism. It's narco-terrorism.

All -- particularly the FARC and the AUC -- the AUC are the paramilitaries -- support themselves mainly through the narcotics trade. It could be growing. It could be distributing. It could be money laundering -- something related to related narcotics -- also, kidnappings and bank robberies and any other way that they can make some money. They are attacking civilian targets.

Ironically, because in the last several years, since the Pastrana administration got into office and the United States started providing military aid, the previous administration -- the Clinton administration, followed by the Bush administration - - started providing military aid and training. The Colombia military got much better, and the FARC decided to -- particularly the FARC -- not to attack the military, because they stood a chance of getting killed. So they started attacking more civilian targets.

Twice -- I was in Bogota about three weeks ago. The day before we arrived, they tried to blow up a dam -- fortunately, the explosives didn't work -- a dam which feeds -- which is part of the reservoir which feeds the city of Bogota. But if the dam had exploded -- if the bomb had exploded and the dam had collapsed, 20,000 people would have been killed, because they live down river from this dam. They would have been just wiped out -- 20,000 men, women, and children.

These are not insurgents. These are criminals. These are terrorists. They are financed by narcotics trafficking -- which, frankly, we, in this country contribute to a great deal through our vices -- and so we have a responsibility. And Colombia is a democratic country, free elected. It's a friend, and we're going to support them.

The other question was on Argentina, on forgiving the debt. I'm going to pass that to the Treasury Department -- (laughter) - - because I'm talking too long.

Yes, sir?

Q Good morning, Mr. Secretary. John Collins, Caribbean Investor. Governor Sila Calderon of Puerto Rico seeks associate membership for Puerto Rico and the Association of Caribbean States, an initiative the State Department opposes. This problem now lands on your desk. Please tell how you view this problem and the roles of Puerto Rico and the U.S. Virgin Islands in the Caribbean, of which they are a part, especially in the context of the proposed free-trade area of the Americas.

MR. REICH: Well, I love Puerto Rico, but I don't think this has landed on my desk. Puerto Rico is a free-associated state. And, as such, the foreign policy of Puerto Rico is conducted by the United States. Puerto Rico is handled, actually, out of the White House. There's an Office of Intergovernmental Affairs that does that.

You know, my area of responsibility, the western hemisphere, covers Canada, Mexico, Central America, South America, and the republics -- the independent states of the Caribbean, not including Puerto Rico.

Q Marielena Mateos, Noticias Venezuela. There have been reports of Colombia guerrillas movement into Venezuela. Do you foresee that this conflict in Colombia would be international in the future? And what would be the reaction of the U.S. government to this? Is there a possibility to expand the Plan Colombia, first?

And second question, is the U.S. government satisfied with the security that the Venezuelan government is giving to its border with Colombia?

Thank you.

MR. REICH: Well, there's always a possibility that, you know, a guerrilla war, such as the one in Colombia, will spill over. There have been already reports in Ecuador, Panama, Brazil, and Venezuela, of armed elements from Colombia crossing the border and being engaged or engaging troops from those countries.

We are concerned about any linkage between the Colombian terrorists and any outside support. The secretary of State himself has expressed concern about the government of Venezuela's -- as he called it -- "strange" proclivities and associations. We would feel a lot more comfortable if President Chavez visited more democratic capitals -- or capitals of democratic governments rather than Baghdad or Tripoli or Havana. I know that he also goes to other places. But this is something that we're following very closely, and I would rather just leave it at that.

Okay, one more question, and then I have to -- and then I've got to go to work. This is fun, but I've got to go to work.

Q Thank you, Mr. Secretary. I am Guillermo Rivera the Dominican Republic. As you well know, the free-trade zone in the Dominican Republic has generated more than 250,000 direct employment and more than 1.5 million indirect employment. Any TLC signed between the United States and the Central American countries, as well as with Panama, will be very detrimental to the economy of the Dominican Republic. I will really appreciate your comments regarding the absence of the Dominican Republican in the meeting that -- with President Bush will have with the president of Central America on the 23rd of March.

Thank you very much.

MR. REICH: Did everybody understand the question? I'll repeat it. That the free trade between the U.S. and -- or trade between the U.S. and the Dominican Republic has generated -- 250,000 jobs, you said?

Q The free-trade zone.

MR. REICH: The free-trade zone.

Q Yes.

MR. REICH: And the concern is that any free-trade agreement the U.S. enters into with Central America may adversely affect Dominican Republic, as it would probably give Central America a relative comparative advantage, if that's not redundant. (Laughter.)

Q Unless the Dominican Republic is part of it.

MR. REICH: Unless the Dominican Republic is part of it. The Central American countries themselves -- when the president announced that he was visiting El Salvador, the Central American -- the president of El Salvador decided that this would be a good opportunity to bring together his regional neighbors -- the presidents of those countries. They did not include the Dominican Republic. This was not, in any way -- we've been told -- in any way, an effort to exclude anyone.

To include the Dominican Republic may have raised questions as to why not include other countries of the Caribbean. This is a regional meeting of the Central American countries.

I guess the way I would answer it -- answer your concern is the same way that President Bush talks about education. You know, he said, "We won't leave any child behind." We don't plan to leave any country behind, in terms of free-trade agreement. This is why, frankly, we keep pushing for TPA, for trade promotion authority, for the negotiating authority, what used to be called "fast track," which passed the House of Representatives by a landslide of one vote. (Laughter.) But as some of us know, a one-vote margin is as good as any. (Laughter.) I'd be happy with a one-vote margin, myself. (Laughter.) (Applause.)

The TPA has not yet passed the Senate, but I'm told that the majority leader -- that Mr. Daschle is in favor of it and -- but there are still some elements in the Senate that oppose parts of it, and I think he's trying to figure out the best way in which to package the trade legislation.

We prefer the free trade agreement of the Americas, precisely because of the things we've been talking about here -- Brazil -- somebody mentioned Brazil, Argentina, Dominican Republic, the nations of the eastern Caribbean, for example, and that we've not talked about very much -- Central America.

We believe it's good for everybody, this free-trade agreement. We're not going to -- but you can be assured, we are not going to leave Dominican Republic behind.

Q Thank you, Mr. President -- Mr. Secretary.

MODERATOR: I regret that some of you who wanted to ask questions couldn't. I'd like to thank Otto. Please join me. (Applause.)

[END OF EVENT.]