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October 14, 1997

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Office of the Press Secretary
(Brasilia, Brazil)

Release October 14, 1997


The Naoum Hotel
Brasilia, Brazil

3:34 P.M. (L)

MR. MCCURRY: I'd like to start with a read out on the President's bilateral meeting with President Cardoso. Deputy National Security Advisor Jim Steinberg is here, along with Ambassador Jim Dobbins, who is the Senior Director at the National Security Council for Inter-American Affairs. And they can tell you more about the excellent meeting that the President's enjoyed today.

MR. STEINBERG: Thank you, Mike. As you know, the principal activity today, in addition to a signing of a numBer of agreements on which you have fact sheets now, was the bilateral meeting between President Cardoso and President Clinton and their respective teams.

My read out to you is in large part an indirect one because a significant part of the discussion were a one-on-one discussion between President Clinton and President Cardoso that lasted for about 30 to 40 minutes at the beginning of their discussions. After they finished, they came out and gave us a sense of what they talked about, so my readout will be based on our understanding from their reports.

The first topic that they discussed had to do with the relationship between Mercosur and the FTAA and the two Presidents' approach to this question. I think you heard a lot about it at the press conference today, which really reflected the tenor of their general discussions, which is that they both agreed that the effort for subregional integration through Mercosur and the broader effort to achieve an FTAA are viewed by both Presidents as complementary, that they both serve the broader purpose of promoting growth and more open trade. And they indicated that they were prepared to move forward with both. In particular, President Cardoso indicated that he agreed with President Clinton about their readiness to launch negotiations for an FTAA at Santiago, Chile at the next Summit of the Americas meeting in April.

And, as I say, you heard a great deal in the press conference discussion about their various approaches, the Presidents' strong support for integration, not only as an economic strategy, but also for the broader political and security benefits that come from greater integration. They also briefly discussed the situation in Paraguay and the upcoming elections there and both indicated their strong support for continuing the constitutional processes through democratic elections in Paraguay. As you know, the countries of the region

all came together to support democratic processes in Paraguay. It's one of the more significant evolutions of the effort within the hemisphere for all the democratic countries to support democratic process.

They also had a brief discussion concerning the Security Council, particularly the issue of Security Council enlargement. President Cardoso indicated that he was not looking out for the United States to resolve the question of how the issue of a Latin American seat should be resolved.

They had an extensive discussion on the issues of climate change. And both had a chance to talk about their broader philosophies and approach to this problem. Both agreed that it was important for the developed countries to take the lead, but there was an understanding that there was a responsibility for developing countries, as well.

Both President Cardoso and President Clinton indicated that the issue was not trying to limit the growth of developing countries but, rather, as President Clinton also said at the press conference today, to try to take advantage of the fact that today we have technologies available for energy use which were not available at the time that the United States and other developed countries were going through their periods of development. And so it's possible to sustain growth through the use of different kinds of energies the will allow for both growth and lower carbon emissions. And I think that was a very important development in terms of trying to develop a common strategy which could have positive effects as we move into Kyoto.

Finally, the President had a chance to discuss with President Cardoso a little bit of his philosophy about the importance to the United States of this consolidation of democracy and open markets in this hemisphere and how important it was to the United States' long-term strategy to have key partners in this hemisphere as a kind of a base from which we can extend and broaden our efforts to consolidate democracy and open markets and open economic systems throughout the world.

While the one-on-one meeting was going on, I should say that Secretary Albright and her counterpart, Foreign Minister Lampreia, had a chance to discuss a number of important international issues, including the Angola peace process, the Middle East and the peace process there. They also discussed Paraguay. They talked about some of the business before the Security Council. As some of you may know, Brazil is coming on to the Security Council as a non-permanent member. And they talked about issues such as Iraq and Libya. And they also had a chance to discuss our common efforts to resolve the conflict between Peru and Ecuador.

Following this briefing to the smaller group, the two Presidents joined a larger meeting which included significant numbers of members of the Cabinet of both countries, and on the Brazilian side we had a chance to hear from both their Finance Minister and their Planning Minister, discussing Brazil's approach to its domestic economic strategy of trying to promote growth while sustaining low inflation.

We heard from the Brazilian Education Minister who talked about their strategy for using technology to improve educational opportunity. And Foreign Minister Lampreia also discussed the issues coming up through the FTAA negotiations and again, the relationship with Mercosur.

On the U.S. side, in addition to President Clinton, Secretary Riley and General McCaffrey spoke -- Secretary Riley, obviously on how we plan on cooperating with Brazil and the elements of the agreement that we are signing today; and General McCaffrey praising the Brazilians for the new spirit of cooperation that prevails between our countries across a broad spectrum of common narcotics efforts.


Q They said that they discussed some of the trade disputes between Brazil and the U.S. What were they?

MR. STEINBERG: I think, as you heard from President Cardoso and also President Clinton, I think they acknowledged that there are a number of specific trade disputes, but what they both indicated is that they really wanted -- that they understood that there were going to be issues in trade, specific issues, but that it was important for their negotiators to take them on. This was not something the Presidents themselves would try to resolve the disputes, but rather try to give a new impulse to them in terms of trying to resolve them. And again, you heard a number of them mentioned.

Q If negotiations do begin at the next Summit of the Americas for a free trade agreement, will Brazil -- was the agreement that Brazil would negotiate bilaterally or as a member of Mercosur?

MR. STEINBERG: It wasn't presented in either of those terms. I mean, it was presented that as the Finance and Trade Ministers are coming together to try to figure out what the strategy is, the strategy would be for comprehensive negotiations, which means the full range of issues. And what the formats will be and what the range will be is something that needs to be decided probably by the heads at Santiago. There will be meetings of the Trade and Finance Ministers before then. But from our perspective, the most important of what they've agreed to do is that they are going to begin comprehensive negotiations, which means all of the issues including tariffs and market access and the like will all be on the table from the beginning of the negotiations.

Q Isn't that a key point of difference that you still haven't sorted out is whether or not Brazil -- the United States will negotiate with Brazil or with Mercosur?

MR. STEINBERG: I think that there are a number of strategies that we believe are possible to get to the free trade agreements, and the countries themselves will figure out how they want to come to the table. They can participate as having common views or having individual views, but what we want to do is to get all the issues on the table first and then we'll figure out how to structure those negotiations. I don't think that from our perspective, it is -- the countries are going to come as countries, but obviously they will have the opportunity within Mercosur to decide whether they have common positions and how they're going to approach those questions. So I think that as a procedural matter that the issue will not be framed quite the way your characterizing it.

Q Do you think the administration is prepared to negotiate with Mercosur, instead of an individual country?

MR. STEINBERG: There isn't sort of one answer to that question because there are a number of different issues on the table, whether they're tariffs or market access, and each will have to be dealt with in sort of the appropriate framework. You can't make a single answer to that question, and that's one of things that we need to get into with all the parties.

But what is important is the recognition that we're going to put all these issues on the table. They now have sort of the substantive agenda, in effect; now we can begin to decide on the procedural modalities that they're going to work on. There's a lot of work to do, obviously, we're still a number of years away. But we're not either precluding or deciding any of those questions at this stage.

Q On greenhouse gases, is what the President said different from what he has said in the past about developing

countries doing their fair share? And were there any discussions about specifically what Brazil could do to reduce pollution and emissions?

MR. STEINBERG: There were a number of discussions about what Brazil could do, because one of the things that we are doing through some of the agreements that we're working on here are collaborative efforts on things like clean energy and technology transfer.

But what the two Presidents spent most of their time talking about was what kind of international framework could they use in which both the developed and the developing countries would take on obligations with the developed countries obviously taking the lead because of the fact that we have higher living standards, that we have obviously benefitted from the carbon emission up until now; but also the President's very strong conviction that even if the developed countries were to take very stringent measures that the relatively rapid growth of developing countries would mean that the problem would soon be even worse than it is now, unless the developing countries themselves took on some obligations.

And, again, the idea was to try to find a way to do it which focused on trying to divert the path of energy use away from high carbon usage to relatively low carbon usage while still preserving growth. And because we have the technologies, a lot of this is focusing on how do you transfer the technologies to the developing countries in a way that they can sustain their growth and reduce carbon emissions.

Q Did they also discuss global emissions trading and how something like a framework would work?

MR. STEINBERG: I don't have a lot of the detail, because some of it was discussed in the private session. But they did talk about those kinds of concepts -- joint implementation, global emissions training and the various kinds of strategies that would lead to an efficient use of energy resources; and also providing the right kinds of technologies to developing countries so that they can take this different energy path.

Q Did they agree on anything? Was there a proposal that they agreed on?

MR. STEINBERG: Again, I think that what they talked about was the basic concept and hopefully that this can lead, as we move forward first to Bonn and then to Kyoto, to more formal kinds of ideas.

Q Can either you or Mike give us a little more sense of the timing of a policy announcement on this? Is it going to happen while we're on this trip? The Bonn thing is just like a day or two after we get back. And what might be the forum that the President would announce what his policy is?

MR. STEINBERG: I think at this point the only thing we can say is that the President has indicated that he would like to be able to make an announcement during the course of the Bonn session. At this point, I'm not prepared to be any more specific.

MR. MCCURRY: Also, as I think you know, the President indicated in the press conference that he has used his line item veto today. He has cancelled 13 projects in the Defense Appropriations Act of 1998. That will save $144 million in authorized spending for fiscal year 1998. We've given you some materials that detail the projects involved, which are a small fraction of those that were added by the Congress.

Clearly, the President acted in a way that recognizes the importance of Congress' role in shaping appropriations measures. We will have piped into here for you a briefing shortly from the Director of the Office of Management and Budget and the Senior Director for Arms Control on Defense Policy at the NSC, who will be briefing up in Washington with greater detail.

Q The President did seem frustrated by the fact that five of the eight questions on the U.S. side, in fact, dealt with the problems back home. Is there that frustration?

MR. MCCURRY: Well, he addressed that himself. He leaves it up to you to decide what questions to ask. I've had a number of this room on many occasions have said to me that it's sometimes frustrating to you to have to dwell on domestic matters. And, as you know, I tried to create an opportunity last night for the President to address some of these matters in the best setting that was available and that clearly didn't work.

Q I'm not asking whether he was embarrassed, I'm asking whether -- is there White House frustration that your attempt to focus on trade is not piercing the --

MR. MCCURRY: I think that the American people will be interested in what happened on this trip and what causes the President advanced in their name, and I hope they get to read some about that. It would be frustrating if they don't get to.

Q Do you think -- for the press conference?

MR. MCCURRY: I don't know. I don't know what you guys are writing and how you're going to report.

Q In answer to Larry's question about whether, in fact, he's avoiding all contact with Janet Reno is kind of hurting the efficient functioning of the administration, he said whether this puts our system in or out of balance is up to you. But yesterday on Air Force One he clearly hinted that he had some opinions about that. Does he feel that the fact that he now can't talk to her about anything, not even these investigations, is a bad thing?

MR. MCCURRY: I think the President, as you pointed out, addressed that last night, and he answered that question.

Q Mike, can you explain on the controversy over the Commerce Department document how the President can be appalled at what the Commerce Department official had written in there, but what the State Department has now authorized is only slightly more tepid criticism than what was there?

MR. MCCURRY: I think there's a big difference. If you talk to any of the Brazilian people here, the concept of a practice that is endemic in a culture is very different from saying that there is some evidence of corrupt practices. There's a big cultural difference and it resonated clearly here with the people of Brazil and the President took proper note of that.

Q Is the new language that there's widespread corruption in Brazil, is that accurate? Or what is the new language?

MR. MCCURRY: You can ask the State Department. I don't have that available to me.

Q You don't have that, you can't get that for us?

MR. MCCURRY: I don't have that available to me right now, but I understand that it takes note of some of the

practices that exist in an effort to properly inform U.S. business interests of what investment opportunities here are like. I'll see if the Justice Department has got anything more.

Q Mike, back on the disagreeable subject. The President said he wasn't aware of any talks to set up an interview with General Reno, but do you now? I mean, it's quite possible, of course, that some talks are going on that he's has not been party to.

MR. MCCURRY: I imagine if there are they would be between his attorney, his private attorney and the Justice Department. And the President has not been in a good position to be briefed on any talks like that.

Q Mike, the President sounded hoarse and gravelly today. Is he all right?

MR. MCCURRY: He's been using his vocal cords a lot. He used them last night on the plane longer than he should have probably.

Q One more on the disagreeable subject. It obviously took a lot of time at the press conference. Was it taking any of his physical time in terms of making calls back to Washington to talk to Ruff or anything of that nature?

MR. MCCURRY: No, the only time that it's taken for him is just to prepare for the questions that we anticipated.

Q How would you define the relationship with Brazil now? That Brasilia wants to be equal, does it mean it's going to be like --

MR. MCCURRY: I think it was -- a number of members of our delegation who participated in bilateral discussions with the government of Brazil really described this as being a sea change in the nature and quality of the relationship.

President Cardoso's description of this meeting as one that was truly excellent, reflecting both a personal relationship he has with President Clinton and the growing ties and bonds between our two countries was significant and very much appreciated by the President and by the delegation. But we really have created here an opportunity for an entirely new level of cooperation on a lot of areas, some of it reflected in the documents that were signed today. And I really think it augers well for increased U.S. involvement in this region, increased cooperative effort to address items that are on both our bilateral agenda and, given Brazil's leadership role in the hemisphere, on the regional agenda as well.

MR. STEINBERG: Just to add to that, I think one of the things that you could all see today is the personal relationship between these two Presidents is very strong. They share a lot of common interests and a common philosophy about how economic development and social justice, social opportunity go together. And they had a chance, really, to talk about those kind of broader themes, which will have a big impact on how the bureaucracies and as the question at the press conference came about.

I think what you're seeing is really a chance for their individual commitment to the relationship between the two countries to form a basis for moving forward on a lot of other areas of common interest. And so this provides yet a kind of new impulse in what has been a remarkably growing and strengthened relationship over the years, particularly since President Cardoso has become President.

Q I'm sorry -- to bring up the equality concept

-- did you agree on the equality concept and does it mean --

MR. STEINBERG: Absolutely. I think as you heard, the President indicated that what the United States view is that what we want is strong partners. The more we have countries that share our basic approach to governance, that share our conviction that we want to make the world a better place for our people to deal with the international challenges, the better off the United States is.

Although, the United States has many strengths, there are many of these challenges which we can't resolve by ourselves. And so the more countries like Brazil are able to strengthen the quality of life for their own people, improve their economic situation and participate more actively on the international stage. And what we've seen from Brazil is a remarkable, positive development in that respect, which the President very strongly welcomes.

Q -- he's reporting the leadership of Brazil in the hemisphere?

MR. STEINBERG: What I'm saying is that the President supports all the countries, democratic countries playing a broader role on the international stage. And that countries like Brazil, as like many of the democratic partners, the President believes that all of the countries that we're visiting on this trip and all the democracies of this hemisphere have an enormous contribution to make; and that the process that we've launched with the Summit of the Americas, strengthening hemispheric cooperation, suggests that we do this as partners. There's not a question of one being dominant or one being a leader and one being a follower, but rather a partnership of democracies that are committed to the same values, working together to meet common challenges.

Q Yes, but the United States always says it wants leadership, so --

MR. STEINBERG: I think the issue is the question of our moving together. We have no reason to lead or follow if we're all pursuing the same objectives.

Q Can I ask a question? What about Europe in this whole process of unifying the markets? Europe is developing an agreement with Mercosur. Does it worry the United States? And what can you say about the statement that was made yesterday about Brazil and Europe, which says the culture and orientation of Brazil is moving away from Europe and towards the United States? Is that the policy of the U.S. to move apart --

MR. STEINBERG: As you heard both Presidents talk about this issue at great length, this is not a zero-sum game. What we want to see is all of their countries opening their markets and expanding trade. And if the European Union is willing to open its markets more, what's important obviously is that it's on a nondiscriminatory basis, which is the basic rules of the WTO.

But we would very welcome any impulse that would lead Europe or any other country or group of countries to be more open in their trading, because we consider the United States to be perhaps the most open market in the world. And so we encourage all countries and groups of countries to proceed in that direction.

Q Why is the President risking provoking Congress over this line item veto when he's really saving very little money out of the overall spending that's involved?

MR. MCCURRY: Well, these were projects that the

President looked at carefully, and they did not meet the criteria that he establish for review of this appropriations bill. They were not projects that he had requested in his 1998 budget. They don't contribute to our national security in the estimation of the President's military experts. And they don't fit with our long-range defense plans.

There were, as you know, 750 projects that Congress added beyond the President's budget request, many of them worthy, and the President, mindful of the role the Congress plays in developing appropriations measures, let many of those stand, even though they exceeded both his own budget request and the terms of the bipartisan balanced budget agreement.

So I think he's acted here in a very prudent way, in a narrow way, consistent with the criteria that he established, and I would suggest, precisely the way that Congress intended when Congress gave the President of the United States the line item veto authority.

Q Mike, are there a lot of projects still in there that he'd really like to veto, but out of deference to Congress he's not going to, that don't meet criteria?

MR. MCCURRY: There are projects there, if you had constructed differently, that you might have been more expansive in the use of line item veto authority -- that's clear. Let me refer all those questions -- you know, you're going to have an opportunity to hear the questions that are asked up in Washington.

Anything else before we have to go?

Q Yes, Mike, can you give us an idea for the people here what the timetable is for the release of more tapes --

MR. MCCURRY: If you're interested in that story, the timing is such that you can contact the Travel Office and drop off the trip and get to Washington in time to cover it probably.

Q This may be a better question for Jim, but I'll let you guys decide. The President today repeatedly tried to dispel suspicions among Brazilians that the U.S. wants to push them around, doesn't take Mercosur seriously, basically that we recognize them as a serious emerging power in the hemisphere. I guess my question is, how did we reach the point where he has to say those things? I mean, has there been such neglect in recent years of the bilateral relationship that these suspicions have been allowed to flourish? Why does he have to do this?

MR. STEINBERG: I think inevitably that there are forces that are interested in trying to find bases of conflict to try to sort of stake out positions that would cause particular problems between the countries. We have a number of specific trade disputes which are at issue between the countries. But I think what is important is that there aren't that many opportunities for the two Presidents themselves to get together and discuss these issues, so it's more to counteract the suspicions about what countries' objectives or their motivations might be.

From the beginning, the President has been very strongly supportive of this. He gave you the example of talking about the European Security Identity. This has very much motivated his overall philosophy. I think what's important is from time to time you have to be very vocal and public to remind people that there is an overriding objective, and that even though we have to deal with very real difficulties on specific issues, that these broader objectives are the guiding ones. And

I think it gives an impulse to all the people on both sides, that this is their goal.

Q Jim, can I follow on that? Would a mature, self-confident country get so upset about these things like whether the security -- the advance team was rude? This hypersensitivity almost suggests in some ways that Brazil has yet to really develop the potential that you keep promoting.

MR. STEINBERG: John, you're going to have to retract your statements pretty soon. (Laughter.)

We have a great deal of respect for President Cardoso and his government and the people of Brazil. And we think that this -- we have been treated extraordinarily well. The President has felt this has been an extraordinarily gracious reception. Just the fact last night that the President took the President and the First Lady up to their quarters and they spent time with them showing them around last night really reflects the quality of this relationship. And we're very pleased with the reception we've gotten here.

Q -- did any of this come up in the meeting the two Presidents themselves -- I mean, the rough press --

MR. STEINBERG: Not to my knowledge. And certainly nothing that we've heard has that been an issue.

MR. MCCURRY: All right. Anything else?

Q What is the main difference, if any, between the visit to Caracas and to Brazil in terms of the outcome of the bilateral meetings?

MR. MCCURRY: Well, I think in both cases we had an excellent opportunity to review a range of bilateral issues. There was, not surprisingly, somewhat more focus on energy related issues in the meetings we had in Caracas, given Venezuela's importance in the oil sector. But they were both meetings which advanced the President's objective of better and closer ties to a region that will increasingly be important to the people of the United States of America, and both sets of meetings quite successful in the President's opinion.

Q -- to organize a summit in November at the White House with Arafat and Netanyahu?

MR. MCCURRY: I'm not aware of any plans of that nature. I think you heard the President say at the time that President Weisman was in Washington that that idea to have utility would require the leaders to be prepared to do summit-type things. And we hope that we will someday be in a position to believe that that is the case, but at the moment the patient diplomacy we're doing is the best formula for success.

All right, see you all in the next country.

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