MR. TOIV: Good afternoon, everybody. As you all know,the President is scheduled to leave Saturday for his long-awaitedtrip to Asia for the APEC conference in Malaysia, as well as visitsto Japan and South Korea and Guam. Here today to brief you on thosesubjects are Gene Sperling, the President's National Economic Advisor-- and Gene will talk to you about our goals for the APEC conference.Lael Brainard, our Deputy National Economic Advisor for InternationalEconomic Affairs -- Lael will tell you about the trip schedule. KenLieberthal, who is the National Security Council's Senior Directorfor Asia -- you may remember Ken from an earlier briefing he did inan earlier life, before President Jiang Zemin's trip here to the U.S.

Also here to take questions are Ambassador SteveSestanovich who is over here from the State Department to talk aboutthe bilateral meeting with Prime Minister Primakov. Steve may haveto leave early; if so, he'll be replaced by somebody else and we'lllet you know. Tim Geitner is here; he is the Treasury UnderSecretary Designate for Economic Affairs.

And I think that is it. Let me just tell you one thing-- or not tell you one thing I know the question that is uppermoston your minds is the one that Joe took earlier today and that is thequestion of whether the President is going on this trip. None ofthese briefers will be able to elucidate the situation any furtherthan Joe did. So I'll leave you with that.

Q Is he going? I'm serious. You say the Presidentplans -- how did you put it --

Q You said "is scheduled."

MR. TOIV: Yes, and as Joe said, the President islooking forward to going, has been looking forward to going. He is,obviously, watching events elsewhere in the world, particularly Iraq,very closely. And if we have any schedule changes to let you knowabout, we will let you know about them.

Q Would someone go in the President's stead if thePresident were unable to attend APEC?

MR. TOIV: That's a hypothetical question that I don'tthink Mr. Lockhart would have answered.

MR. SPERLING: I apologize up front in that I have toleave in about 10 minutes, though we're well-equipped here. APECprovides a particularly good forum for the President to continue theprocess of forging consensus on the practical and immediate stepsneeded to deal with the Asian financial crisis and growth issues, andthe widespread poverty and economic harm that have accompanied thissituation.

In particular, at APEC we hope to continue the processof trade liberalization that is important for continued worldwidegrowth. As you know, in Vancouver the President and APEC leadersasked the trade ministers to deliver -- make progress on furtherliberalization in nine key sectors, and we hope to follow through onthe commitment to make further liberalization in those areas.

We think this is critical at this time in the worldeconomy to show that further progress on trade liberalization can andshould be made to serve as a strong signal that we should not beturning back or closing up even at this difficult time in the worldeconomy, that the benefits of open markets are too important tosacrifice at this time.

The President also will be discussing many of the stepshe has been working on over the last year, and particularly laid outin his Council on Foreign Relations speech, particularly the need tohelp private companies restructure their debt in Asia and return togrowth and expansion; the need for further social safety net reformto help deal with the transitions that are needed in this difficulttime; and taking actions to ensure that we're spurring our ownexports into the region.

Clearly there will also be discussion on further effortson long-term architectures. As you know that at this -- at APEC thePresident called for the special finance ministers meeting that issometimes referred to as the G-22, but the basic notion that emergingmarkets should be brought into the discussion with the G-7 on thelong-term issues. And it's worth noting that Vietnam, Russia andPeru will be at APEC for the first time.

On the trade liberalization, which I mentioned, whichgoes by the initials EVSL or Early Voluntary Sectoral Liberalization,the nine areas are all areas that the United States is quitecompetitive in -- chemicals, energy goods, environmental, technologygoods, fish-forestry, gems and jewelry, medical equipment, toys, andtelecom. Just example -- environmental technology in the UnitedStates has $14.5 billion in exports, and over $20 billion in medicalequipment and scientific products.

The goals is to press forward on these and continue insix other areas over the following year. As you know, APEC in thecontext of the information technology agreement -- the ITA -- servedas the form that helped bring that together and brought to the WTOfor the eventual agreement.

It has been a disappointment to us that at this stageJapan has not made more progress and, in fact, has been resistant inthe areas of fish and forestry. These are the two areas that --which are most relevant to Japan. Even though they only have betweenfive and six percent tariffs in these areas, there's been significantresistance. Outside of these two areas, there's very little tariffreduction required of Japan, and we feel that if we -- to makeprogress and to discourage other countries from making excessivereservations, we are hopeful that we will be able to pull togetherand make progress on the trade liberalization that was hoped for atthis time.

I will turn it over to Lael. I will say that obviouslysome of the President's bilaterals are important on the economicfront. Ken will go over some of those more. Certainly with China wenot only want to discuss their economic reform efforts and some ofthe difficult reform efforts as they make transitions from theirstate-owned enterprises, but certainly the further trade progress andliberalization progress that must be made for them to be able to join the World Trade Organization.

And certainly in our trip to Japan there will becontinuing discussions on the agenda that is quite familiar to all ofyou now, which will be particularly important in the area of theimplementation of their banking program where the size of the fundsput forward has certainly been significant, but significant questionsremain as to the implementation -- questions and certainly the issuesof stimulating growth and some of the trade issues that are stillbetween us, whether implementing sectoral agreements as flat glassor some of the issues on steel that have arisen recently.

So let me, with that, turn it over to Lael Brainard.Lael, if not all of you know her, is the Deputy InternationalEconomic Affairs. She is the third to hold that position after BoCutter and Dan Turillo, and has been with us for a few years and isformally a professor of economics at MIT.

MS. BRAINARD: That's probably more than you needed toknow to hear about this schedule. (Laughter.) We're leavingSaturday evening en route to Kuala Lumpur. We arrive mid-morning onMonday. The President has a very full schedule that day. He has abilateral with Jiang Zemin of China -- also, with Prime MinisterChuan of Thailand, and Ken Lieberthal will speak about both of thosein a minute.

That evening, he's going to give remarks at the APECBusiness Summit. The next morning -- Tuesday morning -- he will bemeeting with Prime Minister Primakov from Russia. He then starts thefull agenda for APEC, and it goes through the traditional APEC agendathat's been established over the last few years.

It starts off with an agenda briefing among all of theleaders -- as Gene mentioned, we'll have new members there this year.That is essentially a chance for the host to go through the scheduleand talk about the issues on the agenda. That will be followed by ameeting with the ABAC -- the APEC Business Advisory Council -- whichis the private sector advisory group from which each economy appointsthree members. We have three members there who will be participatingin that along with the leaders.

The next morning starts the Leaders' Retreat. They willgo off to a place called Cyberview Lodge. And there will be twosessions and a lunch. I believe the morning session will focus moreon the growth agenda for the region and the specific tradeliberalization initiative on the table. The afternoon session willfocus more on a broader trade agenda, in particular the WTO processthat kicks off next year as well as some issues like electroniccommerce.

That evening, Wednesday evening, they depart KualaLumpur and they go on to Tokyo. Thursday morning in Tokyo, thePresident is planning to do a meeting with some local members of thebusiness community. I believe some American business leaders will bethere as well. And it will be followed with a town hall meeting withJapan's sort of next generation of leaders, young people. He has acall on the Emperor midday, and then the afternoon is devoted tobilateral meetings with the Prime Minister, and a dinner thatevening.

Friday morning will replicate a little bit of thefeeling of Tarrytown in the sense that Prime Minister Obuchi wantedto go off campus and spend a little bit of time with the President ina more relaxed environment. So they will go off to Hakone togetherand they are also expected to spend a little time on environmentalissues during that day.

Friday evening they depart, arriving in Seoul. Saturdaymorning is the official bilateral with President Kim Dae-Jung,followed probably by, I think, a discussion with civil society --members of civil society and a dinner later that evening.

Sunday the President will be spending some time withtroops in Korea. I believe he leaves now Sunday evening, arriving inGuam. In Guam -- actually, I'm mistaken. He's leaving Mondaymorning, arriving in Guam Monday morning. There he will do threeevents. He will have a meeting with community leaders and GovernorGutierrez. He will visit the War in the Pacific World War IIMemorial, and he will also have an opportunity to speak to the peopleof Guam. At that juncture I think he gets back on a plane and we areestimating that he returns Monday evening.

Did we lose Steve already? Carlos is coming? Okay, whydon't we flip to the bilaterals that Ken Lieberthal will go through.

Q Can you describe more the audience at the town hallmeeting in Tokyo and also who is at the meeting with members of civilsociety in Seoul?

MS. BRAINARD: Why don't I let Ken do that when he goesthrough the actual sort of bilateral events.

MR. LIEBERTHAL: Thank you, Lael. Let me take up anarray of issues that are kind of more the political and security sideof all of this. First, some questions have been raised as to why weshould attend the APEC meeting, given that it is taking place inMalaysia. And the answer to that is very simple. The APEC meetingis important. It's a major international group in which the U.S. hasplayed a central role all along. That meeting is taking place inKuala Lumpur, but we are going to Kuala Lumpur in order to attend theAPEC meeting.

This is, therefore, not a bilateral U.S.-Malaysiansituation. The Malaysians have not asked us for bilateral meetings.We have not asked them for bilateral meetings. Our rubbing shoulderswith Malaysian officials will be totally in the context of the APECmeeting itself. But we regard that meeting as warranting Americanparticipation and support.

While the President is in Malaysia, he will hold severalmeetings with other leaders there. Shortly, we'll have a briefer into tell you about the meeting with Primakov. Let me tell you aboutthe two other major leaders. One is with Chuan of Thailand. Themeeting with him will primarily give us an opportunity tocongratulate him on pursuing the IMF agenda for economic recovery ina rigorous fashion.

We think Thailand has moved along very substantially.If you look at their economic performance, they're in what could becalled a virtuous cycle. In other words, they have essentiallystabilized their foreign exchange rate; interest rates have comedown. They are beginning to attack foreign direct investment. Theystill have a lot to go, but this is the kind of path that weanticipated and we want to show our support for what they have donethere.

In the process, they have, if anything, become a moredemocratic country. And an underlying theme of the President's tripis the kind of intersection, if you will, or compatibility of movingin a more democratic direction and doing better in economicperformance with the kind of information-based market economy thatwill be key to prosperity in the 21st century.

The President will also meet with Jiang Zemin of Chinawhile at APEC. That meeting is one that is seen as essentiallylaying out between the two men an understanding of where ourbilateral relationship will head over the course of the coming year.So this is not merely to kind of sustain the summit diplomacy and topat each other on the back. It is not simply to check the boxes ofwhat we have done since the last summit. It is rather to see wherewe can really move forward in our agenda and make this constructivepartnership work.

Q Where does the President want it to go, if you'llelaborate a little?

MR. LIEBERTHAL: Some of the key issues here are WTOaccession -- I'll say a word about each of these, if you wish -- butWTO accession, cooperating with regard to North Korea, Chineseconsideration of membership in the Missile Technology Control Regime,MTCR, and the human rights agenda.

Why don't we save for Q&A my specific comments on any ofthose, but you've noted them down. I'm happy to elaborate on each ofthem in response to your questions, but we want to run through thebasic brief here and then let you focus on where you want.

So the meeting with China we regard as an importantmeeting and as a kind of looking to the future. It will not producea press statement, but hopefully it will produce some real energy inthe relationship as we go into the next year.

We then move on to Japan. In Japan the President willhave the opportunity, in no small part through that town hallmeeting, to carry the message of APEC to the people of Japan. Thatmessage, we anticipate, will be a message that favors open markets,but also that recognizes the critical importance of Japan'sdeveloping demand-led growth domestically as a core element in Asianregional economic recovery and indeed in global economic growth. Andcoming from APEC, this will give the President a good opportunity inan interactive fashion with citizens of Japan to make those pointsand also to hear what they have to say.

Someone asked about the composition of that group. It'sbasically young people, ages 21 to 45, from different walks of life.There is a mix of professionals and just an array of people from verydifferent sectors. There will be two different locations -- live, Ibelieve, and plus citizens of Japan will have the opportunity to submit questions in advance by Internet. So most ofthis will be the President responding to questions that people inJapan raise either live or through the Internet.

In addition, the President will be talking with theJapan about security issues on the bilat. Those security issues willfocus in part on how to deal with North Korea, because North Koreahas been behaving in ways that none of us would really like to see--and also some alliance issues that are very well-known to peoplewho follow the U.S.-Japan alliance. These are longstanding issuesthat I'll get into again if you wish to raise them in the Q&A.

On the economy, I think Gene basically covered what heplans to do on the bilat on the economy, but the economic bilat isquite important.

He then moves over to Korea. In Korea, the economicside of the issue is more -- kind of similar to what he's doing inthe bilateral meeting with Chuan of Thailand, which is to say tocongratulate the Koreans on sticking to a course that is a verydifficult course; that while it is the right prescription we thinkfor long-term growth and prosperity, in the short-term it produces anenormous amount of social dislocation and pain. He wants to sayessentially that he understands that and to encourage them to stickwith that course.

He also regards Kim Dae-Jung rightly as one of theoutstanding democratic figures of Asia and wants to acknowledge that,and there will be discussion of democracy issues in Asia and therewill I think a program on democracy -- or a forum on democracy thatwill be discussed.

And then, finally, on the security side, he again wantsto go over the Korea situation -- the North Korea situation -- withthe people in Seoul. So to sum up, one of the underlying securityissues for China, Japan and Korea is how to deal with North Korea,and it's important for us to get coordination and mutualunderstanding and cooperation among all three -- two of whom arealliance partners of us, one of whom cooperates with us -- in orderto handle the North Korea issue effectively.

And then we have econ issues that go all the way throughthese meetings and then some other particular issues in each bilat.

With that, let me turn it over to Carlos Pascual, who isSenior Director for -- covers Russia -- I've forgotten what yourwhole directorate is called -- but, anyway, covers Russia, to go overthe bilat with Primakov. And then we'll open it up to yourquestions.

MR. PASCUAL: Just very briefly, the President will seePrime Minister Primakov on Tuesday. It will be the first meetingthat we have with the Prime Minister since he's taken on his newposition and moved from being the Foreign Minister. This will be forus an opportunity to hear from Prime Minister Primakov about hiseconomic strategy, about how he sees Russia moving ahead and dealingwith the current kind of economic crisis it has, what his thoughtsare about promoting economic stability, and what Russia's plans areto try to restore economic growth over time.

It's also going to be an opportunity for us to talkabout specific steps that could be taken on the nonproliferationfront and addressing concerns that we've had in the past. All of youhave seen recent indications that there may be movements on START II.That will certainly be an issue for discussion. We hope that we canmark some additional progress, moving along on that front.

Obviously, it's been discussed in recent days in thepress the situation of records of POWs and MIAs. Depending on whatfinal information we get today from Senator Smith and Ambassador Toonwho have been in Russia and have been working on this issue, thatwill be -- may be an issue that requires additional follow-up aswell.

It's a relatively short meeting of just about an hour,so we don't expect any major developments coming out of it, but it isan opportunity for us to continue to work on these issues which havebeen a longstanding part of the bilateral agenda.

Q Carlos, as long as you're -- what does this sayabout Yeltsin that he's not there --

MR. PASCUAL: Well, we're glad that President Yeltsindid come back from Sochi and has begun to reengage again. We hopehis health is better. It's obviously of concern that -- if he isn'twell, but we don't have additional information from what you'veactually seen. This evening, I understand that he did notparticipate in the dinner with Obuchi. That probably shouldn't besurprising because he hasn't been engaging in an extensive schedule.

Most clearly, in terms of authorities andresponsibilities, it's been most clearly placed by the Kremlinitself, when Mr. Sysuyev, the spokesman for the Kremlin, indicatedthat responsibility for day-to-day economic issues and for economicstrategy is going to be with the government and with the PrimeMinister, and President Yeltsin is going to be the guarantor of theConstitution. Exactly how that breaks down into specificresponsibilities over time we still don't know. These are sort of ageneral statement of principles that they've laid out, but I don'thave much more for you than that.

Q What about Iraq -- any discussions with Primakov?

MR. PASCUAL: Obviously, in terms of the developments onregional issues, there may be a whole range of regional issues thatcome into play -- Iraq, Kosovo -- and we will decide on what thespecific items are as we're close to the time.

Q Carlos, can you give us an update on how things arelooking from the Russian perspective as far as any kind of militaryaction -- conversations with them recently and how are they going?

MR. PASCUAL: I can't comment on that, sorry. I haven'tbeen directly involved in the Iraq issue, so I'll pass on thequestion.

Q On the economic front, is there going to be anagreement on this debt relief proposal that was written about I guessyesterday in the Wall Street Journal?

MS. BRAINARD: You're referring to the APEC meeting? Ithink Gene was talking earlier about our broad recovery agenda whichI think is shared by most of the leaders in the region, and we arehoping to make progress on all of the priorities, all of thedifferent pieces that he talked about -- Japan's critical role, theneed for it to expand its own economy, absorb more of the exportsfrom neighboring economies in the region. We want to make someprogress on the need for stronger social safety net spending in theregion.

As you probably know, as the IMF programs have takenhold in many of the crisis-stricken economies, they've been able toexpand their fiscal spending on social safety net kinds of programs.And there has also been an initiative for the World Bank and the ADBto augment financing for that.

We certainly -- among those priorities, the one ofgetting the corporations and companies in the region out from undercrushing burdens of debt and the associated connection tostrengthening the banking system; alleviating the credit crunch isvery important, and we would like make some progress in that area.

Q Has Japan agreed to that?

MS. BRAINARD: At this juncture there is a variety ofdiscussions on this important issue. This is a priority that thePresident laid out in the Council on Foreign Relations speech. Andsubsequent to that, there has been a lot of work on this area. Butat this juncture there is just a large work program as opposed to aspecific initiative.

Q So Japan has not agreed? That would be a no?

MS. BRAINARD: No, that would not be a no. There is awork program. This is something that will be discussed at themeeting. Japan is a very important part of our work, our cooperativework in this area, and that will continue to be true.

Q Is the United States willing to put forward any ofits own funds to back such an effort, or would it seek fundsexclusively from other countries and multilateral agencies?

MS. BRAINARD: Again, there is a work program thatinvolves a variety of initiatives. There is no specific fundedinitiative at this juncture.

Q So the U.S. is open to the idea of using its ownmoney for this?

MS. BRAINARD: I think what we're looking for is thebest way of moving forward the corporate sector restructuring and thefinancial sector restructuring.

Q On the corporate debt restructuring, the debt wasannounced today -- not announced, but that was proposed -- Japan hasalso announced a plan, the Miyazawa plan. And I was wondering howyou envisioned the plan that the U.S. is proposing different from theMiyazawa plan. What are the differences in the two?

MS. BRAINARD: The Japanese government has announcedthat it has a certain amount of money that it wants to make availablefor a variety of initiatives in the region, which I believe you'rereferring to as the Miyazawa plan. The priorities that they havediscussed in using that financial assistance is very much similar tothe priorities that we have articulated. And indeed we're workingcooperatively with them on those priorities, bilaterally and alsomultilaterally.

The other thing that is, of course, extremely importantfor Japan to contribute to the region's recovery is getting its owndomestic economy moving again based on domestic demand-led growth.

Q But where do you see it being used? Is it for thecorporate debt overhang or social safety net, or both?

MS. BRAINARD: My understanding is that the specificuses of that money are still being discussed. As I understand it,though, the priorities that they have articulated are very similar tothe ones that I just articulated -- things like trade finance, thingslike credit enhancements to get private investment flowing again,things like social safety net spending, and things like corporate andfinancial sector restructuring.

Q A scheduling issue -- when the President meets withU.S. troops in Korea, where will they meet? At the DMZ, or someplaceelse?

MR. LIEBERTHAL: No, they will not meet at the DMZ.There will be two places where the President is on military ground,if you will. One is the Korea Training Center, the KTC, and theother is Osan Base. He will -- depending a little bit on theweather. If the weather is kind to us, at the Korea Training Center,he will view U.S. and ROK troops together and have a chance toaddress the troops, have lunch with them and so forth.

He will then leave Korea from Osan Air Base, which isalso the site of anti-chemical weapons, Patriot battery, and soforth. While there, he'll address the people at the air base in abrief set of remarks, and then leave from Osan.

Q I didn't understand the meeting with civil societyin Korea. Who is the meeting with?

MR. LIEBERTHAL: This again is a roundtable discussionwith a group of individuals from various sectors of Korean society.It is, as much as anything, for the President to understand some ofthe social consequences of the changes that Korea is now goingthrough -- those consequences are very severe -- to both understandthat better himself and to express his concern about that.

So it's an opportunity for him to get out of the kind ofstandard official setting where he's standing up there and tellingpeople what he thinks, and instead to learn something directly frompeople who are involved in various sectors of Korean society.

Q Are they supposed to be talking about theconsequences of the economic downturn in the region, or moregenerally about life in Korea?

MR. LIEBERTHAL: They will be to talk about anythingthey want to talk about, but I think the idea is to focus on Korea.This is not seen as an opportunity for him to hear economists talkabout what has to be done for the region as a whole; it's anopportunity for him to talk to people in various sectors of Koreansociety about what they think is going on in Korea, and to talk withthem about what he thinks probably needs to happen in the future andget some sense of how they react to that.

Q Could you talk about what the President or otherpeople traveling with him will be saying to the Malaysians about thetreatment of Anwar? And will anybody, particularly SecretaryAlbright -- I know there has been talk that she might meet withAnwar's wife -- has any decision been made on that?

MR. LIEBERTHAL: Let me say first, we have had a numberof our top officials specifically comment on the situation inMalaysia, bemoan the apparent movement away from democraticprinciples and toward more authoritarian methods there. SecretaryAlbright has made a statement of her own. Secretary Rubin has made astatement. Vice President Gore has made a statement, and so forth.So we've been relatively vocal on that issue. I think it is quitepossible that Secretary Albright, while in Kuala Lumpur, will find anopportunity to meet with Anwar's wife. That is not confirmed, butthat is certainly something that she would like to see occur if itcan be arranged in an appropriate fashion.

Q Can you address the parallel situation of the hostcountry, in this case Malaysia, opposing free market principlesadvocated by the United States?

MR. LIEBERTHAL: Well, you know, the choice of Malaysiaas host was made four years ago, and no one anticipated four yearsago that this kind of situation would arise. The U.S. wants to gointo this meeting with a positive message. That positive message hasa core economic component that Gene and Lael have laid out. There isalso, to my mind, a tightly related political component that we willarticulate, and that is the compatibility -- I mentioned thisbriefly; let me just take an additional moment on it -- thecompatibility between democratic forms of government, if you will,democracy and good governance, and doing well with a free marketeconomy in the Information Age.

When you think about it, more democratic societies havea stronger commitment to the rule of law. They allow fordecentralized decision-making and individual initiative. They allowfor the free flow of information. They produce governments that aremore responsive to the needs of society, and also more legitimate inthe eyes of the people when they have to make tough decisions.

These are all elements of a mix that enables you to dobetter in response to economic crisis, and we think is a mix thatenables you to do better given the nature of the internationaleconomy that is developing out there for the coming century.

So that if you look historically, countries in deepeconomic crisis have tended to go either toward a much moreauthoritarian kind of system. The most dramatic example, obviously,is Nazi Germany in response to the Great Depression. Or in a moredemocratic direction, if you will, the New Deal in response to theGreat Depression.

We are encouraging countries to go more toward thedemocratic side. And if you look at the countries with whom thePresident is having bilateral meetings and whom he's visiting, theThais have gone in a more democratic direction. He will meet,although not for the same length of time as with the Thais, he'llmeet with the Indonesians. Secretary Albright will be going toIndonesia and Thailand after the APEC meeting. The Indonesians have

moved in a more democratic direction. He'll be going to Korea. Theyhave moved in a more democratic direction. This is something that wewant to highlight, both kind of conceptually and in terms of wherethe President chooses to spend his time.

Q Did the United States ever seriously consider notgoing to this meeting because of its opposition, its disapproval ofthe way the government of Malaysia is tending?

MR. LIEBERTHAL: I am not sure what is required toqualify for "seriously considering," but let me say all the waythrough we have felt that it is very important for the United Statesto be well represented at the APEC meeting and to play a significantrole at this meeting.

Keep in mind, please, that APEC is the one multilateralorganization that both includes all major economies of Asia and,historically, has included the United States as a major player. Youdo not walk away from that kind of vehicle, if you will, because ofsome other set of political concerns. Rather you try to stress whatyou need to stress in order to achieve long-range, major goals thatare important for this country and you deal with the other elementsas they come up.

Q But just to be clear, to follow up on a previousquestion, you don't expect the President himself to directly expressin any way his dissatisfaction with the Malaysian government, otherthan by not meeting one-on-one with --Mahathir.

MR. LIEBERTHAL: I, frankly, cannot tell you exactlywhat the President will and will not say. He will have theopportunity while in Kuala Lumpur to make various remarks and he maychoose to comment on the Malaysian situation. But we'll have to waitto see what his actual comments are.

Q To clarify in Indonesia, you said that thePresident would be meeting with the Indonesians. Is that sort of apull aside with Habibie, rather than a formal, sit-down --

MR. LIEBERTHAL: It is a shorter meeting with Habibie,and it's a shorter meeting with Habibie in part because SecretaryAlbright will be going to Indonesia shortly afterwards and there's alimit to how many long meetings you can have while you're attendingthe APEC meeting within the constraints of time that he's in thecity. But he did -- let me stress, if I can, he did want to meetwith Habibie because he does want to encourage the Indonesians tocontinue to move down a path toward the elections this coming year,which will produce, presumably, a legitimate government that has thepolitical stability necessary to attract foreign direct investmentand to improve the lives of their people.

Q What day is that meeting?

MR. LIEBERTHAL: The meeting with Habibie is on the17th, at 5:00 p.m.

Q Any other short meetings?

MR. LIEBERTHAL: Yes, although I don't want to give youa definitive list because the short meetings can change a little bit.But he certainly will be meeting with the Sultan of Brunei, withPresident Estrada of the Philippines and with Habibie.

Q You had mentioned North Korea is going to be athreat, a security threat going through the meeting with Japan, themeeting with China. What direction are you trying to get everybodyto go on board toward? What do you want everyone to agree to?

MR. LIEBERTHAL: Good question, I'm glad you raise it.There is not a single direction -- we don't have a set of answersthat we want to lay out for everyone and get them kind of marchingalong our path here. As I'm sure most of you know, the U.S. Congressmandated in the closing days of its last session that we appoint apolicy coordinator for Korea and undertake a serious review of policytoward Korea.

Part of what the President will do is to explain thatsituation and what the policy review entails to the Chinese, to theSouth Koreans and to the Japanese, and will stress that in theprocess of this policy review we want to fully consult with ourallies and friends in the region. The fundamental issue here is notone of moving away from what's called the agreed framework, the basicarchitecture, if you will, of how we try to prevent the North Koreansfrom making nuclear weapons and from threatening their neighbors, butrather how do we strengthen that by getting the North Koreans toactually act in the way that they have committed themselves to act.

We view the way we approach that with a view tostrengthening the agreed framework and putting it on a solid basepolitically here and, in reality, in Northeast Asia. And we want todo that with the full knowledge and participation of our Asianfriends and allies. So that's what I intended to signal bycommenting on North Korea.

Q Is the President going to be appointing somebody tolead that review?

MR. LIEBERTHAL: Yes, he is mandated to appoint a policycoordinator for that review, so he is appointing a policycoordinator. I, frankly, can't remember whether I'm allowed tocomment further on that or not, so let me not, no.

Q Will the President be doing a news conferenceduring this trip?

MR. LIEBERTHAL: Yes, there will be a news conference atthe very end of the trip, at Korea -- right before departure fromKorea. I think that's -- is that the only one? It's a joint pressconference at the end of the trip in Korea. Lael, do you want toflush that out at all?

MS. BRAINARD: Saturday, before the Civil Societydialogue, he's doing a press conference.

Q Will there be a press statement after the Primakovmeeting -- you said there wasn't one after Jiang Zemin.

MR. PASCUAL: Probably not. (Laughter.)

Q -- right after a meeting with China you -- fourareas of discussion. Do you expect any tangible progress, like --

MR. LIEBERTHAL: As I mentioned, we do not plan to havea press statement at the end of that meeting. Our purpose in goinginto that meeting is to try to get the best feel that we can betweenthe two leaders as to where progress can be made, some sense of thepace of that progress and how best to proceed from where we are nowto where we want to be.

In that sense, do I hope for some progress in thismeeting? In that sense, I do; but it's not in the sense of signingany kind of agreement or having something to announce at the end ofthe meetings. It's rather, in my view, so the President will comeout of that meeting and will direct me and others who deal with Chinaon where we should be moving, what our priorities ought to be andwhat the benchmarks are as we go forward.

Q Do you have an assessment of how the variousleaders who the President will be meeting with view the impeachmentprocess ongoing and whether or not it will have an impact on thePresident's credibility or his ability to deal with these leaders,which will be going on at the same time that the President is inAsia.

MR. LIEBERTHAL: No, I don't know what's in their headsabout that. I do know that the President remains, I believecertainly in any area I deal with, he remains extremely effective.And I think the other leaders -- just judging by how anxious they areto meet with him and how full the agendas are when they sit down withhim -- I think they take him extremely seriously. But I can'tcomment.

Q On the nine sectors that you had mentioned Japanhas shown resistance, particularly on fishery and forestry, but themomentum for most countries seems to be going towards not coming tofull agreement on liberalization and something less than fullagreement. Is this an up or down situation for the United States?Is there anything that you can envision that would be less than fullagreement on these nine sectors?

MS. BRAINARD: The agreement that we hope to reach is tomake progress, as much progress as possible. As you may recall fromthe information technology agreement on the tariff side, this is thefirst step of a two-step process. And so what we hope to do is takethe results we achieve this year into the WTO framework and use it toget multilateral commitments.

So, in that sense, this will be an ongoing project or anongoing challenge. We certainly hope to get as many countriesparticipating in as many sectors with as ambitious targets aspossible. But I think as Gene mentioned earlier, the environment inthe region is a difficult one. A lot of economies are experiencingsubstantial declines in growth, many of them substantially negativegrowth. So it will be difficult for them to make progress.

I think if we can make some progress on the tradeliberalization front it would be really quite important, an importantsignal of the region's determination to stay integrated into theworld trading system and to get back on a recovery track.

Q Can you comment on what your latest information ison what the Japanese have been doing to try to get some of the othercountries to side with them in this dispute and what your reaction isto what they're doing?

MS. BRAINARD: I think what we are engaged in is a sortof regional negotiating process with a large number of tradingpartners. And I believe there is, to some degree, a calculation onthe part of each economy that their offer will, to some degree,depend on the ambitiousness, the quality of other country's offers.So it's in that sense that we keep saying that we would like to seeJapan try to make some progress on those two vital sectors, wherethey really have the most to give.

Q Can you give us any sort of benchmark on what thatwould mean? I'm sorry to be dense about this, but I don't know, whenyou say progress on those two sectors in particular, is there somesort of number you're looking for?

MS. BRAINARD: There is not a particular number. Ithink as Gene said earlier, they have tariff averages that aresubstantially higher in those sectors than in their other sectors,which is why it would be nice to see them putting their tariffs --some tariff offers on the table, some substantial volume of productsin each of those two sectors. But in terms of precise numbers, no,we don't have particular targets.

Q How do you respond to the Japanese assertion thatany trade liberalization efforts should be voluntary? Nobody shouldforce anybody to do anything, that's a basic principle --

MS. BRAINARD: Well, arguably, all trade liberalizationis voluntary. So we would hope that they would recognize it is intheir interest, as the second largest economy in the world and thelargest economy in the region, to really participate in this. Ithink Japan does recognize they have a special responsibility in theregion, and that's why participation by them is so important.

Q But they have -- difficulties facing the domesticindustry in Japan, the Japanese government is now saying that theycan't do this at this moment. What's the point of forcing them to dothis, if what you're saying is it's voluntary efforts?

MS. BRAINARD: Again, I think we recognize that theenvironment in the region, the financial economic environment isparticularly difficult this year for many economies. Many economiesare suffering a great deal and a great deal more than Japan. Andit's difficult, I'm sure, for everybody to make any kind of movementon open trade. But by the same token, that's why it is so veryimportant to show that APEC really is capable of continuing to moveforward, even in the trickiest of times.

Q This meeting is going to take place now in anenvironment where -- in previous meetings it was enough to sort ofget together, but now you've got a major regional crisis. If youfail to convince the Japanese government to do this, and you don'tget your private sector financial arrangements out in time or they'renot approved, is there any standard by which the success or thedegree of success of this meeting should be judged? Or is just goingto be sort of ambiguities and vague talk of progress as has beensomewhat the case at previous meetings, and we'll all go on? Howshould we measure what you do?

MS. BRAINARD: I will leave to you to decide how tocharacterize whether or not this meeting is successful. We'rehopeful that it will be an important forum for the leaders of thisregion to talk about the financial crisis.

Again, as Ken was suggesting earlier, this is quite aunique forum. The President has invested a lot of his own time andenergy in it. As you know, he convened the first leaders' meeting.

And over time, this forum has become very relevant to the keyeconomic issues of the day. And I think we want to see leadersreally grappling with the economic challenges and agreeing on a setof priorities for addressing them. And I think we are hoping to seethat coming out of this meeting.

MR. LIEBERTHAL: Can I add just one line to that, if Imay? Most of you have a great deal of experience in traveling withthe President and so forth. You know how difficult it is to have atime that is somewhat unstructured when leaders can really talk toeach other. And the leaders' meeting at this conclave allows leadersof 15 economies to spend literally hours together with a lot offluidity in what they say.

And so it's an almost unique opportunity to get togetherkey people from the most -- what to my mind is the most importantregion of the world and have them interact on an intensive basis.You're always looking for measures of success, and you're right to doso. But one of the underlying elements of this that make itimportant is precisely, simply the opportunity to, face to face, batthings around.

Q Some of the countries are countries in LatinAmerica. They worry how the crisis will affect them. How is thePresident going to address this fear in this particular forum? Is itgoing to be --

MS. BRAINARD: I think that we have, from our LatinAmerican partners, Peru will be in attendance for the first time, andMexico and Chile are members of APEC. In terms of the crisis, Ithink the President has spoken to the crisis in a variety of fora andreally has spoken on the short-term measures and the long-termmeasures which I think pertain to Latin America as they do to otherregions of the world.

One of the things that I think was very important is theattempt to strengthen the IMF and to give it new tools for the newtypes of financial situations we see in recent years, and inparticular the precautionary financial facility, which was really putin place to help countries ward off crises, countries that arealready carrying out good policies.

In addition, he wants to continue discussions andprogress and a work program towards significant reforms to theinternational financial architecture. I'm sure the leaders will talkabout some of the transparency surveillance issues that are importantfor Latin America as much as they are for Asia, indeed as they arefor this country.

Thank you.

Briefings - PreTrip

Press Briefing By Deputy National Security Advisor

Press Briefing For The President's Trip To The APEC Summit

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