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Remarks of Secretary of State James A. Baker III in Presentation of the Summit Political Communiqué

Houston, 10 July 1990

Secretary Baker: Ladies and gentlemen, you have before you, I think, the copies of the Political Declaration and statements on terrorism and nonproliferation, and I'd like to, by way of opening this up, summarize those for you, and then I'll be glad to respond to your questions.

Question: Mr. Secretary, I wonder if you thought the decision taken in Moscow yesterday--sharing of power among the various Soviet republics--is the sort of step to democracy that the Summit is trying to encourage. And have you any--will you have, or do you think the Summit provides a positive response to your opposite number, Mr. Shevardnadze's appeal for more credit, for what he calls "economic cooperation"?

Secretary Baker: Let me start with the second question by saying that I don't think there's any question but that the countries represented at this Summit all desire to see perestroika succeed. And they would like to do what they can to promote the success of perestroika, to promote the success of the reform effort in the Soviet Union. They all believe that a reforming Soviet Union will be a more secure, stable and open Soviet Union if the reforms can succeed.

So I would hope and believe that with respect to the question of economic assistance to the Soviet Union, a way would be found for a positive response and reaction to the request that has come from the Soviet Union.

As you know, the United States has been engaged for quite some time in a process, a fairly detailed process of technical assistance to the Soviet Union, and we would hope that we could continue that.

The first part of your question had to do with the question of more autonomy for the republics of the Soviet Union. And we think that anything that moves toward democratization, more openness and political pluralism is beneficial and is helpful. Beyond that, we think it is very important that the Soviet Union, the central government of the Soviet Union, deal with, in a fundamental way, the difficulties that have existed between the republics and the central government. And it would appear to us that this would be a rather fundamental step in the direction that they have said they want to go, which is to provide more political and economic autonomy for the republics.

Question: Can you ever see the United States granting what is commonly thought of as economic aid to the Soviet Union?

Secretary Baker: Ever?

Questioner: Ever.

Secretary Baker: I don't think you should ever say never. There are, as we've, I think, articulated, the particular problems that face the United States today in using taxpayer dollars to provide economic assistance to the Soviet Union. But things can change. And if there is a fundamental effort toward free market economic reform, if there is a fundamental effort toward stopping the support of governments around the world that support instability in other regions, if there's a fundamental effort to reduce the size and magnitude of the gross national product spent on military expenditures, I don't think we should say that in perpetuity we would rule out the prospect of providing financial and economic assistance to the Soviet Union. But we're already providing economic assistance of a sort: technical economic assistance. And we've been doing it going all the way back to last September. And I would hope that there would be a consensus coming out of this Summit on the part of all nations that technical assistance to the Soviet Union is warranted even under the circumstances that exist today.

Question: Have the leaders basically agreed, Mr. Secretary, that each country can do what it wants to in terms of aiding China and the Soviet Union?

Secretary Baker: Well, not China. If you'll read the Political Declaration, you'll see what the agreement is with respect to China. With respect to the Soviet Union, we are still in the process of discussions. A decision has just been taken at the plenary that has just concluded that the foreign ministers will reconvene and engage in some drafting to see if we can come up with an approach that is acceptable to all the countries represented here.

Question: Does this tie--does this document tie Japan's hands? They've been indicating they plan to resume their loans to China.

Secretary Baker: This document, if you would note, if this--if you read the Political Declaration there, and I think it's Paragraph 4, you will see the agreement that has been taken with respect to China--the last paragraph of Paragraph 4 appearing on Page 2.

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Question: Mr. Secretary, as I understand the letter President Gorbachev wrote to President Bush as host of the Summit, he specifically asked for credits and Western investment. Doesn't your conclusion here essentially reject President Gorbachev's request?

Secretary Baker: No, I don't think it does. In the first place, we're still in the process of working out the language that hopefully will represent the agreement among the whole. In the second place, if you look carefully at the letter, you'll see that that wasn't all that was asked for. There are quite--there's a request in there for technical assistance, assistance in training, assistance in the steps that should be taken to convert to a market economy. So let's wait and see when it comes out before we prejudge it.

Question: Mr. Secretary, one of the other problems for the U.S. in trying to aid the Soviet Union is their outstanding debt problem. Is your administration considering any steps to assist them with their debts to the U.S. dating back to 1917 and post-World War II?

Secretary Baker: Yes.

Question: And are you also considering any steps to allow U.S. banks to extend credit--private banks to extend credit to the Soviet Union that would allow--that would require some legislative change?

Secretary Baker: I don't think we need to take steps to permit private banks to extend credit--

Questioner: The Debt Default Act doesn't permit the U.S. government--

Secretary Baker: The Johnson Debt Act doesn't permit them to sell their securities and bonds and so forth in our private financial markets. But let me answer the real question--your question by saying it's--I should have included that as part of my answer to Cragg. Do you rule out forever? The answer is, I don't think you do rule it out forever. Right now, we have laws that prohibit our rendering financial and economic assistance to the Soviet Union. And we have the Johnson Debt Act which prohibits some of our private institutions from rendering financial and economic assistance. We're engaged now in discussions with the Soviet Union with respect--about the possibility of settling some of those old Kerensky Debt claims. And if we were to do that, then we would no longer have legal prohibitions. And I think that you'll see us continuing to try and move those negotiations forward in a positive way.

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Question: Mr. Secretary, a question--apart--on another subject from this Declaration, can you give us a sense of whether there has been any progress at all on the effort to break this deadlock on trade subsidies--agriculture trade subsidies? And along what lines?

Secretary Baker: We discussed this. In fact, this was the subject that we concluded the plenary with a few moments ago, and several suggestions were made. The sherpas are going back to the drafting table and it remains to be seen the degree to which we can make progress on this issue. I'm hopeful. But who knows. We'll have to see what comes out of the drafting session and out of the plenary meeting that follows that.

Question: Mr. Secretary, along those lines, has any private deal been struck or compromise reached between Chancellor Kohl and President Bush in which the President would support or let the Germans give the aid to the Soviet Union without opposition, in return for the Germans' movement on environment and agriculture?

Secretary Baker: As far as I know, there's been no such agreement made, nor has there been such an agreement suggested. That is the idea that we would somehow link the question of assistance to the Soviet Union to the issue of environment. We still have to resolve the issues respecting the environment that were on the table when we came. That will be--the initial plenary discussion of that will take place this afternoon. We still have the trade issue, particularly the agricultural trade issue, to resolve. And we still have to resolve the question of assistance to the scope and degree and extent of assistance to the Soviet Union. And that's going--we're going to do some drafting at our lunch, and then we'll take that back into the plenary this afternoon.

Question: Can you say the last sentence on Page 2 of the "Securing Democracy" statement that talks about each of us stands ready to help in practical ways--those countries that choose freedom? Could that apply to the Soviet Union as well, and could that not be interpreted as a go-it-your-own-way approach?

Secretary Baker: Could it apply to the Soviet Union? It could apply to the Soviet Union as and when it moves toward political pluralism and a free market economy and the other things we mean by freedom.

Question: Is this intended to refer to the Soviet Union as well in talking about providing economic assistance as appropriate or economic know-how? Is that intended--

Secretary Baker: We're already providing economic know-how to the Soviet Union, even as their reform process continues in an incomplete state.

Questioner: My point is, was that written to provide language for each Summit country to address its own--

Secretary Baker: No, it was not written for that purpose. There will be specific language with respect to the Soviet Union that will be in the Economic Communiqué that will be issued tomorrow. It is that language that we are now drafting. Further, there is specific language in this Political Declaration with respect to the Soviet Union--Paragraph 3 on the preceding page.

In the back.

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Question: Mr. Secretary, is there any indication from the closing of the plenary session today that the European Community is ready to make some movements away from its tough stand on ag subsidies? Did you get any impression from the meeting today?

Secretary Baker: Some suggestions were made during the course of the plenary that various countries indicated they would give consideration to. And as I just said a moment ago, I think we have to wait to see what the final product is before we try and judge that.

Question: Mr. Secretary, on the Kerensky Debt, will the Soviets be held responsible for the entire amount plus all the interest that's been accrued over the years or is there a possible compromise?

Secretary Baker: Well, I think the Debt's about $300 million and the interest that's accrued since 1917 runs up into the billions of dollars. And I've already said that we have a negotiation underway. And I would think that would answer your question. It's a negotiation, so we'll have to find a way to resolve it somewhere short of their claim and our claim.

Question: Mr. Secretary, when you say that you still have to work out the scope and degree and extent of aid that might be offered to the Soviet Union, are you saying in that, that you've reached a generalized agreement on that--you will endorse some degree of aid, and that also have you agreed generally on the idea of a fact-finding mission to determine Soviet needs possibly--

Secretary Baker: Haven't yet agreed on the question of the fact-finding mission, but I think I said that all of the countries around this table want to see perestroika succeed. And we want to support it. And I think I also said that technical assistance, I think, is pretty generally embraced by all of these countries. Now, we really should wait and see exactly what the language is, what we come up with. But I would think that most everybody around the table will support the idea of technical assistance to the Soviet Union. Help them in their effort to move toward a free market economy, in their effort to overcome what is an extraordinarily difficult problem, because for 70 years they have embraced an economic philosophy that is totally foreign to the principles that we believe in. So technical assistance is very, very important and could be every bit as important, if not more important, than a specific dollar amount of financial assistance.

Question: I wonder--was Cuba mentioned from the beginning in the draft of the declaration--Political Declaration--that Cuba should install democracy--that you're mentioning?

Secretary Baker: Cuba was--Cuba has been discussed quite frequently during the course of the talks we've had here in Houston. It has been discussed particularly during the course of our discussions regarding the Soviet Union. And it was discussed last night at our--at the dinner of the foreign ministers.

Questioner: What--draft the declaration?

Secretary Baker: I'm not sure that there's a reference specifically of that in the draft declaration, but I'm telling you we've discussed it in detail and obviously it doesn't take a crystal ball to know that we're not pleased with the scope of developments in Cuba and the lack of movement toward freedom and democracy that's taking place everywhere else around the world.

Question: Mr. Secretary, you say you're considering World Bank loans to China. What has happened in China to justify this gesture?

Secretary Baker: There have been some--I think you'll see there, there's a reference to developments in China. And there have been some developments that we acknowledge--the release of Fang Lizhi, among other things. But if you look at the paragraph in its entirety, I think it suggests quite clearly that more needs to be done, and that's why the sanctions that were put in place last year, generally speaking, are going to be preserved. We will explore whether or not some World Bank loans that would move economic reform in China would be possible.

Question: Yes, Mr. Secretary, in the mentioning of the Northern Territories, you mentioned they call for a resolution of that regional issue. You didn't say that the G-7 supports the Japanese claim to the Northern Territories. Can you comment on that? And secondly, isn't it true that, in fact, this statement does represent a rejection of Prime Minister Kaifu's initiative with respect to encouraging loans to go into China as a political statement?

Secretary Baker: No, it does not represent a rejection of Prime Minister Kaifu's suggestion, and I'll let the government of Japan speak for itself. But it would not surprise me if they went forward with their bilateral third yen loan program. But that's not for me to say. It's clear where we stand on the Northern Territories--we, the United States--and I don't want to speak for anybody else here, because frankly that issue was not discussed whether specifically each country there supported the position of Japan on the Northern Territories. I would be surprised if they didn't. Let me speak for the United States. We do support the position of Japan on the Northern Territories, and we raise it with the Soviet Union every time we sit down with them.

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Question: Mr. Secretary, you mentioned something about the Middle East. Was there any other ideas reflected, some other ideas which have been separated on the table on the subject of the Middle East and whether they support the desire of all of them?

Secretary Baker: You've got to speak a little louder. I'm sorry. What? The question was: are there any other ideas--

Questioner: Any other ideas which was reflected on the table while you were discussing the Middle East--and whether they all supported the dialogue between the Israelis and--

Secretary Baker: Everyone supports the concept of our trying to move toward a dialogue between Palestinians and Israelis. They support that as the most--as having the greatest potential for developing an active peace process and for moving that peace process forward.

Question: In another part of the world, Violeta Chamorro appears to be facing a crisis. Is the U.S. providing any kind of technical assistance, intelligence or advice and should or could the U.S. try to help her out of this mess?

Secretary Baker: Well, we've been very helpful to Mrs. Chamorro in the past. And it goes without saying that we would want to be helpful in securing democracy in Nicaragua just as the statement mentions, without mentioning that specifically. But the whole purpose and idea here is that we would like to see these moves toward democracy worldwide secured. So we would want to be helpful. I'm not going to respond to your question with respect to whether we have been or haven't been--I've been in meetings for the past four and a half hours.

Question: Mr. Secretary, at this morning's session, did any country object to the notion of a study mission to the Soviet Union carried out under the auspices of the IMF and the World Bank?

Secretary Baker: The European Community has already commissioned a mission of that sort. And I think it's fair to say that those countries represented here who are members of the European Community might prefer to see that as the mission, perhaps even the sole mission. But others feel that because of the particular expertise of the IMF in assessing the needs of various economies and their expertise in the economic area that they should--and because of the fact that all countries here are members of the IMF that perhaps they should play a role.

Question: Mr. Secretary, there's some objection to concerns raised in several delegations about a dual standard in the way that the Chinese and the Soviets are being treated. Do you share those concerns and what are you doing about it?

Secretary Baker: I do not agree with that. I don't think there's any parallel between China and the USSR, to quote one of the principals in our plenary session. The United States and the G-7 countries as a whole still have sanctions against China. So the idea that somehow we are treating them more liberally than we are the Soviet Union I think just doesn't wash.

From the standpoint purely of the United States of America, we have laws on the books that constrain what we can and cannot do insofar as the Soviet Union is concerned and, indeed, what our private sector can and cannot do. We should not lose sight of the fact that, in addition, there are no nuclear missiles targeted on the United States by China, as far as we know. So there is a different situation, and I reject the idea that somehow we are using a different standard to judge China and to judge the Soviet Union.

Question: Are you putting missiles above human rights, sir?

Secretary Baker: No, we don't. But we consider all factors.

The Press: Thank you.

Source: Released by the White House Office of the Press Secretary at the Houston Economic Summit, 10 July 1990


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