American Institute in Taiwan

I'm glad to be back in Chicago and to see some old friends again. I am something of a baseball fan, and being in the Windy City reminds me of one the game's many good quotations. After a game in rough weather -- probably at Comiskey -- Yankee outfielder Mickey Rivers is reported to have said that it was so bad out there, "it was blowing 360 degrees."

I can sympathize. In Washington -- and in foreign affairs -- it frequently feels like it's blowing 360 degrees. But our nation's interests aren't seasonal. We have to look much farther down the road -- and consider how to ready ourselves for the long-haul and prepare for the storms ahead.

So as we near the end of the Clinton Administration's first term, I want to talk about the key foreign policy challenges America will face in the coming years. Political leaders may change with elections, but America's interests do not. The way these challenges are met -- or ignored -- will affect the lives of each and every American and our prospects for the century ahead.

Halfway between the end of the Cold War and the dawn of a new century, our nation is at peace. Our economy is strong. The tide of market democracy is rising around the world, bringing freedom and prosperity to more people than ever before and new opportunities for us.

Yet this promising new era is not risk-free. Old threats like aggression by rogue states have taken on new and dangerous dimensions. A host of modern threats -- from terrorism to drug trafficking to man-made environmental disasters -- ignores national borders and undermines our security.

In this new world of possibility -- but also peril -- America's global leadership is more important than ever. That great scholar of diplomacy Woody Allen once remarked that 80 percent of life is just showing up. For better or worse, simply "showing up" is not enough in foreign policy. To lead effectively, our nation must do two things at once.

First is the business of managing crises as they arise. Whether dealing with an outbreak of violence in Liberia, trying to secure a Middle East cease-fire, or responding to a global 911 like the Kobe earthquake, managing crises is fast-paced, high-profile work. Its rewards -- or its failures -- are readily visible, and frequently found in the headlines.

This audience knows that such foreign policy challenges don't arise in neat four year cycles. Every Administration inherits problems it must manage; ours was no different. Three of the most urgent were repression in Haiti, the war in Bosnia and the containment of Iraq. Because we backed diplomacy with force, the dictators are gone from Haiti, the desperate flow of refugees has ended, and the first-ever democratic transfer of power took place this year. The last of the U.S. peacekeepers came home on time, as promised. Because we deployed our troops rapidly and decisively to the Persian Gulf in 1994, Iraq withdrew the troops it massed on Kuwait's border -- and we preserved peace and stability in the region.

Because we stood up for peace in Bosnia, the slaughter has ended. American troops and their IFOR partners are helping give the Bosnian people the breathing room they need to build the peace they have chosen.

I am proud that our Administration led the world's response to these problems. But it was also important that while managing these emergencies, we also pressed forward with the projects that stretch beyond the crisis of the day and are essential for building the future that we want.

This is the second aspect of leadership: anticipating the problems of the future...making the investments that will pay greater benefits -- or prevent greater costs in the future...and laying the groundwork for the peace and prosperity of tomorrow. Even as we handle day-to-day events, we must devote ourselves to the acts of construction on the core security issues that affect the daily lives of American citizens.

And I believe we are laying the foundation for a post-Cold War world in which our interests are protected and our people prosper. Over the next four years, whoever leads this country will have a chance, and a responsibility, to build on that foundation.

What are these "construction projects?" One is to strengthen and broaden our core alliances as we lay the groundwork for peace in the 21st century. On the President's trip to Asia last month, we signed a new Security Charter with Japan. We joined with South Korea in launching a major initiative that we hope will lead to a permanent peace between North and South and eventually erase the Cold War's last remaining frontier. Those achievements...along with our efforts to engage China in a productive dialogue...aim at fulfilling the President's vision of a peaceful Asia Pacific community built on shared efforts and shared benefits.

Since our policy on Asia is seizing today's headlines, I would like to focus on three other "construction projects" for the next four years: building an undivided, democratic Europe; preparing for the military threats of the future; and building a new global trading system.

Building an Undivided Europe History has taught us that when Europe is in turmoil, America suffers, and when Europe is peaceful and prosperous, America can thrive as well. Today, with the Cold War over, a peaceful, democratic, undivided Europe is within reach.

We have worked hard to turn that vision into reality by supporting the process of Europe's integration. We have helped the nations of Central Europe and the former Soviet Union to develop the essentials of democracy: fair elections, a free media, and an independent judiciary. We have helped them to rebuild their shattered economies.

These efforts are paying off. Many Central European nations are moving from aid to trade. Some -- like Poland and the Czech Republic -- are among Europe's fastest growing economies. Today, America is Russia's largest private investor, and our total trade with Russia has grown 65 percent in the last three years. More trade with and investment in Europe's new democracies with their millions of new consumers means more jobs and higher wages at home.

We are also deepening security cooperation with all who share our values and our vision of peace. A key part of this process is NATO's enlargement. NATO can do for Europe's east what it did 50 years ago for Europe's west: prevent a return to local rivalries; strengthen democracy against future threats; and provide the conditions for fragile market economies to flourish.

Two years ago, the United States laid a cornerstone of the new Europe by initiating the Partnership for Peace. From the Black Sea waters of Romania to the bayous of Louisiana, Partners and allies are building bridges of cooperation. For some countries, the Partnership will be the path to NATO membership. For others, it will be an active link to the Alliance. For all, it is a powerful incentive to deepen democracy, establish civilian control of the military, and be responsible members of the global community.

Already, we are seeing results. Right now in Bosnia, soldiers from at least 13 Partner states are standing shoulder-to-shoulder with NATO troops. One of those Partners, Hungary, is the major staging ground for America's contribution to the NATO force.

Over the next four years, we must lock in these gains for the 21st century. This means moving NATO enlargement forward on the same steady, transparent track we have followed since the start. That means resisting calls to move too rapidly, which could undermine our goal by compromising NATO's consensus on bringing in new members. But it also means that those nations that are ready to add to the strength of the Alliance must not be kept in limbo. Delaying enlargement would destroy the momentum we have built and dispirit new democracies that have worked so hard to reform. We will not allow such delays.

As enlargement moves forward, we must also work to make the NATO-Russia relationship a full-fledged partnership. Our teamwork in the Contact Group and between our troops in Bosnia has shown that such a partnership is both possible and productive. It is a harbinger of the undivided Europe that lies before us, if we all have the vision and determination to achieve it.

Preparing for the Military Threats of the Future Our second act of construction lies in preparing for the real military threats of the post-Cold War era. Superpower confrontation has passed. But the lid has been lifted on numerous simmering ethnic and religious conflicts. Before, rogue states could be restrained by those who armed and supported them. Now, they are more likely to gamble on the use of force to achieve their ends.

The United States has taken these developments to heart -- and we are strengthening our defenses for a world that remains dangerous. Indeed, we may be doing a better job of preparing for the threats of a new era than did previous post-war generations. Remember, five years after World War II, America's military drawdown had gone so far that we were nearly pushed off the Korean Peninsula. Five years after Vietnam, the Army Chief of Staff declared that we had a "hollow army."

Now, five years after the post-Cold War drawdown began, America's military has completed an extraordinary transformation. Our military leadership has received far too little credit for one of the greatest management successes in history -- a large-scale personnel reduction with no loss in morale or needed capacity. I visited the Great Lakes Naval Training Center this morning, and was very impressed with the morale of the Navy recruits, now becoming sailors.

Following our Bottom-Up Review -- an analysis of unprecedented scope -- our forces have been reshaped for the challenges we face today and those that may confront us tomorrow. America's military readiness has never been higher -- and our forces are prepared and equipped to meet potential crises around the world. Our strategy calls for our forces to deter and, if necessary, fight two major regional conflicts nearly simultaneously. In 1994, when Iraq: menaced Kuwait...tensions rose in Korea...and trouble in Haiti boiled over...we showed that our military was equal to the task -- and more. Our troops' rapid, professional deployments deterred possible aggression in the Mideast and Asia -- and brought the people of Haiti a chance for a brighter future. They're also performing the kind of new missions for peace and freedom that our era demands -- as we have seen in Haiti, Rwanda and Bosnia.

To maintain our forces' superiority, the Clinton Administration has made an unwavering commitment to give our troops the resources they need. Because of that pledge, when circumstances change, we adjust and provide what is required. Over the last two years, we added nearly $4 billion to the military budget to cover the costs of unexpected missions. Based on a clear look at what we needed for readiness and modernization, President Clinton decided in December, 1994 to increase funding for our long-term defense plan by $25 billion over six years. As he has said so often, the President is determined that America's military be the best-trained, best-equipped and best-prepared fighting force on earth -- and we will provide the means to keep it that way.

Just as the Administration is committed to preserving our edge in conventional forces, we are also determined to reduce the threat to the American people posed by weapons of mass destruction. When the Iron Curtain fell, a window of opportunity opened for building a world that is safer from chemical, biological and nuclear weapons.

So we have set the most ambitious arms control and non-proliferation agenda in history. And we are meeting it.

Because of our steady engagement with Russia and the new independent states, no Russian missiles are targeted at America's cities and citizens. START I and START II -- which we hope the Russian Duma will soon approve -- will slash by two-thirds the nuclear arsenals that we and Soviet Union held at the height of the Cold War. We are also working to strengthen the Biological Weapons Convention and pressing for ratification of the Chemical Weapons Convention. We are urging the Senate to approve this vital treaty without delay.

We have secured the indefinite and unconditional extension of the Non-Proliferation Treaty. We hope to sign a Comprehensive Test Ban Treaty this year -- and thereby constrain the next generation of nuclear weapons. And we are working so that all nations abide by the provisions of the Missile Technology Control Regime.

Not too long ago, debate raged over the value of arms control treaties. In the post-Cold War world, the answer is clear: these gains -- the result of determined diplomacy by both Democratic and Republican administrations -- are real and have made the American people safer.

But we will not be truly secure through diplomacy alone. Maintaining our deterrent force -- conventional and nuclear -- remains the best way to keep any state from challenging us with weapons of mass destruction. Any potential enemy must know that our response to an attack using these weapons will be absolutely overwhelming and devastating. This is how we kept the peace for 50 years -- and it is our best guarantee for the next 50 and beyond.

Nonetheless, we must prepare for the unlikely event that our military might, arms control agreements and nuclear deterrent fail to prevent some rogue nation from launching a missile attack against the United States or our armed forces. Our Administration is spending $3 billion a year to develop and deploy missile defenses. Our approach, as the President said this week at the Coast Guard Academy, "is based on real threats and pragmatic responses." It's based on the common-sense notion that before we build a missile defense, we need to know what the threat is.

Today -- and for years to come -- the greatest threat we face is from short and medium-range missile attacks against our troops or our allies. And the regions of greatest peril are the Middle East and Asia. That's why we have made theater missile defense our top priority. We have deployed upgraded Patriot missiles to South Korea. We are working with Japan to upgrade their defenses. And we recently reached an agreement with Taiwan to provide them with an anti-missile capability. We are cooperating with Israel on theater defenses. We are pressing ahead with a range of advanced short and medium range missile defenses, such as Patriot PAC-3, Navy Lower Tier and Army THAAD -- which will be ready for use by 1998 -- and the more capable Navy Upper Tier, which can be fielded a few years later.

Putting Theater Missile Defenses first makes sense. It addresses the threats that exist now. But we also have to look ahead to prepare ourselves for threats down the road. While our Intelligence Community does not believe that a rogue state is likely to acquire a long-range missile capability within the next 15 years, we are committed to developing a National Missile Defense system by 2000 that can, if needed, be deployed by 2003.

This is a rational response to a possibility that is remote -- but whose consequences would be horrifying.

The alternative to our plan, the bill launched by the Senate and House leadership last March, would require that we choose a missile defense system today for certain deployment by 2003.

This is the wrong way to defend America. It would lock us into today's technology -- and deny us the benefit of tomorrow's advances. If some future dictator gets reckless, we don't want to get caught with a Betamax when we could have the latest technology on our side.

Their bill would also violate arms control agreements that are making us safer. It could resurrect many of the technologies of the failed "Star Wars" scheme -- including space-based missiles and lasers -- as well as sea-based and multiple-site anti-ballistic missile defenses. All of these systems would violate the Anti-Ballistic Missile Treaty. The ABM treaty remains a cornerstone of our arms-control achievements -- and throwing it into question would imperil the ongoing cuts in Russia's nuclear arsenal. Giving up the reduction of thousands of warheads for protection against a threat that doesn't yet exist is a bad tradeoff. It simply doesn't make sense. We can preserve the Treaty while fielding the defenses we need.

Their approach would not only be bad strategy -- it's bad budgeting. Last week, the Congressional Budget Office estimated that the bill's program would cost somewhere between $31 billion and $60 billion by 2010. At that price, our nation would have a hard time sustaining the modernization our conventional forces must have. It's not surprising that when the bill's sponsors heard that estimate, they pulled it from the floor of the House -- though its supporters in the Senate appear determined to press on.

There is a right way and a wrong way to defend America and its citizens from a missile attack. I hope we can come together in a bipartisan fashion behind the right way. The practical way. The prudent way. As Secretary Perry said in an interview yesterday, we should find common ground on this issue, for example along the lines envisioned in the substitute amendment on National Missile Defense policy that Congressman John Spratt of South Carolina intends to offer when the House takes up the Defend America bill. That way, our nation will have the missile defense it needs against the threats that may develop...and our forces will have the best equipment and training for all the missions they will inevitably face, conventional and nuclear.

Trade The two "construction projects" I've discussed so far -- building an undivided Europe, and building the right defense against military threats we actually face -- have an obvious impact on the security of the American people. But we define "national security" in terms of people's daily lives -- and that means not just the military security of our nation, but our citizens' economic well-being as well, a basis for their personal security. In an era where goods and ideas are traded all over the world and where millions of dollars can flash across the planet at the stroke of a computer key, it is clear that our economic welfare is tied to the rest of the world.

That is why we have worked so hard to build a new global trading system. Through painstaking negotiation and hard-headed persuasion, we are opening markets to American goods and services and creating new opportunities for American companies and workers. Now, with regional efforts like NAFTA, APEC and the Summit of the Americas, global accords such as the Uruguay Round, and tough bilateral negotiations like the U.S.-Japan auto agreements, barriers are coming down and our exports are going up -- creating more than one million good, high-paying jobs in just the last three years alone.

You can see the results of our strategy in the progress we've made in Japan. There is more hard work ahead, but in the last three years, our two nations have signed 21 separate trade agreements, covering everything from medical supplies to computers. Our exports in those sectors are up about 85 percent -- meaning more jobs and better pay for American workers, and lower prices and greater choice for Japanese consumers.

We also created America's first National Export Strategy, helping our firms walk through the doors we opened with trade agreements. With our support, American firms have won more than $57 billion in foreign business contracts since November 1993.

To sustain this performance and strengthen prosperity into the 21st century, our nation must enforce existing trade agreements, including the more than 180 agreements concluded by the Clinton Administration. We must transform our vision for free trade in the Americas into concrete results, including by expansion of NAFTA to Chile. And we must build on our blueprint for free trade in the Asia-Pacific region -- the fastest-growing market in the world.

Conclusion Even as we lay the foundation for the new century -- dealing with today's crises, and building tomorrow's framework for stability, security and prosperity -- the tools we rely on are the same as ever: Diplomacy where we can; force where we must. Working with others where we can; and alone when we have to. Keeping our military strong while adapting our alliances to new demands. Maintaining constructive relations with the world's great powers -- those nations that have the greatest ability to help or hinder us in our efforts. And we must have the resources needed to conduct effective diplomacy, use our aid programs to head off future crises, and support our military.

Just as we rely on time-proven tools, so we are fulfilling a timeless mission. In many regions, the roots of the democratic society -- pluralism, tolerance, liberty -- are not yet firm. Now, as before, our special role in the world is to safeguard and strengthen the community of democracies and open markets.

Enlargement of democracy is central to all of the challenges I have mentioned today. A democratic Europe is more likely to remain at peace, and to be a strong partner in diplomacy, security, and trade. Democratic nations are less likely to go to war against one another -- and more likely to join us in promoting arms control, fighting proliferation, and combating the forces of destruction. And democracy undergirds the open markets that promote prosperity because the rule of law helps guarantee that contracts are respected, just as the searchlight of free media helps expose corruption.

Over the next four years, we have a chance to pave the way to a bright new century -- in which Central Europe, where two world wars began, becomes an anchor of stability in an undivided, democratic Europe -- in which we work with our allies and friends in the Asia-Pacific region to sustain our security and build a future of growing prosperity -- in which the dark cloud of nuclear destruction gives way to the sunshine of peace -- In which open societies flourish, linked and invigorated by open markets -- In which our children and children everywhere can therefore make the most of their talents to pursue their dreams.

That is America's challenge on the eve of the millennium. America can -- and must -- meet it. I think we will.