U.S. GOVERNMENT PRINTING OFFICE

69–981 DTP WASHINGTON : 2001

DEVELOPMENTS IN WESTERN EUROPE

HEARING

BEFORE THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

OCTOBER 18, 2000

Serial No. 106–195

Printed for the use of the Committee on International Relations

(

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(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

[VACANCY]

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

JOHN HERZBERG, Professional Staff Member

SHENNEL A. NAGIA, Staff Associate

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C O N T E N T S

Page

WITNESSES

Charles Ries, Principal Deputy Assistant Secretary of State, Bureau for European Affairs, U.S. Department of State ............................................................. 2

APPENDIX

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress from the

State of New York, and Chairman, Committee on International Relations ... 19

Charles Ries ............................................................................................................. 19

Additional material submitted for the record:

Response submitted by Mr. Charles Ries in reply to Chairman Gilman ............ 23

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DEVELOPMENTS IN WESTERN EUROPE

WEDNESDAY, OCTOBER 18, 2000

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERNATIONAL RELATIONS,

Washington, DC.

The Committee met, pursuant to call, at 10:05 a.m. in Room

2200, Rayburn House Office Building, Hon. Benjamin A. Gilman

(Chairman of the Committee) presiding.

Chairman GILMAN. Committee will come to order.

This morning’s hearing on the developments in Western Europe

will provide the Members of our Committee the opportunity to review our policy toward that region of the world in which our core

national interests are most engaged. The majority of our allies are

there, the bulk of our international trade and investment is with

the countries of this vital region, and, of course, it is with these

countries that we share our fundamental values and institutions.

Although our overall relations with these nations are excellent,

it would be a mistake to not take stock of them and stress those

areas where we may differ and disagree. This is particularly true

with regard to the members of the European Union as we continue

to work on the European Project, creating the bonds and institutions that have already led to a single European currency, as well

as efforts to forge a more common foreign and security policy that

are the main attributes of a single sovereign state. The implications of these developments may be profound for the citizens of our

own Nation, but which, in this time of unprecedented peace and

prosperity, are not much discussed outside the bounds of policymaking circles and our institutions of higher learning.

The European Project has not been without its own difficulties.

The dramatic plunge in the value of the euro since it was launched

last year is evidence of these problems as is the ongoing difficulty

in agreeing to enlarge the European Union to include some of the

countries of Central and Eastern Europe that have long regarded

EU membership as a cementing of their status as independent

states sharing in the free market and democratic traditions embodied in the countries of the West.

Attitudes among Europe’s elite toward America are also shifting

in the aftermath of the Cold War. Comments by officials of one of

our closest allies suggest, for instance, that Europe should be concerned about tendencies in our country to pursue neounilateral

policies, and that European integration is necessary to provide a

counterweight to curb the exercise of American power.

How widespread these critical attitudes are among the countries

we look to as partners for cooperative efforts to meet those chalVerDate 11-MAY-2000 12:44 Feb 22, 2001 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\FULL\H101800\69981 HINTREL1 PsN: HINTREL1
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lenges that confront all of us is a significant question which we

hope our witness from the State Department will be able to address this morning.

I would like to welcome Principal Deputy Assistant Secretary

Charles Ries of the Bureau for European Affairs, and I want to

thank Mr. Ries for his appearance at this hearing. Mr. Ries transferred to the Bureau earlier this year from our embassy in London

where he served as the Minister Counselor for Economic Affairs.

Prior to that assignment, he served at our mission to the European

Union and has served in a number of interesting positions related

primarily to our trade and economic policies.

Mr. Ries, you may proceed with your testimony, which will be entered in full in the record, and you may abbreviate it as you deem

appropriate, but first, I would like to call on our Ranking Minority

Member, the distinguished gentleman from Connecticut, Mr.

Gejdenson.

[The prepared statement of Mr. Gilman is available in the appendix.]

Mr. GEJDENSON. Thank you, Mr. Chairman. I would like to also

welcome our witness here today, and obviously from both a military

and economic perspective, Europe is a critically important area for

the United States. The issues we have dealt with them on are varied, from Milosevic to missile defense, to the economic kind of

issues, whether it was the battle over hushkits, where the Europeans tried to use the EU to block American products, or whether

it was our own missteps where changes in our own export laws has

most of the European foreign ministers saying that they will try to

exclude American parts from their satellites because of our convoluted satellite export policy.

The Congress itself has been somewhat schizophrenic in response

to the European defense initiative. The Congress condemns the Europeans on one hand for not being full partners and pulling full

weight, but when the Europeans tried to coordinate their defense

production and resources, the Congress seems anxious about that

as well.

I think that trade issues and the defense issues and issues like

missile defense where America has an instinct to go it alone complicates not just our relationship with Russia, but also with Western Europe. So I join the Chairman in looking forward to hearing

your remarks in these areas. It is obviously a very broad field of

interest for the United States.

Thank you.

Chairman GILMAN. Mr. Ries, you may proceed.

STATEMENT OF CHARLES RIES, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF STATE, BUREAU FOR EUROPEAN AFFAIRS, U.S. DEPARTMENT OF STATE

Mr. RIES. Thank you very much, Mr. Chairman. I have a full

statement that will be entered in the record. I will just make some

introductory comments and look very much forward to a dialogue

with you and the Ranking Minority Member.

Chairman GILMAN. Without objection, your full statement will be

made part of the record.

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Mr. RIES. I thank the Committee for the invitation to meet with

you today. We see our foreign policy as a partnership between the

executive and the legislative branches in service to the American

people, and this is an opportunity—this hearing today is an opportunity to have a dialogue, very much a true dialogue on our goals

and objectives in Europe.

Mr. Chairman, the great lesson of 20th century history is that

the destinies of North America and Europe are joined. If Europe is

secure, America is more secure. If Europe prospers, America does

as well.

The U.S. is focusing on three opportunities in our relationship.

Our first opportunity is in Europe itself, ensuring the continuing

integration of the continent so that conflict in Eastern Europe becomes as inconceivable as conflict in Western Europe, and hope for

a better life is shared across the continent.

The second opportunity is between Europe and America,

strengthening and deepening the bonds between our societies in

ways that make a positive, tangible difference in our daily lives.

The third opportunity extends beyond Europe and America, improving our opportunity to deal with issues in a wider world that

neither of us acting alone will be able to confront effectively.

When we pull together, the transatlantic community is the engine in progress on every world-scale issue. When we pull in different directions, the engine is less efficient.

To benefit from a stronger Europe, we need to work with Europeans to build a more democratic and stable Europe. In Brussels,

on March 30th, we agreed with our European partners to launch

$2.3 billion of quick start programs for Southeastern Europe. Of

that amount, the U.S. share is $77 million, about 3.2 percent of the

total, but real structural change and future conflict prevention requires long-term engagement.

Mr. Chairman, one area where that engagement will be critical

is Serbia. The election and swearing in of President Kostunica is

an extraordinary victory for the people of Yugoslavia, who have already chosen democracy and a future in Europe over dictatorship

and repression. A democratic Serbia committed to the rule of law,

the establishment of which President Kostunica has made one of

his primary goals, will be a welcome addition to Southeast Europe.

President Kostunica has affirmed the adherence of his government to the Dayton Agreement for Bosnia and to U.N. Security

Council Resolution 1244 on Kosovo. A democratic Yugoslavia can

provide a new basis for strengthening regional cooperation and advancing democratic and economic development throughout the region. We expect Yugoslavia to meet the same standards on human

rights, rule of law and cooperation with the international community as other states.

Key to the success of this effort will be doing our part to consolidate the democratic changes in Belgrade. We want to show the people of Serbia there is an immediate democracy dividend. We are

working in close cooperation with our European allies to this end.

One of our first steps has been to lift the oil embargo and the flight

ban, as President Clinton announced on October 12th. Lifting the

sanctions is part of the implicit promise we made when we imposed

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them, that a return to democracy by the people of Serbia would be

rewarded.

We should continue and, as appropriate, increase assistance to

humanitarian needs and strengthen democracy in the FRY. We are

consulting with Congress in the context of the appropriations discussions which are still ongoing and the fact that the new government is still in the process of forming to determine appropriate levels of assistance.

Mr. Chairman, the United States is dedicated to conflict resolution and management in other parts of Europe as well. We are

working closely with Greece and Turkey in the search for a solution to the Cyprus problem. In Northern Ireland we support local

leaders and the governments of Ireland and the United Kingdom

to achieve a lasting political settlement. We have also had enormous success in correcting wrongs of past conflicts in the area of

compensation through forced and enslave laborers in World War II.

We are addressing similarly difficult issues of property restitution.

The United States is working with our European allies to

strengthen defense capabilities in Europe, as you mentioned.

NATO’s open door policy and the Membership Action Plan are key

elements in our work. Kosovo demonstrated the clear gap between

U.S. and European military capabilities. ESDI and NATO’s Defense Capability Initiative are a way for Europe to take more responsibility for its own defense. A stronger European military contribution will make the alliance stronger, lift some of the burden

on the U.S. to act in crises, and make the U.S.-European relationship more of a partnership while in no way eroding the transatlantic alliance that we have worked so long to establish.

We have a vibrant multifaceted relationship with the European

Union as well, as embodied in the new transatlantic agenda of

1995. Mr. Chairman, you make a major contribution to this effort

through your active participation and that of your colleagues in the

transatlantic legislators dialogue. Your tireless efforts and those of

others in Congress help us reach members of the European Parliament and national parliamentarians throughout Europe. In this

way we can ‘‘design-in’’ compatible approaches to common problems

right from the outset.

We are otherwise engaged with the EU across a range of economic foreign policy and global issues. We hope to resolve important trade disputes between us. We are acting together to advance

our common foreign policy objectives worldwide, in Southeast Europe, the Korean Peninsula and Ukraine just to name a few examples.

With the EU we are tackling new challenges. At the Lisbon summit last June, we crafted a safe harbor approach to data privacy

protection. We have launched an important effort to find common

ground on biotechnology and to fight HIV/AIDS and other infectious diseases. Similarly, we are working together to promote ecommerce and information society links between us and worldwide.

Cooperation between the United States and Europe also means

working closely to strengthen the OSCE, the Organization for Security and Cooperation in Europe. The OSCE has dramatically improved its ability to address emerging crises through rapid deployment of civilian expertise, using innovative tools such as the rapid

5

expert assistance and cooperation teams, better known as REACT.

OSCE missions in many countries funded through peacekeeping

funds help alleviate conflict and reinforce human rights practices,

and we are using OSCE as an important tool in our fight against

trafficking in women and children.

The United States encourages regional cooperation in Europe,

not only with the stability pact in Southeast Europe, but in Northern Europe, in the Baltics, via the Northern Europe Initiative. I

would like to thank the Committee and particularly you, Representative Gejdenson, for your support of the Northern Europe

Initiative. You recognized that relatively modest U.S. funding for

regional approaches is the key to leveraging greater support for the

Baltics and Russia.

Finally may I note that we are taking great strides to ensure

that management of the European Affairs Bureau here in Washington contributes to greater policy success in the field. Reinforcing

the security of classified information is at the top of our priority

list. We have had European Eurowide town hall meetings and are

closely reviewing our security arrangements and updating our

standard procedures as part of a commitment on the part of the bureau leadership to an absolutely secure environment.

This is just a brief list of EUR Bureau activities set out more

fully in my written statement. Behind these policies are a great

team of dedicated people. However, at this time we don’t have the

resources to fully realize our opportunities in Europe. We lack technology, infrastructure and enough people to do all that we are

called upon to do. If we don’t support our diplomatic readiness, our

policies become harder to implement, and U.S. interests suffer.

The bottom line, though, is that our partnership with Europe

does real things for real people. It generates jobs. It stimulates investment. It reduces the threats we face from crime, terrorism, nuclear arms proliferation, drugs and disease. It increases our security and cuts the cost to the American taxpayer of achieving that

security. When it works, it enables us to achieve goals we could not

achieve alone. When it does not, stalemate and crisis can result.

But making it work requires resources, personnel, facilities and

funding to pursue expanding U.S. interests.

Thank you very much.

Chairman GILMAN. Thank you, Secretary Ries, for your analysis.

[The prepared statement of Mr. Ries is available in the appendix.]

Chairman GILMAN. Let me ask, many observers believe the time

line for EU enlargement has slipped with no new entrants likely

before 2003. How long do you expect the current round of enlargement negotiations to last, and has the EU’s decision to expand

membership negotiations through a greater number of countries led

to a general slowing down of the negotiations, or rather than institutional process problems, is there simply a growing reluctance to

actually take this step of enlargement?

Mr. RIES. It is a difficult series of questions, Mr. Chairman. I

would say that there is widespread recognition in Europe that enlargement of the European Union is an imperative for Europe and

for the EU’s relationship with its neighbors. Part of the task that

the EU faces is that there are so many countries that have a valid

6

claim on accession into the European Union. The European Union

realizes that in order to bring in a substantial number of new

members, it will have to make substantial institutional changes in

its constitutional arrangements, number of commissioners, the way

they handle the Presidency, the question of voting, matters that

are decided by unanimity. These are very difficult questions for

them and are the priority topic for the present Presidency of

France and were the subject of a summit meeting last weekend.

Because they are so difficult, though, they are hard to resolve,

and it remains EU’s objective to come up with a new institutional

basis for relations among member states that would allow for accession and to do that at the summit at Nice in December. We very

much hope that they succeed in that.

You asked a question, though, whether the unprecedented large

number of accession candidates—the difference in development levels between many of these candidates and the EU 15 now—and

these institutional problems may cause a further delay in the timetable. I certainly hope that is not the case. I think that the Europeans acting collectively in Brussels and many of our major European partners as a matter of national policy certainly favor entry

as soon as possible with as many countries as qualify.

It is a very difficult task though. The longer the EU goes on, the

body of legislation that they have adopted over the years since the

1950’s in the initiation of the organization becomes a bigger and

bigger task. Each new entrant faces a larger legislative task. I

would be loath to speculate exactly when the first tranche would

come in, only to say we certainly hope it would be as soon as they

possibly can.

Chairman GILMAN. What you are telling us then, is that there

is no general reluctance.

Mr. RIES. I don’t think so. There are occasional politicians who

occasionally suggest things. There was a great deal of attention

placed in the comments, apparently offhand comments, of one commissioner in Germany that maybe there ought to be a referendum,

and there was the suggestion that that might presage a general

change in policy to slow up accession. I think the reaction to the

reporting of that comment both from the Commission itself and

from the German government and other governments involved indicates no slackening in the political commitment to enlargement as

soon as possible.

Chairman GILMAN. Secretary Ries, which countries are up front

on being considered as potential new members?

Mr. RIES. If you ask any of the 12, they would say, ‘‘me’’.

Chairman GILMAN. Which 12 are there?

Mr. RIES. Is this a trick question, I have to list them all?

Chairman GILMAN. Not at all. If you just tell us who are the

dominant.

Mr. RIES. The Baltic three, Latvia, Estonia, Lithuania; the

Visagrad four, which would be Poland, Hungary, Czech Republic

and Slovakia. That is seven. Then we have Bulgaria, Romania, that

is nine; Cyprus, Malta, 10, 11.

Mr. GEJDENSON. Slovenia.

Mr. RIES. Slovenia, thank you very much.

7

Chairman GILMAN. So these are all up front for future consideration?

Mr. RIES. That is right. And the Turks are also, after the Helsinki summit, considered to be an accession candidate. They do not

have accession programs under way.

Chairman GILMAN. Mr. Secretary, how can the inefficient, protectionist common agricultural policy which presently consumes half

of EU’s budget be sustained if EU membership is offered to poor,

agrarian states in Eastern Europe.

Mr. RIES. Well, the Europeans themselves recognize that the

common agricultural policy requires further and substantial reform. They agreed to this a couple of years ago at Berlin. They understand that the current agricultural policy in its present form is

unsustainable with the accession of many of the states, in particular Poland, which has a very large agricultural sector.

Fortunately, this is something that would be good for the world

anyway. We are just finishing the period of implementation of the

Uruguay Round, which required the Europeans to make a substantial cutback in the export subsidies that they gave that supported

the high-price common agricultural policy, and we are hoping that

we will have very soon a new round of multilateral trade negotiations. In any case, it was agreed during the Uruguay Round that

we would start, and we have started agricultural negotiations in

the WTO to take on the next phase. In our view, the common agricultural policy disadvantage particularly the poorer countries

around the world, because the Europeans—because they have this

high-price, high-production policy, have to export their surpluses at

rock bottom prices, and that harms other producers of agricultural

commodities it is particularly onerous for the Third World as well

as our own agricultural exporters.

So in sum they need to reform the common agricultural policy to

meet their international trade objectives, and they need to reform

the common agricultural policy in order to handle enlargement,

and fortunately they recognize the need to do both.

Chairman GILMAN. So as part of their reforms, is there any real

prospect of European liberalization of agricultural policy in the

forthcoming trade negotiations?

Mr. RIES. We think so.

Chairman GILMAN. It has been reported that some EU members

are pressuring EU aspirant countries to sign contracts with European firms or give preferential treatment to European-based businesses at the expense of our own companies by hinting that it will

enhance the prospects of their becoming EU members. Even more

seriously, there have been reports that aspirants are being pressured to take diplomatic positions, including within NATO, that

support certain EU members against the United States. Are those

allegations accurate to some degree, and if so, what are we doing

about that kind of blackmailing of Central and Eastern European

countries to the detriment of our own interests?

Mr. RIES. Well, we have heard reports of that nature, Mr. Chairman, and let me assure you we take them very seriously. I have

since May, since actually arriving in my present job, led a dialogue

with the European Commission in Brussels about enlargement,

just give us a forum to take up these very matters, and I have

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raised a number of cases in which we had the indication or the concern that the European Union institutions or individual member

countries were using their leverage, real or potential, over the aspirant countries for either commercial advantage or for policy advantage in terms of crafting European legislation. And we have really

been quite clear with the Commission that we did not consider that

to be a responsible way to proceed, and they have agreed with us,

and they have agreed to look into any particular instances that

raise concern with us, and they have done so.

We don’t, though, leave it there. We also, of course, have very important bilateral relationships with all of these countries. Many of

the aspirant countries are themselves—some of them are members

of NATO, and all of them have close relations with us, and those

are relations that they value, they themselves value. And so when

we hear tales of this sort, we also stand up and are counted in the

capitals.

Chairman GILMAN. With regard to our good relations with them,

despite U.N. Secretary General Kofi Annan’s recent statements

that words can inflame or soothe, that everyone needs a restoration

of calm or quiet so as to create the best possible atmosphere for resumption of talks, according to Secretary General Kofi Annan, in

the Middle East, the U.N. General Assembly plan s an emergency

session today, as a matter of fact they are meeting now, in which

a resolution will be considered which once again condemns Israel.

It almost sounds to us like the U.N.’s racism resolutions of the

past. And I have been calling on our colleagues to join with me in

condemning the latest active incitement, but I wanted to ask you,

Mr. Secretary, what is our Nation doing to build opposition to that

kind of a measure to ensure that it will be defeated?

Mr. RIES. Well, Mr. Chairman, I am sure that we are making an

all-points effort to deal with this, as well as other aspects of the

Middle East crisis that we have been within the last 2 weeks, and

as we did with the last resolution. We will talk to our European

allies that are permanent members of the U.N. Security Council—

France and the UK—and our other major European allies, to make

sure that they understand the implications of anything that is

being considered and make sure that our views are clearly known

there. We do this normally here, in New York and in capitals, and

the Secretary, as you know, speaks to her European foreign minister colleagues several times a week, and she will and does raise

these issues with them.

Chairman GILMAN. Well, I would hope that when you return to

the office after this hearing, you will engage in that process before

the resolution is adopted, and we would enjoin our Secretary of

State to participate in that effort. I met yesterday with Mr.

Holbrooke, and I know he is hard at work on this, but he needs

some help from all of us in appealing to the European Union representatives to work along with us rather than at opposite poles.

Mr. RIES. We will do so.

Chairman GILMAN. Thank you, Mr. Ries.

Mr. Gejdenson.

Mr. GEJDENSON. Thank you, Mr. Chairman.

How does the creation of a distinct European defense identity

play into Russia’s present sense of unease about NATO expansion?

9

Does it actually mitigate because it gives the appearance of multiple fields of interests, or does it enforce the anxious state of the

Russian Government in seeing the West ever moving eastward and

giving them a greater feeling of insecurity?

Mr. RIES. That is an interesting question, Congressman. I am

thinking about it. I would think that the development of the European Security and Defense Identity per se would not be considered

to be an additional or grievous threat to Russia’s security interests.

It is taking place in the framework of NATO. After all, the European Security and Defense Identity is in a way the development of

a European capability that would take place, be separable but not

separate from NATO, and it is not changing, if you will, the boundaries of the NATO area of interest and operation. And in a sense,

because it is in the context of NATO, the NATO Permanent Joint

Council relationship with Russia gives Russia an ability to have a

dialogue with the Europeans with respect to European defense. I

have seen no indications that the Europeans are concerned to reassure Russia. I think that they are confident that the Russians understand that this capability is designed to deal with a variety of

largely international tasks. Short of war, it is not an offensive capability. So I would be surprised if it was a major concern for the

Russians.

Mr. GEJDENSON. There is apparently a recent agreement among

six Western European countries to work toward a common export

control regime. The impact on the United States seems to me to be,

you know, one more step in isolating America’s somewhat convoluted export policies in that there will be even more pressure

within the EU not to do business with the United States.

And I have referenced the actions taken by Daimler-Benz. Following the United States moving satellite export licensing from

Commerce to State, I think almost every one of the NATO foreign

ministers sent us a letter saying they would, where possible, now

buy components from outside the United States because they see

us as an unreliable supplier, and where there are no alternative

suppliers, they will seek to create alternative supplies.

And that ties into my next question, which I would like to combine here, and that is that the EU has been protectionist in places

like agriculture and hushkits and jet airframes and things. I believe in a good economy. If the economy stalls, it seems to me the

United States has to confront an EU that will be more focused on

protectionism than it has been during that time of economic expansion.

So in a combination of America’s own stupidity in how we formulated our export laws, partly due to Congress and partly to European protectionism, I think we could have some serious problems

in the critical fields where the growth of the American economy is

at stake. They are not going to do this across the board. So, in a

sense, it doesn’t galvanize American public opinion. It will be in

high technology and computers and jet engines and airframes and

critical areas where the future is. Do you see that as a problem?

Mr. RIES. Well there are a number of points in your questions,

and let me see if I can address, them in this way.

First of all, I think that we share an interest with the Europeans, a fundamental national security interest, in making sure

10

that technology that assists adversaries or potential adversaries is

adequately controlled. Obviously, there is the potential of countries

around the world developing missile systems and weapons of mass

destruction and other high-tech instruments that could threaten

our security, and they also threaten the security of the Europeans.

Both of us, therefore, have export control regimes, and through the

Wassenaar Arrangement we actually coordinate our export control

efforts.

Mr. GEJDENSEN. You are not seriously arguing that Wassenaar

is a real coordination? I mean, we didn’t have real coordination

during the Soviet era and COCOM where basically the Germans,

the French and others had, you know, one of those things you go

through on the subway without a coin, though, just a spinning rotation, whereas American export licenses could get bogged down for

months here? You are not arguing that the Europeans take export

controls with equal seriousness to which the Administration or

Congress does?

Mr. RIES. I am arguing that we both have similar objectives, and

the Europeans in doing this six-nation agreement are doing it for

similar objectives. The purpose is to try and focus controls and to

keep technologies out of the hands of countries of concern. I am not

a great expert, obviously would not want to speak to the actual effectiveness in specific cases, but what I would say is that we share

this goal of protecting sensitive technologies, which is why we have

the export control laws and regulations that we have and why they

have the ones that they have, and we do have a forum for coordinating.

We also, though, both sides, are interested in promoting transatlantic defense collaboration. The United States this spring announced a defense trade security initiative designed to simplify the

parts of U.S. export control regulations that inhibit or seem to inhibit defense collaboration and trade between the United States

and our European allies, and implementation of that defense trade

security initiative is proceeding.

I know that various participants in the satellite and other hightech markets are concerned that the export control rules that we

have and the way that we proceed to implement those rules inhibit

their commercial flexibility, and that is, I suppose, to be expected

when national security objectives have to interact with the rapidly

changing largely commercial market.

Your question, though, also turned to the point about whether

the EU is turning more or would turn more protectionist in the

context of an economic slowdown. There is always that risk, and

obviously a good part of our trade policy is to confront any hint or

aspect of such a turn that we should see.

I think it is fair to say that with respect to Europe, as well as

the rest of the developed countries, we have actually seen a gradual, if not dramatic, liberalization in trade barriers in the last decade. We feared very much that the creation of the single market

in Europe would lead to Fortress Europe and raising of barriers toward our exports in high-tech areas as well as others, and, in fact,

that really hasn’t happened.

The hypothesis that if the economy goes down, protectionism will

increase has been one that we have seen many times and I have

11

experienced several times in my professional career. I actually

think that there is an alternative explanation that could also apply

in that we have had such a period of rapid growth. Many of our

industries and many European industries in the high-tech area

have had trouble with keeping up with domestic demand. If there

actually is a slowdown in domestic demand, it is more likely that

high-tech industries are going to be looking more intensively at

international markets, and that might actually add to the steam

for further liberalization of international trade.

Mr. GEJDENSON. Thank you.

Chairman GILMAN. Mr. Secretary, does the present Administration view with alarm the French rhetoric articulated by both President Chirac and Foreign Minister Vedrine that implies that a motivating factor for European integration is a desire to challenge

America’s global preeminence? I know the French have never been

very helpful in these areas.

Mr. RIES. Well, Mr. Chairman, I think that we don’t in general

greet any ordinary sort of political rhetoric with alarm in Europe.

We have a very mature relationship very much based on close cooperation and understanding, and the President has that kind of

a relationship with President Chirac and Prime Minister Jospin,

and we understand that occasionally in politics the rhetoric gets

away from the reality, and so alarm is probably too strong a word.

I think it is true that some European elites have concern about

a world structure in which the United States has disproportionate

power relative to other players in the international community, and

we have done polling in Europe to try and understand this phenomenon. From what we can tell, the fundamental ties that unite

us and the fundamental interest and support for America, American values and American positions in the world really remains

quite widespread. There are ups and downs in attitudes that are

often tied to short-term, transitory events and that we do not think

that they presage some sort of serious undermining of the transatlantic relationship.

Chairman GILMAN. Well, Mr. Secretary, how widespread is the

anti-Americanism feeling among the European elite, the policymakers?

Mr. RIES. I think it varies by country. In no place is it fundamental or even dominant.

Chairman GILMAN. Mr. Secretary, Secretary of Defense Cohen

told a recent meeting of NATO defense ministers that the U.S.

viewed the creation of a separate EU defense capability outside of

NATO as natural and inevitable. Why has the Administration apparently abandoned our concern that the European Union was developing military structures separate and apart from NATO and

while many of us are concerned that that kind of a structure could

eventually erode NATO?

Mr. RIES. Well, I think, Mr. Chairman, we think that the European security and defense structure that is being developed is

being developed within the context of NATO, and we have long

supported the idea of a European Security and Defense Identity

that strengthens the alliance and contributes to our own security.

The Europeans are developing a rapid reaction force of about a

corps size that they could maintain in the field for a year or more,

12

and this gives them the capability to act when the alliance is not

engaged. That is the fundamental arrangement that was reached

last year here in Washington at the 50th summit of NATO, and we

think that the implementation and the development of this capability will strengthen NATO rather than weaken it. These forces

will be—there is one pool of forces that could be drawn upon by

NATO members for NATO contingencies as well as others.

The Kosovo conflict demonstrates quite vividly the asymmetry in

the forces available to NATO members and brought out quite obviously the need to build a bigger European capability. And the European security and defense proposals help make a case for that

strength and capability, and we are very much engaged with the

EU now in common planning, using of our planning assets to figure

out what kind of force they need, how that force can be developed

in such a way that it can be compatible with NATO standards and

forces and use NATO contingencies as well as times that NATO,

the alliance as a whole, is not engaged and Europeans choose to

act alone.

The long and short of it is we expect that the development of this

force will strengthen the alliance.

Chairman GILMAN. Well, essentially won’t they be calling on

NATO for the military forces that they plan to utilize under this

new structure?

Mr. RIES. Well, they will have their own military forces. They

may well call on some NATO assets, intelligence and communications assets, in specific contingencies, and that is part of what we

are working out, the ways that they can have access to NATO assets. And the whole package is—there are a variety of different

interfaces between the EU’s effort and NATO. We are talking between the NATO 19 and the EU 15. We are having discussions.

There are discussions being held between the EU, and its non-EU

European allies in the so-called ‘‘15 plus 6’’ format. The planners

are talking. There is really a great effort being made by both sides

to make sure that the development of the European Security and

Defense Identity strengthens the alliance as a whole.

Chairman GILMAN. Will this new EU rapid reaction force need

some aircraft or carriers, as some in the European Parliament have

suggested?

Mr. RIES. Well, it will certainly need aircraft, and part of the

project is to get individual member states to pledge assets that can

be used by this new rapid reaction force.

Chairman GILMAN. Well, some of it—there is question whether

some of these European countries who have been cutting back on

their military budgets are going to be able to manage this kind of

an arrangement financially.

Mr. RIES. And that is a fair question, and there are those in Europe who also question that. The Europeans are aware that they

need to build political support for that, and they need to bring

along their publics to support increased effectiveness in their military forces. The French are hosting a capabilities conference in November at which countries will come forward and talk about what

specific kinds of forces they would make available for this European security and defense program. In many cases the Europeans

use their military forces for a variety of different things, and they

13

have a lot of men under arms, some of which are not trained or

usable in a contingency.

Some of the increased capability can be accomplished by spending smarter rather than spending more, but it is likely that some

additional spending and certainly new weapons systems will need

to be procured.

Chairman GILMAN. Well, Mr. Secretary, what do aircraft carriers

have to do with the Petersburg test? Why aircraft carriers?

Mr. RIES. It is news to me they would build an aircraft carrier.

Chairman GILMAN. Well some of the EP members have been

talking about that.

Mr. RIES. I see. The French and British, of course, have their

own national aircraft carriers. I had not heard of any. There may

be speculation of that nature, but I don’t think that that is necessarily a part of the ESDI program.

Chairman GILMAN. Let me talk for a moment about the national

missile defense. The Administration contends it has consulted with

our allies on the ABM Treaty, beginning at a high level with Deputy Secretary of State Talbott’s meeting with the North Atlantic

Council back in 1999 and continuing with the sharing of intelligence estimates about the potential missile threat from North

Korea, from Iran and Iraq. Our European allies have criticized this

consultative process as having been neither sufficient nor timely.

Would you be able to comment on that for us?

Mr. RIES. I haven’t heard such criticism lately. The U.S. actually

undertook a very active program of consultations with the alliance

on national missile defense. We sent not only Deputy Secretary

Talbott, but a series of briefing teams to Brussels to brief, in

NATO, on the threat and to talk about our analysis of the implications of building on deterrence and a variety of other—the arms

control implications, why we see the ABM Treaty affected. We

talked to them. We gave them several, numerous briefings on the

substance of our conversations with the Russians.

So it is probably true that there were some comments at the outset, 1998, early 1999, of the kind you mention, but I think more

recently during the course of the past 12 months or so, they have

been really quite pleased with the degree and the kind of consultations we have engaged in.

I think it is fair to say that the Europeans share our analysis,

the President’s analysis, underlying his decision to postpone a deployment decision because they, on the basis of the briefings we

have given them and otherwise, feel that the technology wasn’t in

the position where he could make a judgment, and so there certainly is no divergence between us on the question of deferral of deployment for the time being.

Chairman GILMAN. Well, Secretary Ries, is there a uniform position on NMD among our European allies, and if not, what are their

different points of view on this proposal?

Mr. RIES. We could get that for you, Mr. Chairman. I am an

economist, so I would rather stay out of characterizing individual

countries.

Chairman GILMAN. If you could submit a response for the record.

[The response by Mr. Ries is available in the appendix.]

14

Chairman GILMAN. Can you tell us, how does a recent decision

by our Nation to intervene and support the euro comport with Secretary of Treasury Summer’s statement that a strong dollar is an

important national interest?

Mr. RIES. I believe the Secretary reaffirmed that as he—we have

a firm and consistent policy of not commenting on exchange rate

values, and if anyone says anything, it is the Secretary of the

Treasury, and so consistent with that, I would stay away from

characterizing our views. I think that the Secretary’s statement on

the occasion of the intervention along with other G–7 countries

stands on its own, and I would rather keep it there.

Chairman GILMAN. With regard to the euro being now at low levels relative to the dollar that it was before the joint American, European and Japanese intervention, was our decision to participate

in the intervention ill-considered?

Mr. RIES. Mr. Chairman, I refer you to the Treasury for details

on what it is we did and why, but clearly I would not think that

it was ill-considered.

Chairman GILMAN. If the value of the euro continues to collapse,

will we continue to intervene and support it?

Mr. RIES. I am really not able to comment on any plans we might

have for intervention or—at the State Department we leave all

such matters to the Treasury Department.

Chairman GILMAN. Is there any discussion between State and

Treasury on this since it is an important policy matter?

Mr. RIES. Well, clearly the Treasury is in touch with the White

House.

Chairman GILMAN. Have they been in touch with your office?

Mr. RIES. Not my office specifically, sir.

Chairman GILMAN. With the State Department?

Mr. RIES. I can’t say.

Chairman GILMAN. Would you have any recommendations to

make?

Mr. RIES. On the matter of currency intervention?

Chairman GILMAN. Yes, with regard to the Euro.

Mr. RIES. We do not comment on currency values.

Chairman GILMAN. Who in the State Department would comment on that?

Mr. RIES. I don’t think you would find anyone. Even the Secretary would be loath to comment on that.

Chairman GILMAN. You mean to say that no one in the State Department would comment on the Euro and maintaining its ability

to finance the European community?

Mr. RIES. I will be glad to comment on the Euro itself. It is the

question of intervention and exchange rate values. The exchange

rate, the exchange rates themselves are what we do not comment

on.

Chairman GILMAN. Would it be left separate and apart from any

policy consideration with regard to the Euro? It would seem to me

that the State Department would want to be and should be involved in that kind of consideration. Do you feel that there is no

role for the State Department in that kind of a policy decision?

Mr. RIES. No. Obviously, the role of the State Department is in

the formulation and implementation of foreign policy and to the exVerDate 11-MAY-2000 12:44 Feb 22, 2001 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\WORK\FULL\H101800\69981 HINTREL1 PsN: HINTREL1
15

tent that a policy or the implementation of a policy by the Treasury

Department involves foreign policy, yes, clearly we should be involved.

Chairman GILMAN. Well, I would hope your department would be

involved as we look to what is happening to the Euro and what we

should be doing and whether we should intervene or not intervene.

It would seem to me that when the State Department engages in

trade discussions or any concessions that there should be some consideration with regard to the Euro, and I would hope that you

would encourage the Department to become more actively involved.

Let me turn a moment to northern Ireland. In legislation now

being moved in the British Parliament, the British government has

watered down the most important recommendations of the Patton

Commission on policing in northern Ireland and that is a very key

consideration in the continued peace process. What position is the

State Department taking on how that legislation fits in with the

Good Friday Accord’s requirements that the British government

should advocate complete implementation of the Patton Commission’s recommendations?

We even sent over the former head of DEA and a former head

of our New York State Police, Mr. Constantine, to assist the British

government in implementing the Patton Commission report. It

then went to the House of Commons and not too much was done.

As a matter of fact, it eroded some of the Patton Commission’s recommendations and had it shipped over to the House of Lords.

Could you tell us where that stands, what the State Department

is trying to do to make certain the Patton Commission report is

going to be properly implemented?

Mr. RIES. We—as you know, Mr. Chairman, we have long supported the process of developing peace and reconciliation in northern Ireland. The President has been second to none in his efforts

to find the solution and support the Good Friday Accords. We

have—as you allude to, we made available expertise from the

United States to help Chris Patton in his work.

The peace process in northern Ireland is at a delicate stage. It

is important that the involved institutions function, and it is important that all the parties stay in the government of the province

and we support the British and Irish governments in their efforts.

In order that they have the flexibility to bring all parties to the

table, we are not and have not specified a position on the individual issues before—on the table between the parties.

I note that the legislation has not been passed. It is still under

discussion. There is no final resolution of a policing bill. My understanding is that Parliament is expecting to pass it sometime in November. So it is really at a delicate stage.

Chairman GILMAN. It is delicate to the entire peace process; and

I would hope that your department, particularly your office, would

weigh in with the British government to see what can be done to

implement the Patton Commission report. We met with Mr. Patton

not too long ago, and he was very much concerned about the implementation of the report which we considered to be a very substantial and very important report to reform the policing mechanism,

the RUC in Northern Ireland. We would welcome your review of

all of that.

16

Mr. RIES. Thank you very much.

Chairman GILMAN. Just one or two more questions. Have we received any indication as to whether the EU or any of the European

countries plan to contribute to Plan Colombia to help combat the

serious narcotics problem there as we move ahead to authorizing

funding for Plan Colombia to help President Pastrana and meet

these threats to his country.

Mr. RIES. I am not sure we have the specific numbers here. Yes,

several European countries are planning to make contributions in

support of Plan Colombia. I know the Spanish have pledged a substantial sum of money and several others have. The Spanish hosted

a pledging conference in July; and my understanding is that they

are hosting another one, I believe, this month or next on Plan Colombia. And several other European countries are interested in financing various aspects. Europeans may actually take up buttressing programs that support the objectives of Plan Colombia

while not necessarily Plan Colombia itself. That seems to be the attitude of some countries. I do know that the Spanish have been

steadfast in their interest in supporting Plan Colombia.

Chairman GILMAN. What about the EU itself? Does the EU plan

to support Plan Colombia?

Mr. RIES. The EU Commission, the European Commission, which

is sort of the executive arm of the EU, has buttressing assistance

programs in Colombia as I suggested.

Chairman GILMAN. And they will be providing funding to assist?

Mr. RIES. They do provide funding, and presumably they will be

doing more. That is an issue for the next pledging conference.

Chairman GILMAN. I have about one last question, Mr. Secretary.

I understand that the Deutsche Telekom recently took concrete

action to block the deployment of U.S. developed wireless technology in Europe. That technology is called Code Division Multiple

Access, or CDMA. Specifically, Deutsche Telekom recently ordered

Westel, which is a Hungarian wireless operator that was planning

a trial U.S. technology to, and I quote, terminate any act, actions

and measures regarding the utilization of CDMA, including testing,

close quote.

The Westel trial is the first major step of CDMA in Europe.

Deutsche Telekom is a majority owner of Westel. Were you aware

of that situation, Mr. Secretary, and what will the State Department do to ensure that American technologies have access to the

European wireless marketplace?

Mr. RIES. The specific situation in Hungary I have only recently

been aware of. Let me come back to that via the overall policy.

Mr. Chairman, in my period of time in London we worked very

hard to make sure that the rules for so-called third generation

wireless were technology neutral. Our view has been that there are

various technologies including CDMA, as you mentioned, and

TDMA and other kinds of technologies to increase the bandwidth

and speed with which data is put over mobile networks and we

thought that we should not be in a position of choosing a winner

technology. So we fought in the international telecommunications

union to get a technology neutral specification for third generation

wireless.

17

We are now in the phase of implementation of third generation

wireless, and it is our feeling equally that the implementation

should be technology neutral on the part of governments. We will

follow up in this case that you mention to ensure that there is no

improper influence brought to bear by the German government or

others to prejudge a technology which—where the marketplace

should really be the judge.

Chairman GILMAN. Mr. Secretary, we have been reading some

comments in the press over the last few days regarding a secret

agreement between Vice President Gore and Russian Prime Minister Victor Chernomyrdin regarding arms sales; and, if true, we

would be dismayed to think that the Vice President accepted without protest a letter from Russian Prime Minister Chernomyrdin instructing him to keep their agreement secret from third parties including the Congress. If that be the case, it would indicate a disturbingly casual disregard by the Administration for Congress as

an integral branch of government under our constitutional system.

I don’t expect the Vice President to be responsible for something

a Russian official may have written in a letter, but I think the Congress and the American people have a right to expect their Administration to clarify that Congress is not a third party that can be

kept in the dark and, if that is the case, it is the U.S. Constitution

that should be the controlling legal authority. Are you familiar

with this situation at all?

Mr. RIES. I am afraid not, sir. As you recall, Russia and things

Russian have been hived off of the area that we are responsible for.

Chairman GILMAN. Have been what?

Mr. RIES. The European Bureau, the bureau that I work in, is

not directly responsible for Russian affairs.

Chairman GILMAN. Which bureau is responsible for Russian affairs?

Mr. RIES. Well, there is an organization that is associated with

the Secretary’s office that handles Russian affairs.

Chairman GILMAN. What organization is that, Mr. Secretary?

Mr. RIES. It is the Office of the Special Representative for Russia

and Newly Independent States.

Chairman GILMAN. Who is in charge of that organization?

Mr. RIES. Operationally Steve Sestanovich.

Chairman GILMAN. And they consult with you with regard to any

Russian problems?

Mr. RIES. Well, surely if they involve the Europeans, yes.

Chairman GILMAN. Would this, do you think, involve Europeans,

this recent contention with regard to a secret arms deal with Russia?

Mr. RIES. I am not familiar with it in detail. It is—as you described it, it is not self-evident that it would.

Chairman GILMAN. I would hope you would familiarize yourself

with it. It appeared in the Washington Times, it appeared in the

New York Post within the last few days, and it is something that

we are very much concerned about.

Mr. RIES. I will take that back, sir.

Chairman GILMAN. I would hope you would take a look at it and

get back to your Committee with regard to any information you

may be able to provide.

18

Mr. RIES. We will do that.

Chairman GILMAN. Thank you very much.

Unless there are some further discussions from our staff, the

hearing is adjourned; and I thank you for the appearance.

Mr. RIES. Thank you, sir.

[Whereupon, at 11:10 a.m., the Committee was adjourned.]

(19)

A P P E N D I X

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE BENJAMIN A. GILMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF NEW YORK, AND CHAIRMAN, COMMITTEE ON

INTERNATIONAL RELATIONS

This morning’s hearing on Developments in Western Europe will provide the members of this Committee the opportunity to review our policy toward that region

of the world in which our core national interests are most engaged. The majority

of our allies are there, the bulk of our international trade and investment is with

the countries of this vital region, and, of course, it is with these countries that we

share our fundamental values and institutions.

Although our overall relations with these nations are excellent, it would be a mis- take to not take stock of them and assess those areas where we differ and disagree.

This is particularly true as the members of the European Union continue to work

on the ‘‘European Project’’ creating the bonds and institutions that have already led to a single European Currency, as well as efforts to forge a common foreign and security policy that are the main attributes of a single sovereign state. The implications of these developments may be profound for the citizens of our own country,

but in this time of unprecedented peace and prosperity, are not much discussed outside the bounds of policy making circles and our institutions of higher learning. The European Project has not been without its own difficulties. The dramatic plunge in the value of the euro since it was launched last year is evidence of these

problems, as is the ongoing difficulty in agreeing to enlarge the European Union to

include some of the countries of central and eastern Europe that have long regarded

EU membership as a cementing of their status as independent states sharing in the

free-market and democratic traditions embodied in the countries of the West.

Attitudes among Europe’s elite toward America are also shifting in the aftermath of the Cold War. Comments by officials of one of our closest allies suggest for instance that Europe should be concerned about tendencies in this country to pursue

‘‘neo-unilateral’’ policies, and that European integration is necessary to provide a counter-weight to curb the exercise of American power. How widespread these critical attitudes are among the countries we look to as partners for cooperative efforts

to meet those challenges that confront all of us is a significant question which we

hope our witness from the State Department will be able to address this morning.

I would like to welcome Principal Deputy Assistant Secretary Charles Ries

(REESE) of the Bureau for European Affairs, and thank him for his appearance at

this hearing. Mr. Ries transferred to the Bureau earlier this year from our Embassy

in London where he served as the Minister Counselor for Economic Affairs. Prior

to that assignment, he served at our Mission to the European Union and has served

in a number of interesting positions related primarily to our trade and economic

policies.

Mr. Ries you may proceed with your testimony which will be entered in full in

our record.

PREPARED STATEMENT OF CHARLES RIES, PRINCIPAL DEPUTY ASSISTANT SECRETARY

OF STATE, BUREAU FOR EUROPEAN AFFAIRS, U.S. DEPARTMENT OF STATE

Mr. Chairman, I am pleased to have this opportunity to meet with you today to

review US objectives and challenges in Europe. The policy landscape shifted dramatically during the 90’s, as the fall of the Berlin Wall, the collapse of the Soviet

Union, the break-up of Yugoslavia and a new phase in European integration created

a very different set of problems and opportunities. We believe that we are well posiVerDate 11-MAY-2000 12:44 Feb 22, 2001 Jkt 000000 PO 00000 Frm 00023 Fmt 6601 Sfmt 6621 F:\WORK\FULL\H101800\69981 HINTREL1 PsN: HINTREL1
20

tioned now, at the beginning of this new American century, to protect American interests in Europe, and in partnership with Europeans around the world, through

the changes we have put in place: an enlarged NATO; a deeper US-EU relationship;

and a strengthened OSCE. The great lesson of the 20th century is that the destinies of North America and Europe are joined. If Europe is at peace, America is more secure. If Europe prospers, America does so as well. In an increasingly integrated and globalized world,

our security, prosperity and democracy depend on each other, so our work in Europe

is not complete. Old lines of division have given way, but we still must complete

new networks of cooperation. And, although no power today menaces Europe or the

US, terrorism, weapons of mass destruction, and environmental degradation are just

some of the critical challenges that must be addressed, and are best addressed by

Europe and the US together. Thus, our goal is to build an enhanced relationship

with Europe that is:

• a relationship with Europe as a whole, not just the western half.

• a relationship in which defense and security remain priorities, but in which

economic prosperity and addressing global threats receive increased attention.

• a relationship that considers conflict prevention and crisis management as

priorities for cooperation.

• a relationship where the US and Europe share, risks and burdens, but also

the responsibility to find solutions to threats and crises beyond Europe, and

• a relationship that recognizes the realities of the new global economy.

Three Opportunities

Building this new relationship means addressing three opportunities. Our first opportunity is in Europe itself—ensuring the continuing integration of the continent, so that conflict in Eastern Europe becomes as inconceivable as conflict in Western

Europe and hope for a better life is shared across the continent. This means working with our partners to complete the integration of Europe’s democracies into

NATO and the EU, strengthen our partnerships with Russia and Ukraine, and

transform southeastern Europe—including Serbia—from a primary source of insta- bility to a fully integrated part of the transatlantic community, and improve relations between Greece and Turkey—the key to lowering tensions and increasing co- operation in the Aegean. The second opportunity is between Europe and America—strengthening and deep- ening the bonds between our societies in ways that make a positive, tangible difference in the daily lives of our citizens. Our societies are more integrated than at

any time in our respective histories. More than 14 million workers on both sides

of the Atlantic owe their livelihoods to our $1 trillion trade and investment relationship, the largest and freest in the world. European companies are the largest foreign

investors in 41 of the 50 states, and American companies continue to invest about

as much in Europe as they do in the rest of the world combined. This is why we

view the Euro not as a threat but as a sign of our continuing partnership with Europe.

But the bonds are not just economic. The North Atlantic Treaty Organization

(NATO) is as vibrant as ever, and more countries ate clamoring to join. We have

an interest in more balanced burden- and responsibility-sharing. That is why we actively support the Partnership for Peace and the candidate countries’ efforts to reform and modernize their military forces. And that is why we support a European

Security and Defense Identity that strengthens the trans-Atlantic relationship and

enhances Europe’s defense capabilities.

Our third opportunity extends beyond Europe and America improving our ability

to deal with issues in the wider world that neither of us, acting alone, will be able

to confront effectively. When we pull together, the !transatlantic community is the

engine of progress on every world-scale issue. When we pull in different directions,

the engine is less efficient.

The Challenges Ahead

How do we pursue this relationship with Europe? First and foremost, we need to

work in Europe’s southeast comer. Our immediate challenge there is to help build

democracy, which is the key to our strategy for the;,region. Open, integrated democracies built on the rule of law don’t occur overnight, but when democratic governments emerge, the international community needs to nurture them.

The swearing-in of Vojislav Kostunica as the democratically-elected president of

the Federal Republic of Yugoslavia is an extraordinary victory for the people of

Yugoslavia, who have clearly chosen democracy and a future in Europe over dictatorship and repression. Along with our European Allies, we look forward to engaging

21

President Kostunica’s government and to bringing Belgrade into the international community. A democratic Serbia committed to the rule of law—the establishment

of which President Kostunica has made one of his primary goals—will be a welcome

addition to Southeast Europe. President Kostunica has affirmed adherence to the

Dayton agreement for Bosnia and to UNSCR 1244 on Kosovo. A democratic Yugoslavia can provide a new basis for strengthening regional cooperation and advancing

democratic and economic development throughout the region. We expect Yugoslavia

to meet the same standards on human rights, rule of law and cooperation with the

international community, as applied to others. Key to the success of this effort will be doing our part to consolidate the demo- cratic changes in Belgrade. We want to show the people of Serbia there is an immediate democracy dividend. We are working in close cooperation with our European

Allies to this end. One of our first steps has been to take steps to lift the oil embargo and the flight ban, as President Clinton announced on October 12. Lifting sanctions accords with the implicit promise we made when we imposed them—that a

return to democracy by the people of Serbia would be rewarded. Moreover, sanctions-lifting is a promise we have made explicitly over the past weeks, as we sought

to strengthen the opposition during the FRY electoral campaign. We will also ensure

that such measures do not allow Milosevic supporters to continue the systematic

theft of resources that have marked the last thirteen years. In that vein, we will

continue to enforce a ban on travel to the US by top members of the Milosevic regime, and keep in place measures that help the new government deter a looting of

the national patrimony. We will also review our restrictions on Serbia’s participation in international financial institutions as Serbia makes its democratic transition and meets its international obligations. Our positive engagement with Croatia, which led to that country’s turnaround in cooperation with The Hague, will serve as a valuable model.

We should continue and, as appropriate, increase assistance to meet humanitarian needs and strengthen democracy in the FRY. We are consulting with Congress in the context of the appropriations discussions, which are still ongoing, and

the fact that the new government is still in the process of forming to determine appropriate levels of assistance. We welcome the initiative of the European Union to

invite the European Commission and the World Bank to lead in evaluation of needs

and coordination of economic and financial assistance to the FRY.

Europe is leading the partnership to reconstruct Kosovo. Europe and Canada have

82 percent of the troops on the ground there. According to the World Bank, Europe

has contributed 63% of total donor assistance—excluding humanitarian assistance— to Kosovo in 2000. The US has pledged 14%. In Kosovo—and through the Stability

Pact for Southeastern Europe—we and our partners have acted decisively on our conviction that Europe’s future will be shaped by the democratic integration to which most people in the region aspire rather than by the demagogic exploitation

of ethnic and other differences that have brought untold tragedy to this region over

the past decade. On March 30 in Brussels, we agreed with our European partners

to launch $2.3 billion-worth of ‘‘quick-start’’ programs to get these countries back on

their feet: to rebuild transportation, water and energy infrastructure; to reopen borders; and disarm local militias. Out of that $2.3 billion, the US share is $77.65 million—only about 3.2 percent. The United States has also nurtured the growth of regional cooperation among the frontline states through the Southeast European Cooperative Initiative to combat cross-border crime, facilitate regional trade and transportation and lower barriers to commerce and investment.

While we have accomplished a great deal in the region, we face very real risks

and tensions at present. Ethnic hatred remains very much alive in Kosovo, and Albania and Bosnia are fragile. Important elections in the region will be held in the

next 60 days. They must succeed. We are committed to working with our European

partners to transform this region from a primary source of instability to a fully integrated part of the transatlantic community. We welcome their contribution as part

of a more balanced partnership, where the US does not always carry the biggest

burden. But, we must have the resources available in the future to continue to make

our contribution, to respond flexibly and swiftly to changing circumstances, and to

continue our SEED programs to stabilize, transform and integrate Bosnia and the

remainder of Southeast Europe into the European and transatlantic mainstream.

There is much work to be done at NATO and on European security issues. We

will continue to work with the members of the European Union to implement this

year’s decisions on the European Security and Defense Identity (ESDI). Kosovo demonstrated the clear gap between US and European military capabilities. ESDI and

NATO’s Defense Capabilities Initiative are the way for Europe to take more responsibility for its own defense. A stronger European military contribution will make the

Alliance stronger, lift some of the burden on the US to act in crises, and make the

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US-European relationship more of a partnership, while in no way eroding the transatlantic Alliance.

We need to keep NATO’s door open to new members, perhaps as early as the Summit in 2002, through the Membership Action Plan and our bilateral security assistance programs (FMF and IMET). We should help the nine candidates—Estonia,

Latvia, Lithuania, Romania, Bulgaria, Slovenia, Slovakia, Macedonia, and Albania—become the best candidates they can be, Furthering NATO enlargement con- tinues the process of developing a Europe that is whole and free, and consistent

with our security interests. At the same time, membership of new candidates will

be decided on the basis of their contributions to the Alliance.

We must continue to deal with threats posed by weapons of mass destruction (WMD) and the means of their delivery with our European allies and partners. The

Allies recognized that proliferation can pose a direct military threat to Allied territory, populations and forces. This was the starting point of the NATO summit’s WMD initiative. On that basis, we have consulted closely with our Allies on development of a national missile defense system. The President’s decision in September to

defer deployment reflected these consultations as well as the three other key issues

of the threat, technology, and cost effectiveness. The consultations with Allies confirmed that WMD and missile proliferation remains a serious concern to the Alliance and a threat to which Allies must respond militarily. At the same time, Allies want to preserve deterrence and arms control as a means

of responding to the WMD threat. We have made clear to our Allies that we need

to continue to deal with the issue of missile defense. We will need to continue to

consult with them about how to cooperate on common missile defense efforts which

meet our and their security needs and maintain the unity of the Alliance in this

critical area.

We want to strengthen the Organization for Security and Cooperation in Europe (OSCE) by working closely with the Chairman-in-Office, the Secretary General and member.states and improve its ability to address emerging crises through rapid deployment of civilian expertise using innovative tools such as REACT. OSCE missions in many countries, funded through PKO funds, help alleviate conflict and reinforce human rights practices. And we are using OSCE as, an important tool in our

fight against trafficking in women and children. Our relationship with the European Union is a multifaceted one. We strive for

ways to work effectively with the EU on common challenges worldwide and to reduce barriers against us. Two-way trade between the US and EU is robust and we

are each other’s largest foreign investors. Yet significant trade disputes between us remain stubbornly unresolved. We will be making strenuous diplomatic—and public

diplomacy—efforts to find a basis for opening European markets consistent with world trade rules. We also will use the early warning and problem prevention principles agreed upon at the Bonn US-EU Summit to prevent regulatory and other

minor differences from becoming major disputes. Our ultimate goal remains building

a barrier-free, simple, transatlantic marketplace that sets world standards for protection of consumers, the environment and labor.

But our relationship with the European Union reaches far beyond trade and economics, just as the Union itself extends beyond its origins as the European Coal and

Steel Community. Together, we continue to knock down global economic barriers

and advance peace in Southeastern Europe, the Korean Peninsula, and the Middle

East. Together, we promote nuclear safety in Ukraine and Russia, respond to natural disasters, attack trafficking in women in Eastern Europe, and defend human

rights. We fight infectious diseases—including AIDS—in Africa, arrest child pornography on the Internet, and develop a global early warning network against communicable diseases. And together, we prevent the proliferation of weapons of mass destruction and fight criminals, terrorists and drug traffickers wherever they may be.

We continue to advance US interests in the Eastern Mediterranean. We are working with the parties toward a bicommunal, bizonal settlement on Cyprus. We will

continue to encourage Greece and Turkey, two allies, to develop closer ties between

them. We will work with Turkey to put it in the strongest possible position to attain

its European aspirations in the economic and security spheres. But our tasks are

made more difficult, not just in the eastern Mediterranean, but in the Caucasus and

Middle East as well, by actions that alienate a key regional ally, the Republic of

Turkey.

In Northern Ireland, we support the efforts of local leaders and the governments

of Ireland and the United Kingdom to achieve a lasting political settlement. The US

contribution to the International Fund for Ireland promotes private investment and

free enterprise, while the Walsh Visa Program provides needed vocational training

and multicultural experience to disadvantaged youth that might otherwise turn to

violence.

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We have also made enormous progress in correcting the wrongs of the past. The

Department worked closely with Deputy Secretary of the Treasury Stuart Eizenstat

in reaching an international agreement to provide payments to individuals who

served as slave laborers for German firms during World War II. We are on the verge

of completing a similar agreement with Austria. We estimate that over a million

people, including several thousand Americans, are eligible for payments under these

arrangements. In addition, we played an important role earlier this month at the

Vilnius Forum which furthered international efforts to assure the return of Nazilooted art works to their rightful owners.

Through the Northern Europe Initiative, we seek a Baltic Sea region in which its

countries have developed a vibrant and multifaceted culture of cooperation in key

areas of political, economic, and social development, characterized by positive, constructive Baltic-Russian relations, greater Russian engagement with its Baltic Sea

neighbors, and continued regional engagement by the Nordic countries and Germany. Small amounts of SEED, FSA, and D&CP funding leverage support from our

Nordic partners to pursue an increased number of NEI projects and greater involvement of Russia. Here I’d like to acknowledge the support that this committee, and

particularly Rep. Gejdensen, has given to our initiative with the passage this summer of H.R. 4249, the ‘‘Cross-Border Cooperation. and Environmental Safety in

Northern Europe Act of 2000.’’ This Act recognizes the importance of promoting regional cooperation in the Baltic Sea region and, most importantly, the need for continued funding to do this important work. We appreciate this support.

The bottom line: our partnership with Europe does real things for real people. It

generates jobs. It stimulates investment. It reduces the threats we face from crime,

terrorism, nuclear arms proliferation, drugs, and disease. It increases our security

and cuts the cost to the American taxpayer of achieving that security. When it

works, it enables us to achieve goals we could not achieve alone. When it does not,

stalemate and crisis can result. But making it work requires the resources—the personnel, facilities, and funding—to pursue expanding US interests.

QUESTION FOR THE RECORD FOR PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR EUROPEAN AFFAIRS CHARLES RIES FROM REPRESENTATIVE BENJAMIN GILMAN, CHAIRMAN, HOUSE INTERNATIONAL RELATIONS COMMITTEE

Question:

Is there a uniform policy among our European allies on the U.S. NMD effort?

Answer:

Although many of our European Allies expressed initial skepticism and even opposition to NMD1, there is no ‘‘uniform’’ view among them. We also believe that their

final views on this issue are far from set.

Starting last fall, we initiated a regular pattern of briefing the Allies on NMD,

the threat posed by missile proliferation, and our discussions with the Russians on

ABM Treaty issues and further strategic arms reductions. These consultations have

been useful in building greater appreciation among the Allies about the extent and

nature of the threat and the need to respond to it. This has already led to more

openness among Allies to consider the issue of missile defense.

At the same time, many European Allies want to preserve deterrence and arms

control as means of responding to the WMD threat. They continue to be concerned

about the implications of abrogating the ABM Treaty, believing:that doing so could

undermine what they see as a major pillar of global strategic stability. Allies also

continue to stress the importance of our maintaining a dialogue with Russia on this

subject.

We have made clear to our Allies that we will have to continue to deal with missile defense. We plan to continue our pattern of briefing European Allies and partners on this issue, as well as maintaining dialogue with the Russians. We also intend to consult with them about how to cooperate on common missile defense efforts

which meet our and their security needs and maintain the unity of the Alliance in

this critical area.

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