WILLIAM MARSH RICE UNIVERSITY
JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY
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In connection with my participation in the Baker Institute's annual conference at Rice University on October 16, 1997, I hereby agree as follows:

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THIS IS A RUSH TRANSCRIPT.

MR. DJEREJIAN: (In progress) -- who has taken a leading role in the internationalization of Rice University and the Baker Institute's role in that major effort. Ladies and gentlemen, help me welcome Dr. Malcolm Gillis (sp).

MR. GILLIS (sp): Muy buenos dias. Rice students, faculty, staff, board members, and all friends of the university, welcome. Welcome to the third annual conference of the James A. Baker III Institute for Public Policy.

Yesterday, last evening, we proudly dedicated the new James A. Baker III Hall, the new home of the Baker Institute. Baker Hall also provides state-of-the-art facilities for the school of social sciences, particularly for the departments of economics and political science. And we hope that while you're here, you'll be able to take a little time and wander around the rest of the Rice campus and explore some of its singular beauty.

We've chosen Autry (sp) Court, a basketball arena, as the venue for this conference because of the extremely high level of interest in this event, not only interest by Rice students and faculty but other constituencies as well. And I'm proud to welcome 2,491 participants from other area universities, colleges and high schools. From the University of Houston, there are 400; from Texas Southern, 200; Houston Community College, 200; Prairie View, 200; and Houston Baptist, 200. (Applause.)

We're also joined by 900 students, teachers and administrators from the Houston Independent School District and nearly 300 high school students from various private schools around Houston. Welcome to you all. (Applause.)

With us today are also numerous representatives of Houston's distinguished (consular?) corps, as well as leaders of our local and state government. Your presence, all of you, your presence here today attests to the importance of these discussions and to their relevance for the coming century as we enter an era of increased international interdependence, accelerated technological achievements, and a flowering of ethnic and cultural pluralism.

We are indebted to Secretary Baker, Ambassador Djerejian and our faculty and the staff of the Baker Institute for advancing Rice University's leadership in addressing critical public policy questions facing not only this country but the entire world. From its inception, the Baker Institute has sought to build bridges, to build bridges between the world of ideas and the world of action,

by bringing scholars and policymakers together in an interdisciplinary setting to focus on major public policy issues.

Last year, the Institute's second annual conference dealt with domestic policy challenges. This year our attention is directed toward America's foreign policy priorities on the eve of the 21st century.

We're joined today by individuals with unusually keen appreciation of the connection between ideas and action. Each is recognized for his contribution in articulating and defending his nation's interests around the world while keeping sight of wider human interests. And each is distinguished for leadership during times of crisis.

Secretary James A. Baker served as secretary of the treasury in the Reagan administration and as the 61st secretary of state in the Bush administration. Among his countless noteworthy achievements, he helped build the international coalition of nations that expelled Saddam Hussein from Kuwait. And most recently, at the request of U.N. Secretary General Kofi Annan, Secretary Baker is serving as the personal envoy of the secretary general in the effort to settle the conflict in the Western Sahara.

As secretary of state during the first term of the Clinton administration, Warren Christopher was actively engaged in the pursuit of peace in such deeply troubled regions as Bosnia and the Middle East. During the Carter administration, Mr. Christopher led the negotiations for the release of the American hostages in Iran.

Dr. Henry Kissinger served as national security adviser to President Nixon and as secretary of state in both the Nixon and Ford administrations. For his role in the negotiations to end the Vietnam War, he shared the Nobel Prize for Peace in 1973. His tireless quest to bring peace to the Middle East was responsible for the coining of the now-famous phrase, shuttle diplomacy.

Our keynote speaker, Mikhail Gorbachev, served as president of the Supreme Soviet of the USSR. His unusually keen grasp of the geopolitical ramifications of the information revolution was one of the factors leading him to launch a far-reaching program of reform of Soviet policies and institutions. The impact of his vision and his foresight is still being felt today, not only throughout Europe but throughout the world.

We are grateful to Mr. Bernard Shaw for moderating this morning's panel discussion. Mr. Shaw, as you know, is one of the most highly respected news anchors in television today. His reporting conveys a clarity and a balance that is esteemed around the world.

So under the auspices of the Baker Institute, Rice University aims to be in the forefront of the discussion, the debate and the development of public policy for the coming century. As individuals, as a university, and as a nation, we all have a great stake in our country's relations

with other countries and peoples of the world. We hope that today's deliberations will be both
thought-provoking and fruitful and that we'll go forward, each of us, from this conference with a
much-enhanced understanding of the challenges and the opportunities that lie ahead.

Thank you. (Applause.)

MR. DJEREJIAN: Ladies and gentlemen, the Baker Institute annual conference is part of a broader program which emphasizes scholarly research. Another equally important part focuses on a pragmatic approach to actual policy issues in our country and abroad.

One example is in the international arena of conflict resolution. The Institute recently hosted the fourth round of the Western Sahara talks under Secretary Baker's United Nations mandate. This long and intractable problem was brought closer to a viable solution by the tangible progress made here for the very first time by the parties agreeing to a code of conduct for a referendum to determine the future of the Western Sahara.

On the domestic front, the Baker Institute is working on a range of urban issues in collaboration with the University of Houston Center for Public Policy, including regional governance, economic development and public opinion polling.

Again, we hope that today's conference will yield some new ideas and pragmatic solutions to the foreign policy challenges we face on the eve of the 21st century. We certainly have four extraordinary foreign policy practitioners in our program today.

It is now my honor to invite our distinguished moderator and our distinguished participants in the panel discussion on United States foreign policy priorities on the eve of the 21st century to come forward. As Malcolm Gillis mentioned, their illustrious careers are well-known and outlined in more detail in your program. Unfortunately, for personal reasons, the honorable Cyrus Vance, 57th secretary of state, is unable to be with us today.

Now please join me in welcoming Mr. Bernard Shaw, principal anchor of Cable Network News, CNN, who has graciously and, let me say, courageously accepted to be our moderator.

Thank you, Bernie. (Applause.)

Our distinguished panelists will now come to the stage. The honorable Henry Kissinger, the 56th secretary of state. (Applause.) The honorable Warren Christopher, 63rd secretary of state. (Applause.) The honorable James A. Baker III, the 61st secretary of state. (Applause.)

After the panel discussion, there will be a short break, as indicated in your program, which will be followed by a question-and-answer period. Ushers are available to pick up your written questions on a card distributed to you.

It is now a very special privilege and honor to announce the participation in our dedication

conference of a truly outstanding American who is not listed in your program. He has generously taken the time to be with us today. His contributions, ladies and gentlemen, to world peace and security will be emulated by practitioners and studied by scholars for many, many years to come. Ladies and gentlemen, please join me in welcoming the 41st president of the United States of America, the honorable George Bush. (Applause.)

PRESIDENT BUSH: Thank you all very much. (Applause.) Thank you for this welcome. Thank you. Please be seated. May I -- it's a thrill to be here. And may I salute Dr. Gillis and for the hospitality of Rice for this marvelous institution. To tell you something you probably already know, something that everybody affiliated with this great outfit knows, and that is that in Ed Djerejian, you have one of the very best people that ever served our country -- 33 years, I believe it was -- and now doing a great job here. (Applause.)

And, of course, it's nice for me to be back on the Rice campus. This is a little-known fact. For a fleeting year or two, I was an adjunct professor at Rice. I had to ask what adjunct was. They said, "You can come, but you don't get paid." So I left after a year or two. (Laughter.)

Yesterday was a great, wonderful day for Houston and for this Institute with the dedication and today's conference with this marvelously distinguished panel. It will hopefully spark a constructive and ongoing debate about the direction of U.S. foreign policy as we go into a new century, indeed, a new millennium.

I always hesitate to refer to people as statesmen, because Harry Truman once said a statesman is a politician who's been dead for 10 years. (Laughter.) But these gentlemen drawn here to this Institute are very much alive and they are true statesmen. And both Henry Kissinger and Warren Christopher and my friend Jim Baker fit that -- and Jim, too -- fit that description, statesman, really in the finest sense of the word.

And each serves, I emphasize this, with integrity and with honor. And just as important, their invaluable contributions to American foreign policy helped to shape a period of history when freedom triumphed over tyranny. And as such, they are ideal candidates for the discussion at hand this morning, examining U.S. foreign policy heading into the 21st century.

The topic is well worth exploring. Observers of the political debate taking place in America today, as they will no doubt acknowledge, foreign policy is not an issue of primary concern or interest with the American people. We saw this in various campaigns last year, which focused almost exclusively on domestic matters, and not much has really changed since then.

But that makes the value and work of the conferences such as this one all the more important. And it may not make a lot of headlines, but those of us who share a concept of active and engaged U.S. leadership in the world have an obligation to stand up and be counted and continue to make the case why America cannot turn inward as some would have her do.

The Cold War is over, and great credit goes to the three men here in various capacities. And the Soviet bear has receded into history, but threats remain. And some of these threats are old; ethnic hatreds in the Balkans or tensions in the Korean Peninsula. And some are new, like nuclear proliferation and international terrorism and the just relatively recent phenomenon of Islamic fundamentalism.

And the problem is, on these and many other issues, particularly international trade, we have a strange and unsavory coalition rearing its head, comprised of elements of the political left and indeed the political right. And it's an inward-looking and, in my opinion, backward-thinking view of America's role in the new era. And in short, they think it's time for America to pull back, to come home, to put, quote, "America first," unquote.

And I am happily unemployed these days, but I sometimes wonder if the current proponents of isolationism and protectionism realize that freedom prevailed in the Cold War, and I wonder if they understand that the superpower struggle ended the way it did largely because we led. And just as important, I wonder if they appreciate that freedom and democracy are on the move around the world today with new markets emerging, involvement by private sector -- many leaders of that here today -- along with the government.

And so as we seek to secure the peace that was won at great cost and to further the cause of democratic capitalism, we need to be debating -- we need not debate whether we should be pulling back and ducking our responsibilities. That, in my view, is a given. But we ought to debate how we can engage our allies and friends around the world in a strategic dialogue that enhances the prospects of peace and prosperity.

And to that end, I commend Jimmy Baker for holding this conference, this great Institute for what it will do in the years ahead. I also want to pay my respects to your honoree today, Mikhail Gorbachev. Gorbachev was given the same order I was. He was given what Churchill called the order of the boot. But nevertheless -- (laughter) -- I think, and I'd be interested what these distinguished statesmen feel -- I think history is going to be very, very kind to Mikhail Gorbachev as the years go by.

I wish you well in this conference. You are lucky to have my friend Bernie Shaw here to keep these fighting tigers from demolishing each other in what I know will be a lively discussion and a lively debate. And congratulations to Rice and to Baker Institute for this marvelous institution.

Thank you all very, very much. (Applause.)

MR. DJEREJIAN: Ladies and gentlemen, it is now my pleasure and honor to introduce yet another major participant in our program who is also not listed in your program but who has taken the time from her intense schedule to deliver a message at our dedication conference, for which we are very, very grateful. Ladies and gentlemen, the 64th secretary of state of the United

Page 6

States of America, the honorable Madeleine Albright. (Applause.)

SECRETARY OF STATE ALBRIGHT: (From videotape.) Secretary Baker, Secretary Kissinger, Secretary Vance, Secretary Christopher, President Gillis, Ambassador Djerejian, members of the Rice community and distinguished guests, I deeply appreciate your invitation to attend the third annual conference of the Baker Institute. Unfortunately, by the time you hear this, I'll be in Buenos Aires with the president, probably trying to explain why I sang a parody of "Don't Cry For Me, Argentina" in Asia last summer.

Ten months ago, immediately after learning I would be nominated for the job I now hold, I began calling every living former secretary of state for advice. It was the smartest thing I could have done. In personality and background, our recent secretaries differ a great deal one from the other, as Americans tend to do. But each is a source of wisdom and experience.

From the dramatic breakthrough with China a quarter century ago to the Camp David Accords to Operation Desert Storm to the Dayton agreements, to Secretary Baker's most recent diplomatic success, each has made his mark on history. Each has been true to the bipartisan tradition of American leadership. Each remains a national asset. Each deserves the respect and gratitude of our people and of the world.

So to the virtuoso quartet of secretaries gathered today in Houston, I say thank you and please stay near the phone. I also want to extend a special word of greeting and respect to this year's recipient of the -- (inaudible) -- prize. There are those in public life who spend their entire career accumulating political capital by doing the safe and popular thing, never taking risks, never bucking the tide. Once in a great while, a figure arises who has the courage to put all his capital on the table and the vision to challenge and transform the conventional wisdom in a cause that is right. That is when history truly is made.

President Gorbachev -- (speaks Russian). For all you have done to free the world from the bitter rivalry of the Cold War to bringing your people into the open air of democracy to reduce the risk of nuclear war and to protect the global environment, I salute you. And I look forward to your continued contributions in years to come.

Last February, in my first public appearance as secretary of state, I had the pleasure of speaking at the Baker Institute. I sought to make the case that even in this era of relative prosperity and peace, Americans have an enormous stake in events overseas. I stressed, for example, the need for timely U.S. participation in a convention to ban chemical arms, a goal which, with bipartisan support, we have since achieved.

In the coming months, we will make other critical choices. Congress will vote up or down on our request to renew the president's traditional fast-track negotiating authority. The Senate will decide whether to grant or to withhold consent to our plan to enlarge NATO. The Comprehensive Nuclear Test Ban Treaty should be considered. And we will face challenges to

our policy of active support for Russian democracy, our strategic dialogue with China, our effort
to remain an honest broker in the Middle East, and our collaboration in building a peace in Bosnia
that can last.

These issues literally span the globe and may seem disconnected from each other, but in
truth they are part of a pattern. So we have a strategic choice to make as we prepare to enter the
new century, whether to lead or to shy away from leadership, whether to harness the forces of
political and technological change that are transforming the world or to try in vain to insulate
ourselves from them.

Inspired by the example and building on the achievements of our predecessors from both
parties over many decades, the Clinton administration has made its choice. We see an historic
opportunity to bring the world closer together around basic principles of democracy, open
markets, the rule of law, and a commitment to peace. We believe that if America continues to
lead and if we continue to have bipartisan support for that leadership, we can overcome the many
dangers which still exist and help build a future of greater security, prosperity and freedom than
any generation has known.

In that effort, we need and seek the support of all Americans. We value especially the
counsel and backing, when they judge we deserve it, of our former secretaries of state and others
who have earned the lasting respect of our people. And we are deeply grateful for centers of
excellence such as the Baker institute, where the legacy of leadership is honored and the torch of
American engagement is passed from the leaders of yesterday and today to those of tomorrow.

Thank you very much, and please send me a transcript of the whole event. I sure wish I
could be with all of you. (Applause.)

MR. DJEREJIAN: Thank you very much, Secretary Albright.

Bernie, over to you.

MR. SHAW: Thank you, Ed. Ladies and gentlemen, my first assignment with you this
morning is to say, with pleasure, here now a true seeker of global peace, James A. Baker III.
(Applause.)

MR. BAKER: Bernie, thank you very much. Thank you, ladies and gentlemen. Let me
begin by saying how delighted we are that all of you could join us this morning for our discussion
of foreign policy priorities on the eve of the 21st century. I am particularly pleased that we have
so many young people in the audience; young people not just from Rice but from other local
universities and from high schools in and around Houston.

We are, of course, especially honored, as President Bush told you, that Mikhail Gorbachev
will be sharing his own expert perspective on international affairs at the conclusion of our panel

discussion this morning. As Secretary Albright mentioned in her message, our panel includes two of the most distinguished American statesmen of our era. Henry Kissinger, to my right -- it's the first time Henry has ever been to my right. (Laughter.) And Warren Christopher to my left. It may look to you like Henry's to my left, but he's really to my right.

Ed Djerejian told you we're disappointed that Cy Vance couldn't be here for personal reasons. We will miss his insights today. Cy, like Chris, was, of course, a secretary of state for a Democratic president, and he would have given partisan balance to our proceedings, and we're sorry that Cy couldn't be with us.

We are committed here at the Baker Institute to strict nonpartisanship, a fact that I think was underscored in Secretary Albright's message. We're, of course, also privileged, Bernie, to have you with us. Bernie is here to ask the hard questions, as he used to ask each and every one of us when we were in office and he was doing his work as anchor for CNN, and he's here to ride herd on us when we begin to ramble. Bernie has already enjoined me to keep these initial remarks brief, and I'm going to take that injunction to heart.

It's my hope that today's discussion will be both general and specific in nature. There are a number of broad trends out there, like economic globalization, like the rising role of culture, like the ongoing transformation of the Soviet bloc, which, in my opinion, at least, are clearly shaping the international landscape today.

These broad trends, though, I think we have to recognize, are not implacable and impersonal forces. They are trends that are manmade. And the foreign policy challenges that they represent in terms both of threats but of opportunities are both specific and urgent. The globalization of the world economy, for instance, something that President Bush mentioned, clearly a positive trend; clearly something, in my view, at least, that offers real hope for higher living standards here and around the world, not lower. But continued progress to this end demands a continued commitment by the major economic powers of the world.

President Clinton's recent request for fast-track authority, as Secretary Albright just mentioned, is a very welcome sign of that commitment. It is very important that the Congress give the president this fast-track trading authority. Secretary Albright said in her message that it was a traditional authority, and indeed it is traditional. It sounds like something special, but it isn't.

Even though, assuming that the administration receives that fast-track trading authority -- it is unclear whether it will or not, I must interject -- but even if it receives that authority, it's still going to take some very, very sensitive and protracted negotiations with potential trading partners in Latin America particularly and in East Asia that will have to bring to fruition the possibility of additional economic globalization, at least as far as the United States is concerned.

That's going to take sustained commitment by the administration. It's going to take

sustained commitment by the Congress of the United States. It's going to take sustained commitment by the American public. We're not going to get there with the occasional rhetorical flourish.

The rising role of culture in foreign policy is a very important trend, in my view. I would broadly define that to include any and all movements that are based on communal identity, whether that movement toward communal identity is based on religion or whether it is based on ethnicity or whether it is based on language.

Of course, the rising role of culture is a far more ambiguous trend than the trend toward globalization. There exists today an arc of crisis comprising -- an arc of crisis in the world comprising much of North Africa, the Middle East, the Balkans, the Caucasus and Central Asia, which is really a seasoned cauldron of ethnic animosity and religious extremism.

Conflict in this region, either current or potential, is going to, of necessity, in my view, be at the top of our foreign policy agenda and be there for the foreseeable future. The Arab-Israeli dispute is merely one, if a particularly important one, but merely one case in point. But conflict elsewhere is also going to test the United States, and it's going to test the broader international community. Those disputes will often take the form of internal conflict within states.

The enormous difficulty of dealing with such conflict has been highlighted, of course, by the experience of the United States and the international community in Bosnia, a problem that Chris had to face and to deal with. And here, it seems to me that the Dayton Accords have achieved a certain fragile measure of success.

But we have to begin to ask ourselves what our exit strategy is. How and when will the United States be able to extricate itself from the situation in Bosnia? Are we really there for the long haul, or are we really going to engage in an effort at nation-building? But this is the kind of thing that I'm talking about when I talk about that particular trend.

The third important trend forming today's foreign policy environment is the ongoing transformation of the Soviet bloc, including, of course, the transformation that's taking place in Russia herself. Despite the economic and political difficulties that these countries still face, I think we ought to all remember the situation back there when I was secretary of state, for instance, that existed, let's say, in 1989 or 1990.

If anybody had asked you if Russia would elect a president twice in a reasonably free and fair democratic election, you would have said, "You're crazy. It's not going to happen." And yet it has happened. So there has been some progress, particularly some political progress there. I think the task as far as Russia is concerned for the United States and our allies is to make sure that what progress has been made is irreversible and do what we can to assist the case for additional progress.

Page 10

The expansion of NATO is in the headlines today. It was the lead editorial this morning; any of you that might have had a chance to look at the New York Times. There's a lot of difference of opinion on this issue of the expansion of NATO. I don't think there's much difference of opinion among the three of us up here at this table. But it is a very, very important issue. And the expansion of NATO to include Poland, Hungary and the Czech Republic at a minimum, I think, is an essential part of the strategy of the United States and her allies in trying to see to it that reform succeeds in the former Soviet Union and in Central and Eastern Europe.

The opponents of expansion of NATO, of course, tend to focus exclusively on the military aspects of the North Atlantic Alliance. They forget that NATO has, since its inception, played a very, very vital political role. It is also a political alliance. That role is exemplified, I think, by the way in which it reinforced the development of a democratic, prosperous and peaceable Germany firmly embedded as a member of NATO. I think that the alliance can play a similar role in Central Europe.

Fast-track trade authority, then, Bosnia and NATO expansion are just three specific issues that are linked to these broader trends that I have mentioned, three specific issues linked to those trends that are shaping the international landscape. There are, of course, a lot of others, and I hope we'll be able to cover a number of them this morning.

But before I conclude, I want to add a cautionary note. We Americans, I think, sometimes forget just how powerful we are today. We have no serious military rival anywhere around the world. Our economy, of course, remains the world's largest and most competitive, and this in the face of what people were predicting as recently as the late '80s, when I was secretary of the treasury. Everybody said, "You're losing out to Japan. Japan's going to rule the world. The American economy is in decline."

Well, here we are today, not only the largest but the most effective and efficient and competitive economy in the world. So our military situation is unrivaled. Our economy is really unrivaled. And our political system, no matter how messy our democracy may look from the inside -- and it looks really messy a lot of times -- has proven to be one of the most durable political systems in history, and we know it works. And that's why a lot of other countries around the world want to embrace democracy.

But all of this strength, I think, has an ironic consequence. It tempts us, on the one hand, to withdraw from the complex and contentious arena of world affairs, just as President Bush just mentioned. But on the other hand, it tempts us also to involve ourselves capriciously on the basis of whatever might be the lead story in the morning's news or on -- Bernie, I might say, on CNN.

And so what we really need to think about, I believe, is an approach to international engagement that avoids both of those extremes; that is, withdrawing completely or capriciously engaging every time a conflict comes up and we begin to get pushed in that direction by someone who thinks this would be an extraordinarily humane or proper thing to do.

Page 11

Such an approach, of course, would necessarily be selective. It would seek to identify our
national interests clearly. It would seek to strike a balance between competing American
objectives. And oftentimes in our relationship with another country, there are many competing
American objectives. China, of course, is a case in point. And it would attempt to match
practical means with achievable ends.

So what I hope our session this morning can do is to apply that test to some of the key
challenges confronting us on the eve of the 21st century. I'm looking forward to Chris and
Henry's thoughts, not just on the issues that I've raised in these brief introductory remarks, but on
other equally important and urgent matters, matters that face American foreign policymakers
today.

So thank you all again, ladies and gentlemen, for being here. I hope you enjoy the
program. I think we will enjoy it up here. And it's my real pleasure and privilege to introduce to
you now a truly great lawyer and an outstanding public servant, the nation's 63rd secretary of
state, Warren Christopher. Chris? (Applause.)

MORE

x x x (Applause.)

MR. CHRISTOPHER: Thank you, Jim, and good morning. I'm just delighted to be here in Houston in my first visit to the Rice campus and my first time at the James A. Baker Institute. I came in from California yesterday, Jim, and I want to claim credit for bringing this weather with me. I may take it along when I go back, too.

MR. BAKER: Come back.

MR. CHRISTOPHER: A few years ago, there was a great deal of theorizing about what the post-Cold War world would look like. Some feared that poverty in the developing world would create chaos and instability. Some feared claims that history had ended; the great ideological battles of human conflict had essentially been resolved once and forever.

Some predicted that the cultural differences would be the next great source of
international conflict, that civilizations would clash and foment instability. Others claimed that
state sovereignty was dead, that old alliances would wither and the United Nations would emerge
as the central organizing force of global cooperation.

Now, each one of these ideas attracted a great many adherents because they were simple
and clear and because they pointed to very real problems and opportunities. But none of them, it
turned out, could explain the world and all of its complexity or predict the future and all of its
possibilities in the new era that President Gorbachev did so much to make possible.

Page 12

We still hear calls for a one-word or one-phrase description of our foreign policy perhaps arising from a nostalgia-driven need for a bumper-sticker word like "containment." I believe that such simplicity is neither possible nor desirable. Instead, in the first Clinton term we sought to define a set of objectives attuned to the particular challenges and goals of the new era.

I thought that looking at these objectives would be the best way to understand the priorities and challenges as we saw them as we sought to lay a foundation for the American diplomacy in the 21st century to key into the subject of this program, the priorities as we approach a new millennium.

The first of these key objectives is to build an undivided, peaceful and democratic Europe. The most important efforts in this regard are to pursue NATO expansion, to maintain as cooperative and positive relationship as we can with Russia, and to work closely with the European Union.

As Secretary Baker implied, failure to ratify the enlargement of NATO would be for the United States to miss an enormous opportunity to anchor Central Europe firmly into the West. The community of democracies built in Western Europe with United States leadership can and definitely should be extended to the East. We think we'll all be safer and more secure as a result of this expansion.

Beyond the enlargement of NATO, there are deeper issues that must be considered as we move into the next century. The principal danger to the security of NATO members in the future does probably not come from threats to their territory but threats to their interests, such threats as nuclear proliferation, terrorism and the disruption of oil supplies. The defense of members' territory, of course, will always be important to NATO. But since NATO's territory is not now threatened, shifting NATO's emphasis in an evolutionary manner to a defense of common interests is now a strategic imperative for the alliance.

To do so, NATO must be prepared to form coalitions of the willing that can project power beyond the territory of NATO. The coalition to turn back Saddam Hussein that President Bush and Secretary Baker did such a splendid job of putting together exemplified one such approach of the coalition -- (inaudible). And, of course, Bosnia is the current example.

For the future, into the next century, our relationship with Russia is and will be fundamental. Certainly no relationship received more attention from President Clinton and our administration in the first term. Despite many warnings to the contrary, we felt confident that if we were steady and clear in pursuit of NATO expansion, ultimately Russia would see it in her interest to establish a constructive relationship with the alliance. As we go forward, implementation of the new NATO-Russia agreement, which is called the Founding Act, will require both responsible action and imagination on both sides.

The second objective that we defined was to anchor America's position as a stabilizing

force in a more integrated, more open Asia-Pacific community. Starting with the first APEC summit in Seattle, our purpose was to give our policy toward Asia a prominence equal to that of our policy toward Europe. Ambassador George Kennan noted that today's friendly relationship between the great powers is without precedent in the history of recent centuries, and he stressed that it is absolutely essential that it be cherished, nurtured and preserved into the future.

Nowhere is this good advice from Ambassador Kennan more trenchant than in our relationship with China, where there is the greatest risk of confrontation. Agreeing with Secretary Baker that the best way to find an enemy is to go looking for them, I believe we should emphatically reject calls to contain or isolate China.

We had a number of reasons, including some very constructive advice from Secretary Kissinger, to seek to have a better relationship with China when we finished our first term than we did when we began. I believe we definitely achieved that goal, but there's a lot of work to be done all across the board. And the summit in two weeks in Washington with Chinese President Jiang Zemin gives us a good opportunity to keep up the momentum that we were able to build during the end of our term.

Working through APEC and with Japan as the cornerstone, our deep involvement in Asia is more important, I believe, than ever before. We need to deal with the fiscal crises in Southeast Asia, to press for more reform in Vietnam, to defend our security interests in North Korea, and above all, to maintain a strong military presence in Asia.

A third objective that we pursued was to try to bring peace and democracy to areas where our national interests are involved. From time to time, but as Secretary Baker indicated, definitely not every time, the United States, in the wise exercise of our superpower status, needed to take on some of the world's most dangerous problems.

In Bosnia, where the United States relationship was essential to bringing about the Dayton Accords, we continue to be the most imorptant player. I believe that the success of the Dayton Accords to peace in Bosnia was critical, but it's about more than just peace in Bosnia. It's about our vitality and credibility in Europe as a whole. With such high stakes, I believe we should not precipitously withdraw our forces from Bosnia.

In the Middle East, the search for peace requires an active role by the United States at the highest levels. Our national interests and our emotional ties are just too deeply engaged for us to step aside and watch things unravel there. Secretary Kissinger and Secretary Baker both made major contributions in the search for peace in this region, as did Secretary Vance, my mentor and friend who I'm very sorry could not be with us today.

In the future, there'll be other areas where our involvement will be critical, even though it will be unpleasant and costly at times. Certainly we should not gallop off, as Secretary Baker indicated, to deal with each of the world's problems. But we must remember how much the world

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depends upon our leadership when it's necessary.

The fourth objective that I'll mention is the pursuit of a vigorous economic (state craft?). Accentuating the economy as a foreign policy issue was one of the dominant themes of the first Clinton term. Going into the 21st century, we need to remain at the center of world trade, promoting liberalized trading systems with Europe, Asia and South America, and increasing our investment in trade opportunities around the world.

The United States needs to take responsibility to protect the international system to see it through dangerous moments like the Mexican peso crisis. And as Secretary Baker said, the president needs to have a renewal of his traditional fast-track authority to negotiate trade agreements in the interest of the United States in the future.

The fifth and final objective is to address the growing family of global threats. The dark side of the theme of globalization that we hear so much about is the growth of new threats with global characteristics. By this I mean threats like weapons proliferation, terrorism, corruption, narcotics, crime, information sabotage, environmental damage and overpopulation.

What characterizes these threats is that they know no boundaries. Usually they cannot be addressed either on a bilateral or even a regional basis. They must be tackled through the cooperative action of nations on a worldwide basis. This gives new impetus to the efforts we made to try to update and reform our international institutions.

One of the things we need to notice in this period is these global threats are particularly dangerous for new democracies. As President Clinton has said, for the first time in our history, more people in this world live under democracy than under dictatorship. But that could change. It is far from inevitable. In the coming years, we may have to concentrate on preserving the progress that we've made by defending these fragile democracies against this new family of global threats.

It's fundamental to achieving these five objectives that we obtain the necessary resources from Congress. For a decade, Congress has been cutting back the funds for international affairs year after year to the point where appropriations have been cut 50 percent in real terms in a decade. In speeches and testimony in my last few months in office, I described the resources problem as America's most pressing foreign policy issue.

In this post-Cold War era, diplomatic readiness will prove to be no less important than military readiness. I'm glad to say that in our first 10 months in office, Secretary Albright has built on this theme. And with growing bipartisan support, I think we've begun to turn the corner on this resources issue. The common theme runs through the objectives that I mentioned; namely, the theme of American leadership, a point that Jim Baker eloquently made.

It's a basic feature of the post-Cold War world that the success or failure in the

[L.C.]

international arena depends upon the United States. That's the lesson of every crisis in the last four years, from Bosnia to Haiti to the Middle East to North Korea, Taiwan Straits, the Mexican peso crisis. Each case exemplifies the imperative of American leadership.

I'm glad to be here at the James A. Baker Institute particularly because I believe it can play a significant role in ensuring that the United States fulfills its responsibility, the responsibility that providence has destined for our great country. With the kind of leadership that it has from Secretary Baker and former Assistant Secretary Ed Djerejian, I'm just sure that the Baker Institute will be in the forefront of undertaking these responsibilities.

Thank you very much. And now I'm pleased to introduce my distinguished predecessor, the 56th secretary of state, a man who really, I think, added great luster to the role of secretary of state and will always be remembered, Secretary Kissinger. (Applause.)

MR. KISSINGER: Chris, I appreciate these remarks very much. Jim, thank you for the opportunity to speak to this distinguished group. If you had been wondering what Jim has been whispering to me while others have been speaking, it is that "If you go one minute beyond 10:00, a trap door will open up and swallow you." (Laughter.)

For those of you who think that you're hearing a Harvard accent -- (laughter) -- I must point out that since my native language is German, I can go for 10 minutes without (placing a verb?). (Laughter.)

The fascinating thing, when you have served in this office, is -- there are two aspects to it. One, each of us have administered a department with one special peculiarity, which is that most of our subordinates think they know foreign policy better than we do. Indeed, most of the foreign service officers believe -- no, they're convinced -- that none of us could have passed the foreign service exam -- (laughter) -- and that we entered by what they call lateral entrance, which they resent deeply. (Laughter.)

But the second thing is that, however different one's approach when one enters, one comes to be united in a realization that the national interest of the United States is not something that can be invented in every administration. The national interest of the United States in the search for peace and progress in the world has some fundamental aspects to it. And so we are driven back to certain core principles.

Some of you may be aware of the fact that President Clinton was my second choice in two elections. (Laughter.) Nevertheless, on NATO expansion, on fast track, on the (main lines of?) China policy, I am in fundamental agreement with what the administration is doing, because -- and I do not believe that foreign policy can be recycled every four years on a partisan basis.

So do not be surprised if I tell you that on all the issues that have preceded, that my preceding speakers have raised, I'm in agreement with the specifics of the policy. And so let me

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make a few philosophical observations to tie this together.

The United States right now is undergoing a huge emotional and philosophical adjustment in its approach to foreign policy. Until the end of World War II, we really did not need a foreign policy in the traditional sense. There's no other major country in the world that was insulated from world affairs or that was populated entirely or almost entirely by immigrants or that believed that its institutions were so unique that the whole rest of the world should copy them, no matter how different they were.

At the end of World War II, we got projected into world affairs with an atomic monopoly, with close to 50 percent of the world GNP. So, for a long time, foreign policy was a question of allocation of resources, and we did a tremendous -- we performed a tremendous role. Without us, the post-war world would surely have been different.

Then, I would say, starting with the Nixon administration, we came up against the limitations of our reach and we had to learn that we could not do everything simultaneously. And many of our bitter debates was that the allocation of our possibilities came up against the perfectionism of the American soul and that this led to enormous domestic debate.

So, in a way, the foreign policy that was started had to be started in the Nixon administration and has been carried out by all of our successors, with the variations that are, of course, necessary. It's the foreign policy with which we now have to deal. And I would say we face something unique for us. We don't have a single enemy. We don't have unlimited resources. And yet we are indispensable to the conduct of foreign policy.

We have, I would say, three distinct categories of issues into which the various problems that have been mentioned fit. One, the relationship between democracies in the Atlantic area and in the Western Hemisphere. In those regions, military conflict on any significant scale is almost out of the question.

In those regions, we can practice the arts in which we are particularly skillful and which we have perfected through our national history; the development of large cooperative projects, the development of a global economic system, of free markets and democratic societies. And it is the reason, above all others, why the countries of Eastern Europe must be able to join NATO and not be put into a never-never land where they cannot join this great adventure of building the democratic society and developing the heritage of freedom, human dignity and free markets that is so peculiarly the creature of our civilization.

And the relationship of Russia, historically torn between the opportunities of Asia and the limitations of Europe, is one of the great challenges of that period. And if it is possible to make Russia realize that with 11 time zones, they need not feel claustrophobic, and that if Austria could develop a thriving economy with no resources, Russia, with huge resources, should be able to do it, then this whole pattern of foreign policy that for hundreds of years has spelled European

conflict will disappear.

The second is the one that Jim Baker has described as the -- (inaudible) -- arc of cultural conflict that is going on from North Africa into Central Asia, through the Middle East, which actually far transcends the Arab-Israeli dispute. And this is something for which we have very little national experience to come up against people who prefer victory to stability and whose hatreds are more dominant in their lives than their human relationships.

It's very difficult for Americans to come to grips with the hatreds of the ethnic conflicts and of these cultural differences. And the huge gap that develops between the fact that there is a globalized economy and the political loyalties which are national and ethnic, that is a second set of challenges.

The third set of challenges is the one that we see most strongly in Asia. We tend to speak about cooperative relationships in the world and of global economies. But the real problem is that some parts of our lives are global -- economic, informational and so forth. But some of them are national.

And the clash between these two comes to expression periodically, as we see it, for example, today in the reaction to the economic crisis in Southeast Asia, where the crisis is caused in part by global economic factors and by local mistakes and where then the consequences have to be carried out by political leaders who are not in the habit of making themselves dispensable for the sake of an abstract economic system. That clash is going to become an important challenge.

But the most important problem is that in Asia, the United States faces something for which we have, again, no historic experience. The relation of the Asian countries to each other -- Russia, Japan, China, India, Southeast Asia, Korea and so forth -- is more similar to the relation of the European countries to each other in the 19th century to what we are used to in the 20th century in NATO and the Marshall Plan and so forth.

Between them, strategic conflict is not impossible. And while I don't think there's necessarily going to be a war, they look at each other in terms of the predominance of one over the other. In such a relationship, the United States cannot be the dominant country but it can be the balancing country, and the relationship of the United States to the key Asian nations must be one in which we keep greater options than they have towards each other, so that we can play a balancing role. And for this reason, good relations with China are essential.

I have just attended a debate which really shook me deeply, because people were talking there about China as if it were our next enemy. They were saying, "Our policy has failed." There are two aspects in China. One is the internal evolution in China, in which many things occur with which we do not necessarily agree. The second is the foreign policy of China in which six presidents, nine secretaries of state and I don't know how many security advisers all unanimously have concluded that dialogue with China is essential for stability and progress and that it's not a

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[LC]

favor we do to China, that it's not something that we must turn into domestic politics.

It is easy to milk applause lines by throwing out phrases that create the impression that we can change the domestic structure of all people. We ought to remember, the Chinese have existed for 5000 years and they believe that for 4800 of those, they managed without significant advice from the United States. (Laughter.) So at least one has to (leave some time?).

So let me conclude by quoting an alleged Chinese proverb. I say alleged, because I think the Chinese are laying more proverbs on us (that exist?) and they make them up as they go along. (Laughter.) The proverb allegedly goes like this: When there is turmoil under the heavens, little problems are dealt with as if they were big problems and big problems are not dealt with at all. When there is order under the heavens, big problems are reduced to little problems and smaller problems should not upset you.

Whatever our differences were in specific policies, I think every secretary of state has learned that the toughest thing is to make sure he's dealing with big problems, that he's dealing with the important and not with the urgent. And that, in the end, unites us all. And that, in the end, is what provides continuity and hope for America.

Thank you very much. (Applause.)

MR. SHAW: Ladies and gentlemen, and to our audience on C-SPAN, we have heard a former president of the United States say, quote, "We have a strange and unsavory coalition rearing its head." President Bush referred to the left and the right in our great country.

We heard Secretary Baker warn that we should be careful lest we fall into the thought and be tempted by the prospect of withdrawing from the contentiousness of world affairs. And conversely, he warned against capriciously engaging in conflicts that come up.

We heard Secretary Christopher bemoan the fact that in a decade, Congress has cut appropriations 50 percent in real dollars. And we've just heard Secretary Kissinger say the United States is undergoing a huge emotional and philosophical approach to its foreign policy.

Gentlemen, what are we to think -- what is going to happen when you consider the remarks we've heard from this stage and consider a survey by the Pew Research Center which was just released in Washington last week, a survey of post-Cold War attitudes in the United States, a survey which concludes, quote, "Most Americans fundamentally doubt the relevance of international events to their own lives." Majorities, sometimes large majorities, say events in Europe, events in Mexico, events in Asia, events in Canada, quote, "have little or no impact on them."

My question to these distinguished panelists is, with this attitude, how can a president of the United States lead? How can a Congress advise and consent? How will the United States

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continue to command respect and lead, given this attitude? Gentlemen? Mr. Baker.

MR. BAKER: Okay, Bernie. Let me answer you by citing a real-life example that we faced when President Bush was in office and I was secretary of state, and it had to do with the Persian Gulf War. There was no support -- zero, absolutely none -- for the idea that America would go to war in the Persian Gulf.

President Bush painstakingly built that support on the part of the American people. He did so in a number of ways; first, by using the bully pulpit of the White House to explain the national interests of the United States that were at stake, but also by putting together an unprecedented international coalition of countries that would support America's efforts to eject Iraq from Kuwait. So he was in a position after that to go to the Congress and say, for instance, "Senator, you're not going to support me in this action, and yet the president of Ethiopia is going to support me?" And that was a very powerful argument.

The point I'm making is I think there is some latent support out there on the part of the American people for engagement where the national interest is sufficiently explained to them and where our leaders undertake to do what is required to build that support. But I would say -- I would go even further than what I said in my opening remarks, and I would say that the number one challenge facing -- the number one foreign policy challenge facing America today is maintaining the internationalist political tradition that we have followed since the end of World War II. And it's very difficult.

It's going to take a lot of work by people such as the people in this audience, who understand the issues, people such as ourselves, former policymakers, present policymakers. And we have to explain that our involvement and our leadership role in the world does a number of things. One, it promotes peace and stability. No country will argue with that. Everybody knows the United States doesn't want anybody's turf. When we are involved, we do promote peace and we promote stability.

But more importantly to the average American, our involvement in the world translates into direct economic benefit to Americans, particularly our involvement with respect to international economic matters such as trade.

MR. SHAW: Secretary Christopher.

MR. CHRISTOPHER: I think, Bernie, that this shows the weakness of polls. It was Shimon Peres who once said that polls are like perfume. It's all right to smell them, but you shouldn't drink them. (Laughter.) One of the things I think a secretary of state has to do is be very careful not to be over-awed by polling data, because, as Secretary Baker indicated, so often our job is to do the educational work necessary.

But a fundamental reason, I think, why that poll is inaccurate is that foreign policy is a lot

like electricity. When it's on, we take it for granted. We don't understand its importance. But let all the electricity be turned off because of a storm or something and we soon realize how vital it is to us. And I think foreign policy is in that same category.

I've got a great deal of confidence in the good sense of the American people when faced by an issue and reasonably well informed on it. Former President Bush spoke so eloquently here about the left-right coalition creating a problem in this country, and that certainly is a real danger. But one of the issues that tested that most recently was the vote in Congress for the extension of most-favored-nation treatment -- that is, normal trade treatment -- for China. We all worried about that vote, thinking it might be very close in the House, might be turned down in the House and have to go to the Senate.

But when the votes actually came in, it showed that the people of the country understood the importance of our continuing engagement with China. There had been enough education to make that possible. So I've got a great deal of confidence over time that if we do our educational job well, if the Baker Institute and other institutes do their job correctly, we're going to be able to manage this situation in the future.

MR. SHAW: Secretary Kissinger.

MR. KISSINGER: Well, I can't add much to this. I would like simply to point out a few instances to add to what Jim Baker said. In 1937, the Congress passed three neutrality acts that prohibited any American relationship with any combatant during the war, during any war that might break out. President Roosevelt made a speech for which he was lambasted in which he talked about quarantining aggressors.

My point is, within three years, despite overwhelming congressional majorities, he managed to take a united country into the war, and that was almost entirely due to his leadership and to his bringing home to the American public what was at stake.

In the more recent past, when President Clinton took office, I had a conversation with him about the importance of NAFTA. And he showed me a poll which was really very unfavorable to NAFTA. And for whatever reason, surely not primarily because of my conversation with him, but he concluded that he would back NAFTA. And he fought for it and he managed to receive bipartisan approval. In fact, Jim and I appeared with him in the East Room of the White House to make public statements. So a lot depends on our leadership.

Where we have failed, in my view, is this. Our political contests have become too much focused on the day-to-day popularities. I always say, when I started out advising politicians, they would ask me what to think. Now they ask me what to say. And that way you get focused too much on, if you forgive me, on the evening news and what the commentators say.

So the obligation of our national leaders is to raise (the sights?). And the role of

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institutions like the Baker Institute is to keep the dialogue going at a high level. I think the American public will support what is necessary for the survival of this country and the growth of freedom.

MR. BAKER: Let me just add -- Bernie, let me just add two more examples. There are any number of them out there, and I'm glad Henry mentioned NAFTA, because I think that was a defining moment, just like the aftermath of World War I. We had a real debate at that time -- and Chris, of course, was leading the charge -- on whether America would remain engaged with the world or whether we would withdraw from the world, whether we were going to exert our leadership or not. Fortunately, it came out the right way.

We've had at least two more of those during the Clinton administration. One was the very difficult issue of the Mexican peso crisis and what the United States would do. And there was a lot of opposition to that. It was terribly politically unpopular to make that loan to Mexico, but it was the right thing to do. The same thing is true with respect to ratification of the Chemical Weapons Convention here just within the last few months.

What all of these things indicate to me is that one critical factor in all of this is we must find a way to have some bipartisanship with respect to these very difficult issues involving whether America will or will not remain engaged with the world.

MR. KISSINGER: Could I make a comment on this last one before love reigns supreme on this panel? (Laughter.) I would say just as the reaction of the administration to the peso crisis was right in educating the American public, the reaction of the administration to the Southeast Asia crisis did not have the same stature, because the United States took the position, "This is far away. We are not going to do anything ourselves for Thailand," thereby creating the impression that we talk about a globalized economy but then we ask the regions to solve their problems on their own. And it has led to a tremendous wave of regional nationalism in Southeast Asia. We couldn't do what we did for Mexico, but I think symbolically we should have done more.

MR. SHAW: Secretary Christopher, did you have a comment?

MR. CHRISTOPHER: I think that -- not to extend this too far, but on that last point, the Halifax Summit tried to improve the international capacity to deal with crises like the Southeast Asia fiscal crisis at the present time. I think the indications are that the International Monetary Fund, through its enhanced capacity coming out of the Halifax Summit, is dealing pretty effectively with the currency crisis in Southeast Asia. And so the United States is not called on, at least up to this point, to take the same kind of steps that we did with respect to Mexico.

But I do think that we have an obligation, as I said in my remarks, to the international trading system. And I think the United States will be there if and when it's necessary in Southeast Asia, as well as elsewhere around the world, if a currency crisis threatens the whole international system.

MR. SHAW: Secretary Christopher, a lot is happening in Iran. There is a new president, a so-called moderate. Is Iran changing?

MR. CHRISTOPHER: Well, there's been a search for a moderate in Iran that goes back at least to the time when our 52 Americans were held captive, and so far it's been a fairly unsuccessful and feckless search. I think we should continue to make that search and continue to ask whether the new leadership of Iran wants to move them back into the western orbit. But at the present time, Iran's support for terrorism, its opposition to the Middle East peace process and its efforts to acquire weapons of mass destruction would give one a lot of pause.

But I think it's quite right for the administration to be testing whether or not Iran wants to move in a different direction. Certainly we shouldn't have any permanent enemies around the world. Iran could be a powerful country in the Middle East for good. Up to this point it has not been. But as I say, I think we should be ever-watchful as to whether or not there may be new hope for some moderation in Iran.

MR. SHAW: Secretary Baker, is it the United States' posture to try to jawbone a private company, Totao (ph), when it engages in a $2 billion enterprise effort with the government of Iran, simply because Washington does not like Iranian policy?

MR. BAKER: Are you asking me, Bernie, if that's the United States policy or are you asking if that was what the policy should be?

MR. SHAW: Both.

MR. BAKER: It's what the United States policy today is. It's a policy that was formulated in large part from the Congress. There's legislation on the books that gives the president the power to sanction companies that make an investment of in excess of $40 million with Iran. But it gives the president some discretion. He's got some national security discretion there not to sanction.

I'll tell you what my own personal view is here. I haven't seen evidence yet that Iran is changing. I totally agree with what Chris just said about that doesn't mean we ought not to look for evidence. There is a new president there. He is allegedly a moderate. At least he was more moderate than the person he was running against. But I don't think he's going to call the shots in Iran. I think the shots are going to be called by the ayatollahs. And so far we haven't seen any indications of moderation in behavior.

There is no country in the world that supports to a greater extent, in my opinion, state-sponsored terrorism than Iran. As Chris has pointed out, they are implacable foes of the Middle East peace process. They've done everything in the world they could to subvert that process. They used to take Americans and westerners hostage in Lebanon and hold them, kill some of them and hold others. And so I think we ought to be very, very firm in our reaction.

Now, the whole question of extraterritoriality of U.S. sanctions is a very, very difficult question. If you check -- again, if you check the Times this morning, you'll see where it's presenting quite a problem with respect to some financial issues. But I don't see anything wrong with sanctioning a country. And I frankly, even as a former secretary of state, don't have a lot of difficulty with extraterritoriality where the vice that we are trying to combat and defeat is something as pernicious as state-sponsored terrorism. If we can't get our allies to go along with us, then I think there's nothing wrong with telling a French company that wants to trade with a country that is doing this, telling them, "You've got a choice: You can trade with Iran, or you can trade with the United States -- take your pick." In most instances they'll pick the United States of America.

Now, (Total ?) might not, because it doesn't have any investments here, but most countries will. That's the way I feel about it. (Applause.)

DR. KISSINGER: I support what Jim Baker has just said. I just would like to point out one additional thing. We keep talking about -- or people keep talking about moderation in Iran. It is quite possible that the new president will be more moderate in the economic policy, and it is also possible that he will purchase this by continuing his ideological campaign in foreign policy to keep the ayatollahs on their side. So I think the correct American policy is to let Iran know, as Chris pointed out, that we are willing to have a dialogue, but to gear our actions to their actions, and not to our psychiatric analysis of the mentality of the new president. (Applause.)

MR. SHAW: Secretary Kissinger, why should the American taxpayer to the tune of roughly $3 billion in foreign aid, support the government of Israeli Prime Minister Netanyahu when secret agents of his government are about the streets of Amman trying to assassinate people?

DR. KISSINGER: The conflict -- what is going on between the Israelis and the Palestinians in that battle, when Israelis get blown up in the streets and I don't know, 120 people have been killed in suicide bombings organized by types like the fellow they tried to assassinate in Amman, I cannot get excessively excited about the moral issue involved here. I think I -- the stupidity of doing it in this manner, or doing anything in this manner. Our concern in the Arab-Israeli dispute, the thing we have to decide, is what pressures will the American government -- not because of that one issue -- what is the role of the American government in facilitating negotiations between Arabs and Israelis. And I think we have to understand that no progress is possible unless we are willing to suffer some pain, because both parties are going to blame us and are going to shove difficult decisions to us. And we also have to balance not driving the various parties to absolute despair by taking chances. So I have no problem with continuing to give economic aid to Israel. I do have a problem with the fact that at some point the United States has to enter these negotiations. When Jim Baker organized the Madrid conference, there were people on both sides -- actually also on the Israeli side -- who were very dubious about the process who are now grateful that the process was started. And this is the specific role of America: to try to be an honest broker between the two sides, and recognize that this is not painless. It is not

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something in which suddenly an agreement materializes and you can announce it on the White House lawn. That is the question we should address, not whether -- how we react on an individual act in this miserable war of terrorists and anti-terrorists.

MR. SHAW: Mr. Secretary?

MR. BAKER: Bernie, adding just a little bit to what Henry said, because I agree with everything he said -- it was stupid and dumb to do what was done or attempted to be done in Jordan, but it was stupid because it has the potential of undermining King Hussein, who is one of the foremost Arab leaders leaning toward peace with Israel. And Israel enjoys now a warm -- relatively warm -- peace with Jordan, and this stupid maneuver puts that warm peace at risk.

You're not going to get anywhere in the Middle East, in my opinion, unless you're willing to take some heat from both sides. Both sides have things they need to do. The Arabs, Arafat in particular, needs to be a heck of a lot more diligent with respect to terrorism. But the Israeli side as well should really -- should really do what Secretary Albright has asked very politely: Please give us a time out on settlement activity. Settlement activity is the most destructive thing to the Middle East peace process -- except for terrorism. And what's really required is for the Arabs to be more diligent on terrorism and the Israelis to stop building these settlements which basically foreclose any opportunity to negotiate on the basis of United Nations Resolution 242 and 338.

The only time the United States has ever made any real progress over there is when we are willing to take a lot of heat. Henry took it in the disengagement agreements. Cy Vance took it with respect to Camp David. We sure took it with respect to Madrid. And look what Madrid has produced: it's produced a peace between Israel and Jordan, and it's produced a process that is at least continuing in a way between Israel and the Palestinians.

Chris certainly took it by making the efforts that he made. And you have to be willing to do that or you're not going to see any results. (Applause.)

MR. CHRISTOPHER: Really echoing the comments of both Henry and Jim, we must remember how far we have come in the Middle East. It was not too long ago that every Arab nation in the Middle East was an implacable foe of Israel. Now there is peace with Egypt, peace with Jordan, and tremendous progress in the Palestinian sector, even though it's hard to realize. Of course you have Gaza and Jericho, and you have now nine West Bank cities where the Palestinians have self-rule.

And what we have not talked about here yet is the economic dimension of peace. There have been four conferences in the Middle East -- or there will have been by the end of this year I hope -- where Israelis and Arab businessmen -- businessmen from all around the world participating -- are beginning to very important trade and investment deals. More countries now have diplomatic relations with Israel than ever before. So there's a good deal of progress, and we just need to be persistent about it -- persistence really is the absolutely key to progress in the

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search for peace. You have to be tenacious about it. You have to realize that progress comes sometimes at unexpected moments. But the United States, as both of my colleagues have said, has to be in there weighing in in an appropriate way, but nevertheless indicating what our vital stake is in the Middle East and how we think those problems should be resolved.

MR. SHAW: Mr. Kissinger?

DR. KISSINGER: I'd like to point out that in the Middle East negotiations we are at a philosophical divide similar to the one that I've said we reached in our national policy about 25 years ago. And it is this: all of us here, and since 1973, have been pursuing what was called the step-by-step approach. We thought that by little steps at a time we would create a better atmosphere for an ultimate negotiation. And I think that was very successful, and it had the results that Chris has pointed out.

Now we are at the end of that approach, because there are not too many little steps left. I think there are only a few fundamental issues left: Borders for Israel, creation of a Palestinian state, future of the settlements, and Jerusalem. I think Jerusalem ought to be put aside. But all the other issues ought to be attempted to be settled in one comprehensive negotiation. And I think this is where the United States could come forward with at least some principles to give the parties something to repair to. To argue whether the next slice of Israeli withdrawal should be 10 percent or 12 percent or 9 percent -- that is too esoteric to frame a negotiation around. But to decide what should the borders be, will there be a Palestinian state which the Israelis have not yet accepted -- what will happen to settlements. Those are fundamental issues, and they all should be wrapped in my view into one negotiation.

MR. BAKER: Do you want some disagreement up here? We've been agreeing with each other all the time. Let me disagree with Henry's suggestion that we go immediately to final status discussions. I do not think there is a snowball's chance in hell that those would succeed if we can't make the agreements that have already been negotiated, and signed, sealed and delivered, if we cannot take those steps and make that succeed. It's just a difference I suppose in approach.

But let me say, Bernie, I think it's important to make clear there is no moral equivalency here between bombs and bulldozers. The point Henry made earlier is absolutely right: You cannot expect Israel to negotiate seriously under a land-for-peace formula when innocent Israeli women, children and citizens are being blown up in the marketplace in Jerusalem. At the same time, it's very difficult to see how the Palestinians are going to be able to negotiate seriously at the very time that the bulldozers are confiscating Palestinian land and building further Israeli settlements. I think we ought to keep on the step-by-step approach that was laid out originally in Madrid and then in the Oslo peace conference. And the day will come when there is a new dynamic for peace in my opinion. It may take a change of leadership on both sides.

But there is no going back. There is no going back, because the Israeli body politic wants peace, and the majority of the Arabs with whom they are negotiating want peace.

MR. SHAW: Secretary Baker, you say the day will come when there is a new dynamic, but Mr. Christopher could you start off please and go rapidly, because we have more territory to cover -- could you start off by explaining why United States foreign policymakers have coddled King Hafez al-Assad of Syria?

MR. CHRISTOPHER: I'd have to begin by disputing the premise of your question. (Laughter.) Syria is on both our terrorism list and our narcotics list, which effectively rules out any trade relations with them -- and we have very, very limited relationships with Syria. But Syria has indicated it has made a critical choice for peace, and in view of that I think we need to test that and then find out if they are prepared really to seek peace.

Syria is not in the same category of some others who really have been denouncing the peace process. It's been part of the peace process. But we are certainly not coddling Assad. Nevertheless, we see there an opportunity to end the strategic threat that Syria has been to Israel. Syria and Israel have a difficult border that Secretary Kissinger played such a very important role in pacifying for a time. But I think that a peace treaty between those two countries which are in a technical state of war would be in the interest of both countries, as well as in the interest of the world as a whole. So, Bernie, I guess what I would say -- you can talk to people without coddling them. I think talking with people who have indicated some desire for peace is always well worthwhile.

MR. BAKER: Bernie, I agree with what Chris just said. I don't think any American administration has coddled Hafez al-Assad or Syria. Let me say to you that there absolutely would never have been a Madrid conference had Syria not changed what had been a 25-year Arab policy of refusing to even talk with Israel. And we got the Arab side to make that significant change which enabled us to have the Madrid conference. We got them to agree to that because we went to Damascus and we sat down and spent endless hours -- as both of my colleagues here will tell you -- you spend endless hours any time you meet with President Assad. And we spent endless hours meeting with him. But it was only because we did that that we were able to get to Madrid. And you're just not ever going to have a comprehensive peace between Israel and the Arabs until you get to peace between Israel and Syria.

DR. KISSINGER: It used to be -- the Israelis used to say there can't be an Arab war without Egypt, and there can't be peace without Syria. And I think both of these principles are right. In the period in which I negotiated I made the same experience as Jim did, which is that Assad is a complicated fellow. I once brought him a letter of invitation to the Geneva Conference, which was our equivalent. And he accepted it immediately, which is not his character. So I said -- I said there's something I forgot to ask you that I should have asked you. He said, "As a matter of fact you did -- something you forgot to ask me." I said, "What is it?" He said, "You didn't ask me whether I'm going to the conference." I said, "Are you going?" He said, "No." (Laughter.) So he didn't care what I said. But he didn't go, but he didn't block it. And he made it possible for the others. So just as the peace process in Jim's period started with Syrian participation, it started in the period in which I was secretary of state with Syrian toleration, and it

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would not have been possible. So sooner or later there is no way to have a peace process in the
Middle East that does not include Syria in some way.

MR. SHAW: Gentlemen, we now go from the Middle East to this hemisphere. Our country is rapidly becoming a more ethically diverse society -- ethnically. Americans of Hispanic and Asian heritage in particular represent an ever-larger share of or population. Sometime in the next century non-Hispanic whites will represent less than half of the American population. The president of the United States currently is on tour in South America. He is in Brazil, the most economically powerful country in South America. But there has been a perennial seemingly turning of the back on Latin America, South America. How will the change in population, ethnic population, in the United States affect U.S. foreign policy? Anyone?

MR. CHRISTOPHER: As I reside in a state where the Hispanic population is growing very rapidly and is -- I think in the city of Los Angeles now it is coming up -- may soon be in the high numbers in that city. I think it's correct the Los Angeles school district has more Hispanics in its district than any other ethnic group. So clearly there will be a political power in the hands of Hispanics, which I think will tend to have its effect over time on American foreign policy in that intersection that there always is between politics and foreign policy.

But, Bernie, I think there is a deeper reason why South America is going to be important to us than that -- I think that's a long-term trend -- and that is the tremendous importance of South America to us in both economic and political terms. I'll have to contrast the time when I was deputy secretary of state in the Carter administration with the time I just finished four years with President Clinton. In the earlier time South America was governed in many respects by military dictatorships. Coups were fairly frequent there. The quality of government there was relatively low, and their economies were very backward. Now we have every country in the Western Hemisphere except Cuba a functioning democracy. We have tremendous progress on the economic front. So I think rivaling Southeast Asia, and in some ways a good deal more attractive than Southeast Asia -- Latin America is a tremendous market for the United States. Its political support for the United States is exceedingly important.

There's just been a sea change in attitudes in South America where they used to I think enjoy putting pins in us. Now they enjoy supporting us. That particularly is true of the two most powerful countries in South/Latin America, Brazil and Argentina. Now their relationships, as you can see from President Clinton's visit this week, are warm relationships. So I think that fundamental support in both an economic and political area is likely to be the future of our relations with South America.

MR. SHAW: Mr. Kissinger?

DR. KISSINGER: I think the second point that Chris made is more important than the first point: We should not conduct our foreign policy primarily on the basis of the ethnic composition of our population, but on the basis of a national interest that includes everybody.

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(Applause.) But the second point that Chris made about the cooperation of democracies, the Western Hemisphere is the ideal place where this unity should be demonstrated. And I would like to point out one thing: We have been a little slow in pursuing the promise of the Free Trade Area of the Americas that was put forward at the Miami Summit by President Clinton. And in the process of delaying putting forward the fast track and others, Brazil is organizing something called Mercosur. They're doing it in the charming Brazilian manner, and it's almost painless. But the fact is they are organizing a common market in Latin America in which the United States does not participate -- the first time that such a structure has existed in the Western Hemisphere. And if this trend continues, we will find the Western Hemisphere for the first time divided. So it's essential that the negotiations start between NAFTA and Mercosur, and that we go to this Free Trade Area of the Americas before our neglect, due to our domestic difficulties, creates a schism in the Western Hemisphere which we will regret.

MR. BAKER: Sadly, Bernie, we have waited too long. We have waited too long to submit fast track to the Congress. We did so because we had -- in part we did so because we had an election in 1996 -- and this is a very difficult politically sensitive issue. Hopefully we'll win fast track, and I know a lot of Republicans will be supporting the efforts, as we have said before.

I couldn't agree more with Henry when he says we should not base our foreign policy on the basis of ethnic background and ethnic considerations. That is one of the -- that is probably the most important distinguishing characteristic of this country from other countries. We are not a -- we do not base our policies on the ethnic background of all the people who make up this wonderful melting pot called America. Why? Because we are first and foremost Americans. We are brought together and we are kept together by our fundamental belief in a number of very important principles and values. That's what it means to be an American.

Now, does it mean because we have an ethnic progression in the direction your question suggests, does that mean we'll pay more attention to South America, Latin America? Maybe it does mean that, and if so that's all to the good for the reason that Henry pointed out. If we don't get fast track and if we don't go forward with a hemispheric free-trade zone, you can get your life that the South American countries will be cutting their own deals with Asia and with Europe in short order, and we'll be left out. (Applause.)

MR. SHAW: Mr. Secretary?

MR. CHRISTOPHER: Well, maybe we have something we can disagree on a little bit, although not very much. My view is that for the last two decades we have been ignoring Latin America much more than we should. And one of the reasons that we have been ignoring Latin America is an almost total lack of Hispanic representation in the Congress. (Applause.) That is beginning to grow. And I don't think it's an unhealthy thing for Hispanic representatives to point out to us the importance of our relationships across the border into Mexico and down into Latin America. Frankly I think the neglect of Latin America has been a function of our foreign policy, perhaps caused by a number of factors. But certainly in the future I think we're going to have

leading political figures calling our attention to that, and I don't think -- this being a democracy, I
don't think there's anything wrong with that.

MR. SHAW: Is the United States at long last discovering Africa?

MR. BAKER: Discovering Africa? Not in my view. We worked extensively with respect
to the problems of South Africa when I was in the government. Are we discovering the problems
that beset Central Africa today? Yes, we are -- sadly. But again it gets back to the points that I
made in my opening comments, Bernie: We need to find a way to assess the national interests
with respect to those areas of the world where it is important for the United States to involve
itself and to engage. And particularly when we talk about sending peacekeeping forces or military
engagement, we must determine the national interest and then we must apply our principles and
values to that. Our principles and values -- one of those of course would be we ought to do
everything we can to prevent genocide. We ought to do everything we can to prevent human
misery and suffering that is occasioned by those kinds of conflicts in the center of Africa today.
But unfortunately we cannot conduct foreign policy on the principles of Mother Teresa -- that's
sad, but it's true. And it's not my quote; it's somebody else's. But I think it's apt. But we have to
take a look at each and every one of these circumstances.

We went into Somalia in a humanitarian way. We saved literally hundreds of thousands of
lives there. And then we began to do a little nation-building in Somalia and we lost 19 brave
Americans, and we had to turn tail and run. So we've got to be very careful when we jump off
here and get into a country.

MR. SHAW: Mr. Kissinger? Before I move onto another subject did you want to make a comment?

DR. KISSINGER: Not particularly, but I don't want to ever admit that I -- (laughter) --

MR. SHAW: Let us continue then. Let us continue. (Applause.) Mr. Christopher?

MR. CHRISTOPHER: I agree with Jim that we need to always ask where our vital
interests are. But Africa is a huge continent with a number of different things going on. We quite
often forget that North Africa -- that strip across North Africa is an extremely important area with
Egypt and Libya, Algeria, Morocco, where Secretary Baker has just performed another very
strong diplomatic feat. I think that our relationships there have been critical. Our relationships in
southern Africa of course are always very important to us. And there is good news in southern
Africa -- the emergence of democracies and some peer group pressure in southern Africa. And so
I think the United States will always be concerned about Africa for humanitarian reasons, but also
from time to time for geopolitical reasons. We shouldn't lump the whole continent in a single bag
and push it to one side -- it's far more important to us than that in the long pull.

One of the challenges of being secretary of state is to try to keep your eye all around the

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horizon -- go 360 degrees everyday to try to make sure that some problem doesn't come up and threaten the national interests before you have had an opportunity to address it.

MR. SHAW: People in this audience have been listening very intently to what each of you has had to say. People in the C-SPAN audience have been listening very intently. You have used the word "trade" by my count at least 45 times on this stage. And yet the United States' largest trading partner lies northward, Canada. Very little is made of Canada, and in this nation's foreign policy relatively little is said. Why does the United States government take Canada for granted?

MR. BAKER: Who do you want to answer? (Laughter.)

MR. SHAW: You can go first.

MR. BAKER: Again, like Chris did earlier, Bernie, I would respectfully disagree with the hypothesis of the question. We don't take Canada for granted -- at least we didn't when I was there, and I'm sure we didn't when my colleagues were there. The fact of the matter is we have excellent relationships with Canada on the whole. And there aren't any -- many problems to deal with. We now have a few little trade irritants involving salmon and timber and a few other things in the Pacific Northwest. But you know the predecessor agreement to NAFTA was the U.S.-Canadian Free Trade Agreement negotiated in 1987. I was a part of that when I was at Treasury.

The best thing I think we can do with respect to U.S.-Canadian relations is to remember they are our biggest trading partner, that remember that they are our open border to the north -- do whatever we can to bring about this hemispheric free-trade zone that President Clinton has talked about. Canada is for that. In fact, Canada, if we don't move forward again Canada would have every reason to want to move on their own. That would focus attention in Canada on the importance of hemispheric cooperation and away from such difficult issues as for instance as the secession of Quebec. But I think our relationship with Canada is in excellent shape.

MR. SHAW: If I could get from each of you a two-sentence response to this question. (Laughter.) Beginning with you, Secretary Kissinger -- (laughter) -- two sentences: Why is a containment policy of China stupid? (Laughter.)

DR. KISSINGER: Two sentences for me are 20 minutes. (Laughter.) If China becomes aggressive, then containment may be necessary. But it is essential to see whether we can establish a cooperative relationship with China, where China helped solve issues such as Korea, Cambodia and Taiwan, where it does not contribute to tensions in the area. And to declare somebody an enemy who does not want to be an enemy, and thereby make him an enemy, that is stupid. (Applause.)

MR. BAKER: It may or may not be stupid, Bernie. I think it is stupid. You'll get a debate about that. But at the best it is dangerously premature for us to talk about containing

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China. When we talk about containing China in my opinion we are looking for an enemy. And the best way to find an enemy, as I have said before, is to look for one. (Applause.)

MR. CHRISTOPHER: One -- (laughter) -- the containment of China is not in our national interest because we need Chinese assistance in dealing with some of the problems of Asia and the world, and dealing with such issues as proliferation -- we certainly had their help and benefitted from it on the Non-Proliferation Treaty and on the Test Ban Treaty.

Two, the advocates of containment sometimes think that in that way we can improve the human rights conditions in China, but exactly the opposite will result because history shows the most repressive periods in Chinese history are when they are isolated and contained. (Applause.)

MR. SHAW: Very shortly Mikhail Sergeyevich Gorbachev will be on this stage. And thinking pre-Gorbachev, gentlemen, is there an old Russia lurking under the new Russia? Mr. Baker?

MR. BAKER: Not in my opinion, Bernie -- at least not now, if by "old Russia" you mean a Russia that returns to a communist model. I think communism is a philosophy that is probably as dead as the divine right of kings today. So we are not going to see that.

We may see a virulent form of Russian nationalism, depending on how we respond to what's going on in Russia today, depending on how we handle some of these challenges that we've talked about earlier this morning. So I don't see it happening, provided the West handles the relationship in the way in which we should.

Now, you said there's too much agreement here among this panel, so I am going to say something that I know Henry disagrees with -- and I don't know about Chris. But in my view when we talk about expanding the North Atlantic Alliance we should take great pains to make it very clear that we are not talking about doing that because we fear Russia as an enemy. Russia today is not a military threat to Western Europe. And we need to make very clear to the Russian people and the Russian military that NATO expansion is to promote peace and stability in an area of conflict, the center of Europe, and it's not directed against the Russians. And I for one would even go further and say -- and this is where Henry will disagree with me -- that given the political character of the North Atlantic Alliance, we should never rule out the possibility that Russia herself, if she stays on a democratic course and on a free-market course, could one day be eligible to join an alliance the primary mission of which was to promote peace and stability on the Eurasian continent. (Applause.)

MR. SHAW: Mr. Kissinger?

DR. KISSINGER: There are two types of Russia that could be theoretically lurking. One is the communist one and the other is the traditional Russia of czarism, nationalism, expansionism. Communism is dead. The growth of a -- the emergence of a nationalist, czarist Russia -- type

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Russia -- is not impossible. It can be ameliorated by American policy, but it cannot be entirely affected by American policy. And so this is something -- I favor giving Russia every incentive to participate in the international system and to become an honorable member of it.

I do not believe that including Russia in NATO is the way to do that. NATO is a defensive alliance, and once you include Russia into it it has changed its character completely. If we want to create a political system for the evolution of Eurasia, certainly Russia should be part of it. But to have a defensive military alliance with Russia and thereby project the borders of NATO into the Middle East, Central Asia and the Far East. That is something that would so change the character of NATO that you could no longer call it NATO. That would be a different institution altogether. (Applause.)

MR. SHAW: Mr. Christopher, we give you the last word.

MR. CHRISTOPHER: Essentially I agree with Secretary Baker's viewpoint on this. NATO is evolving. Its mission, as I said in my statement, is more likely to be concerned about the interests of its members rather than the defense of territory. But it's a long evolutionary pull. We have three nations that are designated to be the first to come in -- some difficult preparation on their part. And then we can move forward to next steps. But one thing that I would say, based upon my experience, is that it's very important to be firm with Russia in pursuing matters of our own national interests. We felt the expansion of NATO was in our national interests. Many said that Russia would really rise up if we continued down that course. But we continued down that course, told them we were going to do it in an open way, and offered them an opportunity to have a special relationship with NATO, which they now have. And I think that Secretary Baker carried out a similar policy on East Germany when many said that if there was an incorporation of East Germany into West Germany that that would present insufferable problems with Russia. But we followed a steady course, and I think that's what should follow here, remembering always what our main concern is, the United States national interest.

MR. BAKER: Bernie, can I just add one thing to this discussion? We've talked a lot about the importance of the expansion of the North Atlantic Treaty Organization to promote peace and stability in Central Europe, and that's important because that's after all where America -- we are the players and major players in NATO. But what really ought to happen as well, and every bit as important if not more important, is that the European Union should open its doors to these countries from an economic and trade standpoint and bring them into the system so that they can participate -- not just through a security alliance, but through the economic and financial and market alliance of the European Union. And we need to press the Europeans to do this. (Applause.)

MR. SHAW: I would just ask, rhetorically, is your optimism justified, given the problems with the effort toward monetary union?

MR. BAKER: Well, I think we can be -- I didn't say I was optimistic. I said we need to

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press the Europeans to bring these Central European countries into the European Union. That's a different issue than whether or not Europe gets to monetary union. My own view of that -- and I'd be interested in the views of my colleagues here -- my own view is they will get to monetary union of a sort. But they'll get there by slipping the standards that they have laid out there for monetary union. Monetary union now has such a political imperative behind it that they almost have to get there. So I think they'll get there. But they're going to do some very creative accounting in order to get there. And what this is going to do is result in a Euro, the European currency, which is going to be a softer currency than the Deutsche mark. And so if we are really observant and we watch this debate unfold and we want the votes being taken, we'd be smart to go out and buy dollars, in my opinion, which won't help the U.S. trade deficit, but it would be a good investment.

DR. KISSINGER: The Euro I agree is almost certain to come into being -- I'd say nearly certain. The real problem will arise not in creating the Euro but what will happen afterwards, because the fiscal policies of the European countries are at enormous variance with each other. And how you can have a common currency with different fiscal policies in each country is something that nobody has as yet paid sufficient attention to.

They want to create a central bank that is entirely free standing. Such a thing has never existed before in history -- a bank that has no political institutions to balance it. So that I think the real problems of the Euro will happen after it comes into being and not in the process of its coming into being.

Secondly, once a united Europe exists, there is a crucial decision that they need to make which is what -- how will they define their identity. The French point of view would be that they should define their identity in some degree in opposition to the United States. Another point of view would be to have an identity in cooperation with the United States, and that would be a very fateful decision, because whether you can incorporate Russia which -- the only disagreement I have with Jim on that is whether it should be through a military institution or through a political institution -- and I would think through a political institution. But whether that can be done effectively depends on whether Europe and the -- Western Europe and the United States work together. Because if there is a conflict between us, then all kinds of maneuvers open up for various alignments. That is the fateful decision that they'll have to make after the Euro comes into being. And this is where I would like to see if Britain could begin to join it -- it would be a more comforting institution than if France is the dominant factor.

MR. SHAW: I've been writing notes, and people in the audience here at Rice University have been writing too. They've been writing questions. Mr. Christopher did you want to make a comment before we pause for a moment?

MR. CHRISTOPHER: You know, the Euro is such a "mego" issue that I really don't think I'll comment. "Mego" means "my eyes glaze over" -- (laughter) -- unless I'm talking to investment bankers in New York, and talk about the Euro, I find a certain glazing. So I think we

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ought to get to the audience's questions. (Applause.)

MR. SHAW: Out of consideration for attention spans and people's physical comfort, before we get to the questions we're going to pause for a few moments. And we ask that people in the auditorium please stand in place because of security concerns. And just stretch for a moment and we'll come right back, and we'll go to as many of your questions as is humanly possible. We'll be right back.

(Break.)

MR. DJEREJIAN: We are absolutely thrilled that this conference has drawn over 6,000 people to Rice University's campus. (Applause.) All of our overflow rooms are overflowed, and we are very happy that this is being put on C-SPAN and on television so that the greater public can see it. Bernie, back to you.

MR. SHAW: Ladies and gentlemen, before submitting your questions to these gentlemen of skill and courageous dedication to country and cause, please permit this reporter a few personal observations. If each of these diplomats on this stage gave full voice to what they know, we would be drunk from revelation. Each has experienced high purpose, polluted by politics abroad and at home. Each has served at the pleasure of a president. Each has absorbed blame, due and undue. Each has known those two opposite impostors, triumph and disaster. These gentlemen more than served; they gave beyond what they thought they had. Cyrus Vance, who is not here with us today, Henry Kissinger, Warren Christopher and James Baker have walked history's sands and now they can look back, satisfied that the shoreline is still there. And we thank them. (Applause.)

To James Baker: Are you sorry you never ran for president? (Laughter.)

MR. BAKER: No, you wanted short answers, the short answer is no. (Laughter.)
Bernie, before you go on though, may I just say one thing -- (laughter) -- that doesn't have
anything to do with politics? We were talking about the European Union a minute ago before the
break, and we were talking about European monetary union. And Chris quite rightly said it's one
of these issues that make your eyes glaze over. But European political union doesn't make your
eyes glaze over. And I think it's important to make the distinction that what we were talking
about there was monetary currency union. My own view is that European political union isn't
going to happen. Maybe I say that because I was a veteran of the unfolding events in the former
Yugoslavia when the United States deferred to Europe's lead there, and we saw the European
powers all go off in their old traditional ways. I just wanted to add that to the original comments
on European union.

MR. SHAW: Well, you're still on the griddle. By the way, we received more than 500 questions. So I'll try to move as briskly as possible. (Laughter.) Mr. Baker, couldn't President Bush have intervened earlier and more effectively in Bosnia?