James A. Kelly, Assistant Secretary for East Asian and Pacific Affairs, Remarks to the Woodrow Wilson Center Conference on George W. Bush and Asia: An Assessment, "U.S.-East Asia Policy," Washington, DC, November 9, 2004


I was very pleased to receive your invitation to introduce today's program
assessing the Bush Administration's East Asia policy--which, I can see, will
result at the end of the day in my own report card for the last 4 years. Never
before have I been given the opportunity to help write my own report card.

As I address this Administration's accomplishments thus far in furthering our
foreign policy in East Asia and the Pacific, I hope you will conclude that we
deserve "A's". We have come a long way since January 2001, with many successes
that have expanded security and opportunity for America. While no
Administration can claim to have resolved all the issues confronting it in only
4 years, we can say with confidence that we've had excellent achievements and
made solid progress in Asia. We've faced many challenges during this
Administration--especially the realities of a post-September 11 world--and
we're proud of our record. We also put in place new structures and mechanisms
that can serve as a foundation for further progress in the new century.

Regional Issues

If there is one constant in Asia it is rapid change. For the most part, that
change has been positive, dynamic, and very much in the interests of the United
States. Asia is largely at peace. Democracy, perhaps the greatest success story
in recent years, is blossoming. Economic growth has rebounded, led by China, a
re-energized Japan, and an ASEAN region that has left the financial crises of
the late 1990s behind. Growing intra-regional trade and investment have raised
living standards, dramatically reduced poverty, and brought new opportunities
to hundreds of millions. These positive developments have naturally led to
efforts to consider new regional architecture arrangements. The United States
supports efforts that contribute to openness and inclusiveness. We are, and
will remain, an essential and pivotal power in the region.

Engagement with China

One essential Asian question concerns the peaceful rise of China. From a bad
start--the EP-3 incident of April 2001--with effort from both sides, we have
successfully forged an effective relationship with China that defies
description by any slogan.

We have worked hard to develop a relationship that lets us communicate often
and directly to address common challenges--regional and global, economic and
political. In fact, the Secretary of State has already talked on the phone with
Foreign Minister Li 14 times this year, and the two men have met face-to-face
five times. And as the Secretary said on his most recent trip to Beijing, in
our search for common ground, we are finding many more areas in which we agree
than in which we disagree. First and foremost is our joint dedication to a
Korean Peninsula that is free from the threat of nuclear weapons. Here we are
encouraging China to move from being a convener and mediator among the Six
Parties to becoming an even more active participant in the effort of persuading
the North Koreans that their security and prosperity are best assured by
putting nuclear weapons aside. China has responded in a way that shows it can
be a "player" in this process, not just an interested observer on the
sidelines. Increasingly, that is how China engages us and the world, and that
shows an important maturity in its foreign policy.

We also have differences and disagreements, of course, whether on Taiwan, Hong
Kong, human rights, religious practice, or encouraging a dialogue with the
Dalai Lama. There has been some progress on the latter, and we work to be
direct on our approaches to all of these matters so that a crisis does not
arise out of a misjudgment.

Strengthening of Alliances

From the beginning, President Bush emphasized strengthening and revitalizing
our alliances, and, in Asia, we have succeeded quite well. Nurturing our
alliances is work that is never done. As Secretary Shultz used to put it, the
"garden" must be tended, and that was what Secretary Powell was doing late last
month in Northeast Asia. In each case, the ties we have with our five key
allies in the region--Japan, Australia, the Republic of Korea (R.O.K.), the
Philippines, and Thailand--have been strengthened since 2001.

Japan

This Administration came in with a vision for advancing our relations with
Japan toward a more mature partnership. Many senior officials in the
Administration had worked closely with Japan and saw much more potential for
U.S.-Japanese relations. Among these is Deputy Secretary of State Richard L.
Armitage, who was one of the driving forces behind a noted study on
U.S.-Japanese relations issued before his current appointment. September 11
gave those efforts a new urgency and focus, and the Administration has
continued to expand and deepen our alliance with Japan since then.

President Bush and Prime Minister Koizumi established a very warm relationship
when they first met at Camp David in 2001. Their confidence in each other has
brought our cooperation to new heights. Indeed, there is too much good news
about Japan to cite in the time we have today, but I can say that within three
months of 9/11, Japan began providing fuel at no cost to U.S. and other
coalition ships patrolling to prevent terrorists from using sea lines in
Operation Enduring Freedom. Japan has now provided over 84 million gallons of
fuel to coalition vessels, and recently extended the program for six more
months. Japan has also proven itself to be a major partner in rebuilding
Afghanistan.

Japan now has deployed in Iraq members of its Self-Defense Forces to provide
humanitarian and reconstruction assistance, Japan's first such overseas
deployment in the postwar era. In the Six-Party Talks, where our cooperation is
critical, as a partner in important areas of ballistic missile defense, in its
cooperation with the Proliferation Security Initiative (PSI), in the key acts
of legislation passed, Japan has become an even more vital partner. It is also
fair to say that the Japanese people are increasingly aware of their country's
need to play a more significant role in regional and global affairs. And these
opinions are resonating among the country's political leadership.

We are consulting closely with Japan on our U.S. military presence there in
order to enhance deterrence and maintain the security of Japan while addressing
the concerns of base-hosting communities. Equally important, we are resolving
challenging trade issues in a spirit of cooperation. Last month, talks in Tokyo
ended a 10-month ban on U.S. beef imports brought on by fears over BSE--mad cow
disease. This temporary agreement will resume U.S. beef imports to Japan,
giving Japanese consumers access to safe, high-quality U.S. beef while
restoring an important trade link.

Some have called this a "Golden Age" in U.S.-Japan relations. I believe the
Administration has indeed set a "gold standard" for future cooperation with
Japan.

Australia

Our alliance with Australia has been strengthened by the especially close
personal relationship President Bush developed with Prime Minister Howard. This
began with the events of September 11 when the Prime Minister was visiting the
United States. The U.S.-Australian relationship is at a new level. Bilateral
security is enhanced by stronger defense, non-proliferation, and
counterterrorism ties, and broadened joint intelligence cooperation, while
trade barriers have been diminished through an historic Free Trade Agreement.
And, of course, Australia has been a vigorous ally in the global war on
terrorism, including its dispatch of troops to Afghanistan and Iraq.

South Korea

Prominent among the policy successes of the past 4 years has been the
consolidation of our partnership with South Korea. I consider this a
particularly satisfying achievement, not least for the difficulties we have
overcome. When Roh Moo-hyun campaigned for the R.O.K. Presidency, there was
talk of his charting a "middle path" between the D.P.R.K. and the United
States. But his victory, and later that of the Uri Party, instead committed a
far broader range of the South Korean political spectrum to the close military
and political ties between our two nations.

How to explain this? By understanding and appreciating the strengthening of
democratic institutions in South Korea. Recent elections empowered the
reform-minded '386 Generation.' Too young to have experienced directly the 1950
53 conflict and too often suspicious of U.S. motives, their rise to political
maturity challenged us to anchor bilateral relations more deeply, and on what
could be clearly seen as a more equal basis. We have to work to justify the
importance of our ties in new terms to a new generation of leaders. This is as
it should be. I am proud to have cultivated cordial relationships with key Uri
figures like Floor Leader Chun Jung-bae and Party Chairman Lee Bu-young.
Secretary Powell, former Ambassador Tom Hubbard, and our new Ambassador to
Korea, Chris Hill, among others, have met with many of the numerous first-term
parliamentarians. There has been more contact with young Koreans as we have
reached out to make new friends and bring new energy to our public diplomacy.
This outreach has enjoyed considerable success, paving the way for the smooth
restructuring of the U.S. military presence in South Korea, the R.O.K.'s
sizable and courageous contribution to the coalition effort in Iraq, and to the
R.O.K.'s central role in working with us in the Six-Party process. I believe
that by encouraging appreciation among R.O.K. reformers and younger
policymakers of our shared interests--and these remain both broad and deep--we
have grounded more firmly our future relations with this strategic partner.

The Philippines

Another success of this Administration is that relations with the Philippines
have rebounded after reaching a low point in the mid-1990s after the withdrawal
of our bases. In the Global War on Terror, a joint U.S.-Philippine operation in
2002 cleared Abu Sayyaf Group terrorists from what had been one of their
strongest bastions on Basilan Island. In addition, Philippine officials
enthusiastically support the jointly-funded Philippine Defense Reform, which we
recently launched, to restructure and train the Philippine armed forces. This
will make them a stronger force for stability and will discourage terrorists
from moving into the area. The Philippines was one of our first coalition
partners to send forces to Iraq as part of Operation Enduring Freedom, and
earlier this year we named that country a Major Non-NATO Ally. While we were
disappointed at their sudden withdrawal from Iraq following the kidnapping of a
Filipino citizen, our alliance remains strong and we continue to cooperate on a
broad range of issues.

Thailand

We have steadily strengthened our alliance relationship with Thailand over the
past several years. Following the September 11 terrorist attacks, Thailand
began providing vital over flight rights and access to facilities for Operation
Enduring Freedom and the conflict in Afghanistan. It became an active provider
of stabilization forces when it sent an engineering battalion to Afghanistan to
help rebuild Bagram airfield. In the war against terrorism, Thailand has also
been a staunch partner and ally. In August of last year, Thai authorities
captured senior Jemmah Islamiyah terrorist Hambali, who was responsible for the
deadly bombings in Bali and Jakarta. Thai troops served bravely in Iraq, where
they suffered two fatalities in December 2003. President Bush, following his
State Visit to Bangkok last fall, recognized the strength of the alliance by
designating Thailand as a Major Non-NATO Ally. And Thai leadership at last
year's APEC strengthened that forum, and also highlighted Thai economic
resurgence. Now, FTA negotiations are proceeding.

Since the beginning of this year, Thailand has been confronting a significant
surge in violent attacks against its security forces, government officials,
schools, and other symbols of central Thai authority in the far southern
provinces. The roots of this violence are complex and will require the Thai
government to address long-standing resentment by the local population against
central rule. As a long-time friend and ally of Thailand, we will continue to
offer our support, while making clear our views on the importance of respect
for human rights in dealing with the ongoing violence.

Cooperation on Counterterrorism

The counterterrorism cooperation we have received from Asia-Pacific countries
goes well beyond just these five allies. An ironic by-product of the September
11 terrorist attacks has been a strengthening of our ties with many of the
governments of the region--which appears to be the exact opposite of what the
terrorists would want. Immediately after the attacks, we received an outpouring
of support for our efforts to eliminate the scourge of al Qaeda. This support
came in the form of offers of military or materiel assistance, as well as
statements of solidarity and offers of other kinds of counterterrorism
collaboration. Governments around the region have cooperated in freezing
terrorist assets, and Malaysia established a regional counterterrorism training
center for which we have provided several courses. There is a growing
realization throughout the region that terrorism threatens all civilized
governments, and that the best way to confront this menace is to work together
pro-actively. Terrorists routinely disregard national boundaries; we need to
reach across those boundaries to defeat them.

Indonesia tragically discovered on October 12, 2002, that it was not immune to
the tide of Islamic radicalism when close to 200 people, foreign visitors and
Indonesians, perished in the devastating Bali bombing. In the months since
then, Jakarta has seen two other major bomb attacks, but the government has
also taken major steps to arrest terrorist operatives, put them on trial, and
convict them. The United States and others, notably Australia, have provided
assistance to Indonesia to help them pursue and confront terrorism. Our
cooperation has been one element of our overall relationship with this
burgeoning democracy and contributed importantly to the safety and security of
the entire region.

Compacts of Free Association

Although issues involving the most populous or wealthiest of Asia-Pacific
nations occupied much of our attention, we also achieved little heralded, but
significant successes with two of the smallest countries in the region. During
the past two years, we renegotiated Compacts of Free Association with the
Federated States of Micronesia and the Republic of the Marshall Islands, a
continuation of our unique relationships with these sovereign countries. These
compacts contain revised immigration procedures that allow both nations'
citizens continued privileges while improving security measures. They also
provide for new management and financial oversight to ensure that U.S. support
to these nations results in real improvement in the peoples' lives and lays the
groundwork for long-term growth and prosperity. I should also note that these
nations, as well as Palau, have shown a commitment to keeping the world free of
terror. Hundreds of their citizens are serving in the U.S. armed forces; both
the Federated States of Micronesia and Palau have lost countrymen in the
service of our country in Iraq.

Economic Engagement

Asia is also vitally important to the United States in an economic sense. U.S.
trade with East Asia and the Pacific totals over $600 billion a year--a figure
that exceeds our trade with the EU--and it's growing at a rapid clip. Home to
nearly 30% of the Earth's population, East Asia accounts for over a quarter of
world production and nearly a quarter of world trade--and those numbers are
growing, too. The region buys about 40% of our agricultural exports and
supports, directly and indirectly, millions of American jobs in all sectors of
our economy. For these and many other reasons, East Asia is just as important
to the United States in an economic sense as it is in a military, diplomatic,
or geopolitical sense.

The Administration's economic policy was rooted in clear and mutually
reinforcing goals:

* to open markets for U.S. goods and services;
* to improve the region's overall business environment;
* to maintain a stable macro-climate favoring open trade and sustainable
growth;
* to encourage regional cooperation.

Opening Markets

Opening markets for U.S. goods and services is priority number one. Toward this
end, the Administration worked hard, and to excellent effect, to put the
once-wobbly Doha Round of the WTO negotiations back on track. The
Administration scored successes in reducing trade barriers across a wide range
of sectors through free trade agreements, or FTAs. Our FTAs helped create new
opportunities for American business and benefit American consumers by ensuring
more competitive prices on the goods and services covered by the agreements.
Our FTA with Singapore came into force on January 1 of this year; we have
recently concluded an FTA with Australia; and we have entered into FTA talks
with Thailand. We also have Trade and Investment Framework Agreements with a
number of Southeast Asian partners.

China has been a major focus of Administration attention, and rightly so. China
made some strides since its WTO accession in opening its markets, but we
continue to have serious concerns, especially with respect to IPR enforcement,
standards, transparency, and services. We are encouraged by Chinese leadership
pledges to implement market-access commitments, but the next Administration
will have to remain deeply engaged with the Chinese until full implementation
of its WTO commitments is achieved.

Business Environment

For open markets to be meaningful to the business community, there must also be
a favorable business environment, and the Administration worked hard to achieve
progress in this area. We helped improve the business environment in Asia by
developing transportation links, opening up the Asian civil aviation and
telecommunications industries, improving intellectual property rights
protection, and combating corruption. Working through the International Civil
Aviation Organization and International Maritime Organization, for example, we
helped make air and maritime services more secure for passengers and cargo
alike. The U.S. Container Security Initiative now includes many major ports in
Asia. The United States worked bilaterally and multilaterally to improve IPR
protection, and we obtained good results in some places, but piracy and
counterfeiting are still rampant in many parts of Asia. In these and other
ways, we improved the business environment in Asia to the benefit of U.S.
businesses, workers, and farmers. I regard our work in this area as a
significant success, though there is plenty more to do.

Macroeconomic Environment

Maintaining a stable macroeconomic climate is the third element of our economic
approach to Asia, and here again, we have met with great success. The region
has certainly come a long way since the financial crisis of 1997-1998. We have
encouraged, among our Asian partners, more prudent and sustainable fiscal
policies, monetary policies focused on price stability, and increased openness
to international trade and capital flows. As a result, interest rate spreads
are down; there have been no major foreign exchange or balance of payments
crises; "contagion" is less prevalent; and, among those economies with flexible
exchange rates, volatility has decreased. Japan is showing strong signs of
recovery, and China is maintaining a strong rate of growth.

The United States has invested a terrific amount of time urging China to move
toward a more flexible, market-based exchange rate for its currency, and the
Chinese agree that making this transition is a top priority. China is
undertaking important measures to liberalize capital flows, to restructure its
banks, and to develop a currency derivative market. While China clearly needs
to do more, these are all steps in the right direction.

Increased Regional Cooperation

Our Asian partners have begun forging more regional organizations among
themselves, reflecting their growing cooperation. We welcome this trend,
understanding that strengthened ties and cooperation between nations of the
region contribute to regional prosperity and stability, two of our highest
priorities. I have seen suggestions that the growth of regional organizations
reflects a loss of U.S. influence in the region. I disagree. The trend toward
regional cooperation offers the United States the opportunity to engage on a
multilateral level to address issues we were unable to resolve through
bilateral approaches.

Throughout this Administration, the United States brought important leadership,
expertise, and resources to address the economic, political, and security
challenges facing the region. We provided active leadership in the ASEAN
Regional Forum, attending dozens of working level meetings throughout the
region. The Secretary himself attended each year's ARF Ministerial meetings. We
supported confidence-building measures and cooperative work in key areas such
as enhancing the security of Southeast Asia's strategic waterways,
non-proliferation, and counterterrorism. We have also worked to strengthen ARF
as an organization, getting agreement on an ARF Unit within the ASEAN
Secretariat and guiding the ARF members toward preventive diplomacy.

The United States also participated actively in the Asia-Pacific Economic
Cooperation forum or APEC. APEC provides a unique opportunity for leaders from
around the region to meet annually. In fact, the President, Secretary of State,
and U.S. Trade Representative will all be attending the APEC annual meeting in
Chile next week. President Bush will meet with his 20 APEC counterparts and
work through a very substantive agenda that includes three key objectives:

* support for trade liberalization and facilitation, especially by supporting
the Doha Development Agenda and ensuring that FTA's are truly
trade-liberalizing, WTO-consistent, and comprehensive;
* concrete action to implement the APEC Leaders' 2003 Bangkok Commitments on
security;
* promotion of transparency and fighting corruption.

The President announced in October 2002 the Enterprise for ASEAN Initiative,
which we are using to deepen our trade relations with Southeast Asia. We have
implemented the ASEAN Cooperation Plan, announced by the Secretary in 2002.
Under this plan, we have committed over $9 million to fund cooperative projects
with ASEAN on issues from trade facilitation to counterterrorism to disaster
management. In this work we developed partnerships with other countries like
Australia and Japan who contribute financial support for projects of common
interest.

Favorable Trends

At the beginning of the Administration, we reaffirmed America's traditional
policy priorities of security, stability, democratization, free markets, and
human rights. These priorities formed the cornerstone of our engagement with
the region throughout the 4 years. We pressed forward on a broad front on these
priorities, raising them at every opportunity and supporting them with our
actions and assistance. What we have seen over the past 4 years are several
trends favorable to our interests in the region.

Spread of Democracy

None of the trends is more important than the region-wide strengthening of
democracy. Already this year, successful elections have taken place in Japan,
the Republic of Korea, Taiwan, Mongolia, the Philippines, Malaysia, Indonesia,
Australia, and even Hong Kong, for half of its Legislative Council seats. In
the coming months, East Asians can look forward to elections in Taiwan and
Thailand. The success of democratization cannot help but demonstrate to the
remaining non-democratic countries the advantages of giving the people a voice
in their own governance.

I would especially like to mention the remarkable democratic progress we have
seen in Indonesia. Very little in its history of colonial rule prepared it to
succeed as a democratic state. After a hard-fought battle for independence in
the 1940s, its first hesitant steps toward democracy were followed by 32 years
of autocratic rule under former President Suharto. In the late 1990s the Asian
economic crisis provided the final stimulus for transition to a new political
regime. This year, Indonesia successfully conducted a series of elections,
voting in a new parliament and for the first time in its history, a
directly-elected president. International observers hailed these elections as
fair and peaceful exercises, and the Indonesians are rightfully proud of the
transition they have gone through. Incidentally, Indonesia's most recent
election turnout was about 117 million, one million more than the number of
American voters who cast ballots last week, despite our 25% larger population.
Throughout this time of democratic reawakening, the United States has stood by
Indonesia, providing support for its people and assistance in strengthening its
democratic institutions. As an example, in August of this year, the Embassy
signed an agreement with the Government of Indonesia for a 5-year program that
will provide a total of $468 million for basic education, water, nutrition, and
the environment.

Increased Economic Opportunities and Greater Prosperity

Prosperity is growing, and nations of the region are moving toward greater
economic openness, lower trade barriers, and regional cooperation. Income
levels have doubled and redoubled almost everywhere in East Asia. East Asian
nations are looking increasingly beyond their borders for markets, investment
capital, higher education, and ideas.

Increased Security and Stability

East Asia is an area largely at peace, despite the long-standing tensions on
the Korean Peninsula and in the Taiwan Straits or the handful of local
separatist conflicts. There has been a widespread rejection of radical Islam in
Southeast Asia. The kind of radical Islam that spawns terrorism appeals to a
very small segment of society and the terrorists are few in number. Throughout
the East Asia-Pacific region, governments and people have recognized the
advantages of resolving differences through dialogue and the ballot box, and of
maintaining political stability as an essential ingredient of economic
prosperity.

Increased Attention to Global Issues

The U.S. continues to lead the way on alleviating human misery in Asia by
combating human trafficking, HIV/AIDS and other infectious diseases, narcotics
trafficking, international crime, and promoting human rights. We've noticed a
large increase in interest in the region to these issues. The increased efforts
by governments in the region to combat human trafficking and to fight HIV/AIDS
are very positive signs. Development assistance is up sharply in Asia and even
more world-wide; appropriated State Department and USAID resources for all of
Asia totaled $2.9 billion in FY '04, compared to $1.93 billion in FY '02. At
the UN in September 2003, President Bush pledged a significant $50 million to
combat human trafficking. On HIV/AIDS, the President has committed the largest
portion of funds toward ending this horrible disease--$15 billion over 5 years.
Under the President's leadership, Vietnam was added as the 15th country to
receive funds under the President's Emergency Plan for AIDS Relief. The
Emergency Fund will work with NGOs to prevent at least 660,000 new infections,
and provide care for 65,000 people infected and affected by HIV/AIDS. This is
just a small example of giving substance to these issues.

Millennium Challenge Account

Every so often, a really significant new program appears. President Bush took
our international development goals one step further and stated that America
must lead by example. He created the Millennium Challenge Account (MCA)--a
bold, new initiative that provides the greatest amount of foreign development
assistance since the Marshall Plan. Through the MCA, the U.S. provides
development assistance to nations with a proven record of governing justly,
investing in their people, encouraging economic freedom, and fighting
corruption. Congress approved $1 billion in start-up funding in 2004, and we
hope to increase this to $5 billion a year by 2006. Sixteen of the world's
poorest countries were selected for the first year of the program, including
two in the East Asia-Pacific region: Mongolia and Vanuatu.

Through the Millennium Challenge Corporation, we negotiate compacts--or
contracts--with developing countries to establish mutual responsibilities and
expectations. We invest in their projects and measure the results in economic
growth and poverty reduction. We believe this program will encourage other
countries to follow suit and improve their governance in the future.

These successes over the four years of this Administration represent a solid
record of accomplishments.

The Challenges Ahead

While it is clear that we have contributed much in the last 4 years to bring
security, stability, democracy, and prosperity to the Asia-Pacific region, key
problem areas remain. Chief among these are the situation in North Korea and
continuing cross-Strait tensions. In addition, in the future, we will also have
to contend with such challenges as promoting genuine national reconciliation
and democracy in Burma; opening China to equal trade in products and services;
countering terrorism; and addressing issues of a global nature, such as the
proliferation of weapons of mass destruction, environmental degradation, drug
trafficking, the spread of infectious diseases, and human trafficking. What
this Administration did achieve was to put in place structures and mechanisms
that will help future Administrations resolve these challenges.

Good Starting Point

I have already mentioned the generally good bilateral and multilateral
relations and the strong alliances we have grown and nurtured for the last 4
years. This wealth of friendship and good will serve to open doors for the
second Bush Administration.

We also began the work of restructuring of our global defense posture to
improve reactions to emerging threats while maintaining the ability to address
traditional threats. We are taking advantage of advances in technology that
have multiplied the combat power of our individual soldiers to reduce our
military footprint in the region. At the same time, we are using our increased
mobility to guarantee that we will be present when needed to help our friends
and allies. Our forces will not only be available to meet long-standing threats
lingering from the past century, but will also be able to move rapidly anywhere
in the region to confront new threats. We are engaged in discussions with our
allies and friends on how best to go about this restructuring while maintaining
our commitments to them.

North Korea

Although, as I mentioned, we did not successfully reduce the long-standing
tensions on the Korean Peninsula, we have established what we believe offers
the best hope for resolution of this problem: the Six-Party Talks framework. As
I explained here at the Wilson Center in December of 2002, our discovery, and
Pyongyang's subsequent acknowledgement, of a covert uranium enrichment program,
required us to adjust policy midstream by recognizing that in this instance
bilateral diplomacy had failed. We now adhere to the principle that
multilateral diplomacy is the best way to ensure that North Korea lives up to
its international commitments and obligations. This administration remains
committed to a peaceful resolution of the multiple problems on the Korean
Peninsula, beginning with the necessity for the D.P.R.K. to denuclearize. As
President Bush said during his visit to the R.O.K. in February 2002, "We're
prepared to talk with the North about steps that would lead to a better future,
a future that is more hopeful and less threatening." Nonetheless, we are sober
and realistic about the prospects for diplomacy and will not approach the
D.P.R.K. with blinders on. North Korea needs to make a strategic choice and, so
far, shows no sign of a readiness to change course.

The Six-Party Talks, hosted by China, harness the diplomatic leverage of the
parties most directly affected by D.P.R.K. proliferation to our effort to
dismantle in a permanent, thorough, and transparent manner all of North Korea's
nuclear programs. We recognize that all the countries in Northeast Asia have a
vital stake in this issue. The Six-Party Talks framework allows each to
contribute to a successful outcome for all. The D.P.R.K. and the nuclear issue
it poses represent a continuing challenge.

Proliferation of Weapons of Mass Destruction

Another threat to regional and global security is the proliferation of weapons
of mass destruction and the means to deliver them. While in the past we were
primarily concerned with proliferation from state to state, we have become more
conscious of the possibility that terrorist organizations could use these
weapons to wreak death and destruction on innocent persons in any location in
the world. For this reason we initiated the Proliferation Security Initiative
to stop the transit of these weapons. I am pleased to say that Australia and
Japan are among the core participants in PSI.

Maritime Security

Today, the states that border the Strait of Malacca are beginning to work
together to ensure the security of that strategic waterway, through which half
the world's oil flows to markets in the region and beyond. We will continue to
look for ways in which we can help these littoral states, which have the
sovereign responsibility for ensuring the security of straits, to enhance their
capabilities and their cooperation. Enhanced maritime security in the Malacca
Straits can deter or even prevent a range of transnational maritime crime,
including smuggling, trafficking, and potential acts of terrorism.

Burma

We continue to follow closely developments in Burma and remain deeply concerned
about the safety and welfare of Aung San Suu Kyi and other political prisoners.
Over the course of the past several weeks, a number of senior Burmese officials
have been ousted from their positions and replaced by hardliners. The current
Prime Minister, Soe Win, was reportedly involved in the decision to attack
Nobel Laureate Aung San Suu Kyi and her supporters on May 30, 2004. In my
opinion, Burma is moving steadily away from its ASEAN counterparts and toward a
most objectionable one-man rule. We continue to press Burma's leader and his
henchmen to engage the democratic opposition and ethnic minority groups in a
meaningful dialogue leading to genuine national reconciliation, to release Aung
San Suu Kyi and other political prisoners immediately and unconditionally, and
to allow the National League for Democracy to reopen its offices and to take
steps to respect and ensure the free exercise of the fundamental human rights
of the people of Burma.

Conclusion

For the past 4 years, this Administration maintained a vigorous policy of
engagement with the East Asia-Pacific region, and it has established a good
structure to continue to move forward in President Bush's second term. Some
have suggested that the U.S. is withdrawing from the region. But the record of
the Bush Administration is clearly reflective of an intensified American
involvement and certainly not any withdrawal. Let me end with this thought: we
are an Asia-Pacific country not only by geography, but also by virtue of our
openness to free trade, our support for the growth of democracy, our interest
in worldwide security and stability, and the enduring ties of the millions of
Americans of Asian origin. We are a key player in the region, and we are in the
region to stay.

[End]


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