Office of the Press Secretary
For Immediate Release                                    November 7, 1998


     President Clinton has decided to ease sanctions against India and
Pakistan in response to positive steps both countries have taken to
address our nonproliferation concerns following their nuclear tests in

     The President took this step after Congress passed the Brownback
amendment last month as part of the Omnibus Appropriations Act.  This
measure, which the Administration supported, provides limited authority
for the President to waive some of the sanctions imposed on India and
Pakistan in May under the Glenn amendment.

    For the last five months, Deputy Secretary of State Talbott has led
U.S. efforts to persuade India and Pakistan to take steps to lessen the
danger of a nuclear arms race in South Asia and to repair the damage to
the global nonproliferation regime caused by their nuclear tests.  In
response, the Indian and Pakistani Prime Ministers have both declared a
moratorium on further nuclear testing and publicly committed at the
United Nations General Assembly to move toward adherence to the
Comprehensive Test Ban Treaty by September 1999.  Both have committed to
strengthening controls on the export of nuclear and missile technology.
The two are now participating in Fissile Material Cutoff Treaty
negotiations in Geneva.  Finally, the Indo-Pakistani dialogue, including
discussion of Kashmir, has resumed.

     In response to these steps and to encourage greater progress in the
future, the President, after consultations with the Congress, has
decided to make use of the Brownback waiver authority in a limited,
targeted way.  With respect to our bilateral economic ties, he will
restore the Export-Import Bank, Overseas Private Investment Corporation
(OPIC), and Trade and Development Agency (TDA) programs in India and
Pakistan, and lift restrictions on the activities of U.S. banks in India
and Pakistan.  We will also resume our military-to-military
relationships with both countries by restoring military education and
training programs (IMET).

     These steps are intended to demonstrate to the leaders and publics
of both India and Pakistan that we are serious about our dialogue and
that we seek to create a more positive environment that will encourage
India and Pakistan to take further steps to lessen the danger of a
nuclear arms race in South Asia and to repair the damage to the global
nonproliferation regime caused by their nuclear tests.  We look forward
to actions by India and Pakistan as soon as possible to fulfill their
assurances concerning adherence to the CTBT and strengthening export
controls.  We also want to work closely with them in pursuit of a
multilateral moratorium on the production of fissile material for
nuclear weapons, pending entry into force of the FMCT and their adoption
of restraints on the development and deployment of nuclear capable
missiles and aircraft.

     We and many other countries are very concerned about Pakistan's
financial crisis.  The International Monetary Fund is working actively
with Pakistan to develop a program to forestall default on its
international debt.

   To address this issue, the United States and its partners in July
agreed to relax our multilateral sanctions to allow the IMF to negotiate
a support program to strengthen the Pakistani economy.  The IMF is still
negotiating this program with Pakistan.  In light of continuing weakness
in the Pakistani economy, the President has decided that the United
States will work closely with our allies to permit lending from the
multilateral development banks as necessary to support an agreement
between Pakistan and the IMF.  Implementation is contingent on Pakistan
reaching agreement on a credible reform program, including the problems
facing the independent power producers.  Like our decision in July to
support resumption of IMF negotiations with Pakistan, this decision is
in response only to Pakistan's financial emergency.

     Further progress on the benchmarks agreed by the P-5 and G-8 is
necessary and achievable.  We look forward to the possibility of a
Presidential visit to India and Pakistan next year after more progress
has been achieved.  We want to see that visit take place in the kind of
positive environment that should mark our bilateral relationships with
these two important countries.

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