[Title] Secretary of State Baker's Address on "A New Pacific Partnership"

A New Pacific Partnership: Framework for the Future

Secretary Baker's address prepared for delivery before the Asia Society in New York City on June 26, 1989.

Thank you for that introduction, and I am honored to be here. I am especially happy to appear before the Asia Society in the company of Japan's Foreign Minister, Hiroshi Mitsuzuka. As the representative of a great democracy, the Foreign Minister understands, as we all do, that a free government depends upon well-informed citizens who are active in public affairs. The Asia Society can, therefore, reflect with pride upon its contribution to America's understanding of East Asia and the Pacific rim. Each one of you, by participating in the [Asia] Society, makes a unique contribution to our national interests.

Our understanding of events in Asia and the Pacific has become all the more important because the postwar era is over. In Asia, as in Europe, a new order is taking shape. While the rites of passage will be painful - China proves that - it is an order full of promise and hope. I believe strongly that the United States, with its regional friends, must play a crucial role in designing its architecture.

There are major challenges to be met as the new order emerges. In Asia and the Pacific, as elsewhere in the world, the demand for democracy is the most vital political fact of our time. The Philippines and South Korea have made the transition to free government. But, as we have seen to our sorrow last year in Burma, and more recently in China, there are no guarantees of progress.

Another challenge stems from the very fact of the Pacific rim's economic success. Economic achievements carry new responsibilities. Explosive growth has been accompanied by imbalances that threaten the integrity of the open trading system.

Finally, we continue to face security challenges. Conflict continues in Indochina. And on the Korean Peninsula, there remains a heavily armed stand-off. Elsewhere in Asia, the postwar security arrangements are being strained by economic constraints, changing threats, and rising nationalism. Yet without a regional consensus on defense, all other achievements will be put in doubt.

The Pacific region is clearly of great and growing importance to the United States. That is why President Bush and Vice President Quayle visited Asia within the first 100 days of the new Administration. In a few days, I will be traveling to Tokyo to meet with other donors to the Philippines Multilateral Assistance Initiative. Then, I'll go on to Brunei to meet my colleagues in ASEAN [Association of South East Asian Nations], one of the Pacific's most constructive regional organizations.

The purpose of my trip is to establish the framework for a new Pacific partnership. To build that new partnership, we need continued American engagement in the region's politics, commerce, and security. We need a more creative sharing of global responsibilities with Japan. And we also need a new mechanism to increase economic cooperation throughout the Pacific rim.

Elements of the New Partnership: American Engagement

The foundation of the new Pacific partnership must be the engagement of the United States. President Bush has declared rightfully that America is a European power and will remain one. America is also a Pacific power, and we will remain one.

The stakes are great. In 1988, for example, our transpacific trade totaled $271 billion, far exceeding our transatlantic commerce of $186 billion. U.S. trade with East Asia has more than doubled since 1982.

Eight of our top 20 export markets are now in the Pacific. U.S. investment there, exceeding $33 billion, accounts for 23% of all overseas profits earned by U.S. corporations.

The prosperity of the Pacific, however, depends upon the peace of the Pacific. For four decades, the United States has provided a framework of security that has permitted the region to prosper. America's forward-deployed deterrent remains more essential than ever to the security of the Pacific. And, as we demonstrated through the treaty abolishing intermediate-range nuclear forces, we will not seek to improve the security of another region at Asia's expense.

Today, our allies are stronger and more prosperous than ever. And there may be new opportunities to reduce both political tensions and threatening military capabilities.

Surely we will be able to find creative, new ways to assure our mutual defense. Just as surely, we must avoid false complacency. We have fought three major wars in East Asia in the past 45 years. Neither we nor our allies want to fight another.

I think that the facts are clear and the conclusions inescapable. America's unique political, economic, and military capabilities provide the foundation for a prosperous and secure Pacific. And that foundation can be strengthened further through improved regional partnerships that reflect the achievements of our friends and allies.

The U.S.-Japan Global Partnership

Among those relationships in the Pacific, none is more important to the region or the world than our alliance with Japan.

Over the past decade, that alliance has experienced a fundamental change. Japan has become a world power. We applaud this achievement which holds so much promise for the future. But to make the most of that promise, the United States and Japan must build a new and truly global partnership. The foundations for that global partnership are now being laid.

- Japan is shouldering more of the mutual defense burden and provides 40% of the cost of stationing U.S. forces in-country.

- The recently concluded FSX fighter codevelopment project is an important advance as we strengthen our cooperation in defense and technology.

- Japan will soon be the largest donor of overseas development assistance. Its role in the Philippines' assistance initiative offers a prime example of the good Japan can do in bolstering emerging democracies and sharing responsibilities.

- Finally, Japan has offered to help in alleviating the international debt proplem{sic}.

There are, of course, other issues that will find their way onto the agenda of a global partnership, including environmental protection and international peacekeeping. But the message is clear. The time has arrived for Japan to translate its domestic and regional successes more fully into a broader international role with increased responsibility. And I am glad to say here today to my Japanese colleague, Foreign Minister Mitsuzuka, that I look forward to a new closeness of coordination with Japan.

This expanding relationship will require a transformation of outlook and policy in both our countries. That is already evident in the area of trade, where our bilateral relationship continues to be troubled. Prime Minister Uno himself put it best when, in his first major speech to the Diet, he urged Japan to "embark upon rectifying those institutions and practices that are objectively viewed as unfair." Though we have seen some progress in the trade area, the full opening of Japanese markets must still be achieved. And at the same time, we look forward to the full implementation of the structural reforms advocated by the Maekawa report.

We and Japan must recognize how interconnected we really are. That is why we are looking to begin a structural economic initiative. Its purpose is to identify, on both sides, impediments to the reduction of economic imbalances - and to develop action plans to remove them.

Change will be required of the United States, not just of the Japanese. That is why President Bush is determined to put our American house in better order - to improve our education, to sharpen our competitiveness, to reduce the trade and budget deficits that weigh so heavily on our economy. And we will continue to oppose the protectionist pressures that menace the world trading systems. The challenge of structural change is not Japan's alone.

Pacific Economic Cooperation

Let me turn now to the next part of the framework - a new mechanism to increase economic cooperation throughout the Pacific. Last year intra-Asian trade approached $200 billion, reflecting the rapid pace of Pacific rim economic integration. Yet unlike Europe, there are inadequate regional mechanisms to deal with the effects of interdependence. Many distinguished statesmen and influential organizations have suggested ways to fill the gap - among them Australian Prime Minister Hawke and MITI [Japan's Ministry of International Trade and Industry] during the time Hiroshi Mitsuzuka headed it. All their suggestions share the objective of improving economic cooperation and offering a regional forum to discuss a range of common problems.

Clearly, the need for a new mechanism for multilateral cooperation among the nations of the Pacific rim is an idea whose time has come. Our involvement in the creation of this new institution will signal our full and ongoing engagement in the region. And by furthering the development and integration of market economies within the international system, we strengthen the collective force of those that share our principles.

I want to explore the possibilities for such a mechanism in detail during my trip. The United States will not offer a definitive blueprint. We will be looking, instead, for a consensus, drawing on the best elements from various plans. This new mechanism should be based on the following key principles.

First, any mechanism should encompass a wide array of issues, extending from trade and economic affairs to issues such as cultural exchange and the protection of the Pacific region natural resources. As such, it would embody what the President has called "creative responsibility-sharing," meaning that each government should act commensurate with its resources and capabilities. All our economies have benefited from the world trading system and all should act commensurate with their resources and capabilities to help strengthen it.

Second, any Pacific-wide institution must be an inclusive entity that expands trade and investment. It must help, not hinder, already existing efforts, such as the Uruguay Round of GATT [General Agreement on Tariffs and Trade], the OECD [Organization for Economic Cooperation and Development], or a regional group, such as ASEAN. It should be based on a commitment by market economies to facilitate the free flow of goods, services, capital, technology, and ideas.

Third, a pan-Pacific entity should recognize the diversity of social and economic systems and differing levels of development in the region. At the same time, we should recognize that private initiative and free-market policies offer the best route for individual opportunity and higher living standards.

Today, Minister Mitsuzuka and I talked about the possibility of such a new entity. And I will be discussing how we can create this new mechanism when I see Prime Minister Hawke this week and our ASEAN friends next week. If a consensus can be reached, we would support the Prime Minister's call for a ministerial meeting this fall as a first step toward developing such a new Pacific institution.

Constructive Relations With China

Full American engagement, a global partnership with Japan, and a new political mechanism for Pacific economic cooperation are critical pieces in the puzzle of Asia's future. But that future will be incomplete without China. And today, more than ever, China casts a long shadow over the Pacific.

China had made great economic strides. Per capita income doubled in a decade. An open window to Western trade, technology, and investment was an essential part of reform. To sum it up, if I can, China had decided to join in regional progress rather than remain isolated from it.

History shows, however, that economic and political reforms are but two sides of the same coin. Now it has become all too evident that the pace of political change in China did not match the aspirations of the Chinese people.

The President has condemned in the strongest terms the brutal events of this past month. We and other nations have suspended business as usual. But we and the rest of the world must not let our revulsion at this repression blind us to the pressures for reform.

China has suffered a tragic setback, but the story is not over. As the President said, "the process of democratization in communist countries will not be a smooth one, and we must react to setbacks in a way that stimulates rather than stifles progress."

That is why we have acted in a measured way. The hasty dismantling of a constructive U.S.-Chinese relationship, built up so carefully over two decades, would serve neither our interest nor those of the Chinese people. Above all, it would not help those aspirations for democracy that were so obvious in the millions who marched to support the students in Tiananmen Square.

Having said that, let me be clear: The U.S. Government and its people will stand for the democratic values we hold dear. China's current leadership may have cleared the square; they cannot clear the conscience. China's rendezvous with freedom, like its rendezvous with the advancing nations of the Pacific, cannot be long delayed. We will be there to help when the day follows the night.

Conflict in the Pacific

Finally, we and the entire region must deal with the remaining major conflicts that threaten peace: the Korean Peninsula and Indochina.

I must note with regret that the North Korean regime has yet to abandon its self-imposed isolation or its pressure tactics intended to destabilize the Republic of Korea. We will continue to probe for hints of progress in reducing tensions between North and South, looking for signs of a willingness to engage in greater glasnost and military transparency. Our policy is to facilitate reconciliation through dialogue with all concerned parties, above all through direct talks between South and North. We will maintain fully our security commitment to Korea to faciliate such progress and prevent armed conflict.

In Cambodia the shooting continues and the danger of renewed civil war is real. Hanoi's announced intention to withdraw its troops by the end of September has accelerated efforts toward a negotiated settlement. Our principal objectives are to bring about a verified Viet-namese withdrawal, to prevent a return to power of the Khmer Rouge, and to provide the Cambodian people a genuine opportunity for self-determination. We believe comprehensive agreement, backed by a credible international presence under UN auspices, is the best way to achieve these goals.

We believe that Prince Sihanouk's leadership is essential to the process of creating an independent Cambodia at peace with itself. That is why we have asked Congress to authorize additional aid to the noncommunist resistance. Such aid will strengthen the Prince's position in the political process now underway and increase the prospects for a settlement which can ensure that the Khmer Rouge never again take power.

As we examine the possibilities of resolving the remaining Pacific conflicts, I want to note here some new developments in Soviet policy. For much of the postwar era, Soviet actions in Asia could only be described as ominous. Moscow has deployed a formidable military presence able to project naval and air power well into the Pacific.

Three years ago, at Vladivostok, General Secretary Gorbachev announced a new approach to Soviet interests in Asia. After easing Sino-Soviet border tensions, withdrawing Soviet troops from Afghanistan, and influencing Vietnamese restraint, Mr. Gorbachev was able recently to visit Beijing. President Bush welcomed this development. It confirms that a constructive Soviet approach is possible if Moscow changes its policy of military intimidation and support for aggression.

Now, it is time for new Soviet deeds to match new Soviet thinking. Let Moscow end its occupation of Japan's Northern Territories. Let Vladivostok become an open port, as Mr. Gorbachev proposed 3 years ago. Let special economic zones bloom in the Soviet Far East, as Mr. Gorbachev suggested 1 year ago. Let the Soviet Union cooperate in resolving the tensions and hostilities in Korea and Cambodia.

Conclusion

A political philosopher once wrote that "there is nothing more difficult to take in hand, more perilous to conduct, more uncertain in its success, than to take the lead in the introduction of a new order things." Yet today in the Pacific and East Asia, as in Europe, we face the inescapable challenge of building a new order.

There are perils. There will be difficulties. Yet I believe that despite these uncertainties, the rewards of a free, prosperous, and secure Pacific are within our reach.

That calls for a new Pacific partnership, based on a global sharing of responsibilities with Japan. We also need a new political mechanism to enhance economic cooperation in the Pacific rim. And we need to address the points of conflict that still threaten the peace of the Pacific.

Let me close on this note. I believe that, ultimately, what beckons us to our Pacific destiny goes beyond the reckoning, of material interests. It is the idea of a creative harmony, the product of many different nations, each with its own approach but drawn together around certain principles. It is the faith that we can create a Pacific community reaching out to the rest of the world. It is, in short, the belief that free peoples, working together, can emancipate our region at last from historic burdens of poverty and conflict. That is our vision, to which we this day dedicate our new Pacific partnership.