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Answer. In the Joint Declaration, China made a commitment that Hong Kong's Legislative Council shall be constituted by elections. The provisional legislature it announced last month is clearly not one constituted by elections. We believe a legislature elected on the basis of open, fair and representative elections should be put into place as soon as possible after reversion. This would enable China to fulfill the commitment it has made.

China has also committed to an independent judiciary for Hong Kong, with ultimate judicial authority resting in a Court of Final Appeal. In 1995, Britain and China reached agreement on establishment of the Court of Final Appeal in a fashion both judged consistent with the Joint Declaration. The Administration supports that agreement because it provides for continuity of the rule of law in Hong Kong.

The key question is whether China will live up to these and other commitments to preserve Hong Kong's high degree of autonomy after July 1. We do not yet know the answer. In some areas, such as economic and immigration matters, China's statements and actions have been reassuring. In other areas, such as respect for political institutions and the freedom of expression, Beijing has shown an insensitivity to the way in which Hong Kong works and the wishes of its residents. As the transition approaches and beyond-we will continue to clearly convey our expectation that Hong Kong's autonomy, stability and prosperity must be preserved under Joint Declaration principles.

Question. A lot of people, including this Senator, are watching very closely China's efforts to join the World Trade Organization. Do you agree that China must first open its markets and comply with WTO rules on fair trade practices before it can be granted membership into the WTO?

Answer. We will need to have a commercially acceptable protocol package of commitments signed and in-hand before we will agree to China's WTO accession. The United States is ready to work with China before and after its accession to ensure it fulfills it commitments on a timely basis.

Question. China strictly controls foreign investment and restricts access in many sectors, such as auto parts and textiles. Do you agree that WTO accession for China must be based on significant market access for goods and investors?

Answer. We will seek a protocol package of commitments that will bring greatly enhanced market access for our traders and investors. Specifically, we will insist that China eliminate WTO-inconsistent aspects of its industrial policies and provide significantly improved access in the services sector. USTR is now leading an interagency team that is renegotiating our bilateral textile accord with China. This team, which has been seeking enhanced market access commitments in China's domestic textiles market, has been coordinating closely with the USTR-led negotiators who are working on China's WTO accession.

Question. Do you agree that if China joins the WTO it should be based on economic considerations and whether China opens its markets and not based solely on foreign policy considerations?

Answer. Our long-standing policy is that China's accession to the WTO should be based on WTO principles and standards and a commercially acceptable protocol package of commitments to open its markets.

Question. I am concerned that China may seek an exemption from trade laws like the anti-dumping laws on the grounds that it is an "economy-in-transition." During the Uruguay Round, the Administration considered a five-year exemption from the anti-dumping law for Russia. But that proposal was withdrawn after many Members of Congress objected. The risk to American jobs is even greater if China were granted an exemption from the anti-dumping laws. Will the Administration reject any such proposal in the case of China?

Answer. The Department of Commerce takes the lead within the Administration on all anti-dumping issues. The Department of State will continue to participate actively in the interagency effort addressing these issues.

We have no intention of exempting China from our anti-dumping laws. Because China continues to maintain formal and informal price controls on a significant number of key commodities, it is long-standing U.S. practice to use prices from third countries with economies similar to China's where market prices prevail to develop price data in anti-dumping investigations concerning goods made in China.

Question. I understand that China currently restricts the ability of foreign firms to import into and export from China, as well as their ability to distribute goods within China. These "trading rights" are granted only to certain designated trading companies (which are often government-owned entities) and U.S. firms doing business in China must use these trading companies. Will the United States insist that China grant all U.S. companies full trading rights as a condition of China's entry into the WTO?

Answer. Liberalized trading rights in China for U.S. and other foreign companies are one of the core commitments we and other WTO members seek from Beijing. Without this right, the Chinese could effectively "nullify" many of the other market access commitments they might make as part of their WTO accession package. Moreover, it is important to note that we seek to allow all individuals and entities in China-local or foreign-to engage in foreign trade of goods.

Question. I want to work very closely with you on the matter of China joining the WTO. During this process with China, I urge you to consult Congress and this committee on a regular basis. Will you do that?

Answer. Absolutely. In addressing the China WTO issue, the State Department works closely with the United States Trade Representative (USTR), which has the lead in negotiating trade agreements. I plan to cooperate closely with Ambassador Barshefsky on this and other trade issues and would be pleased to address these during my regular consultations with Congress on foreign policy issues. I also anticipate that the State Department, along with USTR and other agencies, will maintain an active staff-level dialogue with thee relevant committees and interested members in both houses and both sides of the aisle.

Question. Will the new State Department Advisory Committee on Religious Freedom Abroad have sufficient clout in the international arena?

Answer. The Committee will prove to be an invaluable resource on specific policy matters as well as for raising the profile of religious freedom issues within the U.S. Government. We look forward to working with Committee members to explore ways in which the U.S. Government can better address these issues and support the activities of nongovernmental organizations working to promote freedom of religion.

As you know, the operation of all State Department Advisory Committees is governed by relevant statutes and regulations which offer specific guidelines as to the range of their activities. By law, Advisory Committee members are not themselves diplomatic representatives of the United States.

RESPONSES OF MADELEINE ALBRIGHT TO QUESTIONS ASKED BY SENATOR LUGAR Question. Numerous studies have questioned our diplomatic readiness for handling the foreign policy tasks we will confront in the future. International affairs funding has been declining, equipment is increasingly obsolete, US consulates and AID missions have been closed and other resources available for the conduct of American diplomacy have been trimmed. Some have challenged this grim portrait with the view that ample funds exist to cover our diplomatic needs, but have been allocated for other needs. If you had more resources in the international affairs Function 150 account, where would you allocate them? Where are our greatest needs?

Answer. The Administration will provide a detailed account of its foreign policy priorities when it submits its FY 1998 budget on February 6. The following are among the programs that will receive the highest priority as we seek Congressional support for what we hope will be a Function 150 budget restored to adequate funding levels.

One of our most critical national security interests during the next four years is the future of the New Independent States of the former Soviet Union. We will seek funding for a new Partnership for Freedom (PFF) initiative, the centerpiece of which is a package of measures built to move the NIS, particularly Russia, from economic stability to economic growth, concentrating heavily on trade, investment, and anticrime programs, as well as environment and energy.

Our participation in international organizations continues to be hamstrung because of our outstanding debts of over $1 billion. In order to pay these unmet obligations, the United States must devise a plan to keep our commitments. The FY 1998 budget request will recommend that we pay current assessments to international organizations (CIO) and international peacekeeping activities (CIPA) in FY 1998. Remaining arrears to international organizations and for peacekeeping activities would be paid under an agreement we hope to reach soon with the Congress. The request for the Multilateral Development Banks would include funding to meet FY 1998 scheduled payments, sufficient funds to clear arrears to the 10th replenishment of the World Bank's International Development Association (IDA-X), and funds to pay down about one-third of arrears to other institutions.

Our diplomats and their support staffs require adequate resources to ensure their "readiness" as much as their military colleagues. Yet five years of flat budgets have cut State Department operations to the bone. We must restore adequate funding for operations and improve our infrastructure. The Department budget request has been formulated to meet urgent investments in information systems, facilities, and

personnel. Much of our information technology is obsolete, frequently breaks down and requires costly repair; our infrastructure deficit is over $2 billion; and 35 percent of our motor vehicles are older than GSA standards permit and need to be replaced.

There will be new State Department funding requirements in FY 1998. We have an International Telecommunications Union (ITU) telecommunications conference to sponsor in Minneapolis; facilities in China and elsewhere badly need repair; in Germany, the U.S. embassy will move from Bonn to Berlin; and there are new FOIA reporting requirements and increases in passport workload. These are but a sample of upcoming day-to-day activities.

Our allocation process is based on logical and studied analyses of where our national interests lie. Expenditures are directed strategically at the vital regions and functional areas of the world where America has the most at stake.

The value of peaceful diplomacy may be hard to quantify, but the high cost of inadequate diplomacy is something we have seen too often. I hope that we will work together to enter the 21st Century with both military and diplomatic readiness.

Question. Late last month, the IFOR was replaced by SFOR, the Stabilization Force, which is about half the strength of IFOR. SFOR is operating under similar rules of engagement as IFOR and has less fire-power, but faces many of the same dangerous tasks as its predecessor force. Although there has been considerable progress in separating the fighting forces, and the killings have ceased, there is a distinct likelihood that fighting could resume because many of the problems under IFOR will now be confronted by a smaller, less potent SFOR. Is SFOR too small and under-powered to prevent serious fighting over unresolved issues in Bosnia emerging from the Dayton Accords? Is more war inevitable in Bosnia?

Answer. The conclusion of all U.S. agencies is that the SFOR is fully prepared to respond to any serious breach of the peace in Bosnia now. Given the current low state of readiness of the armies of the parties, any serious effort on the part of one of them would necessarily involve a rather long-and public-buildup of men and material, which SFOR would be able to prevent. Indeed, the quicker, more mobile SFOR will be in a better position to respond to potential "breakouts" than would a larger, more heavily armored force, such as the original IFOR.

Many of the most dangerous tasks which IFOR faced, in fact, will not be faced by SFOR-precisely because IFOR was so successful in accomplishing its mission. When IFOR first crossed into Bosnia in December 1995, it faced the fully mobilized, armed and deployed forces of the warring forces. Today, those forces have returned to their barracks, placed their weaponry in SFOR-approved cantonment centers, and dramatically reduced the number of military personnel still on active or reserve duty. In addition, IFOR established a thousand-mile Zone of Separation (ZOS) between the forces, demilitarized the ZOS and oversaw the exchange of significant and previously contested pieces of territory. As we saw, IFOR had more than adequate equipment, training, authority and rules of engagement to deal with any serious threats-which never materialized.

We believe that renewed warfare is not inevitable, and that the deployment of SFOR for an 18-month mission should help enable the peace in Bosnia to become self-sustaining. The role of SFOR is a critically important one, but it is only one component of overall peace implementation. SFOR's mission, which is more limited than was that of IFOR, is to stabilize the military situation while further civilian consolidation takes place.

The United States will be working with the parties during this period to achieve a military balance, based on implementation of the arms control agreement and on the U.S.-led Train and Equip program for the Federation military. We will also seek to ensure fully functioning and effective joint political institutions, improve freedom of movement throughout the country and the return of refugees and displaced persons, and implement the arbitration decision on Broko.

Question. There is a strong desire by many for independence of Taiwan, more autonomy and a greater role in the UN and other international fora. However, Beijing has made it clear it will go to war, if necessary, to defend the "one China" policy and has backed up that statement with belligerent actions during the last Presidential election in Taiwan. How will we respond to those Taiwanese who believe their achievements merit a greater role in world affairs? Do you support a more independent role for Taiwan in the UN?

Answer. We fully recognize the tremendous achievements of Taiwan in the economic arena during the past decade and, more recently, in its transition to an open democratic system.

Both Taiwan and the People's Republic of China (PRC) have a "one China" policy. They disagree on its meaning. Our policy toward Taiwan continues to be governed by the Taiwan Relations Act (TRA) and our three joint communiques with the PRC.

We maintain strong, robust, unofficial ties with Taiwan and help provide for its defense.

Consistent with our "one China" policy, U.S. recognition of the PRC as the sole legitimate government of China in 1979, and the TRA, we do not support member state status for Taiwan at the United Nations. However, we do support Taiwan's appropriate participation in international bodies which are open to membership by non-states.

Question. You served for four years as the U.S. Ambassador to the UN. During that time, the peacekeeping budget skyrocketed as the U.S. supported peacekeeping operations in Somalia, Cambodia, Bosnia, Haiti among others. We are now in arrears to the UN for more than $1 billion, mostly for assessed contributions for peacekeeping operations. As a participant in UN decisions, where do the major weaknesses in the UN system lie? Do you believe Congress should express itself before the U.S. votes on UN peacekeeping operations?

Answer. Both we and the UN as an institution have learned a lot over the past several years about how to structure and manage peacekeeping operations. Since the Administration adopted its policy on "Reforming Multilateral Peacekeeping Operations" in May 1994, the scale and cost of UN peacekeeping have declined dramatically. At the height of its involvement in peacekeeping in 1994-95, the UN had about_70,000 troops in the field and an annual peacekeeping budget of over $3 billion. By the end of 1996, there were fewer than 25,000 personnel serving in the UN's 16 on-going peacekeeping missions, at an annual cost of roughly $1.2 billion. The goal of the Administration's peacekeeping reform efforts has been to assure that questions about cost, size, risk, mandate and duration be asked and satisfactorily answered before operations are started, extended or expanded. We also undertook a number of initiatives to improve the UN's ability to plan for and support peacekeeping operations in the field. Our efforts have borne fruit, both in the policy directives laid down by the Security Council and in the Department of Peacekeeping Operations' capacity to manage operations mandated by the Council.

The Administration recognizes Congress's interest in peacekeeping and has pursued an active dialogue with the Congress on these issues. The staff briefings that occur monthly and the written notifications we supply prior to Security Council consideration of new or expanded peacekeeping operations provide a sound basis for our consultations. I look forward to continued exchanges with the Congress on these important issues.

Question. The problem of narcotics and narcotics trafficking has plagued our country for decades with little or no resolution in sight. How helpful is U.S. denial of assistance to those countries unwilling or unable to cooperate with the U.S. war on drugs? Does decertification of other countries' cooperation with the U.S. help or hinder their cooperation and effectiveness on the war on drugs?

Answer. The option of denying narcotics certification to a country can be an effective lever to improve the counternarcotics cooperation of a major narcotics producing or transit country. Because a denial of certification by the President triggers a 50 percent cut-off of U.S. foreign assistance, mandatory voting against that country by U.S. representatives in international financial institutions, and the possibility of discretionary trade sanctions, the issue of fulfilling counternarcotics bilateral commitments or complying with the UN Convention takes on greater importance within a government's agenda. For example, we believe that the denial of certifications to Laos, Peru, Bolivia and Colombia resulted in subsequent improvements in their counternarcotics cooperation.

Question. The Middle East peace process has been slowed in recent months as violence has flared and talks between the parties have been infrequent. Last month, the Israeli Cabinet decided to revive subsidies and tax breaks for Jewish settlers in the West Bank following the killing of an Israeli settler and her son in the territories. Will an agreement satisfactory to both sides on Hebron break the ice on resolving other difficult issues between the Israeli government and the Palestinian Authority? What is our position on the expansion of new Jewish settlements in the West Bank?

Answer. The January 15 agreement on Hebron redeployment should serve as a catalyst, creating a solid foundation for implementation of the Oslo Agreement. The U.S. will continue pressing vigorously on all tracks for a secure, comprehensive and lasting peace between Israel and her neighbors.

The U.S. position on settlements is well-known. Settlement activity is unhelpful. It clearly complicates the negotiating process. When either side says or does things that are seen to preempt the outcome of a negotiation, it makes it that much more difficult to achieve progress.

Question. More than fifty federal agencies now sponsor one or more international exchange programs. Though important, this proliferation creates redundancy and

excessive allocation of funds for administration and too little for exchanges themselves. Do you believe the management of our international exchange and visitor programs should be rationalized or reorganized in order to maximize the return on increasingly scarce resources?

Answer. Thirty-nine U.s. government federal agencies reported that they conducted international exchange and training programs in 1995, totaling some $2.4 billion. They range from the U.S. Information Agency's world-renowned Fulbright program to USAID's training activities at U.S. universities to exchanges in such critical fields as counternarcotics, law enforcement, nuclear safety, and international money-laundering.

International exchange and training programs are an indispensable tool for promoting a wide range of U.S. interests abroad and for addressing common challenges. The Vice President's National Performance Review has been studying the question of possible duplication. Some steps have already been taken to ensure better coordination, including the formation last year of a joint USIA/USAID working group tasked with reducing administrative and programmatic overlap and duplication.

It is also worth noting that the U.S. Information Agency has been a leader in forging public/private partnerships in this field. For every dollar of federal support for exchanges, USIA leverages another dollar from private sector and foreign government partners.

RESPONSES Of Madeleine ALBRIGHT TO QUESTIONS ASKED BY SENATOR ASHCROFT Question. I believe that any deployment of U.S. military forces must be guided by five sure principles. We must:

1. Identify vital U.S. national security interests at stake;

2. Outline clear U.S. military and national policy objectives;

3. Construct a timetable and strategy for achieving those objectives;

4. Develop an appropriate exit strategy; and,

5. Gain the support of the American people for our policy initiatives.

Do you believe each of these criteria was met in deciding to send troops to Bosnia and Somalia? If so, would you explain your basis for saying they were met in each situation?

Answer. The decision to deploy our armed forces is one of the most serious any President can make. He must be guided by sound principles, and those you suggest are a good starting point.

I will base my recommendations to the President on my judgment of what is best for America and in our national interest, always mindful that our armed forces' job is to protect the United States, that the lives of the men and women of our armed forces are precious, and that their protection will be a top priority. We should not use force when diplomatic or economic tools would be effective.

We should not hesitate to use force, however, when it is necessary to defend our vital interests, which include our territory, citizens, economic well-being and the security of our allies. In other situations, I would make recommendations on a caseby-case basis, taking into account a number of factors, including: the U.S. interest involved, the clarity, duration, and feasibility of the mission; whether Congress and the American people have been consulted; our ability to command, control, and protect our forces; and the willingness of other interested states to do their share.

In Somalia, President Bush decided to deploy U.S. forces in response to the humanitarian crisis and the threat to regional peace and stability posed by massive starvation and the movement of refugees. In Bosnia, President Clinton correctly decided that U.S. interests were at stake: the stability of Europe; maintenance of our important alliance, NATO, which was under strain as a result of the continued conflict; and a basic American value of responding to genocide and aggression.

Question. As you know, the 104th Congress passed a law mandating that the United States would pay only 25 percent of UN peacekeeping operations. Yet, the UN continues to assess us at 31.7 percent. Who, in your view, has ultimate sovereignty over decisions that affect the American taxpayers' pocket: the United States Congress or the UN General Assembly: Currently, what percent does the United States have the obligation to pay? Which prevails in this situation, U.S. law or UN edicts? Will the difference be listed by the UN as a debt owed by the United States?

Answer. Under the UN Charter (which is an international treaty to which the Senate gave advice and consent), the United States, along with other UN members, has an obligation to pay for UN peacekeeping operations at the rate of assessment approved by the UN General Assembly. The current rate is 30.862 percent. This rate is determined according to a formula that was approved by the UN General

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