Prior to his appointment as U.S. trade representative
by Bush in 2001, Zoellick served as under secretary of state
for economic and agricultural affairs. Previously he served
as senior U.S. official in the German reunification process
and as U.S. negotiator of the North American Free Trade
During the hearing, both Republican and
Democratic senators praised Zoellick for his work as U.S.
trade representative. “The committee expects that
Ambassador Zoellick will bring to the deputy secretary's
job the same energy and hard work he has devoted to his
role as our chief trade negotiator,” said Senator
Richard Lugar, Republican from Indiana and chairman of the
Foreign Relations Committee.
419 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON,
9:32 A.M. EST, TUESDAY, FEBRUARY 15, 2005
SEN. LUGAR: (Gavel.) This hearing of the Senate Foreign
Relations Committee is called to order.
The committee meets today to consider the nomination of
Robert Zoellick to be deputy secretary of State. Ambassador
Zoellick has served the last four years as President Bush's
United States trade representative. He has a distinguished
career as a public servant having worked in high positions
in the Treasury Department, the White House, and the State
Department during several administrations. He has also excelled
in the private sector, having served as executive vice president
of Fannie Mae.
American credibility in the world, progress in the war on
terrorism, and our relationship with our allies will be
greatly influenced by the effectiveness of the State Department
in the coming years. The department functions best when
it has the benefit of a talented and experienced deputy
secretary who is trusted by the president, the secretary
of State and the Congress. Ambassador Zoellick is highly
qualified to meet this challenge. He will bring to his new
job not only the experience in international affairs which
he has gained as our trade representative, but also intimate
working knowledge of his new responsibility at the State
Under the first President Bush, Ambassador Zoellick served
as undersecretary of State for Economic and Agricultural
Affairs, as well as counselor to Secretary of State James
Baker. During that time, he played a major role in many
important developments across the globe. He was a senior
official at the Two-Plus-Four talks, which helped bring
about German unification. He was the lead State Department
official involved in launching the Asia Pacific Economic
Cooperation Forum. He played an important role in the State
Department's efforts to bring peace to El Salvador and to
Ambassador Zoellick has also displayed an excellent capacity
to work with Congress. In 1991, he, along with other officials
from the first Bush administration, spent many hours briefing
Congress on what was then called fast track authority to
enable the president to negotiate trade agreements. However,
years later, as the U.S. trade representative, he served
as one of the point men in an effort to renew fast track
authority. His tireless efforts helped win approval of what
we now call Trade Promotion Authority, one of the most important
victories of President Bush's first term.
I'm pleased to note that he has worked also with Congress
to expand the African Growth and Opportunity Act, which
I introduced, and to pass the Vietnam Trade Agreement, and
the free trade agreement with Jordan.
The committee expects that Ambassador Zoellick will bring
to the deputy secretary's job the same energy and hard work
he has devoted to his role as our chief trade negotiator.
In four years, he's successfully negotiated free trade agreements
with Singapore, Chile, Australia, Morocco and Bahrain, as
well as CAFTA, a free trade pack with five Central American
countries and the Dominican Republic. He started trade talks
with Thailand, Panama, the Andean countries, and the South
African Customs Union. He has worked with Congress to get
many of the completed agreements enacted into law. He did
all this while overseeing the launch of the current Doha
round of multilateral trade talks involving 144 countries.
The issues involved in the Doha Round, particularly the
goal of changing the current worldwide system of agricultural
subsidies, are very significant, but also very sensitive
for the United States, the European Union, and developing
countries. Ambassador Zoellick has done an excellent job
of handling a difficult, and often contentious assignment.
During the last four years, the Foreign Relations Committee
has enjoyed a close relationship with Deputy Secretary of
State Armitage, who has been a good friend to the Congress,
and appeared before us many times. He testified on many
of the most critical policy topics, including Iraq, Iran,
and North Korea. We counted on him for enumerable consultations
and he took personal interest in committee initiatives,
including our efforts to strengthen the State Department's
post-conflict stabilization and reconstruction capabilities,
and to improve nonproliferation programs. We are eager to
establish a similar relationship with Ambassador Zoellick,
and I am confident we will do so.
Ambassador Zoellick, we welcome you to the committee, we
look forward to a dialogue that will illuminate your thoughts
on the direction of the United States foreign policy, the
management of the State Department, and many other topics.
Before I call upon you for your testimony, it's a very great
pleasure to welcome my great friend, distinguished statesman,
and chairman of the Finance Committee, Senator Grassley
for an introductory statement.
SEN. GRASSLEY: Thank you very much, Mr. Chairman. It's a
privilege to have been asked to help sponsor Ambassador
Zoellick before this committee, because I'm the senator
from Iowa, and he has not lived in Iowa, but he is an Iowa
resident because he's visited our state fair. (Laughter.)
But also because I see Ambassador Zoellick as one of the
very best examples of public service, either capitalized
or small letters, the very best example of public service,
a person who gets into a job, just gives it all the time
that it needs and more, more importantly giving up what
most public servants take as an American right, having weekends
off, and evenings at home watching television and everything
else. I don't think Ambassador Zoellick, at least as I've
seen his work, has ever had an opportunity to do much of
that. And I use that as a measure of a good example of public
service, with the emphasis upon public as one word, because
the public good is upper most in his mind, and secondly
the service it involves to get that done for the public.
And I have a long statement, and I think you anticipated
my statement, because I was going to go into a lot of work
that he has done in his job as trade representative, but
most importantly highlighting one little thing you said,
well, one big thing you said and that was, getting this
whole process started, getting Trade Promotion Authority
back to the president after six or seven years, maybe eight
years, that the president didn't seek it and didn't have
it. And without Trade Promotion Authority, you can't get
done in the United States what needs to be done to promote
jobs, and that is to have export policy that encourages
leveling of the playing field. And so, with Trade Promotion
Authority firmly in hand, then Ambassador Zoellick did what
he promised Congress he would do: he aggressively advanced
the nation's trade agenda, and you went through that.
Through his hard work and tenacious attitude, he initiated
then an additional number of free trade agreements, which
are right now as he leaves this position not entirely completed,
but when they are I believe will significantly benefit our
economy. And perhaps even more importantly, his creativity
proved to be key to unlocking a positive framework for the
present round of Doha World Trade Organization negotiations.
And in this regard, obviously, it's sad to see him go, but
with confidence that his successor will have the same drive
and creativity needed to ensure these negotiations lead
to a successful end.
On a personal level, I have found the ambassador to be a
good ally, and more importantly a good friend, so I don't
have to own a dog in this town. He is genuinely responsive
to the needs of committee members, and to Congress as a
whole. He is always prepared, and you're going to find that
today. In fact, as his staff can tell you, it is a rare
day when he does not know more about the subject at hand
than anybody else in the room. Most importantly, Ambassador
Zoellick has strategic vision and a key understanding of
international politics way beyond just the trade issues.
He does not make a move on the international stage without
understanding how that move fits into a broader international
agenda. I appreciate his commitment to public service, his
keen intellect, his genuine desire to do not just what is
politically expedient, but what is right, and when he does
what's right, that also benefits the politics. There is
no doubt that we're going to miss his service at the USTR,
but I'm confident, should he be confirmed, and I think he
will be, as deputy, he will bring the same dedication, the
same passion, the same intellect, the same strategic vision
to this new post that he did as U.S. trade representative.
To that end, I'm confident that should he be confirmed,
he will make great contributions towards helping our foreign
policy advance. I believe the committee will find Ambassador
Zoellick to be an outstanding candidate. I recommend his
And thank you, Chairman Lugar. And I would like to have
my entire statement put in the record.
SEN. LUGAR: Your entire statement will be made a part of
the record, and we thank you very much, Senator Grassley,
for making that statement this morning
I'm going to recognize your partner in Finance Committee,
and then recognize the distinguished ranking member of the
committee before we move to Ambassador Zoellick's testimony.
But it's a real privilege to have Senator Baucus, a good
friend of the committee, distinguished ranking member of
the Finance Committee with us today.
SEN. MAX BAUCUS (D-MT): Thank you very, very much, Mr. Chairman.
It's a real honor to be here, frankly, to introduce Ambassador
Zoellick to the committee and to follow my good friend and
chairman of the Finance Committee, Senator Grassley. It's
not often that we have opportunities to recommend people
of such high stature to such important jobs, but we certainly
do today, and it's a real honor for me, because I believe
so strongly in Robert Zoellick.
Our relationship really didn't get started off on the right
foot, I might add. (Laughter.) I looked at this guy and
wondered, what's going on here? He's extremely bright. I
probably was envious of his intellect, and of his running
ability. I think he's run a 2:20 marathon. I fancy myself
sometimes as a runner, but nowhere near 2:20 in a marathon.
And he seemed to kind of have it all -- prior experience
in the State Department and other agencies.
But, I want to tell this committee very quickly, Bob Zoellick
became a good friend, and it's because he worked on the
relationship. He came to me, he asked my advice. He told
me what he thought. He was candid, forthright. I didn't
always agree with the administration's trade policy, I must
say. And I don't know if Bob Zoellick, to be frank, also
always agreed with the administration's trade policy. But,
he is so good in furthering the goal of the administration,
and so good in helping advance the ball in virtually every
area that I can think of, and more importantly his candor,
and his forthrightness, and his perceptive ability to kind
of help us move forward.
On another level, I must say that he's a man of his word.
I asked him some time ago if he could set up sort of a kind
of a "Montana Round" of the U.S.-Thai trade negotiations
in Montana, and meet in Montana. And he said, "Yeah,
that's a good idea. Let me look into that." And I thought,
well, gee, he'll look at it and, you know, that'll be the
end of that. But, no, one day I checked my e-mail --
SEN. BIDEN: Were you chairman then? (Laughter.)
SEN. BAUCUS: No, I was not chairman then. (Laughter.) I
was not chairman then. I checked my e-mail one night and
there was an e- mail from Bob Zoellick. And he said, "I
think that's a good idea. So-and-so is looking into it,
and we'll get back to you." And then it went back and
forth in emails, and lo and behold, we're having a Montana
round of the U.S.-Thai trade negotiations.
So I'm not going to repeat all the accomplishments that
my good friend Chairman Grassley mentioned. He did it far
better than I could. But, I just wanted to say, at least
on a personal level, in addition to all the compliments
that the chairman has given to this committee on behalf
of Ambassador Zoellick, that I personally think he's a very
good man, and we are so lucky as Americans to have Bob Zoellick
serving us in the government, particularly in a very high
position as deputy secretary of State.
SEN. LUGAR: Thank you very much, Senator Baucus. I know
Senator Biden joins me in thanking the distinguished chairman
and ranking member of the Finance Committee. It's wonderful
to have this association with your committee today, as we
come together to hear Ambassador Zoellick. As you need to
be excused, please feel free to leave, or to stay, as the
case may be. But, we're grateful to you for coming.
SEN. JOSEPH BIDEN (D-DE): Thank you.
Before Chairman Grassley left, Ambassador Zoellick, I was
for you until I heard how much Senator Grassley liked you,
and I'm forced to reconsider. But when I -- I just want
you to know that his comparing you to a dog was meant as
a compliment. (Laughter.) I just want you to -- I don't
want you to be -- you know, diplomacy, there are different
forms of diplomacy. But, all kidding aside, it was great
to hear Senator Grassley's comments, as well as Senator
Baucus. And they reflect, quite frankly, the universal view
of anybody who has worked with you. And I have a statement
here that I'm going to ask to be placed in the record. Just
let me make two brief comments, Mr. President (sic.)
SEN. LUGAR: (Inaudible) -- in the record in full.
SEN. BIDEN: It's often talked about these days that we need
people who are, as the secretary announced, this is going
to be the --
SEN. GRASSLEY: (Off mike.)
SEN. BIDEN: (Laughs.) I was only kidding, Chuck. (Laughter.)
Are you a St. Bernard, what is it? (Laughter.)
All kidding aside, the secretary has indicated this is a
time for diplomacy. And the best combination I've observed
in my time here, as someone engaging in diplomacy in a difficult
time, is not only to have good instincts, and basic diplomatic
skills, which you obviously have, but to also be, as was
related about you, fact-based.
I used to have a friend on this committee, actually not
in the committee, the assistant Republican leader, Senator
Simpson. Who in debate, he was a great debater, and in a
debate he would occasionally stop and he'd look at Senator
Obama, he didn't know him, but he'd look and he'd say, well,
I'd say my friend is entitled to his opinion, everyone is
entitled to their own opinion, but they're not entitled
to their own facts. And one of the things I've observed
about Ambassador Zoellick, he always knows of what he speaks.
We may or may not disagree, and I'm not at any disagreement.
But, he does his homework, as has been mentioned here. There's
a lot of homework to be done, because, quite frankly, the
diplomatic skills you brought as our trade rep -- and it
required significant diplomatic skills, significant diplomatic
skills, the contacts you made all over the world, the contacts
you've made, and the respect you've earned are going to
serve us very well.
But what gives me some solace here is, you have a prodigious
intellect, and a serious, serious work ethic about knowing
what the facts are. And you're going to be moving into areas
you've not dealt with before, areas that you have not had
to know a great deal about, from proliferation to the training
of Iraqi forces. And I feel very, very good about the fact
that there's going to be someone with your background, and
your demonstrable capability who's willing to come and take
a fresh look at some of this, to actually take a look.
I don't think it's telling tales out of school, Mr. Chairman
-- my friend from Nebraska will appreciate this -- I suggested
that the secretary actually pick up the phone and call some
of the colonels and generals and commanders that we've all
dealt with in Iraq, to actually physically go. I have great
confidence in his objective capability to discern what the
And so I'm anxious for you to get on the job, Mr. Ambassador.
I'm anxious that you take this, what will have to be in
some cases a fresh or initial look at some things you have
not dealt with before. And I'm confident that whatever perspective
you leave with will be one that's more informed. And that's
what I'm looking for, an informed opinion based upon your
own initial and consistent follow-up in terms of essentially
research, and suggestions to the secretary as to how to
proceed. But you are going to be doing a lot, I suspect
-- a lot more active diplomacy than your predecessor, who
I think is one of the best guys I've ever worked with in
your government -- than your predecessor has, because the
secretary can't be everywhere. And so I look forward to
working with you. I think the secretary had made a great
recommendation, and the president has made a great choice.
And so I obviously welcome this nomination. And, again,
I ask unanimous consent that my formal statement be placed
in the record.
SEN. LUGAR: It will be placed in the record in full.
SEN. BIDEN: Welcome.
SEN. LUGAR: Thank you, Senator Biden.
We look now to our nominee for his opening statement. Ambassador
AMB. ZOELLICK: Well, thank you, Chairman Lugar, Senator
Biden, members of the committee. At least as a trade negotiator
my bite was worse than my bark.
I'd like to thank Senators Grassley and Baucus for their
friendship, partnership and thoughtfulness in introducing
me today. Although I would have been delighted to have hailed
from Iowa or Montana, it was not residence or roots that
prompted me to ask them to accompany me this morning. Over
the past four years of service as the U.S. Trade Representative,
I worked closely with both senators during their skilled
leadership of the Finance Committee, and I believe the three
of us are proud of what we have accomplished together. And
as they hand me off to a new committee, I wanted you to
know the high priority that I assign to listening to your
interests, learning from your experiences, and working together
to pursue America's purposes around the world.
I'd also like to thank you for taking the time during a
busy period to talk with me individually. Our discussions
have given me a much better understanding of your ideas
and concerns, and frequent subsequent consultations with
this committee are important to me. So, if confirmed, I
look forward to working very closely with you.
Of course I had the opportunity to work with many of you
over the past four years on trade topics, and along the
way probably learn more than I ever expected about the economic
interests that inform the international outlooks of your
states. I've also gotten to know many of you over the 30
years since I first served our country as a very junior
public servant during a long distant Ford administration.
And, in particular, as the chairman noted, I had frequent
contact with the Foreign Relations Committee during the
tumultuous, rewarding period of 1989 to '92, when I served
as an undersecretary of State.
For members of the committee with whom I have not had the
opportunity to spend much time, I look forward to doing
so. And especially during my tenure as U.S. Trade Representative,
I learned how active outreach and consultation and consideration
-- of course debate -- are critical to the effective performance
of an executive official's responsibility under the U.S.
I'm honored and appreciative that the president nominated
me to serve this country in this new post, and I certainly
understand the importance he vests in America's conduct
of foreign policy as we pursue the transformational goals
he set. I respect the serious responsibility that Secretary
Rice has proposed to share with me when she suggested this
assignment, and I want to thank her for the opportunity
to contribute. As colleagues and friends over 16 years,
I know very well her commitment to guiding and driving a
transformational diplomacy to achieve the president's goals.
As the secretary also mentioned to this committee, and as
Chairman Lugar and Senator Biden both referred to, we've
been fortunate to follow Secretary Powell and Deputy Secretary
Armitage, who have served America extraordinarily well time
and again with honor and conviction. And in particular I've
already seen their attention to the management of the State
Department has set an exemplary standard.
Now, given that the president has outlined recently his
foreign policy vision, and pointed to key directions in
both the Inaugural and State of the Union Addresses, and
because Secretary Rice spent hours with you going over particular
matters, it would be presumptuous -- and, in total candor,
imprudent -- for me to present a policy statement this morning.
But I read closely the transcript of the secretary's confirmation
hearing so as to better appreciate your questions, and of
course to try to stay constant with her answers. While of
course recognizing the inevitable differences of opinion
or degrees of concern about specific matters reflected in
your exchange with her -- and that's inevitable and appropriate
in a vibrant democracy -- I cannot help but be struck by
the value of that exchange. At times the debate may be uncomfortable,
but I assure you that we recognize the need to consider
new information and changing circumstances, identify new
issues, integrate other perspective, subject analysis to
tough scrutiny, challenge assumptions and learn lessons.
After all, you -- and if confirmed I -- have a very serious
charge: the high duty to advance U.S. security, economic
and political interests and values around the world in a
fashion that warrants the support of the American people
and fulfills our oath of office. And I just wanted you to
know I take such matters very seriously.
I thought it would be helpful for the committee in considering
my nomination to have an outline of the duties that I hope
to perform to the best of my abilities.
First, I would support the secretary as the administration
develops policies in priority areas. As your hearing with
Secretary Rice pointed out, the top two matters are the
critical follow-through on Iraq after the successful elections
there, and working with Israel and the Palestinians to achieve
the goal of two democratic states living in peace.
Second, working with the undersecretary for management,
I would assist the secretary by supervising operations of
the State Department, including budget and resources, facilities
and personnel. And, in particular, I hope to help the secretary
as we take on the challenge of strengthening America's public
diplomacy -- a subject I know is of very strong interest
to the committee.
Third, the secretary has asked that I assist in the conduct
of U.S. diplomacy abroad. When the secretary announced her
first trip abroad, to Europe and the Middle East, she also
announced that, if confirmed, I would visit all the other
NATO capitals, so together we would be consulting directly
with 26 alliance partners early in 2005. I also hope to
arrange a session with the European Parliament, as I did
shortly after becoming the U.S. Trade Representative in
2001, and will maintain my close ties of the various institutions
of the European Union.
The secretary has suggested that I follow up Secretary Powell's
and President Bush's prompt visit to the Southeast Asian
countries hurt by the tsunami to assess how we can assist
in the reconstruction in countries in which I've had frequent
Following up on the president's meeting with President Hu
of China, I hope to expand make regular our dialogue with
China on regional and international issues, terrorism, trade
and economics, and other topics.
I hope to build off my activities over the past years with
countries throughout Latin America and the Caribbean to
advance our diplomacy in this atmosphere.
Last year I traveled to sub-Saharan Africa three times,
including West, southern and East Africa, and I'm proud
to have been the very first USTR to have visited sub-Saharan
Africa in 2001.
My fourth duty will be the participation in the interagency
policy process. I've been working closely with departments
over the four years -- Treasury, Commerce, Agriculture,
Labor, Homeland Security, OMB, EPA -- and my colleagues
at the Pentagon have already been gracious in starting to
provide briefings in areas with which I have not been involved
Fifth, I hope my experience with international economic
issues will help me to integrate U.S. economic interests
into our political and security strategies around the world.
In addition to my past service or work with economic agencies
-- I've been fortunate to serve in the Millennium Challenge
Corporation Board, have worked with AID on integrating trade
and AID in our development work, and have experience working
with the multilateral development banks. The secretary has
asked in particular that I assist in supervising the coordination
of our political economy, democracy and capacity-building
work in the broader Middle East. I've already been working
with many of these countries through the president's initiative
to create a Middle East free-trade area; and, as I've discussed
with a number of you, I hope my office can also serve as
a familiar point of contact at the State Department for
the wide ranging network of business and farmer leaders
with whom I've had the privilege to work.
Finally, but vitally, given the importance the secretary
assigns to our work with Congress, I want to assist her
in ensuring that we listen and respond to your concerns
and interests. I was pleased to see the interest of many
of you and prompt congressional action on the U.S. free-trade
agreement with Central America and the Dominican Republic.
And as the official who signed that agreement for the United
States, I certainly want to work with you to achieve that
In closing, Mr. Chairman, I want to say that I consider
myself very fortunate over the past four years to have worked
with an extraordinary group of public officials at the Office
of the U.S. Trade Representative. They're highly motivated,
incredibly hard working, extremely responsible, and directed
towards achieving real results for the people of the United
States. The State Department is of course much larger, covering
the Foreign Service, Civil Service, foreign service nationals
and details from many department. But my frequent visits
to our missions overseas, small and large, have reinforced
how fortunate the United States is to have such a committed
core of public officials. If confirmed by the Senate, I
will benefit from their considerable experience and insights,
and it will be an honor to serve with them.
Thank you, Mr. Chairman.
SEN. LUGAR: Thank you very much, Ambassador Zoellick.
We have good attendance of the committee members this morning.
The chair will suggest that we have an eight-minute time
limit on our first round of questions, so that we can get
to senators as rapidly as possible.
I'll commence the questioning by pointing out, Ambassador
Zoellick, that commercial ties with emerging market nations
often help promote democracy and stability. There are a
few countries that remain subject to the provisions of the
Jackson-Vanik Act, which prevents permanent normal trade
relations with the United States. Currently most notable
of these is Ukraine, which has demonstrated a commitment
to meet its immigration requirements of Jackson-Vanik, and
to abide by free-market principles and good governance.
Last month, Senator Levin and I introduced legislation to
revoke Jackson-Vanik for Ukraine. Do you support this legislation?
And, if so, are there areas of concern that you might have
AMB. ZOELLICK: Well, Mr. Chairman, the president feels strongly
that we should try to remove Jackson-Vanik for both Ukraine
and Russia. The bill has some provisions that cause us some
pause, and I'll identify them briefly, and then I'll be
happy to work with you on them.
First, it would require a vote on bilateral market access.
And the reason that would cause a problem is, first, we
have 147 other members in the WTO; we've never had a vote
on those members. And so while respective of Congress's
constitutional authority, the executive branch also has
a constitutional authority to protect. But, in addition,
the bilateral agreement is really one of three parts, Mr.
Chairman. There's a bilateral agreement that we do; but
then under the most-favored-nation provision we get the
benefit of all the bilateral agreements that other countries
do. And, third, we negotiate with other countries the multilateral
rules and access. And in fact when I work closely with the
business and farm communities, they want to know how all
three fit together. So to have a vote at that time I think
would probably be a problem in proceeding.
And, second, I wanted to draw your attention, chairman,
there's a provision at least in the bill that I saw that
would require us to include a special safeguard that was
included in the China accession. There are safeguards in
the WTO already, and it may be the case since Ukraine is
a very different type of economy than China that we may
not need such a safeguard, and other countries may not feel
it is appropriate. And so ironically if my successors have
to follow that statutory requirement, we could unintentionally
delay the accession process for Ukraine, which I know is
not your purpose.
So on the principle of removing the Jackson-Vanik, four
square behind you on some of these items -- perhaps we could
talk further with your staff.
SEN. LUGAR: Well, I would welcome that. I appreciate your
specific and informed comments about the legislation, because
we're hopeful it might move, and so we look forward to working
with you on that.
Now, secondly, last November I introduced legislation designed
to improve the State Department's ability to eliminate conventional
weapons around the world. In response, I understand that
the department believes -- and I quote, "There is a
requirement to destroy large excess stockpiles of conventional
munitions," end of quote. This legislation does address
a need not adequately covered by current state programs,
tools and resources available are presently insufficient
to address the threat. I would ask that you look into this
issue, and into the legislation specifically, because I
think we have a real opportunity to make progress in the
area, and I say this on the basis of visually sighting 79
MANPADS during a mission to Albania in August, which really
triggered some concern -- not only about weapons of mass
destruction, but some very conventional arms that are potentially
of great danger in the hands of terrorists. Do you have
any comment about this area to begin with? And, if so, why?
Would you please proceed?
AMB. ZOELLICK: Well, chairman, you and I had a chance to
talk about some of the travels you made. And, as I mentioned
to Senator Biden and others, it's one of the reasons frequent
contact is very helpful, is to get an on-the-ground sense.
My understanding, chairman, is that there's general support
for the principles of legislation; there's some concern
about whether it directs certain structural actions. But
I think people consider it to be a constructive direction.
We'd like to work with you on it.
SEN. LUGAR: Very good. Well, we would like to proceed rapidly
with you, and we'll look forward after your confirmation
Third, I'd like to discuss for a moment the African Growth
and Opportunity Act. Last year the third amendment to that
act was signed into law, extending third-country fabric
benefits that had been critical to the development of the
textile sector. One of the key goals of AGOA has been to
build capacity as well as to extend preferences. Can you
give an overview of the implementation of AGOA, and likewise
where we should head further down the trail, having extended
that opportunity in what is the most significant trade act
in terms of African countries having the ability to export
and to make money on their own as opposed to being simply
recipients of grants?
AMB. ZOELLICK: Well, chairman, first I want to compliment
you for your leadership on this with some of my friends
in the House, because I think it has been an extraordinarily
important avenue of opportunity in sub-Saharan Africa. I
worked with Africa 10 or 12 years ago when I was in the
State Department, and coming back in this post I've sensed
a whole different mood and opportunity in the continent.
There are a number of leaders now who one way or another
managed to broaden their education, want to try to break
some of the shackles of the past, want to fight corruption,
want to create economic opportunity.
And AGOA is extremely popular. I visited sub-Saharan Africa
in December and I stopped in Lesotho -- the first U.S. cabinet
official ever to be in Lesotho -- which sends some $350
million, $400 million of textile exports under AGOA.
Now, you emphasized the capacity-building. And one of the
things that we learned along the way was that while AGOA
opens up about 98 percent of U.S. markets to sub-Saharan
African trade, in some areas one needs to help them be able
to develop the capacity to trade. And in particular, in
the agriculture area, there's a need to often meet our sanitary
and phytosanitary standards.
So my office, working with AID, actually established hubs
in East Africa, southern Africa and West Africa to try to
be supportive of this process, and also to work closely
with the business community, because the Corporate Council
on Africa has been a very, very strong partner in this.
So one area of ongoing focus is to see how those hubs work
and, again, to find areas where we can promote different
types of sub- Saharan African exports, because, Mr. Chairman,
most of the countries have focused on textiles and apparel.
And that's an okay starting point, but one of the challenges
that they're going to encounter and many others are going
to encounter is that with the end of the 40- year-old quota
system, they're going to have to compete with China and
India. And that's not going to be so easy. They're going
to have the benefit of lower tariffs, but they're also going
to need to create more integrated operations.
And in addition, frankly, one reason they start in textile
and apparels is the retail companies are backward-integrated
to buy the products. They don't have to do the retailing.
In other areas, that isn't the case, and we have to connect
them with some of the other products.
And finally, I'd say, Mr. Chairman, we're working on a free
trade agreement with the five countries of the Southern
African Customs Union -- South Africa, Namibia, Swaziland,
Lesotho and -- I'm just drawing a blank -- Botswana. And
this won't be easy. (Laughter.) This will not be an easy
agreement, but frankly, it's a way of starting to bring
them up the next ladder in the chain.
SEN. LUGAR: Thank you very much for those very helpful and
SEN. BIDEN: Which category do you pick this time? (Laughter.)
I'll tell you what, I'm glad I never had to sit in your
I'd like to ask you a little bit about Russia, Mr. Ambassador.
During the past four years, President Putin has reversed
the course of -- in my view, at least -- democratic development
and human rights in Russia. He's made regional governorships
appointive positions. He's manipulated the Duma to eliminate
most of the opposition. His government has taken control
of nearly all the television stations in the nation.
Nongovernmental organizations have been threatened and warned
against cooperation with foreign colleagues. Corporations
and corporate leaders who have demonstrated any political
independence have been renationalized. And on December 20th
last year, Freedom House -- '04 -- announced, in its major
survey of global freedom, that political rights and civil
liberties have become, quote -- not quote -- so restrictive
in Russia that the country has been downgraded to, quote,
And for the most part, the administration, understandably
with its hands full with other things, has not spoken much
about these developments. It's said some things, but appears
not to be as worried about the developments in Russia and
appears to believe that Mr. Putin is a close friend and
a partner in some of the things we're worried about.
And my question is that in the president's talk about "Freedom
is on the march," to quote George Will in one of the
programs I was on with him, he said, "Freedom is in
retreat in Russia."
In priorities, how high up on the scale is the concern about
and the sense of a need to do something to stem this erosion
of freedom in Russia?
MR. ZOELLICK: Well, Senator, in the spirit in which you
-- (inaudible) -- your opening statement, let me give you
kind of my perspective on what's happening. I think that
President Putin came in and was worried about the disintegration
of Russia. And, given his background with the KGB and other
associations, I think he thought that he was going to try
to strengthen the Russian state.
I think the real problem has been that he's ended up strengthening
the Russian bureaucracy. And the Russian bureaucracy has
a long history with its own deep traditions, and unfortunately
they often include a parasitic nature and a lot of corruption.
I think, on the economic side, Senator, that there's another
problem, which is I think that oil revenues in the country
have misled people about the nature of the performance.
As you know from your own experience, there's always dangers
in a resource-based economy about it being too narrowly
focused and the dangers for corruption.
And I do not believe that they've been creating a positive
environment for investment, which I think they need to do.
They have some very bad health problems, particularly with
HIV/AIDS and some other issues.
Now, are these problems irreversible? No. But they go to
the whole nature of the relationship. About a week or two
ago, I was in Zurich with the economy minister, Gref, to
try to work on Russia's WTO accession. And this will be
a very interesting challenge over the coming months, because
a lot of the actions that Russia would have to take would
move and challenge some of the corruption, some of the anti-transparency,
and break down some of the oligarchy.
We have seen some signs of where it's a mixed society. You
do have a growth of NGOs. You're exactly right about the
national media, but there's been a smaller media, often
in the print media, that sort of continues to exist.
And so I think when you ask about priorities, Senator, I
think this has to be an important part of our discussions
with them, but we need to try to figure out a constructive
way that serves the mutual interest. WTO accession would
be one, and we'll see if they're willing to take on the
forces of that. We have about $48 million this year in terms
of helping develop, through NED and others, democracy- building
exercises. And I think there's been some 55,000 people in
exchanges. We need to keep that process going.
In addition, I think we've got to work with the environment
around them. We've had tremendous events in Ukraine. And
I think that one of the things that will eventually influence
Russia is recognizing that its relations to the West --
with the United States, with the European Union, with a
free Ukraine -- create an opportunity for it also to open
up its society and that the future is not a creeping authoritarianism.
So I share much of your assessment, and that's at least
how I would start to approach it.
SEN. BIDEN: Well, I don't want to compare apples and oranges
here, but the president likes to talk -- and I think it's
useful -- in broad, value-based terms about the spread of
freedom, about democracies don't attack democracies, et
And I can't figure out -- and I have been one, like others
on this committee, my friend on my left and my right here
-- who have worked for years trying to get the relationship
right with the former Soviet Union and help the end of that
empire, speed the end of it, to do whatever we could to
give, quote, "Russia" a chance here.
But I think it's deeper and more purely authoritarian, the
instincts that Putin is pursuing, the actions he's pursuing,
more than corruption, more than an oligarchy. And I was
in Zurich as well -- probably you met on the way back from
the World Economic Forum is my guess, and I spent some time
at the Forum as well. And I had, I guess, my third meeting
with a very extraordinary guy, and that was the new president
of Georgia. He's very articulate, I think a democrat with
a small 'd.' I think the guy really has his act together.
And all he wanted to talk to me about was why -- and he
was very, very -- in what were some contentious meetings
-- all my friends have been to Davos; you know, we spend
all our time lately, Democrats and Republicans, pushing
back the excessive criticism of the United States. And at
one of the meetings with a group of Europeans, several foreign
ministers and high-ranking European officials in a closed
meeting where I was to speak and Senator Hatch, and there
was a -- the interlocutor was the president of Latvia --
there was a lot of harsh criticism of the United States.
And the president of Georgia spoke up and said, "Were
it not for the United States, Ukraine would not be where
it is today." Europe was basically silent. Russia was
aggressively negative. And then he said something that --
he turned to all the -- I guess I'm allowed to say this;
I mean, it was a closed meeting but I don't -- let me be
a little careful here. But he turned to all the Europeans
assembled and he said, "And why are you silent on the
occupation of my country, in part? There was an agreement
signed, an agreement signed that Russia would withdraw all
its troops. And all of you turned a deaf ear to me -- a
deaf ear to me."
And it was a very direct and straightforward and absolutely
factually accurate statement that he made. And within the
OSCE -- and I know my time is up, but if I can finish this,
Mr. Chairman -- Russia is using the threat of exercising
a budgetary veto to weaken the organization's democracy
and human rights dimension and to expand its political,
military and security dimension in order to undermine NATO,
in my view.
Is the administration going to do what it does everywhere
else in the world? Is it going to start to talk tough? I
mean, look, Iran wants to get in WTO, and they actually
had a modulus that was making some progress. The senator
from Nebraska and I didn't -- we raised that issue about
any discussion. And here you're looking for, in China and
Russia, the way to ameliorate their excesses and what in
some cases is pure violation of human rights. We talk about
But in the engagement -- with regard to any real engagement
in regard to Iran or Korea -- and they're different animals
-- there seems to be this we isolate to cause the fall.
To quote you in a piece you wrote about North Korea back
in Foreign Affairs in 2000, you said the United States must
retain the initiative so that opponents are so worried about
what America is planning that they cannot plot attacks or
new forms of blackmail.
So is there a distinction? I mean, tell me what the philosophic
distinction is here. When are we going to get tough with
MR. ZOELLICK: Well, you covered a lot of ground there, Senator.
SEN. BIDEN: The bottom line is, you're being silent on Russia.
They're bad guys, what they're doing right now. They have
troops occupying part of Georgia. They agreed to leave them.
We're silent on it. We don't say anything about it. And
yet we talk about engaging them in order to bring them into
the WTO so they can -- I'm not opposed to that -- so they
can change their behavior because they have to accommodate
to that. But with the rest of the world, we don't seem to
think those kinds of techniques have any value.
MR. ZOELLICK: Well, I know the red light's on. May I answer?
SEN. BIDEN: Yes.
MR. ZOELLICK: With respect, Senator, I don't think that's
true. I mean, your own example of people at Davos talking
about how the United States sticking up for Ukraine against
Russia's action makes the counterpoint. And I've said today,
very honestly, what I see are some of the problems. Those
aren't complimentary terms. The president has said, when
he talks to Putin, that he raises these items. I know that
Secretary Rice raises them.
And so one of the challenges, of course -- and I think this
is something we all struggle with -- how do you integrate
the balance in this? And then how do you get operational?
And again, we just have a short time today, but I was trying
to outline some ways in which we have interest to work with
Russia. We should have common interest with Iran. We should
have common interest against terrorism. There are other
challenges we need to work together on in the world.
But that should not stop us from engaging on some of the
items that you've mentioned, and it didn't stop me from
talking about them. Then also, however, how can we work
with Russia as it changes inside? And I've tried to make
some points to try to say how economic change can encourage
and support that, but also some of the political organizations
and some of the support, for example, NED and some of the
actions to build on the civic society that is developing
So I know you know these countries very well. There's no
simple formula. It's a question of how you integrate those.
And I think it's entirely appropriate to keep pressing us
on the freedom issue since it's one that we have emphasized
SEN. BIDEN: I apologize for going over.
SEN. LUGAR: Thank you, Senator Biden. Senator Hagel.
SEN. CHUCK HAGEL (R-NE): Mr. Chairman, thank you.
Ambassador Zoellick, welcome. Good morning. We're glad you're
here. We are glad that you have responded to the president's
request for you to continue your service to our country.
Many of us who have worked with you over the years are very
enthusiastic about you coming to the State Department again
and your willingness to make another series of contributions
to our country at a very important time, so thank you.
Your testimony, which I read carefully and then listened
to you carefully, as well, this morning, noted some of the
areas where you intend to take some particular initiative,
and one of the areas that you focused on and noted in your
testimony was China. With your background, the depth and
width of experience, knowledge, and understanding of the
circles of interest that intersect for our country, foreign
policy being, at least in my opinion, is the arc of those
interests -- energy, security, trade, economics, environment
-- you are going to be particularly well suited to deal
with some of these great challenges. And in that regard,
as you have noted China being an area that you are going
to pay particular attention to, could you develop for this
committee briefly what some of those interests and opportunities
are that you see developing over the next four years in
our relationship with China?
MR. ZOELLICK: Well, first, thanks for your kind words as
well as your friendship, Senator. The process that I refer
to is one that was created by President Bush and President
Hu but has not yet been activated, so I was pleased to discover
it because one of the things that I felt that has been lacking
in our relationship with China is some effort to try to
integrate some of these items. We often deal with them in
a piecemeal fashion. And so we'll see how this works. It
depends somewhat on the attention that the Chinese have.
They have their own stovepipe system.
But the big picture that I see, Senator, is that China is
a rising force, it's both an economic force, and that will
have security implications. I think, at this point in time,
it's focused primarily on its economic development, and
it wants a stable security environment, it wants access
to energy. I think that there are -- it is in our interest
to try to integrate them into both the economic and security
system that we've helped develop over the past 50 years.
That was part of the role the WTO accession and now the
follow-through in this process. And, similarly, on the security
side with, for example, the six-power talks dealing with
North Korea. That's another structure that could be important
in the future, and I think we may also want to look at other
aspects of some of the changing dynamics in the region.
Japan is growing increasingly sensitive about the growth
and power of China. This ebbs and flows in Japan. Japan
is a good ally. I think, as we work with China, we need
to keep a good, close working relationship with Japan, Australia,
and in South Korea as well. So the main reason that I wanted
to draw attention to it in my opening statement, Senator,
was just to suggest that -- I know many of you have a strong
interest in the topic. There are different pieces that come
together. It's going to be my hope to try to integrate these
a little more, and I would welcome your help and counsel
as we do it.
SEN. HAGEL: Mr. Ambassador, thank you. Continuing along
that line, over the years many of us here in the Senate,
in particular, have been concerned about export control
regime, reauthorization of our Export Administration Act,
and here is my question -- how do we balance the commercial
trade interests of our country with the security interests
regarding export controls? I almost am daily barraged with
questions, and my reading of this, and my understanding,
and I've spent some time, not just here in the United States
but all over the world with our trading partners. Prior
to my coming to the Senate, I had a real job. I was a businessman,
and I saw it then. And I think there's a very serious problem
that we have in that we are holding captive our own interests;
holding hostage our own security in commercial and trade
interests to a very silly regime that, in fact, doesn't
do what we intend to do, and I think we are undermining
our interest with our allies, with our interests across
the globe. Would you develop that for me and tell me how
you think we should approach this? You are not exactly a
bystander in this debate. You have been actively engaged
in it over the last four years as you have served as our
trade ambassador. But as you know, and I have said this
to Secretary Rice, commercial trade interests are part of
the foreign policy portfolio of this country, which you
and Secretary Rice will have a great deal to do with.
MR. ZOELLICK: Well, Senator, I haven't been as closely involved
with it as you have, so I'm going to just make a couple
of general observations. One, the standard approach to this
is to try to narrow the categories so that you can give
them real protection, and this always becomes a source of
great debate in the dual-use area. So what are the elements?
I would lean in the direction of trying to be quite rigorous
in protecting the important stuff because, particularly
with changing technology, at least historically sometimes,
we've been protecting things that you could probably buy
in India in a stall somewhere in terms of computer power.
The second part, however, and this I'll compliment someone
who recently left government. Undersecretary Ken Juster
(sp) at the Commerce Department took what is a very technical
area and really tried to make some significant advances
by working with countries, particularly India and, to a
degree, China, so that we could be certain that they tried
to put in the controls and have the domestic law and the
follow-up so we could expand our high-tech exports and,
in the case of India, for example, we've tripled them. And
one of the issues that we did work on last year was trying
to strengthen China's regime, and the problem with China
in this area, as in all areas of China, is not only having
the legal regime but having the follow-up and enforcement.
And there have been problems with China, which both you
and I are well aware of, in proliferation and other areas.
So I think that, frankly, Under Secretary Juster's successor
will be a very important position because, at the end of
the day, this comes down to nuts and bolts and trying to
make sure people put in the right regimes and enforce them,
because there will always be people from the outside that
want to find one incident or something and tear down the
hole. So I would be pleased, Senator, to work with you on
it as you proceed.
SEN. HAGEL: Thank you. My yellow light is on, and my red
light will soon be on. I would end my questioning with the
acknowledgement, Mr. Ambassador, of your recognition of
the good work of former Secretary of State Powell and Deputy
Secretary Armitage. I think the two of them did a tremendous
job to advance our cause across the globe at a very difficult
time in the last four years, and to hear you recognize the
former secretary and deputy secretary is something, and
I think it was important and should be noted. So thank you.
Mr. Chairman, thank you.
SEN. LUGAR: Thank you very much, Senator Hagel. Senator
SEN. PAUL SARBANES (D-MD): Thank you very much, Mr. Chairman.
I want to join my colleagues in welcoming you to the committee.
I share Senator Hagel's view that you have some large shoes
to fill, because I think there's a general perception here
that Rich Armitage did a first-rate job down at the State
Department as deputy secretary of State.
I wanted to ask you about -- right off the bat, about student
visas. There was a recent article in "The New York
Times" -- "U.S. Slips in Attracting the World's
Best Students," is its headline, and it goes on to
say that this year brought clear signs that the U.S. overwhelming
dominance of international higher education may be ending,
and it talked about the sharp drop in the number of students
from abroad seeking to come into the country. Foreign applications
to American graduate schools declined 28 percent this year,
actual foreign graduate student enrollments dropped 6 percent,
enrollments of all foreign students and undergraduate, graduate,
and post-doctoral programs fell for the first time in three
decades. Meanwhile, university enrollments have been surging
in England, Germany, and other countries.
Now, recently the State Department announced that it will
begin seeking to extend the period of time that some students
and scientists can remain in the country before they have
to renew their clearances. I think this is a positive step,
but how serious to you regard this problem and what more
can be done about it?
MR. ZOELLICK: Well, Senator, I know that this is a topic
that came up with Secretary Rice, as you probably know.
She feels very strongly about it, given her role as provost
at Stanford, and I think that's one reason why, quite early
in the process, she took the step that she did. I share
the feeling of the importance of it, because as I have mentioned
in other contacts, I think bringing those students into
the United States is not only beneficial today for us but
pays extremely important long-term benefits.
I've talked with the secretary about some of the recommendations
from the 911 Commission report, and, as you know -- I don't
know the state of official-ness on this -- but the executive
director of that report has been working with us and one
of the tasks that the secretary and I have talked about
would be having that individual try to follow through and
open these issues. Senator Alexander mentioned his willingness
to help from another committee's perspective on this as
we drive forward.
I have learned that the numbers, I think about 573,000 last
year, went up a little bit, and that's good, but I don't
mean to take it for granted. And just to give credit where
credit is due for some of the work that's been done, at
least my information is that about 97 percent of the approvals
come in one or two days now so people don't have to wait.
And where you need a security check, the State Department
has lowered the time from about 75 days to 14 days. But
I think the key point is, for many reasons, this is an area
that, working with Homeland Security, I know we want to
do much better.
SEN. SARBANES: The visa determinations are made by a front-line
officer at the embassy, usually a fairly new employee of
the department, as I understand it. I mean, these are fairly
junior people that are put into those front-line spots,
is that correct?
MR. ZOELLICK: That's my understanding, Senator. It's a first
post for most Foreign Service officers to be the counselor
SEN. SARBANES: Well, there's a tremendous -- I think if
you're a new person, and you're dealing with these security
questions, obviously, I think you're going to be very careful
and very cautious, and the question is, is whether the department
ought to consider some process by which you can have an
expeditious review of some of these instances by more senior
people who are more willing to, in effect, I guess, take
the risk, in a sense, if there is any risk, although I think
if we run the right sort of security checks there ought
not to be. But I would suggest to you, looking at the process
to see if there's some way you can introduce in it to some
review, which may address this problem.
MR. ZOELLICK: Senator, I've made the same observation about
where the bias would be for a young officer. What I've learned,
so far, is that there can be some improvements simply through
the lists that people use to check the name, and that's
one way we made an early improvement. But it's an issue
that I plan to dig into further. I think the points you
make -- I don't know the exact right answer to fix it, but
I think it's something we need to do better on.
SEN. SARBANES: Well, I think it's important, because the
constituency that is turned away is, in many instances,
sort of the best and the brightest of these countries. So
these are people that are probably going to go on to exercise
-- play important roles and have influence, and I think
we really need to make sure that our process is very much
up to standard.
You've focused on the trading system, of course, but as
deputy secretary you're going to have a much broader playing
field to work on. I'm interested in your view of the importance
of the human rights records of countries that we interact
with and, in particular, under what circumstances do you
believe that economic and trade sanctions are appropriate
based on human rights performance?
MR. ZOELLICK: Senator, there is an answer to a question
that I gave on this that Senator Biden had asked as part
of the questions for the record, where I try to address
a little bit of this, and I partly tried to give a flavor
that even in my present position, there is a lot we can
do and should do and are doing in terms of trying to support
human rights issues. Senator Coleman and Senator Feingold
were here before, but I told both of them, in the case of
Hmong, that when Congress granted the vote for PNTR for
Laos, I not only directed that our ambassador go in and
raise the points, but I had my deputy call on the ambassador
to emphasize the importance of if they wanted to have a
healthy economic relationship with the United States, that
they were going to have to improve the treatment of the
Hmong. Now, that's just a small example of a lot of what
you can try to do. It's an example, to me, Senator, that,
by and large, I think it's better to try to use the economic
interest to open markets and to try to create opportunities.
But there are situations, and there are situations that
Congress has voted for, where people do impose sanctions.
Sanctions worked with South Africa starting in 1986. You
could see the difference that it made. So I really think
it depends a lot on the country and their circumstances
and what has been tried before. In general, I believe in
trying to open up societies.
SEN. SARBANES: And how important do you regard sustainable
development as an objective of U.S. foreign policy, and
what do you perceive the interaction will be with USAID
in addressing this question?
MR. ZOELLICK: Well, as you probably know, Senator, the term
"sustainable development" has grown up over the
past years and been an accepted point and principle about
how one tries to not only encourage growth but sustainable
growth in considerations for environmental and other issues,
and I believe in general, and this is reflected in our trade
agreements, that if you can encourage the rule of law and
its application in environment areas, and other areas, if
you can help develop civil society in these areas, they
all contribute to the types of society that you would like
to create. And particularly on the environmental side, there
is a nice connection in that as countries become wealthier
and more prosperous, the take a greater interest in these
environmental issues, and so I work with AID on this as
well as EPA, and CEQ and other topics. So, I think it's
now been mainstreamed in terms of part of the policy, and
you certainly know about the Office of Environment and Science,
which has some very good quality people in it at the State
SEN. SARBANES: Mr. Chairman, I know that time is up, but
could the Deputy Secretary nominee address the question
of the relationship between State and USAID in respect to
MR. ZOELLICK: Well, Senator, what I have seen on the reporting
chart, and I believe this deals with the legislation in
the '90s, is that AID has been integrated in the sense that
it reports to the Secretary of State. And I noticed on the
chart, you would be surprised if I didn't notice this, they
didn't report to the Deputy Secretary of State. But I hope
to work closely with AID and find out where that line was
-- why it was drawn that way.
SEN. LUGAR: Thank you very much for making that distinction,
Thank you, Senator Sarbanes.
SEN. VOINOVICH: You have responded to the president's request
to join the State Department, in a very important position.
We've known each other a long time, and I think that you
will be a real asset to the department. For the record,
I would like to bring several issues to your attention that
I'm concerned about. Southeast Europe, status in Kosovo,
there's going to be a meeting in Brussels coming up, and
I think it's really important to the stability of that region
that we make very clear that the meetings that are going
to be held in Kosovo this year, wherever they're going to
be held, in terms of the future of Kosovo should be on standards
and not status. The president of Serbia has just visited
Kosovo, made it very clear that the status talks would not
be, at this time, in the best interest of everyone. And
we have a fragile situation in Serbia that will be exploited
if those talks turn into status talks.
Global anti-Semitism is an issue that Secretary Powell did
an outstanding job in terms of recognizing, and I would
hope that the office that has been promised in the legislation
that we passed to combat and monitor anti-Semitism is put
in place as soon as possible.
Iran, I think all of us are concerned about Iran and keeping
close tabs on what's happening there, and their impact on
Israel, and now, from what I've been reading, they're also
trying to meddle in the situation in Iraq, and I think that's
something that someone is going to have to spend a great
deal of time on to make sure that doesn't unwind, and we've
got to make sure that our European friends understand how
important it is to their best interest as well as ours and
China, as you know, I've had a little difference of opinion
with your department in terms of the relationship with China,
in terms of their fixing their wan, in terms of intellectual
property rights. I sometimes wonder, and I think it builds
on, I think, Senator Hagel's remarks, that to a degree we
may be compromising our economic interest because of the
fact that China is so important to the effort that we're
bringing to bring some kind of sense to North Korea. In
addition to that, President Hu in China, it's a dictatorship,
human rights violations are rampant, and somehow we just
kind of close our eyes to all of that stuff. There doesn't
seem to be anything being done about it.
Last, but not least, and the question is, you know, on the
organizational chart, have people reporting to you. Undersecretary
of State for management, you mentioned that in your remarks,
global affairs, economic affairs, political affairs, arms
control, public diplomacy, they report to the secretary
through you. And you've just outlined that you're going
to get on an airplane and fly around the world and see NATO
people, and visit here, and visit there and so forth. The
question is, who is going to run the State Department, the
major management responsibility, who is going to run the
shop, who is going to set the priorities in terms of where
the efforts are going to be made, and make sure that the
folks that are out in the field know that somebody cares
MR. ZOELLICK: Senator, would you like me to focus on the
SEN. VOINOVICH: I would. The last one has to do with all
the other things.
MR. ZOELLICK: The Secretary is the person in charge. But,
as you and I have discussed, I think one of the things that
Secretaries Powell, and Armitage, and Green did a very good
job of is sort of creating a team that at different levels
could deal with different issues and management, whether
they be in personnel, whether they be buildings, whether
they be communications systems. I think the starting point
is to try to get a first-rate undersecretary for management,
and I actually talked to the secretary about that this morning,
as a matter of fact, when we were coming up here, because
we're interviewing various candidates.
But, in addition, I know that Secretary Armitage had put
in some different procedural reviews that I want to take
a look at and see whether I might also want to try to use
because I've found at other times in my career, those can
be very useful devices for keeping on top of the overall
performance, and identifying issues. So, I would expect
to be working close to the undersecretary for management,
but also with the various line offices.
But, as the secretary has told you, she has a strong interest
in these items, too. So, going back to your point about
travel, I would expect that when the secretary is traveling,
I'll be back, and probably vice versa. So one or the other
of us will always be on the scene to try to have overall
Also, Senator, I know you had asked about management audit
before, and I checked on that, and actually we can follow
up with you on that, but there's actually some good news
on that in terms of some of the work that Undersecretary
Green did with OMB and some of the different sort of audit
requirements, and the performance has improved over the
past four years. So, I knew that was a particular interest,
but I'll be happy to share the data with you.
SEN. VOINOVICH: Have you decided yet who is going to take
over. Mark Grossman did, I thought, a very good job in Southeast
Europe. Has any thought been given to who is going to try
to pay attention to what's been happening there in terms
of that part of the world?
MR. ZOELLICK: I have to be real careful here, in that I
think Ambassador Burns' name has been sent to the committee,
has it not? No? Well -- well -- (laughs.) (Aside.) It has?
It has. Nick Burns, who is our ambassador in NATO, and who
Secretary Rice worked with in the NSC, and actually was
my assistant at the State Department starting out, is being
courted by the president for the undersecretary for political
affairs. So that would be Mr. Grossman's position. In terms
of the overall responsibility, that would be a natural location,
but I haven't had a chance to talk about that with the secretary.
SEN. VOINOVICH: Well, Mark really spent a great deal of
time on it. And I know Secretary Burns quite well because
I also worked with him on NATO expansion. He's an outstanding
individual. I'm glad to know that he's the one that will
have the job, because I've got a relationship with him.
Would you like to comments about my comments about China,
and are we walking on eggs over there?
MR. ZOELLICK: Well, you and I have had a chance to work
on this, particularly in the intellectual property rights
area, which is one of the items you highlighted. I think
that is the number one item on our agenda. And before Secretary
Evans left, he took a trip to China to set up another meeting
of what is called the JCCT, which Secretary Evans and I
chaired last year, which I think was a very useful device.
We got resolution of a whole series of issues, some in agriculture,
some in high tech standards. We made a start in the intellectual
property rights area where they lowered the basis for penalties,
increased criminal penalties, increased the enforcement
effort, but I still think it remains an enormous problem.
Now one issue that we talked about that the administration
developed last year was the STOP initiative, which is the
one dealing with a particular type of counterfeiting, and
that's one that I hope in a second term we can work with
other countries. The Japanese were just in my offices yesterday.
I talked to Peter Mendelsohn, the European Trade Commissioner,
because to make the counterfeiting part work well, we need
to do it with other countries.
On intellectual property rights more generally I want to
just identify for those of you that have an interest in
this, to try to give us some additional information and
leverage. About three months ago my current office, USTR,
put out a notice in the Federal Register, sent letters to
every member of Congress asking companies to provide us
evidence of intellectual property rights violations. And
we know this is a sensitive matter, but we promised to keep
Now, one reason we want to know this, Senator, is that some
people talk about the possibility of a WTO action, if necessary,
to put pressure on China. There is a standard called effective
enforcement required by the WTO rules, but it's never been
tested. And one point that I feel quite strongly about is,
if we're going to test that language for the first time,
I'd like to make sure we've got good evidence for the basis
of a case. And so for you and others who hear a lot about
this, I hope we can get some of the information, because
from the copyright industries, we've gotten some very good
information recently, but from a lot of other sectors, the
response has been less than deafening.
And so if we're going to work on this, we actually need
some of the evidence we can use. Where there are particular
cases, some with pharmaceutical companies, one with GM that's
well known, we work on them individually to try to make
sure our interests get represented.
SEN. VOINOVICH: Thank you. I just would like to make one
point, and that is that you ought to know that I have written
to the Chamber of Congress in Ohio, the manufacturer's association
and said, you've been complaining, and complaining, and
complaining, let's come up with the cases so that you've
got some of this evidence that we need, and they haven't
been as forthcoming as I'd like them to be. And I'm working
SEN. LUGAR: Thank you very much, Senator Voinovich.
SEN. CHRIS DODD (D-CT): Thank you, Mr. Chairman. And Mr.
Chairman, I would ask unanimous consent that opening comments
about the nominee be included.
SEN. LUGAR: Those comments will be included in full.
SEN. DODD: Let me first of all commend -- (off mike.) I
have high regard for Mr. Zoellick. We've known each other
for a number of years, going back to the early 1980s, and
I think the country is fortunate that he is willing to take
on this responsibility. We're going to lose you in the trade
office, unfortunately. But, my hope is in doing this job,
you'll be able to bring that experience to the department
and have some strong effect on some of these trade agreements
that are still lingering out there. So I intend to support
this nominee. I think he's a great one. And I look forward
to working with you.
Let me raise a couple of issues. Your presence here obviously
gives us an opportunity to talk about some questions presently
before us. You may not have seen, there was an article in
today's Washington Times dealing with Darfur. The headline
was "Has Bush Forgotten Darfur?" And it goes on
to recite the list of atrocities, the 300,000 people who
have lost their lives, the 10,000 a month that are being
annihilated. It goes on to describe the U.N. report, quoting
the report, of killing of civilians, torture, and forced
disappearances, destruction of villages, rape and other
forms of sexual violence, pillaging and forced displacement.
And this is all being, they say, the attacks are deliberately
and indiscriminately directed against civilians by the government.
And it goes on to describe how this doesn't qualify to the
definition of genocide.
We heard, of course, Secretary Powell describe it appropriately
as being genocide without any question at all. My question
is this, it has to deal with how this is going to be handled.
I know the administration's long-standing opposition to
the use of the International Criminal Court, and walking
away from that proposal. The Sudan is not a member of the
ICC and therefore before they can be brought before the
ICC, a U.N. resolution would have to be passed. This is
one of the points that we insisted upon during the negotiations
with the International Criminal Court, that if you're not
a member of the ICC, they couldn't just bring you to court
without a U.N. resolution. So the safeguard we insisted
upon is working, I might point out as an aside.
What is troubling to me is that we're suggesting, based
on these articles, that we revive the ad hoc tribunal used
in Rwanda, as a way of proceeding with the case of the Sudan.
As I understand it, that tribunal -- one, I find it somewhat
ironic, because simultaneously we've also been calling for
the dismantlement of that tribunal, that ad hoc tribunal.
But, the cost of doing that would be roughly $100 million,
presumably solely borne, I gather, by the United States,
whereas going through the International Criminal Court,
even given the fact that the U.N. commission does not properly
define these events as being genocidal, it seems to me that
may be a wiser course to follow. What is the position of
the department? Are we going to veto the U.N. resolution
when it comes before us to allow the atrocities to be brought
before the ICC or not?
AMB. ZOELLICK: Well, senator, what I saw in today's paper
actually was, as you might have seen, was that the U.S.
has actually been trying to push a resolution on Darfur,
including expanded number of peacekeepers. And, as you know,
the main problem in that has been some countries that have
disappointed all of us in terms of moving forward with a
As I understand it -- but this is what I just read in the
paper this morning, the section in terms of the tribunal
has been left open. Now, I've talked with various officials
to try to understand what's been developed, and the concept
that we've been working with is one that I do think is important
for the long run, which is try to develop African Union
capabilities. One of the things we were talking about earlier
under AGOA was the role in Africa of developing their own
institutional processes. I might put a little footnote here:
I think this is going to be a bigger issue in terms of military
capabilities in Africa, and perhaps some that use some new
methodologies, to try to deal with future problems like
this. But in the legal structure, at least the reports that
I've gotten, senator, is that there has been some interest
in African countries. I haven't heard the cost estimate
that you heard. It may be the case, but I haven't seen it
-- and that Tanzania has done a good job in terms of the
Rwanda tribunal. And it would at least be my inclination,
senator, is that where you can develop effective tribunals
that in a regional context that develop some of their capacity,
that would be the preferable way to go. I mean, you've seen
this in the Western Hemisphere, how it's important to try
to develop local institutions and structures.
So I don't know yet whether it's possible. I don't know
the full degree of support. But I did get a report that
there has been some interest.
SEN. DODD: But my question is: Are we planning to veto the
resolution on that basis?
AMB. ZOELLICK: Well, first off, I don't know if there's
a resolution that requires it. As I said, the only resolution
I know of is one the United States pushed this morning,
and it looked like it was an open question.
SEN. DODD: Well, I'd be interested in following up with
you on this, because I'm told that that is the resolution
and the reports are that we vehemently agree with the ICC
handling this case. I'd point out to the irony in a sense
that it's been our position -- been highly critical of the
Rwanda War Crimes Tribunal -- the Bush administration has.
And the idea that we're going to revert to that, something
we're highly critical of as a way of handling these matters
seems to be going the opposite direction, particularly if
we're bearing a cost of $100 million to pay for that. And,
by the way, the $100 million cost is the report out of the
State Department -- I didn't make up the number. It's from
the report --
AMB. ZOELLICK: I didn't say you did. I just said I hadn't
seen the number.
SEN. DODD: Now, the Europeans and others, by the way, are
strongly urging us to go in that direction. I'd do a follow
up on that -- I'd be interested in how that would work out.
The second question I want to raise with you quickly here
if I can has to do with the issue of job loss. And utilizing
your experience, your background as the U.S. Trade Representative.
I know you're familiar with a process called offset arrangements.
Let me just explain what it is to my colleagues and others
who may not be as familiar with it. This goes back to the
postwar period when we were trying to help -- the language
talks about "war-torn" Europe -- and that is saying
-- allowing countries there that would approve of defense
contracts in the United States to offset the cost of those
contracts by insisting that sub-contractor work be done
in the country that has accepted the contract. There are
several nations, like Holland, which insist upon 300 percent
of the value of the contract as part of the offset agreement,
Belgium -- the average is around 100 percent of the value
of the contract. Senator Shelby and I, along with others
last year, wrote an amendment to the Defense Production
Act, asking for there to be a study done by a joint commission
made up of the Department of Defense, the State Department,
the Commerce Department, to analyze what is going on. The
Department of Commerce says we're losing 10,000 jobs a year
as a result of these offset arrangements. We require nothing
like that in the United States -- nothing like it at all,
and it's of deep concern to us that there's been nothing
done, no reports at all made by this report that we -- it
was modified. Our amendment actually was a stronger amendment,
but during the conference report there were those who asked
us to modify the amendment, so we did by just asking for
a report to be done by this joint commission to -- an interagency
task force I should say, including the U.S. Trade Representative,
secretaries of State, Defense, Commerce and Labor to develop
U.S. policy on how to mitigate foreign offsets. The law
required that a report by this task force be provided to
Congress months ago. We've never heard a word on any of
this. Do you know the status of this and why we haven't?
AMB. ZOELLICK: I don't, senator. And why I really haven't
been a part of the defense trade, I'm afraid I don't have
much expertise on defense offsets. I do know a little bit
about the economy of the state of Connecticut, so I will
be pleased to follow up on this and try to learn its status.
SEN. DODD: Well, I wondered if you would, because your office
as well, USTR, was involved in this. Did you ever hear anything
AMB. ZOELLICK: I've heard generally over the years about
defense offset trade, but I keep a pretty close watch on
what goes on there, and I have not heard, no.
SEN. DODD: Well, I'd like it if you could get back to us
on that. This is a -- we're going to raise this again. It's
an important concern obviously with 10,000 jobs being lost
on offset arrangements that are just done primarily to reward
these countries for -- at a time when it's hard to make
a case that they need this extra economic lift provided
to them, when you consider as well we do nothing like this
at all in a reciprocal arrangement.
AMB. ZOELLICK: I wrote it down, senator. I'll make sure
SEN. DODD: Thank you. Thank you, Mr. Chairman.
SEN. LUGAR: Thank you very much, Senator Dodd.
Let me mention that Senator Coleman is unable to attend
today's hearing. He's chairing a hearing on the oil-for-food
problems in his capacity as chairman of the Governmental
Affairs Subcommittee. Senator Coleman has asked me to submit
questions for the record, in which I will do, and we will
ask with regard to these as well as other questions that
might be submitted within the appropriate time frame for
you to respond, sir.
AMB. ZOELLICK: Pleased to do so.
SEN. LUGAR: Senator Allen.
SEN. ALLEN: Thank you, Mr. Chairman. I'm pleased the president
has once again called on Ambassador Zoellick to serve our
country. And he has an outstanding record, which has been
brought up on a bipartisan basis here.
I'm sorry I had to leave to give -- -- I'm co-chairing a
civil rights pilgrimage to Alabama, and we had a press conference
with John Lewis, and it's a bipartisan, bicameral effort.
And it does strike me that what we see looking at our own
history on civil rights and making sure that all people
have equal opportunities to compete and succeed regardless
of race, religion, ethnicity and gender, is what we're trying
to advance throughout the world. Ambassador Zoellick has
been involved on the economic front in trying to make sure
there's that economic freedom. I'm glad to see that so many
of my colleagues brought up human rights, whether that is
Senator Sarbanes and Senator Voinovich and I'll not get
into all of those.
But I'll say this, Mr. Chairman. I just came back from Iraq
this last weekend, as well as Israel, meeting of course
with our troops who are the best of our country in Iraq,
but also with Dr. Jaafari, who heads up the Dawa Party,
the winning coalition's -- part of that winning coalition's
slate -- and talked to him about what we consider to be
the pillars of freedom, similar to what we went through
in discussions with Dr. Rice's confirmation hearing. The
pillars being: number one, freedom of religion; second,
freedom of expression; third, private ownership of property;
and, fourth, the rule of law. At least those are my four
pillars for a free society.
In Iraq, listening to Dr. Jaafari, there was agreement on
that. The issue, which is where I think you're going to
be helpful in both of these areas, is that economics do
matter. I had suggested to Dr. Jaafari, who is going to
be part of that winning -- whatever his position is -- presently
he's vice president of the interim government -- we don't
know where he'll be in the ministry -- the concept similar
to what Alaska has with Alaska Permanent Fund, where every
resident of Alaska gets a dividend check every year. I suggested
to him that might be a good idea for Iraq, where every citizen
gets a dividend check, and the oil is in the north and it's
also in the southern part of the country. Number one, it
would be a national effort, national asset. People would
be getting maybe a few hundred dollars a year. They'll care
about upgrading their system. But the other thing is that
as there's another pipeline getting blown up near Kirkuk,
they're going to care about these terrorists blowing up
the pipelines, so that's money in their pocket being lost
because of these terrorist activities.
The same applies -- and I'm going to ask your views on this
-- in Israel. Meeting with Prime Minister Sharon, Minister
Netanyahu, as well as the Labor leader, Shimon Peres --
there is a ray of home there that they can deal with Mahmud
Abbas or Abu Mazen. Shimon Peres is talking about, Let's
get tourism, let's get more investment into the Palestinian
territories, that it's very important. You as ambassador
-- we have free trade of course with Israel. We got through
the Jordanian free trade agreement. That's another area
where there could be a convergence of people's rights and
civil rights, so to speak, but also the importance of those
And so I'd like to hear from you, Mr. Ambassador -- and
you know that Iraq and the Israel-Palestinian issue are
the two forefront issues, as well as of course Iran, of
course North Korea and also of course protecting intellectual
property rights in China, who cheats on a variety of fronts,
and you've helped in the past on their semiconductor unfair
taxation, addressing that as well as South Korea on the
DRAM chips. But I'd like to hear from you, Mr. Ambassador,
how do you see in Iraq, in Israel, Palestinian areas, as
well as China, how you see the advancement where your expertise
is outstanding and commendable, how do you see that converging
with also our security interests in these troubled areas
where we're trying to make sure that the citizens not only
have freedom, but also that the economic activities, which
come along with free societies?
AMB. ZOELLICK: Well, thank you, senator. And as a resident
of Virginia, maybe we could get one of those Alaska programs
for us too. (Laughter.)
SEN. ALLEN: We don't have much oil in Virginia. We do have
severance taxes on the coal for the coal field areas.
AMB. ZOELLICK: Just thought I'd try. Well, your larger point
is one that I know the president and the secretary feel
is very important, and I hope I can add some other perspectives
from my past background.
I wrote an op-ed about 10 or 11 days after September 11th,
and it stirred a little controversy in some quarters. But
the point that I was trying to make was the importance of
open markets and trade in the long-run war against terrorism.
And part of it is the points I was talking about a little
bit I think with Senator Biden about, the open societies
and the rule of law and transparency and fighting corruption.
But equally important, while I don't believe that poverty
causes terrorism -- and if you look at the demographics,
you have a hard time making the case -- it is certainly
the situation that where societies lose a sense of hope,
where people don't have any sense of opportunity, these
are fertile grounds, whether they're in Indonesia or in
the Palestinian territories.
To take the case of the Palestinian territories, they are
now covered under our free trade agreement with Israel.
And so one thing one would want to do, if you move toward
a two-state solution, is make sure they don't lose that.
They haven't been able to take full advantage of it yet,
but I've met some Palestinian entrepreneurs who regularly
come through, and frankly the business spirit that you encounter
in a lot of the people is really extraordinary.
Now, the security environment has to change. And right now,
as you know from being there, I think we also have to try
to make sure that there's some money that gets pumped in,
whether it be in construction or housing or other aspects,
so that Prime Minister Abbas can start to show that he can
deliver. He has the legitimacy of the election now. He needs
to build the authority of a prime minister, and that includes
attacking corruption, the security issue, and frankly also
I think the economic dimensions. I know the World Bank has
been helpful on that, and I know that that is part of the
effort that the president put forward in the supplemental.
In the case of Iraq, I talked to Ambassador Negroponte yesterday,
and I know from your hearing with Secretary Rice there was
a lot of focus on getting some money flowing quickly to
their parties, which I think is important, but I think we
need to blend it also with making sure that you do build
the structures for the future, including you mentioned the
energy one, whether it be oil or electricity. So my own
view is economic power is a very important component of
America's power. Economic dimension motivates an awful lot
of life that I've seen around the world. Economic freedom
is linked to political freedom. So how we integrate those
can build on some of America's values and its interests.
SEN. ALLEN: Thank you, Mr. Ambassador. My time is about
up. One other area that we'll need you to -- and I very
much agree with you, and that's why I think you're a perfect
person to be in this post at this time as we advance all
these concepts of freedom.
Finally, on China, China, which as you well know is just
constantly cheating on a variety of things. (Bell rings.)
Time's up. Please understand I'll be with you trying to
ride herd on them, and this committee has made an extra
effort to put more funds in to these countries to make sure
that our intellectual property rights are protected. That's
everything from computer software, to motion pictures, music
and so forth. But China just cannot continue to take this
valuable intellectual property from our innovators and creators
here in this country.
AMB. ZOELLICK: Chairman, if I could just have two second.
Senator, I know we've worked closely on this, particularly
given the high-tech community in Virginia. There's another
issue, a related issue, that we need to focus on, and again
I will try in my new post to help support my current post,
and that is the setting of standards. One of the things
that we worked closely with the industry last year on was
setting standards in some of the 3G wireless area and some
in the WAPI, the Internet protocols. This will be an increasingly
important issue with China, because they're big enough that
they will be tempted to say, Well, we'll develop our own
standards. Frankly, I don't think that's in their own long-run
interests, because if they want to sell to the world, they've
got to operate on international standards. So in addition
to intellectual property protection, which we talked about
with Senator Voinovich, I think this issue of standards
development sounds very technical, but is going to be very
SEN. ALLEN: Sure is. I look forward to your confirmation
and to working with you. Thank you, Mr. Chairman.
SEN. LUGAR: Well, thank you very much, Senator Allen.
SEN. RUSS FEINGOLD (D-OR): Thank you, Mr. Chairman. Congratulations,
Ambassador Zoellick. I have enjoyed working with you, and
especially enjoyed our very good meeting last week, and
look forward to many more good meetings.
Let me get right into questions. And I'm so pleased to hear
that Senator Dodd already discussed some aspects of the
Darfur situation. The administration has worked very hard
and it's achieved obviously real success in its efforts
to end the devastating north-south conflict in Sudan, and
I do applaud that achievement. But in the meantime a crisis
has emerged in Darfur that has raged for over a year, and
frankly shows essentially no signs of abating. And the administration
has been vocal in condemning those who created this manmade
disaster. U.S. policy has actually, however, failed to stop
-- actually utterly failed to stop what Secretary Powell
called genocide. The administration has been particularly
ineffective in its effort to rally a multilateral coalition
to bring real pressure on the government of Sudan.
On a trip a few weeks ago, I met with refugees from Darfur
who were in Chad, and their assessment in my meeting with
them of the African Union effort to date corresponded to
what we hear from most credible international observers;
that what has happened is simply nowhere near enough.
So while we applaud the AU effort and want to strengthen
it, we cannot continue to simply point to the AU as if the
AU, which is a very young institution with a very modest
capacity so far, as if somehow they can handle the whole
The evidence to date suggests that it cannot -- and we would
actually have a good chance of compounding the tragedy in
Darfur if we also set up the AU to fail as part of our response.
So I'd like to ask you in your view what new direction is
the administration going to take? What new diplomatic efforts
is the administration going to meek in this area to ensure
that our Darfur policy becomes more effective?
AMB. ZOELLICK: Well, senator, since I'm not yet in the position,
I can only give you sort of my inclinations as I approach
this. First, I had a long conversation with Chairman Frank
Wolf, who you know has focused very hard on this issue.
He and I worked very closely together. He was my appropriator,
so we worked together particularly closely. And I think
one starting point actually is where you began with the
north-south conflict. There's an agreement, but that has
not yet been implemented. And so one of the things actually
that the State Department has just done -- and Chairman
Wolf and I talked about this -- is send out a charge d'.
We didn't want to have somebody that recognized the government,
but we wanted a higher level official to focus on the implementation
of the agreement. Now, the reason why is that there's aspects
of the implementation of that agreement in terms of creating
a national unity government that I hope might be actually
useful in changing the government's attitude towards Darfur.
So that's at least one element that I would like to try
The second is that in terms of strengthening the peacekeeping
force, as I mentioned to Senator Dodd, I just saw this morning
the request to try to increase it to 10,000. My understanding
it was about 3,300, and only 1,100 had actually gotten into
place. I will say to all of you -- because I encountered
this on the House recently -- part of the president's request
for a supplemental appropriation includes some money for
this. And I mention this because sometimes I know members
find it a hard time to vote for just general peacekeeping.
Please recognize a good chunk of this money is to go for
Sudan and Darfur. So if that's an issue of concern to members,
I hope they would be willing to support something that is
otherwise labeled peacekeeping.
And in terms -- I talked a little bit with Senator Dodd
in terms of the war crimes aspects and whether develop an
African Union tribunal or sort of the role of the U.N. As
you know, part of our problem in this -- and I think this
is a good reason why pushing the issue in the U.N., is that
it's been held back by some of the other members of the
Perm 5, as we have encountered in the past. And I think
we partly need to draw attention to that, and show that
there have been genocides taking place, and people are turning
a blind eye to it.
I'll make one more -- and so part of this, senator, is it's
a darn difficult problem. I don't know for sure how we're
going to try to solve it. These are some initial ideas.
But I'll tell you one other thought that I've just been
having, and that is I do believe, as I mentioned to Senator
Dodd, it's important to develop regional capabilities. And
I think one area that I would like to look at further is
what we can try to do not just on the court side but in
terms of the military side with AU capabilities. If these
problems are going to happen again -- and I sadly have to
suspect that they might -- and if we don't want to necessarily
put in our forces, then we're going to need more capable
African forces. And frankly, you know, I've gotten to work
with and know a lot of the African leaders. I appreciate
the contributions Nigeria, Rwanda and others have made.
But there has been some thinking about how, with the right
types of training and technology, that a smaller group,
using sensors and other issues, might actually be able to
be more effective. So that's another area that --
SEN. FEINGOLD: Let me say that I respect that I do believe
in efforts in that area. But I just want to be clear for
the record, I don't think there's any talk of 10,000 for
the AU force. I think the 10,000 relates to the north-south
peacekeeping. So the figure of 3,300, I think, is sort of
the up side. And I think you're right, that there's only
about 1,100 of the AU's. I just want to be clear on that.
The other thing I want to reiterate is my feeling that the
administration ought to appoint a high-level presidential
envoy to try to marshal the international coalition. We
had Secretary Danforth do an excellent job as a special
envoy with regard to north-south agreement. Many of us believe
that this crisis, which needs immediate attention -- we
can't wait for the AU to develop in a way that would allow
it to completely handle the situation -- that the United
States should appoint a special envoy to deal with something
like this when our own secretary of State has called it
And that would lead just to a follow-up question. I know
it's difficult to get the other countries in the Security
Council to go along with us on this. I'm just wondering
why we believe that at this point the efforts we're making
now on the Security Council will be any more successful
than they have in the past, because they haven't been very
MR. ZOELLICK: Well, on your second question, I think, in
general, part of the nature of diplomacy is when you run
into resistance is not necessarily to stop but to try to
highlight for other parties, and in this case world opinion,
about what's happening when certain countries block the
issue, and then try to use the facts on the ground to justify
Now, I don't know whether it'll be effective, but probably
you and I would agree that just sitting on our hands isn't
necessarily going to take the action either. So sometimes
it's a combination of your public diplomacy, your role in
the U.N., what you can do with regional groups. And I will
look into your question about the special envoy, Senator.
But, you know, I also will be honest with you. It's a tremendously
difficult and challenging problem. But I will just share
with you the sense that I feel seized with it, too. I think
it's just a terrible outrage and it's a spot on the global
community of what happens there.
SEN. FEINGOLD: I just have a few seconds and I wanted to
ask you about the reports from the special inspector general
for Iraq and the very disturbing stories about money that
may have been improperly used. How can we ensure that the
U.S. reconstruction efforts in Iraq contribute to a culture
of transparency and accountability rather than a culture
of corruption? Because, I'll tell you, the headlines today
are not pretty.
MR. ZOELLICK: Well, I think the first step is that if it
relates to our own operations in any form -- and I only
know what I saw in the newspaper -- you have to investigate
them and pursue them to the end to find out what's gone
wrong, and if somebody has gone wrong, that you take action
against the wrongdoers.
I think, more generally, what I hope we can encourage in
the development of the new political system in Iraq is a
more transparent rule-of-law system. I've talked about that
more generally, because I think, frankly, shining the light
of public awareness in a system where everybody knows the
rules is probably the best way to combat not only corruption,
but frankly the control of a small group of people that
often stops other people from having a chance in society.
SEN. FEINGOLD: Thank you, Ambassador. Thank you, Mr. Chairman.
SEN. LUGAR: Thank you very much, Senator Feingold. Senator
SEN. LISA MURKOWSKI (R-AK): Thank you, Mr. Chairman.
Mr. Zoellick, thank you for your time here this morning,
and I look forward to working with you in your new capacity.
My question this morning relates to China and the relationship
with Taiwan. China has proposed the anti-secession law that
would unilaterally change the status quo between -- on the
China-Taiwan issue. And it has long been the stance of the
United States that Taiwan and China should mutually reach
a peaceful resolution of the Taiwan issue. And I would like
to know your thoughts on the impact of the anti-secession
law and its relation to our obligations to Taiwan under
the Taiwan Relations Act.
MR. ZOELLICK: Well, as you said, Senator, our goal is for
the parties to work it out peacefully, in an acceptable
way to people on both sides of the strait. And in that sense,
we encourage a dialogue and we certainly discourage actions
like that that move in the other direction, with the anti-secession
And there have been some steps between China and Taiwan
recently in terms of transportation links and others that
I hope will move in a positive direction. But as you know,
we retain the one-China policy and the three communiques
that we also -- and the president is committed to the terms
of the Taiwan Relations Act.
SEN. MURKOWSKI: There's been a fair amount of conversation
this morning about Russia and some discussion about the
application to join the World Trade Organization. I understand
that the bilateral talks are ongoing. But one of the issues
that I would like to focus on is Russia's domestic natural-gas
We have a company in Alaska. Right now they export ammonia
and uria used in fertilizers throughout the Pacific Rim.
They've been in business for about 30 years now on the Kenai
(ph) Peninsula and have been very successful at what they've
been doing. Of course, natural gas is the key component
in this manufacturing process.
This company is going to be shutting down now after 30 years
because it can no longer compete with the subsidized low-price
competition from Russia. So we've got really the number
one employer there on the Kenai (ph) Peninsula that is shutting
down. They've been the backbone of this economy, and they're
quite possibly no longer going to be around.
Now, Russia's laws requiring gas pumps sell natural gas
to domestic industries at below-market prices, regardless
of profitability, while selling to foreign markets at prices
five times higher doesn't allow for American companies to
produce products requiring natural gas, like the fertiziler,
to compete on the global marketplace.
And we recognize that the EU and Russia reached a side deal
on Russia's energy policies, but that agreement has been
kept secret at Russia's request to help it through these
negotiations. And it's probably too late for this company
in Alaska that's going out of business, but I guess I'd
ask you to look down the road. What does it mean to other
U.S. businesses? We don't want to see others in the same
fate that Agram (ph) is now going. What's the status of
these talks? Where are we at in getting Russia to adopt
market reform principles as it relates to its domestic natural-gas
MR. ZOELLICK: Well, Senator, I've actually met with the
representatives of the fertilizer industry, because, as
you properly pointed out, what they learned about the EU-Russian
bilateral agreement left them anxious about the specificity
in terms of building in the full costs for raw materials
So it is one of the prominent issues on our agenda. And
indeed, I raised it with Minister Gref when I met him about
10 or 11 days ago and saying that we have to have a system
as part of this to make sure that whatever their internal
price system is, that if it's going to be competing with
a product like fertilizer, we've got to make sure that the
raw material includes the full cost basis for that. And
so that is one of the items that we'll be pursuing, and
we'll be pleased to continue to work closely with the industry.
They're in very close touch with my office now, so I suspect
they even know about the work we did in the past 10 days
SEN. MURKOWSKI: I think this is going to be important to
all of us as we work through on some of these energy issues,
so I appreciate your attention to that.
Thank you, Mr. Chairman.
SEN. LUGAR: Thank you very much, Senator Murkowski. Senator
Nelson, I thank you for your patience.
SEN. BILL NELSON (D-FL): Yes, sir. Thank you, Mr. Chairman.
Well, I'd like to bring our discussion back to the Western
Hemisphere. I enjoyed our discussion privately, Mr. Ambassador.
And I'd like to start by quoting you an article in Foreign
Affairs in the fall of 2000.
Quote: "With Latin America in particular, the United
States has resumed its old bad habit of overlooking its
neighbors until problems compel it to pay attention."
And you go on from there to give some specific examples.
Let's talk about Haiti. Haiti for 200 years has continued
to be in a spiral down. What are we going to do? One of
the things that I suggested to you privately was to take
Senator DeWine's bill, the HERO Act, which would allow Haiti
to bring in textiles, as we approved in the sub-Saharan
Africa bill -- bring in textiles, manufacture them, and
export them duty-free to the United States.
If we can do it for sub-Saharan Africa, why can't we do
it for the poorest nation in the Western Hemisphere, whose
economic and political condition has a profound effect upon
the United States, and particularly upon my state? What
do you think?
MR. ZOELLICK: Well, first, I think, as you and I discussed,
the starting point, before you get any business there, is
to make sure the security situation is conducive to that.
And you and I talked a little bit about the peacekeeping
operation. I spoke to the Brazilian foreign minister, since
the Brazilians are in charge of this, since he's also the
SEN. NELSON: But we also discussed that long-term security
isn't going to cut it if we don't have some kind of economic
MR. ZOELLICK: Right. And I was just going to make the point
that I think we need -- after you and I talked, I tried
to find a little bit about where that stands, and I'm modestly
encouraged, but recognizing that Haiti has a very long and
tragic history from both natural disasters and human ones.
On the economic side, I'll tell you, the best thing that
Congress could do in the near-future would be to pass the
CAFTA-Dominican Republic free trade agreement, because there's
about a million Haitians working in the Dominican Republic.
And so that'd be the fastest way to make sure that we don't
lose jobs and create jobs (to go back?).
On the third point, on the HERO bill, I think, frankly,
Senator, I live in a world of trying to get things done.
And I think that what we will find is that there's some
appetite in both the House and the Senate for a version
of that bill. Whether it be the exact version that Senator
DeWine had, I don't know. All of you know; everybody's got
their own sensitive issue. If I talked about a sugar bill
with you, you'd be a little anxious.
And so I think, you know, the administration has been interested
in trying to work with the House and the Senate to try to
put something together there.
I will point out that Haiti now benefits from a role in
the Caribbean Basin Initiative. And the reason it's a little
different than Africa is the only difference is it has to
use yarn and fiber from the United States. Well, that's
a little easier to do if you're in Haiti, because that's
what the Dominican Republic does and that's what Central
And I think the worries of the textile industry will be
that there's about $500 million of exports of that that
could go away to China or somebody else. So that's the issue
we'll have to try to work on. But as you know, I agree with
you, you have to create economic opportunity there too.
SEN. NELSON: Well, I want to thank you for your attitude.
I think it is a receptive attitude. I certainly did not
get this when we questioned Dr. Rice. And I thank you very
MR. ZOELLICK: Well, then, I'd better be careful, but I'll
look at what I said. (Laughter.)
SEN. NELSON: Well, you evidence an attitude of being able
to look at something. And if we're going to do anything
about Haiti -- and Lord knows we need to, and so do the
other nations of the Western Hemisphere, as well as some
European powers such as France -- we need to do something
for that country. Otherwise it's going to continue to go
on as it has.
The chairman of this committee is presently conducting an
investigation by asking the GAO to examine our posture of
oil importation from Venezuela. And aside from the rhetoric
that we hear, the rhetoric particularly from the president
of Venezuela, we have to start facing the reality that it
is possible that there might be negotiations going on right
now between Venezuela and China for China to construct refineries,
the kind of which we have on our Gulf Coast of the United
States, that can refine the grade of crude oil that comes
out of Venezuela.
We import 13 to 15 percent of our daily consumption from
Venezuela. We'd have a little lead time because you can't
construct these refineries overnight, but they could be
done within a reasonable period of time. Give us your thoughts
of what such a prospect of cutting off that oil to the United
States would do, and what would we do about it?
MR. ZOELLICK: Well, first, Senator, I remember you going
into this in the transcript, and actually I had learned
from your answer because I hadn't focused on the types of
refineries and the grade of the oil. I'll be interested
to see what the GAO report suggests.
I'll tell you my own sort of general impression. The oil
market is a world market. So this idea that you're going
to be able to send oil to one place and it's somehow going
to stop it coming to the United States, I don't understand
economically. It's a commodity market.
So, frankly, if they're sending that to China, which frankly
will cost them a lot more and somebody's going to have to
invest in the refineries, well, then there's going to be
other oil that China otherwise would have used that would
come to the United States. So I'll be interested to see
how the GAO does this, but that would be my understanding
of how the world commodity market works.
SEN. NELSON: Well, if it's a fungible item in a world market
that easily flows, I would agree. But if you suddenly had
cutting off 15 percent of the oil coming into this country,
we'd be scrambling, and thanks to the chairman, he's getting
ahead of the curve because the United States may be faced
with this possibility. Thank you, Mr. Chairman.
MR. ZOELLICK: And, Senator, that's where the contributions
that I know haven't been easy for the Congress for the SPRO
are a very important investment.
SEN. BIDEN: Mr. Chairman, could you yield to me for 30 seconds,
because I have to go to a subcommittee, and I don't want
to take the time from my friend from Illinois, but, Mr.
Ambassador, I hope that -- you wrote a significant article
in the Republican foreign policy campaign 2000 in the foreign
affairs in 2000. It's a really well- written article.
MR. ZOELLICK: It hasn't got as much attention because there
was a companion article by someone named Secretary Rice.
Hers is the one that's always quoted, but I appreciate --
SEN. BIDEN: Well, I hope yours is listened to, because the
Republican foreign policy you lay out here bears very little
resemblance to the Republican foreign policy that's being
pursued now, in my view, and I didn't want to ask you questions
of this, because I didn't want to play the "gotcha"
game. It would come off the wrong way, but at some point
I'd like to talk to you privately about this article. I
think it's well-written, some parts I disagree with, but
it bears little resemblance to what's going on now, and
I hope they knew what they were picking when they picked
you -- or I hope you still believe what you wrote when you
wrote it. Thank you.
MR. ZOELLICK: Thank you, Senator.
SEN. LUGAR: Well, thank you very much, Senator Biden. I'm
confident the president did know what he was doing when
he nominated Ambassador Zoellick. (Laughter.)
SEN. BIDEN: If not, sneak up on him. (Laughter.)
SEN. LUGAR: Thank you, Senator Nelson, likewise. Senator
Obama -- the record shows Senator Obama was here at 9:30,
promptly heard the original testimony in full, and we appreciate
your returning for the questions.
SEN. OBAMA: You are very kind, Mr. Chairman.
SEN. BIDEN: You'll learn to have a greater respect for seniority
in about 10 years. (Laughter.)
SEN. OBAMA: I appreciate you allowing me to come back. I
am very apologetic that I missed most of the questioning.
My staff kept terrific notes, and I'll try to get the transcript.
So forgive me if I end up being a little bit repetitive.
I was trying to review to see what had been covered and
what has not.
One area that I think has not been covered, if I'm not mistaken,
was the issue of North Korea, and so I was wondering if
you could share with us your thoughts -- we had a briefing
last week in which there was guarded optimism on the part
of this administration with respect to the six-party talks.
The very next day North Korea announced that it was pulling
out of the six-party talks and had nuclear weapons, not
a surprise to anybody, but certainly didn't seem to encourage
I'm interested, I guess, in two issues -- one, your assessment
of the role that economic incentives as opposed to security
concerns may play and ultimately bring in better resolution
and, secondly, given your experience with our trading partners
in Asia -- China, Japan, South Korea -- what role you think
we can play in managing or encouraging them to help us resolve
MR. ZOELLICK: Well, first, Senator, I'm not in the day-to-day
flow on these issues, but I'll be pleased to give you my
assessment. I've obviously been giving it substantial thought,
I guess the first point I'd make is I would be careful about
reading too much into the North Koreans most recent statement.
It's, as we know, it's an extremely opaque society. That
could have different messages. That could have been, as
they've done in the past, sort of a demand to get additional
compensation. It could have been pounding one's chest before
one makes a move to show the domestic audience as being
tough. It could have been something related to the fact
that the Chinese were scheduled to come, and they partly
have played a key role in terms of economics and assistance.
So my view is, under any of those scenarios, and in some
sense it doesn't matter which one guesses, it important
for the United States to stay constant with the core strategy
here, and the reason that I think the six-power focus has
been important goes to some of the points that you related
All the other four parties, other than North Korea and the
United States, have a very strong interest in pressing North
Korea on this negotiation. On the economic side, Japan has
been considering actions separately to deal with insurance
requirements for its ships coming into its ports that could
have a very significant effect on North Korean shipping
that comes out. China, as I referred to, has been a major
source of assistance and support.
So the proposal that the United States put forward in June
was work with our allies and was a basis to try to have
a discussion with the North Koreans, and it included, obviously,
an offer to discuss it in detail. It looked towards a multi-lateral
security assurance, and it also looked to a series of phasings
that would get into some of the economic issues, and it's
been clear, from the statements of South Korea and Japan
and China where some of those elements would come in. It
included elements in terms of energy support, as one goes
So my own sense -- and on top of that, the president made
the statement saying we have no -- we're not going to attack
or invade North Korea. So I don't know what the North Koreans
will do. I think, so far, the response of the other parties
has been useful, because it's been emphasizing that the
North Korean statement won't be a shakedown or blackmail,
as it's been sometimes in the past. But it's my own sense,
Senator, that whether they're willing to engage or not engage,
you want to keep the structure, because if they are willing
to engage, some of these other parties will have points
of influence and economic influence and, frankly, you keep
some pressure on the North Koreans, and if they don't engage,
which is also a possibility, you're going to need that structure
to try to deal with the nature of the problem, either in
terms of our deterrence with our allies or also, frankly,
to stop the North Koreans from doing things that we don't
want them to do.
So I think that's how I would approach the structure of
SEN. OBAMA: Is there anything else you think we need to
be doing with our allies in the area at this point, to encourage
the kind of constructive moving forward that you'd like
MR. ZOELLICK: I think we need to be in very close contact
but, from my understanding, the secretary has been calling
her foreign ministry counterparts, the foreign minister
of Korea was here. I know we're in close contact with the
Japanese, and I think this helped encourage what was already
their initial reaction. The Chinese, as I understand it,
were supposed to have a mission either this week or next
to North Korea, and it will be important to follow up on
that process. But, again, I think, particularly with a country
like North Korea, which is so closed off from the world,
I have found, Senator, that even people that you work with
closely it's so easy to have confused messages that, particularly
in this situation, it's important to stay straight and simple,
and what we've tried to offer is a framework that offers
one path in terms of security assurances, opening economics,
another that basically says you're going to stay in isolation.
I personally think one of the challenges with a country
like this is not to let the day-to-day confused the basic
course of direction and then work with your coalition partners
to reinforce the message.
SEN. OBAMA: Let me shift gears quickly, then. There's been
a lot of debate of late with respect to some of our European
allies, some of the developing countries, putting development
assistance at the top of the agenda. Again, I apologize
if this is ground we've already gone over, and the sense
that the United States has been dragging its feet a little
bit or has not been taking it as seriously. One commentator,
I think, characterized it as perhaps the Europeans and the
other developing countries aren't taking the war on terrorism
as seriously as we are and, conversely, we're not taking
the war on poverty globally as seriously as needs to be
taken. And so I'm wondering if you care to comment on the
perception, at least, that the United States has not been
as bold as, let's say, the Blair government in putting this
front-and-center? That, despite some of the creative work
that's been done in developing the Millennium Challenge
approach that it actually has not been funded or, at least,
the money has not started getting out the door to places
that need it. I'm wondering if you want to just give me
your general assessment in terms of where we're falling
MR. ZOELLICK: Well, I would start, Senator, by saying that
one of the things I've gotten to see very close up over
the past four years is the important connection of trade
and aid. And, frankly, I think one of the lessons of the
past is aid alone creates a dependency that is often unhealthy.
The Senator and I were talking about the African Growth
and Opportunity Act, and some of the capacity-building aspects
that are critical, related to that. So one of the things
I would say to you European colleagues when you see them
is I wish they'd be willing to open up their markets a little
bit more in agricultural products including from the developing
On the aid side, I do feel that what the president wants
with the Millennium Challenge Account is very, very important,
because what I've seen over the years is you know how hard
it is to get support in the Congress and the public for
foreign aid, and one of the reasons is people just felt
it hasn't been effective, or they've felt it's used for
other purposes. So the reason why the Millennium Challenge
Account, in my view, is such a revolutionary notion is that
it really focuses on objective criteria that go to some
of the other things we talked about -- governance, investment
in your people, the health conditions -- and in terms of
funding the -- I think Congress has appropriated about $2.5
billion over the past two years, the president has another
request for $3 billion. I serve on the board of the Millennium
Challenge Account, and I just go a note from the director
saying that I think the first loan may be going out in the
next quarter or so, which I think will be very important
to get the money starting to flow, but I understand people
had to put together that organization.
But I think that element, for the United States, is something
that we can be very proud of, and we've got to make it work.
Because if it works, and there's a big component of this
for sub-Saharan Africa. There's also some in Central America.
We can, I think, build more support for foreign aid and,
if I recall, I think the president is actually committed
to try to increase our foreign aid by about 50 percent and,
at least from my past experience, that's a heavy lift. So
I'm very pleased that we're standing for that.
I would also say that one of the things that I think has
been brought to people's attention increasingly in recent
years is the health dimension, particularly in places like
sub-Saharan Africa where you've got HIV AIDS that just wipes
out a whole productive class, and I've seen this in a lot
of countries that I work with. So I think the U.S. is, by
far, the biggest contributor -- $15 billion to HIV AIDS
-- and for the international programs. And, at least from
what I've seen, Senator, Mr. Tobias, who came in to run
this program, has done a superb job in terms of the elements.
I think those will be issues that we'll also have to deal
with. People have talked about malaria, tuberculosis, some
of the other aspects that can, in effect, weaken the productivity
of the population in the developing world. So I think the
challenge here will be a combination of the health policies,
the aid policies but also the trade policies.
And just to close on the trade, maybe that's the one I'm
just most familiar with -- the reason that's so fundamental
is, at heart, one needs to move societies to where they
get their own sense of self- respect, the ability to participate
and compete, and so by closing markets to these countries,
whether they're Central American countries or African countries,
we're not only, you know, thwarting their economics, but
I feel we're thwarting their political development.
SEN. OBAMA: Well, Mr. Chairman, I thank you very much. I
would just note that the soon-to-be-deputy secretary, although
many people have claimed him, actually went to high school
in Illinois. (Laughter.) So aside from the fact that he
attended my law school alma mater, I claim him as well.
I think he'll do an excellent job, and I look forward to
working with him closely.
SEN. LUGAR: Well, this is good to know of, these close ties
between the senator from Illinois and the deputy secretary.
Let me just follow through on the one of the points Senator
Obama made on the Millennium Challenge. This is a personal
note -- nine days ago I was asked by the president to go
to the funeral of Zurab Zhvania, who tragically died --
the prime minister of Georgia. He was 31 years old and one
of the founders of the Rose Revolution. But in that delegation,
importantly, Paul Applegarth of the Millennium Challenge
came along, and we found, on the ground there in Tblisi,
Georgia, some very talented people working for the MCC and,
likewise, that this is perhaps the major shoring up of economic
strength of that country right now -- the promise of how
that application will come along, the need that the president
of the country, President Saakashvili pointed out, it has
to happen in a few weeks of time rather than along down
the trail. We are serious, as a country, about democracy,
and the president has pointed at Georgia as a cardinal point,
and the Rose Revolution, and then the election of the president
of the country.
But the country is poor -- $740 per capita. It has great
ambitions, rooting out corruption and firing all the police
who have harassed the public and other things totally improbable
in that neighborhood. I mention all of this because sometimes
we think about foreign aid as somehow divorced from democracy,
freedom, the great movements against terrorism. But this
is part and parcel, and so I congratulate the president
on the budget, which goes to $3 billion- plus. Many of us
hope that will be expanded to the $5 billion range, which
at least has been mentioned in our hearings, appreciating
that the 16 applicants have yet to finish their applications,
to at least found the initial programs. But I appreciate
the senator raising this, because I share his view that
this is really a critical element and one, which, probably
because of your membership of that board from the very beginning,
will be a part of your portfolio and really an important
tool as you visit these countries.
Senator Dodd, I think you have another question.
SEN. DODD: Yes, thank you, Mr. Chairman, and I appreciate
your spending an extra couple of minutes. Let me underscore
the point the chairman just made and my colleague from Illinois
has made who, by the way, Tip O'Neill would love the fact
that you are here with politics always being local -- making
those ties are very important with the high school of the
But I wanted to -- we take some parochial pride in Connecticut
over the fact that when Harry Truman gave his inaugural
address in 1949, it was exclusively on foreign policy, and
the point in that inaugural address that people remembered
more than anything else was Point 4 in that address, and
the author of Point 4 was a relatively unknown, relatively
low-level bureaucrat of the State Department who came up
with the idea and who managed to get through to the White
House with this idea where they were looking for something
novel and new to suggest. And Point 4 of that speech was
foreign aid, and it has been a great success story over
the years, and I think the Millennium Challenge Accounts
really are creative ideas in extending that and looking
for new ways for us to really make these dollars meaningful.
And having just spent a few days in Nicaragua and Peru and
Paraguay, you know, these are countries also accounting,
to some degree, on Millennium Challenge Account support
and assistance. I just wanted to pick up -- and I raised
the issue of the foreign trade stuff and the Darfur issue
but, obviously, as you know we've worked closely over the
years on Latin American issue. The Free Trade Area of the
Americas -- I don't know if this was raised with you at
all or not -- I know CAFTA was. But I would hope, and you
could give me some quick answers here, if you can. I know
you've done a good job in negotiating these agreements.
We need to get these agreements up here fairly soon. You
and I both know what happens when you delay this process.
The closer you get to election day, the reality is it gets
harder and harder for these agreements to work. And so my
hope would be that there'd be a sense of urgency about moving
these items up. You wait a long time on this -- you get
into this next fall some time, then the possibility of getting
these very important agreements to be considered by the
Senate are going to be remote, or get more remote.
So I wonder if you might give us some sense at all if you
have at this point of when you think these matters may move
AMB. ZOELLICK: Well, first, Senator, I want to thank you
for your support. I remember as we start the negotiations
with Central America I called you, knowing of your strong
interest in this, and I think we probably both feel that
in addition to the economic opportunity given the suffering
in that region and the lack of democracy, to finally have
a moment where you have democracies with the Dominican Republic
sort of struggling together is a moment you don't want to
lose, so we have these cycles sort of we ignore, and then
it goes downhill again. And as you and I know, there's difficulties
in some of those countries, particularly Nicaragua, at present.
SEN. DODD: You bet.
AMB. ZOELLICK: I met just yesterday with the Guatemalan
vice president. There is an issue that we need to remedy
with Guatemala relative to the agreement they're trying
to remedy I hope this month. I have separately talked to
Chairman Grassley and Senator Baucus and Chairman Thomas
about willingness to schedule hearings rather quickly. And
I think there is a willingness to do that -- maybe next
month. The timing of the actual legislation will obviously
depend on talking to the leadership in both the House and
the Senate and see when they can bring this up because,
as you know, under the trade promotion authority it comes
up under an automatic timeframe.
But, Senator, I'll give you 100 percent assurance I feel
very strongly about trying to get these agreements done.
It's very important for the economy of these countries,
it's very important for democracy, and it's an important
signal to the overall hemisphere, because we're, to follow
on, we're negotiating -- we're very close with Panama on
a free trade agreement; we're making headway with Colombia,
Peru and Ecuador, and I know you visited a number of those
countries. So frankly in terms of sending a signal to the
region about the United States' commitment -- this is one
of the points of Senator Obama -- a lot of what they want
is just to be able to trade with us. For goodness' sakes,
it helps us to be able to do that. So I'm pushing for quick
attention. And I would just say that also in terms of working
with my colleagues at the White House, we're now focusing
the business, the agricultural communities and others that
are supportive of this.
SEN. DODD: And I hope you would as well, in conjunction
with this -- and I mentioned earlier the question of these
offset agreements and so forth -- there is a significant
job loss that's occurring in the manufacturing sector in
this country, and our concerns are that we're not being
as strong about some of the highly developed countries that
take advantage of us and the drain that's occurring in those
areas. The message in both areas I think could be tremendously
Let me mention as well if I can very quickly the -- and,
again, I know Senator Nelson raised this with you. But Latin
America generally. I know that President Bush has a fairly
good relationship with President Lula. I think he has worked
to establish a relationship with some of these other presidents.
There's trends. Most of these governments in Latin America,
with the exception of Uribe in Colombia, are center-left
governments. And if we don't work more closely and these
governments don't succeed -- politically and economically
-- the answer is not to the right, it's further to the left.
You're watching that in a number of countries already. And
I hope that -- I know the problems obviously we deal with,
with Iran and North Korea, and certainly Iraq take a lot
of attention -- reduction has been talked about here, China
is tremendously important -- I just hope that we will --
you know the area fairly well. You've spent a lot of time
working on these trade arrangements. You know the conditions
these people are living under, what's going on in Argentina,
what's happened in Nicaragua, what's going on in Colombia,
Venezuela obviously. There's a tremendous need. You're going
to have 660 million people living south of the Rio Grande
in a very short order, not including obviously the populations
of this country and Canada to the north. And if we don't
create more opportunity there, then these democracies who
have taken such pride in the emergence of them over the
last decade or so are going to collapse. There's no doubt
in my mind that will happen. And so it really does require
-- we need good people to head up these divisions within
the department, and good quality people. And you've got
some wonderful people to choose from to serve in these posts
to really make a difference.
And on the matter of Chavez in Venezuela, again, I am very
worried. The Chinese are all over Latin America. There were
there in Argentina, they were there in Paraguay, in Brazil.
They have tremendous need for natural resources, for food,
and for energy. And they're offering tremendous prices to
be able to have tremendous -- much more than we're talking
about. And if we're not careful in how we deal with Venezuela,
we could find ourselves in a situation where 13 percent
of our petroleum reserves are going to be heading elsewhere.
And I know there's concerns about President Chavez, but
we need to have some sense of apportionality about how we
deal with this and put it in context, or we can find ourselves
in deep economic trouble ourselves. So I urge you to see
if we can't calm things down here and begin to explore some
avenues in how we reach some accommodation to work with
elected governments here. And whether we like everything
they do or not, it's going to be important that we try and
establish those relationships. And I -- you have the experience,
you have the background, you know these people, you know
these players, Bob, so we're looking to you for some leadership
in these areas. Thank you, Mr. Chairman.
SEN. LUGAR: Thank you very much, Senator Dodd. Let me just
follow through while you're here on the Venezuela point,
because mention was made about that earlier. You commented,
Ambassador Zoellick, that oil was fungible and in the event
that Venezuela does not ship oil to us, it's shipping it
somewhere else, and somewhere else in the world oil might
be available to us. In the short run this might be true.
This is a point to be pursued perhaps in another hearing
dealing really with energy and our foreign policy. But my
concern at least in initiating some inquiries about this
is that the Chinese and India have been very aggressive,
and properly so in terms of their own national security,
in attempting to pin down the very last reserves any place
on earth right now -- in the former Soviet Union, in Latin
America, anywhere else. With the thought which perhaps is
not shared in our country, but I'm concerned about it, that
the amount of oil available on this earth does have its
limits, and the price mechanism may in fact ration that
supply in due course as it becomes less and less available
to us. But that would have very detrimental effects upon
the bottom line of most of us in this country, whether we're
heating our homes or our businesses or what have you. In
essence, the certainty of supply of our friends in Latin
America is of the essence, and our assistance to them so
that they may be able to supply more, so long as we have
this independence upon foreign oil. Now, I'm one, and you
have been another I think who have advocated less dependence
upon foreign oil, and that is certainly an avenue to be
pursued. But the fact is in our country we have not been
pursuing this nearly as vigorously as some of us would like
to see. And while that is the case, we have some foreign
policy problems. And I think Senator Dodd's point is well
taken, without getting into a discussion, President Chavez
and the relationship during the hearings for Dr. Rice, now
Secretary Rice. Venezuela arose, as you perhaps saw in the
record, several times, because members of our committee
have been visiting that country, as well as others. And
as a result, why this is something we'll want to pursue
some more, but I just for the record indicate sort of a
notion that this is important to many of our members.
AMB. ZOELLICK: Chairman, if you and Senator Dodd have a
minute, I'd be pleased to give you a view of how I see the
context of this, but it's up to you. I know you're --
SEN. LUGAR: Yes, please do.
AMB. ZOELLICK: Because I think -- and I did read closely
the transcript, and I know from some of our conversations,
one of the problems I see is there's always the issue du
jour. So whether it be the Venezuelan oil or whether their
rifles or so on and so forth. And at least in thinking about
the region, I think one has to look in a little bit deeper
context of what I think is going on, because I think one
of the things that's going on is that one of the problems
in Latin America is that sort of the upward mobility of
many indigenous and poor people have been basically kept
out of the system, because it's been corrupt, it's been
oligarchic. It's basically rigged against the poor. And
what I think we're seeing now is that the people who are
on the margin of the traditional society -- the indigenous
people, the poor -- are using some of the democratic openings,
and they're saying, Look, I want my share. I want my piece
of this. And I think it is critically important -- and I
hope to work with you to do this -- the U.S. should be identifying
with those people. We are a society that challenges the
status quo, we favor openness, we favor the types of change.
Now, we can't do it for them, okay? And so part of this
will be what combinations of trade agreements, what combinations
of our democratic support, microlending -- a lot of it is
creating the legal infrastructure, if people don't have
basic property rights. I mean, De Soto thesis and other
aspects of this. And so I think there's ways we can help.
Now, bringing this to Chavez, I think what you're seeing
happening throughout the region is there's a new Pied Piper
of populism that's going on, so I would -- whether -- I
don't look at it, Senator, as left to right, because the
first person to do this was Fujimori. Okay? So I don't know,
is he right or left Peru? And the same with, you know I
think, with Chavez. And I think it's a very dangerous course
for these countries. You saw what eventually it did to Peru.
And I think, coming back to where we need to go with this,
is that -- and I know Senator Dodd and Senator Lugar both
were key parts of this -- you know the history in this region
of resisting foreign intrusion and the Calvo doctrine. So
what we did in 1991 with the Santiago Declaration in 2001
about protecting democracy in the region is a huge step.
The problem is it's basically oriented towards the old threat
of coups. It's not oriented towards what we're now seeing,
which is a creeping authoritarianism. Sure, you win the
election, but you do away with your opponents, you do away
with the press, you do away with the rule of law, you pack
I think one of the challenges -- and I'd be pleased to talk
with you further about your thoughts of this is that we
need to work with the OAS and some of these other parties
to try to say, Look, if we mean what we say about democracy
and we want to try to help some of these people, we have
to try to set some standards on this. Now, the reason I
partly make this point is that I personally believe that
Chavez sort of feeds off confrontation, and you know he
wants to set this up as David and Goliath. And my own view
is that what we can do effectively with him -- is we shouldn't
be afraid to say when he's taking away liberties -- not
at all -- and we should stand for that. But at the same
time, we also need to stand for some of the people that
created the resentments that he has been tapping, because
frankly the Venezuelan governments of the past, whatever
their party, they didn't serve the people. So part of what
we need to do with the assistance that we have, with trade,
with other programs, with exchanges -- I talked to Senator
Alexander about maybe creating something new in this --
is that we need to be able to get ourselves associated with
what we truly believe, which is helping those poor people
have a chance. And so that's at least -- I, you know, wanted
to give you some preliminary thinking about how I would
approach the problem, but I think in the meantime we also
shouldn't fool ourselves. You know, Chavez has done some
terrible things, and we should say that. And, in the meantime,
we should try to help those, frankly -- I'm sure you visited
Colombia -- I've been there three times recently -- is that,
who are frankly doing a very impressive job. And I'll say,
chairman, there were some questions about Uribe did, that
I went in the hearing with Secretary Rice, I went back and
checked -- they haven't occurred in terms of blocking his
opposition and things like that. So make some of those areas
work -- Central America, Colombia, Chile -- and then expand
it, and then frankly try to get some others to work with
us to say if we believe in democracy we've got to stop creeping
So I apologize for going on, but I know the senator has
-- both of you have the strong interest in this. And I just
want to give you the context at least in which I would be
approaching these issues.
SEN. LUGAR: I think we appreciate very much your taking
this time. That was a very important statement, I believe,
and one which we have a lot of common feeling and ability
to work together. But I appreciate especially the thought
we need to identify with the poor who are outside the spectrum,
because whether it is the countries you mention, or even
Bolivia comes to mind as a dramatic case in which a good
number of people who are outside the pale of government
could create extraordinary dilemmas for governments at all,
and even if this is not at the forefront of the interests
of the press or some in even this committee, why it's important
to those who are following Latin America, and the senator
from Connecticut has been the foremost among the members
of this committee for a long time in doing that.
SEN. DODD: Mr. Chairman, I thank you. Well, I can't thank
you enough for that statement. That's the most encouraging
statement I've heard about Latin America in a long, long
time, and I'm really heartened to hear you say what you
did, and I look forward to working with you on this as well,
and I certainly don't disagree that where people do things
we disagree with we ought not be shy. We get the legitimacy
of saying that if we're doing both. That's all you're doing.
Then it becomes -- it doesn't work, you know? And Chavez
shows up in Brazil, and a hundred thousand people turn out
to see him. And he gets a stronger welcome than the president
of the country does -- a nation he's visiting. You get some
idea of what's occurring in the region, and so it's an important
Can I just mention briefly too -- and I meant to mention
this -- and, again, we thank the efforts being made on AIDS,
and obviously -- and Africa is such a critical area. Can
I ask you as well though to take a look at this, aside from
Haiti and Guyana, we're not doing much at all on AIDS in
these small Caribbean islands. They're small places, but
they have almost as high a degree a problem with AIDS as
the sub-Saharan regions do in Africa. And we have 10 million
Americans that travel to these islands every year as tourists.
Some 600,000 people from these islands travel to the United
States to visit family members and the like, and they're
pretty much excluded from the AIDS packages. Basically other
than Haiti and Guyana it's -- they're not part of the deal.
And I wonder if you might look and see how we can make them
part of the effort. I think it's a very important message,
picking up on your last comment to these small independent
island nations here that we understand the problems there
are serious. There are literally thousands of these orphan
children living down there that don't get quite the attention
given the scale. Obviously the numbers are much smaller
overall what we're talking about in Africa, but still as
a proportion of their population they're huge, and really
deserve more attention.
AMB. ZOELLICK: I'd be pleased to, Senator. I had a similar
experience in that I know that the new Global Fund focused
on I think 15 countries, and Lesotho wasn't part of it,
and Lesotho has actually been a great performer in lots
of things. I talked with Mr. Tobias, and we actually got
some support. So I'll be happy to try to do this, sir.
SEN. DODD: Terrific. Great. Thanks very much. Thanks, Mr.
SEN. LUGAR: Thank you, Senator Dodd. Let me just mention
also the mention of Hernando de Soto. I would add Vargas
Llosa, people that are meaningful to you, meaningful to
all of us, having addressed some of these issues. And it
is good that their thinking permeates the atmosphere and
Let me just follow on the AIDS question, because I have
two or three more things that I wanted to ask. But one of
them was simply to follow through on what might be called
the second-wave countries. After the 15 that have been designated
now, essentially in addition to the Latin American countries
are the Caribbean islands that Senator Dodd mentioned, very
large countries such as Russia and China and India, apparently
have substantial problems -- at least there are indigenous
reports of that. What do you envision, granted the administration
has a compelling interest, and that's been manifested in
the budget request, for the follow through not only with
the 15 countries over the five-year period of time that
we're dealing with them, but also what might be called the
second wave, including some very large entities?
AMB. ZOELLICK: Well, my understanding, Senator, is that
of the president's five-year, $15 (sic) plan, $10 billion
is devoted to the 15 countries.
SEN. LUGAR: I see.
AMB. ZOELLICK: Four billion is devoted to an additional
85 countries, including international research. And then
of course we contribute another billion to the Global Fund
to fight AIDS, tuberculosis and malaria, which other countries
also contribute to as well. So there are other -- there
are funds as part of the president's program to go to these
other items. I think the logic of this was to try to focus
on some of the poorest countries, particularly sub-Saharan
Africa, try to make a difference. In a way it goes back
to the point I made with Mr. Obama. We both know how hard
it is to get aid funds. We need to start to show we're making
a difference in some of these places, whether it be sort
of with the Millennium Challenge Account or these sets of
issues. And indeed -- I know you probably saw that Mr. Tobias's
first report in terms of the numbers of people that they
had -- they had, let's see, they so far within the first
full year they've treated at least 200,00 HIV- infected
people, prevented 1.3 million new infections, care for 1.1
million people, including over 500,000 orphans. This is
the sort of results we have to get if we're going to build
ongoing support. So I think that was the concept of the
focus. But there is -- there are funds for these other countries.
SEN. LUGAR: Well, I thought the Tobias report was extremely
significant. Frequently we talk about what kind of metrics
there are, what kind of measurements we can use as either
benchmarks or reports to the people of this country, as
well as the rest of the world. And I'm hopeful there will
be greater publicity of the Tobias report. I think it's
known to a few people here in the Congress who are deeply
interested, but not to many. And so I ask if this is not
your responsibility at the State Department necessarily,
but it is -- it serves a diplomatic message in terms of
our public diplomacy, to ourselves as well as to others,
to understand that something is happening, that country
by country a certain number of people had been treated,
and we estimate that a number of tragic cases have been
prevented but what has occurred.
Now, let me ask about Pakistan. We frequently in our committee
noted the work of the Pakistani military attempting to arrest
al Qaeda leaders in operating in Pakistan, and certainly
President Musharraf has affirmed that he sees as his responsibility
and that of the military of that country. And, as a matter
of fact, recently Pakistan has arrested several Afghan Taliban
leaders. But at the same time it always appears that for
some reason this is not going as satisfactorily as we would
like. The Pakistanis indicate that this is, after all, a
sovereignty question. Our military ought not to be in hot
pursuit across the Afghanistan border, and even if we are
looking for Osama bin Laden or for other functionaries that
might be important to us.
What is your own view of how that is proceeding, both the
relationship as well as the efficacy of the Pakistani forces?
AMB. ZOELLICK: Well, I know that Secretary Rice made a core
point, and I think it's worth emphasizing, which is it's
important to look from whence we've come and where we are.
But, of course, there's much more to do. You know, in 2001,
before September 11th, you had a Pakistan that was on the
verge of slipping to extremism, was supporting the Taliban,
was fueling additional problems with Kashmir. And frankly,
we didn't have any relationship with it of any type.
And I think now we've got a partner that, from what I've
been able to see, Senator, is a strong partner in the war
on terror, working with the Afghans on the trade and economic
issues. When I saw the Afghanis, it was quite clear, as
an inland country, they need to have relations with their
neighbors, and so we had to work out some issues related
to some border topics with Pakistan. India-Pakistan relations
have improved. There's a process going forward, still some
very difficult issues, but at least it's headed in the right
And now, at least what I've seen, Chairman, is that they
are sending military forces into some of these border issues
which were semi-autonomous and probably have been wild for
centuries. So I don't mean to underestimate the scope of
the difficulty. And in our focus on democracy, we're looking
towards elections in 2007 in Pakistan.
But I think there's been a lot of progress, and I think
one of our challenges for this term will be to try to build
on that progress.
SEN. LUGAR: Let me mention that even as we attempt to build
on the military progress, we've had testimony before our
committee about the madrasa schools or, worse, schools that
don't really have much organization, and a public education
system in Pakistan that appears to be foundering, or perhaps
really never got off the ground in a large movement.
And many have commented, if we are very serious about the
root causes of terrorism, or even the production of persons
who, as Jessica Stern has pointed out in her book, after
she visited with young men who were suicidal in their intent
coming out of this situation, as to why -- what brings people
at a young age to have those views? And it's derivative
from an educational system, or lack of it, in a very large
country involving a lot of people and a lot of money.
I know that you've thought about this situation, and our
committee has tried to explore with administration witnesses
and those who had something to do with it. I've had a personal
experience with a classmate from Denison University, where
I attended, Dr. Peter Armacost, who was a university president
in our country but now has committed his life to Forman
(sp) University in Pakistan, a university that President
Musharraf attended and therefore has an interest.
And I mention that because here essentially Presbyterian
Church of the United States has come together with people
of other faiths, and students, 6,000 at least, as I understand,
are receiving college education with a good bit of American
participation, along with Pakistanis and even church people
of the Muslim faith.
I mention all of this because these are isolated instances,
but they offer opportunities for some insight in which Americans,
as educators, and in a humanitarian way, have taken an interest
in this problem, as opposed to somebody saying it's very
big and the numbers are awesome.
Do you have any views, really, in terms of what we might
do with the Pakistan education system and our overall public
diplomacy? What important aspects are there to this issue?
AMB. ZOELLICK: Well, the point that just jumps out at me,
Chairman, is one where we've seen a huge change in Afghanistan,
which is the education of women. And, you know, if I would
put an emphasis on anything in Pakistan, it would be trying
to make sure that young girls have the same opportunity
that young boys do.
I once asked a very well-known scholar that studied the
Islamic world what did he think was the major reason for
this sort of clash with modernity and sort of the Muslim
world falling behind. And I was very much struck by his
answer, which he said if you take 50 percent of your population
and don't allow them to contribute to your society, you're
not going to keep up.
And so I certainly know much less about the Pakistani education
system. But perhaps some of the progress that has been made
in Afghanistan, educating girls as well as boys, is something
that can be extended, if it's not at present, in the Pakistani
And I think the second point that your comment evoked from
me is that, you know, you gave good examples of where the
private sector and private individuals are playing very,
very important roles in this. I think part of the challenges
of a transformational diplomacy is how we create the structures
for that to work effectively.
It's what we do in economics. You know, I don't do the trade
myself. I try to create an enabling environment. Well, similarly
we need to try to create an enabling environment, whether
it be the Peace Corps or whether it be church groups or
others, that sort of continue America's message.
And the third point that your comment suggested to me is
one that I felt about public diplomacy, and that is, you
know, the traditional press diplomacy business is more of
a reactive business. You're dealing with today's story.
It's sort of the Washington-centered sort of press briefing.
We have to be out telling America's story, just as when
you go back to Indiana, there may be some news that isn't
news in Washington. But by working in a local media context
and pushing the story about something, what it's doing,
you are kind of conveying the message.
Your comments about HIV/AIDS -- you know, we're helping
people all around the world every day, whether it's HIV/AIDS
grants, whether it be some trade arrangement, whether it
be a microlending grant. As an individual, I tried to draw
attention to this on my trips, so I would always try to
work in an aspect of public diplomacy-related so that you
have the policy related to action related to message.
And so I think, more broadly, that is something that at
least your comments evoked, that I hope we can use to try
to address this larger question of America's public image
in the world.
SEN. LUGAR: Well, I like that comment a lot, and I mention
it because you will be traveling a lot. You have opportunities
just personally in your role to talk about these ties, often
with personalities or organizations or what have you, at
the grassroots of our country, or of the country which you're
visiting, which can be very, very important as these stories
are replicated elsewhere.
Now, let me just say, with regard to their neighbor, India,
that certainly our country has been hopeful that the negotiation
between India and Pakistan will be fruitful. What more do
you envision we might be able to do to keep those talks
on track? They have been dealing with a number of issues.
Obviously the overall problems in Kashmir are enormous.
They cannot be dealt with just as an agenda item in a particular
hearing. But still, the need for peace, for some degree
of tranquillity for the benefit of the people involved,
as well as for the rest of the world, given the size and
the scope of those countries, is tremendously important.
And I just ask you during this hearing for your views on
what we can do constructively there.
AMB. ZOELLICK: Well, I think the first good news, Chairman,
is that both President Musharraf and Prime Minister Singh
seem to have expressed a strong commitment to this overall
peace process. And I think this is where we have to walk
a very fine line. I think we need to look for ways to encourage
that process but keep the parties at the heart of it. This
is not something we can fix for them.
I think one area that I know there have been some track-two
discussions -- I don't know what's happened at the governmental
level -- is nuclear confidence-building as a very important
element, an area you would know well from your other work.
And then I think we need to make clear that we stand ready
with the parties to try to help as they proceed, whether
it be in confidence-building or other aspects.
And then, finally, Chairman, I think, in general -- you've
seen this with some of my answers -- when you get a diplomatic
problem, it's also how you kind of work the context of it.
And in this case, we have far better relationships with
Pakistan as I described than we did three or four years
ago. And I'm absolutely delighted we have a far better relationship
with India. And I think both Ambassadors Blackwell and Mulford
deserve a lot of credit for this.
One of the things that I would like to do is to try to see
what we can do in sort of a second stage in terms of developments
of relationships with India. We talked a little bit, Senator
Hagel, about the high-tech trade, and there's been an expansion.
But there's some other things that we've looked at trying
to explore with the Indians in terms of some of the civil
nuclear area, civil space, high- technology exports; on
the security side, missile defense as well.
So, going back to the president's core principle about supporting
freedom and democracy in the world, I think one of the challenges
of the next four years is, in addition to working with the
established democracies of Western Europe and Japan, the
type of relationships that we can create with the Indias,
the Brazils, the South Africas, the developing-country democracies.
Now, I've had a fair amount of experience with this over
the past four years, because those are the countries I deal
with regularly in the WTO. And sometimes it's very frustrating
to try to open up markets. But I think, to go with the question
that you posed in the relationship, I think we also need
to see part of the challenge is strengthening the relationship
with the two individual countries.
SEN. LUGAR: Let me ask about your neighbor and Afghanistan
-- the re-submitted congressional notification on a new
Afghanistan counter-narcotics strategy arrived this month
and proposed $776.5 million for 2005. It still leans heavily,
in our analysis, toward eradication. Other potential pillars,
such as the justice sector, alternative livelihoods, the
interdiction of traffickers, have received far less assistance
despite the significant role they play, unfortunately, in
this very fragile state. What is the future of our role
with those in Afghanistan led by the president of the country,
President Karzai, who has identified this issue. In our
hearings, we have learned, on occasion, maybe as much as
half of the entire GNP of the country is involved in poppies
and production, then, of the substances that come from those
farmers. So it's a serious issue, and we've grasped that.
Others, maybe perhaps are disappointing in terms of their
response, but can you give some oversight as to how this
is likely to progress?
AMB. ZOELLICK: Well, as Secretary Rice mentioned, we believe
we need to stress five components, and they have to be interconnected.
One is the eradication you mentioned, but a second is interdiction.
A third is alternative livelihoods, and we've seen this
actually work in the Colombian context, where it's one thing
to stop people from growing something, but you've got to
give them a chance to grow something else or have an alternative
livelihood. And then, fourth, is basically the public de-legitimization
and here, at least from what I've seen, Karzai has started
to play a very important role in making this a moral issue
in terms of Afghanistan and, at least, I saw one early news
account that suggested that plantings were way down this
year. Now, whether that can be sustained, I think depends
on whether some of these other people's -- or other fall
in place. And then the fifth element, as you said, is it
has to be connected to an effective law enforcement system
and even integrating what I was saying with Senator Dodd
about the Western Hemisphere. I think one of our challenges
is going to be trying to work with countries at what I'll
call the "second stage of democracy development"
-- building the civil institutions, the law enforcement
system, the courts, the prisons -- this is clearly one of
the big challenges in Iraq today as well. And the State
Department has a function in that, and I've appreciated,
from what I've seen, the support that you offered in terms
of trying to help us add and build some of those capabilities.
SEN. LUGAR: Well, that will continue, and I appreciate these
responses in areas where you have been traveling and will
be traveling. Let me finally conclude with a question back
home about the management of the department itself. It's
been the observation of senators and our staffs that we
believe there is a certain amount of duplication of administration
and overhead costs undertaken by various bureaus at the
State Department; that many of the contracting and program
management costs are being taken on by each bureau running
programs independently, duplicating the capabilities that
have been authorized by agencies, such as USAID, to take
I just simply ask that, in your new responsibilities, you
study this problem. You have a good background in terms
of financial management, organizational structure in addition
to this comprehensive view, country-by-country, that we
have taken you through today. Do you have any initial reflections
as you have taken a look at the department prior to undertaking
this responsibility? Do you see possibilities for management
changes that are not dramatic and discomforting to the members
of the department but still would make sense?
AMB. ZOELLICK: Well, I need to look a lot more, and I will,
Senator, and if you or your staff have some ideas of where
you think there can be some -- or there is duplication or
overlap, I'd certainly be delighted to see them. I'll make
a general point, which is the State Department's organization
chart is kind of a multiple matrix and creates the executive
secretary with the most challenging job in the world --
how to get all these pieces fitting together.
But as some of the question here revealed, there's reasons
for that -- somebody wants a special envoy for this; you
want a special office for that. So, to be honest, Senator,
if we're going to get at some of this, we're actually going
to need to work with some of the members of the committee,
who also want to create an office every time there is a
Now, maybe, as your question suggested, there are some functions
that cut across offices and ones that create some additional
efficiencies, but I think that, in general, part of the
challenge is that -- I think the secretary has mentioned
that she wants to look at, is as we consider some of the
new functional demands of our diplomacy -- some of the ideas
that you've developed, for example, with the reconstruction
and stabilization. How do the pieces fit more effectively
with that? So I think we need to do some more homework and
thinking, but then I will seek your indulgence to also help
us with colleagues who each have a favorite office and piece
and never want to see it changed.
SEN. LUGAR: Well, that's a very important point to make
and a challenge to the members of this committee in terms
of individual enthusiasms. Let me just say, for my part,
I strongly support the secretary and your efforts in trying
to rationalize how all this came about. We have been frustrated
in terms of our authorization legislation, which might have
helped to change at least the basic legislation. On some
occasion, we may be able to finally pass that, and that
would be helpful to the department as well as our own views.
But, absent that, much of this will have to occur administratively
as you wrestle with this and with our support, and you'll
have to point out, as you just have, some of this comes
about because of congressional enthusiasm.
I think, at the same time, there is equal congressional
enthusiasm, perhaps more so, for a cleaner chart, as you've
described these lines today, and perhaps for some examination,
too, in such areas as the roles of our ambassadors abroad.
What should they be responsible for in the year 2005 as
comparative to 10 or 20 years ago, given modern communications,
given the travels of you and the secretary? Who ought to
do what and how are these people interrelated to all the
functions we've talked about as well as to our overall foreign
policy. And that, I suppose, could be replicated in any
number of ways less dramatic than our embassies themselves,
other offices that we have abroad as they interrelate.
But we very much appreciate this opportunity for this hearing,
because it has been, as you've noticed, well attended by
a large majority of our members, most of whom had an opportunity
to ask questions that illuminated their interest but offered
you an opportunity, I think, for some very important answers.
I think the record of the hearing will be constructive all
by itself and largely because of the quality of your answers.
So we thank you for this appearance. We look forward to
taking action on the nomination as rapidly as possible.
We understand the urgency of confirmation, if that is the
will of the Senate, and I hope that it will be.
AMB. ZOELLICK: Thank you very much, Mr. Chairman. I look
forward to working with you, if the Senate exercises its
SEN. LUGAR: Thank you very much, sir, and the hearing is