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U.S. Department of State

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Frank E. Loy
Under Secretary for Global Affairs
U.S. Department of State
Speech to the Miami Chamber of Commerce and the German-American Trade Council
Miami, Florida, February 16, 2000

Blue Bar rule

Thank you, Walter, and good afternoon. Thanks to the Chamber and the German-American Trade Council for inviting me to speak to this august and well-tanned group.

In Miami, perhaps more than in any American city other than New York, one can sense the impact of the world: in its commerce, in its culture, in its way of living. In important ways, you've learned how to relate to the world to your advantage. I want today to broaden that subject and talk about the way America, as a whole, needs to relate to the rest of the world at the start of this new century.

At this dawn of the 21st Century, America is in a place somewhat similar to its place at the beginning of the 20th century.

In the aftermath of the Spanish-American War, the United States found itself in an unfamiliar position: it was now a great world power. How it would exercise that power and what role it would play in the world were far from clear. The debate was between those who favored a limited and passive role in the world and those, led by Theodore Roosevelt, who favored a foreign policy characterized by assertive, energetic, though mostly unilateral, engagement. In large part, the latter view prevailed.

In the period following World War I, the same divide characterized the American scene, with Woodrow Wilson asserting value of the international engagement.

Today, we are again at the dawn of a new century, again enjoying the benefits of a major foreign policy victory -- this time the Cold War -- again trying to assess what our role in the world should be.

In order to determine that role, we need to articulate where we are trying to go. What is this administration's vision? It starts, of course, with security. We need to make sure that our country is safe from hostile actions by others. This administration's emphasis on maintaining a strong military capability is the principal guardian of that security.

But in today's world this is not nearly a broad enough description of our goal. Both the threats we face and the ambitions we have require a different approach. One way to put this is to say that whereas in earlier times nations pursued a territorial foreign policy, focused either on expanding their territory or protecting it, today we need to pursue a milieu foreign policy -- one in which we try to build a milieu, an environment, in which our goals can be achieved.

Some years back, the issue was framed differently: as a choice between isolationism and internationalism. That no longer seems to me to be the best way of looking at the world. Two World Wars have settled that debate. In a world of the World Wide Web, of exploding international trade, in a world where a financial crisis in Thailand determines whether you can launch an IPO in New York -- in that kind of world, isolationism is no longer an option.

Our choice is not whether to be involved with the world, but rather how. And our dilemma stems not from any weakness of ours, but from our strength. We are the only remaining superpower; we are, in Secretary Albright's words, "the indispensable nation." Therefore, in theory, we should, it is suggested, be able to pretty much get our way on the world stage. And there is no question -- it's better to be an indispensable power than a dispensable one. While it saddles you with burdens, in exchange you have an opportunity to shape events.

But the facts, in contrast to the theory, are different. We can only shape events to a limited extent. And in many of today's areas of concern, our military and economic power alone cannot achieve some of the most important things we want. They can't achieve a level playing field for our trade; they can't achieve an environment free from ozone-depleting pollutants or from carbon-induced climate change. They cannot protect Americans from the ravages of international organized crime, international trafficking in narcotics or from new infectious diseases. While military power is at times necessary to prevent massive human rights violations -- see for example Kosovo or East Timor -- that power must be accompanied by extensive and expensive multinational peacekeeping and society-building efforts if we are to have lasting results. Perhaps most fundamentally, military power cannot by itself produce a world with values we not only hold dear, but values that, I submit, are necessary if we are to live in a world in which we can feel safe and comfortable. I speak of a regard for the rule of law, for human rights, for tolerance of minorities, for all the attributes of democracy.

Of course, these are very widely-shared goals in America, and no one is going to propose sacrificing them. But questions are often raised about whether multilateral engagements and approaches are the best way to achieve them. Most often, these questions suggest that:

All three arguments have enough truth to them that they must be seriously considered. But Americans have a well-deserved reputation as being a pragmatic people. And I suggest we apply here not an ideological internationalist or non-internationalist test, but rather, in each case, ask the question: what is the benefit we get from the engagement?

I assume you know what I think generally will be the answer when we ask that question, since it was printed on the invitations that were mailed to you. Simply put, I believe very strongly that if America is to remain a world leader, it must commit to a broad-based, multilateral foreign policy. I believe, in fact, that in an increasingly integrated world, there simply is no alternative.

Clearly, that commitment has implications. It means supporting some institutions that are useful and productive, but that may not always be perfect or in total accord with our desires. It means participating in treaties that serve our purposes, but are almost never exactly the way we might have written them on our own. It means paying our dues to the institutions and supporting the usually modest cost of implementing the treaties. And sometimes it might even mean providing some resources to developing nations so that they can implement the treaties that, by hypothesis, benefit us as well as them.

In a moment, I'll try to demonstrate all that with a slightly detailed discussion of the diplomacy regarding two agreements -- one dealing with climate change and one with international trade in bio-engineered agricultural products. But first let me briefly mention two other cases that make the point.

As you may remember, the international community negotiated a comprehensive agreement -- the Montreal Protocol -- to phase out the use of chemicals that damage the ozone layer. To put it simply, in order to have an America in which the risk of skin cancer from exposure to ultra-violet radiation is minimized, engaging with other governments to achieve the Montreal Protocol was absolutely necessary. It was simply not possible for our government, or any government, to solve that problem on its own.

And we can't have this sort of discussion without mentioning international trade and the role of the WTO. I was in Seattle, and took some time to meet with the protesters in the street. They seemed to say: let's demolish the WTO and let's stop globalization in its tracks. I responded -- without too much success, but with total conviction -- that if we're going to have multi-trillion-dollar trade regime -- and it seems 100 percent clear that we will -- is it not better to develop a regime be based on some clear and specific rules? And an organization that can negotiate such rules and settle difficulties? In other words, the WTO.

Let me just add parenthetically that we believe the WTO needs to be made more open, more responsive and more sensitive to environmental and labor concerns. Efforts are under way to achieve these objectives, but needless to say, neither the United States, nor any other country can do that unilaterally.

Now, let me talk in a little more depth about two issues that illustrate rather well the need for multilateral engagement: climate change and biotechnology.

We are in the home stretch of our efforts to craft an international agreement to address the issue of global climate change. It's called the Kyoto Protocol and what we hope will be a definitive round of international negotiations will take place in November of this year. We hope then to develop fully this exceptionally complicated agreement.

A brief primer: Kyoto was born of a treaty signed in 1992 at the Earth Summit in Rio de Janeiro: the Framework Convention on Climate Change. It obligated countries to reduce greenhouse gas emissions, but no quantities or deadlines were named. Five years later, we crafted the Kyoto Protocol, which, for industrialized countries, converted those generalized obligations into specific reductions required to be achieved by a fixed date. What we're trying to do now is work out the specifics of it.

Getting international agreement on how to combat climate change represents an enormous scientific and diplomatic challenge. For the carbon that causes the damage comes mostly from the burning of coal and oil. And reducing carbon emissions requires some changes in the way countries use and conserve energy.

The science, however, tells us that if emissions continue to rise, the consequences will be horrendous: declines in health and the wider spread of infectious diseases; changes in what crops farmers can grow where, requiring farmers to shift crops and increase irrigation; sea levels that are predicted to rise between six and thirty-seven inches. A one-meter rise in the sea would wipe out much of the Everglades and the Florida Keys, as well as some entire island nations. We can also expect more frequent and more severe droughts, floods and changing landscapes that will reduce biological diversity.

The United States is the largest producer of greenhouse gases, principally carbon dioxide. With about five percent of the world's population, we are responsible for one quarter of all greenhouse gas emissions. That means the rest of the world is responsible for three-quarters. Here is almost the perfect case requiring both domestic action and multilateral agreement, if we are to reduce emissions.

Let me focus on three issues in the Protocol negotiations that claim our attention. You'll be hearing more about them as the year goes on.

From the U.S. point of view, a bargain was struck at Kyoto. We agreed to a tough emissions target: seven percent below 1990 levels by 2008-12. But in return, the agreement provided this and other countries with maximum flexibility as to how to make that reduction. This flexibility is reflected in the agreement in various ways.

One involves the use of innovative market mechanisms, such as emissions trading, that will substantially lower the cost of reducing emissions. This approach was successfully pioneered domestically in the U.S. in combating acid rain, but has not yet been used elsewhere.

Two, Kyoto allows countries to use what we call carbon sequestration as a means of reaching their emissions targets. Sequestration, simply put, is the soaking up of atmospheric carbon dioxide by forests, agriculture and other terrestrial "sinks." A ton of carbon sequestered is equal to a ton not produced.

And three, we absolutely must have meaningful participation of developing countries in any global effort to reduce greenhouse gas emissions. For today, they already produce 44 percent of all emissions, and that number will grow to 50 percent in 20 years or so. And yet they, in contrast to industrialized countries, have not taken on numeric, time-specific targets for reductions. And the emissions-trading regime I referred to will only work haltingly until these potential trading partners are full-fledged participants in the system.

So, we are now engaged in a diplomatic full-court press to secure meaningful participation by developing countries. They are concerned that this participation would slow their growth, although President Clinton has made it quite clear that we would never ask that of any country. And they point out that industrialized countries caused much of the present greenhouse gas concentrations. We are somewhat helped by the realization that lowering emissions can also provide a multitude of other benefits -- economic, environmental and health benefits. We see countries like China already making great progress toward lowering their emissions per unit of output.

In the area of biotechnology, we recently had reason to celebrate: we reached an international agreement, the Biosafety Protocol, to govern trade in bio-engineered agricultural products. The negotiations took place in an atmosphere of great fear -- in some parts of the world I'd say hysteria -- about the safety of genetically-modified agricultural products. Our aim was to ensure a regulatory scheme that informs the public and regulators, in a science-based way, about risks; to provide a regulatory scheme for products, such as seeds, that are intended for introduction into the environment, but, in contrast, not to burden trade for products intended for consumption, where there really is no credible evidence of risk. There we were faced with suggested regimes that would have required storage, shipping and transport infrastructures that would make it hugely expensive or impossible to ship bio-engineered grains in international commerce. We achieved a complex balancing act that I believe will serve us well and will somewhat depolarize the current debate over biotech agriculture.

That's what the Biosafety Protocol does. Now let me say what it does not do: It does not require American farmers to segregate their modified and non-modified commodities. And, it does not change any country's rights or obligations under other international bodies, such as the World Trade Organization.

I say "we" reached this agreement, but in fact, the United States was not a party to the negotiations. And the reason for that has much to do with our cautious approach to multilateral diplomacy. The agreement, which has been named the Cartagena Protocol on Biosafety, is part of the UN Convention on Biological Diversity. Because the Senate has not given its approval to ratify this convention, we were not able to participate directly in the formal negotiations. We could only observe from the sidelines. While we worked hard -- and in the end, successfully -- to protect our interests, throughout five years of negotiations we had to rely on our allies to be our voice. It would have been a better agreement from our point of view if we had been able to sit at the table and participate.

This is not a good state of affairs. The U.S. leads the world in biotechnology. Our agricultural exports total $60 billion annually. Eighty percent of biotech exports worldwide come from the U.S. Yet, we were only guests at a negotiation aimed at regulating our agricultural industry.

Let me, in conclusion, return to the issue of costs and budgets. The cost of our multilateral engagement -- investments in institutions and multilateral agreements -- is not high, measured as a proportion of the federal budget or generally in terms of the value we receive. But, of course, there are costs. Leadership isn't cheap. And we most certainly can't lead very well on the funding levels we're living with at present.

Today, only one penny of every dollar the federal government spends is devoted to international affairs. Yet, as Secretary Albright has said, "that one percent (of the federal budget) may determine 50 percent of the history that is written about our era. And it will affect the lives of 100 percent of the American people."

How? The State Department promotes national security by negotiating arms control agreements, helping defuse regional disputes, countering terrorists and stemming the flow of illegal drugs into our neighborhoods. We advance U.S. business interests abroad and ensure a level playing field for our trade and investment. We promote American values by supporting democracy and human rights abroad and by providing life-giving aid to millions of people beset by poverty or disaster. And we provide more than two million American travelers each year with passports and emergency help overseas.

Yet our foreign affairs budget this year is almost exactly what it was in 1985, even though our obligations have multiplied and we have had to open more than two dozen new embassies.

American diplomacy should be on the short list of our budget priorities. And it deserves the strong support of the American people.

I hope I've given you a compelling argument for the inevitability of American leadership and that this requires active, multilateral involvement in the post-Cold War world. We face today a host of new challenges that absolutely require the active cooperation of other countries if we are to have any hope of overcoming them. We can think of our multilateral approach as an investment that increases our chances of success in shaping and living in a more stable and prosperous world.

Thank you very much.

[end of document]

Blue Bar rule

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