The Future of U.S. Foreign Policy

It's my very great pleasure to welcome back to the Kennedy School the Honorable Robert Zoellick. He's an alumnus of the Kennedy School and of the Harvard Law School and Secretary Zoellick has certainly made us very, very proud. He is currently serving as the Deputy Secretary of State and thus the highest ranking Kennedy School alumnus in the U.S. Government currently. And his swearing-in at the State Department is really just the latest chapter though in an extraordinary career that spans quite a number of things and has led him to be held in the highest esteem by Republicans and Democrats alike.

And one of the rarest of qualities in people that rise to very senior levels in the public service is that they span boundaries that are rarely spanned, and one of those boundaries that rarely get spanned is the economic boundary and the diplomatic boundary, and yet we have before us here someone who has distinguished himself at the very highest level in both of those and in many ways presages what I think is the future, where those boundaries and those distinctions will certainly be blurred.

In February of 2001, he was appointed the 13th United States Trade Representative and during his time he completed negotiations to bring both China and Taiwan into the World Trade Organization. During George Herbert Walker Bush's Presidential Administration he was the Under Secretary of State for Economic and Agricultural Affairs as well as Counselor of the Department. He represented the United States as the senior official in the negotiations for German unification and worked closely with Secretary James Baker on the policies pertaining to the end of the Cold War. And his tenure at the Bush Administration also included service as the President's personal representative to the 1991 and 1992 G-7 Economic Summits and as White House Deputy Chief of Staff and Assistant to the President. And before that, from 1985 to 1998, Mr. Zoellick served in various positions at the Department of Treasury, including Counselor to the Secretary, Executive Secretary of the Parliament, Deputy Assistant Secretary for Financial Institutions Policy.

In short, he has had a really quite remarkable career and the evidence of the esteem he's held in on all sides come from the words of Dennis Ross, who said simply, "He is superb at everything he does. I simply don't know a better public servant."

And others too have recognized his hard work, including, by the way, his brother, who I happened to run into kayaking one day in Maine, and we quickly figured out he was a Zoellick but not this Zoellick but as a brother, and we've since become close friends. It's a distinguished family as well.

More evidence of his capacity to bridge these boundaries and distinguish himself is the different awards he's received. He's received the Distinguished Service Award from the Department of State, their highest honor; the Alexander Hamilton Award from the U.S. Department of Treasury, again their highest honor; and the Knight Commanders Cross from the German Government for his role in developing U.S. strategy towards German reunification.

But you know, through all these years and in spite of his remarkable service, there's one award that has always eluded him, and I'm sure it's the kind of thing that bothers him although he would never be the one to admit it. And we're going to correct that tonight. So finally I am thrilled to announce that we're going to present the Kennedy School's Alumni Achievement Award in recognition of his fine works. So Secretary Zoellick, let me provide you with this Alumni Achievement Award. Now, I want to say one thing. Awards of this sort typically have a bunch of words on them and they come in one of two ways. They either say, "Whereas," and then there's a whole series of whereases, or there's, "In recognition of," and you can tell how distinguished you are by how many things follow the "whereases" or the "in recognition of," and there are one, two, three, four, five, six, seven, eight. That's the highest I've ever given out -- (laughter) -- "in recognitions of" here. So it is my very proud honor to present our Kennedy School Distinguished Alumni Award to Secretary Robert Zoellick. (Applause.)

Thank you very much. Let me just introduce you, Graham, and we'll get started. Graham is -- (laughter). Graham needs no introduction. He is the former Dean of this illustrious institution, really built much of what you see before you. He is also the head of the Belfer Center and was the Assistant Secretary for Policy and Planning at the Department of Defense. So with no other ado, Graham and --

MR. ALLISON: Thank you very much, David, for a very warm introduction, for a graduate of whom we are most proud. I said with a group of students today that if we -- if Dick Neustadt were here back in the period in which the public policy program was being founded 30 years ago, in which I was a very junior participant, and you had asked what they dreamed about, what they aspired to, both the career that David has given us a little bit of the highlights from, but more importantly, as he emphasized, what Bob actually -- Bob has never been about having jobs. He's been about doing jobs. So what was accomplished in these various roles from the reunification of Germany inside of NATO, the end of the Cold War with a whimper rather than a bang, China's and Taiwan's entry into the WTO, NAFTA, and in his current incarnation, the way the State Department -- I mean, the Deputy Secretary of State is responsible for everything. You can ask him about any foreign policy issue and he's supposed to know the answer, but his boss, Condi Rice, when I talked to her once, she said, look, we recognize that most of these problems are very complex and have lots and lots of layers of nuances and subtlety, so we've kind of at least taken lead responsibility and divided it up among the senior members of the seventh floor team. And his portfolios include international finance and trade and Doha, and China and Sudan, Darfur and genocide, and Iraq on a day -- so we could go through a very long list.

The number of questions therefore that we have an opportunity to talk to a person who we know as a member of this community for a long time, it's a fantastic opportunity for all of us. Again, we did a student session this afternoon with some students from one of our courses. If you're asking me sort of what are the -- what's the sort of the stuff of Zoellick that I admire so much as I've watched him through these iterations, I'd say that there's this very almost unique combination of intellectual capabilities that the school would be proud of; strategic insight -- see, he starts with the problem strategically; political savvy, which is even rarer among smart, analytic, strategic people; character, all of which then grounds a -- you know, getting up every day and going to work and counting in terms of what things are accomplished. So I think we are very lucky to have him here as an example. I don't think we could have a better example of somebody, you know, deserving of the Alumni Award and I think we're glad to have him visiting and we wish he would visit more often.

The only problem, one of my students said to me after the session today, "Hey, why are you teaching this course?" I said, "That's because they won." So maybe if ever Republicans lose or if he loses interest, I would say we would be so lucky as to have him doing something like teaching the course he was doing today.

When Bob asked that rather than give a speech that I would just put some questions to him and press him on them for a little bit, so that's what I'm going to do to start with, and then we're going to go to -- and I'll try to ask questions that I think many of the people in the audience would be interested in. And then we'll go to the audience for questions and there are microphones and so you can be thinking about your own questions.

DEPUTY SECRETARY ZOELLICK: Can I make just a brief comment?

MR. ALLISON: You're the Secretary so you can say whatever.

DEPUTY SECRETARY ZOELLICK: Well, first I want to thank Dean Ellwood. It's a surprise and I'm very much touched by it. I have very fond feelings towards the Kennedy School and the larger community and it's nice to see somebody who knows both my brother and me. There's actually very few of us around in the world. We've had different paths and so it's -- I very much appreciate that generous gift.

I said about the community and I just want to share with all of you we started out with a lunch today and I had, I don't know, how many former bosses there and certainly colleagues from different capacities, even a fellow classmate, as one of them pointed out, now a professor here. But I want to make a special mention that I think one of the reasons that the Kennedy School experience for me has been an extremely positive one was not only the time that I spent here but the ongoing connection with it, which I hope will be the case for all of you as well.

And Graham has been a fantastic mentor as well as a friend, and as I think many people over a longer period of time than he may be willing to want to acknowledge have found him to be a good counsel and partner and suggester and his energy and his enthusiasm for this topic was I think a critical element of what he is contributing.

And I want to thank all of you for coming because one of the things I said to the group of students that I met, and I want to make sure I communicate to all of you, is that I always believe very strongly that public service is the highest calling. And I know that's what brings you to not only this forum but what you have committed yourselves to, and it often isn't easy. These are difficult career paths and they're certainly not as remunerative as others and the problems are darn hard. When I was here at the Kennedy School we actually talked about, you know, if the private sector could handle some of these things, it would, and so sometimes you get the hardest problems in the public sector and the combination of political and interest groups as well as analysis and, in my case, institutional structures around the world don't make things easy. So I very much admire and appreciate all of your commitment to this, and of course since these problems are so hard, don't be too rough on me if I don't have the answers. (Laughter.)

MR. ALLISON: Thank you again for coming, and I thought I would ask a question about the, in effect, career advice for students as they're thinking about your career, then a couple of questions just from the front page because you can't not be interested in the news story. The President announced this morning that an agreement had been reached with India for civilian nuclear cooperation, but what about the Dubai Ports and the rest? And then since I think what Bob brings almost uniquely to this, as David has already underlined, is this ability to think strategically about things that are both economic and political, and actually more than that; they're economic and political and strategic. I'd like to go there for a little bit because I thought the conversation this afternoon about China was especially instructive in that regard.

But let me start off to the point about the connection between policy and policy analysis on the one hand and politics, particularly electoral politics, on the other. I think we have a huge number of students at the Kennedy School who would be happy to be the assistant to the Secretary telling him about policy. Actually, there's one of our students here, Taiya Smith which I would like -- Taiya, stand up, please. Yeah. Taiya is a 2001 graduate of the school in the Public Policy Program who is now Bob's special assistant and who deals, among other things, with Darfur and Sudan.

DEPUTY SECRETARY ZOELLICK: She's actually got all of Africa and Europe. We sort of spread people thin, so she's got a heavier role. (Laughter.)

MR. ALLISON: She and some students here in the school are interested in Darfur were having a conversation earlier this afternoon. But I will say we have plenty of people who would apply for that job. Another side of Bob Zoellick that most people don't remember is that he's actually been very actively involved in political campaigns and I can remember pretty vividly in 2000 when there was a contested election in Florida and Jim Baker was the leader of President, then-candidate, Bush's efforts, his chief lieutenant in trying to make sure they counted more Republican votes than Democratic votes was Bob Zoellick. (Laughter.)

So what would you say about people who want to do policy but don't want to do politics, or what advice would you have for people about that sort of getting involved in electoral politics if you're interested in policy?

DEPUTY SECRETARY ZOELLICK: Well, there are obviously a diverse set of career paths that people can have and so there's room for everybody from elected office to something that might be sort of a more technical policy analytical aspect, more disconnected from politics. But sharing my experience, it's useful to always recall we start with a democracy and we have a Constitution, and I have found that in trying to think about policy problems and also their execution that it is critical to have a sense of the political environment in which you're operating.

Let me take this in a slightly different direction. Secretary Baker, for whom I worked from '85 to '92 and at the State Department for four of those years, was a pretty shrewd politician. And one of the things I think people don't understand about diplomacy is that I think one of the reasons that he was so effective, in addition to his abilities, was that his counterparts are also political leaders. Many of them are elected, actually, unlike our Secretaries of State, they're part of, often governments with parliaments and coalition parties.

And what is important, and if you actually look at the start of his biography, his autobiography, he talks about this, is, you know, first having somebody that understands your own political system so you can actually make sure that you can deliver on what you're talking about, and that means the bureaucratic and organizational politics, dealing with the Congress, sort of public moods at large. But a lot of the skills that one deals with in politics -- here I'm not just saying electoral politics -- are the same that you deal with in the world of international diplomacy, with coalition building, advocacy, negotiations. They all come together.

Now, in particular, I have found that, you know, while I came up very much on the policy side, I have taken part -- I was Issues Director in the '88 campaign, I helped in debate preparation at different times, I was Deputy Chief of Staff in '92, which shows we can lose too. (Laughter.) But I honestly feel it also gave some good insights about the system, and for someone who came on the policy side, the exposure that I had to people who were more actively involved in the campaigns and the political side gave me valuable insights about the politics. And particularly I relate this to the Congress.

Now, when I was USTR, you know, I think probably everybody here knows the power over trade is granted to Congress by the Constitution; so as I used to say is that they would let us borrow the power now and then but we'd have to return it in good shape. If you're going to be an effective Trade Representative, one of the reasons it's one of the most intriguing but challenging jobs is on the one hand you have to be able to master with the skill of your colleagues the technical material, but then secondly you have to deal with international diplomacy and trade and economics, while you also have to be able to deal with domestic constituencies as represented through the Congress.

And so the point that I think I made in one of our discussions today, I'm an ardent free trader, perhaps one of the last around, but when some of my free trade colleagues would be critical of various compromises I had to make along the way, I would point out I also believe in the Constitution of the United States and I have to work with this political and electoral system.

So I found -- but this depends on individual types -- that actually it gives some valuable insights. But again, you know, people will come to this from different perspectives and different ground rules. And I think one of the other things that I've learned along the way -- and this is too late, unfortunately, and I probably wouldn't have the right temperament - the best job in the country is being governor because the governors of the states have a wonderful opportunity. And I know a lot of people here are interested in state and local government because there I think you can operate at a different level and see the direct results of a lot of what's accomplished.

MR. ALLISON: Let me turn you closer to the front page and India for a second because
Virginia Dormandy (sp?) here at least asked about India. I'll be in trouble.

The President is in India today and announced this major breakthrough in U.S.-Indian cooperation on civilian nuclear technology, and at least according to the press, the agreement will have India identify its major civilian nuclear reactors, separate them from the military reactors and make those subject to IAEA inspection. And the President will now have to go to Congress, so just where you left off, to get the law amended to make this feasible.

Anticipating this agreement, on Tuesday the New York Times leader opined that "Congress should kill it." I know you don't always agree with the New York Times leaders, but to us, in terms of American national interest, how does this advance Americans should care about -- not Indians for the minute. And then every issue obviously has pros and cons, but which of the cons worry you the most, if any?

DEPUTY SECRETARY ZOELLICK: Okay. Well, this actually connects to your prior question in this sense. If Secretary Rice and the President had not been able to complete this nuclear agreement, it definitely would have cast a pall over the visit. But as I was taking with Ash Carter today, in some ways it also shouldn't overshadow the bigger sort of strategic direction here, which was one that, you know, I'm pleased to say was heavily advanced by someone who taught here and was a colleague of mine, Bob Blackwill, who was the Ambassador to India who did a tremendous job in recognizing the changed circumstances in the global context and also in the relationships between the two countries. It gave an opportunity to develop a different relationship with India.

MR. ALLISON: Just a footnote. Blackwill was sitting here on Monday night.

DEPUTY SECRETARY ZOELLICK: And he undoubtedly said the same thing about himself, no? (Laughter.)

MR. ALLISON: Even more, yes. (Laughter.)

DEPUTY SECRETARY ZOELLICK: But so let's put the agreement in context. The first striking point, and this is part of a broader discussion about changes in foreign policy, is the role of India not only today but 5 or 10 and 15 years from now as a major democracy in the world. And a democracy -- and this is the second point -- that is sort of moving beyond sort of its immediate post-colonial, somewhat closed economic system, the combination of the inheritance of a British civil service system run amuck with Fabianism and it was kind of 50 years in the nonaligned movement of which it was associated. So there are political changes in India that developed along that line.

You have an opening up of the -- at least starting to open up of the Indian economy and certainly the outward orientation of the Indian economy. So you've got dimensions here that are strategic. You've got dimensions that are economic. You've got dimensions in terms of democracy. Now, there are other points that people will refer to; for example, the relationship with China and sort of a balancing notion. I would caution one on this and it's because I think it's too simplistic to simply see that this could be a maneuver that the United States will align India up in a balance against China. Of course, we're not inattentive to the fact of the relationships of these two rising powers and their relationship with one another, but India's own sense of itself and its own integration with China is far too complex to where you can have this simple billiard ball maneuver.

So with that sense of seismic changes going on, this nuclear agreement really was a recognition that the long-run interest of the United States was trying to develop a closer foreign policy, security, economic policy relationship with India. And that required -- and this goes back to your point about the New York Times editorial -- a judgment call that required people to evaluate some of the basic tenets on sort of nonproliferation policy.

And you could -- one point of view would be we must not reward the Indians, we must penalize them, we'll keep them in the cold box until they change their nuclear program. That didn't seem too likely to many of us. And so then it requires how do you make the adjustment and under what circumstances.

So what this negotiation has gone to is how do you try within that bigger strategic context of making India a positive nuclear player separate its civil program from its military program and have it play a positive role even in the proliferation agenda. Now, of course this raises the question to people to say, well, what about sort of horizontal equity and you're not treating everybody the same. And yes, this is what foreign policy choices are about and one of it is that I don't believe that India is the same sort of country as a North Korea or Iran and so, yes, that may lead to policy differentiation.

Now, will that mean that you'll be presented with arguments that you've have to counter and cope with in those circumstances? Yes. But so, in a sense, I think the New York Times editorial reflected the sort of traditional proliferation view. And again, this is the right of an editorial writer as opposed to a policymaker. So where would that leave you in your relationship with India and would it lead you into a better position in terms of economic security, even nonproliferation policy? And our judgment was that it wouldn't. And I'm pleased in a bipartisan sense that when I talked with Ash -- Ash Carter has been helping on the Congress because he shares the same strategic perspective.

One last point to connect it since you mentioned the economic. You know, I reflected on -- when I was in government in a prior run, if I were talking about the world economy and its state, I would be primarily focused on the U.S. or North America, Europe and Japan. And I think again, one of the big challenges for today, but certainly for the years ahead, is how within these structures are you going to fit in the Indias and the Chinas, perhaps the Brazils as well. I certainly encountered this in the trade world. But it's part of a larger piece of repositioning the U.S.-India relationship. And I must emphasize again, this won't go always in a smooth line. I cautioned my fellow colleagues as they were going to India on this final -- what we hoped would be the final negotiation. Having sat across the table from Indian trade negotiators, it's just there's something in the culture that it has to be a painful process, and so indeed it was.

MR. ALLISON: Let me pick up from there because, as I mentioned before, I think one of the things you've done almost uniquely is think about the ways in which economic architecture ends up impacting politics and then security. So let's go to the China case, which you've involved yourself deeply there.

As we were discussing today, your theory -- you've got a theory about initially China's integration into the global economy, which then you've now taken a further step -- that was the WTO and that sort of arrangement. And then your speech in which they now become then stakeholder --your term -- with some responsibility for the global stability and openness that they've benefited from, which you then think will produce economic development which then will look something like Asian democratization. I mean, I'm caricaturing or summarizing a very complex thing, but here's a theory. China is a now many thousand years old government. Henry Kissinger, my own mentor, used to like to say the Chinese always are wondering how did they manage to survive before we came along to tell them how they should manage their affairs. So I know that you're not giving them lectures about this, but you are running an experiment, I believe, and deliberately. And it looks to me -- I don't know of a better experiment, but tell me a little bit about -- of the presumption and the plausibility of this theory as it relates to a rising great power called China.

DEPUTY SECRETARY ZOELLICK: Well, let's take it in the context of what I think I'm trying to do. I'm not trying to run China; I'm trying to help shape U.S. policy towards China and in the process perhaps send signals to other players in Asia but also maybe in Europe on how they may want to shape policy and how China engages with us. So my ambitions may not be quite Kissingerian, I guess, in that sense.

MR. ALLISON: No. But ultimately it’s Chinese behavior --

DEPUTY SECRETARY ZOELLICK: Right. So let's start. Okay, so integration. The starting point, because there are different themes here. One is that what I was trying to draw attention to, and I say this because I'm someone who often sees policy as a series of continuums - and seeds planted that may sprout - but now and then it's useful to draw attention to a step function shift of sorts. And what I was trying to draw attention to was for seven administrations, since at least 1978, the policies of the U.S. Government has been to say let's integrate China into the world system. And recognizing this is different than it might have been with the Soviet Union, where you had sort of a containment logic, and it was the idea that the way to both help China, make it a better living conditions for its people but also to deal with it as a rising power and also perhaps to, in our terms, reform it, is to connect it to this international system.

And what I was stopping to do was to say, okay, circa late 2005, let's look at world currency markets, capital markets, commodity markets, counterfeit markets, counter-proliferation issues. China's integrated; we've succeeded. It's hard to look at an area of world endeavor, where I was talking about Sudan and Darfur; China's involved with that. HIV/AIDS, avian influenza, you pick it. Okay. Global climate change, it's there.

So now I'm saying is our goal can't simply be to integrate; it must be to integrate for what purpose. And so the notion here was also a message to the Chinese as well as to an American audience that says in a shorter time span than you might look at, of thousands of years, let's just take hundred, which is kind of what an American might manage. The 20th century was a pretty not difficult century for China, except frankly for the last 20 years, and its growth and dynamism in the last 20 years was connected to an international system that the United States helped create and helps foster along with others.

And so China has an interest, even as it continues on its internal development path with many, many challenges, about trying to support that international system. And now this loaded term: What is international system or a network of systems? But I was trying to engage the Chinese, and I think this was important because for all the influence that we see globally of China, inside China you still see huge challenges. And you can see from a Chinese perspective that you might be, for goodness sakes, leave us alone, we've got enough to do at home. You know, why do you need us, bother us, and all these other things? And my message to them was, in part because of their accomplishments, "We have to. You influence the system."

So how do we see our common interest beyond perhaps narrow national interest in the system as a whole? And then what I set out in the speech was not surprisingly an American agenda on how to be a responsible stakeholder. And that has launched a series of discussions with China, discussions with me and others, and that's something will be a challenge for me and those that succeed me.

Now, you connected it with a view of changing China on the inside. And on there I would just say that, you know, I think the logic, having looked at patterns of development in many countries, is those that do open up, those that develop middle classes, those that institute a series of economic reforms and bring in various notions of property rights, create the conditions for a more open political system. Now, this isn't Marxist. It's not for sure. But again, another insight sort of, as I mentioned today. I live in a world of probabilities. A lot of my job is to try to increase the probabilities in different things. And so do I believe that this can increase the likelihood that you'll also have political reform and change in China? Yes.

And let's just look at the historical experience. I lived in Hong Kong in 1980 and for all the difficulties and human rights in China today, human rights conditions in China today and the openness create a lot more space for people than it did circa 1980. Now, this is not the end of the story and where you could go further on this is that where I actually think one of the most interesting -- one of the challenges of diplomacy is always to try to find points of mutual interest with your colleagues, where it's not just you must do this because we want you to do it but try to come up with an explanation on why they may be interested in doing this as well. And here the whole issue of rule of law which is tied in with the trade area, and one of the reasons that China wanted to join the WTO was not only to be part of the international economic system but, as the Chinese will tell you, to use the economic rule of law context to help import rule of law into China.

Now, they have a long way to go in terms of rule of law development. And when I was last in China I was talking with some Chinese universities and some American and Chinese NGOs about rule of law development, where some of these political and social issues will come into contact is, as they try to develop the rule of law system, one important step will be a much better judiciary. But it will also be what happens when that runs into conflict with the power of the communist party. And I think China's far from having solved that issue.

So to kind of pull that together, I start out, Graham, by -- my job is to represent my country's interest. I'm trying to do this in a way that not only takes account of my national interest but the systemic interest. But, you know, part of the challenge of American foreign policy is you're merging your interest with your values, and if there's a way that you believe you can enhance those and make them more likely, that's what that combination of things is about.

Are you persuaded?

MR. ALLISON: Actually, yeah. No, I like the theory very much but I think that it puts it much larger -- and I thought your speech did a good job of putting it much larger than usually people think of them as separate --

DEPUTY SECRETARY ZOELLICK: Can I mention one other point on this? Because it relates to the topic of general discussion.

In the speech there was actually a lengthy section on democracy, which is, for those papers that covered it, they covered that topic and they actually kind of missed the other part. Fortunately, the Chinese were listening more carefully. But, you know, part of what the other message was, and this is one of the challenges the United States has, is that the Chinese are worried that the goal of democracy is to destabilize the system. And what I was partly trying to emphasize there is that, particularly after September 11th, the vision that President Bush has outlined is that societies that aren't open, that are closed, that become the source of problems in the global system and become whether intolerance or linked to terrorism and others -- and there are hypotheses as part of this -- and that part of the reason that we promote democracy is not an assault on China but relate it to this broader notion of a long-range security system. And in that context we're saying things that China has done that has also tried to move in this direction. So again, part of the challenge of diplomacy or interagency efforts is how do you try to find win-win solutions? That's part of what that was also trying to do.

MR. ALLISON: Well, I like the general theory of the case and I think that's a good explanation. But going back to David's earlier point, how many people join economics and politics and security, and unfortunately not enough, but it's a great opportunity for a place like this.

Let me take you -- because I see Bob Rutherford (sp?) here and I know that he's about to kick off a panel or a conference this weekend on Sudan. And you were five minutes late because you and the Foreign Minister from Sudan were negotiating about some item or another.

DEPUTY SECRETARY ZOELLICK: Discussing mutual interests. (Laughter.)

MR. ALLISON: I said they had five more minutes to prevent genocide but he had to come down to the forum. It was -- Bob Blackwill who was here -- you mentioned on Monday -- had a nice line. He said now that he's about a year out of government, it's amazing to him how much clearer all the public policy issues are, how much easier it is to see the obvious solution and how petty the obstacle to solutions appear relative to how they do when you're sort of stuck in the system. So let me ask about Darfur.

The President more than a year ago named what's going on there genocide. The international community has repeatedly said never again; we would not allow this to happen. The U.S. Deputy Secretary has taken this account. It's the only time I ever know of a Deputy Secretary of State who's taken an account in Africa and been to Darfur four times. In fact, Taiya was telling us you've been to Darfur more than you've been to New York.

DEPUTY SECRETARY ZOELLICK: And certainly Cambridge.

MR. ALLISON: And certainly Cambridge. I mean, this is a naïve question but why not just say no? Why not just say this is going to stop?

DEPUTY SECRETARY ZOELLICK: Well, the most basic reason -- this is good for a school of public policy to understand how organizations work -- is sometimes the deputies gets the most difficult jobs than the principals, don't they? And you can't say no if you're working in the job.

But more seriously, this is an issue that is very important for the President of the United States. I think it's very important to our society and insofar as you have a sort of a public groundswell. This is a very interesting foreign policy. This is represented by some of the people here.

Having worked on a lot of issues over time, this is one that generates more public interest outside the opinion leader community than almost anything I've dealt with. I mean, trade I guess, would be a good -- a good complement in a different way. And you know, it covers the evangelical community. It covers the American Jewish community. It covers the African American community. And then obviously at universities all over there's again a very strong interest in this.

And just to give you another little government policy insight, a number of times when President Bush has spoken about this issue, it's when he's gone out of Washington and spoken to general audiences -- once he did it in Kansas, recently he did it in Florida -- where he gets these questions. So this is what people are interested in. So insofar as the government also reflects the interest of its public and the Congress as representatives, it's pretty important.

But there's another level, and that is Darfur, as this conference will discuss and as the organization suggests, is really symptomatic of a larger problem of Sudan that goes to Sudan's history and its founding, where Khartoum in many respects was sort of the capital of the commercial influence, the traders, the soldiers, the administrators, and the history of North-South relations, which was a 21-year-old civil war that cost millions of lives, Darfur, the East, are all problems of how Sudan comes together or doesn't come together as a country.

And I believe -- as many people may not know, Sudan is the largest country in Africa. It has some nine neighbors. So what happens in Sudan is of great interest to other African countries that also deal with colonial borders. So there's a huge -- what I'll call more traditional set of foreign policy aspect, including to the humanitarian and value aspect.

And then maybe there's a third point, which is that -- and this was due to my predecessors. President Bush had asked former Senator Danforth to play a lead role in trying to help mediate the North-South struggle, the 21-year-old civil war between North and South. And the United States was able to help play a role in bringing together a historic peace agreement, the CPA, which actually creates a political structure for dealing with all of Sudan's problems. So it's more than a North-South ability; it's a structure to deal with this historic issue. And that has a little lesson, which is sometimes there's things that the United States is probably the only player that can do. And so given these combined needs, I think the United States has a particular role.

Now having said that, this is an issue -- to do it well you've got -- this is a classic multilateral diplomacy. I work with the African Union on this. I work with the European Union. I work with the Perm Five -- are all critical elements of the policies. So it's an interesting example of, you know, of a problem of historic nature and that’s got huge human value as issues, strategic issues but a lot of multilateral challenges, too.

MR. ALLISON: Let me do one more question and then we'll coming to the audience.

On the Dubai Ports deal, the announcement that -- or the Administration decides to sell to a Dubai-owned company, a state-owned company in Dubai, six terminals at six ports to operate. Congress -- congressional eruption. You now have Republicans and Democrats competing to see who can raise the barrier higher. Shelby, the Republican Banking Committee chair, is proposing legislation that will do one set of hurdles, and Schumer and Clinton either want to have a congressional review after the 45-day Administration review or even, I think, Senator Clinton has proposed no foreign ownership of these -- and operation of the ports and the terminals.

I look at this and I think at first it's politics connected to policy, but then I think is this a serious threat to the global free trade and investment system that you've been, you know, spending most of your career building? I mean, is it a serious threat or is it just one of these issues that, you know, there it is and we'll get over it and we'll move on?

DEPUTY SECRETARY ZOELLICK: Well, since you made your opening point was about policy and politics, every once in a while it's useful to have a few of the facts. Let's get the facts out on which one bases the policy.

Fact number one, in terms of the security of the ports, this is managed by the U.S. Government, whether state and local, Coast Guard, others, so this doesn't involve the security of the ports. Now, people can legitimately raise questions about how the security of the ports is conducted, but it's not due to this deal.

Second, it's not ownership of the ports. It's a lease. And by the way, these ports, if they decide they don't want this lease, they cancel the lease after a certain period of time and maybe they can go to one of the other five or six foreign companies that are doing this business around the world.

Third, in terms of the security of the Dubai Ports company, we have found them to be an exceptionally good partner and one of the leading partners in the Middle East and dealing with container security initiative -- many of the things we've launched after 9/11.

Fourth, the United Arab Emirates has also been an extraordinary partner. I think the Defense Department pointed out that we have more ship visits in Dubai than any place outside the continental United States. And you've got UAE forces in Afghanistan. They've been an extraordinarily good partner on a series of things.

And fifth, something that's overlooked in the area of foreign investment is that about five to six million jobs in the United States depend on foreign investment.

So that's the factual context, but yes, there's a political storm. So coming to your point of could it upset these things? Yes, it could, because these are -- as President Bush has talked about and emphasized in his State of the Union, underneath the surface there's a protectionism and isolationism in the country. One has to be careful about that and it comes out in different forms. I mean it's (tape change)…people here see it and you can see it if you spend time in many of these businesses. There are many parts of America that are sort of just (inaudible) the international environment, but how they engage in the political process is quite important. Let me give you an example.

The Congress people from Silicon Valley, when it came time for voting for trade agreements, which you would think would have an international orientation, wouldn't vote for it. Okay, now they understood in their business interests and their own local interests that it relates to somewhat of the politics of their party and the primaries and roles of unions and others, making the point that those who do believe in openness and free markets, including, I hope, some in this room, have to very much argue and make the case because otherwise organized special interest against it will fight.

This also creates an issue. I think, in this case, you have the special circumstance of the fact that that also then was linked to the terrorism issue. So it's a difference in whether protectionism or isolationism. And some people wanted to score political points on that and some of them believe it allows them to maneuver or outflank the President on the terrorism issue and that's very appealing. And some of them, frankly, either didn't care about the facts or don't listen to the facts. And so you can -- in the way that our government works, you could say, look, it's very important then for the Executive Branch to do its job to brief people of the facts. Point made, fine. But after the facts are out there, when Comedy Central is now making the case on our side, then I would like to believe that some political figures will also get some backbone on this issue.

So, you know, the bottom line for me is: Is direct investment or investment in the United States very important? Yes, not only because -- you've got some people who are here studying economics, if you have a $720 billion current account deficit -- I won't explain the trade and the capital account but most people here understand that connection -- you're going to need some foreign capital. Okay?

But more important than that, I am a believer, and if you want to get to core principles, that the United States' core strengths are its openness, its openness as a society to ideas, to goods, to capital, I even say people -- another very controversial topic. And I've watched over my career of, you know, some 20 years in public service, 20 or plus more years, that I've seen big debates in this country, even in that limited time, and including the '80s, when our economy was all supposed to be beaten by the Japanese and the Germans.

And one of the things that people miss is the turmoil that you have in the United States is because it's a relatively open system and it's dynamic and it adjusts. Now, there's a whole policy field on how to help people adjust to the dynamic, but I think it would be a terrible mistake for the United States to send a signal to players that we are not going to be an open system. And of course, there are effects that will affect American investment in other countries.

And also, you know, Secretary Rice was in the UAE at the time that the story was breaking. What message, honestly, does it send to the Arab world? And after you've dealt with all the security questions and all that, it's not a pretty message. And so if you don't believe that, you ought to stand up and fight it, and I'm very pleased that my Administration has done so.

MR. ALLISON: Just speaking personally, I would say I agree completely with that proposition and I think this is a very interesting phase in which national interests both in an open global trading system and investments, and so that whole structure come at loggerheads with politics.

DEPUTY SECRETARY ZOELLICK: Can you give me two more minutes on this?

MR. ALLISON: Please.

DEPUTY SECRETARY ZOELLICK: Okay. Let me connect this to some of the other things you were talking about. When I was USTR, I started a free trade agreement with the United Arab Emirates, which is in negotiations. We have completed one with Jordan, we completed one with Bahrain, we completed one with Oman, we have completed one with Morocco. A number of them have been passed by Congress.

In going to the larger point that we were talking about, sort of change in the global system -- open economic and political systems, take your China issue and apply it to the Arab world -- the UAE is a case of a country that says we want to get beyond oil and gas, we understand the changes in globalization, we're going to develop a service-oriented economy, we're taking advantage of our port position, we're also going to develop tourist facilities. And it's the exact example of what we want to be encouraging.

And one of the reasons that a lot of these countries wanted free trade agreements with the United States was not so much just the direct market access, but they were actually working with us and using these free trade agreements to deal with their own microeconomic and legal reforms, because our trade agreement -- free trade agreements are a term that's used kind of loosely around the world, but ours are quite comprehensive and they really get into everything from transparency in systems and others. And they become sort of a Good Housekeeping Seal of Approval of economic reform. And if you believe, as I do, that economic reform is also linked to political reform, so what message exactly are we sending here if we're concerned about America's larger role in the world not only with Arabs, but with economic openness and political reform? Not a good one.

MR. ALLISON: Good. Let's start with the questions and let me remind you the questions need to be short. We'll also have to try to have short answers since there's a huge number of people who would like to ask questions, and we'll start here. Please introduce yourself as well.

DEPUTY SECRETARY ZOELLICK: Did they get the line up when I was speaking? I didn't notice that. (Laughter.)

MR. ALLISON: Yes.

QUESTION: I'm Joseph Ratenburg (sp?). I’m a student here at the Kennedy School. With China, Russia, and India enjoying extensive economic and political relations with Iran, I was wondering what your thoughts are about whether the international consensus will hold for tough action if Iran continues to develop its nuclear program.

DEPUTY SECRETARY ZOELLICK: Well, this depends on a number of factors. One is -- you know, how we've tried to conduct the diplomacy has been one that have tried to bring to the attention of other partners, starting with the EU-3, a different position that we were in over a year ago, about the common interests that we have on this issue.

And actually, it's -- you know, again, if you reflect on it, just think about the difference in this situation with others where here, you have the EU-3 in front trying to point and say why Iran has to take these various actions. Now, I think you have to take each country's circumstance on its own. In the case of Russia, I think Russia -- you know, has its own very strong interest in why they don't want to have Iran develop a nuclear weapon. I think that this, again, has been handled -- I'm not trying to pat ourselves on the back, but this went well in the sense that -- you know, as opposed to having Russia be an outlier, we sort of welcomed the Russian proposal that emphasized to the Iranian people that you can have a civil nuclear program, but let's not have the enrichment facility. It was an important distinction. We're working with the Russians on that.

In the case of India, they obviously have very strong energy interests. They also have some interest that people I haven't talked about much in terms of their own Islamic population and its neighbors, but here again, it goes -- where sort of where Graham started the question. I think the relationship we build with the Indians -- the Indians took what we know are some very difficult political decisions which you've seen in some of their votes in this process. And so, this is part of the partnership they're developing with us and others, but partly their calculation of interests.

But China, which I spend a lot of time with, might be the most interesting and here -- you know, I'll just mention when I was in China in January and I was following up these concepts with some on-the-ground examples, Iran was one of the major ones I discussed. The Chinese emphasized to me that they agreed with the core principles. They did not want Iran to develop a nuclear program. They might differ somewhat on tactics. But then, here's how the dialogue goes, basically. On the one hand, I'm emphasizing to them the criticality of this issue in our bilateral relations and the Chinese are shrewd, they pick up that.

But then they also mentioned, among a couple of different things, that "Look, we've got energy needs. We've got concerns, you know, that we have to sort of weigh in this process as your question suggests. But -- so this allowed -- this sort of dialogue we have, where I then can say fine. Let's just set aside how this ranks in the U.S.-Chinese relationship. Let's look at your own interest. If you have energy interests, what will it do to those interests if you have a country that -- a clear weapon of supporting terrorism, claims that the Holocaust didn't occur, believes that Israel should be wiped off the face of the map and then develops a nuclear program. What does that do for the likelihood of energy security in the major energy security region of the world? The Chinese recognize that. So in their own interest, this is something that they also want to try to counter.

Now the next steps which will be -- having said that, at a certain interest level, the tactics, the timing, you know, how you offer possibilities, including the Russians, for Iran to change. That's a lot of the hard work of diplomacy and then calculating how those interests are handled in individual circumstances.

MR. ALLISON: Okay. We're up here on the (inaudible).

QUESTION: Hi. I'm Deborah Murphy. I'm an MPP student at the Kennedy School and I was in Khartoum in January talking to people about implementation of the Comprehensive Peace Agreement. And a common refrain was that the international community has too rigid an approach to its implementation that ignores the fact that, as written, the power and wealth-sharing formulas in the CPA don't leave enough room to meet the demands of other marginalized groups in the north, such as the Darfur rebels. So given the constraints imposed by the CPA, I was wondering what you think the best approach would be to develop a truly comprehensive peace in Sudan?

DEPUTY SECRETARY ZOELLICK: Well, let me try to take the bigger focus you mentioned. I actually think the opposite. I think the CPA, as I suggested, provides the framework here for dealing with a series of long-festering problems of regions of Sudan that have not been accepted in a remotely equal fashion in terms of the power structure.

Now what is most important, though, and this is why I don't think the CPA would really impede at all, is that the CPA envisions an election process, four years, as I recall. What you have done now is do some allocation -- they have seats in the legislature and other government positions and I believe there is room in that allocation to also bring other parties in, which frankly both the SPLM in the south and the Communist Party in the north have already agreed to reallocation in the seats, that they did to bring in some other parties in the north which have been discussed with the Beja in the east in which there are ideas now being put forward by the Government of National Unity, north and south together, for the Abuja peace process -- something that's sort of just started to develop over the past week. And one of the issues that I hope to be working on next week in Europe is trying to work with the African Union mediation force to try to accomplish that.

But in a sense, I think there's a bigger issue here. I mean, the bigger issue is not -- when I look at Darfur, take all this complexity, I focus on three things. One is the humanitarian condition. What do you have to try to do to make sure that these two million people in camps have basic security and food and medicine and others? And that, I must say, there's a tremendous effort by an international NGO community and others to try to supply that.

Second, is security conditions. And clearly, the African Union mission has not been sufficient. A number of us -- and myself -- hoped that it would be. There was a question of whether they could go up to higher levels of troops. I think, however, one needs to recognize that the African Union mission, where I've spent a lot of time visiting and talking to, has done a tremendous job with what they have. I think we could strengthen it even more with some additional planning and logistics capabilities and I think they would like to have that or least the commanders that I've talked to on the ground. But I also don’t think it's going to be enough for an area that's the size of, depending on your perspective, France or Texas. And then, that's why we're looking towards a UN mission as well.

But it comes back to the full circle and this is the point I want to emphasize for people interested in Darfur, it won't be enough. We have to reach a peace accord, as well, because otherwise, the situation has an inherent instability and danger. And the peace accord is key to eventually letting people return home, which is where the security forces might get you. So I believe actually the CPA creates the architecture. And then for the negotiation of seats and positions, I believe that's all within the realm that could be had.

MR. ALLISON: Let's go here to the next row.

QUESTION: Paula Bahram (sp?), I'm a Ph.D. student here at the Kennedy School. Recent headlines said that the State Department earmarked an additional 75 million for public diplomacy in Iran. And I'm wondering what you hope to accomplish with that amount? It seems kind of trivial. Surely, it's not going to galvanize regime change or revolution. And then what matrix do you use to see if that money is effective or your public diplomacy is effective in Iran?

DEPUTY SECRETARY ZOELLICK: I'm sorry, were you saying something else?

QUESTION: No. Thank you.

DEPUTY SECRETARY ZOELLICK: Okay. It's an exceptionally good question. It's actually 85 million, including the ten we had before, but it depends on which press report, whether you use 75 or 85. The questions you're asking about metrics is a question we're asking right now and sort of an internal one, in terms of we're trying to think about how to try to deal with this. One has to be honest, this is subject to all sorts of difficulties about, you know, exactly what you're trying to measure and how you try to get the information. But I think -- and we're also discussing -- well, first, we're having to work with the Congress to be able to get the money, which isn't so darn easy, I have to say. But in addition, we're trying to discuss how it could be best deployed and whether through some private communication systems, whether it what was -- used to be the Board for International Broadcasting. It has a different name now. And of course, one has to recognize you're doing this in a system that may not welcome this sort of influence.

But I think -- the way that I look at that issue is at the same time that we're trying to deal with sort of the questions that I discussed in one of the seminars today with the nuclear proliferation question and sort of build this coalition, that one has to -- over the long term, try to encourage a process of political change and openness. And so I would hope that the goals and the metrics that we come up with are some way of trying to -- see if I can recall this, at least start to get some reasonable input measures, output measures that lead to the outcome measure of a kind of a more open political system. But it's an exceptionally good question. I hope you do some research on it, because it's something that's fluid right now.

MR. ALLISON: If somebody has a good memo on that, if they'll send it to me, I'll send it on to Bob.

This gentleman.

QUESTION: Hello. I'm (inaudible) a second year (inaudible) Kennedy school and I'm from Mainland China. My understanding is that in the current U.S.-China relationship is a (inaudible) relationship. It should be a two-way bilateral in a new deal, rather than a one-way relationship. Now, there's a burgeoning crisis across the Taiwan Strait because the current President of Taiwan has just announced the freeze or abolishment of its national unification program or council. And it's very clear that his next step is very likely to be the official announcement of the independence of Taiwan. So as the U.S. has repeated so many times, it will never abandon its commitments to 23 million Taiwanese people which is the peace across the Taiwan Strait. My question is how the U.S. government could comply with its commitment to 1.3 billion Chinese people which is "one" China principle? Thank you.

DEPUTY SECRETARY ZOELLICK: His question has the slight indication (inaudible) that I sometimes get in China over semi-official (inaudible) questions. But I will -- so I will give you partly a semi-official answer: we stand by the three communiqués, we stand by the Taiwan Relations Act. But then I'll try to go to the substance. Look, in my dialogue with Chinese officials, I think there has been some recognition and I would cautiously say some appreciation of the fact that President Bush has made it very clear that there should not be a change in the fundamental status quo. And that means on the one hand, no independence. That also means no use of force by China, which we discussed in an earlier session, there was a change - it's a dual-clarity policy as opposed to a dual ambiguity policy. And I think Beijing has recognized that you may disagree or agree with this President on many things -- what he said, he's going to do, he believes in and so he has conducted his policy with Taiwan accordingly.

Now what you're referring to is the fact that along the way, the Chen Shui-bian have made four particular assurances and one other one related to the National Unification Council which he made first in 2000, 2001, then he was elected in 2004. So as you probably know, we have pressed him on those issues and he did not lead to an abolishment of the National Unification Council. He said that it would sort of cease its function and it tends to be moribund in any event. But our core point remains a fundamental one, which the President has made about recognizing that we expect Chen Shui-bian to keep his promises on what he said and we certainly do not want to have any unilateral changes in the status quo. But I would also say from the Chinese side, it would help if China also recognized in its dealings the democratically elected Government of Taiwan. And believe you me, I have sat through a lot of discussions. I know how intense this is held in Beijing. But frankly, I think that, you know, Beijing has done some things over the past years to try to lower the intensity and try to open up the ties and I think that's been constructive. It's invited opposition leaders. It hasn't had the dialogue with the elected leaders in Taiwan. And I know that's not an easy sort of step to take, but it's one that we would encourage. And so you know, there's certainly no shift in our position and we will continue to be stalwart in the view that we've had towards Taiwan. But I also hope that over time that Beijing can recognize in a way as it grows and expands and its influence increases in many ways, it may also have the confidence to deal with Taiwan in kind of a slightly less reactive fashion all the time.

I was thinking recently -- Mike Oxenberg who was one of America's great Chinese scholars, shortly before he died had written some things about how China might also rather creatively sort of engage Taiwan in a way that sort of recognized its -- the fact that the people of Taiwan also don't want to have a sense of international isolation. But having had the challenging task, I might say, in 1991 or '92 of bringing both China and Taiwan and I might add, Hong Kong into APEC and then getting the hot potato of bringing China and Taiwan into the WTO, I realize the extraordinary sensitivities related to this topic.

MR. ALLISON: (Inaudible) is telling me we're close to the witching hour, so what we're going to do is take these three people to put their question and then a short answer to them. So short questions, please.

QUESTION: Hi. My name is Carlos Gonzales (sp?). I'm a student here at the Kennedy School and my question is regarding U.S.-Mexico relations and U.S.-Latin American relations. How have they changed after 9/11 and why would do you think that people in Latin America feel that the U.S. has abandoned them and what would you think if life in the future considering that many of these countries have turned towards the left?

MR. ALLISON: Okay and we'll take the -- what was the last (inaudible) -- they have what?

QUESTION: -- of the left.

MR. ALLISON: Of the left.

QUESTION: I'm going to shorten my question. I wanted to ask you, do you see any prospects for the free trade area of the Americans resuscitating and, if so, in what form and under what conditions? There are some students at KRC that were involved in the negotiations of the project, so we'd be interested to hear your views.

QUESTION: Hi. My name is Ashley Stalwart (sp?) I'm MPP here. Earlier this month, Bush said he would support expanding the role of NATO in Darfur. However, today Sudan said they're pulling their support for UN troops. So do you see -- how do you see NATO helping and do you see any other organizations that could help as well?

MR. ALLISON: Okay. And I apologize very much to the many other people who wanted to ask questions. And these three questions were not exactly the same, but if you could give us a brief comment on --

DEPUTY SECRETARY ZOELLICK: Yeah. Well, let me start with the FTAA question. I always believed that trying to do the FTAA with all 34 economies was going to be a challenge. I mean, you got Venezuela in there, too, remember, to say nothing of the negotiations with Mercosur. So in the spirit of portfolio solutions, which I hope people teach at the Kennedy School. You know, I made it quite clear that we were setting a strategic course that could either try to do all 34 and there was a point in Miami in 2003 where it was some significant constituency opposition, I tried to get a baseline agreement we can build from. But simultaneously, wanted to try to offer an alternative which we are now following, which is that we have NAFTA, we now have the Central American Free Trade Agreement of five countries, including the Dominican Republic. We're close to concluding with Panama. We have concluded with Colombia. I concluded with Chile. We've concluded with Peru. And so I hope -- and this will be sort of a trade guide legacy, but if those all come through and get passed, it's actually an interesting legacy for President Bush's term. You will have had two-thirds of the Western Hemisphere in a Free Trade Agreement.

And what I would also do with that -- and suggest it -- is I would then take that and I would create something like the "Association of American Free Trade Agreements" and I'd find a nice place like Miami and sort of make the headquarters of that. And then I would actually then start to try to work on how to try to integrate those more closely together, but take a step beyond which has also been part of the strategy, which is to look at trade as one tool, but connect it with things we do with the Millennium Challenge Account or development tools, things that deal with the security area, like gangs, and try to draw the hemisphere more closely together with the main goal being development and democracy. Those are the goals for the region, so that's how I would approach it. And in the meantime, that also offers the opportunity that if other countries who are not yet part of it, would like to be part, well, then that day is open and again, part of policymaking is taking what you can and then leaving open the possibilities for the future.

This is a nice segue kind of into your point. In a sense, I think that the goal for the United States and I think many partners in the region, has got to be democracy and development. And so I think that there are a number of reasons why you have -- I won't just call it "move to the left," I'll call it a move to sort of a populism because let's take President Lula in Brazil. I'd like to draw attention, even though the Brazilians are very difficult in trade negotiations, to the Brazilian experience, because here is a gentleman who was on the left and stayed with the democratic process, lost two, three elections until he won and has governed within that democratic process.

And the reason why I mentioned this and take a much smaller country, which -- what we're going to face in November is the challenge with Nicaragua where you have kind of the right with Aleman, having gone -- and corrupt and you have Ortega and the Sandinistas and you have two competitors in the middle Montelegre who's broken away from the liberal party and Lewites who's broken away from the Sandinistas with again responsible democratic left, okay. And that's what will have to develop in a number of these countries.

And what we as a country need to try to do is not just do it ourselves, because I'll come back to the Mexico point. But to try to work with other Latin partners that share an interest in democracy and that's what connects to the first question, some of the economic ties to build that group that protects those that are on the precipice and helps support those like in Central America that need the help and here there's a wonderful point about Mexico in that, again, if you think, well, ten years ago, if I were to ask what was Mexico's foreign policy, and generally I could take America’s and put a minus sign in front of it. That's totally changed now. And it's a - I think it's partly changed not only because of some of the integration of NAFTA, but because you now have a democracy in Mexico. I mean, there's a different set of attitudes.

And here's an interesting little vignette for you, Luis Ernesto Derbez Senior Foreign Minister was in my house the day after Christmas and we were trying to talk about democracy in Central America and in the region and how we can work together. Could you have imagined a Mexican minister, an American minister, a deputy minister doing that 10 or 15 years ago? It wouldn't have been the way it worked. So that's a tremendous step. Now I hope we have a Mexican Government that will continue to do that. But that's part of the positive message.

On kind of the sense of being left behind, I think this is a number of things. One -- and so when I talked about populism, I think the real danger in the region, you've seen this in different cycles and you know, it's a sense of -- sense of failure to deliver the goods, part of it is you've had good macroeconomic reforms, not good microeconomic reforms. Part of it is the political systems and some of these countries like Venezuela, had elite structures that failed the people. And so there's a message about the populist which is there are a number of people who've been left out of the political system in Latin America for a very long time, not just this administration, but decades or, indeed, centuries. Those people now have a more open political process and they want to play.

And what is happening, as I use the phrase "pied pipers of populism" -- is you've got some people that are going to take them off the cliff with bad solutions. But we can't just say "no." We need to be in there with alternative solutions, okay, and this is where working with the OAS, in terms of democratic structures, working with the Inter-American Development Bank, perhaps with some programs oriented towards indigenous people. That is what we in the United States need to do, but we'll be much more effective if we do it with Latin partners, as opposed to just to be the gringos from the north.

And so these things do go through cycles, but this is where these two questions are nicely interconnected is that frankly, I think, you know, you've got some countries like Colombia that are facing huge challenges, but have accomplished important things. The Central American regimes, which I have worked closely with, again, I dealt with them in the civil wars of '89 and '90. So to me, the reason why CAFTA is important is not really its trade prospects. It's trying to stabilize democracy in these countries and help them have a chance for the future to compete with China and others. So I actually think there's a good story here, but it's in a phase where it's going to have to get consolidated and offer opportunities for others to go along, and I hope we'll be in partnership with Mexico as we do so.

Let's see, there was a Darfur question.

MR. ALLISON: Darfur.

DEPUTY SECRETARY ZOELLICK: NATO. Okay. I'm trying to remember which I answered and in what context here before. But we have believed that the African Union force, the AMIS mission, has played a very important role, but it does have limitations and its primarily -- it doesn't have enough people and the African Union mission is not going to be able to get up to the 12,000. But it also could be helped a great deal with some planning functions. So if you go through people who were at the security studies here and you go through it, we would have as, you know, one through five in the security intelligence. You got 7,000 people there. The area is, as I said, the size of Texas. You got to know where the problem's going to be. You need intel. You need sort of operational planning, sort of helping with how they do the patrolling. They needed logistics help to sort of fuel the helicopters so that they get around.

Frankly, we believe that NATO can play and the EU, too, if it wants to, we don't want -- it's not trying to have a fight if NATO or EU has been trying to help with that support. But we also believe and this goes to the point about the UN mission about the fact you're going to need more forces and that will probably be done in a UN force that builds on this AMIS force that is supported by NATO. That's where we're trying to get. You mentioned the Sudanese Government, conveniently, you have representatives in the Sudanese Government, so normally I let people speak for themselves. But I will say this, I have urged them to recognize that by resisting the UN effort, I think they're making a big mistake. And let me put it in the most bald terms.

Anytime there's a conflict in Darfur and additional people die, they get blamed. Now sometimes there's a lot of other reasons: there's rebel groups; there's Janjaweed who they probably associate with, but may be off on their own in different circumstances. So I try to make the point to the government, look, in coming back to the other question on the peace accord, we're going be diverted by -- and you're going to continue to be slammed internationally if we don't improve the security situation. So don't resist this. You should be working with us. It should be in your interest as we try to do this. Okay and in particular, you have a UN mission in the south, so it's not like this is, you know, tremendously difficult. But you also, in dealing with other parties, need to try to see from their perspective. Obviously, they want to have some sense of control of their own territory. And this is where it fits nice with the North-South accord because if you want to look towards a takeout option over time, the North-South accord was supposed to develop joint integrated military units from the SPLA in the south and the Government of Sudan. That, the late Dr. John Garang had suggested, might actually play a role in Darfur over time, so that's another sort of good possibility to look towards here. So as recently as -- very recently, I have urged the Government of Sudan representatives, the Government of National Unity not to get too dug in on this -- on that part. And they have themselves said they believe it's important to strengthen the AMIS mission. And so I hope with persuasive diplomacy that we can move them in this direction. But also where we do have an important agreement coming back -- is the peace accord. If you get the peace accord, that's words on paper. You have to implement it and that means getting two million people to be able to go back to conditions in their homes. From your knowledge of this, you know how terrible it is there. They're not going to go back, unless you've created security conditions on the ground, unless you've demobilized the militia and that will require a bigger force, which is why we're pushing for the things I mentioned.

MR. ALLISON: I'm sorry that this is coming to an end now, but I think -- hope that since Bob's come and I trust had a good time, he'll come back soon. Let's say thank you very much for a terrific evening.

(Applause.)

DEPUTY SECRETARY ZOELLICK: Thank you.

# # #