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15 October 1997

TRANSCRIPT: PRESS BRIEFING ON EU-U.S. TALKS ON HELMS-BURTON ACT

(Asst. Secretary of State Larson in Brussels) (3620)
Washington -- Assistant Secretary of State for Economic and Business
Affairs Alan P. Larson told the press in Brussels October 14 that "the
U.S. and the EU share an interest in fostering a high standard for the
protection of property rights around the world. We are both large
foreign investors and we both will benefit directly from higher
standards of investment protection."
Larson explained that the United States was working with the EU to
find common ground to insure "greater solidarity among at least the
investors of the European Union and the United States." Larson was in
Brussels for consultations with his EU counterparts on the Libertad
Act, also known as the Helms-Burton Act.
In his answers to reporters' questions, Larson stressed that the
United States and its European partners share a common goal in
protecting investments in third countries. "So we are looking for
disciplines that would be effective and enforceable and that would put
us mutually in the position of looking out for each other's investors
who have suffered expropriation elsewhere in the world," he said.
Following is a transcript of Larson's October 14 press briefing in
Brussels:
(Begin text)
ASSISTANT SECRETARY OF STATE
FOR ECONOMIC AND BUSINESS AFFAIRS
ALAN P. LARSON
PRESS BRIEFING
Brussels, October 14, 1997
ASSISTANT SECRETARY LARSON: Good afternoon. I am pleased to have a
chance for a brief discussion with you at the beginning of
consultations that we will be having here in Brussels today and
tomorrow. As I think you all know, in April of this year, the European
Union and the United States reached an understanding on certain issues
related to the Libertad Act. Since then, the EU and U.S. have had
frequent consultations to ensure vigorous and effective implementation
of that understanding. I am here today heading a delegation that will
have consultations on two aspects of the implementation process.
First, we will be continuing work on disciplines that will inhibit and
deter the future acquisition of investments from any state that has
expropriated or nationalized such investments in contravention of
international law, and subsequent dealings in covered investments.
The second dimension of our work is that we are going to continue an
ongoing effort to address and resolve, through agreed principles, the
issue of conflicting jurisdictions, including issues affecting
investors of another party because of their investments in third
countries.
Now, in April, both sides agreed to make best efforts to develop these
disciplines and principles before October 15, and subsequently to
introduce jointly corresponding proposals into the MAI (Multilateral
Agreement on Investment) negotiations and these are investment treaty
negotiations that are going on now in Paris, under the umbrella of the
OECD (Organization for Economic Cooperation and Development). The
United States thinks this is a very important effort. We believe that
the U.S. and the EU share common interests and values, we cooperate
closely on a vast range of issues, and we can and need to enhance
cooperation in the areas under discussion today and tomorrow. We
believe, for example, that the U.S. and the EU share an interest in
fostering a high standard for the protection of property rights around
the world. We are both large foreign investors, and we both will
benefit directly from higher standards of investment protection.
In parallel to our discussions on these disciplines for the protection
of expropriated property, the U.S. administration is consulting
closely with Congress on a possible amendment to the Libertad Act that
would authorize the President to waive Title IV of the Act and so,
this is a set of consultations that we have conducted in some detail
and that we will continue to be carrying out.
We are going to be discussing and making proposals on the second
dimension of this exercise. One of the things that we are going to be
talking about is the possibility of enhanced arrangements for dealing
with foreign policy challenges that might present a threat to
fundamental interests and values. We are also going to be talking
about ways that we can ease problems that arise from conflicting legal
requirements imposed by the U.S., the EU or other OECD participants.
We are just at the beginning of the consultation so I am not in a
position this afternoon to give you a status report or to make
predictions about the outcome. We are looking forward to very
intensive and productive exchanges, we will be going back a little bit
later this afternoon, but I did want at the outset to give you an
opportunity to hear from us and what our objectives are. Now I would
be happy to try to answer any questions that you have.
QUESTION: In this playoff between U.S. demands for more discipline in
investing in expropriated property and at the same time
extraterritorial legislation. We've known about this for a while. The
problem is the actual detail. Can you give any more specifics on where
the particular problems still are and what chance you think you have
of solving them by the end of tomorrow?
ASSISTANT SECRETARY LARSON: Well, the first point I guess I would make
is that we really do think that this is a shared interest, not a U.S.
demand. In the course of our discussions, for example, we have had the
occasion to ask some of the member states of the European Union,
"Would you use your commercial assistance facilities to help one of
your investors acquire or deal with a property in some country
overseas where one of your investors had been expropriated? In other
words, to deal with that same property." And they said, "Well no, you
know, we really wouldn't want to do that. That would be contrary to
our interest." And what we are attempting to do in this negotiation is
to extend that principle to each other, so that there would be a
greater solidarity among at least the investors of the European Union
and the United States, and ideally if this becomes a part of the OECD
treaty, among the investors of all of the OECD treaty. So we are
looking for disciplines that would be effective and enforceable and
that would put us mutually in the position of looking out for each
other's investors who have suffered expropriation elsewhere in the
world.
Q: Can you comment on suggestions that these negotiations were aimed
to essentially move the October 15 deadline to sometime in the future,
for example to the December Summit between Clinton and the European
leaders?
ASSISTANT SECRETARY LARSON: We want to make as much progress as we
possibly can. We are eager to move forward substantively in all of the
areas under discussion. As I said at the beginning, I can't predict
where we are going to end up. The Understanding, I guess, said that we
should make best efforts to develop the disciplines and principles
before October 15. I think we have certainly made best efforts, and I
think we have certainly made progress in developing these disciplines
and principles. Whether we have a totally completed package tomorrow
night is a question that we could answer better tomorrow than today.
But I can say that for our part, we are interested in moving ahead, we
are not interested in the process, we want to get results. I think the
EU is interested in results as well. It is just not completely clear
at this stage how far along we will be. I think we will have made
significant progress by tomorrow night.
Q: Is it true that one of the sticking points on expropriated property
is that the U.S. would like the agreement to cover property that has
already been expropriated, whereas the EU is looking for something
that only covers events in the future? And on the timing of the talks,
do you expect these meetings to go through the night tomorrow night if
necessary or is there a cut off point?
ASSISTANT SECRETARY LARSON: Well, on the last point, I have come here
to make as much progress as we can, and I am prepared to work as long
tomorrow as is necessary, you know, so long as we are still making
progress. I have commitments in Paris on Thursday, but if necessary, I
can go to Paris Thursday morning. On the first point, I am not going
to characterize the European position; I think it is up to the
Europeans to do that. You are correct though in saying that, or in
understanding that the United States believes that these disciplines
should be applied to properties that already have been expropriated,
and I think that quite clearly was the intent of the April
Understanding as well. Basically, what we are saying is that, to pick
up the example I gave a few moments ago, if a European investor
somewhere around the world had property expropriated in 1970, we
believe that the United States should be in a position to take
effective action to inhibit and deter American investors from
acquiring that property. And we think the same should be true in
reverse.
Q: What will you be able to tell the Europeans who will wonder what
sort of progress you've made on getting Congress to move on Title IV?
My understanding is that there is no sign yet that Congress will take
this up in the near future, and I wonder if this in itself is likely
to be a sticking point today and tomorrow. Secondly, on the topic of
what exactly you will discuss, how far do you think you will go in
discussing other cases beyond the Libertad Act and, in particular, do
you think a large part of talks will focus on topics like recent
investments in Iran made by European companies?
ASSISTANT SECRETARY LARSON: First of all, on the issue of the waiver
of ... I think our European colleagues are aware of the fact that my
team and I have conducted extensive discussions with the Congress on
our consultations with the European Union and issues related to the
waiver. I believe that there is receptivity in the Congress to a
waiver if we can demonstrate that there are effective and enforceable
disciplines that will be applied or adhered to by the European Union,
and that they will be applied inter alia to properties that are and
were of key concern when the Libertad Act was written. We are trying
to develop a system of global disciplines and that would apply
everywhere in the world. We obviously want to make sure those
disciplines apply to claims that are particularly important to the
United States, but we also want to make sure they apply to claims
everywhere and anywhere that is of particular importance to the
European Union as well.
The answer to your second question is that I'm here to talk strictly
about the issues I highlighted at the beginning: disciplines on
expropriated property and principles on conflicting jurisdiction. I'm
not here to talk about Iran-Libya Sanctions Act, for example.
Q: What happens... (inaudible)
ASSISTANT SECRETARY LARSON: Speaking for the United States, I believe
this process is a very important one, and while one can always wish
that progress were faster, I think that progress is being made, and
we're prepared to continue working on this, not just up to the 15th,
but beyond the 15th. I think that it's important to move as far as we
can over the next few days and consolidate agreement where that's
possible. At this stage I don't know how far we'll be able to move
forward and consolidate agreement, and I certainly don't rule out that
we have a total final package of measures, but for my part, and for
our part, we're prepared to keep working away at this up to midnight
the 15th and beyond.
Q: (inaudible)
ASSISTANT SECRETARY LARSON: Certainly the one part of the April
package was the decision on the part of the European Union to suspend
the WTO (World Trade Organization) case. And I think that that was a
wise decision because the United States felt all through this that
this was not the type of dispute that the WTO dispute mechanism was
designed to resolve. And we felt that it would be damaging, or could
be damaging to the WTO dispute resolution system. But I need to
emphasize that my primary purpose in being here is to develop a much
stronger cooperative relationship between Europe and the United States
on these issues. I think that is what is of most importance and
greatest value and so that is what we are keeping focused on, and
we'll just see if we can move forward on these two issues.
Q: From the way you speak, it sounds as if the threat, if it ever was
a threat, an escalation has more or less been defused...
ASSISTANT SECRETARY LARSON: No, I said at the beginning I'm not going
to speak in any way for our European friends, and I'm not going to say
anything that might be construed as reflecting on what their
intentions are. All that I'm saying is that I'm here to make progress
on some substantive issues where the U.S. and European Union have
shared interests. I think we've come some distance since April. I
think there is the potential to come a lot further, and it's my goal
over these next two days to advance the ball as far as we can. And if
that means we advance the ball over the goal line, that's great. If it
means that we advance it very close but not quite over the goal line,
we're prepared to continue to work with our European colleagues to do
that.
Q: Could you just explain what the U.S. position is on the conflicting
jurisdiction? You make it sound like the U.S. reserves the right to
pass extraterritorial legislation if it asserts vital national
interests.
ASSISTANT SECRETARY LARSON: No, I think we have two ideas on the
questions that you've raised. One idea is that there is in the OECD
something called an Instrument on Conflicting Requirements. It's an
instrument that grows out of a great deal of experience in the area of
conflicting requirements and extraterritorial jurisdiction and
recognizes the fact that there are many areas in international
economic policy where all states exercise jurisdiction in a manner
that's extraterritorial. Everyone who was watching the newspapers this
summer understands that competition policy, for example, is an area
where the European Union asserts a right to extraterritorial
jurisdiction, as does the United States. This is something where both
of us say that we have the ability and the right to look at things in
an extraterritorial fashion. So, what we have seen, and this is the
issue of competition policy is not unique. There many other areas
where countries exert jurisdiction in a way that extends beyond their
borders. So what we have suggested is that this OECD instrument and
the measures that are associated with it, including consultative
measures, might well be incorporated into this OECD investment treaty
as to give them enhanced prominence and strengthen the way that they
operate. In addition, we've argued that the root causes of some of the
differences that we've had on foreign policy sanctions issues, issues
that I would describe as threats to shared interests and values, have
come about arguably because of imperfect consultative mechanisms,
consultative mechanisms that weren't quick enough off the mark, that
didn't result in a shared assessment of how serious a threat to
interest in values the situation really represented, didn't result in
a concerted response to that type of situation. And when, as a result
of that imperfect process, you sometimes have had in the past,
disparate responses that affect each other's interests. Sometimes the
disparate response might be inaction in a situation that would seem
clearly to call for action. In other cases it might be action that's
taken that adversely affects the interests of some of the other major
parties, including European friends. So, we think that this type of
enhanced, more high-level consultations, could be part of the answer
to avoiding these types of problems in the future.
Q: Two questions, one on the subject you're not discussing ILSA (Iran
and Libya Sanctions Act). Would you nevertheless think that if you do
reach some kind of agreement on this, it may help to reach some
agreement with the application of ILSA in due course as well. The
second question, on what you just said about consultations, do I read
that right that you mean that you might envisage consultation before
acts of this kind that might perhaps involve the administration and
the Congress consulting with the Europeans?
ASSISTANT SECRETARY LARSON: Let me answer the question I can answer. I
have a private sector advisory committee on international economic
policy of a year ago when we re-chartered it. The first item on its
agenda, and its agenda was set by the private sector, not by me, was
sanctions policy. And I invited them to organize themselves into a
committee to provide recommendations for the administration of foreign
policy sanctions, and just to make sure that it was a lapdog committee
that would only say what we wanted, we appointed Fred Bergsten to head
it up. No, seriously, we worked real hard to make sure that this would
be a committee that would not pull its punches on the issue of
economic sanctions, which we believe are important issues for a lot of
reasons, including the fact that they've been controversial in terms
of a relationship with Europe and other friends and allies, but for
domestic reasons as well. There's a feeling on the part of our
business community that sometimes we've been too quick to resort to
them, and at times we haven't adequately considered the whole range of
measures that might be taken. So this report was concluded and has
been submitted to the State Department, and one of its three principle
recommendations is that there should be much stronger efforts to work
multilaterally on these types of issues, and made some specific
proposals on about how to do that, none of which have been
particularly important. But the basic recommendation I think is
exceedingly important, that is that sanctions would be more likely to
achieve their intended objective, would be less likely to be harmful
to U.S. companies if we had a more effective, more bilateral approach
to dealing with these issues. And part of that means precisely what
you said: dealing with these issues in a cooperative way long before
countries' positions are locked in, long before there are pressures
that administrations are reacting to rather than situations where
administrations are leading response. That's precisely what we have in
mind: an early, informal, effective consultative process that let's
you get the jump on situations where you see a threat to your values
or your interests.
Q: Could you please tell us what progress has actually been made
that's been substantive in recent weeks, or even in talks that were
held in Washington a few weeks ago. Can you give us a couple of
examples of real progress that's been made since April?
ASSISTANT SECRETARY LARSON: I'm going to avoid getting to specific
when we're right in the middle of consultations. I really want to hold
some of that really for the end and focus more this afternoon on what
our objectives are for this process. I think that it is fair to say
that we on the American side detect a greater understanding of the
idea that it is desirable and feasible to have disciplines that would
affect our investors' sort of acquisitions and dealings with
expropriated property abroad. I think we've pushed the debate on that
quite some distance forward. That's only one example, but it's
probably the best.
Q: On the conflicting jurisdiction thing, is it fair to say the U.S.
has made no proposal whatsoever to restrict or limit use of
extraterritorial legislation?
ASSISTANT SECRETARY LARSON: You mean have we proposed measures that
would have legal, binding effect on the Congress and the
administration? No, we haven't.
Q: On the ... situation, how is that going to handle the ...
(inaudible)
ASSISTANT SECRETARY LARSON: At the end of this session, I'll give you
and anyone else that's interested a few comments on background on
ILSA, but I'll warn you right now, they're going to be basically
reiterating what we've been saying last week out of Washington, but if
it's helpful on a background basis, I can just make sure that you're
aware of our current line on that.
Q: inaudible
ASSISTANT SECRETARY LARSON: Speaking first of the disciplines on
expropriated property, which is the only place that we actually are
using the word "disciplines." Two possible disciplines would include
not allowing the government's commercial assistance programs to
support an acquisitions program or a dealing with an expropriated
piece of property. Another discipline would be actually to bar or
prevent investors or your own permanent residents and citizens or
companies from making acquisitions or having dealings with property
that's been expropriated, in violation of international law. And I'm
not saying those are the only ones, but those are examples. For us,
the important thing is that the disciplines be effective in their
intended purpose. That they would actually have the effect of
inhibiting and deterring investment. That will be our test as we look
at any particular discipline or disciplines that might be imposed.
Thank you.
(End text)