THE WHITE HOUSE Office of the Press Secretary _____________________________________________________________________ For Immediate Release September 28, 1994 BACKGROUND BRIEFING BY SENIOR ADMINISTRATION OFFICIALS The Briefing Room 4:49 P.M. EDT SENIOR ADMINISTRATION OFFICIAL: We're going to have a division of responsibility here. I will give you a brief report on the two meetings this morning. I think we haven't backgrounded on those meetings. My colleagues can speak to security issues; and my other colleague will be joining us, and he can speak to foreign policy issues. We have issued, I believe, a thick set of joint statements and press fact sheets. I think we've issued them; I hope we have. You got them? If you have any questions, I'd be glad to respond to them. Just one brief characterization of this two-day summit, at least for me, personally. I think this meeting -- the fifth meeting between them -- was different than all their others in one big way, and that is that they decided from the first minute that they were going to do this basically one on one. They did have a couple of expanded meetings, but almost all of the really important issues were dealt with on a one-on-one basis. They spoke today about their three-hour meeting yesterday. They also had an hour and a half lunch today, one-on-one in the President's private quarters. And they kept going back to certain issues. Nagorno-Karabakh, for instance, was dealt with in three separate one-on-one sessions -- two yesterday and one today. The issue of European security and NATO expansion was dealt with in the one-on-one this afternoon. They obviously feel very comfortable with each other. They know each other quite well. There is a great deal of trust there. You heard the President say he had spent more time with Yeltsin probably in the last 20 months than any other foreign leader. And that in my mind, at least, distinguishes this summit from previous summits. Let me just give you very briefly -- run through the issues that were discussed this morning. I'll do it briefly; if you have any questions, we can come back to them. There were two meetings this morning. There was an expanded meeting in the Cabinet Room with advisors on economic issues. They then went into -- they then invited into the room Bob Strauss, Ambassador Bob Strauss, who is President of the U.S.-Russian Business Council, and three CEOs of major U.S. corporations. And the four of them presented their views on how we can move forward on private trade and investment, which most people concerned with the relationship think is the greatest challenge for the future of the economic side of the relationship. But let me start with the first meeting between the two governments. Obviously, this was a meeting dominated really by President Clinton. He presented an agenda, a four-part agenda. President Yeltsin then responded to it. Most of the talking was done by the U.S. side. Obviously the President said that we were very pleased with the performance of the Russian economy since the last time the President was in Moscow, which was January. You all remember the scene in January. Now the situation is quite different. The President ran through a series of economic statistics from the IMF and from our government, our Treasury, that spelled out this dramatic turnaround in the Russian economy. And then he then went on to offer U.S. assistance in a number of ways. He talked at the press conference about -- President Yeltsin mentioned President Clinton's offer for tax assistance. That is a proposal that Secretary Bentsen and Larry Summers have developed. It's for the United States to provide, essentially, advisors in the creation of a new tax regime in Russia. You heard what President Yeltsin said about the need for a new tax code. What the business people said today, and what they said in New York on Monday morning, was that is one of the prime factors that is limiting American and Western investment in Russia -- the absence of a stable tax and regulatory regime. So the President did offer that we would send several advisors from the Treasury to Russia to work on this problem with the Russian government. Secondly, the President went back to an idea that he put forward last January. And that is, as the Russian economic transition continues, they are going to have a greater problem with unemployment and with social protection and the building of an adequate -- the transformation of the Russian social safety net. And we are interested in helping, again, through the provision of advisors from our government, we are interested in getting the international financial institutions more heavily engaged in supporting this transformation. The World Bank has recently come forward with a $1 billion proposal. We think there is more out there. And the President laid that offer on the table once again. Third, the President said that, true to our promises at the Naples summit, when Secretary Bentsen goes to the Madrid IMF- World Bank annual meetings, I think in a couple of days, we're going to be pushing for the conclusion of the deal that will expand IMF and World Bank resources for Russia and other economies in transition. This will make a huge difference, we think, over the next year -- a multi-billion dollar difference -- in the level of resources that could be committed to Russia from international financial institutions. And finally, in this respect, the President talked about the importance of an IMF standby, which, in the briefing last week, we talked about in some detail. That is the real stamp of approval from the International Monetary Fund. It's a rite of passage for any economy in transition. They have begun the negotiations, and we fully support the negotiations and hope that they can conclude successfully. That was the first order of business. The second order of business was to talk about our hope that Russia's economy can be integrated successfully over the long-term with the Western economic system. So again, the President repeated some things that you heard him say. We want Russia to be a member of the GATT. Sorry, Barry, I'll have to use the words Jackson-Vanik. The President reiterated the decision he took last week on Jackson-Vanik. And I will just tell you, there was some confusion on the Russian side, mainly because our system is so complicated. And the Jackson-Vanik set of provisions is very complicated about what it meant. So there was a very long discussion about what the President's action meant; what practical effect it would have; and what symbolic effect it would have. And I think now, I hope now that it's fully cleared. Q That was fascinating. Can we move on? SENIOR ADMINISTRATION OFFICIAL: It was fascinating. (Laughter.) The economy is in transition. You heard Yeltsin say he wants the status. What President Clinton said was, it's going to be very difficult to get a bill through Congress unless Russia can show that trade is a two-way street -- meaning that the barriers to trade on the Russian side to American exports come down. And the President specifically mentioned aviation products and automobiles and confectionery products, by which we mean Mars bars and other candy bars, which are a big item in Russia. And President Yeltsin said for the first time that he would try to do something about this. We had not heard that, at least in the last two months from the Russians, and we were glad to hear that. Finally, on trade and investment -- the President told Yeltsin we'd be transferring $100 million this year in economic assistance funds directly to OPIC, commerce and the trade and development agency in the hope that that would lead to an increase in $1 billion in American investment in Russia. There was also a very long discussion about an issue that hasn't gotten a lot of press but is a very important issue to us; and that is the ability of American companies to successfully invest in countries beyond Russia, but in the former Soviet Union. And the President mentioned Chevron's investment in Kazakhstan and the Western oil consortium in Azerbajain, the Caspian Sea, that was just signed last week as examples where the Russian government had either publicly objected -- in the case of Azerbajain -- to the deal, at least parts of the Russian government, or there were problems with the Russian government in concluding successfully a deal. And there was an exceedingly long discussion where the President and the Vice President engaged with Yeltsin and Sokovets on the merits of those two issues. I think it's fair to say that we think we've made some headway on behalf of American firms. Q What's their objection? SENIOR ADMINISTRATION OFFICIAL: Well, there are two different problems. In Kazakhstan, Chevron, in the Tangez oil fields, is putting in the largest U.S. investment project in the former Soviet Union. And the problem that they have is in the construction of a pipeline from the Tangez fields to the Black Sea port of Novorossiysk, and the agreement of Russia, as well as Kazakhstan, that that pipeline be built; and who will own the pipeline and who will put in the investment capital for the pipeline. It is limiting the development of the Chevron investment. And without getting into the details of it too much, I think that President Clinton was able to convince President Yeltsin that it's in Russia's best interest to very quickly conclude this problem with Chevron, and we'd like to be able to facilitate some direct discussions between Chevron and the Russian government. In the Caspian, the deal -- an $8 billion Western oil consortium was announced last week. The Russian Deputy Energy Minister attended that signing, and the next day, the Russian Foreign Ministry objected to it. So we're kind of unclear as to what the position of the Russian government is. But our position is clear -- this deal ought to go forward. It's in the interest of the Western companies, as well as Azerbajain; and, as the President said, as well as Russia, because Russia has a 10 percent stake in this consortium. Q It was only very recently that Russia slapped very high import tariffs on Western aircraft after you talked them out of it in the spring, and then they went ahead anyway. Did you get into the specifics of the situation? And did they explain to you why they're so adamant about this? SENIOR ADMINISTRATION OFFICIAL: We did, and to take you back, the Vice President thought they had an understanding with Prime Minister Chernomyrdin back in June. This is a big issue for us; it's our ability to trade successfully in manufactured exports. And on July 1st, Russia slapped more than 100 percent duties in a couple of these areas on our exports. And what the President said today very directly was, our ability to give you a level playing field in the United States through economies in transition is going to be directly affected in the Congress by your ability to bring down the tariffs for our exports. Q What did the President say about the Texaco deal with Yeltsin? SENIOR ADMINISTRATION OFFICIAL: They discussed the Timan-Pechura deal, which is another huge -- in this case, $9 or $10 billion -- Western -- Texaco investment project. That deal is right on the edge of completion. We were hoping that we could announce it today. Texaco and the Russians did not get there, but both Presidents agreed today -- and in fact, I think we put out a little statement on it today -- that they hope to get their -- that we hope Texaco and the Russians can conclude it in the next couple of months; certainly before the Vice President visits Russia in early December. I don't want to take time away from my colleagues. Let me just make on more point and then we can take questions later. There was a second meeting at the end of this first economics meeting. Jack Smith, the Chairman of GM; Jack Murphy, the Chairman of Dresser; Richard McCormick, the Chairman of U.S. West; and Bob Strauss came into the room, sat together. The President called on Bob Strauss, who made a very eloquent plea for the Russian government to understand the importance of the private sector in the success of Russian reform; and the importance that foreign capital and foreign investment had in the building of the American economic system over the last 200 years and how that can be replicated in Russia. Each of the three CEOs then made roughly five minutes' worth of remarks. They kind of told what their companies were doing, the extent of their investments, what was blocking greater investment on their side. President Yeltsin had a few business leaders from Russia with him, and each of those three men spoke. And one of them was a joint venture partner of General Motors. And there was a very spirited discussion over the joint venture project between General Motors and the Russia concern, and whether or not it could increase in size and what had to happen to move it forward. And it was exactly the kind of meeting that the President had hoped for. After a couple -- after 20 months of talking government-to-government about trade investment, we finally had an opportunity to get some business people in the room. Let me stop there because I think my colleagues have issues to present. We'll be glad to take your questions. Q Can we ask questions now? SENIOR ADMINISTRATION OFFICIAL: Let's get through -- let's get our view out, and then if you want to ask questions, it might be easier. SENIOR ADMINISTRATION OFFICIAL: I'm going to be very brief. I just wanted to say a few words about the phasing of these START treaties and how it came out with regard to the summit. And we'll move quickly on, because my colleague has a lot to talk about in terms of the other strategic loose nukes kinds of issues, so we can get through that pretty quickly. The phasing is, first, we need to get START I EIF. And we will be moving as quickly as possible to get START I into force in the next couple of months. The goal is, then, and it's clearly laid out in our statement, is to ratify by the next summit meeting between the two Presidents, START II and bring that into force. Then, built on top of that is the initiative that President Yeltsin was talking about today and President Clinton, when they said that we're not going to wait for the seven-year reduction period of START II. As soon as START II enters into force, we're basically going to take all warheads off those missiles, get them deactivated, get them out of what the Russians call "combat ready status." And so then we can really shave down considerably the START II reduction period of seven years. So we'll have those reductions in place well before what we see as the kind of target date for that early in the after the year 2000. As far as START III is concerned, both Presidents agreed that we really want to get down to work on the next steps with each other so that by the time START II enters into force, we'll really know where we want to go, we'll have the next steps laid out and we'll know where we want to go with further reductions. But in addition to that, I'd like to stress that both sides feel very strongly that we need to take steps to get back from the hair trigger postures of the Cold War. So in addition to working these issues as a kind of question on further reductions and how many more missiles are we going to cut out of the strategic arsenals, both sides agreed that they wanted to work really hard on the kinds of things that can improve stability and improve the overall balance between the two postures, get us away from those hair trigger kinds of relationships. That will include, in addition to continuing early deactivations, getting warheads off of missiles, unilateral changes in the nuclear postures, such as those that we decided in this country last week and were announced at the conclusions of our nuclear posture review. And then we'll work with the Russians on other kinds of transparency and confidence building measures. So there are a number of things that we will be doing. We won't be standing still, even as we're thinking about how we want to structure this next agreement, which will be called, we assume, START III. One thing that we talked about the last time we discussed the summit and security issues was whether ratification was going to be an issue -- START II ratification. And I must say, I was very interested to see how forthcoming the Russians were in terms of thinking about, we can do this; we can do this by the time the Presidents get together to meet again. And there were not questions raised about whether the Duma was concerned, or whether there were going to be difficulties. So I come away from this summit with a pretty good feeling that this goal can be meet. I'm going to cut off there and turn to my colleague. SENIOR ADMINISTRATION OFFICIAL: Well, let me turn to the part of the security statement that deals with what we're calling nuclear security, or the issue of loose nukes; and to say that our goal, and that of the President, was to be able to demonstrate that we were able, in this area with the Russians, both to show cooperation and to gain their support for an approach to this problem and at the same time, demonstrate that it was more than just a goal, but a series of very concrete steps that we would start taking with respect to cooperating in law enforcement and the areas of crime; cooperating in the exchange of information when we have cases or hear about cases that might be dealing with nuclear smuggling; and then to go through a whole set of steps in which we would be working closely to help the Russians put in place the kinds of security systems that we think are appropriate to ensuring against this in the future. And so I know that some of you are up against deadline, so let me just give you the outlines of what it is that lies behind what you see in the joint statement; and then we'll be providing later, in more detail, what the precise steps are that we have agreed to and put in place. Most important point is, though, that we've been able to, as I say, I think, demonstrate that the Russians will work with us and then we can demonstrate to the American people that President Clinton has taken this seriously and now has underway some very concrete steps to prevent nuclear smuggling. I think the most important steps that you'll see when we take you through all these in detail has to do with the fact that we've been able to have the Russians say to us that they're beginning to open up and reduce the secrecy, share information with us, and to do that in all the various kinds of facilities where fissile materials exist; to begin programs of cooperation between our national laboratories; to begin programs of cooperation between the Ministry of Defense and the Department of Defense; and perhaps most importantly, to begin cooperation in facilities where civilian plutonium and highly-enriched uranium exist; and even to commit, somewhat for the longer term, but to move into cooperation on nuclear materials in military facilities. So I think that we can show cooperation and real steps towards information sharing and across the whole range of places where fissile material might exist. We've also been able to take what I believe to be the next most important step in terms of arms control, with respect to nuclear weapons; and that is, to begin discussions in the early part of 1995 to deal with increasing what we call the transparency and irreversibility of the nuclear materials that will becoming out of the warheads. As these many warheads are actually taken out of these missiles and the materials from those warheads are taken out of the weapon themselves, what happens to the plutonium and the highly- enriched uranium? And so what we want to do is to begin a process whereby we will know not only how much of this material exists, where it exists, but that we know that it's under safe and secure storage until it can be eliminated. And this builds on an agreement that Secretary O'Leary and Minister Mikhaylov from their Menatim (phonetic) agency agreed to in March, and now hope to begin the actual negotiations for transparency and irreversibility in the early part of 1995. And so, again, what it says is that not only do we have underway the kinds of stuff with respect to the delivery vehicles and START and the weapons, but the materials that are in those weapons, which are going to amount, as most of you know, in very large amounts coming out of these warheads will be under -- where we will understand the nature and be able to account for these and place them securely under control and assure that those materials sometime later don't be returned and made into nuclear weapons again. So again, what we were trying to do is to take the partnership, take the goals and demonstrate that there were a number of very specific steps towards this particular set of goals. As you'll see in the joint statement, there are a whole range of other kinds of steps on the security side. But let me, if I could, just spend a couple of minutes on the issue of Russian arms sales to Iran and the COCOM successor regime. As the President said in response to one of your questions, at the end of their discussions, the two Presidents have agreed on a conceptual approach to resolve this issue, and will be asking their experts once again to go back to achieve a final resolution of this issue as quickly as possible. On COCOM -- Q Can you explain what that is? We're really up against a deadline. SENIOR ADMINISTRATION OFFICIAL: The conceptual approach has two elements, okay? On COCOM and the successor regime to COCOM, President Clinton made clear that we want Russia to participate fully in creating the successor regime; that's one element. The second element, on Iran, President Yeltsin assured President Clinton that Russia will not enter into any new arms contracts with Iran, and that only existing contracts would be serviced. Q When do the existing ones expire? SENIOR ADMINISTRATION OFFICIAL: Important details for both of us, as the President said, are to be worked out before we can say we have a final resolution to this problem. The next important step -- and the President said this clearly -- are the details of what it is that is in that pipeline; that is, what the existing contracts will actually cover, precisely. You know, what kinds of weapons are in that pipeline, and precisely what quantities and over what time. Q So we don't know. SENIOR ADMINISTRATION OFFICIAL: And so, we will need, in order to -- we will need to understand precisely what it is that's in that pipeline and precisely what it is that will and will not be transferred between now and the end of that pipeline before the deal is concluded. Q We understand, but don't you have to -- Q Do you have any understanding of the end of this pipeline, is our question. SENIOR ADMINISTRATION OFFICIAL: And the answer is, at this point, the framework is as I described it to you, and we haven't shared the kinds of information necessary for us to be able to answer all the questions in order to bring it to a resolution. Q What about the big-ticket items? I mean, surely -- maybe I shouldn't say surely -- wouldn't you know how many submarines they've contracted to sell to Iran? They've delivered two. How many more are in the pipeline? And I assume they're going to go through, right? The President is going to allow them. He's not going to stand in the way of Russia providing Iran with submarines and other weapons already contracted. I'm trying to get some sense of the dimensions of what they're going to be able to deliver. Q Why do you keep repeating what the President said? We heard what he said -- Q He said the details have to be worked -- SENIOR ADMINISTRATION OFFICIAL: What I'm telling you is that the details still have to be worked out and we haven't done it. We haven't shared the information, but President Yeltsin has committed himself to share this information. And that's a very important step. We haven't had that information. Q hours of talk between Yeltsin and Clinton , and Clinton didn't say to Yeltsin on an issue that's been an irritant for eight years, "so when are these contracts up, Boris?" Q "And how many submarines are there?" Q Yes. There was no -- nobody in this government has any idea -- Q That can't be that elusive a subject. SENIOR ADMINISTRATION OFFICIAL: It is a very elusive subject. Q How many submarines? SENIOR ADMINISTRATION OFFICIAL: It is a very elusive subject and -- Q He's just not coming clean with you -- that's what it is. SENIOR ADMINISTRATION OFFICIAL: The President didn't say he'd resolved this issue. The President said that we had the elements of a resolution, we had now the promise of receiving this information. He would look at the information, decide what was in the pipeline and precisely how long it would last. And then we would come to a final resolution of this issue. Q Was there a pro quid pro quo on this? I mean, why did they give in? Why did they go along? SENIOR ADMINISTRATION OFFICIAL: The other element of it is that they would become a member of -- a founding member of this new regime, become a partner in the new regime, and no longer outside this regime. Q But there will be no new COCOM until this is resolved, or when is the new COCOM going to be -- SENIOR ADMINISTRATION OFFICIAL: The other partners in this new regime are working day and night to try to put it into place. And so, sometime in the middle of October is the next working group meeting, and my hope, but not necessarily my expectation, would be that we would be able to move to a resolution. But I think the devil will be in the details, as the President said, and we haven't received the kinds of information such that we can resolve this. Q middle of October these things should be resolved? SENIOR ADMINISTRATION OFFICIAL: I'm not going to make a prediction. All I can say is that we have taken this important step -- the promise of information -- and know we just have to see what that information is. Q I understand that you don't have a precise understanding of what's in the pipeline, but do you have a general understanding of what they may have already contracted to, and whether, in fact, they are saying we won't sign a new contract means anything at all from our standpoint? SENIOR ADMINISTRATION OFFICIAL: What they said is that they will service existing contracts and that there will be no new contracts. Q Is that meaningful from out standpoint? Do you have any general sense of whether they have given up anything, or whether this contract is so open-ended that that's sort of an empty promise? SENIOR ADMINISTRATION OFFICIAL: Well, clearly the Iranians are seeking to acquire arms around the world, and Russia has arms. So the fact that they would no longer be selling any new arms to Iran is a very important step, and one that the President and Secretary of State have been seeking from President Yeltsin and his government since Vancouver. It is as important to them that we haven't gotten this agreement that they are going to be making these commitments, as it is to us that they make these commitments. So I think the answer is that if it were easy, we would have had this. It's obviously not easy for them to do this. Q What if their contracts essentially say we will supply whatever you need for 100 years? SENIOR ADMINISTRATION OFFICIAL: Without prejudging the President's views on that, that's not my view of what would be a final resolution of this issue. Q Well, you said you don't know what's in the pipeline. Does that also mean you don't know what the life of the contract is either? SENIOR ADMINISTRATION OFFICIAL: At this point we've asked them to share that information and to tell us precisely what they mean by servicing existing contracts. Q Do we have any general understanding of what's, sort of, the outside -- what the dimensions of the possible universe are? SENIOR ADMINISTRATION OFFICIAL: Well, what we know is that over the past year the Russians have been selling approximately $1 billion in arms to Iran. And that's included a range of equipment from tanks to armored personnel carriers to aircraft, and a submarine -- or the two submarines with the possibility of a third submarine. Q Has there been missile technology as well? SENIOR ADMINISTRATION OFFICIAL: There has been munitions on those aircraft -- missiles on the aircraft. Q How many aircraft? SENIOR ADMINISTRATION OFFICIAL: I don't know. I don't have that in my head. The issue here is that there has been a considerable arms sale in the past, and it's been very important to us to try to close it down. And so what President Yeltsin has publicly done today is say, not only to the American people, but to the Russian people, is that new arms sales to Iran are going to end. He's going to do that within the framework of this new regime, which means that he's taking on obligations no different than the other partners in this regime, but that he is taking this step and he's made it public. Q What did Yeltsin mean by saying he agreed to the missile technology group? Is he joining that? SENIOR ADMINISTRATION OFFICIAL: Well, about a year ago, as you recall, we signed a bilateral agreement between Russia and the United States whereby they undertook to commit to carry out the guidelines of the missile technology control regime; and also in that context, to end their relationship and provision of technology to India and their space organization. A year later now, we've been able, through our discussions and consultations with the Russians, is to believe that they are in conformance with that regime and will be supporting their membership in the MTCR when the other partners meet next week. Q On the ABM, you're setting up a committee to discuss what? SENIOR ADMINISTRATION OFFICIAL: This is the existing standing consultative committee that has been the implementing body for the ABM Treaty since it was first signed back in the early '70s. So it is the group that has been established to work out thorny problems with regard to the ABM Treaty. And this is the issue of the demarkation line between strategic-range ballistic missile defenses and theater-range ballistic missile defenses. So that's a very thorny issue, and one that the sides have been working on for some time at a technical level. Now the sides have come to agree that there has been a lot of give and take on this, quite frankly, and the two Presidents did talk about this issue yesterday in their security meeting. We have heard some proposals from them. We have gone back to them now with some proposals that we hope will basically solve this problem of ABM-TMD demarkations. Q try to change the treaty in any big way? SENIOR ADMINISTRATION OFFICIAL: No, no. SENIOR ADMINISTRATION OFFICIAL: I think what's important in the statement is that both governments have committed themselves again to the integrity of that treaty and to its importance. And there is no doubt whatsoever that the United States and Russia support that treaty. Q Well, can they develop defenses against short-range missiles and still keep the treaty -- SENIOR ADMINISTRATION OFFICIAL: Remember, the treaty has always made that distinction between strategic missiles and others. And so we are essentially now demarkating it. Q Can they find the line between -- SENIOR ADMINISTRATION OFFICIAL: We're going to find a line. We're going to find a line. Q But isn't there a problem with the treaty because the treaty itself never contained any language explicitly defining what a strategic long-range ballistic system is? Is that right? SENIOR ADMINISTRATION OFFICIAL: That's precisely what it is that we're doing, is defining that demarkation line for the kinds of systems that we now see in the world. Q I'd like to ask a trade question. Q I have a question. Are you concerned that Russia will have the means to remove the nuclear warheads right up to the ratification of START II? SENIOR ADMINISTRATION OFFICIAL: We have a pretty good track record with Russia on early deactivations already. Both sides, both the United States and Russia have been taking action to get warheads off of missiles that would have been reduced under START I, even though START I has not yet entered into force. Russia has been going all-out to work with Ukraine, Kazakhstan and Belarus to get those systems deactivated in those countries, get the warheads back to Russia for dismantlement, and to basically eliminate, then, the missile systems involved. So that has been, I would say, a very good track record; so I have no reason to doubt that they would not be able to move forward with this kind of immediate deactivation under a START II phase. Q Before I ask you about trade, maybe we can have your colleague do a general briefing rather than just a private for Barry. SENIOR ADMINISTRATION OFFICIAL: You want Bosnia? I think the simplest things I can give you were my sense of how all this came out as of where things are today. And I think all of you appreciate this as a sort of day-by-day affair. I think there's no question that the Russians remained as persuaded as they were when they started these discussions that lifting the arms embargo is something that will only lead to a broadened war and a worse situation. So they oppose that. That said, they were --and I think Yeltsin specifically, after the meeting with Congress this morning and then again from Kozyrev privately this afternoon, we heard -- it's perfectly -- it's very welcome that we have, in a sense, been given further time for diplomacy by the Izetbegovic government, which now itself has sought not to have the lift of the embargo take place for six months. I think there is common agreement -- and this was discussed with the Presidents, Secretary Christopher and Foreign Minister Kozyrev had a long discussion of it -- there's no question of what we're trying to do. Everybody agrees that what we're trying to do is to get the Bosnian Serbs to agree to the proposal of the Contact Group. The question really is sort of, how do you get there? And I think where it was left is that the Contact Group is the body which is important, has done good work, will continue to do good work. They will be looking at how to advance this process against the background of the President's commitment to submit a resolution in New York by the 15th of October, against the background of the speech or the proposal by Izetbegovic yesterday that any implementation of a lift of the embargo be deferred; and against the background of the sort of policy that Mr. Milosevic has adopted of endorsing the Contact Group proposal, and at least, in one way or another, becoming a part of the effort to get the Bosnian Serbs to join the agreement of the contact group. Now, that said, there's going to be more discussion that will continue in New York where Mr. Kozyrev is going up tomorrow. The Contact Group I think -- or at least there is a proposal that the Contact Group meet again, though there's no agreement on timing for ministerial meeting of that group. I think that's sort of what I can tell you. You know, I think where we ended up, in short, is that the Russians and we agree that the deferral of the implementation will provide time for greater diplomacy; the objective remains the same, and we all -- we both agree that it's essential that we stick together on this and work with the contact group and preserve it. END5:28 P.M. EDT