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Roundtable With Assistant Secretary Thomas Shannon

Thomas Shannon, Assistant Secretary for Western Hemisphere Affairs

Washington, DC
December 13, 2006

(9:30 a.m. EST)

MR. WATNIK: I'm Eric Watnik. I'm the press attaché for Western Hemisphere Affairs. You're here to talk with Tom Shannon, Assistant Secretary for Western Hemisphere Affairs. The Assistant Secretary has been traveling a lot and I know he wants to talk about where he's been and who he's been talking to. He also wants to give you a look forward into 2007. So I'm going to ask him to give some brief opening remarks and then we'll open to your questions. Thanks.

QUESTION: And this is on the record, right?

MR. WATNIK: Yes, this is on the record, but off-camera.

ASSISTANT SECRETARY SHANNON: That's best when it's on the record, but off-camera. Well, I hope you've got plenty of coffee and bagels, and again, thank you very much for coming.

As Eric noted, I've been out and about recently. I was in Central America and Europe last week -- actually, for the past two weeks -- traveling to El Salvador, Nicaragua, and Panama. I met with President Saca in El Salvador; with President Bolanos, civil society and political party leaders including President-elect Ortega in Nicaragua; and with President Torrijos in Panama. I then traveled to Madrid for the Haiti International Donors Conference that the Spanish hosted. I had an opportunity to speak with the Spanish on regional issues that affect both of us and then went to London for bilateral consultations with the British, but also for an opportunity to do some public diplomacy.

As all of you know, we're just about at the end of a year-long electoral cycle that has been dramatic. I haven't done the historical count, but some assert that this is the single most active electoral year in the region in a long time. I think we count 13 either presidential or head of government elections and 16 major legislative elections, many of them associated with the presidential elections. We'll try and make sure we get you a list so that it all adds up to 13. It might be 12, depending on how you set the year and how you count the elections.

QUESTION: Does 13 include Canada?

ASSISTANT SECRETARY SHANNON: Yes, we include Canada. But again, I think it's been incredibly important for the region to go through this cycle. There are 34 democracies in the region and to have 16 major elections that means, effectively, almost half of the region. I'm not sure if the 16 includes our own midterm elections, we'll have to check on that. We could be exactly at half of the democracies in the region having gone through an important electoral process.

From our point of view, this has been a very healthy period, a very positive period. As we look to the new year, we're going to have a lot of new governments that we're going to be engaging with. This will be good for us. It will be good for the region because it will be an opportunity to sit down and talk through our priorities and our interests in the region. But more importantly, it will be an opportunity to listen to the priorities and interests of the new governments and determine how we can be helpful.

What's striking as you look out across the region and see the results of the elections is that they've been fairly diverse. The elected leaders really do span the spectrum from the left to the center to the right. And we think, again, this is positive for the region. I think it underscores the fact that the region did not experience some dramatic flirts to the left, but instead, I think, elected leaders who were able to argue effectively to voters that they had social programs and agendas that were going to address the major problems facing each of the individual countries and more broadly, the region.

And what I mean by that is, as important as self-identification is for political leaders and political parties, I think in many ways, what we need to do in the region is look at how voters are behaving, what interests they're expressing, and what it is they expect from their political leaders. And I think there are several things going on within electorates that need to be noted.

First, I think electorates show a very strong commitment to democracy and to democratic institutions and that this electoral process has highlighted that. In fact, Latino Barometer has just come out with its latest opinion survey of the region and for the first time in many years, there's been an increase in a regional commitment to democracy. I think this is reflective of the elections that have taken place. In other words, I think as people participate in electoral processes, they gain greater hope in those processes.

But at the same time, it enhances or increases their expectations. I think voters are expecting their elected governments to deliver the goods and those goods are largely social. I think the electorates around the region recognize that most of the countries in the region face big social problems -- poverty, inequality, and social exclusion among them. The political leaders and the political parties that have won this time around are those who have been able to make the argument that they are offering the best tools necessary to address those problems.

In this regard, we would argue that, in many ways, the electorate in the region is slowly centering itself on different sides of the divide. Some are center left, some are dead, dead center and some are center right, and that the political parties who win elections, whether they be left or right, are really the political parties that find the voters first and offer a social program or a social agenda that meets the concerns of voters.

I also think that for the most part, as we look across the region, voters are looking for political leaders who can build a national political consensus. Because just as you have electorates intent on finding leaders who can address the social problems in the region, I think we're also finding among the elites what political scientists would call a new political offer. In other words, elites recognize that for democratic institutions to survive in their country and for democracy to survive in their country, it has to have a social content. These countries have to be able to address their underlying fundamental social problems. And they're looking for political leaders who can bridge the divide between these elites and between the electorates.

And that's important because what they're looking for is not political leaders who are going to deepen the divide within societies, but leaders who can really use democratic processes to create new political consensus. And in the process of doing that, I think there's a recognition that whatever countries might feel about some of our policies in the world, the United States is an essential partner in the success of these countries. Leaders who can develop a good working relationship with the United States have won in a lot of these elections and we take that as a very positive sign.

As we look ahead to the next year, we really see this coming year as a year of engagement for us as we sit down with all of these new governments, and with our partners in the region who have not gone through elections and who are still there, to talk again about what it is we're doing in the region and how it is that we want to be in a position to be able to cooperate and collaborate in a larger hemisphere process, which is all about consolidating democracy and creating the kind of economic opportunity and individual capacity to take advantage of that kind of opportunity that we think is essential in the region.

That's a very kind of broad-brush kind of view of how we see this past year and how we see the coming year. But why don't I stop there and just take specific questions.

MR. WATNIK: We'll take any questions that you have, but please say your name and where you're from as loudly as you can, so --

ASSISTANT SECRETARY SHANNON: George, do you want to start?

QUESTION: I have two questions. In all these discussions you were having with the leaders of the region, did the question of a sort of coordinated response on Cuba once Castro dies come up? Is this small part, medium-size part of your discussions or did it not come at all?

The second question is, I thought your -- the Department's response to Venezuela (inaudible) given the fact that 22 of their own media access of (inaudible) for Chavez were showing that (inaudible). A suggestion that it would be a (inaudible) controlling 40,000 (inaudible) mobilized for Chavez (inaudible). Chavez's own statement that there's no option to Venezuela other than the (inaudible). Your response to that, please.

ASSISTANT SECRETARY SHANNON: In regard to the first question, obviously when we meet with our partners around the region we're going to talk about regional issues, so Cuba was an important part of all of our discussions. What we're focused on right now is talking about Cuba's future in democratic terms and making it clear that for us the road to stability in Cuba runs through a successful transition to democracy. And that the ability of Cuba to be reintegrated into the inter-American community requires a successful transition to democracy. Therefore, whatever tactical differences -- if you're going to use that term -- or differences of approach might exist within the region about Cuba, it is hoping to create a common objective or common vision of Cuba's future that we can share with the Cuban regime and with the Cuban people. We think for the most part there is broad consensus about the importance of Cuba making a successful transition to democracy, recognizing that this is a transition that the Cuban people themselves have to make and I think in that regard there is broad agreement through the region.

In regard to Venezuela, we are waiting the results of both the OAS and the EU and the Carter Center observation missions. You know, we've made no secret about our concerns about certain aspects of the electoral process in Venezuela. But at the end of the day, as troubling as some aspects might be, voters have to defend themselves and voters have to defend their political processes and their democracy. And we think that coming out of this election there are a couple of things that are important to talk about and I've said these already.

First, there was a clear winner. That's good for Venezuela and good for the region. And it was a clear winner that the opposition accepted. But secondly, I think the opposition -- and in particular Manuel Rosales -- did a pretty impressive thing, which was: number one, overcoming a political divisiveness in the opposition which has hampered its stability to communicate with the Venezuelan people and communicate with the Venezuelan Government, and unite behind a single candidate. And even in the face of all the difficulties you described, the win was about 40 percent of the vote and in a country of Venezuela's size that's significant. Therefore, I think that creates an interesting moment in Venezuela, because one thing the Venezuelan Government has lamented for quite some time is not having an opposition that it has seen as kind of a bowed interlocutor.

But in Manuel Rosales there's an opposition leader who is committed to democracy and democratic institutions who cannot be characterized, as the Venezuelan Government has characterized some opposition leaders, as golpistas or coupsters, who has indicated a willingness and a capability to operate within the electoral system and who brings to the table a large hunk of voters and a large hunk of political support. This is an opportunity for the Venezuelan Government to begin the kind of dialogue with its political opposition that it has always said it has wanted to have.

QUESTION: Pablo Bachelet with the Miami Herald. You talked about engagement with countries across the region and you've reached out, or at least the Bush Administration has reached out to Ortega, to (inaudible) and others. But there is one leader, Raul Castro, who says he wants to sort of engage in talks with the United States but that has not happened so far. I mean what are we waiting for -- for that to -- for the first contacts to begin with the Cuban Government?

ASSISTANT SECRETARY SHANNON: First, one thing we've made clear as we deal with leaders across the region is that we don't much care if they're left, center or right, as long as they're committed to democracy and committed to working with us. So more broadly in the region, whether you're Ortega or whether you're Alvaro Uribe, whether you're Felipe Calderon, or whether you're Rafael Correa, if you're committed to democracy, you're committed to democratic institutions, and if you're committed to having a meaningful dialogue with us, we're prepared to sit down and talk.

In regard to Cuba, of course, the situation is much more complicated because there's not that commitment to democracy. The way we have approached events in Cuba, again, is to highlight our commitment to a peaceful and democratic transition and our interest in doing what we can to help make that peaceful democratic transition a reality.

Raul Castro's offer to us was nothing new. He made it in August. Historically, Fidel Castro has made similar offers at different times. And we've made it clear, I think, at a variety of levels that in terms of dialogues, the most important dialogue is not a dialogue between Cuba and the United States. It's a dialogue between the Cuban regime and the Cuban people about the democratic future of Cuba.

Secondly, our engagement with Cuba has to be part of a changed process that facilitates this democratic transition. Therefore, as we've said before, we're attentive to what's happening in Cuba. We're attentive to what will happen after Fidel Castro passes from the scene. But when we engage, it has to be part of a process of democratic change.

MR. WATNIK: You've got a follow-up?

QUESTION: Yes. Sue Pleming from Reuters. Do you have any updates on Fidel Castro's health? It seems that he's deteriorating quite rapidly according to our sources there. And secondly, some U.S. diplomats in Havana have been telling us that if Raul Castro were to free 59 of the 75 dissidents being held from the 2003 crackdown, that the U.S. would be willing to ease some sanctions. Is this something that you're considering?

ASSISTANT SECRETARY SHANNON: Who's been telling you that?

QUESTION: Some U.S. diplomats in Havana.

ASSISTANT SECRETARY SHANNON: The answer to your first question. You're going to give me some names? (Laughter.) No. Answering the first question, we don't have an update on his health. You know, this is a very opaque regime.

QUESTION: Is he still alive?

ASSISTANT SECRETARY SHANNON: As far as we know. Again, this is a regime that treats the health of its leader as a state secret. It's not easy for us to see into the darker corners of the regime, so we really don't have a health update.

Secondly, we've articulated a variety of goals, short-term goals that would lead towards a political transition: freeing political prisoners; guaranteeing fundamental human rights; permitting the creation of organizations independent of the state, like trade unions and political parties; and then finally creating some kind of pathway towards elections.

The first of those four -- freeing political prisoners -- is obviously an important step towards a political opening, but we want them all free. This idea that you dribble people out of prison who have suffered for their political convictions and for their unwillingness to bend to regimes such as the Castro regime would be a mistake. There should be no political prisoners in the Americas, period, in all the Americas from top to bottom and we can start in Cuba.

QUESTION: Jonathan Beale, BBC. I was in Cuba for the Havana, for the 80th celebration and there was a sense of a transition or succession that had already taken place. Do you fear that you've missed what was a golden opportunity to try and bring about a change in Cuba?

ASSISTANT SECRETARY SHANNON: Well, a transfer of power has taken place. Again, we don't know what Chavez's -- not Chavez -- what Castro's kind of health is, so we don't know kind of what role he's playing in decision-making processes. But there's no doubt that in terms of the day-to-day management of the regime, the transfer has taken place to Raul and those around him who manage the most important parts of the Cuban state, whether it be the Communist Party or the military or the security services and other parts of the bureaucracy. So that's taken place. But at the same time, it's a transfer of power that is an uncomfortable moment because with Fidel still alive, the regime has actually become harder and more orthodox and is not in a position to signal in any meaningful way what direction it will take post-Fidel.

So we don't feel that we've lost an important moment, because quite frankly, we don't see any significant possibility of change of any kind until Fidel is gone.

QUESTION: Can I follow up on that one?

QUESTION: Same question.

QUESTION: Libby Leist from NBC. I'm wondering, so does that mean that once Fidel goes that you expect changes from Raul? I mean, is that --

ASSISTANT SECRETARY SHANNON: Well, once he goes, the successor government is going to have to chart out some kind of path into the future. The question is what path does it chart out? Does it chart out a path that only -- kind of deepens the repression and deepens the misery? Or does it attempt to chart out a path that is one of engagement with the world and opening, both political and economic. But there are no clear signals about what that path is going to be.

Ultimately, we need to understand that the bilateral relationship between Cuba and the United States doesn't possess any magic to fundamentally reshape Cuba. Cuba has to reshape itself. We believe it needs to do so in a democratic fashion because that is what the Americas is all about and it is through this democratic transition that Cuba then can regain what we consider to be a rightful place in the hemisphere, especially within the OAS, the Inter-American Development Bank and the larger inter-American system.

QUESTION: Are you picking up signals that Raul is open to that, to charting a new course?

ASSISTANT SECRETARY SHANNON: Not yet.

QUESTION: But it's -- you can deal with Raul, right? He's been (inaudible).

ASSISTANT SECRETARY SHANNON: Yes, he has been, but if the past is an indicator of the future, no. As you know, in our Helms-Burton legislation, Raul Castro is also named, along with Fidel Castro as political leaders that we have great difficulty dealing with under the current situation and circumstances.

QUESTION: Do you think that Helms-Burton should be adjusted though so that you can -- are your hands tied by Helms-Burton?

ASSISTANT SECRETARY SHANNON: No. No, I think Helms-Burton first of all is representative of congressional intent and it is the law of the land and therefore it's something we need to understand and respect.

QUESTION: Michelle Kellerman with National Public Radio. I just wondered if -- I mean, isn't there an argument though that you should be sort of reaching out to at least those around him, just sort of show what the incentives are to going this way? Isn't that the idea of diplomacy in talking to people. And if I could just ask one quick question about what your conversation with Ortega was like.

ASSISTANT SECRETARY SHANNON: Yes. We're getting all kinds of advice in terms of what we should be doing with Cuba. And there's genuine honest disagreement about how you best approach a regime like this. But again from our point of view, we have to wait and see what happens because it has been evident to us for over a year that as Fidel Castro got older, as he got more infirm, as he approached his health crisis that this was a regime that was locking down and preparing for this moment of succession. And that it saw the success of the succession -- if you can say that three times quickly -- that the success of the succession depended on absolute control of the state of Cuba. We've seen in the appointments to ministries and to government positions the return of old line -- hard line people committed to Fidelismo. And we've seen during this transfer of power again a hardening of the regime and an intent of the actors in the regime to present themselves in a very orthodox fashion within Cuba. And therefore, we have not been able to detect the emergence of any political figures who could be reformers. So we're just going to have wait and see what happens.

QUESTION: (Off-mike.)

ASSISTANT SECRETARY SHANNON: Depending on who you talk to, they all identify somebody else, whether it's Lage, Alarcon, or Raul, we're going to have to wait and see. If you look at how transitions have taken place elsewhere in the world, whether in Spain or in Eastern Europe, they all had a different dynamic depending on the internal processes of the country. But they all seem to work through a variety of steps as they move towards democracy. We really don't know how things are going to break in Cuba and therefore we want to make sure that we, and we hope the rest of the international community, are there to offer support for a democratic change, for a democratic transition.

QUESTION: Can I follow up?

ASSISTANT SECRETARY SHANNON: Oh, I'm sorry -- hang on, let me take him.

MR. WATNIK: Before you go, can I get your name, sir.

QUESTION: Charlie Wolfson with CBS. Earlier you said we don't have an update on Fidel's health. Is that a State Department statement or a U.S. Government statement?

ASSISTANT SECRETARY SHANNON: To begin with, we don't issue regular updates.

QUESTION: Well, no, I --

QUESTION: No, but he's not a normal leader --

ASSISTANT SECRETARY SHANNON: Right, right.

QUESTION: I mean, you know --

ASSISTANT SECRETARY SHANNON: Obviously, it's something we watch very closely. We've got people who study which way the wind's blowing and try to understand better what's happening. But the reality is, this is a regime that doesn't share information and therefore, all we can do is guess and surmise. The fact that he didn't show up to his own birthday celebration is significant.

QUESTION: Before you go on to Ortega, could I ask -- I mean, ask you question in a slightly different way which is, I mean, this -- Cuba's being created, the current Cuba by Castro, by one man. And often when you see a dictatorship fall, it's very hard to hold the country together in that way. Do you see Cuba, as it is, surviving without Fidel under Raul or do you, as some people, liken it to sort a sugar cube disintegrating slowly?

ASSISTANT SECRETARY SHANNON: That's really the question of the day. There's no doubt that there's nobody like Fidel in Cuba; that he had, if you want to call it, this kind of a revolutionary legitimacy going back to the late '50s. He had a charisma, a political skill and a ruthlessness that was unique in Cuba and nobody who follows him has that -- whatever you want to call it -- set of attributes.

Therefore any successor government is going to have to look for ways to establish its own legitimacy. It has at its disposal -- since it's taking over a state -- the security forces of the state, which it's already using in an increasingly repressive way. There were just a bunch of arrests the other day. So it has shown a willingness to respond to any action in Cuban society that might challenge the state and that's not a good sign. This is what I talked about, the regime becoming harder as it gets closer to Castro's end.

But this is a group that is going to have to show, if it hopes to survive at all, that it can make the daily lives of Cubans better.

On Ortega, I thought we had a really good meeting in Managua. This is the first time I had met with Daniel Ortega. We had an opportunity sit down with him, with his wife, with Samuel Santos who's one of his principal foreign policy advisors, and with Renee Nuñez who is the head of Sandinista faction within the Nicaraguan National Assembly. It was a chance to talk through his vision for Nicaragua, our bilateral relationship with Nicaragua, our long-term interest in Nicaragua.

I think we came away -- I mean, I can't speak for him -- but I think he came away with a pretty positive understanding of our intentions of engagement. And we came away, I think, with a positive understanding of how he saw our role in Nicaragua and the importance of the bilateral relationship.

So I think we've got a pretty good base to work off of in terms of our dialogue. He underscored his support for CAFTA. He underscored his support for larger Central American integration. He underscored his support for the Millennium Challenge Compact that we have with Nicaragua, which I think is bringing about $175 million to Nicaragua, and his appreciation for what we've done, both in the G-8 and through the Highly Indebted Poor Countries Initiative and what we're trying to do in the Inter-American Development Bank to reduce Nicaragua's external debt. If we're successful in the IDB, when you add up the IMF and the World Bank and the IDB, I think Nicaragua's external debt will go from about 300 percent GDP to about 60 percent GDP, which is significant.

In other words, we've worked really hard to set the table for the successor government for Bolanos, and that successor government is Daniel Ortega. I think he understands that.

QUESTION: Does he understand what Nicaragua must do to keep that Millennium Challenge money flowing? There are 16 benchmarks that they have to meet, some of which would relate to free markets, et cetera.

ASSISTANT SECRETARY SHANNON: Yes. I hope he does and I think we've been successful in explaining it to just about every Nicaraguan. It's significant to note that the Millennium Challenge Compact was approved by the Nicaraguan National Assembly and the Sandinistas did vote for it. One of the reasons they voted for it is because, at least in terms of the infrastructure work that's being done, a lot of it is being done in parts of Nicaragua that historically have been Sandinista strongholds because those have been some of the poorest parts of Nicaragua and those parts of Nicaragua that had the least national infrastructure. What we're doing in terms of our road building program is really connecting agricultural communities to market centers in order to allow these farmers to take advantage of the kind of economic and trading opportunities that we're going to see increase in the region because of CAFTA but also because of Central American integration.

Right now, about one-third of Nicaraguan trade goes to the United States and about one-third goes to Central America. So CAFTA effectively captures two-thirds of its commercial activity right now. That is commercial activity that, if Nicaragua makes the right kinds of decisions, will only grow.

QUESTION: How do you see his relationship with Chavez? Where do you see his relationship with Chavez? Is it anything similar to what Chavez has with Evo Morales or is there a distance? Where do you see that?

ASSISTANT SECRETARY SHANNON: There's obviously a relationship there that has an ideological basis and historical basis. But again, our focus wasn't on how he relates to others. Our focus was on how he's going to relate to us, because we don't want to import into the relationship problems we might have with other leaders at this point. And I think we've made it pretty clear that we've got a commitment to Nicaragua, to Nicaraguan democracy and to the Nicaraguan people, and that through the things that I just described we have really helped put Nicaragua in a really good place, in a place where it can really develop from. And therefore it's our hope that that's going to be the basis of the relationship.

QUESTION: (Inaudible) Garcia from Reuters Latin America. Trade has been the main tool for the U.S. to fight poverty in the region. Do you see any changes on this policy towards aid when you have the results of the elections showing that people want a better social agenda? Like would that be a solution for the U.S. to increase its engagement in the region because, for example, Chavez offers almost double help in aid than the U.S. in the region?

ASSISTANT SECRETARY SHANNON: That's probably not true, you know.

QUESTION: Well, we do -- we read things but -- we could assume.

ASSISTANT SECRETARY SHANNON: It's a very good question. From our own point of view, we've been focusing on getting more resources into the region since the beginning of the Bush Administration. If you look at what this Administration has been able to do, we've doubled foreign direct assistance to the region. When the Bush Administration came into office, the U.S. on average was spending about $800 million a year in foreign direct assistance. And that's all assistance: development assistance, military assistance, counter-drug assistance, you name it. Even with the $1.3 billion spike of Plan Colombia at the end of the Clinton Administration, it still averages out to about $800 million a year. The Bush Administration has spent about $1.6 billion. On top of that, it has brought new funding sources to the region through the Millennium Challenge. If you add up what we've done in El Salvador, Honduras and Nicaragua and then add the threshold programs in Paraguay and Guyana, it's almost $900 million in addition to the 1.6 billion.

QUESTION: (Off-mike.)

ASSISTANT SECRETARY SHANNON: No, because the money gets spent over several years -- it depends on the program. In some countries it's a five-year program and in some countries less. But it's -- over time it's an additional -- it's just a little under, I think --

QUESTION: So is this obligated funds?

ASSISTANT SECRETARY SHANNON: Yes.

QUESTION: Appropriated or just obligated?

ASSISTANT SECRETARY SHANNON: No, no, it's done. They're done. These are compacts that have been signed.

QUESTION: Is this without -- sorry -- the drug efforts, like to fight --

ASSISTANT SECRETARY SHANNON: The drug efforts will be part of the 1.6 billion in our direct assistance. But even in the 1.6 billion, that portion which is development assistance which tends to focus on child and maternal health and healthcare is higher under this Administration than it has been. I've looked at charts back to 1982 and this Administration is spending more money than any administration has spent over several decades.

If you look at what we're doing in terms of the Peace Corps, this Administration has increased the Peace Corps budget by about 30 percent over time. On average, there are about 600 more volunteers working in the region than there were before this Administration came into office.

If you look at the money that we put into the region on HIV/AIDS, it's probably about $500 million. I'd have to get the exact figure, but it's significant. We have two focus countries on HIV/AIDS, Guyana and Haiti. About half of that money goes to Guyana and Haiti. But the rest is spent elsewhere in the region on HIV/AIDS programs and this is money that is in addition to the 1.6 billion. We've got a malaria initiative that's going to bring additional money to the region.

In other words, in terms of resources, we've committed resources, and we've committed resources in ways that we think are directly linked to the social agenda that this region faces.

In terms of how we engage at a policy or political level, working through the Summit of the Americas process and the OAS, we think we've helped establish a common work agenda in the region that, again, is focused on these big social issues.

But there's a lot more that we can do and there's a lot more that the international community, especially through multilateral development things, can do. And in the process of doing this, we're learning things. We're learning what works and what doesn't work. In our engagement with countries, we are reaching out and engaging in a way in which we want to hear from these countries what they need to be successful, but also to understand what programs they have in place that have been successful. Because again, there's a lot of creative work that's going on in the hemisphere -- and we're not necessarily doing it. It's being done in Brazil, it's being done in Chile, it's being done in El Salvador, it's being done in Mexico, it's being done in Argentina, when it comes to addressing some of these big social problems. And we want to find a way to learn from it.

Actually, this is part of our larger message of hemispheric integration. It's not about us; it's about the Americas; it's about the region; and it's about creating an environment in which we can have the kind of dialogue where we actually share our experiences, share our successes, share our failures, and then look for ways to make sure that we're putting resources against those things that are most important to our partner governments and have the greatest chance of success.

QUESTION: So politically, do you think that it would be important to engage more in aid? You mentioned that you've been asking for more resources.

ASSISTANT SECRETARY SHANNON: We'll take all the money we can get.

QUESTION: But especially with China having an increasing presence in the region is something that you consider?

ASSISTANT SECRETARY SHANNON: Well, first of all, right now we're on a continuing resolution. We don't even have an '07 budget yet. But we're working through the '08 budget process and, with the new Congress the Secretary would be going up to the Hill in either late January or February and presenting our '08 budget. So we've got lots of effort in front of us in terms of walking down funding for the region. There is a lot of competition, but we're going to continue to make the effort that we can use all the money they can give us, number one.

Number two, we need to understand that when we engage in the world it's not just the United States, not just the U.S. Government I mean, and in fact our bilateral assistance is really a pale reflection of the kind of resources that are flowing out of the United States to the region. If you look at remittances coming from the United States today into Mexico, Central America, the Caribbean and some of the Andes, depending on who's doing the counting, it's anywhere from $45 to $50 billion. That is multiples more than we give in foreign direct assistance. If you look at our trade and preferential access programs, about 85 percent of all the goods entering the United States from Latin America and the Caribbean enter duty free. And, again, our commerce has been growing over time, but that's probably about $200 billion worth of goods. Again, many multiples more than our foreign direct assistance.

If you look at U.S. foreign direct assistance in the region, I don't know what the most recent figures are but it's probably about $350 billion. We can get them for you if you'd like.

QUESTION: Assistance or investment?

ASSISTANT SECRETARY SHANNON: I mean investment, foreign direct investment. Again, many multiples more than our foreign direct assistance. Therefore, we have to understand our assistance as being very targeted and very catalytic. Its purpose is to make things happen. When it comes to the greater economic well-being of the region or the greater economic well-being of individual countries, what's important is access to our markets and attracting investment, both U.S. investment and other foreign investment.

QUESTION: In that regard, would you address China's role in the hemisphere and whether it -- how you see it?

ASSISTANT SECRETARY SHANNON: Sure. I went to China earlier this year and we held our first ever U.S.-China consultations on Latin America and we will invite the Chinese to Washington to continue those consultations in the new year.

From our point of view, it was very important to be able to sit down with the Chinese and share with them our vision of the region and our interests in the region and then to hear from them their vision of the region and their interests. What struck me is that at a basic level we share some common strategic interests with China, one of which being the economic success of the region and the second being political stability in the region. China's engagement in the region is all about China. It's all about finding energy resources to drive its industry and economy, basic resources for its manufacturing processes and food for its people.

QUESTION: So in other words, it has a selfish agenda, is what you're saying?

ASSISTANT SECRETARY SHANNON: Well, we all have selfish agendas. What I'm saying is that right now at least, its investment is all about finding resources and goods that China needs now to feed its people, to develop its economy, to run its industry. It has not reached a stage in which it's investing in the region in order to create companies, to create employment, to create wealth. It will eventually get there, but it's not there yet.

So what China needs in the region is reliable partners and reliable suppliers. Therefore, as I mentioned, it does share this fundamental interest we have in stable governments and economies that are successful. I think it's important for us with a country like China to recognize that we do have these common points because it creates a space where we can talk to each other and maybe even work together.

MR. WATNIK: We only have time for one more question.

QUESTION: Antonio Rodriguez with AFP. You said earlier that 2007 will be a year of engagement from the United States in Latin America. At the same time, then we heard Democratic Congress and it's not sure -- we are not sure that they will support the free trade agreements with Colombia and Peru (inaudible). How are you going to deal with this Congress to make sure that they will support your engagement (inaudible)?

ASSISTANT SECRETARY SHANNON: Well, we'll be engaging in the Congress, too. That's the year of engagement. Obviously we're going to have to sit down with the new congressional leadership come January and talk through our agenda for the region. I think for the most part we're in a pretty good position because I think that historically our policy in the region has been bipartisan. I think we've worked successfully with both political parties on some really tough issues, whether it be Haiti, where I think we have really sucked the venom out of an issue that had had previously been highly partisan, but I think now there is broad-based agreement and understanding across the political spectrum in terms of our approach. I think on Colombia our approach has enjoyed broad bipartisan support. And up until the CAFTA vote, our free trade agenda had also had important bipartisan support.

So, one of the things we're going to be looking at, and this is really USTR's lead, but one of the things we hope to be able to do in our discussions about Colombia and Peru is to rebuild this core bipartisan center that has supported free trade over time. And so we're hopeful.

MR. WATNIK: Thank you all very much for coming.

Released on December 14, 2006

ENDS


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