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Robert B. Zoellick Press Roundtable in Brazil

Press Roundtable in Brazil

Robert B. Zoellick, Deputy Secretary of State
United States Embassy
Brasília, Brazil
October 6, 2005

DEPUTY SECRETARY ZOELLICK:Okay, well thanks for taking the time to come by. Let me just make a few opening comments about the purpose of my visit and then we will just open it up to questions.

This primarily is an opportunity for me to consult with a close and important partner of the United States. I've been to Brazil a number of times before, I obviously see Brazilian officials regularly Celso Amorim was in Washington just about a week ago. But it gives me an opportunity to meet a number of different people. I had a chance to meet [Foreign Policy Adviser] Mr. Garcia this morning in the office of the presidency; Senator Mercadante; I'll have a chance to meet Finance Minister Palocci and have a little bit of a clearer sense about trying to discuss some of the issues that reflect our relationship. In particular, I wanted to get some of the impressions of people in Brasília about some of the issues of democratic transition in the region. As some of you may know, I was just in Guatemala and Nicaragua, so I've been focused on Central America and Nicaragua in particular. But Brazil has obviously paid very close attention to developments in Bolivia, so I want to get insights about Bolivia, Ecuador we talked about Venezuela. Obviously we've been working very closely with Brazil in the leadership role it's played in Haiti although that's an item that Secretary Rice and I had a chance to discuss at length with Minister Amorim when we were in Washington.

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And I also wanted to discuss some ways that maybe we could explore working together more with the OAS and the Inter-American Development Bank on these issues of political democracy, development, but also economic inclusion.

Because, I think, it is our view that in addition to establishing the institutions of democracy you have to back them by having some sense of economic opportunity and hope. And we are now at a point where we have two new leaders of the OAS Secretary General Insulza from Chile and, in the case of the Inter-American Development Bank, we have a new President, Luis Alberto Moreno from Colombia. Both these individuals will have a chance to present some of their ideas at the upcoming Summit of the Americas and I feel that, I wanted to get a sense from Brazil in particular how we can work more closely with these institutions to try to address some of these challenges.

I also wanted to get a better sense of some of the economic developments in Brazil, obviously and here, I am afraid, I am a little bit ahead of you are a little ahead of me, I guess, because I will have my opportunity to meet Finance Minister Palocci a little bit later this afternoon. But we have extremely high regard for the work that he and his colleagues have done and want to get his sense of some of the issues that they see going forward.

So, in summary, it is a combination of some things that are bilateral in nature, but I'll probably spend more of my time on some issues that are regional in scope. We'll be having a sort of consultation about some of these topics.

So, and I will meet Minister Amorim for a light dinner to kind of close out the day.

So, we've got a pretty good full program and we had this wonderful event with the young ambassadors that pretty give you a sense of the contributions that people can make in terms of the private sector and the government working together to open doors of opportunity for these young people.


MODERATOR: If I could just interrupt for one second

DEPUTY SECRETARY ZOELLICK: I think it's the air conditioning

MODERATOR: The air conditioning? Okay, we'll turn it down

DEPUTY SECRETARY ZOELLICK: Don't turn it down too much [laughter] all right, that's fine.

Denise Chrispim, O Estado de São Paulo: I sorry, I am going to ask the question in Portuguese. So, [translation] you said two years ago, as USTR, you made a statement that became a sort of prophecy here in Brazil. We've been noting that the trade agreements signed by Mercosur with several partners, emerging economies or developing economies, have been very partial... At the time, you stated that Brazil, because of its resistance against the FTAA negotiations, would end up negotiating an agreement with the penguins in Antarctica. I would like to know if you maintain this assessment?

DEPUTY SECRETARY ZOELLICK:Well, you know, I am no longer the Trade Representative, so I have to deal with these in general terms. But in 2003 I tried to work with Minister Amorim and others on the Brazilian team in advance of the Miami Ministerial for the ALCA, for the Free Trade Area of the Americas to come up with a format that I hoped would be more conducive to Brazilian and Mercosur engagement in this process. And we tried to come up with a concept of a base-line agreement because some in Brazil had said that the types of free trade agreements that the United States has negotiated with other countries were too wide-ranging in terms of their scope. But there is economic value in trying to achieve an agreement that wasn't as ambitious. And so we came up with the idea could we develop a base-line concept? And then others could build on it over time.

Unfortunately, that hasn't born fruit.

And so what I can not remember, people can come with different explanations and reasons for that But what we've also done in the meantime is the United States and Brazil have a very strong interest in the Doha, the WTO negotiations. I worked very closely with Celso Amorim and those on his team in 2004 to try to get the WTO discussions back on track after the breakdown in Cancun. And we did that in July 2004. And we came up with a way more definitive framework for dealing with some of the agriculture. In part because of the political transitions in a number of countries, a new European Commission, there wasn't as much progress made in the intervening time. And now the challenge for the trade ministers and new Director General of the WTO is whether they can use this Hong Kong meeting again to try to make another jump forward. And I believe that the United States and Brazil and other countries are working to that end. I will say that in the agricultural area there should be an important alignment of interest between the United States and Brazil in that Brazil would like, we both would like, the elimination of export subsidies the subsidies that people pay to buy agriculture. That is primarily something European Union has used and that is one of the things that we've actually accomplished in these negotiations: an agreement to an elimination, but not yet an agreement on a date.

Brazil and other countries are interested in a deep reduction of what are called domestic subsidies subsidies that are not for export but can affect production and prices. And we have long said that we are willing to make very, very significant cuts in those domestic subsidies if we can get the European and Japanese to also cut theirs very significantly, and their levels are quite higher. But, this is also important in helping you to open markets for agricultural goods. This should be an area where Brazil has a strong interest, because it is a very competitive agricultural producer.

But, you know, countries have to balance, you know, their overall interests and Brazil works with some other developing countries that are more reluctant to open markets. So, that will be, I think, one of the challenges going ahead.

From the U.S. perspective, you know, we remain committed to trying to achieve free trade in the Western Hemisphere. And, as I said at a number of occasions, there is always two ways to do this: you could do it all at once in the Free Trade Area of the Americas and I tried to come up with the base-line idea to make that happen or we can just keep doing it group-by-group-by-group. So I was one of the things I spent considerable time on earlier this year was completing our congressional action on the Central American Free Trade Agreement. So that's with five countries in Central America and the Dominican Republic. That actually is our second largest export market in Latin America after Mexico. It exceeds Brazil. We are getting close to completing a free trade agreement with Panama. We hope to try in the coming month or two to be able to complete an agreement with some of the Andean countries, so Colombia, Peru, Ecuador. We already have a free trade agreement with Chile. So, you know, I hope that again progress will be made at the global level. We will continue with these bilateral or sub-regional agreements, and, you know, I hope again that the environment will be conducive at some point to do this with Brazil and the Mercosur countries as well.

But that is no longer my primary responsibility. So, Ambassador Portman ought to discuss that.


Vivian Sequera, Associated Press: You just said you wished to have an insight from Brazil on the situation in Bolivia, Ecuador, and Venezuela. Some press commentators are saying that starting at the end of 2005 and throughout 2006 the whole Hemisphere will have general elections and that a veer to the left is possible. I would like you to tell us if the United States has any concerns about Bolivia, considering relations with Venezuela. And would that issue be brought up at the Summit of the Americas?

DEPUTY SECRETARY ZOELLICK: I don't think the issue is whether governments are left-of center or right-of-center. I think the issue is whether governments are committed to democracy and development. I just visited Nicaragua and there you have a pacto between Aleman, who was a leader on the right and Ortega, who was a leader on the left that is threatening the democratically-elected president. I met Mr. Lewites, who was forced out of the Sandinista Party because he suggested they have a primary and because he was popular and Ortega obviously didn't want him to win. I also met with Mr. Montealegre, who had left the Liberal Party because he is trying to resist this pacto. So, my point in meeting with them and my point in Nicaragua was that the important part is the advancement of democracy, not a particular party of one side or the other.

And indeed, in many parts of Latin America I point to President Lula in Brazil as an example of a leader on the left who always stayed with the democratic process. And as we know in many other parts of Latin America, people turned to armed revolution. President Lula, while he lost a number of elections, always stayed in the democratic process.

I think that is a very important signal. And similarly, you know, you have a departing president, President Lagos of Chile, who is a man of the center-left in politics and party. We did a very good free trade agreement with him. We are very strong partners in democracy.

So, I think it is healthy for political systems actually to have parties across the spectrum, but they need to be committed to constitutional and democratic processes. And so, coming back to your point about the Summit, what I hope there will be a better discussion of is how countries that are committed to democracy need to work with those that have more fragile institutions to sustain the democratic process. You know, Brazil and the United States, we are going to have internal debates you know, you've got one going on here right now but Brazil has the institutions of democracy to handle these issues. Some countries don't. And so, what I was trying to get a sense of from my Brazilian counterparts is how they see, not just the elections in Bolivia, but the constitutional process, the institutions, and how we might be able to have the OAS play a constructive role in this process, not just in terms of mediating crisis and Dante Caputo, the former Argentine Foreign Minister, is doing in Nicaragua, but in building the institutions. And let me give you an example: I learned that, you know, some of the Brazilian judges are trying to work with Ecuador because part of the problem with Ecuador's democracy is that the court system doesn't work and that's fed into political crises and the reason why they've been turning over presidents so frequently. So that is a good idea to try to work with them in the judicial development.

When I talked with Senator Mercadante, we talked about the role of legislative processes in this. And so, and again, you know, one should view this trip in part as a consultation, planting seeds of ideas. Not every diplomatic trip is trying to secure an agreement or launch an initiative.

Former Secretary of State George Shultz used a metaphor of tending the garden, spending time going to other people's countries, talking to them, getting their ideas, and then some of these ideas one hopes can be developed over time. And I hope this is one of the issues at the Summit.

Because too often summits have sterile communiqués that seem unrelated to reality. I think having the new head of the OAS and the new head of IDB (Inter-American Development Bank) combined with the fact that you clearly have democracy at risk in a number of countries should

Question: Where?


Question: Where?


Question: Venezuela?

DEPUTY SECRETARY ZOELLICK:Ecuador, I think, Venezuela, Haiti. You know, those are countries where there are issues we need to work with.

Eliane Oliveira, O Globo: [translation] It is about the visit of President Bush to Brazil.

Although they are going to meet at the Summit of the Americas, I would like to know what issues will be discussed, if they will talk about this political issue, about Chavez, the FTAA itself. What motivates this visit and what issues will be discussed in this bilateral meeting?

DEPUTY SECRETARY ZOELLICK:Put another one on that list I didn't mention again was Nicaragua, with its democracy at risk.

Well, I've had the opportunity to work with a number of U.S. Presidents and one of the lessons I've learned is that you don't decide what they are going to talk about. They decide what they are going to talk about. So, I think, what I would expect is that these are two leaders that know each other, respect each other. Undoubtedly, President Bush will be interested in some of the developments -- economic and political in Brazil, but also, I think, he will seek the perspective, and the ideas about some of the topics that I mentioned regionally that we've discussed. And I've been in some of their meetings in the past and the format is often that President Bush will ask questions and try to get a better understanding of how President Lula looks at some of these things. And that, as you know, neither of them are shy individuals. They'll mix it up and have a discussion and they don't let aides decide what they discuss at that point.

There are also aspects of the bilateral relationship, as the Ambassador knows, part of the things that we've discussed with Brazil in the past are things that are of a regional nature but there's often what I think there is also a horizontal expansion, whether it be issues of, some energy issues, some environmental issues, some health and education issues. We were talking about Avian Influenza. We've been working with a lot of countries in Southeast Asia about the dangers of Avian Influenza. So there are aspects of that bilateral agenda that they may also discuss.

You tend to find that President's tend to be interested in some of the international issues and they rely on their staffs to help gear up some of the other topics that cover this other broader agenda.

One other thought I had it will come back to me in a minute. Sorry.

Gerald Jeffries, Dow Jones: Speaking of bilateral issues, did you mention the cotton; did you talk about the cotton issue? What is the next step now that Brazil is asking for retaliation? And the second thing is the recent summit here the other day or last week, they were talking about a South American free trade zone. That issue came up. Is that a further impediment to the second option of all-at-once type free trade area?

DEPUTY SECRETARY ZOELLICK:Well, let me deal with the second one and then come back to the cotton issue.

The United States has always approached free trade areas as something that can complement each other. We don't have a mercantilist vision of saying we can only trade with countries that have a free trade agreement with us.

Chile, which is one of the leaders in creating free trade agreements, is a free trade partner with Mexico. And I find no shortage of countries interested in doing free trade agreements with the United States. So, you know, I don't think it is going to stop the Andean countries from wanting to pursue their free trade agreements. There is countries in the Middle East that are knocking on the door. We have the South Koreans and other countries that want to do them. So, I don't think that they interfere with one another. These things need not be seen in a competitive sense. They need to be seen I think the question is the quality of the free trade agreement and, you know, do you under the WTO rules you're supposed to have a comprehensive agreement that opens up all sectors. There are slightly different standards for developing countries, but you want to try to avoid agreements that just become trade diverting - as opposed to trade-creating - in the process. But, if you can deepen economic integration in South America and people can use this as a way of supporting the economic growth and development of the region, that's a good thing.

On cotton, I didn't raise it, but it's partly because of the meetings that I've had so far in the process. But, as for your question about the cotton case, look, I think there's two perspectives; One is, you know, we're members of the World Trade Organization for a reason, which is when there's a dispute on issues like this bring it to panels, you know, you have an impartial arbiter make the decision. And the goal is then to take action, not just retaliate: in other words retaliation blocks trade. So, you know, our position, as you know, has been: we have put forth legislative proposals to try to come into compliance with the WTO decision. We, like Brazil, have a constitutional system where we have to work with our congress to do that. We're committed to trying to do that and, frankly, I think retaliation would be counterproductive in doing that. And, you know, just from my trade experience, you start those set of actions and there's a lot of other things that can start to happen and it gets additional aggravation. So, retaliation is a tool, but you have to be careful when you use the tool that you are trying to actually keep an eye on solving the ultimate problem.

Now the other issue is the one that I mentioned before, which is that the real way to address the issues of subsidies and market access for agriculture is in the Doha agenda. President Bush just restated before the U.N., you know, our commitment to try to address, if others would, all subsidies and market access. Others haven't necessarily been willing to do that, but what we have set up in the Doha agenda is a potential result that would be much more wide-ranging than one we had in the Uruguay round. Now, the world isn't only agriculture. One also has to have goods and services, ok? And sometimes Brazil is very aggressive about wanting to sell agricultural goods -- it's not so aggressive about wanting to open up its manufactured good market, to say nothing of its services market. And indeed, you know, there have been some areas that Brazil said that it would do in the Cardoso administration it still hasn't done. Which may be a reminder to people about being a little careful about taking some of these actions about following through on commitments, because, you know, Brazil hasn't been able to follow through on all of it's from the Cardoso administration in some of the areas of finance and investment. So, the goal here, keeping in mind, is -- Brazil is an economy that has great potential and you can see in agriculture and other areas it could be one of the driving economies of the world system. It needs to be able to sell, but most countries have also learned that you have to open up your economy to competition to also truly develop productivity.

Oh, I know what it was what I was going to say and your, in fact, kind of, your question prompted this. One of the other thoughts that I had and this is


No, I'm sorry. Remember I said I forgot one, is that, what I mentioned in a couple of my meetings so far, was that, as I was flying down to Brazil I was reflecting on the fact that a month or so ago I engaged in a strategic dialogue with the Chinese about a wide range of interests: economics, nuclear proliferation, political, other issues. And I actually gave a speech not long ago where I sort of set out an agenda for that. And the response that I've seen from the Chinese is one that, even though I am sort of pushing them to see how we can engage together more as stewards of the international system, I think their response is positive. I also was reflecting on the fact that with India we're trying to move the relationship to a new threshold and going beyond some of the ties of the past. And it seems that we should be able to do more with Brazil too.

Brazil is a democracy, China isn't. And so, in some ways, whether it be working on democracy issues or economic issues or other topics, I hope that, you know, again, this is going to be an election year in Brazil, it's hard to sometimes do things in election years, but we can plant the seeds for recognizing that Brazil is one of the major developing counties in the world, that we should aspire to a more in-depth relationship.

Cristiano Romero, Valor Econômico: [translation] During Fernando Henrique's government, in the two terms of President Fernando Henrique there was an approximation, a very strong approximation between Brazil and the United States. This approximation looked like it would continue at the beginning of the Lula government, especially since there was a meeting between the two cabinets, President Lula's visit to Washington with half of his cabinet. It was a demonstration that Brazil apparently was going to continue giving the United States priority in its foreign policy. What we've seen since this has been just the opposite. Brazilian foreign policy today doesn't give priority to dialogue with the United States, it looks to intensify the dialogue, the so-called south-south dialogue. It's sought to intensify Brazil's approximation to international players that aren't the United States. So, I'd like you to evaluate this, in addition, how do you evaluate the fact that, economically and commercially, Brazil is isolating itself - taking up a bit the question which she asked at the beginning - and if this couldn't be a problem for Brazil's future relations with the United States, to the extent that the United States is making bilateral agreements in the entire region and Brazil, in fact, is getting isolated. You said that you'd be consulting during this that President Bush will be, and you're also consulting with Brazilian authorities about the situation of democracies in Latin America, principally in South America, the [inaudible] democracies. And you cited Venezuela. Recently, President Lula said that there was an excess of democracy in Venezuela. Do you agree with President Lula's statement?

DEPUTY SECRETARY ZOELLICK:Well, as I started out by saying, Brazil is a good partner of the United States and one of the reasons I'm down here is to consult with that partner. And I believe that our shared commitment to democracy provides a common bond that is very important, but I also believe that there is more potential to develop the relationship. And one of the reasons that I'm here is to try to get views from the Brazilian perspective about how best to do that, where there'll be commonalities, how to pursue those issues. I worked very closely with Minister Amorim to move the Doha negotiations forward, so there is a very close cooperation in terms of our trade interests, and I as suggested in the answer to Ms. Chrispim's question, I think that I hope that the United States and Brazil can move forward the Doha negotiations now. So, you know, it's up to Brazilians to evaluate, you know, kind of, their overall priorities and foreign policy.

I, again, I would say that, from a U.S. perspective, we're a global player, I mean, so I spend my time, you know, in East Asia, Latin America, you know, Africa, I'm going to Sudan in a couple of weeks probably, and we value partners that can work with us and I think particularly there's a potential for some of the major developing countries to step up into larger roles in that sense.

You know, this is an issue that, and one of the reasons I gave the speech was to say to China, our policy for China for some seven administrations was to integrate it into the world economic system. Well, it's integrated.

You look at commodity prices, capital exchange rates other things. But, so, now we need to aspire for something beyond that and I talked about the responsibility of common stakeholders in the system. Well, you know, we work with India on a series of these issues too, whether they be, you know, dangers of nuclear proliferation in Iran, whether they be the relationship with the Islamic world, whether they be economic Islamic ties.

And, so, I would like to try to see something like that develop more with Brazil. But, you know, this is, this, in part, you know, depends on where we can find the sort of the commonalities of interest. So that's one of the reasons that I'm here to try to discuss some of the topics, is that, you know, I when I met with Mr. Garcia today, and we talked about an upcoming trip he'd make to Nicaragua and I talked about my sense of the situation there and how the United States can work together again with the OAS. So, you know, we welcome stronger ties and, I guess, you know, what I found over my diplomatic experience in the past and now and Trade Representative, is that it's important not just to discuss these in theoretical terms. You know, what can you practically do together. And the one that I'm focused on is the challenge of democracy and economic opportunity in Latin America for the reasons I said. I think this is going to there are some fragile countries. And we should have some common interests in working on this stuff.

Question: And the second question, about democracy in Venezuela. Because President Lula said

Question: President Lula says that Venezuela has a regime which has plenty of democracy.


DEPUTY SECRETARY ZOELLICK:I guess I just don't know what that means.


Yana Marull Drews, AFP: [inaudible] one could say for example that President Kirchner [inaudible] President Chavez [inaudible] is there a concern of this approach of different countries in the region for Venezuela and Chavez government? [inaudible]

Question: It seems that President Chavez has the key right now business, which is oil. So, it happened with Brazil and it happened with Argentina recently last week we signed

Question: They signed a big agreement, oil agreement. So, how do you see that, in your experience?

DEPUTY SECRETARY ZOELLICK:Well, let me, let me say a word about Venezuela but then let me say a word about the region as a whole. We have been concerned that President Chavez has used his electoral position to undermine the institutions of democracy and whether it be the civic society of NGOs which he's clamping down on, whether it be opposition parties, whether it be courts, last week is seemed to be the Central Bank, I mean, you know, there's always something new. Now, this goes to the larger point that I made; is democracy is more than elections? You have to have the institutions of civil society. And I think that is something that people in the region should be concerned about.

Now, you're correct in that he's floating on oil money, but - at least there's a lot of reports - that in the process of living off the oil money, at some point, if oil prices come down, it will leave Venezuela in a very poor position. And I think that should be of concern to people as well.

But, I think the bigger issue here is that, what I see having happened in this region over the past ten or fifteen years is that you move to more open political systems. But, and the good news about this is that it created opportunities for people in Latin America that have been shut out of politics, not just for decades, but for centuries; indigenous people; poor groups; the impoverished, to have a seat at the political table. But, they don't have a sense of the response of the political systems in these countries to their hopes and aspirations. So this is why I mentioned not just, sort of, the institutions of democracy, but economic opportunity and economic and social inclusion.

I think that it's important for the United States, Brazil and others to show that there are opportunities for these people to have a better life, because if we don't, then you will see what I call the "pied pipers of populism" put out messages that look appealing but ultimately will be disappointing and even destructive. Chavez is part of this on one side. I think Fujimori was part of it on another side. Is that, you see this populist movement.

And so, this goes back to, I think it was your question about, you know, the politics of the left and the right, is that - or about center-left and center-right - is that, you know, is the, I don't think it's a question of whether one, I may prefer, sort of, center-right approaches, but you have a center-left government here that has tried to run an economic policy that has created a better, you know dealing with, you know, inflation, opportunities for growth, has, combined with the President's social programs, there are ways to do this within a democratic spectrum and there's ways where people run their society and economy into the ground.

And so, what I am saying is that, you know, Chavez is responding to the fact that there was a failure in the Venezuelan political system. There was a failure of the established order to show a pathway for these people. And that's part of what happens in Bolivia, and in Eduador and others. And so, again, I think on the political side, we need to work more with the OAS.

Not just that they would do it, but they can create networks to help people develop the institutions of democracy. We need to work more with the Inter-American Development Bank and, frankly, this is part of the logic that we've had with these trade agreements is to combine trade openness with development programs. So, you've got to open you've got to create a sense of hope and opportunity for people if you're going to sustain democracy. And so, I look at Chavez in that context as well.

MODERATOR: Thank you.

DEPUTY SECRETARY ZOELLICK: She's been waiting. One more quick one

Mariana Mainenti, Correio Braziliense: [translation] Mr. Secretary, I'd like to know your opinion, first of all, briefly, about a proposal which was made by President Chavez in a meting last week, which is the Banco do Sul proposal, in which he thinks, in order to establish this Banco do Sul among the countries of the region, international reserves should be used, including those that are in the United States. [inaudible]. For example, the are 30-some million, which he would take and put in the Banco do Sul, and he proposed this to other countries. I'd like to know what you think about this? And also, on the issue of free trade, a question remains: I'd like to know if the United States will take the first step to make, for example, an agreement with the bloc with Mercosul as a bloc, four-plus-one, like what happened with the Central American countries and, it seems, will be the model of the Andes countries.

DEPUTY SECRETARY ZOELLICK:I'm afraid I don't know the details of President Chavez's bank proposal. I guess all I would say is I'm not sure I would trust him as a banker.


I'm not sure. Would you? As the different trade models, the type of baseline agreement that we had tried to create out of the Miami ministerial, create a mechanism for that. And, and so I think it really gets to the fundamentals of whether, how people are willing to approach the trade-offs of a trade agreement. Not whether it's just this one structure or that one structure. Look, the reason the United States wanted to try to link those separate agreements together in a Free Trade Area of the Americas goes to some of the questions that have been posed here. We don't only want this to benefit the U.S. economy. We want it to benefit South America's economy. And, what I've learned from negotiating some of these agreements is that for all the talk of free trade agreements - South America or Central America - there are a lot of barriers within the region.

And so the logic of the Alca or the FTAA was to try to also use that to break down barriers within Latin America. And that's why we have preferred a model that could eventually do that and that to me is the benefit of the Free Trade Area of the Americas. So, I think the Four-Plus-One concept, you know, was something that could have worked within that FTAA model if, if it was also seen as something that would reduce barriers among the countries in the region too.

Embassy Spokesman: Thank you very much.

Released on October 7, 2005


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