SECRETARY POWELL: Thank you so very much, ladies and gentlemen, for that warm welcome. And Don, I thank you for your kind and generous introduction. And I am pleased to follow the many distinguished colleagues of mine. You have heard from within the Administration already the President and my other Cabinet colleagues, and I am pleased to have a chance to put this day's activities into a foreign policy setting, even perhaps more so than you heard earlier in the day.

So, good to be back with NAM. I had an opportunity to work with NAM when I was doing work with American's young people. A few years ago I was Chairman of American's Promise, and before I came back into government, I was, as many of you know, on the speaking circuit, where many of my clients are here in the room. (Laughter). Those were the good old days. (Laughter.)

I just left a meeting with the Foreign Minister of Kenya, Mr. Chris Obure. And we were talking about a number of issues, regional issues, the situation in Kenya proper, but also in neighboring countries, the Sudan and Somalia. But he began our meeting not by talking about the economic problems of Kenya, or even the situation in Sudan and Somalia, but he led off the meeting by expressing once again his condolences and the condolences of President Moi, and the condolences of the Kenyan people for what happened here in the United States on the 11th of September.

And he immediately then moved to take note of the fact that it was an attack against civilization, an attack against the world, not just an attack against the United States. And he said he understood that perfectly, and he wanted to make sure that I understood, that the United States understood that Kenya and Africa and the rest of the world understood that this was an assault against civilization. And then he reminded me, although I needed no reminding, that Usama bin Laden, the head of al-Qaida, who we are after, is under indictment not for what happened in September on the 11th, but for what happened in 1998, when his organization blew up two American embassies, one in Kenya, one in Tanzania.

And the Foreign Minister reminded me that when the American Embassy was blown up in Nairobi, 12 Americans died and 246 Kenyans died, and hundreds more were injured. It may have disappeared from our consciousness; it's not on television every day, but we remember those scenes of carnage in the streets. Usama bin Laden went after America in the form of one of our embassies in Kenya, but in so doing, he cared not a whit about the hundreds of innocent Kenyans who would be walking by on their way to work, on their way home, just living a life, a normal life. He cared not a whit that hundreds of them would be killed in Tanzania, or anywhere else that he performs one of his evil deeds.

And the Foreign Minister reminded me that this is why Kenya will be with us, because this kind of terrorism has to be erased from the face of the earth. That is why Kenya and all the other nations of Africa, all the nations of Asia, all the nations of the Persian Gulf area, all the nations in our Hemisphere, NATO, the United Nations itself, the Organization of the Islamic Conference, Article V invitation in NATO, its self-defense clause, the ANZUS Treaty, the Rio Treaty here in our Hemisphere -- all of these groupings, all of these nations come together to say, this has to be stopped; this can't be tolerated in the 21st century.

Usama bin Laden and people like Usama bin Laden, and those who are terrorists, represent no religion that anyone can understand, and no, there is no faith that they are adhering to. They are evil, the President has said, and they have to be stopped. And the civilized world has to come together and make that statement. There is no confusion in the minds of people like Foreign Minister Obure, or his president or the people of Kenya. There is no confusion in the mind of Americans, and all the other members of this coalition.

Well, General Powell, Secretary Powell, will the coalition hold together? Won't it start to fragment? Will the images, those vivid television images of the 11th of September fade away? Well, they haven't faded away. We are not going to let them fade away. We are going to remind people throughout the world every day that the nature of the evil perpetrated by Usama bin Laden, by the al-Qaida network, and by others who believe terrorism is a legitimate form of response to whatever it is they want to respond to in the 21st century; it is not legitimate. There is no relationship to any religion or faith, and it has to be stopped.

The President has made it clear that this campaign we are embarked upon, this war that was brought to us and to which we are responding is a conflict we will fight with patience and persistence, and we will prevail. Well, it's been three weeks; why isn't it over? Well, guess what? Conflict sometimes takes longer than a news cycle. But we will not fail. We will prevail. Because we know we have the right cause, we know we have the right kind of coalition, and we know that it is a campaign that has many facets: financial, going after the financial lifeblood of these organizations; intelligence, sharing intelligence with countries around the world as part of this coalition --that's why we need this coalition, so we can share, so we can exchange; law enforcement activity, securing our borders, securing the borders of other nations, finding these people where they are and see how they get into our country or into other countries, making sure that we remind everybody in the world that this is a campaign not just against al-Qaida, even though that's where we start in Afghanistan, but against terrorism throughout the world.

You can be sure that President Bush and the other leaders who have joined him in this coalition are in it for the ride. We will put against the task whatever it takes.

I saw Prime Minister Tony Blair of the United Kingdom yesterday speak so eloquently and boldly about this to the people of the United Kingdom. Other leaders are just as committed, and we will be just as committed until we deal with this.

We now have anthrax as a problem here in the United States and elsewhere in the world, and we'll have to get to the bottom of that, and we will get to the bottom of that. Because they can bomb our buildings and they can get into our mail system, and they can injure us, and yes, they can kill us. But they can't touch our spirit. We've got a rod of steel in this country that will not bend, that will not break. (Applause.)

And what we will need is your support, your understanding, and your patience as we move forward with this campaign. And I know we will have it, because you are that kind of an organization, and you are that kind of a group of Americans, representative of your fellow citizens around the country, who are committed to our way of life, to our system, and to the economic system that fuels our way of life.

From your founding 106 years ago to help increase foreign trade in the face of economic recession, your association has been at the forefront of America's economic engagement with the world. You were among the first to emphasize growth as the engine that pulls all societies upward, growth when others were thinking of scaling back in response to recession. You were among the first to recognize the importance of welcoming new technology as a way to stay ahead, not to be Luddites, always going backwards and walking in the past instead of embracing your future, and as a way to make your business more productive, your businesses more productive and America more competitive.

And today, through your trade and technology policy group, you are marrying the old economy with the new economy to help create a dynamic American economy for the 21st century. And for proof of NAM's forward-looking, positive role, we need look no further than two of your chairmen, Tim Timken, who is finishing his tenure, and Don Wainwright, who is embarking on his term as your new chairman.

Tim, you have embodied NAM's passion for private sector participation in public policy. Your business life has been about outreach, and your pro-growth/pro-worker legacy at NAM is secure.

And Don is a worthy successor to Tim. And Don, I am sure you will bring to your new responsibilities the same leadership and the same passion for excellence and openness to new ideas that made your plant one of Industry Week's Ten Best.

And so that's why I feel I am among friends here today, friends who have a common focus, as we do in the Administration, on trade and technology. We are all on the same web page, so to speak. For I believe that trade and technology -- my children are trying to make me literate in all this stuff -- (laughter) -- I've gotten pretty good. In fact, I scare the devil out of the guys at the State Department. (Laughter.) Because I say, we're all going to be on the Web at State, all 30,000 computers that we have around the world, I want everyone to have Internet access immediately. And that's costing us a bunch of money, and it's causing people to change the way we think about doing things. And I am so glad you are also in the forefront of that.

Before coming back into government, I was on the board of one of the largest Internet companies in the world, which I shall not name. It was AOL. (Laughter.) And I had a chance, through that experience and other experiences, to see how technology is reshaping the world and the ability to move information and capital speed around the world at the speed of light. And all of that going around the world at the speed of light. And I am so pleased that you are committed to that, because you believe, as I believe, that trade and technology, along with the spread of democratic government, hold a potential to unlock the vast opportunities of the 21st century for mankind.

I believe that in this new century, we have the potential to lift tens of millions of people out of poverty, to help them give voice to their aspirations for a better life, and to free the human spirit within them. I believe in the power of trade and technology, because I have seen it here in America, I have seen how it works. Our country has the world's highest standard of living and the largest and most innovative economy, in large part thanks to you, the manufacturers of America, willing to take advantage of technology and the new open trading opportunities that exist.

Our exports lead the world in quality, as well as in quantity. Our imports are an engine for global growth. When I was in China a few weeks ago, seeing how Shanghai had become such a metropolis compared to the Shanghai I first visited some 30 years ago, remarkable that most of that growth, that building had taken place just in the last 10 or 12 years, and it comes from using the savings of the Chinese people, it comes from outside investment, but it comes essentially from US imports from China. And the average American citizen, trying to make ends meet, who will buy a Chinese product from K-Mart or Wal-Mart or somewhere else.

And so at the same time we are exporting, and you are building for our markets, and to export, at the same time, as a result of those exports, to people who have more money. They get that money by importing to us. And it is an engine that moves in both directions.

Our ideas, our know-how and our culture reach every corner of the world, and is transforming the world as we knew it. Nearly four centuries after the first settlers arrived here to create a shining city on the hill, we are still a beacon of hope to the world. And I am proud of that fact, and you should be, too. I see it everywhere I go. Every continent I visit, every undeveloped nation I visit, I hear the same message: Show us how, give us an example, help us to join this open trading system so we, too, can start up that ladder of wealth.

So economic diplomacy is central to our efforts to help people in the United States and across the globe to realize the vast potential that we all see. America's prosperity depends on a healthy global, economic system. You have already heard from the President and our many cabinet colleagues about the importance of trade and investment to our economy. But the story is a good one, an important one, and it bears repeating. We are -- you are -- the world's largest exporters. Exports accounted for over one-quarter of our economic growth over the last decade and currently supports some 12 million high-paying jobs. One-third of all agricultural production is planted for sales abroad. For over a decade, imports have given Americans high-quality goods at lower prices, a boon especially for lower-income families.

And so clearly trade is a success story, a two-way success story, and continued growth is essential to the continuing health of our economy. However, the case for America's economic engagement with the world goes well beyond these direct benefits to the American economy, important as those benefits are. Our economic engagement with the rest of the world is an important part of our effort to maintain the secure international environment within which Americans and American businesses prosper. It helps spread to others the benefits that we ourselves enjoy.

I believe the case for economic engagement and support of increased international trade and investment rests on five underlying truths: first, that international trade and investment help lift people out of poverty and expand the global middle class. The facts are clear, those who live in countries with open economies have higher incomes. Developing countries that adopt open trading systems see large drops in the absolute poverty level. Higher incomes invariably then lead to longer lives, higher literacy rates, better health, improved working conditions, a cleaner environment and more stable, peaceful societies because people have hope in their societies; they can feed their children, they can put a roof over their heads, they can get an education for their children, they can start up that ladder of consumption and wealth production.

At the same time that you get them moving in that direction, you start to place a demand coming back our way for our goods, for our products, to satisfy the demand that comes from them being able to start up the wealth ladder. Economic isolation, on the other hand, is the fast track to poverty, to disease, to sweatshops, to environmental degradation and to despair.

The second point I would make is that international trade and investment create conditions for expanded personal freedom. I'm not claiming that free markets lead quickly and easily to free people, but there is no question that it is an important connection that can be made. Open market-based economies are too complex for bureaucrats to run. They require millions of individual decisions, too many for a government to dictate or to keep track of. If governments want to participate in the international economic system, they must open a sphere of personal economic freedom.

But, however, once that box has opened, once freedom is out of that box, it's very hard to contain. Repressive governments cannot easily let someone make his own business decisions, but dictate all other aspects of his or her life.

In China, we have already seen the impact of decentralized economic decision-making on personal freedom. Over the course of two decades of reform, Chinese citizens have gained a measure of control over their daily decision-making, to an extent that was unimaginable before. While China has still far to go with respect to human rights, the dynamics of the marketplace have already helped carve out a sphere of personal freedom for millions.

The third point, international trade and investment support rule by law, not by political whim. Markets need good government, functioning institutions, transparent policy-making, and above all the rule of law. Capital is a coward; money flees uncertainty and corruption. To entice capital in and then keep it in, governments must recognize private property rights, deeds of trust, and the sanctity of contract, and they must enforce these rights transparently and fairly.

I have made this point to every foreign minister, trade minister, prime minister or president who has come to see me from an underdeveloped country. We sit in my office and I said, "Look, I got a dollar bill. I want to invest it somewhere. I want to invest it somewhere where it's going to be safe, and I'm going to get a dollar-ten back. And I'm not going to send it to some place where there is no rule of law, where if I had a problem in that society there is no court I can take it to, there is no justice. I am not going to invest it in a place where corruption is rampant. I am not going to invest it in a place where it is not safe, especially when the whole world is now open and I can invest it somewhere else where I can meet all of these conditions for safety.

"And so if you want to be a part of this game, you've got to have the rule of law, you've got to understand contract rules of law, you've got to eliminate corruption, you have to have political freedom, you have to have economic freedom. They go together. And unless you're going to move in this direction, you will discover that you may be able to get an occasional grant, you might even get some help from the World Bank and the IMF, but you're not going to get the private investment that you really need. Money is not going to come to you and you're not going to be successful."

Just as with personal freedoms, it is very difficult to fence off the economic sector from other parts of government and society. Rule of economic law coexists uneasily with the rule of whim in other aspects of life. At the end of the day, one or the other will win. In our diplomacy, we are putting our money on the free market.

The fourth principle I would make, or the fourth point I would make, is that international trade and investment promotes international responsibility. We have seen our economic engagement can change behavior inside a country's borders. It is also a powerful force for changing a country's way of engaging with other countries outside its borders. Countries that benefit from participation in a multilateral trading arrangement have strong reasons not to take actions that threaten that arrangement or their place and their equity in that arrangement. They know that aggressive and disruptive actions jeopardize the benefits they receive from participation in the system.

More broadly, countries with a stake in the system that have tasted the advantages of open markets and the free flow of capital are less likely to act in ways to close markets or to impede the flow of capital.

For example, Mexico's growing trade with the United States, anchored by NAFTA, has helped it weather a serious economic crisis, put its national economic policy house in order and allowed it to undertake reforms that contributed to the opening of its political system.

And I also make this case to nations that I speak to around the world. Come on out. Join the open trading system. See what you can do to access into the world trading organization. And the more you do that, the more you come out, the more you get internet-ed into the rest of the world, the more you see how information and capital and data can flow at the speed of light back and forth, the more you will find attractive the rule of law, the more you will find attractive elemental human rights that free the potential of your citizens to participate in that kind of system, the more you will understand the value of democracy, both political and economic democracy.

The fifth point I would make, and perhaps most important, is that international trade and investment are the keys to open and vibrant societies that are receptive to new ideas. This is really what economic engagement is all about -- opening countries to goods and services. But, yes, when you do that, you open them to ideas, to people going back and forth, to cultures being exchanged, and above all, to ideas, and nothing is more powerful than an idea.

Americans thrive on openness and fair competition. We know that our ideas, our goods and our ways will win. We also benefit from our openness. We have grown and expanded over the centuries, because we have welcomed new people, new ideas, and new ways of doing business.

In my press conference a few moments ago with the Foreign Minister of Kenya, I was asked about our visa policy: are we going to change our visa policy, letting people come into the country? And the response I gave is we are an open society. We want people to come to our country to enrich this wonderful nation of ours. We are a country of countries. There is no country that does not touch the United States and there is no country which is not touched by the United States. So our goal will be to remain an open society but, at the same time, protect our society and make sure we do a better job of knowing who is coming into our country, do a better job of sharing the information about people who may not wish us well and take steps to keep them out of our country. Openness is an essential part of the 21st century international trading system.

The alternatives to openness are stagnation and hardship. It is no coincidence that one of the poorest, most distressed countries on the face of the earth, North Korea, is known as the Hermit Kingdom. They don't let anyone come in except under the most controlled circumstances. They will not let ideas come in. They will not let their people know what is going on in the rest of the world. And as a result, they cannot even feed their own people and have little hope for the future until they do start to open up.

The diplomatic case for trade, then, is clear. American economic engagement supports American interests abroad. In the aftermath of the terrorist attacks of September 11th, economic engagement is not less important; it's more important. The September 11th attacks took place against the backdrop of what was an economic slowdown. The events added to a climate of economic uncertainty already present in our country and the world.

Now, more than ever, we must deliver a message of confidence -- confidence in our form of government, confidence in our society, and confidence in our economy. We must not take counsel of our fears, but move confidently forward with a positive agenda on trade and economic openness and growth that gives the lie to the agenda of hate and division spewed forth by terrorists like Usama bin Laden.

Since September 11th, the fight against terrorism has been President Bush's top priority; but at the same time, I want you to know that he has not allowed terrorism to hijack our foreign policy or our trade and economic policies. The campaign against terrorism is one of our top priorities, but it is not our only priority. No matter how vicious, we can't turn our eyes away from other things that need to be done.

President Bush felt strongly enough about the need to support trade and investment that, at the height of this crisis, he traveled to the APEC leaders meeting in Shanghai to move this positive economic agenda forward. The Shanghai leaders meeting was the first major international meeting to take place after the events of 11 September, and we are pleased with its accomplishments. APEC leaders, whose countries account for two-thirds of world GDP and over half of world trade, reaffirmed their support for a new round of trade negotiations under the WTO. It also issued the Shanghai Accord which provides for practical steps to invigorate member economies.

APEC brought home again the fact that more, not less, economic interaction is needed. We can not hide behind our borders and expect safety or prosperity. If we are to bounce back, we must further open the doors to trade and investment. We must respond to September 11th by continuing to strengthen the international economic system.

And we are making progress. In recent weeks, Congress has passed a free trade agreement with Jordan and a bilateral trade agreement with Vietnam. Talks are underway for Chile and Singapore on free trade agreements. Work continues on reauthorization of the Andean Trade Preferences Act and the general system of preferences, launching talks with the creation of a Free Trade Area for the Americas, a free trade area that will extend from north to south and east to west throughout the Western Hemisphere. Most important, preparing to launch a new round of global talks within the WTO.

We need to keep moving forward. We need to not take counsel of our fears. And above all, to complete our work, to keep moving on this economic agenda, we need the tools of trade and negotiation.

And most important of all, we need Trade Promotion Authority, TPA. Because for the United States to be credible at the negotiating table, our trading partners need to know that there will be no further negotiation on an agreement once we have reached an agreement with them. And that is what TPA does. It gives us credibility in the negotiating process and paves the way for US leadership. We have a more powerful voice as we sit down across the trading table from a partner if we have TPA, knowing that once an agreement is struck, the Congress has an up-or-down vote on it.

It is a wise exercise of Congress's congressional mandate to regulate commerce with foreign nations. Congress not only establishes specific negotiating objectives under TPA, but it utilizes the framework in TPA for strengthened consultation and cooperation during the negotiations before an agreement is signed.

At the end of the day, a trade agreement should be voted for when it benefits America. It should be voted against when it does not. With TPA, Congress retains its authority to give an up-or-down approval, and that is the long and short of it. America needs it in order to be more effective at the negotiating table.

I know that this association shares my enthusiasm and the President's enthusiasm for TPA, and I thank you for that support. I thank you for the support for the Uruguay round, for NAFTA, for China and Taiwan's accession to the Word Trading Organization, and for so many other international economic actions that you have supported.

American economic engagement with the world is critical to our security and to our prosperity, but the government can only do so much. It can help open the door, it can help build the structure; but, at the end of the day, economic engagement is all about you -- you, the American business community. You have the people who can use the structure we have established to create and to distribute wealth. By conducting your business, by going about your business in the exciting ways that you do, you are the medium for Americans' engagement with the world. You invest and hire, creating stronger local economies and greater local prosperity. You operate according to business rules, thereby entrenching those rules in places that you do business, entrenching the habits that those rules engender in the host countries in which you invest and in which you create products and wealth.

By conducting your business in the way that Americans conduct their business, you send a powerful signal all over the world to how people interact in peaceful, prosperous and democratic societies.

I was struck by the manufacturers alliance, NAM's study showing that 95 percent of American firms surveyed applied a corporate code of conduct or ethical standards to their operations in developing countries. This is a powerful model that speaks volumes about why people in other countries prefer working for American companies and why they feel so strongly about America.

We saw the depth of that feeling on September 11th and after, when ordinary people in scores of countries around the world flooded our embassies with flowers and cards and messages, messages of support, messages of condolence. America is all about people. America's engagement with the world is all about people touching people. No one touches more people than you do.

So, ladies and gentlemen, our challenge as government officials is clear. We must continue to work to build a stable and secure international economic environment. We will do our part to sustain the partnership for prosperity at home and abroad which together we have forged between American diplomacy and American business.

And let me challenge you to do your part. I challenge you to use the global economic system we have created to strengthen your business relationships with the world. I challenge you to meet the terrorist threat by making and selling your products, by engaging with your counterparts around the globe, by conducting your business with attention to your important corporate responsibilities, by showing what America is all about.

I challenge you to remain engaged in policy-making, as you are today. You are the eyes and the ears of the government, showing us what is going on out in the world. Let us know what works. Let us know what doesn't. Give us your ideas.

I want to tell you that a lot of what I have said today may sound a little odd coming from the Secretary of State. I am supposed to do wars and sign treaties. But I am astonished, as an old infantry officer. I did not go to the Wharton School. As an old infantry officer, coming into the State Department, to become America's top diplomat and chief foreign policy advisor to the President and to represent the American people in the conduct of their foreign diplomacy and their foreign affairs, I was astonished at how much of it is driven by trade and economy and economic choices. It has been a steep learning curve for me. I do have a Master's of Business Administration, but it is about 30 years old -- (laughter) -- not terribly relevant to the world I inherited on the 20th of January of this year. But it is an exciting world to be in, to see how trade is shaping those countries that used to be my enemies when I was a soldier, to see that the Iron Curtain is gone, and instead of dealing with one red side of the map consisting of the Soviet Union, that red side of the map is now a beautiful kaleidoscope that changes shape almost every day, with the Newly Independent States, with the Central Asian states, with the Caucasus, and all those other nations. And I see them not as a monolithic enemy, but all these nations that come to see us in the State Department.

And sometimes they want to talk about security, sometimes they want to talk about some diplomatic problem; but all the time they want to talk about freeing their economy, they want to talk about trade, they want to talk about how they can move to the West, they want to talk about debt relief, they want to talk about investment, they want to talk about how they can generate the wealth that they need to give their people a better life. They got rid of the Iron Curtain in order to give their people a better life. They will give their people a better life by opening themselves up to these new powerful ideas of freedom and democracy, and above all, open trade, free trade and economic development.

Here in the forefront of that effort, you are my diplomats at work around the world, and I thank you for what you do.

Thank you so much. (Applause.)

MR. JASINOWSKI: Mr. Secretary, thank you very much for that intellectually stimulating talk, and very inspiring talk, and I think the Secretary -- we have some microphones set up -- will take a question or two. So if you have any questions, please step up to a microphone.

Mr. Secretary.

SECRETARY POWELL: Thank you. Anyone? Yes, sir.

QUESTION: Syria and Iran. We're hearing a few reports in the last few days that there may be some warming of relationships with those two countries as a result of the terrorism, and are you able to respond and comment on that, sir?

SECRETARY POWELL: There have been some discussions with both of those nations. We have diplomatic relations with Syria, not with Iran. And I think some new opportunities may be presenting themselves. We have no illusions about the nature of those regimes. They are on our list of states that sponsor terrorism. The President has made it clear, and we have made it clear to them that you can't be for one kind of terrorism and against another kind of terrorism. And so we are prepared to explore those opportunities.

It was interesting that Prime Minister Tony Blair, our good ally, was in Syria recently, for the first time a British Prime Minister has been there in 30 years. And a couple of weeks ago, my colleague, the British Foreign Minister, Jack Straw, was in Iran, for the first time in many, many years.

So there are certain new opportunities that we should explore. And we have ways of talking to both of those countries, and we are seeing where this exploration will take us. But we are doing it with our eyes wide open, without any illusions with respect to the nature of these regimes, and with a clear message to them that if you want to explore with us what possibilities are ahead, then you have to change the way in which you have been acting and behaving for these many years.

And the President made that clear. We will be steadfast, strong, very sane and very clear-eyed about what we are doing, but at the same time, you can be clear-eyed, but not also blind. And you know, you can't do both. Be clear-eyed about what we're doing, but don't deny ourselves an opportunity that may exist if they are willing to change the way in which they have been behaving over the years.

So we'll see. Anyone else?

If not, I do have to get back to the Department to swear in a new Assistant Secretary that the Senate has very kindly confirmed. (Laughter.)

Thank you very much. (Applause.)

3:37 p.m. EDT

[End]

Released on October 31, 2001