U.S. Department of Commerce
November 1, 1999

KEYNOTE REMARKS BY U.S. COMMERCE SECRETARY WILLIAM M. DALEY BEFORE THE SOUTHEAST EUROPE COMMERCIAL OPPORTUNITIES AND PARTNERSHIP CONFERENCE SOFIA, BULGARIA

As of today, we are exactly two months away from the new century -- and in our country, we're very excited about it.

This is only the fourth time we've seen a century turn. But as I've been traveling in Europe, a more mature part of the world, I have found everybody is an old pro at this kind of thing -- and not as millennium-crazed as we Americans.

As the first U.S. Commerce Secretary of the 21st century (assuming I can hang on another 2 months), I feel a special responsibility. It is the responsibility to prepare our economies for the opportunities the next century will bring. A century that will have a new global economy ... that will have new technologies like the Internet that know no borders ... that will have a new round of world trade talks about to start ... and a century that, we hope, will bring new prosperity to Southeast Europe.

Obviously, we know the devastating effect the conflict in Kosovo had here. Each country has been hurt in different ways. I've heard many of the stories this morning. Unemployment is way up. Growth is way down. The transportation bottlenecks are hampering trade.

I am here, because President Clinton asked me to see how we can encourage more American investors to take an interest in the region. As the President says: "It is not enough to end a war; we must build a peace." Let me be frank with you. We are not here with huge deals, or every answer that will turn everything around. The fact is, the future of the region, belongs to you, and the economic decisions the leaders
of this region make, and not what we say or do. But we are here in huge numbers, 100 companies, large and small. And we are here with great optimism. These companies see Southeast Europe as an expanding market of more than 60 million people. Big companies are with me like Bechtel that see opportunities in transportation construction. York International, which has 50 percent of its sales outside America, is excited about selling its refrigeration equipment in Kosovo and
elsewhere. We have investors like Multinational Strategies.

They know there are half a million information technology jobs going begging in Western Europe, and they are building a software company here that can help fill that need. At the Commerce Department we see the growing interest in these markets. We have a website on business opportunities in Europe that receives an incredible 140,000 inquiries weekly. And a growing number of them are about Southeast Europe.

We see it through American Chamber of Commerces. The ones already here are growing rapidly, and three new AmChams will be starting in the region.

I believe just as American companies invested in the north -- we are some of the largest investors in Poland, Hungary, and the Czech Republic -- they want to do the same in the south. Last year, we saw about $1.6 billion [$1,600 million] in two-way trade between America and this region, and there is no reason why we can't become larger trading partners -- as we are with Western Europe.

There is another reason why we are optimistic. Prior to the conflict in Kosovo, we saw what many of your countries had done. We saw how you were developing democratic institutions. How you were putting in place ambitious economic reform programs. It is impressive to see how this region is linking up to trade with countries outside of the region. And at the end of this month, when we begin the World Trade
Organization's new round of talks in Seattle, at the table will be 134 nations, including Bulgaria and Romania. Albania and Croatia are close to joining. Bosnia and Macedonia are moving their applications forward. We support all of them, because the fact is, the more countries that are brought into the trading system, the more places we all have to sell our goods. Obviously, the crisis in Kosovo put a brake on the reform process. But it has to re-start.

In our view, the governments of Southeast Europe must be firmly committed to developing economies conducive to growth and business creation. I know, for an American official to come in here, and make suggestions on what countries should do, doesn't always sit well. I was recently in the Middle East, and someone commented after a speech I gave that he didn't like the suggestions I made about trade, because foreigners should not tell his government what they should do. The
fact is, as democracies, we should all share ideas. Everybody has problems.

For many years, the United States had terrible budget deficits, and the Europeans and Japanese would tell us to get our economic house in order -- and they were absolutely correct. I liked the frank talk I heard today from my colleagues. We need to learn from each other. I have a better understanding of your concerns. And those of us in government, especially need to learn from the business leaders with us. They have overseen the globalization of their companies, some of them have 50 percent of their sales outside America. When they make a decision where to invest, they will factor in the risks and rewards of doing business here, versus the hundreds of other communities that want their business.

A few years ago, we started a Transatlantic Business Dialogue. This is American and European, companies and governments, working together to figure out how we can make doing business easier. I have just come from Berlin, where we had a meeting, and we discussed this region. And they prepared a report on what it will take to increase investment in Southeast Europe. They presented 12 specific ideas, some of which we talked about in the roundtable I just held with my colleagues. They
suggested that governments move quickly to privatize state-owned monopolies. And they pointed out the need for effective legal and judicial systems.

One of the biggest complaints of foreign companies operating in this part of Europe is the arbitrary nature of the legal system and ineffectiveness of the judicial systems in enforcing laws. The report called for the need for adequate infrastructure ... a sound banking system ... open markets ... and modern commercial laws that protect
intellectual property.

It talked about the importance of reasonable and predictable taxes. The one thing businesses want is certainty. They don't want to come in one day and find out the tax rate has just doubled for no apparent reason. I want to mention two issues that are of special concern to U.S. business.

First, the issue of corruption. No question, we see corruption everywhere in this world. We had a very visible problem in the United States with the Salt Lake City Olympics. We see corruption in parts of Asia. We see it in parts of Africa, and one positive improvement there, is when we visit Africa, we talk about it openly, something we could not do a few years ago. No question, in many places in this region, there has been widespread corruption. It is something all democracies want to help you fight, because corruption is a crime against society. Ambassador Aaron has put forward a program that would greatly reduce the possibilities of corruption.

Also, I am pleased to report the Stability Pact, to which all of our countries belong, is seriously addressing the corruption issue. It has made it a centerpiece of its action plan for the region. The governments of Southeast Europe have begun to address this serious issue. And we want to work with you on this.

Secondly, we are especially concerned that procurement related to Kosovo reconstruction and regional economic development is fair, open, and transparent. This will ensure local companies receive the best products and technologies at the most competitive price.

The TABD report obviously is about what your governments can do. President Clinton wants our government to do more, also. We have set up a number of initiatives to help U.S. firms break into the market. As you heard this morning, OPIC [Overseas Private Investment Corporation], Eximbank [Export-Import Bank] and TDA [U.S. Trade and Development Agency] all have new activities. Within the U.S. government, we have established the Southeast Europe Initiative, where various agencies, try to promote democracy and economic prosperity. And in July, President Clinton announced a new, expanded tariff preference program for Southeast Europe. It would provide duty-free access to our market for agricultural and industrial products from the six countries represented here and from Slovenia, Montenegro, and
Kosovo. We envision this to be in place for five years. Obviously, we hope it helps expand the region's access to our market, to diversify your trade with us, and to help in your economic growth efforts. Let me add, we are urging our friends in the European Union to do the same.

All these efforts have a simple goal in mind - to involve the American private sector more directly and more actively in Southeast Europe. They want to be here, or 100 of them would not have come today. You want them here, or all the ministers would not be here today either.

Let me end by saying, what I want to do is this. I want to think about what I learned at the roundtable and my discussions with all the ministers. I want to see how the matchmaking goes tomorrow, which is really what's important about this conference. And then I want to report to President Clinton on what happened here and what follow-up can be done. The President is looking very forward to coming to Bulgaria this month. He will be the first United States president to ever visit this wonderful country. And I want to tell him that our conference here in Sofia has opened the door to making sure businesses help build peace and prosperity.

Thank you very much.