100th Anniversary of the U.S.-Canada Boundary Waters Treaty

January 11 marks the 100th anniversary of the Boundary Waters Treaty of 1909. We note with pride the century of cooperation with Canada in managing water quality, quantity, and environmental health along our 5,525-mile border. The Treaty also established the International Joint Commission, which has played a vital role as an independent steward of these shared resources. Comprised of Commissioners from both countries, the Commission has been an outstanding example of collaborative governance and stewardship, facilitating cooperation, preventing and resolving water-related disputes, and approving and overseeing operation of several major dams and hydropower stations along the border.

Millions of Americans and Canadians depend on the Great Lakes-St. Lawrence River system for drinking water, trade, jobs, recreation, and more. Through the Great Lakes Water Quality Agreement and the International Joint Commission, our two nations are working diligently to restore and maintain the chemical, physical, and biological integrity of the Great Lakes Basin ecosystem.

The Boundary Waters Treaty remains vibrant as it enters its second century. Recent International Joint Commission initiatives such as International Watershed Boards provide opportunities for local stakeholders to build networks that can prevent or resolve problems at the community level. The Treaty continues to be a model for managing shared resources and a tribute to the enduring friendship between the United States and Canada.

Message to the Cuban People

As much of the world celebrates the dawning of a new year, Cuba marks 50 years of one of the cruelest dictatorships this hemisphere has witnessed.

To those who yearn for liberty, all is not lost. The world has witnessed other instances of dictatorship but has ultimately seen those regimes fall and formerly enslaved countries embrace their birthright of freedom. One day, the people of Cuba will enjoy this same blessing.

This message of hope is directed especially to those who have made pleas for freedom only to be silenced by tyranny and oppression—individuals like Oscar Elias Biscet, Luis Enrique Ferrer, Ricardo Gonzalez, Jose Luis Garcia Paneque, and many others. It is equally intended for the families of such prisoners, who dearly miss their loved ones and continue to suffer oppression at the hands of the regime. The American people admire the courage of these families and the emerging civil society movement, reflected in the existence of groups like the Damas de Blanco, who stand up for the fundamental human rights bestowed by our Creator.

As long as there are people who fight for liberty, the United States will stand with them and speak out for those whose voices have been temporarily silenced. All Cubans have the right to be treated with dignity so that they can rise as high as their talents and hard work will take them. This is the standard my Administration and past Administrations—regardless of political affiliation—have expected from the Cuban government as the condition for improved relations.

My Administration has continually challenged the Cuban Government to bring genuine political and economic changes and improve human rights, and has made it clear that the United States stands prepared to respond to any request for assistance from a Cuba that transitions to democracy. The Castro regime's response to our offers has been continued repression of the Cuban people.

Throughout my presidency, the plight of Cuba has been close to my heart. My sincere wish has been for the proud people of Cuba to take their rightful place in the community of democratic, freedom-loving nations.

Laura and I send our Cuban hermanos y hermanas a message of peace and love. May God Bless you and continue to give you the faith and courage to fight for the day when the light of liberty will shine on the people of Cuba.

President George W. Bush and President Felipe Calderón delivered these remarks in Washington, DC

President Bush. Bienvenido a mi amigo. Mr. President, welcome. It has been a true pleasure to work with President Calderón. He's a man of conviction, he is a man of principle, and he is a man who's willing to take on tough challenges. I appreciate every meeting I've had with him.

I want to talk about two subjects quickly. One, Americans are concerned about the battle that's taking place in Mexico, and I want our fellow citizens to understand that this man understands the responsibilities of government to provide security; that he will not allow his country, or parts of his country, to be taken over by narco-traffickers; and that the United States of America wants to share and help deal with the issue on both sides of the border. The less drugs we use, the less pressure there will be in Mexico. We have got responsibilities to help prevent guns from going from the United States into Mexico.

And so, Mr. President, you and I have laid the foundation for a constructive and mutual engagement on this issue.

And secondly, I want to thank you for your steadfast support of trade. I'm a big, strong believer in NAFTA. NAFTA has been good for the United States of America, and NAFTA has been good for Mexico. And I want to thank you for that.

And so, Mr. President, it has been a pleasure to work with you. Thank you for your friendship.

President Calderón. We have a strong commitment in order to fight and defeat the criminals in Mexico, and we will do so. And we have a strong commitment to the rule of law, enforcement of the law in our country.

Interpreter. And for his support. With regard to the issues that President Bush has raised, I want to say that our administration has made a crucial decision in this regard. We are going to be promoting law, we are going to be promoting order in our country. We will be promoting the rule of law for all Mexicans.

We have worked jointly in this regard. We have worked together on the drug trafficking combat front. We have worked together to combat organized crime.

This is not an isolated problem for any country. This is a common problem that affects us both. And in order to do so, we have worked together and we have made this resolution.

We are committed to fighting criminals and to overcoming them once and for all. And the rule of law is the one thing that I want to stress we are going to promote, no matter what, in our country.

I agree with what the President has said with regard to the North America Free Trade Agreement. It has proved to be very useful, both for the United States and for Mexico. In that regard, millions of jobs were created here in the United States. Mexico is the second-largest purchaser of U.S. goods. We buy, in fact, twice as many U.S. products as the People's Republic of China. Two million jobs based on exports were created in Mexico—

President Calderón. No, in the United States.

Interpreter. In the United States— excuse me—as a result of NAFTA. And yesterday, I was discussing with President-Elect Obama the fact that we are willing to continue working on future additions of a way to continue to build on the achievements that NAFTA has created—benefits, issues of concern to both of our citizens. I understand that there are issues of concern to Mexicans, as well as to U.S. citizens, on the issue of the environment and on labor.

I want to wish the very best to President Bush, to his family, as well as to the United States. The U.S. will continue to solve its problems with success, I have no doubt about that. And we in Mexico can only wish the very best for this country, a great country, and for its citizens in overcoming the economic crisis it is now facing, overcoming other problems, as well as drug consumption, because any problems arising in the United States in some way will also affect Mexican citizens, as well.

And so we can only wish you the very best in every area. Thank you.

President Bush. Thank you, thank you. Adios.

President's calls to foreign leaders

This afternoon, President Obama made phone calls to three foreign leaders and to the Secretary General of the United Nations.

Prime Harper of Canada. President Obama thanked Prime Minister Harper for his congratulations on the inauguration. He reiterated his appreciation for Canada's friendship and his commitment to travel to Canada as his first foreign visit as President. He discussed the shared challenges we face in Afghanistan, on climate change and in confronting the worsening global economy.

King Abdullah of Saudi Arabia. President Obama underscored the importance of a strong U.S.-Saudi relationship. He underscored his appreciation for King Abdullah's leadership on the Arab Peace Initiative, the Interfaith Dialogue and for the pledge of assistance to the Palestinian Authority. He asked for Saudi support for efforts to stop weapons smuggling into Gaza and expressed interest in continuing counterterrorism cooperation.

Prime Minister Brown, United Kingdom. President Obama said he looked forward to continuing and strengthening the special relationship between our two countries. He expressed his desire to work together to confront the global economic crisis and reiterated his hope to attend the G-20 Summit in London. He also discussed the situation in Gaza and the necessity to make Afghanistan a top priority.

Ban Ki-moon, UN Secretary General. President Obama underscored his commitment to a strong US-UN relationship and an effective UN working with us to fight climate change, poverty and terrorism. He also voiced support for the UN's assistance mission in Iraq and his hope that the mission will expand this year and enjoy the continued leadership of the current Special Representative. They also discussed the ways in which the United Nations might undertake additional management reforms to improve efficiency and efficacy of the organization in dealing with international problems.

President Barack Obama and Prime Minister Stephen Harper delivered these remarks in Ottawa, Canada

President Obama. Hello, good afternoon.

Prime Minister Harper. Good afternoon, ladies and gentlemen.

Once again, it is a great pleasure to welcome President Obama to Canada. We are deeply honored that he has chosen Canada for his first foreign visit since taking office. His election to the presidency launches a new chapter in the rich history of Canada-U.S. relations. It is a relationship between allies, partners, neighbors, and the closest of friends; a relationship built on our shared values—freedom, democracy, and equality of opportunity epitomized by the President himself.

Our discussions today focused on three main priorities. First, President Obama and I agree that Canada and the United States must work closely to counter the global economic recession by implementing mutually beneficial stimulus measures, and by supporting efforts to strengthen the international financial system.

We concur on the need for immediate, concerted action to restore economic growth and to protect workers and families hit hardest by the recession through lowering taxes, ensuring access to credit, and unleashing spending that sustains and stimulates economic activity.

Second, President Obama and I agreed to a new initiative that will further cross-border cooperation on environmental protection and energy security. We are establishing a U.S.-Canada clean energy dialogue which commits senior officials from both countries to collaborate on the development of clean energy science and technologies that will reduce greenhouse gases and combat climate change.

Third, the President and I had a productive discussion about our shared priorities for international peace and security—in particular, our commitment to stability and progress in Afghanistan.

This has been a very constructive visit, revealing to both of us a strong consensus on important bilateral and international issues. President Obama, I look forward to working with you in the months ahead to make progress on these issues and build on the long and deep friendship between our two countries and our two peoples.

President Obama. Thank you. Well, it is a great pleasure to be here in Ottawa. And Prime Minister Harper and I just completed a productive and wide-ranging discussion on the many issues of common concern to the people of the United States and Canada.

I came to Canada on my first trip as President to underscore the closeness and importance of the relationship between our two nations, and to reaffirm the commitment of the United States to work with friends and partners to meet the common challenges of our time. As neighbors, we are so closely linked that sometimes we may have a tendency to take our relationship for granted, but the very success of our friendship throughout history demands that we renew and deepen our cooperation here in the 21st century.

We're joined together by the world's largest trading relationship and countless daily interactions that keep our borders open and secure. We share core democratic values and a commitment to work on behalf of peace, prosperity, and human rights around the world. But we also know that our economy and our security are being tested in new ways. And the Prime Minister and I focused on several of those challenges today.

As he already mentioned, first we shared a commitment to economic recovery. The people of North America are hurting, and that is why our governments are acting. This week I signed the most sweeping economic recovery plan in our nation's history. Today the Prime Minister and I discussed our respective plans to create jobs and lay a foundation for growth. The work that's being done by this government to stimulate the economy on this side of the border is welcomed, and we expect that we can take actions in concert to strengthen the auto industry, as well.

We know that the financial crisis is global, and so our response must be global. The United States and Canada are working closely on a bilateral basis and within the G8 and G20 to restore confidence in our financial markets. I discussed this with Prime Minister Harper, and we look forward to carrying that collaboration to London this spring.

Second, we are launching, as was mentioned, a new initiative to make progress on one of the most pressing challenges of our time: the development and use of clean energy. How we produce and use energy is fundamental to our economic recovery, but also our security and our planet. And we know that we can't afford to tackle these issues in isolation. And that's why we're updating our collaboration on energy to meet the needs of the 21st century.

The clean energy dialogue that we've established today will strengthen our joint research and development. It will advance carbon reduction technologies and it will support the development of an electric grid that can help deliver the clean and renewable energy of the future to homes and businesses, both in Canada and the United States. And through this example, and through continued international negotiations, the United States and Canada are committed to confronting the threat posed by climate change.

In addition to climate change, Prime Minister Harper and I discussed the need for strong bilateral cooperation on a range of global challenges—one of the most pressing being Afghanistan. The people of Canada have an enormous burden there that they have borne. As I mentioned in an interview prior to this visit, those of us in the United States are extraordinarily grateful for the sacrifices of the families here in Canada of troops that have been deployed and have carried on their missions with extraordinary valor. You've put at risk your most precious resource: your brave men and women in uniform. And so we are very grateful for that.

There is an enduring military mission against al Qaeda and the Taliban in Afghanistan and along the border regions between Afghanistan and Pakistan, but we also have to enhance our diplomacy and our development efforts. And we discussed this in our private meetings. My administration is undertaking a review of our policy so that we forge a comprehensive strategy in pursuit of clear and achievable goals. And as we move forward, we intend to consult very closely with the government here in Canada to make certain that all our partners are working in the same direction.

In April, we'll have a broader dialogue with our NATO allies on how to strengthen the alliance to meet the evolving security challenges around the world.

And finally, we look forward to the Summit of the Americas. My administration is fully committed to active and sustained engagement to advance the common security and prosperity of our hemisphere. We will work closely with Canada in advancing these goals and look forward to a meaningful dialogue in Trinidad.

As I've said, the United States is once again ready to lead. But strong leadership depends on strong alliances, and strong alliances depend on constant renewal. Even the closest of neighbors need to make that effort to listen to one another, to keep open the lines of communication, and to structure our cooperation at home and around the world.

That's the work that we've begun here today. I'm extraordinarily grateful to Prime Minister Harper for his hospitality, his graciousness, and his leadership. And I'm looking forward to this being the start of a continued extraordinary relationship between our two countries.

Q. Thank you, Mr. President, Mr. Prime Minister. I have Afghanistan questions for you both. Mr. President, General McKiernan requested 30,000 extra troops; your new order calls for 17,000. How likely is it that you will make up that difference after the review you've mentioned? And more importantly, how long can we expect all U.S. combat troops to be in Afghanistan?

And, Mr. Prime Minister, based on your discussions today, are you reconsidering the 2011 deadline for troop withdrawal, and are you also thinking about increasing economic aid to Afghanistan?

President Obama. Well, David, the precise reason that we're doing a review is because I think that over the last several years we took our eye off the ball, and there is a consensus of a deteriorating— that there is a deteriorating situation in Afghanistan. I don't want to prejudge that review. I ordered the additional troops because I felt it was necessary to stabilize the situation there in advance of the elections that are coming up. But we have 60 days of work to do. They—that review, which will be wide-ranging, will then result in a report that's presented to me. And from—at that point, we will be able to, I think, provide you with some clearer direction in terms of how we—how we intend to approach Afghanistan.

In terms of length, how long we might be there, obviously that's going to be contingent on the strategy we develop out of this review. And I'm not prejudging that, as well.

I should mention, just to preempt, or to anticipate Prime Minister Harper's—the question directed at him, that I certainly did not press the Prime Minister on any additional commitments beyond the ones that have already been made. All I did was to compliment Canada on not only the troops that are there, the 108 that have fallen as a consequence of engagement in Afghanistan, but also the fact that Canada's largest foreign aid recipient is Afghanistan. There has been extraordinary effort there, and we just wanted to make sure that we were saying thank you.

Prime Minister Harper. Just very quickly, as you probably know, it was just last year that we were able to get through Parliament a bipartisan resolution extending our military engagement in Afghanistan for an additional close to four years at that point. As we move forward, we anticipate an even greater engagement on economic development. That was part of the strategy that we adopted.

I would just say this—you know, obviously we're operating within a parliamentary resolution—I would just say this in terms of the United States looking at its own future engagement. We are highly appreciative of the fact the United States is going to be a partner with us on the ground in Kandahar. The goal of our military engagement, its principal goal right now, beyond day-to-day security, is the training of the Afghan army so the Afghans themselves can become responsible for their day-to-day security in that country.

I'm strongly of the view, having led— you know, as a government leader, having been responsible now for a military mission in Kandahar province, that we are not, in the long term through our own efforts, going to establish peace and security in Afghanistan; that that job ultimately can be done only by the Afghans themselves. So I would hope that all strategies that come forward have the idea of an end date, of a transition to Afghan responsibility for security, and to greater Western partnership for economic development.

Q. Good day. In French for you, Mr. Harper. With regard to the environment, going beyond green technology, how far are your two countries prepared to harmonize your strategy to reduce greenhouse gases? And how will you reconcile your approaches? They seem different when it comes to the tar sands, for instance.

For you, Mr. President, I can repeat in English. On the part of the—of the environment, beyond research, technology and science, how far are your two countries willing to go to harmonize your strategies in terms of greenhouse gas reductions? And how can you reconcile your two approaches when they seem so different, especially considering the fact that Canada refuses to have hard caps, in part because of the oil sands?

Prime Minister Harper. Briefly, first of all, really premature to talk about anything like that, anything like harmonization with the United States. The United States has not had a national dialogue and debate on its own detailed approach. Obviously that's something the President's administration will be doing.

What we have agreed to today is a dialogue on clean energy, and particularly on the development of clean energy technology. Both of our governments are making large investments in things such as carbon capture and storage and other new technologies designed to fight climate change. We share our—our document on this clean energy dialogue talks about things we can do together to improve the electricity grid in North America. There are all kinds of things we can do together, independent of any American regulatory approach, on climate change.

We will be watching what the United States does very—with a lot of—with a lot of interest for the obvious reasons that, as we all know, Canada has had great difficulty developing an effective regulatory regime alone in the context of a integrated continental economy. It's very hard to have a tough regulatory system here when we are competed with—competing with an unregulated economy south of the border.

So we'll be watching what the United States does. We'll be looking ourselves, for our own sake, at opportunities for harmonization to make our policies as effective as they can. And I don't think the differences are near as stark as you would suggest. When I look at the President's platform, the kind of targets that his administration has laid out for the reduction of greenhouse gases are very similar to ours. You say we have intensity, they have absolute—but the truth is these are just two different ways of measuring the same thing. You can convert one to the other, if that's what you want to do.

So I'm—I'm quite optimistic. I'll be watching—I'll be watching what's done in the United States with great interest. But I'm quite optimistic that we now have a partner on the North American continent that—that will provide leadership to the world on the climate change issue, and I think that's an important development.

President Obama. Well, this is not just a U.S. or a Canadian issue; this is a worldwide issue that we're going to have to confront. There are good, sound economic reasons for us to address this issue. You know, to the extent that, on both sides of the border, we can make our economies more energy efficient, that saves consumers money; that saves businesses money; it has the added advantage of enhancing our energy security. And we are very grateful for the relationship that we have with Canada, Canada being one of— being our largest energy supplier.

But I think increasingly we have to take into account that the issue of climate change and greenhouse gases is something that's going to have an impact on all of us. And as two relatively wealthy countries, it's important for us to show leadership in this area. I think the clean energy dialogue is an extraordinary beginning because right now there are no silver bullets to solve all of our energy problems. We're going to have to try a whole range of things, and that's why sharing technology, sharing ideas, sharing research and development is so important.

Here in Canada you have the issue of the oil sands. In—in the United States, we have issues around coal, for example, which is extraordinarily plentiful and runs a lot of our power plants. And if we can figure out how to capture the carbon, that would make an enormous difference in how we operate. Right now the technologies are at least not cost-effective.

So my expectation is, is that this clean energy dialogue will move us in the right direction. We're not going to solve these problems overnight, as Prime Minister Harper indicated. We have to complete our domestic debate and discussion around these issues. My hope is, is that we can show leadership so that by the time the international conference takes place in Copenhagen that the United States has shown itself committed and ready to do its part.

I think the more that we can coordinate in—with Canada, as well as Mexico, a country that has already shown interest in leadership on this issue—and when I spoke to President Calderón, he indicated this is an area of interest to him—the more that, within this hemisphere, we can show leadership, I think the more likely it is that we can draw in countries like China and India, whose participation is absolutely critical for us to be able to solve this problem over the long term.

And, as Prime Minister Harper suggested, there are going to be a number of different ways to go after this problem. You know, we've suggested a cap and trade system. There are other countries who've discussed the possibilities of a carbon tax. I think there's no country on Earth that is not concerned about balancing dealing with this issue on the environmental side and making sure that, in the midst of a severe recession, that it's not having too much of an adverse impact on economic growth and employment.

So we think that we can benefit by listening and sharing ideas, and my hope is, is that we emerge from this process firmly committed to dealing with an issue that, ultimately, the Prime Minister's children and my children are going to have to live with for many years.

Q. Thank you, to both of you. I've got a question for both of you. Mr. President, on Tuesday you said that now is not the time to reopen NAFTA. But your aides said that you would be trying to convince our friends in Canada and in Mexico of the rightness of your position. So, first, did you convince our friends in Canada? And when is the right time to incorporate labor and environmental standards into the main body of NAFTA?

Second, for Prime Minister Harper. Mr. Prime Minister, is there a way for a “Buy American” provision to be compliant with the U.S. obligations under the World Trade Organization?

President Obama. Well, first of all, Jonathan, I'm not sure that was my exact quote. I always get a little nervous about responding to quotes without me actually seeing it. I think what I said was, is that now is a time where we've got to be very careful about any signals of protectionism, because, as the economy of the world contracts, I think there's going to be a strong impulse on the part of constituencies in all countries to see if we—they can engage in “beggar thy neighbor” policies. And as obviously one of the largest economies in the world, it's important for us to make sure that we are showing leadership in the belief that trade ultimately is beneficial to all countries.

Having said that, what I also indicated was that with a NAFTA agreement that has labor provisions and environmental provisions as side agreements, it strikes me if those side agreements mean anything then they might as well be incorporated into the main body of the agreement so that they can be effectively enforced. And I think it is important, whether we're talking about our relationships with Canada or our relationships with Mexico, that all countries concerned are thinking about how workers are being treated and all countries concerned are thinking about environmental issues of the sort that Emmanuelle just raised earlier.

So, you know, I raised this issue with Prime Minister Harper. My hope is, is that as our advisors and staffs and economic teams work this through, that there's a way of doing this that is not disruptive to the extraordinarily important trade relationships that exist between the United States and Canada.

Now you didn't ask me about the “Buy American” provisions, but since it relates to our recovery package, let me just reiterate—and I said this very clearly before the bill was passed and before I signed it— that I think it was very important to make sure that any provisions that were there were consonant with our obligations under WTO and NAFTA.

And I think that is what we achieved. I recognize the concerns of Canada, given how significant trade with the United States is to the Canadian economy. I provided Prime Minister Harper an assurance that I want to grow trade and not contract it. And I don't think that there was anything in the recovery package that is adverse to that goal.

Prime Minister Harper. I'll answer both questions, as well. First of all, I just think it's important to reiterate that since NAFTA came into force, and more importantly since Canada signed its free trade agreement with the United States in 1988, trade agreements between our two countries have been nothing but beneficial for these two countries. There has been a massive explosion of trade. It was already the biggest trading relationship in the world; it's so much bigger now. And that trade supports, you know, countless millions of jobs.

And I don't think we should also forget the leadership that was established in that. You know, this was about the end of the Cold War, and Canada and the U.S. signed the first modern generation trade agreement that really started—started the proliferation of these types of agreements, which really gave us the growth of the global economy.

Now, you know, I know some aspects of trade invariably cause political concerns, but nobody should think for a minute that trade between Canada and the United States is anything but a benefit between the two of us. And quite frankly, the trade challenges we face are common trade challenges. The trade challenges we face in North America are common trade challenges; they're not problems between our countries.

So I just think it's always important to keep this in mind. The President and I did have a good discussion of his concerns. You know, our position is that we're— we're perfectly willing to look at ways we can—we can address some of these concerns, which I understand, without, you know, opening the whole NAFTA and unraveling what is a very complex agreement. But we had a good discussion on that and I think—I'm hopeful we'll be able to make some progress.

On—on the “Buy American” provisions—and let's also be very clear, as well, that in both WTO and NAFTA, there are—there are industries and there are ways in which and there are levels of government at which one can have domestic preferences and purchasing policies. These things are allowed, in some cases, but they are certainly not allowed without limit. We expect the United States to adhere to its—to its international obligations. I have every expectation, based on what the President has told me and what he's said publicly many times in the past, that the United States will do just that.

But I can't emphasize how important it is that we do that. We have agreed in Canada and, you know, all the major countries of the world through the G20, we agreed to pursue economic stimulus measures—not just to stimulate our own economies, but to recognize that we have a synchronized global recession that requires policies that will not just benefit ourselves but benefit our trading partners at the same time. If we pursue stimulus packages, the goal of which is only to benefit ourselves or to benefit ourselves, worse, at the expense of others, we will deepen the world recession, not solve it.

So I think it's critical that the United States has been a leader for a long time in the goals of an open global economy. I think it's critical that that—that that leadership continue. And I'm—I'm quite confident that the United States will respect those obligations and continue to be a leader on the need for globalized trade.

If I could just comment on our stimulus package, one of the things we did in our stimulus package was actually remove duties on some imported goods. Part of the reason we did that, it's in our own economic interest, but also, as well, it will help stimulate continental and global trade. And this is important for our recovery. We know as a small economy we can't recover without recovery in the United States and recovery around the world. But that's true for all of us these days.

Q. I have a question for both of you. Mr. President, during your meetings today, did you discuss the possibility of Canada stepping up its stimulus plans? And secondly, for both of you, what do you think the Canada-U.S. relationship will look like in four years? What will the auto sector look like? Will the border be thicker or thinner? And will you have a carbon market?

President Obama. You stuffed about six questions in there. Were you talking to Jonathan? Is that—

Q. I have more.

President Obama. Yes, I'll bet. Well, first of all, I'll answer your last question first. I expect that, four years from now, the U.S.-Canadian relationship will be even stronger than it is today. I expect that you will see increased trade. I think we will see continued integration of efforts on—on energy in various industries, and I think that's to be welcomed.

I'm a little biased here because I've got a brother-in-law who's Canadian and I have two of my key staff people who hail from Canada. And I love this country and think that we could not have a better friend and ally. And so I'm going to do everything that I can to make sure that our relationship is strengthened.

You mentioned a couple of specific issues—the idea of thickening of borders. One of the things that I would like to see is—and we—Prime Minister Harper and I discussed this—how we can use some of our stimulus and infrastructure spending that is already being planned around potentially easing some of these bottlenecks in our border. Now, we've got very real security concerns, as does Canada. But I think that it is possible for us to balance our security concerns with an open border that continues to encourage this extraordinary trade relationship in which we have $1.5 billion worth of trade going back and forth every single day.

With respect to the auto industry, obviously we are concerned—we're deeply concerned about the current state of the North American auto industry. It is an integrated industry. When we provided our initial federal help to the auto industry, Prime Minister Harper stepped up and provided assistance that was commensurate with the—the stake that Canada has in the auto industry.

We have just received the report back from GM and Chrysler in terms of how they intend to move forward. My economic team is in the process of evaluating it. One thing we know for certain is that there's going to have to be a significant restructuring of that industry. And as that restructuring takes place, one in which all parties involved—shareholders, creditors, workers, management, suppliers, dealers—as all of those parties come together to figure out what is a sustainable and vibrant auto—North American auto industry, it's going to be very important for our government to coordinate closely with the Canadian government in whatever approach that we decide to take. And we are committed to doing that.

And finally, with respect to stimulus, I think that, as Prime Minister Harper mentioned, Canada has put in place its own stimulus package. We obviously are very proud of the recovery act that I recently signed, not only because it provides a short-term boost to the economy and provides relief to families that really need help, but I think it also will lay the groundwork for long-term growth and prosperity.

We were talking earlier about the issue of the electric grid. The potential that exists for creating ways of delivering energy from wind and solar across vast plains to get to urban areas and populated areas is enormously promising. That's why we are investing billions of dollars to help jumpstart that process.

And so we think we've taken the right approach to not only get the economy moving again and to fill domestic demand as well as global demand, but also I think Prime Minister Harper is taking the same approach. And to the extent that as we go to the G20 summit, that we are saying— the most significant economies in the world all taking these steps in concert, then more—the more likely we are that we're going to be able to slow the recessionary trends, reverse them, and start growing the economy again, which ultimately is the bottom line for both the Prime Minister and myself—making sure that Americans, Canadians have good jobs that pay good wages, allow them to support a family and send their kids to college, and let their children aspire to new heights.

So I think we're going to continue to coordinate as closely as possible to make sure that we are helping families on both sides of the border.

Prime Minister Harper. You did ask several questions. I'll try and touch on a few of them. On stimulus, first of all, it's important to understand that Canada's economic stimulus package is very large. It's certainly larger than the kind of numbers the IMF was talking about in the fall with the provincial action that we will bring in to our stimulus spending—will be close to 2 percent of GDP for this year, a percent and a half for next year. This is not as large as the stimulus package in the United States. But the issues in the United States are different, and in fairness, they are bigger than in Canada.

Let me just give you a concrete example of the difference—I could talk about housing, or the banking sector. But the American stimulus package contains a significant money—a significant pot of money being transferred to lower levels of government to deal with health care. Well, in Canada, as you know, we already have permanent health care transfer arrangements with our provinces before this economic crisis. So not all of these things are directly transferable to the Canadian experience. But by any measure, ours is a very large stimulus program.

As the President mentioned, we talked about today how we can use our investments in infrastructure to focus specifically on border infrastructure that we share. We know well at Detroit/Windsor and elsewhere in Canada that the growth of our trade is straining our border infrastructure that's independent even of security demands. So there may be things we can do there jointly in the name of economic stimulus that are beneficial for the long term.

The statement lays out today a whole bunch of initiatives we're undertaking, and I think President Obama mentioned them. Beyond border infrastructure, we have joint action going on on the auto sector. We were working closely with the outcoming administration. We will be continuing to work with President Obama's administration on what is an integrated industry needs an integrated solution.

We are engaged in Afghanistan. We talked about that at length. We are launching a clean energy dialogue on one of the most important challenges of the next decade, and that is climate change. So, you know, I see a range of initiatives that will carry us forward for many years.

I do want to address two specific things, though, you raised—one is border thickening, and one is kind of four years from now. On—on the thickening of the border, I just want to make this clear—and I want to make this clear to our American friends—not only have we since 9/11 made significant investments in security and security along our border, the view of this government is unequivocal: threats to the United States are threats to Canada.

There is no such thing as a threat to the national security of the United States which does not represent a direct threat to this country. We as Canadians have every incentive to be as cooperative and alarmed about the threats that exist to the North American continent in the modern age as do the governant people of the United States. That's the—that's the approach with which we treat the border. Obviously we've been concerned about the thickening of the border.

You know, in our judgment—and we'll have some time to talk about this as—as we move along in our respective governments—we're looking at—the key is to look at how we can deal with security in a way that does not inhibit commerce and social interaction. That is the real challenge. But let there be no—and that's where thickening of the border concerns us—but let there be no illusion about the fact that we take these security concerns as seriously as our American friends.

In terms of big picture, you know, I think this would be the safest prediction in the world, that today Canada and the United States are closer economically, socially, culturally, in terms of our international partnerships than any two nations on the face of the Earth—closer friends than any two nations on the face of the Earth. And I think we can safely predict that in four years' time we will be in exactly the same spot.

What we can do with that in the mean-time—and what I'm sure President Obama will want to do with that—is to take that close relationship that is so deeply integrated when it comes to things like trade and military—military and defense considerations, things where we have not only established a close friendship, but where we have established models that others who want to pursue close friendships have used around the world— that we can take those things and we can continue to lead in the future. We can continue to show how two countries can work together in ways that pursue global cooperation and integration to mutual benefit.

And as we all know, one of President Obama's big missions is to continue world leadership by the United States of America, but in a way that is more collaborative. And I'm convinced that by working with our country, he will have no greater opportunity than to demonstrate exactly how that model can operate over the next four years.

President Obama. And let me just say that, to echo what the Prime Minister said, we have no doubt about Canada's commitment to security in the United States as well as Canada. Obviously we've got long-lasting relationships around NORAD, for example, and the same is true with respect to border security; there's been extraordinary cooperation and we expect that that will continue.

And Prime Minister Harper is right. It's a safe bet that the United States and Canada will continue to enjoy an extraordinary friendship, and together I think we've got an opportunity to show the world that the values that we care about—of democracy, of human rights, of economic growth and prosperity—that these are values that the world can embrace, and that we can show leadership. And I'm very much looking forward to working with—with this government and—and all Canadians in order to promote these—these values.

I want to also, by the way, thank some of the Canadians who came over the border to campaign for me during the—during the election. It was much appreciated. And I'm looking forward to coming back to Canada as soon as it warms up.

Prime Minister Harper. This brings an end to the press conference. Thank you very much, everybody.

Secretary Robert Gates and Minister Peter Mackay delivered these remarks in Arlington, VA

Secretary Gates. Good afternoon, everybody.

Minister MacKay and I had yet another very good meeting. I began by expressing our condolences to the Canadian government, and through them to the families of the three Canadian soldiers who were killed in Afghanistan just a couple of days ago.

We talked about Afghanistan, and also talked about the need to get together and discuss the broader agenda of U.S.-Canadian security issues. And so we're probably going to plan a meeting together that focuses principally on a lot of other issues, from the Americas to NORAD to the Arctic and so on.

And so I think we had a good meeting, and it's always a pleasure to see the minister.

Peter?

Minister Mackay. Thank you very much. I'm delighted, of course, to be here with my friend, Secretary Gates.

And Bob and I did discuss, as we very often do, the situation in Afghanistan. I was extremely appreciative of the condolences I will convey to the family—families of the Canadian soldiers. Clearly, we are often finding ourselves expressing sympathy and solidarity in what is a challenging mission in Afghanistan. This has been a number-one priority for our country, both in terms of our military presence there and our diplomatic efforts as well, and our ongoing attempts to build stability and support for the Afghan people and their government.

We've had such a long-standing relationship as countries. Canada and the United States have historic relations that go back to their very beginnings. And we look forward to working with the new administration. I would convey directly to the president the wisdom that he demonstrated in keeping Secretary Bob Gates in place, that not only shows continuity for the ongoing efforts there through our NATO and ISAF missions, but it demonstrates as well the great confidence that the president has in the work of Secretary Gates.

I look forward to again welcoming Bob Gates back to Canada. He's visited my home province of Nova Scotia. We have a lot of common interests in working to enhance and buttress NORAD and our protection of citizens in both Canada and the United States. And look forward to continuing what has been a very strong and solid working relationship.

Thank you.

Q. Can you tell us what you discussed about the new administration's Afghanistan/Pakistan security review? Mr. Secretary, you're extending the time for that. Mr. Minister, what would you like to see the United States do differently as a result of that review?

Secretary Gates. I basically told him that the review is a work in progress, that we are still eagerly soliciting ideas from our allies and friends, as we did from the Afghans and Pakistanis last week. This isn't a pro forma exercise. We are genuinely interested in other people's thinking on the way forward in Afghanistan.

I told him that, frankly, we weren't at a point where I could offer even preliminary conclusions to him, but I talked about some of the issues that were being addressed—for example, the size of the foreign military presence, how we get better civilian-military coordination, and so on. And we really didn't talk about the deadline.

Q. Under what circumstances—

Minister Mackay. Just—just to respond briefly, we—as the secretary has lined out, we talked about, from a Canadian perspective, what we might add to that review, and we've had very good interaction. We have experience in Pakistan as well, in addition to what we're doing in Afghanistan. I think Canadians recognize, as do others, that this review helps put in context the regional challenges; that this obviously goes beyond any one country. We touched briefly on the involvement of India within that context. And certainly that is also an important country, a very major player within the region. The comprehensive approach that Canada has taken in building capacity of the government of Afghanistan, we think through that prism we should also be looking at ways that we can help the Pakistani people as well and building their capacity in certain regions. Certain concerns about the situation in the Swat, in the FATA. We're watching, of course, very closely what's developing inside Pakistan. And I expect that this review, upon completion, will be a very important—not a restart, but a continuation of the ongoing strategy.

Minister Mackay. I mean, we're like a lot of countries. Of course, this review is going to be of critical importance as we make our way forward both in Afghanistan, but of course Pakistan is a country that you absolutely have to include on the way forward and on the plans that will eventually lead to improved status for both countries.

Secretary Gates. Anybody here from the Canadian press that wants to ask?

Q. Might this review persuade you to ask parliament to extend Canada's involvement in Afghanistan in a combat role?

And I'd also like you to comment on what the prime minister said last week. He said that the insurgency in Afghanistan cannot be defeated. Could you discuss that? And what difference does it make in terms of how you go forward?

Minister Mackay. Well, let me start with what the prime minister said. I think he very much echoed the comments of both President Obama and others who have said that essentially military might alone is not going to do it when it comes to Afghanistan. It's going to require much more. It's going to require obviously an effort to build the capacity of the Afghan government to deliver more for their people; to do more on the training of the Afghan security forces, police and army; to essentially take the approach that many, including Canada, have—have undertaken, and that is to what we've described as a whole-of-government approach, others have used a comprehensive approach. And that is very much in keeping with what the United States and others are doing, the 40-plus countries that are there working inside Afghanistan today.

With respect to Canada's role post-2011, this is something that, as you would know, was a decision of parliament. It came after an extensive consultation involving an independent panel that traveled and gathered information, and referred back to parliament advice on where Canada should be in Afghanistan. So we can't—we can't attempt to build democracy and institutions in Afghanistan and not respect our own. And so Canada post-2011 will play a role. We will absolutely be in Afghanistan performing important tasks. We will reconfigure what the face of that mission looks like. We will be involved in consultations with our allies. But we will always respect the parliament of Canada.

Q. And that's not up for review?

Minister Mackay. Pardon me?

Q. And that's not up for review?

Minister Mackay. Well, look, it's not up for review without parliament, and parliament has pronounced itself on this. We respect that decision. And 2011 is a fixed date to the end of combat. There is much more that can be done in Afghanistan beyond combat, and I suspect quite strongly that Afghanistan will look much differently in 2011.

President Barack Obama and President Lula da Silva delivered these remarks in Washington, DC

President Obama. Hello, everybody. Sorry to make you guys work on a Saturday.

The President and I just had a wonderful meeting. I have been a great admirer of Brazil and a great admirer of the progressive, forward-looking leadership that President Lula has shown throughout Latin America and throughout the world.

We have a very strong friendship between the two countries, but we can always make it stronger in areas like energy and biofuels, in the interest in increasing the standards of living in impoverished countries throughout Latin America, expanding trade relationships—you know, the President and I had a wonderful meeting of the minds.

And I'm grateful that he took the time to visit with us. We intend to have a host of meetings at a ministerial level in the coming days and weeks, both in preparation for the G20, to coordinate our activities to strengthen global economic growth; also in anticipation of the Summit of the Americas that will be taking place in April, so that we can have a proactive strategy that uses the strength of the U.S.-Brazilian relationship to strengthen ties throughout the hemisphere.

So I'm very grateful to him for taking the time to visit, and I'm looking forward to reciprocating in a visit to Brazil sometime soon.

President Lula. First of all, I'd like to say that we have strong, very good relations between the U.S. and Brazil.

Secondly, I mention the importance of President Obama's election, what it represents to the world and especially to Latin America.

The third issue that we discussed is the economic crisis the world is facing today. President Obama and myself are truly convinced that the economic crisis can be resolved by political decisions that could be made on the G20 meeting.

We need to restore credibility, vis-à-vis society as a financial system. We need to restore credibility and trust of the people, vis-à-vis the governments, and for that we need to make credit flowing and pouring in all countries; and also to facilitate trade flow amongst different countries. And we will work together to build a proposal for the G20 meeting. I believe that is extremely important. But all the leaders that will participate in the G20 meeting should be convinced that we have to make more quicker decisions.

That is to say the number of unemployed people are increasing in the world. And the unemployed of today is a social problem of tomorrow. Because we have to take care of this issue very seriously because we already see migrant workers facing many problems in different countries.

We also discussed other matters that are of common interest in the U.S.-Brazil relations. The possibility for us to do some joint work vis-à-vis Africa. We tried to establish a development policy for Latin America, and mainly to strengthen our relations and what has to do with biofuels. And I also believe that President Obama carries the responsibility and has a unique and exceptional position to improve the relationships with Latin America. And I told President Obama that I know it won't be easy, but we should try to reopen the Doha Round negotiations.

And I also told President Obama that in the public rallies that I have in Brazil that I tell to the Brazilian people: I'm praying more for him than I pray for myself. Because with just 40 days in office—to suffer and to face such a terrible crisis the U.S. is facing today, I don't want to be in his position.

President Obama. Well, I tell you what, you sound like you've been talking to my wife.

We're going to call on a couple of reporters. I'm going to start with Mark Knoller, at CBS Radio.

Q. Yes, Mr. President. The Chinese Premier is worried about the trillion dollars his government has invested in U.S. government securities. He wants a guarantee. Is there something you can say to him to allay his concerns?

And President Lula, your government also has investments in U.S. government securities. Are you worried about them, as well?

President Obama. Well, I think that there's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the United States. I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary.

And so I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States. And that is not just in U.S.-issued Treasury notes, but also in the private sector and the commerce and the industry that has made this the most dynamic economy in the world.

There was a question directed to President Lula.

President Lula. I believe that we do have a concern. What is the basic concern? As the money from the emerging countries, there's some flex to buy Treasury bonds in countries like the U.S., then we'll have less money in our domestic market, so that we can put to work industrial sector. This is a problem that we will have to discuss at the G20 meeting.

I say every day Brazil was the last country to be affected by the crisis. But we also have the possibility to be one of the first countries to resolve and get out of the crisis. We don't face any problem in our financial system; maybe we can face some problems with our exports and with a credit crunch. But the truth of the matter is that money has vanished. And if we don't get the credit supply flowing again, then yes, the crisis could deepen in our country.

So that's why I believe it's urgent to reestablish the credit supply in the world.

Q. I have a question for President Lula and a question for President Obama.

President Lula said that during their meeting they talked about energy, President Obama talked about a possible partnership for energy within the hemisphere. The question I have is can't this partnership get off-balance? Because there's a lot of interest in the future of Brazilian oil. Brazilians do not understand today how come that a fuel—that a clean fuel that is renewable fuel can't reach U.S. market because of duties, whereas the same product, essential clean fuel in the United States gets incentives. Where would be the balance between these two issues?

President Obama. Is that directed at me? Well, look, I think Brazil has shown extraordinary leadership when it comes to biofuels. And I've been a great admirer of the steps that have been taken by President Lula's government in pursuing biofuels and developing them. And this is an investment that Brazil has made for a very long time.

My policies coming into this administration have been to redouble efforts here in the United States to pursue a similar path of clean energy development. And I think we have a lot to learn from Brazil.

As I mentioned to President Lula, I think we have the potential to exchange ideas, technology to build on the biodiesel cooperation structure that we've already established. I know that the issue of Brazilian ethanol coming into the United States has been a source of tension between the two countries. It's not going to change overnight, but I do think that as we continue to build exchanges of ideas, commerce, trade around the issue of biodiesel, that over time this source of tension can get resolved.

President Lula. This is the very first meeting that we have between the Brazilian administration and President Obama's administration to discuss this issue. Actually, my answer is built in your question. I can't also understand while the world is concerned with climate change and with carbon emissions that bring greenhouse effect, (inaudible) fuel gets tariffs, and clean fuel also gets tariffs. I have discussed this with Angela Merkel, with Tony Blair when he was Prime Minister, with President of France, Sarkozy, with former President Bush.

I never expect an immediate answer. This is a process. As time goes by, Brazil is proving that biofuel is an extraordinary alternative. And slowly the countries will be convinced. And slowly other countries will join the biofuel effort. That's what I believe.

A seminar will be held in New York City on Monday, where I will attend, and this will be a strong issue that will be discussed there. I talked with President Obama about the possibility for us to build partnerships with third-party countries, especially a joint project with the African continent. And things will move forward as people start changing. No one can change overnight, in terms of their energy matrix. Thank God for 30 years Brazil has already control—technological control and know-how on this issue.

And when President Obama comes to visit Brazil I'm going to ask him to get inside a car that is run by a flex-fuel engine and he will feel very comfortable.

President Obama. I actually had a flex-fuel vehicle. But one of the problems here in the United States is, is that we don't have enough gas stations that have biofuels in them. So that's one of the areas that we need to change our distribution networks here in the United States.

We've got Jeff Mason.

Q. Yes, sir, right here. Mr. President and Mr. President, you mentioned the G20. Do you intend to work together on moves related to fiscal stimulus? Did you ask the President to join the side of the U.S. in pushing for fiscal stimulus over financial regulation?

And Mr. President, do you side with the Europeans or with the U.S. on that issue?

President Obama. Jeff, I'm glad you gave me the opportunity to address this. I don't know where this notion has emerged that somehow there are sides developing with respect to the G20. They're not emerging from Tim Geithner, they're not coming from Larry Summers, and they're not coming from me. So unless you have some secret source in the administration— if you will follow the track of this story line, it is completely contrary to what our policies are.

Look, this is not a either/or question; this is a both/and question. We do believe that it is important for all countries around the world to step in and figure out how we can ensure that we are compensating for the drastic contraction in global demand. We're not unique in that position. Gordon Brown feels the same way, as does President Hu in China. Kevin Rudd has taken similar steps in Australia. And the Europeans have taken some steps with respect to stimulus and increasing global demand.

Not every country is going to do the same levels. I think it would be useful if we have a international body that is—that is accounting for how much stimulus is taking place out there, just so that, you know, various foreign ministries can keep track of what's happening with respect to global demand.

But as I've said here in this country, and I will repeat in the G20, fiscal stimulus is only one leg in the stool. We have to do financial regulation, and nobody is going to be a more vigorous promoter of the need for a reform of our financial systems. I think most of those initiatives are going to be taking place in individual countries, but there's going to need to be coordination between the various countries.

And I've already spoken to my economic team, along with members of Congress, and I've said to the American people, we are going to be moving very aggressively to make sure that the systemic risks that exist right now, that we are dealing with those so that this kind of crisis will not happen again.

So I can't be clearer in saying that there are no sides. This is a phony debate that I think has been—has evolved over the last few days in the news cycle. We think that we have to take a whole range of approaches. Financial regulation is front and center in terms of issues that we want to deal with. We also think we've got to see worldwide concerted action to make sure that the massive contraction in demand is dealt with.

And then there are going to be other steps to deal with emerging markets, for example, and what are we doing to help them get access to credit; very poor countries, figuring out how do we make sure that their food supplies are adequately dealt with.

So there are going to be a host of issues that we have to deal with. But in my mind at least there is no conflict or contradiction between the positions of the G20 countries and how we're going to be moving forward. There's going to be differences in details. Those are being worked out right now. I expect to have a productive meeting.

Sorry to take so long on the answer, but, you know, Jeff always does this to me.

President Lula. That's not a problem, Mr. President—presidents talking too much. Because we all talk too much. It is very good that you should take into account the problem.

On April 2nd in London, the main leaders of the world will gather, and we cannot afford going to such a meeting just to discuss whom we should put the blame on. We have to sit in the roundtable and find a resolution to the crisis. We all know that we have to restore credit supply policies in the world. We have to have a special credit supply for the poorest countries and the developed countries. And we also have to strengthen international institutions like the IMF, the World Bank, and so on.

So we will attend that meeting to make decisions. We are in a large ship and water is leaking. Now is the time to fix the leaking and make the economy go back to the tracks. And there are two key words: Reestablish and restore credit in the world, and restore trust and confidence between—amongst the people. And then from there on we'll make the decisions. We can have some divergence at some time, but that belongs—it's proper to democracy.

I am confident that this crisis—it's a very delicate one—but at the same time it is an extraordinary opportunity so that we can prove for those that elected us that we are capable to cope with major issues. Every country has to go back and start investing in infrastructure, in housing projects, in education, in health care.

The bottom line is that what we need and I'm sure that that's President Obama's concern, too. And my own concern is to create jobs, to create incomes and consumption and that on the—that it will also—that will unfold and generate new development.

So I'm very much optimistic. There's no individual way out for a country (inaudible); that we have to make joint decisions. And that's why I will go to London to participate in this discussion.

Q. Good, thanks. You both have been criticizing—both of you criticized protectionism and warning people about the dangers of protectionism, especially in a crisis time like this one. However, Brazil refuses to make concessions that the U.S. thinks are important so that some progress can be done at WTO. At the same time, the U.S. adopts a stimulus package that prevents Brazilian businesses or companies to participate in projects that are financed by the stimulus package. Has there been any progress made in these two attitudes so that will give this whole discourse a practical tone?

President Obama. Well, we discussed during the course of our meeting, and we are going to have our—Foreign Minister of Brazil and the Secretary of State of the United States, Secretary Clinton, discuss these issues in more detail.

I think it is very important for all countries to recognize that trade is an important engine for economic growth. I think there's a natural tendency at a time of economic difficulty—people losing their jobs, businesses closing—to want to focus inward and ensure that any sacrifices are taking place somewhere else, as opposed to here at home, because people are already going through tremendous hardships. That's true in Brazil, that's true here in the United States.

But I think that it is important for us to understand that ultimately U.S. businesses will benefit from our exports, that imports from Brazil can actually provide us access to products and services that consumers want here in the United States. I think the same is true in Brazil, and the same is true worldwide. Our goal should be to at least not go backwards.

So, for example, the “Buy American” provision that was in our stimulus bill, my administration worked actively with our Congress to make sure that any provision in there did not violate WTO and will not be interpreted in a way that violates the WTO. And I'm sure that President Lula is going to be taking similar steps in Brazil to make sure that we are not moving in reverse when it comes to world trade.

It may be difficult for us to finalize a whole host of trade deals in the midst of an economic crisis like this one, although we have committed to sitting down with our Brazilian counterparts to find ways that we can start closing the gap on the Doha Round and other potential trade agreements.

So I'm optimistic that we'll be able to make progress. It may not happen immediately. In the meantime, we just have to make sure that we're sending a message to our respective countries that ultimately job growth, income growth, building our way out of this economic crisis, doesn't involve trying to draw a fence around each respective country, but we all have to rise together.

President Lula. Just one thing to mention—there's a certain justice that you made in your question towards me. Brazil has undertaken an immense effort so that we can reach the Doha Round negotiation agreement still during the Bush administration. Why didn't we manage to close the deal if everybody was agreeing to do so, and there's only a minor divergence between the U.S. and India?

I imagine that that happened because of electoral reasons. That's why we didn't manage to reach a deal at the Doha Round—because Brazil made concessions on industrial products, and Europe and the U.S. almost managed to reach market access on agriculture for the emerging markets. And at the end, we stayed only with two issues, one agricultural issue in India, and the other one was the subsidies and the agriculture in the U.S. I believe that now in the midst of this economic crisis, it's more difficult for us to conclude and reach a deal at the Doha Round. But at the same time, I believe that to conclude the Doha Round could be one of the components to relieve the poorest or less developed countries in the world vis-à-vis this crisis.

The U.S. and Brazil trade balance is around $54 billion. The U.S. exports $26 billion to Brazil, and Brazil exports to the U.S. around $28 billion. So it is clear for the size of the two countries, we don't have much trade flow in our trade balance between the two countries. What is the issue? What happens today, every country just wants to sell. Every country wants to engage in trade surplus. It's a two-way street. It's not possible to happen— (inaudible)—you sell and buy to keep the balance.

And we need to strengthen this idea because protectionism now, in my opinion, would aggravate the economic crisis if we stop tapping the water in international trade. It's like taking out a fish out of water—and then you'll lack water. So now we have to bring more dynamics. On the one hand, our domestic economies, and on the other hand we have to help to make more (inaudible) credit for trade, for international trade. I think it's—this is much more than (inaudible).

I hope that the U.S. and Brazil can mature their thinking and then we can come and arrive on April 2nd in London, and together with other countries we can present to the world a solution. Financial system, yes, it needs regulation—we cannot afford that. What will be the size of the regulation? Let's discuss it in London. I'm very optimistic.

President Obama. I'm always optimistic and I've had a wonderful visit with the President, and I'm looking forward to seeing him in Brazil.

Q. When?

President Obama. Well, you know, we—we haven't gotten the days yet. I will tell you that because I'm somebody who grew up in Hawaii, I felt it was very important that I at least go to Rio, where I understand the beaches are pretty nice.

Q. Can you start at the Amazon?

President Obama. You know, I would love a trip to the Amazon. I suspect that the Republican Party would love to see me travel through the Amazon and maybe get lost. But I'm not sure what—

Q. We won't let that happen.

President Obama. We don't know how long we'll be able to stay, but this will just be the first visit. Hopefully it will be visits that are repeated in the future. So—but we've had a wonderful visit. I can tell that the relationship between our two countries is only going to get stronger.

Thank you, everybody.

Secretary Hillary Clinton and Secretary Patricia Espinosa delivered these remarks in Mexico City, Mexico

Moderator. Good afternoon to all of you. We have here with us today State Secretary of the United States, Mrs. Hillary Clinton, and the (inaudible) First Ministry of Mexico, Ambassador Patricia Espinosa. Both will be conveying an initial message right now, and then after that we shall go into the question-answer period.

Foreign Minister Espinosa. Good afternoon, friends, and the media. Before anything else, I would like to thank, in a very special fashion, State Secretary Hillary Clinton, for having accepted my invitation to visit Mexico. I welcome the fact that this is a meeting taking place a few weeks after she took office, Department of State of the United States.

Your presence in Mexico has a special importance, since this is the first trip to Latin America, a little before President Barack Obama will also be visiting Mexico. After a very intense agenda of activities in Mexico City today, Secretary Clinton will be traveling tomorrow to the city of Monterrey, where she—where I will be having the pleasure of being with her. And I would also like to say that, as you know, today Secretary Clinton has made a courtesy visit to President Calderón, where they discussed multiple topics of the bilateral agendas; for instance, migration, trade, competitiveness, border development, and security. It was truly an extremely fruitful conversation; a very interesting conversation they held, and that's the reason for our being delayed a few minutes. And we would like to thank you for your understanding, and thank you also for being here to be with us in this press conference.

In the dialogue we held this morning with Secretary Clinton, we have coincided on the importance of the topic related to migration, and we've also coincided that this is a key issue that unites our two countries. We are going to be working together. We're going to be working together in the following years so that the migration phenomenon may be a phenomenon that will be benefiting both of our nations.

In highlighting our full respect for the United States legislation and the sovereign process of that country and the legislative process of that country, I told Secretary Clinton the concern of the Mexican Government due to the situation that our co-nationals are facing in the United States. And I also highlighted the importance that we give the legal framework of migration issues so that it will respond to the migration reality and the need to change the climate that Mexicans now live in the United States.

The bilateral agenda between Mexico and the United States is a very broad agenda, and in them, the economic issues have, of course, particular importance, especially today in this context of economic crisis at the international level. We've coincided as well in this environment on the need of concentrating our efforts on being able to have our regional competitiveness increase as a means to promote the well being of our respective countries. Here, I also wanted to highlight the will to work together, to work together so that we can accomplish conditions that will allow for the full compliance, commitment that we have taken upon ourselves in NAFTA, as countries of NAFTA, with certainty in each one of the different provisions, including the topic related to motor transportation. The border has been a key aspect, a key issue in our conversations. We've also expressed our willingness to invest with determination on border infrastructure in short, medium term, so that we can integrate, and thus be able to turn the border into a pull for competitiveness, to increase competitiveness between our two countries.

We also talked about the importance of cooperation and the maturity we have been able to get in our fight against organized crime, as well as the convenience and the importance of continuing, and in a more profound manner, the implementation of the Merida Initiative. We have said that the high-ranking level group of the Initiative that met for the first time in Washington last year will be holding this year as well another working session, if possible, if the agenda so allows it, with all the participants here in our country. And the different working groups, the coordination groups that are working on security issues, the groups we've been able to create greatly reflect the bilateral character of our focus based on the principle of co-responsibility. And later on, in a working session with the attendants in this Foreign Ministry and some members of the cabinet in terms of security issues, we're going to go into a greater detailed discussion on this.

We also had the opportunity of talking about the world situation and we coincided on the role that our countries are now called to play in the multilateral fora in a particular manner, in the United Nations, and, of course, especially also now during our membership in the Security Council of the United Nations as non-permanent members.

And we also spoke about the participation of Mexico in the relevant fora; for instance, the case of G-20 and the G-8, G-5 dialogue. And in this sense, we also agreed to continue increasing our collaboration and dialogue within the framework of those fora. And Secretary Clinton will continue with a very intense agenda that shows her interests for Mexico, and the very broad gambit of issues that unite our two countries, in terms of education, for instance, culture, social development issues, entrepreneurial and the environment, of course.

This visit is and has been a—it is, today, although she will still be with us in Mexico for approximately 24 more hours, a little bit over 24 more hours—but it has already been, this visit, a very successful visit. And let me also say that the Governments of President Calderón and President Obama will coincide in the following four years, and that is why both governments, both administrations are determined to consolidate our relationship as a true, true partnership at the strategic level, a strategic partnership.

I would now like to give the floor to State Secretary Hillary Clinton, who does not require really any type of introduction, because she is one of the most important women of the political life of the United States, and also a very close friend of Mexico. Mrs. Clinton, you have the floor. Muchas Gracias.

Secretary Clinton. Thank you very much, Secretary Espinosa. I appreciate that kind introduction, and I'm also grateful for your invitation to visit Mexico for my first stop in Latin America as Secretary of State.

The Secretary and I had a very productive conversation about a broad range of issues. As she has just described, we are looking forward to working together in the months ahead on many of these issues on behalf of our presidents and our countries.

President Calderón has demonstrated great courage and dedication in working to shape the future of our continent and our hemisphere. And I bring greetings from President Obama, who looks forward to coming himself to Mexico in just a few weeks time.

Our two nations know each other very well, and with good reason. This is one of the most important relationships that exists between any two countries in the world. We are part of the same family, we share this continent as our common home, and we will inhabit a common future. That is why the United States and Mexico need a strong and sustained partnership, one based on comprehensive engagement, greater balance, shared responsibility, and joint efforts to address hemispheric and global issues.

We need such a comprehensive agenda in order to make progress on the economy, on energy and climate change, on security, immigration, education, health, and other areas that are of great importance to our two countries and our two peoples. During this trip, we will be discussing many of these topics. And I am pleased to announce several measures that will help strengthen our partnership with Mexico and move us both closer to our shared goals.

First, the global financial crisis has reinforced how closely our economies are linked. If there was any doubt before, there should be none now. We rise and fall together. We know that commerce between our nations is and will be a crucial part of our economic recovery. I want to thank President Calderón, Secretary Espinosa, and the Government of Mexico for the important role that you are playing in helping to shape the G-20 agenda.

In order to facilitate legal trade and travel between our nations, the Administration has set aside $720 million dollars for modernizing border crossings. That money will help encourage commerce and travel by making the gateways between our countries more efficient.

I also want to speak to the issue of security.

Now, our relationship is much bigger than any issue, including this one. Yet the criminals and kingpins spreading violence are trying to corrode the foundations of law, order, friendship, and trust between us and that support our continent. They will fail. With bold leadership from President Calderón, we are working together to provide the people of our nations with the security they deserve. Under the Merida Initiative, a program conceived by Mexico and embraced by the United States, we have now committed hundreds of millions of dollars to training and equipping Mexican law enforcement, and strengthening Mexico's judicial system and democratic institutions.

Part of being a good partner is being a good listener. The Mexican Government made clear to us its urgent need for additional helicopters to take on the drug traffickers, and we are responding. And I am pleased to announce that the Obama Administration, working closely with Congress, intends to provide more than $80 million in urgently needed funding for Blackhawk helicopters for Mexican law enforcement. These aircraft will help Mexican police respond aggressively and successfully to the threats coming from the cartels.

We are also announcing the creation of a new bilateral implementation office here in Mexico, where Mexican and U.S. officials will work together, side-by-side, to fight the drug traffickers and the violence which they spread. We realize that drug trafficking is a shared problem. I have discussed with the Secretary and with the President what the United States can do to reduce the demand for drugs in our own country, and to stop the flow of illegal guns across our border to Mexico. And I reported to them on the major steps that our government announced yesterday.

Coming to Mexico soon will be Secretary Napolitano and Attorney General Holder to discuss in greater detail what we will do to reduce gun smuggling from the United States to Mexico, and other measures including equipment and surveillance that will help address violence on both sides of the border.

We are confident that with the courageous efforts undertaken by President Calderón, the Government of Mexico, the military and police of Mexico, and the people of Mexico that the efforts undertaken to strengthen this country's response, to stamp out corruption, to build strong intuitions, will succeed. And we will stand shoulder-to-shoulder with you as you undertake all of these actions.

Even as we focus on these urgent challenges, let us not forget that our relationship is far greater than any threat, and that our people share an unshakable bond. Mexico has supported the United States at many critical moments in our own history. I will never forget, and I want to thank the Government of Mexico and the people of Mexico, for the help you gave us after Katrina. The Mexican army was there to help provide food and support to people who had been evacuated from that terrible natural disaster.

I thank you for the help that you give on a regular basis, with wildfires in California or tornado damage or flooding in Texas. We have an ongoing, absolutely important, unbreakable bond, and that's what I want to reiterate today.

This is a significant moment in the history of our continent. Yes, we do face many serious challenges, and we can't just talk about them; we must act to meet them. But this is a moment of great opportunity. Tomorrow, I will be visiting a state-of-the-art clean energy plant in Monterrey, a plant that, frankly, is more advanced than most, if not all, of the plants we have in the United States. I will be witnessing the signing of agreements between the University of Texas and Universities here in Mexico to further and deepen our energy partnership. I will be meeting with indigenous students who are part of exchange programs here in Mexico, with families and institutions in the United States. So let us build on this cooperation, on comprehensive engagement, balance, and, yes, shared responsibility for a new century of cooperation and progress together that will unleash the boundless potential of the people of Mexico and the United States. Thank you so much, Madame Secretary.

Q. Madame Secretary, I'm going to ask several questions made by the press here, so I would just ask you to bear with me. First of all would be President Obama said yesterday that if the plan to secure the border fails, the U.S. is ready to take further steps. What are these further steps? Does that include a militarization of the border, or even a U.S. military presence in Mexico? That would be the first.

The second would be will the U.S. take any steps to prohibit the sales of automatic weapons to other countries, and is the Obama Administration ready to tackle the second amendment in the U.S.?

And finally, the third question would be about the helicopters. The Mexican Government has actually bought helicopters in France because of the delays faced with the Foreign Military Sales Program. Could you elaborate on that?

And finally—. Sorry, a lot of questions. The Department of Defense announced that it's going to help the Mexican Department of Defense with $13 U.S. million dollars to liberate areas controlled by drug trafficking corporations here in Mexico. Do you believe that parts of Mexico are under control of the drug trafficking organizations? Thank you.

Secretary Clinton. Well, thank you very much. We have made a commitment to assist the Government of Mexico in its struggle against the drug traffickers, and we have accepted that this is a co-responsibility. We know very well that the drug traffickers are motivated by the demand for illegal drugs in the United States, that they are armed by the transport of weapons from the United States to Mexico; and therefore, we see this as a responsibility to assist the Mexican Government and the Mexican people in defeating an enemy that is committing violence and disruption that is very harmful and which is something that all people of conscience should attempt to defeat.

What the President said is a shorthand for our commitment. We have not made any decisions, as was announced yesterday on National Guard along the border. We are working to provide more support for the Mexican military, the Mexican police, as well as other governmental institutions, and we will be guided by what the Mexican Government believes is working, what is appropriate, and how best we can proceed to support Mexico.

We believe that we have announced a plan to use every tool at our current disposal through administrative actions to track illegal guns, to arrest and punish those who are trafficking in illegal guns, to share more information with the Mexican Government so that they can also track and seize these guns. Obviously, I am someone who supported the assault weapons ban which was passed in 1994, but it was passed with an expiration date and it expired ten years later. I, as a senator, supported measures to try to reinstate it. Politically, that is a very big hurdle in our Congress. But there may be some approaches that could be acceptable, and we are exploring those.

Certainly, the export of assault weapons and illegal weapons is something that has grave consequences for Mexico. And we're going to look at whatever is possible that we can do ourselves within the Administration, and we will explore with Congress other steps to take.

With respect to the helicopters, I am well aware that our long process of approval was cumbersome and challenging for the Mexican Government. We're going to see what we can do to cut that time. We want to provide these helicopters to the Mexican Government. We think they are a necessary and important tool in the fight against the drug cartels and criminals. It's also suggested to us we ought to look at this more generally, that it takes too long from a decision to delivery, and we'll see what we can do to shorten that.

I believe that the fight against these drug cartels is something that the Mexican Government is making great progress in expanding and demonstrating the strength of the response, and I don't believe that there are any ungovernable territories in Mexico. But I remember very well when we had such a crime wave 15, 20 years ago. There were many parts of cities in our country that people didn't feel safe going to, that they didn't feel safe leaving their homes. People felt imprisoned because of the criminals on the streets of America. So we know what it is to be intimidated by criminals. And we fought very hard to lower our crime rate, to disarm our criminals, to improve our policing, improve our judicial responses. And we see it as a similar struggle to what Mexico is now engaged in. So are there neighborhoods in Mexico where people are afraid to walk, as there were and are still even in my own country? Of course. But that's why it's important that we join together to defeat the violence and the criminal gangs so that people here in Mexico can feel safe in their own homes, their own neighborhoods, their businesses. And that's what President Calderón and the government is attempting to achieve.

Q. Thank you. Secretary Espinosa, I was wondering if you could comment on—does Mexico—how does Mexico feel about the steps that the U.S. has announced? Does this meet your expectations or not? And a second question. You have rejected the idea of Mexico as a failed state. Are there any parts of Mexico where you would not feel comfortable taking Secretary Clinton? Thank you.

Foreign Secretary Espinosa. Well, first of all, I would like to stress that we are engaged in this really broad cooperation and the Merida Initiative has really meant a qualitative change in our cooperation in terms of the fight against drug trafficking and in general against organized crime. So—and we are very conscious that this is a process where each of us—and this is how the Merida Initiative was conceived—involves actions that each of us has to take on its own territory and many measures that we can take through cooperation that we can—the objective is really to strengthen the capacity, the capabilities of the Mexican state to face this common threat.

So in that sense, we recognize. And I have stated yesterday also in some press conferences that I had, the actions that were announced yesterday go very much along the line of the kind of cooperation that we have been trying to build upon. We have raised the issue of trafficking in arms from the north into Mexico many times. We have raised also the issue of bulk cash coming into Mexico and going into the hands of criminals.

So we are really—we recognize very much these efforts that are now being undertaken by U.S. authorities, and we are also looking forward to receiving Secretary Napolitano and the Attorney General in the coming days, where they will meet with their counterparts and where they will continue to go deeper into the consideration of all these issues and how we can improve. Of course, there's always room for improvement. There is room for improvement here, there is room for improvement in the U.S., and there is room for improvement everywhere.

I have rejected also the idea that Mexico is a failed state, and I have stated that it is very clear for anybody who comes to this country, for any person who lives here, that this is a democratic country with strong institutions, with very strong leadership, where the citizens can really have a normal life every day. Of course, like in many parts of the world, and Secretary Clinton was just referring to some situations that were faced in U.S. cities, in some cities some time ago. As is normal, you have to be careful. You have to take precautions. You have to be very conscious of some risk and some possible situations that may arise. But absolutely, we are—I think there is no reason why anybody could say that Mexico is a failed state and that institutions are not working properly.

I would like Secretary Clinton to come very often to Mexico, and I would like to take her to many, many very beautiful places that we can share here in our country. Of course, there are some places where I would not take her, and I believe she would not take me to some places in her country, either.

Secretary Clinton. Well said, Madame Secretary. Although I can't resist saying, you know, my husband and I spent our honeymoon in Mexico, and we've come back many times on both personal and professional, official occasions. And I have such a deep regard and affection for Mexico that I am eagerly accepting the Secretary's invitation to come back often. So that is one of the ways we're going to deepen and broaden our cooperation.

Foreign Secretary Espinosa. Thank you.

Q. Buenas tardes, Secretary Espinosa.

Secretary Clinton, I'll try to be very brief. And I'm hoping you could give us some more insight or be more specific on the meeting and the conversations you had with President Felipe Calderón earlier today. And then also, I would like to know if you could give us the name of the new U.S. ambassador to Mexico—and when he will be coming.

And finally, considering the high expectations everybody has on this new Administration in the United States, could you send a message to undocumented Mexican migrants who are still seeing their human rights violated in the U.S. and who are still suffering or are victims of mistreat in the United States? Secretary Clinton, if you may.

Secretary Clinton. Yes. We had a very broad, productive conversation with President Calderón. It covered certainly the economic situation that both of our countries are facing, our preparations for the G-20 meeting in London. President Calderón and the Mexican Government have been leaders in pushing for replenishment and reform of international financial institutions, like the IMF. We discussed energy and climate change, an area that both of our presidents have great interest in, and which we all know must be addressed. And I hope that there will be a concerted effort to pursue some of the ideas that President Calderón has presented that find a great amount of interest on the part of our Administration. And that will be on the agenda for the meetings between the two presidents.

We talked about the upcoming meeting. We're very excited about it. I know that President Obama is looking forward to it. We talked about the Summit of the Americas that we will both be attending shortly after that meeting. And we certainly talked about the security issues, the Merida Initiative. It was a broad, open conversation, which I appreciated greatly.

Yes, we are going to be naming a new ambassador. We cannot do that on this trip, but there will certainly be an ambassador. And we're very much looking forward to that, although I have to say, it's been a real—a really positive experience for our chargé to be representing us leading up to this trip, and I appreciate her efforts.

And finally, with respect to immigration reform, President Obama remains committed to comprehensive immigration reform. It is and will be a high priority for him and his presidency. We are also taking some actions through administrative changes and looking at the situation that our Administration inherited. So we are certainly sensitive to and understanding of the great concern toward your co-nationals in the United States. We have long said that we are both a nation of immigrants and a nation of laws, and therefore we believe strongly that there have to be changes made, and we hope we'll be able to pursue those in the coming months.

Mr. Wood. The last question is from Warren Strobel from McClatchy Newspapers.

Q. Thank you very much. First for the foreign minister, you mentioned the trucking issue and NAFTA. Congress recently voted to cut off funds for the pilot trucking program. The Obama Administration signed that law. Are you worried about a rising tide of protectionism in the United States—a rising tide of protectionism in the United States as the U.S. goes through an economic recession?

And really quickly for Secretary Clinton, if she would entertain a question on another topic. There's news today that North Korea has put a missile on the launch pad. I'm not asking you to confirm such a report, but do you see this launch now as inevitable, and what will the consequences for North Korea be?

Thank you very much.

Foreign Secretary Espinosa. Well, on the first question, I would like to say that a very broad consensus has evolved even from the Washington meeting of the G-20 in the sense that it is important to avoid protectionism, to not go into the temptation of protectionism, because this was— this proved not to be a good solution to the crisis in the '30s. There's many reasons, but regarding a scenario of a big crisis like the one we're facing, this was very clearly one of the reasons why recovery was so slow and it took such a long time.

So in this respect for us (inaudible) Mexico (inaudible) conversation President Calderón and President Obama when they met in January. The issue of keeping (inaudible) need to avoid protectionist measures, which is an issue that has the utmost relevance. This issue which concerns us now (inaudible) problem is the problem that has been a typical problem among our countries. It has been present for a long time. It is not referring only to this point in particular. But here, what I think we should highlight is the fact that both governments have expressed a clear political will to work together in order to find a solution that will benefit both countries and that will allow us to comply with the obligations that we have accepted.

Secretary Clinton. We are working very hard to achieve a resolution of this issue, and I appreciate the points that the Secretary made concerning the dangers of protectionism. I believe that she is accurate historically and it is certainly true today that we have to get the global economy moving, we've got to get jobs being created again, we have to get incomes rising. And so we are committed to working this through, and I have told the Secretary that.

With respect to North Korea, we have been absolutely clear the intention, as stated by the North Koreans, to launch a missile, for any purpose, is a provocative act which we believe violates Security Council Resolution 1718. We have made it very clear that the North Koreans pursue this pathway at a cost and with consequences to the Six-Party Talks, which we would like to see revived and moving forward as quickly as possible, and we intend to raise this violation of the Security Council resolution—if it goes forward—in the UN. And coincidentally, Mexico will be chairing the Security Council starting in April. We have a very broad agenda that we intend to work with—issues like Haiti and others are very important to both of our countries. But this provocative action in violation of the United Nations mandate will not go unnoticed and there will be consequences.

Thank you.

Secretary Janet Napolitano delivered these remarks in Washington, DC

Secretary Napolitano. Chairman Lieberman, Senator Collins, and members of the Committee: I appreciate this opportunity to testify about the Department of Homeland Security's role in the U.S. effort to combat the campaign of violence waged by drug cartels in Mexico, and about the Department's efforts to keep Americans safe from this security threat.

The violence in Mexico is not only an international threat. It is a homeland security issue in which all Americans have a stake. America has a significant security stake in the success of Mexico's efforts against drug cartels. The cartels that Mexican authorities are battling are the same criminal organizations that put drugs on our streets and use violence as a tool of their trade. Illegal drugs, money, and weapons flow both ways across our border and inextricably link the United States and Mexico in our efforts against drug cartels. The two nations share a nearly 2,000 mile-long border, billions of dollars in trade, a commitment to democracy, and the need to prevail against the transnational threats of terrorism and organized crime. Threats to the United States come from every part of the globe, and the security situation of our next-door neighbor deserves our utmost attention.

At DHS, we are not in a wait-and-see mode. We are taking action now to aid the Mexican government in addressing this threat and to secure our country. DHS is bolstering the resources dedicated to this mission and taking a number of new steps. America has several roles to play: First, we must provide assistance to the Mexican government in its efforts to defeat the drug cartels and thereby suppress the flare- up of violence in Mexico. Second, we must take action on our side of the border to cripple smuggling enterprises. Third, we must guard against and prepare for the possible spillover of violence into the United States. The Department of Homeland Security is working with the Departments of State, Justice, and Defense, as well as with border states and border communities, on all of these fronts.

The Violence in Context

Those who have worked on issues related to our southwest border know that incidents of transnational violence are, unfortunately, not a new phenomenon. But what is occurring in Mexico now is violence of a level that we have not seen before.

The spike of cartel violence in Mexico is primarily a reaction against the efforts of the Mexican government to take on the cartels and battle the organized crime, corruption, and violence that comes with the illegal drug trade, as well as a result of competition among the traffickers themselves to control constricted territories and smuggling routes. The cartels' backlash against the crackdown—though brutal and deeply troubling—is predictable. They seek to protect a very lucrative criminal livelihood. Mexican drug cartels have used violence as a tool of their trade for some time, but recent violence in Mexico between drug cartels—and, particularly, violence against Mexican officials by the cartels—has risen to unprecedented and disturbing levels. About 6,000 drug-related murders occurred in Mexico last year alone, more than twice the previous year's total, which was also a record. These included the deaths of 522 military and law enforcement officials.

We are seeing limited increases in drug-related violence in the United States. This has come mainly in the form of cartel operatives committing violence against one another, the kidnappings of those involved in the drug trade or their family members, and assaults on Border Patrol agents by those attempting to bring illegal drugs into the country. Mexican drug cartels maintain drug-distribution networks, or supply drugs to distributors, in at least 230 American cities, leading the Justice Department to call Mexican drug cartels the “greatest organized crime threat to the United States.”[1]

It is important to note that any increase of cartel-related crime we have seen in the United States is not the same kind, on nearly the same scale, as in Mexico. While kidnappings and weapons violations have risen in cities close to the border such as Phoenix, at the same time, most major U.S. cities in border states saw declines in their murder rates in 2008. For example, the police department of El Paso, Texas reported 17 murders in 2008, while over 1,600 drug-related deaths occurred that year directly across the border in Ciudad Juárez.[2]

The Department of Homeland Security works to fight border crime every day. U.S. Customs and Border Protection (CBP) interdicts shipments of smuggled contraband and prevents dangerous people from entering the country. U.S. Immigration and Customs Enforcement (ICE), by conducting investigations, cracks down on smuggling rings and arrests border criminals. The U.S. Coast Guard is heavily involved in drug interdictions at sea.

I have fought border crime for the past 16 years in my posts as Governor, Attorney General, and U.S. Attorney in the border state of Arizona. I have hiked, driven, flown in a helicopter, and even ridden horseback over our southwest border. While border crimes are not new to those of us who are from border states, they are troubling, which is why we are bolstering DHS's ability to go after border criminals. For example, DHS is redeploying assets in support of border enforcement—doubling the number of ICE agents assigned to the Violent Criminal Alien Sections (VCAS) located in the five Southwest Border Field Offices, from 51 agents to 101. The VCAS works in coordination with U.S. Attorney's Offices to prioritize the felony criminal prosecution of recidivist criminal aliens.

While the United States has not witnessed a spike in border violence to nearly the same extent Mexico has—and while we are bolstering our efforts against spillover violence—we do not discount that we could see an increase in some crimes.

Accordingly, United States has a large security interest in Mexico's success in its battle against the drug cartels. The government of Mexico is not backing down from its efforts to rein in the smuggling cartels, and is instead pushing even more aggressively to strengthen security and the rule of law in Mexico. This effort touches every American community. Assisting in the fight against Mexican drug cartels is a critical step in fighting the drug trade in big cities and small towns across the nation. Another reason combating cartel violence on the Mexican side of the border is critical is that many Americans and Mexicans who live in border communities cross back and forth regularly—to work, to shop, or to visit family. Fear of the violence occurring in Mexican border cities has reduced crossings that are important to the lives of Americans and to the economic health of American border communities. The dynamic of the border region makes violence on one side of the border a pressing concern on both sides. The transnational nature of this threat clearly makes addressing the violence in Mexico a top priority in securing the United States.

DHS Efforts

The Department of Homeland Security is not waiting for the problem to worsen—we are taking action on numerous fronts to aid Mexico in its efforts against cartels and secure America against this threat. DHS has a unique set of statutory authorities and operational capabilities in identifying, interdicting and investigating criminal activity at our borders. DHS's combination of law enforcement and border management authorities place it in a position to address the causes and effects of border violence.

As I mentioned, the mission to address the security threat of drug cartel violence in Mexico is composed of several roles America must play. For one, we must provide assistance to the government of Mexico in its push to defeat the smuggling cartels. This is a long-term effort that means building partnerships among law enforcement agencies, providing training and equipment, engaging Mexican security officials about common threats, and ensuring our efforts are not undermined by corruption. Further, we must fight smuggling on our side of the border, which means ramping up our enforcement capabilities both at the border, and make greater use of intelligence against these criminal enterprises. We also must prepare for possible, if even in some cases unlikely, eventualities that could emerge from Mexico's drug war, including increased spillover violence into the United States.

In my testimony to the House Committee on Homeland Security on February 25, I outlined that securing America from this threat relies upon four interrelated actions: coordinating the federal response with state and local stakeholders and including local law enforcement in the United States in our efforts; building partnerships and leveraging existing relationships with Mexican law enforcement; combating the smuggling of illegal weapons into Mexico; and planning for worst-case scenarios. Working with the Departments of Justice, State, and Defense, DHS is strengthening its actions in each of these areas.

Including state and local law enforcement

The partnership of state, local, and tribal law enforcement in the border region is essential to securing our nation against the threat of cartel violence. They have significant roles to play both in addressing the current violence and preparing for scenarios where violence in Mexico could further strain the United States.

Law enforcement agencies at the state, local, and tribal level have long fought border violence. They have deep operational knowledge of the border region. Confronting a multifaceted threat like border violence means federal agencies must constantly collaborate with our state and local partners, sharing resources and information.

With this in mind, DHS works collaboratively with state and local governments in a number of ways—though more remains to be done. The Department created the Homeland Security Intelligence Support Team at the El Paso Intelligence Center in 2007 to improve information sharing among federal agencies and with state and local partners. ICE is a member agency of the Organized Crime Drug Enforcement Task Force (OCDETF) Program, and actively participates in multi-agency OCDETF investigations of Mexican drug trafficking and money laundering organizations.

In 2006, DHS also created Border Enforcement Security Taskforces (BEST), which are led by ICE. BEST is not just a program, but an innovative model for collaborative law enforcement. The 12 BESTs that currently exist (of which eight are on our southwest border) include the participation of ICE, CBP, the U.S. Coast Guard, and the DHS office of Intelligence and Analysis (I&A) on the DHS level; the Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Federal Bureau of Investigation (FBI), and U.S. Attorney's offices on the Justice Department level; and state and local law enforcement agencies. Mexican law enforcement agencies also participate in BEST (see: Partnership and interaction with Mexican law enforcement), and the government of Mexico has agreed to provide representatives to every BEST team on the southwest border.

The BEST model has been successful: DHS and its partners have cracked down on arms trafficking, human smuggling, bulk cash smuggling, and narcotics smuggling organizations. These efforts have disrupted the ability of the cartels to cause violence in the United States and Mexico. Since July 2005, the BESTs have been responsible for 2,034 criminal arrests, 2,796 administrative arrests, 885 indictments, and 734 convictions. In addition, BESTs have seized approximately 7,704 pounds of cocaine, 159,832 pounds of marijuana, 515 weapons, 341,345 rounds of ammunition, 745 vehicles, and $22.7 million in U.S. currency and monetary instruments.

The successes of the BEST model demonstrate that we should be doing more to use this collaborative approach to tackle border crime. On this front, DHS will shift investigators to the taskforces and double its efforts and increase the number of DHS agents working on BESTs from 95 to 190. This will greatly expand our ability to work with local law enforcement on cartel-related crime occurring on our side of the border.

In addition to BESTs, CBP has also overseen and developed the implementation of Border Violence Protocols. On a local level, the protocols have led CBP to institute monthly meetings between CBP, the Mexican government, and local and state officials to foster cooperation. CBP has added eight Law Enforcement Tactical Centers (LETCs), which are central points of information-gathering for local law enforcement to share intelligence with CBP. Additionally, the DHS Office of Counternarcotics Enforcement is co-leading, along with the Department of Justice, an interagency effort to update the Southwest Border Counternarcotics Strategy. That strategy directs the coordination of counter-drug and border security initiatives to address the drug trafficking threat while enhancing overall border security. The Strategy includes efforts to improve coordination and support among federal, state, local, and tribal authorities.

In addition, DHS will make up to $59 million available in Operation Stonegarden funding to enhance state, local and tribal law enforcement operations and assets along the border. Changes include expanding the scope of current Operation Stonegarden funds to pay for additional law enforcement personnel, operational overtime expenses, and travel or lodging for deployment to the southwest border.

As we work to bolster intelligence sharing and joint operations between DHS and state, local and tribal law enforcement along the southwest border, we also must completely integrate these levels of government into scenario planning. When spillover violence occurs, state and local law enforcement—not federal agencies— are the first responders. DHS has contingency plans in place for a significant increase in spillover violence (see: Planning contingencies for worst-case scenarios), and the first part of that contingency plan involves our support of state and local first responders in the event of spillover violence. DHS will continue to work with state, local, and tribal law enforcement—as well as interagency partners such as the ATF and DEA—as the threat of cartel violence continues to evolve, so we can ensure that U.S. plans address the reality in border communities and are fully integrated with state and local response plans.

As you know, one of my major priorities as Secretary is to improve DHS partnerships with state, local, and tribal governments across the board. I should also note the same is also a priority of Congress and the Administration, which recently dedicated $2 billion to the Byrne- Justice Assistance Grants program and $1 billion to the Community- Oriented Policing Services (COPS) grant program through the Department of Justice. These two programs are critical to aiding local law enforcement, and the strengthening of them will have an effect on the ability of state and local law enforcement agencies on the border to improve their capabilities.

DHS will continue to work to improve our partnerships with state, local, and tribal law enforcement in all respects, especially as related to border violence.

Partnership and interaction with Mexican law enforcement

Assisting Mexico in its battle against drug violence requires strong coordination with Mexican law enforcement to ensure that Mexico and the U.S. are operating together in combating this transnational threat. DHS is engaging with Mexican authorities on a number of levels that are making our efforts more successful.

The cornerstone of U.S.-Mexico security cooperation is the Mérida Initiative, led by the Department of State. DHS is an enthusiastic partner in the Mérida Initiative. From the DHS perspective, Mérida is a platform to work more cooperatively with regional partners on addressing security threats and provides ways make America safer by developing regional security partnerships. We anticipate the largest DHS role under Mérida will be for CBP to aid Mexican authorities in adopting nonintrusive inspection equipment. This equipment will help Mexican authorities screen for illegal substances and goods—including weapons—that are being smuggled into that country. DHS has a strong relationship with the State Department, and we look forward to building that relationship further and discussing with them, the Department of Justice, and other stakeholders ways that the Mérida Initiative could be strengthened.

DHS has a broad range of capabilities that present important opportunities to assist Mexico in confronting security threats. DHS has expertise in drug and weapons interdiction and combating bulk cash smuggling; maritime security; the gathering, sharing, and analysis of intelligence; conducting investigations; and the development and implementation of security technologies—all areas where DHS currently assists Mexican authorities in their battle against drug cartels, and where DHS is broadening its collaboration.

These partnerships take place under the aegis of the Mérida Initiative as well as outside it. DHS components such as CBP, ICE, and the U.S. Coast Guard have relationships with their Mexican counterparts and work with them to disrupt drug trafficking organizations. These relationships will be strengthened by Mérida's support for bilateral information sharing, law enforcement training, and interdiction efforts.

ICE's Border Liaison Officer (BLO) program allows ICE to more effectively identify and combat cross-border criminal organizations by providing a streamlined information- and intelligence-sharing mechanism. The BLO program creates an open and cooperative working relationship between the U.S. and Mexican law enforcement entities.

ICE currently partners with the government of Mexico on Operation Armas Cruzadas, which cracks down on arms smugglers (see: Stopping illegal weapons smuggling into Mexico). The ICE Attaché office in Mexico City has coordinated the establishment of vetted Special Investigative Units of Mexican officers that work with ICE special agents in Mexico to investigate and prosecute border crimes such as smuggling. Mexican agents are involved in DHS's Border Security Enforcement Taskforces on the Southwest border, to great effect (see: Including local law enforcement). Since August 2005, CBP has worked closely with Mexican officials on Operation Against Smugglers Initiative on Safety and Security (OASISS), a bilateral alien smuggler prosecutions program which enables both governments to share information and prosecute smugglers for crimes committed in the border region. We expect OASISS will be further strengthened by the Mérida Initiative. DHS and the government of Mexico also have a government-to-government agreement on science and technology for homeland security.

DHS is strengthening its coordination with the government of Mexico by reassigning on-board agents to immediately increase ICE Attaché personnel in Mexico by 50 percent. At present, there are 24 special agents in Mexico, and DHS is currently deploying 12 more to Mexico City, Tijuana, Hermosillo, Ciudad Juarez, and Monterrey. Through its attaché in Mexico City and associated sub-offices, ICE assists in efforts against transnational drug trafficking, weapons smuggling, human smuggling, and money laundering syndicates in Mexico. ICE Attaché personnel work day-to-day with Mexican authorities to combat these transnational threats, and these efforts will be assisted by more officers.

DHS is also immediately quadrupling the number of ICE officers in the Border Liaison Program by redeploying agents to support this important program. Currently, there are 10 border liaison officers in California and Texas—ICE will add 30 more to the southwest border.

These boosts to the ICE Attaché office and the Border Liaison Program will bolster our ability to fight border crime effectively and coordinate with Mexican enforcement efforts.

Close working relationships with Mexican officials will be critical to our efforts to execute the U.S. role in addressing this security threat. In my previous post as Governor of Arizona, one of my closest day- to-day working relationships with a fellow governor was with Governor Eduardo Bours of the state of Sonora, Mexico. Our collaboration proved critical to our states' development of innovative, binational ways to fight the threat of drug and human smuggling. I look forward to strengthening current DHS relationships with our Mexican counterparts and building new ones.

Stopping illegal weapons smuggling into Mexico

A large number of weapons recovered in Mexico's drug war are smuggled illegally into Mexico from the United States. Clearly, stopping this flow must be an urgent priority.

President Calderón has identified the illegal flow of weapons from the United States as one of the biggest security threats to his country. Stopping weapons smuggling is a particular challenge, both because of the nature of the southwest border and because much of the smuggling occurs in small shipments of a few weapons at a time. DHS is uniquely positioned to address this challenge. In order to confront the transnational criminal groups operating across our common border, as early as next week, DHS will begin short-term increases to operations and programs designed to choke off the key resources for criminal groups: Guns and bulk cash. This will be done in concert with the ATF, DEA, and appropriate state and local law enforcement officials.

ICE and CBP partner in the eTrace initiative, led by ATF, an innovative partnership that aids Mexican officials in the forensic tracking of weapons used in drug cartel violence. CBP is also partnering with the DEA and High Intensity Drug Trafficking Area centers to expand the DEA-created National License Plate Reader initiative, which will lead to better intelligence on trafficking organizations. CBP and ICE, along with ATF and the DEA, have jointly developed the Southwest Border Trafficking Initiative to identify and disrupt weapons and ammunition smuggling. Discussions are ongoing within that initiative to address more detailed procedures regarding the coordination of multi-agency operations and information sharing.

Notably, ICE launched Operation Armas Cruzadas, a partnership with the government of Mexico to fight cross-border arms smuggling. Under Armas Cruzadas, ICE has taken an intelligence-driven, systematic approach to arms trafficking investigations. As part of this effort, ICE initiated a Weapons Virtual Task Force to create virtual communities where law enforcement can rapidly share intelligence and communicate in a secure environment through the Homeland Security Information Network (HSIN). ICE also created a U.S.-vetted Arms Trafficking Group of Mexican officers. Since inception, Operation Armas Cruzadas has resulted in 112 criminal arrests and the seizure of 116,478 rounds of ammunition, 1,417 weapons seizures, and $3,341,388 in monetary instrument seizures.

We clearly need to do more, however. These successful seizures account for only a fraction of the weapons being smuggled into Mexico. That is why DHS is ramping up intelligence-driven enforcement against the southbound flow of weapons in a number of ways.

The bolstered ICE presence in the border region, increased collaboration with state and local authorities in the U.S., heightened resources dedicated to coordinating with Mexican officials, and improved support to state and local governments should all help to address southbound weapons smuggling. Still, DHS is taking additional steps to strengthen our efforts.

DHS will triple the number of intelligence analysts from DHS Office of Intelligence and Analysis on the southwest border. These analysts will provide the strategic, intelligence-driven guidance that will be a driving force behind the efforts of ICE and CBP to secure our borders and stop the flow of illegal weapons into Mexico. ICE operates a Border Violence Intelligence Cell at the El Paso Intelligence Center that provides intelligence support to BESTs. These enhancements in intelligence will also improve the Department's ability to assess whether it is using its resources at the border in the most effective possible way to secure America.

Further, CBP is now screening 100 percent of outbound rail cars on the south-west border. There are eight rail crossings along the southwest border, and previously, CBP did not screen any outbound cars, instead focusing only on inbound cargo. We are using existing non-intrusive inspection equipment to screen all outgoing cars for anomalies that could be weapons. DHS is also developing protocols to inform Mexican authorities of anomalies CBP uncovers, since the rail cars will be on Mexican soil immediately after CBP inspection.

CBP is also moving swiftly to focus existing resources on the southwest border. The Z-Backscatter (ZBV) mobile X-Ray unit, used in a mobile inspection capacity to identify anomalies in passenger vehicles, has greatly assisted CBP officers in inspections. Nine ZBVs can be transferred to the southwest border immediately. CBP is also immediately deploying 100 Border Patrol agents to augment outbound inspections at the ports of entry; Border Patrol agents have not normally served in this capacity. Additionally, three Mobile Response Teams, consisting of 25 CBP officers each, have been placed on ready and are prepared to deploy to the southwest border to augment port of entry operations. Of the 75 mission ready Mobile Response Team members available, 15 have already been deployed to support a specific outbound operation along the southwest border.

In addition to addressing weapons smuggling, DHS is also combating the illegal movement of cash across the southwest border. One reason drug cartels pose such a dangerous threat is their extensive monetary resources. The U.S. must interrupt that illegal flow of money. Operation Firewall, led by ICE, addresses the threat of bulk cash smuggling. ICE and CBP have conducted various Operation Firewall operations with Mexican counterparts. ICE has also recently established a Trade Transparency Unit with Mexico to identify cross-border trade anomalies, which are often indicative of trade-based money laundering. Under this initiative, ICE and law enforcement agencies in cooperating countries work to facilitate the exchange of import and export data and financial information. ICE's efforts led to more than $50 million in cash seizures in fiscal year 2008.

Increased ICE presence in Mexico and at the border will strengthen efforts to reduce illegal bulk cash smuggling. The non- intrusive inspection equipment CBP will use to screen outbound rail cars for weapons will also be able to detect anomalies that could be bulk cash. Furthermore, CBP currently has 12 dual-detection canines, trained to detect both weapons and currency and that are operationally available, which are being deployed as a part of a strategy to catch outbound smuggling.

Planning contingencies for worst-case scenarios

I believe the United States can effectively help to suppress the violence in Mexico, by both doing our part on our side of the border and providing assistance to Mexican authorities. However, this does not mitigate our need to plan for worst-case scenarios, even if they are unlikely— and not only scenarios where the United States encounters significant spillover violence, but also other situations where DHS capabilities could be strained as a result of ongoing violence.

DHS has a plan in place to address border violence, authorized by former Secretary Chertoff in January. The plan, known as the Southwest Border Violence Operations Plan (“the Plan”), outlines a layered response to provide the appropriate level of support to local law enforcement and DHS components in the event of escalating violence. State and local law enforcement, however, had little input into the Plan, so we are in the process of collecting that input now, before the Plan is final.

The Plan provides a structure by which DHS and the federal government can coordinate an effective response, while remaining flexible to conditions on the ground. Because of their predominant role at the border, CBP would serve as the lead DHS component responsible for the effort to prevent and respond to a significant escalation of violence along the southwest border, while the Plan also clarifies and coordinates the roles of other DHS components.

There are a number of cabinet departments and federal agencies involved in this effort to fight violence on the southwest border that DHS needs to partner with on contingency plans. The Department of Defense has been a close partner in scenario planning. Under current plans, any Defense support in responding to a border violence scenario would include the Department of Defense in a supporting role at a late stage. However, we are working with the Department of Defense to determine if there are other support roles for the Department of Defense to assist us in securing our southwestern border.

I have also asked my department that the Southwest Border Violence Operations Plan be revised to determine whether it will be responsive to other challenging contingencies apart from a rise in violence along the border. We are also increasing DHS awareness of how state and local law enforcement resources are positioned, and how to coordinate calls for assistance from state and local governments. DHS is working among its components to develop an overarching plan that integrates existing component plans into one Department plan. This overarching plan will enhance the Department's ability to fully leverage all of our component capabilities in this critical effort. DHS' Office of Operations Coordination and Planning, which led on devising the current plan, will lead efforts to plan for additional scenarios, and to fully engage our state, local and tribal partners in DHS planning.

Conclusion

I thank the Committee for this opportunity to testify. As you can see, I am committed to addressing the threat of cartel violence in Mexico as a top homeland security priority for the United States. I look forward to working with Congress on securing America from this threat. I am happy to answer your questions.

1. [1] National Drug Intelligence Center, National Drug Threat Assessment 2009

2. [2] Crime data gathered from various sources by DHS Office of Intelligence and Analysis

Vice President Joe Biden delivered these remarks in Viña del Mar, Chile

Vice President Biden. Madam President, I should start by saying it's humbling for a mere Vice President to be in the midst of so many Presidents and Prime Ministers. I'm flattered, and I thank you all very much.

I will attempt to—(inaudible)—assignment, which was to speak to what our administration is doing to deal with the crisis, but if you'll permit me just a few brief introductory comments.

You know, I think when our children and our grandchildren look back at this moment, they're going to say: Why didn't they know this was going to happen? In a sense, this crisis was predictable.

And that in hindsight is easy. But, you know, there's a—if my—if my friend, Gordon Brown, will permit me to quote an Irishman—and by the way, I remind our Chilean friends that it was an Irishman that helped out here, I want you to know. And President Lula, I thought it was only we Irish who spoke too much, I didn't think that was just a Latin problem.

But the poet William Butler Yates, speaking about an incident with Great Britain in a poem he wrote called “Easter Sunday 1916”, he used a line in that poem that I think is particularly appropriate, applies to this moment. He said, “The world has changed, it has changed utterly, a terrible beauty has been born.”

The fact is the world has changed utterly—not merely technology and information, but the world has changed in every respect. It is fundamentally different than it was—I've been a United States senator since I was 28 years—29 years-old, since 1972. The change that's taken place from roughly 1989 to today, both politically, economically, technologically, is staggering.

To quote an American columnist, Tom Friedman—he talks about the world being flat. It is flat. It's flat like it never was thought of before. And it is—it seems to me that we should not overreact—we should not overreact. It's not a choice of markets or governments, in my view.

Markets are still—a free market still needs to be able to function. But if I can steal a phrase from a former President speaking of a crisis in 1932, a worldwide depression, it was referenced about him that he saved capital—saved capitalism from the capitalists.

Well, it seems to me—(inaudible)— have to, in a sense, save the markets from free marketeers right now. And the essence of that requires transparency and accountability. And I think what—I know what President Obama and I are attempting to do in our administration, and I want to make it clear: What we're doing domestically I'm not suggesting is the answer for any one of you. That's for you to decide. We are not here, and I am not attempting to in any way suggest or dictate what we think the outlines of recovery should be. I can just tell you what we think it is for us and what role we think we have an obligation to play in the world.

And that is that it's time to build a new foundation for a much broader and sustained growth moving into the 21st century. And I think to the extent that—are we able to—is it being translated?

I think the answer lies less in ideological prescriptions than it does in practical applications of the circumstances we face.

And so I'm going to talk a little bit about how the United States is attempting to respond to this economic crisis. And we understand we share a responsibility. Some of you suggest we are primarily responsible, but regardless of your perspective, we understand we share a real responsibility. Some of the approaches that I'm suggesting may be applicable elsewhere, as I said, but I recognize that every country's circumstances are different.

For the Obama/Biden administration, progressive government in a time of economic crisis that we find ourselves in means basically four principles. The first is to aggressively pursue the necessary steps to offset this recession, and bring about robust economic growth. Forbearance is not an option. Some of our colleagues around the world seem to think that forbearance may be the answer. Well, we will not stand down in our country until we reverse the negative trends in jobs and incomes that exist within our country—and in many of yours, all of yours, quite frankly.

The second is we want to build a policy framework to ensure that, A, we can achieve lasting prosperity, based not upon excessive borrowing supported by speculative bubbles, whether they be the dot.com bubble or the housing bubble, but by investing in the future, by—and secondly, that prosperity has to be broadly shared. It has not been in my country and many of yours over the past decade or more. We believe it's essential that there be a strong middle class, and access to the middle class from those who are striving to join it.

The third principle of our agenda is that making public investments in health care, energy, and education are the three areas we believe are the new foundational basis upon which we can build a sustained economic growth that everyone can share in.

And, fourthly, doing all this in the context of a fiscal budget that ramps up to meet the crisis we face today, and then has mechanisms built into it that allows it to achieve a stable fiscal path by building into that budget that we've submitted the ability to regain control of these deficits.

Progressive governance must occur with respect to a global economic context within which we all reside. We recognize that, as well. The President and I realize how interconnected our economies are and we are deeply committed to resolving this crisis we all face. A strong American economy, not out of a sense of chauvinism, but out of a sense of necessity, a strong American economy is integral to a strong global economy, at least for this moment.

As Madam President has pointed out, we—25 percent of the world's GDP is the United States. So that if we do not prime the pump, if we do not get our engine running again, we all have a problem, particularly—particularly less-developed countries.

And so we are aggressively pursuing a domestic policy agenda that I will elaborate on in a second, but we're thinking globally, as well. An important part of the G20 agenda is beginning the discussion about coordinated policies to reduce the systematic risk that we now all understand exists in global markets. A global market in the year 2009 is fundamentally different than what a global market was in the year 1980, or 1990, or even 1995.

And so I'd like to share with you our administration's economic agenda. And we're addressing this crisis in four parts: First, a recovery package. Now, I might add, we talk about politics—we all understand we're all politicians around this table. I think that's a good thing, not a bad thing. I'm proud of it. But we're all politicians. And we understand how difficult it is to take what are very complicated notions and explain them to even very well-educated portions of our public.

Who ever talked about derivatives before? How are we explaining to people how complicated the international financial system is, and international monetary policy? It's a complicated thing to communicate to well-educated constituents.

And so this recovery package was difficult for us to start with, because we inherited a deficit of $1.2 trillion. Even in America, that's a lot of money—$1.2 trillion. So this recovery package, already approved by Congress, was to restore economic demand. And in the face of this deficit, we went out and said, by the way, we want the Congress to appropriate and we want to spend over the next 18 months another $787 billion, adding initially to the deficit.

In the face of this deep recession, we passed the largest stimulus—fiscal stimulus package in the history of our country—I'd suggest maybe in the history of the world. And since the Great Depression of the '30s, our country has widely accepted the practice of temporarily pacing the missing private sector demand with public sector demand.

And we are—it's projected that for at least the next two years in our country that public sector demand will be off by at least a trillion dollars per year. And so there's nothing ideological about this; it's just a practical approach, that when a trillion-dollar demand is taken out of the economy, it need be replaced, at least in large part in order to stimulate the economy. And that's what we did with this $787 billion package for this year.

And we hope and believe it will create or save 3.5 million jobs by the end of the year. Because as our folks understand, if people don't have jobs—to make the President's point—they don't have income. If they don't have income, they cannot purchase anything. If you cannot purchase anything—and the list—the cycle goes on.

The Recovery Act, as we call it, provides a necessary jolt to our economy to implement what we refer as “shovel-ready” projects, meaning projects that were on the books that were needed in the municipalities and the states that would improve the quality of life for our constituents, the competitiveness of our businesses, but were unable to be funded. Because we wanted to get the money and we were attempting to get the money—it's my personal responsibility—I learned something about you Presidents—don't send you long memorandums suggesting how we should proceed without being ready for the President to turn to you and say, okay, go do it. So I've been given that responsibility to marshal and account for $787 billion. I guess that's easier than trying to raise it. But the fact of the matter is it is a Herculean task.

And so we hope it provides a necessary jolt to the economy. And we've done countercyclical measures. I won't bore you with the detail of the plan, that's not particularly relevant. But we're going to use this money to create mostly—the vast majority of which create private sector jobs, not public sector jobs. Over 80 percent are private sector jobs. And we'll be doing that by rebuilding our infrastructure, beginning the process.

And we're going to construct—and at the same time, we hope that in this package we have picked those—funding of those projects that will lay the foundation for a stronger and sustained economic growth for the 21st century—constructing wind turbines, solar panels, a new energy grid, laying broadband and expanding mass transit, investing in health information technologies to save health care costs.

The stimulus makes a real commitment to renewable energy, energy efficiency, and a stronger energy infrastructure in the name of reducing carbon emissions and reducing our dependence on foreign oil, but in addition to that, creating jobs immediately—good-paying, sustainable jobs. Now, above all, as I said, it's about jobs.

Our next element of our plan, in this sort of three-legged stool here, is that we believed that it was necessary, although it is the most politically painful part of the process, and that is—that is restoring our financial institutions.

Now, I don't know about your constituency, but mine believes that it's all the problem of those financial institutions. To use the popular jargon, were they not so greedy, were they not so this or that, we wouldn't be in this problem; why are we saving them? Why are we helping them? It's not an easy answer, in a political context, to provide. But we all know it is necessary. We need to get credit flowing again.

And so when our housing bubble burst, our banking system took a huge hit, and our credit markets froze up. And until we start lending again, it's going to be very difficult for the U.S. economy to get the lift it needs, and by extension, very difficult for us to provide the lift that the international economy is looking for us to provide.

So when there's no lending, creditworthy families can't afford to buy homes or cars. I'm talking about creditworthy families. I'm not talking about families who, for good or bad reason, are not creditworthy, but when creditworthy enterprises are not able to move, the whole system begins to implode and turn in on itself.

So our financial rescue plan takes some of the following steps to address this. A, it gives private investors the incentive to partner with the government to clear bad assets off the balance sheets of these banks. It also floods the credit market with liquidity, hundreds of billions of dollars from our Treasury and Federal Reserve Bank to loosen up credit lines. Thirdly, it recapitalizes our banking system, strengthening the balance sheets with direct capital injections. And finally, and perhaps the most important step, is to introduce a set of financial market regulations that will prevent excessive speculation, under-regulated processes that got us in this mess in the first place. And we're actively rolling out these ideas, and will do so in advance of the G20.

The third element of our plan is housing. The housing bubble that inflated over the last decade burst in 2007, and may ultimately mean a loss of $6 to $8 trillion in housing wealth in our country. And to address this part of the fallout, our housing plan works with mortgage lenders to help homeowners refinance to cheaper loans. That's why we reduced interest rates so dramatically. It avoids foreclosure to those with high debt-to-income ratios by modifying the terms of their loans. And we believe these plans are going to help a minimum of 9 million homeowners in the United States stay in their homes.

And the fourth and final piece of our— and I want to make it clear now, I hope this does not come off as proscriptive, that we think we're doing all this right and, therefore, why doesn't everybody else do the same thing. We do believe this is what is necessary to get the engine going again in the States.

The fourth and final component of our economic budget and—is the second most difficult part of our agenda, and that is that we set out a budget—(inaudible)— roundly criticized by the opposition, and that's legitimate for them to do, but also, some skeptics in our own—among our own friends, in our own parties.

(Audience participant speaks.)

Vice President Biden. Whatever you said, yes. I just like the way you said it. No, they always criticize. I like the way you say it, though.

But this component of our economic plan seems to fly in the face of what some of our friends internationally, and at home, can't understand. It, in the near term, also further raises the deficit. And our budget is over $3.7 trillion. And the budget has three goals. One is to set aside the needed funds to meet the current challenge we face, begin to make the long-term investments critical to our economic future, and ramp down the currently elevated spending levels to get to a sustainable fiscal path.

The major lesson from the Great Depression, in our view, is that forbearance is not an option. That's what Herbert Hoover did for a couple years, and Franklin Roosevelt inherited the Depression and he started to change it. It's not just a question of having a social safety net to save people from falling; we want to lay a foundation for a new economy so that prosperity can be broadly shared and we can build a platform and not just a safety net.

I would respectfully suggest that with the advent of the social welfare state after World War II, which made sense and was necessary, we find out that a safety net that relies upon the largess of the wealthy and wealthy nations in not the best bet always to make. It's not always available. We'd like to go beyond that and actually begin to change access to wealth formation for all people.

We want to reform our health care system, reducing costs and increasing coverage, and we invest in the budget of $600 billion in health care over the next decade to do that.

Now, we have a meeting of the minds, believe it or not, we're no longer engaged in the polemic argument at home that we went through—and most of you settled years ago—about whether or not health care is a right or a privilege, and all of that. American businesses figured out they're at a serious competitive disadvantage without a rational health care system.

We also realized that there's no way to gain control of our out-budget years and our deficit without controlling the cost of health care. Health care costs went up 54 percent in the last eight years and wages increased 3 percent. It is an unsustainable position purely from a budgetary point. So we believe we're generating some consensus.

We also want to make our country energy-[e]fficient while creating sustainable clean energy for the 21st century. As President Obama has said, the country that harnesses the power of sustainable renewable energy is going to lead the 21st century. And like all of you, we want to enter the competition to do that, to lead. By investing in development of clean, renewable energy, the President's budget is going to reduce our dependence on fossil fuels, create millions of good-paying jobs in the private sector in a new green economy. And at the same time, we hope and believe that we will begin finally to meet the threat of climate change.

And we seek to modernize, thirdly, our education system to foster economic growth and competitiveness now and into the future. Among the things that the budget does is build in the Recovery Act expanding the size of what we call Pell grants that provides access to college for the poor. We also support funding and support—renew initiatives at state and local levels to help low-income students and the like.

And the one thing I can say, if I could wave a wand, beyond providing food and sustenance for all of those in the world under pressure now, it would be to educate the world's public. (inaudible)—a lot of us have good education systems, but quite frankly, access to those systems even in some of your countries, I respectfully suggest, is not as accessible as it should be. But that's for you to decide, not us. We know in our country it has to get better.

So, in conclusion, let me say that be assured that we are aggressively attacking a full set of challenges that are facing our economy. We expect the recession to end later this year. But as President Lula pointed out to me last night—and all of us, and we all know—is that employment will lag far behind. We're still going to have a very, very difficult circumstance in our country—and most of our countries— even when the GDP begins to grow again, as it hasn't in our country. We're technically in—not technically, in fact in recession. So unemployment is likely to continue rising.

However, thanks to our recovery package, we expect it to rise less than it otherwise would. And at the same time, the most important thing we can do during this whole process—and it's going to begin at the G20—is to reset the rules of the road; to have common sense oversight that keeps us from getting back into the same spot we're in 10 years from now. And that's an effort that we look forward to joining all of you, our global partners, in doing.

So let me conclude by saying that we— President Obama and I sought these offices because we had a fundamental disagreement with the policies of the last administration. We don't question the motive of the last administration; we question seriously their policies. And it's a little bit like that old metaphor—it takes a while to turn around a super-tanker. We are moving as rapidly as we can to change the direction of our country and our policies, but we're going to have to ask—and we don't expect to get it, but we have to ask for a little bit of patience as we move forward.

To be able to do all we need to do all at one time is not likely. We've only been in office now a couple months, and we've made some fairly significant changes. But the most important one I want you all to keep in mind, as we really, genuinely—we genuinely want to be collaborative. We genuinely want to engage in consultation. We genuinely want to know what others think.

We do not look to ourselves as the engine to solve the problems; we only look to ourselves in joining you to jointly solve the problems. But I will end with where my friend from Argentina began, that we do need rules of the road. We acknowledge that. And we will play by the rules. But one of the things I would say to all of us is when the rules are broken don't just expect us to enforce the rules. Let me say that again—when the rules are broken, as they repeatedly are, we are reluctant, as an international community, to enforce the rules, whether they be in Iran or whether they be in other countries in the world.

So we are going to join—once the rules are set, we will abide by them as part of the effort to draft them, but when they're broken there's a need for all of us to step up.

And so the good news is there's a change. The bad news is, for you all, there's a change. As I said to one of you— and I will not—we were joking—I said, the very good news is that we're willing to, and want to collaborate. The bad news is that you don't have the last administration to use as an excuse—I use this phrase editorially, not “you” particularly—the last administration as an excuse for non-action.

So we look forward to working with you. I'm delighted to be here and I truly am flattered, as Vice President, to be here and given the same privileges as the Presidents of these great countries—and Prime Ministers. Thank you very much.