Combatting Terrorism and Weapons of Mass Destruction

Larry Stout, CTV News and Honorary Director, The Empire Club of Canada; David A. Edmison, President, Martin Lucas & Seagram, Past President, The Empire Club of Canada and Chairman, The Empire Club Foundation; The Rev. Kim Beard, Rector, Christ Church, Brampton and Director, The Empire Club of Canada; Francisco Gomez, Regional Vice-President and General Manager, The Fairmont Royal York Hotel; Paul Cantor, Managing Director, Russell Reynolds Associates; Meir Romem, Consul General of Israel; The Hon. Barbara McDougall, OC, President and CEO, Canadian Institute of International Affairs and Former Minister of External Affairs; Gareth S. Seltzer, President, TWS Private Management and Past President, The Empire Club of Canada; Tony van Straubenzee, Associate, Insite Institute and Past President, The Empire Club of Canada; Antoinette Marwitz, Consul General of the United States; The Hon. Michael H. Wilson, PC, Chairman and CEO, UBS Global Markets and Former Minister of Finance; Robert L. Brooks, Executive Vice-President, Investment Banking, Scotiabank and Past President, The Empire

April 2, 2003

Club of Canada; and Timothy Hearn. Chairman, President and CEO, Imperial Oil Limited.

Introduction by Ann Curran

I would now like to introduce to you a person who was instrumental in arranging today's luncheon and who is a great friend of The Empire Club of Canada--The Hon. Michael Wilson.

Mr. Wilson is Chairman and Chief Executive Officer of UBS Global Asset Management Canada. Prior to this he was Vice-Chairman, RBC Dominion Securities, responsible for senior client relationships and advice to Canadian and international companies and governments. He also had a distinguished political career with senior cabinet posts in Finance, Industry, Science and Technology and International Trade. On top of this he has been active in a number of professional and community organizations such as the Centre for Addiction and Mental Health, Neuroscience Canada Partnerships, The Canadian Club of Toronto and the Canadian Council for Public-Private Partnerships.

Mr. Wilson has been a close friend of Mr. Baker's since his days in cabinet, having worked with him on the NAFTA agreement. He was also instrumental in bringing Ronald Reagan here in 1988--one of Tony van Straubenzee's, as well as the Empire Club's biggest and most memorable events.

Ladies and gentlemen, please welcome Mr. Michael Wilson to introduce on behalf of The Empire Club of Canada our very special guest speaker.

Introduction by Michael Wilson

We are very fortunate indeed to have as our guest speaker highlighting the 100th Anniversary of the Empire Club, The Honourable James A. Baker, III. Mr. Baker has had a remarkable career in public service and comes to us today at a critical point in history. He has served in senior government positions under three United States Presidents: under President Ford as Under Secretary of Commerce, President Reagan as Chief of Staff and then Secretary of the Treasury and Secretary of State under President George Bush. Mr. Baker led presidential campaigns for Presidents Ford, Reagan and Bush over the course of five consecutive presidential elections from 1976 to 1992.

Jim Baker is a good friend of Canada. I saw this firsthand when we served together when he was Secretary of the Treasury and I was Minister of Finance. He played a critical role in the conclusion of the Free Trade negotiations in 1987 and went the extra mile to resolve the impasse over the dispute settlement mechanism, which was so important to Canada. Those negotiations concluded at 20 minutes to midnight on the day of the deadline for the negotiations. Without the flexibility, which he displayed at that time, we might never have had a Free Trade Agreement.

Mr. Baker is also Honorary Chairman of the Baker Institute for Public Policy at Rice University. This institute makes an extraordinary contribution to public policy issues having recently published positions on a number of very topical issues ranging from post-conflict policy in Iraq, Latin American economic turmoil and the war on terrorism.

Mr. Baker continues to lead a very busy life. Some years back I bumped into him in a hotel lobby in Indonesia where he and his wife were waiting to leave for the airport to fly to New Delhi having just arrived in Indonesia from Moscow.

In spite of this busy schedule he and his wife Susan find time for their large family of eight children and 14 grandchildren as well as their wonderful hideaway near a terrific trout stream in Wyoming.

Mr. Baker's broad experience in international affairs carries from the Cold War period through a period of regional hostilities to the current challenge of terrorism. His perspective over this range of challenges is unique, having served in public office during the fall of the Berlin Wall, the first Gulf War and the challenges of Middle. East Peace where he was very active as Secretary of State. In 1997 he served as the personal envoy of United Nations Secretary General Rod Annan to mediate during the dispute over the Western Sahara.

It is from this broad and strategic perspective that Mr. Baker will speak to us on "Combating Terrorism and Weapons of Mass Destruction." Please join me in welcoming The Honourable James A. Baker, III, 61st Secretary of State for the United States of America.

James Baker

Thank you, Mike, for that introduction. Ladies and gentlemen: Some weeks back, I was asked to speak on combating terrorism and weapons of mass destruction. While the war on terrorism continues and is closely related to the question of what we do to prevent the development and proliferation of weapons of mass destruction, I will, for obvious reasons, concentrate on that second issue.

Before I begin, however, allow me to indulge in some memories.

Fifteen years ago in June 1988, I was in Toronto as part of the U.S. delegation to the G7 Economic Summit in Toronto. Brian Mulroney was Prime Minister of Canada, Ronald Reagan was President of the United States, and Margaret Thatcher was Prime Minister of the United Kingdom. I then served as Treasury Secretary.

That 1988 G7 summit was, in some sense, a celebration of a world economic transformation that had been triggered by the free-market, free-trade policies of Canada, the United States, and Great Britain. This economic transformation was confirmed in a larger sense one year later by the fall of the Berlin wall, followed three years later by the collapse of the Soviet Union. In many ways, the 15 years that followed that summit have been ones of immense optimism marked by the spread of democratic and free-market ideals to corners of the world unimaginable in 1988.

But not all the changes since then have been for the better. Indeed, my very topic today is a testament to an unhappy transformation of a different sort--the rise of global terrorism and the distressing possibility that those who killed thousands yesterday with hijacked airliners may try to kill tens or hundreds of thousands tomorrow with nuclear, biological, or chemical technologies. At a very important level, the war in Iraq is limiting the possibilities that this terrible nightmare might become a reality.

At the outset, let me make one thing very clear. I know the policymakers in Washington very well, and I talk to them from time to time. But I am speaking for myself today and not for the administration.

My views are those of a private citizen.

To date, the allied performance in Iraq has been on "track" according to the President and the Pentagon. Progress on the ground is said to be on schedule. Of course, even one death of an allied serviceman or woman is one too many. But, given the scale of the operation, allied casualties have been low. War is always uncertain.

But there can be no doubt about this conflict's final outcome. The United States and its allies will win it--and win it convincingly.

But I am not here to discuss military strategy, a subject on which I can claim no special expertise. Anyway, one thing we don't need right now is another armchair general. Rather, l would like to focus on how the United States and its allies can ensure not only that the allies win the war but that we also win the peace.

Make no mistake about it: "Winning the peace" makes the allied military efforts more difficult. This is because, in addition to defeating Saddam's army, the allies must to the extent possible limit civilian casualties and minimize damage to the country's infrastructure. And the allied military deserves great credit for its success thus far in achieving these additional objectives.

But these are just the first steps in winning the peace. What should the United States and the allies do next? Fortunately, we have a "road map." The Council on Foreign Relations and the James A. Baker III Institute for Public Policy of Rice University recently published "Guiding Principles for U.S. Post-Conflict Policy in Iraq." The report's most important point is that the allies ought to avoid imposing a solution on Iraq from the outside. Reconstruction models for post-war Japan and Germany are unhelpful because, as "Guiding Principles" says, we want the Iraqis to be °a liberated, not a defeated, people." This argues against a long-term U.S. led occupation or U.S.-imposed post-war government.

Instead, the Iraqi people should take charge of their own country as quickly as possible. At the same time, the allies should promote a vision of a representative Iraqi government committed to federalism, human rights, a free-market economy, peace with its neighbours, and the absence of oppression of its citizens.

In the first few months, however, there will be little alternative but to put an allied military commander in

charge of an emergency government. Chaos will follow unless the allies quickly establish law and order, and begin dismantling Saddam Hussein's system of repression. The allies will need to begin identifying and bringing to trial war criminals and human-rights violators, including those responsible for any atrocities against allied troops in the current conflict.

Iraqis will also need food, water, and medical assistance. Humanitarian relief operations should begin as soon as possible. Last Friday's decision by the UN Security Council to resume the "Oil for Food Program" will make this vital task much easier. Canada, needless to say, can play an important role in this relief effort.

War may also drive refugees across Iraq's borders. To mitigate the effects, the allies must co-operate with Turkey, Iran, and others in the region.

Iraq's territorial integrity and internal cohesion must be protected. One potential threat is neighbours with cross-border interests, particularly Turkey and Iran. There is the risk that Turkish troops will move into northern Iraq to prevent a massive influx of Kurdish refugees and to forestall the creation of an independent Kurdistan. To date, Turkey has wisely avoided entering Iraq in a substantial way. It is important that the United States and European countries continue to urge restraint in Ankara.

Perhaps an even greater risk is internal instability--the anarchy that might accompany an outbreak of ethnic and political score-settling.

Allied troops will be needed in all major population centres. At the earliest opportunity, the military governor should surrender control to an interim government that would be internationally supervised but run by Iraqis--a government of, by, and for Iraqis.

As President Bush and Prime Minister Blair made clear in their Azores Declaration on the future of Iraq, the United Nations should have an important role. This is especially true in such areas as humanitarian relief. But talk of a UN administration in Baghdad is premature. There is still a war going on. And the last thing Iraq will need is a cumbersome, politicized UN administration.

If all goes well, a fully sovereign Iraqi government can assume control as soon as possible, although this could take a year or more to occur.

Iraq will also require a new constitution. Iraqis should write it, but the world community reasonably may condition its recognition on certain basic principles--democracy, fair representation for all elements of Iraq's diverse population, true power-sharing, respect for human rights, and a solemn pledge not to build weapons of mass destruction.

The Iraqi economy must also be revived and Iraqi ownership and control of oil resources must be guaranteed. The U.S. and its allies should support--not direct--Iraqi efforts to restore production. Suspicion of U.S. motives in post-war Iraq is misplaced. The allies are not in this war for oil, territorial conquest, or financial profit. Washington and the allies should therefore be very careful to avoid any impression that we see Iraqi resources, especially oil, as the "spoils of war."

The full costs of post-war reconstruction are unknown. Estimates run between $25 billion and $100 billion. Some of this will be covered by Iraq's own oil revenues. But Iraq alone cannot be expected to foot the entire bill. The international community should share the burden.

The economic reconstruction and political rehabilitation of Iraq are an enormous undertaking, fraught with risks. But if they are done and done well, the region and the world will be safer and more prosperous.

Military victory and a successful reconstruction, however, will not be enough for the United States and its allies to ensure that terrorists and extremists are weakened, not strengthened, in the aftermath of the war.

Washington must also begin the process of re-engaging countries--notably France, Germany and Russia--who

played unhelpful or even destructive roles in NATO or the UN during the lead-up to the war. Here, let me stress two points: first, that it is only right that the United States demonstrate its disappointment with these countries by word and deed; and, second, that reconciliation is a two-way street.

But Washington cannot let disappointment cloud its judgment. NATO and the UN remain important, useful organizations. And France, Germany and Russia--whatever our differences on Iraq--are invaluable allies in the war on terrorism. So, I might add, is Canada--despite the decision of the current Canadian government not to support us in Iraq.

Looking forward, the United States and its allies will also need to achieve substantive progress towards resolution of the Arab-Israeli dispute. As all of you know, the tragic conflict between Israelis and Palestinians continues to elude resolution.

But I believe that there exists a window of opportunity similar to the one that existed in the aftermath of the Gulf War in 1991. At that time, we used that opportunity to convene the Madrid Peace Conference, the first-ever face-to-face meeting of Israel and all of its Arab neighbours.

Today Washington has a similar vehicle, in the form of the so-called "road-map" made public by President Bush two weeks ago, that can help move the stalled peace process forward. So, too, will the appointment of the moderate Mahmoud Abbas as Palestinian Prime Minister.

Of course, the United States cannot "create" peace in the Middle East; only Arabs and Israelis can do that. Washington's responsibility is to help them. Above all else, we need to remember certain truisms about this dispute:

1. Only the U.S. can effectively act as an honest broker between the parties.

2. There can be no military solution to this conflict.

3. A political process and dialogue are essential, and whenever the political process breaks down, there will be violence on the ground.

4. And this Catch-22 applies to the dispute: Israel will never enjoy security as long as she occupies the territories, and the Palestinians will never achieve their dream of living in peace in their own state as long as Israel lacks security. It's a tragic version of the old chicken-and-egg problem.

Land for peace under United Nations Security Council Resolutions 242 and 338, therefore, is the only basis upon which the dispute can be settled.

Any decision to reopen the "road map" to substantive amendment, for instance, is an open invitation to interminable delay. And there should be no conditions whatever to Israel's obligation to stop all settlement activity.

The United States must press Israel--as a friend, but firmly--to negotiate a secure peace based on the principle of trading land for peace in accordance with UNSC Resolution 242. And the United States must keep up the pressure on the Palestinian authority as well, particularly by requiring a 100-per-cent effort to stamp out terrorist violence. But the bottom line is this: the time for talking about a "road map" is over. We have one. And, when the war is over, we need to begin using it.

Let me turn to another area where we need a "road map." And that is the threat posed by North Korea--a hostile country that now has nuclear weapons and soon could have more. Indeed, some critics of the administration's policy towards Iraq have suggested that the United States has gone after the wrong target.

My friends, the implication that Washington should have ignored Iraq because of North Korea is exactly backwards. North Korea is "Exhibit A"for the proposition that appeasement does not work. It is proof that waiting gives rogue states the time and space to develop weapons of mass

destruction. And it demonstrates that, when such states do develop these weapons, the possibilities for effective diplomatic and military responses are sharply reduced.

Why is North Korea out of control today? Because the United States allowed itself to be "blackmailed" in 1994 through the so-called Framework Agreement we entered into with North Korea at that time.

North Korea promised to freeze its nuclear program and comply at some unspecified time with international nuclear safeguards. In return for paper promises, the United States supplied them with fuel oil (courtesy of U.S. taxpayers) and began building two light-water nuclear reactors to provide electricity.

Meanwhile, the North Koreans never complied with the international standards. In fact, they started a secret new program to develop uranium-based weapons and now have reactivated their original plutonium nuclear program.

So what should the United States do now?

Brent Scowcroft, my colleague from the first Bush administration, has some good suggestions.

His key point is that enriching plutonium is an absolutely unacceptable threat to U.S. and allied security. And we should make that point absolutely clear.

If North Korea freezes all nuclear activities in a verifiable way, however, Washington should be willing to offer security assurances and to help bring North Korea into the community of nations, through trade and communications.

The United States should not worry too much about the form of the discussions. Direct talks are not a concession, but allowing plutonium to be reprocessed is. So the administration should be prepared to hold direct talks with North Korea.

At the same time, however, the United States and the world community should never reward North Korea again for repeating old promises. The bottom line is clear: No more blackmail!

By providing a clear diplomatic solution and a "road map" to get there, the United States can mobilize an international consensus on North Korea.

But it will require leadership to do so--the sort of leadership that I believe my country is showing in dealing with Iraq, and which I hope it will show in taking advantage of the window of opportunity after the war to make peace between Arabs and Israelis.

Iraq, North Korea, the Arab-Israeli dispute, and tensions in our old alliances (not to mention the war against terrorism) challenge the United States, working with its friends, to provide leadership in a dangerous and complex world.

And, as the war in Iraq so dramatically demonstrates, leadership is not about making easy or popular decisions. It is about making right decisions, no matter how difficult they might be.

Thank you.

The appreciation of the meeting was expressed by Tony van Straubenzee, Associate, Insite Institute and Past President, The Empire Club of Canada.