Excerpt from transcript, Confirmation hearing of Robert Zoellick to be Deputy Secretary of State, February 15, 2005

Excerpt from transcript, Confirmation hearing of Robert Zoellick to be Deputy Secretary of State, February 15, 2005

AMB. ZOELLICK: I met just yesterday with the Guatemalan vice president. There is an issue that we need to remedy with Guatemala relative to the agreement they're trying to remedy I hope this month. I have separately talked to Chairman Grassley and Senator Baucus and Chairman Thomas about willingness to schedule hearings rather quickly. And I think there is a willingness to do that -- maybe next month. The timing of the actual legislation will obviously depend on talking to the leadership in both the House and the Senate and see when they can bring this up because, as you know, under the trade promotion authority it comes up under an automatic timeframe.

But, Senator, I'll give you 100 percent assurance I feel very strongly about trying to get these agreements done. It's very important for the economy of these countries, it's very important for democracy, and it's an important signal to the overall hemisphere, because we're, to follow on, we're negotiating -- we're very close with Panama on a free trade agreement; we're making headway with Colombia, Peru and Ecuador, and I know you visited a number of those countries. So frankly in terms of sending a signal to the region about the United States' commitment -- this is one of the points of Senator Obama -- a lot of what they want is just to be able to trade with us. For goodness' sakes, it helps us to be able to do that. So I'm pushing for quick attention. And I would just say that also in terms of working with my colleagues at the White House, we're now focusing the business, the agricultural communities and others that are supportive of this.

SEN. DODD: And I hope you would as well, in conjunction with this -- and I mentioned earlier the question of these offset agreements and so forth -- there is a significant job loss that's occurring in the manufacturing sector in this country, and our concerns are that we're not being as strong about some of the highly developed countries that take advantage of us and the drain that's occurring in those areas. The message in both areas I think could be tremendously helpful.

Let me mention as well if I can very quickly the -- and, again, I know Senator Nelson raised this with you. But Latin America generally. I know that President Bush has a fairly good relationship with President Lula. I think he has worked to establish a relationship with some of these other presidents. There's trends. Most of these governments in Latin America, with the exception of Uribe in Colombia, are center-left governments. And if we don't work more closely and these governments don't succeed -- politically and economically -- the answer is not to the right, it's further to the left. You're watching that in a number of countries already. And I hope that -- I know the problems obviously we deal with, with Iran and North Korea, and certainly Iraq take a lot of attention -- reduction has been talked about here, China is tremendously important -- I just hope that we will -- you know the area fairly well. You've spent a lot of time working on these trade arrangements. You know the conditions these people are living under, what's going on in Argentina, what's happened in Nicaragua, what's going on in Colombia, Venezuela obviously. There's a tremendous need. You're going to have 660 million people living south of the Rio Grande in a very short order, not including obviously the populations of this country and Canada to the north. And if we don't create more opportunity there, then these democracies who have taken such pride in the emergence of them over the last decade or so are going to collapse. There's no doubt in my mind that will happen. And so it really does require -- we need good people to head up these divisions within the department, and good quality people. And you've got some wonderful people to choose from to serve in these posts to really make a difference.

And on the matter of Chavez in Venezuela, again, I am very worried. The Chinese are all over Latin America. There were there in Argentina, they were there in Paraguay, in Brazil. They have tremendous need for natural resources, for food, and for energy. And they're offering tremendous prices to be able to have tremendous -- much more than we're talking about. And if we're not careful in how we deal with Venezuela, we could find ourselves in a situation where 13 percent of our petroleum reserves are going to be heading elsewhere. And I know there's concerns about President Chavez, but we need to have some sense of apportionality about how we deal with this and put it in context, or we can find ourselves in deep economic trouble ourselves. So I urge you to see if we can't calm things down here and begin to explore some avenues in how we reach some accommodation to work with elected governments here. And whether we like everything they do or not, it's going to be important that we try and establish those relationships. And I -- you have the experience, you have the background, you know these people, you know these players, Bob, so we're looking to you for some leadership in these areas. Thank you, Mr. Chairman.

SEN. LUGAR: Thank you very much, Senator Dodd. Let me just follow through while you're here on the Venezuela point, because mention was made about that earlier. You commented, Ambassador Zoellick, that oil was fungible and in the event that Venezuela does not ship oil to us, it's shipping it somewhere else, and somewhere else in the world oil might be available to us. In the short run this might be true. This is a point to be pursued perhaps in another hearing dealing really with energy and our foreign policy. But my concern at least in initiating some inquiries about this is that the Chinese and India have been very aggressive, and properly so in terms of their own national security, in attempting to pin down the very last reserves any place on earth right now -- in the former Soviet Union, in Latin America, anywhere else. With the thought which perhaps is not shared in our country, but I'm concerned about it, that the amount of oil available on this earth does have its limits, and the price mechanism may in fact ration that supply in due course as it becomes less and less available to us. But that would have very detrimental effects upon the bottom line of most of us in this country, whether we're heating our homes or our businesses or what have you. In essence, the certainty of supply of our friends in Latin America is of the essence, and our assistance to them so that they may be able to supply more, so long as we have this independence upon foreign oil. Now, I'm one, and you have been another I think who have advocated less dependence upon foreign oil, and that is certainly an avenue to be pursued. But the fact is in our country we have not been pursuing this nearly as vigorously as some of us would like to see. And while that is the case, we have some foreign policy problems. And I think Senator Dodd's point is well taken, without getting into a discussion, President Chavez and the relationship during the hearings for Dr. Rice, now Secretary Rice. Venezuela arose, as you perhaps saw in the record, several times, because members of our committee have been visiting that country, as well as others. And as a result, why this is something we'll want to pursue some more, but I just for the record indicate sort of a notion that this is important to many of our members.

AMB. ZOELLICK: Chairman, if you and Senator Dodd have a minute, I'd be pleased to give you a view of how I see the context of this, but it's up to you. I know you're --

SEN. LUGAR: Yes, please do.

AMB. ZOELLICK: Because I think -- and I did read closely the transcript, and I know from some of our conversations, one of the problems I see is there's always the issue du jour. So whether it be the Venezuelan oil or whether their rifles or so on and so forth. And at least in thinking about the region, I think one has to look in a little bit deeper context of what I think is going on, because I think one of the things that's going on is that one of the problems in Latin America is that sort of the upward mobility of many indigenous and poor people have been basically kept out of the system, because it's been corrupt, it's been oligarchic. It's basically rigged against the poor. And what I think we're seeing now is that the people who are on the margin of the traditional society -- the indigenous people, the poor -- are using some of the democratic openings, and they're saying, Look, I want my share. I want my piece of this. And I think it is critically important -- and I hope to work with you to do this -- the U.S. should be identifying with those people. We are a society that challenges the status quo, we favor openness, we favor the types of change.

Now, we can't do it for them, okay? And so part of this will be what combinations of trade agreements, what combinations of our democratic support, microlending -- a lot of it is creating the legal infrastructure, if people don't have basic property rights. I mean, De Soto thesis and other aspects of this. And so I think there's ways we can help.

Now, bringing this to Chavez, I think what you're seeing happening throughout the region is there's a new Pied Piper of populism that's going on, so I would -- whether -- I don't look at it, Senator, as left to right, because the first person to do this was Fujimori. Okay? So I don't know, is he right or left Peru? And the same with, you know I think, with Chavez. And I think it's a very dangerous course for these countries. You saw what eventually it did to Peru. And I think, coming back to where we need to go with this, is that -- and I know Senator Dodd and Senator Lugar both were key parts of this -- you know the history in this region of resisting foreign intrusion and the Calvo doctrine. So what we did in 1991 with the Santiago Declaration in 2001 about protecting democracy in the region is a huge step. The problem is it's basically oriented towards the old threat of coups. It's not oriented towards what we're now seeing, which is a creeping authoritarianism. Sure, you win the election, but you do away with your opponents, you do away with the press, you do away with the rule of law, you pack the courts.

I think one of the challenges -- and I'd be pleased to talk with you further about your thoughts of this is that we need to work with the OAS and some of these other parties to try to say, Look, if we mean what we say about democracy and we want to try to help some of these people, we have to try to set some standards on this. Now, the reason I partly make this point is that I personally believe that Chavez sort of feeds off confrontation, and you know he wants to set this up as David and Goliath. And my own view is that what we can do effectively with him -- is we shouldn't be afraid to say when he's taking away liberties -- not at all -- and we should stand for that. But at the same time, we also need to stand for some of the people that created the resentments that he has been tapping, because frankly the Venezuelan governments of the past, whatever their party, they didn't serve the people. So part of what we need to do with the assistance that we have, with trade, with other programs, with exchanges -- I talked to Senator Alexander about maybe creating something new in this -- is that we need to be able to get ourselves associated with what we truly believe, which is helping those poor people have a chance. And so that's at least -- I, you know, wanted to give you some preliminary thinking about how I would approach the problem, but I think in the meantime we also shouldn't fool ourselves. You know, Chavez has done some terrible things, and we should say that. And, in the meantime, we should try to help those, frankly -- I'm sure you visited Colombia -- I've been there three times recently -- is that, who are frankly doing a very impressive job. And I'll say, chairman, there were some questions about Uribe did, that I went in the hearing with Secretary Rice, I went back and checked -- they haven't occurred in terms of blocking his opposition and things like that. So make some of those areas work -- Central America, Colombia, Chile -- and then expand it, and then frankly try to get some others to work with us to say if we believe in democracy we've got to stop creeping authoritarianism too.

So I apologize for going on, but I know the senator has -- both of you have the strong interest in this. And I just want to give you the context at least in which I would be approaching these issues.