Free trade and open markets are key to improving lives and generating hope throughout the world, Secretary of State Colin L. Powell told an audience of private-sector executives meeting in conjunction with the Asia Pacific Economic Cooperation (APEC) summit in Bangkok, Thailand.

In October 20 comments to the executives, Powell said that in the APEC ministerial meetings that took place October 17-18 on security, trade, technology and economic growth, "what we were really talking about was hope, what we need to do to bring more hope to the peoples of the world, the peoples of this region."

"Hope is lost on those who lack the very basics of life: fresh air, clean water, arable land. Hope means nothing to those who are struggling under brutal dictatorships and arrogant kleptocracies," said Powell.

Powell called hope a "mere concept and with no meaning" to millions of people who are malnourished, sick and suffering, but said trade has the potential to empower and lift people from poverty.

"The reason that we focus on free trade and open trade, is that it is the only way, truly, at the end of the day, to lift whole societies out of poverty, to generate optimism, to help people help themselves, to put meaning into democracy and the beliefs we have in free open economic systems," Powell told the group of CEOs.

"The United States is committed to free and open trade, removing all barriers to trade possible, as the surest way to bring hope to the undeveloped world," said Powell in reference to U.S. efforts to conclude bilateral and multilateral trade agreements.

The secretary also told the executives that security issues have been integrated into APEC discussions, not as a "stand-alone item," but as an overall effort consistent with the original purpose of APEC -- to facilitate economic growth, trade and investment in the Asia-Pacific region.

Discussing the security threat facing Asia with the prospect of nuclear weapons in North Korea, Powell reiterated the U.S. commitment to reach a diplomatic solution and work with interested parties to "achieve a complete, irreversible, and verifiable dismantlement of North Korea's nuclear weapons program."

Powell said the six-party multilateral approach including South Korea, Japan, China, and Russia is more appropriate than bilateral U.S.-North Korea talks would be, to address the threat to regional security.

He called North Korea a country that is "starving its people to pursue wasteful ambitions," but said the U.S. has no intention of invading or attacking North Korea.

"Now we're all working together in partnership to persuade the North Koreans that not only is nobody planning to invade you, but so much more can be done for you if you get rid of this weapons program that will achieve nothing for you and really would just keep you in a continuing position of despair and failed economic policy and a hungry people," said Powell, citing U.S. cooperation with the Chinese and other states involved in multilateral talks with North Korea.

SECRETARY POWELL: Thank you so much, ladies and gentlemen. Mike, thank you for that most gracious introduction. Mr. Deputy Prime Minister, Mr. Minister, Dr. Vachara, all who are assembled here, it is a great pleasure for me to have an opportunity to speak to you for a few moments. And, then I'd look forward especially to the opportunity to take some questions from the audience.

Let me begin by saying that I was delighted that I was able to set that thing off the way it was supposed to go off. (Laughter) We had a great deal of discussion last night at my staff meeting as to how that was going to happen. And the original plan was for me to use a bolt cutter, a big bolt cutter, but some members of my staff thought that I would not know how to use a machine so we elected just to pull that little plastic thing off the end. But in reality, a bolt cutter was supposed to be used, and I am somewhat disappointed that my staff did not have sufficient confidence either in my mental ability, my agility, or my strength to use a bolt cutter. (Laughter) Nevertheless, the demonstration was successful.

I am so pleased that my good colleague and I were able to be there at the demonstration because it really does indicate what we are doing working together to improve security. And by improving security, improve trade, improve commerce. Through these techniques of linking up security with trade, we really do have an integrated package, and really is a theme of APEC this year. How can we include security into our discussions and deliberations, not as a stand-alone item, but as part of our overall effort, the major purpose, the original purpose of APEC, and that was to improve trade and economics for everyone? And now security has to be an essential part of that.

I know that President Bush is sorry he couldn't be with you today, but as you know, he is getting ready for the Leaders' retreat. But you also know, that he believes strongly that business, as represented by all of you here today, have an essential role to play in confronting the challenges we face in the world today. The President will look forward this afternoon to speaking with other APEC leaders as to how we can put the World Trade negotiations back on track and ensure that continued growth in this region and this world takes place, so that we can help, as Mike said, as the Foreign Minister said, those greatest in need.

I am especially pleased to be here in Thailand. It is my second visit ever to Thailand and to accompany the President of the United States on a State Visit is always a treat. And I would like to take this opportunity to extend to Thai officials here our heartfelt thanks for all the hospitality that has been extended, not only to the American delegation, but to all the APEC economies that are represented at this very important conference.

On the State Visit aspects of it, we were thrilled last night by the wonderful dinner hosted last night by their Majesties. We were encouraged by the agreements we entered into, whether it was extending major non-NATO ally status to Thailand, or the beginning of our discussions on a free trade agreement. All of this is illustrative of this strong relationship that exists between the United States and Thailand, and it is a relationship that has been there for many and many years. We have stood side-by-side through times of peace and times of war. We are standing side-by-side now in Iraq and in Afghanistan. I think for me, at least, as an old soldier, the most moving event yesterday was being at the Defense Headquarters where the President was able to the address those wonderful Thai soldiers who have served their nation and the cause of peace so well in Afghanistan and in Iraq.

And so, Mister Ministers, to you I convey my heartfelt thanks for all the hospitality that has been extended, but more importantly my thanks for the friendship you've extended and my appreciation for the strong relationship that exists between our two countries, and I know will only continue to grow stronger in the days, months, and years ahead. (Applause).

When I met with the other Foreign and Trade Ministers two days ago, we talked about trade, we talked about security, we talked about technology, we talked about growth in our economies, but what we were really talking about was hope, what we need to do to bring more hope to the peoples of the world, the peoples of this region.

It goes back to what Mike was saying a little earlier -- hope really is about young people, hope is about children. How do you put hope in the hearts of young people so that they can believe in themselves, believe in their societies, believe that there is a better life waiting for them? That's what we are all here for. We are here because far too many in this region, far too many people on this planet lack the means to unleash their full potential. And when that happens, when we all suffer, we suffer together. Hope is lost on those who lack the very basics of life: fresh air, clean water, arable land. Hope means nothing to those who are struggling under brutal dictatorships and arrogant kleptocracies. Hope is a mere concept and with no meaning, with no purpose to millions of men, women, and children who are malnourished, who are sick, who are suffering, who wonder if anybody cares about them, who wonders if they will ever have hope in their lives.

Time and again, as has been noted, free trade and free markets have demonstrated a proven ability not just to put profits into the pockets of businesspeople, not only to reward shareholders, but more importantly, and the reason that we focus on free trade and open trade, is that it is the only way, truly, at the end of the day, to lift whole societies out of poverty, to generate optimism, to help people help themselves, to put meaning into democracy and the beliefs we have in free open economic systems. People will only believe in those kinds of systems, and in the democratic system, if they see their lives improved. Their lives will improve with proper government, with sound basis of law within a society. Their lives will improve when they see that their leaders believe in them, but their lives will only improve, not just with the infusion of aid from other nations, but with trade -- trade that brings jobs, trade that brings the incentive to entrepreneurship. Trade that gives people a roof over their head, food on their table, and an education for their children, and healthcare, and clean water, and all the other things that people expected democracy to bring them when they moved toward democracy.

I have seen this kind of transformation around the world with my own eyes, as I have gone about my duties as Secretary of State. I have seen in Africa, seed capital spur start-up businesses and provide internet access to craftspeople in remote villages, linking them to the larger world, letting them know that they are not trapped in their village, they are part of a larger world, and they can participate in that larger world. In Asia, in parts of the Middle East, technical training and management programs are spawning a new generation of entrepreneurs. In Latin America, small farmers who once grew coca to feed their families, now are being given economic incentives to grow alternative crops.

And the United States will continue to work with others to build futures, futures that are full of hope. Hope for children. And despite the headlines of the day that often deal only with war and crises, we remain active with APEC economies in building what President Bush has called a world that trades in freedom and grows in prosperity.

All of us in this room want to see freedom spread across the globe. But we also know that freedom cannot exist, therefore, without prosperity, and prosperity cannot thrive without security. All of us must remember that security and stability in Asia, underpinned by the continuing American presence, have been the foundation on which prosperity has been built in Asia. It should come as no surprise to you then that the number one topic for this conference has been security, and for good reason. Terrorist networks have failed to make fear a fact of everyday life, but that is still their goal. That is what they are trying to do by these dastardly crimes we see around the region and around the world. Terrorists hope to make fear an integral part of life so that we will be fearful of moving down the democratic path. They offer no viable alternative other than death and destruction and yet they will not sleep until we have gone after them, until we have stopped them, until we have dismantled these networks. And let there be no doubt about it, this isn't a problem for the United States or just the countries and economies represented here. It is a challenge for the entire world.

My friends, the lessons of our young century are being written in real time. If we have learned anything so far, it is that gathering threats in distant places can pose very real dangers at home, wherever your home may be. Every nation, every economy represented here, every business, every leader, every one of us is a potential target of terrorist activities.

And we, the economies represented in APEC, must do everything in our power to fight this threat and to keep the world safe. We've been encouraged by the cooperation we have received in Asia. The Philippines, for example, and President Bush visited just the other day, is working closely with us in so many ways to share intelligence and stop terrorist groups from operating within its borders. Malaysia, Singapore, and Indonesia have cracked down, and cracked down hard, on terrorist cells. They've learned now that it is not something they can look away from or pretend it doesn't affect them, they now know better. All the nations of the region know better, and they are all cracking down. We're all working together in a more cooperative fashion. China is working with us bilaterally against terrorism and as a member of the United Nations Security Council. So, too, Japan has provided invaluable support in the war on terror since 9/11.

Asia faces another security threat with the prospect of nuclear weapons in North Korea, a country that is starving its people to pursue wasteful ambitions. You cannot eat plutonium. You cannot grow a crop because you have the benefit of a nuclear weapon in a bunker somewhere. It is wasteful of the talent of the North Korean people and what little treasure the North Korean people have. None of us in this conference threatens North Korea. The United States does not threaten North Korea. We have no intention of invading or attacking. But the spread of weapons of mass destruction is a threat to everyone in this region. That is why we are working so closely with our friends in the region to deal with this potential threat from North Korea. That is why we have worked so closely with our Chinese friends to set up six-party discussions that will deal with this potential threat to the region.

We have had one round of six-party talks and we hope that, in the not-too-distant future, another round will take place. The United States is committed to finding a diplomatic solution to this problem. Working with interested parties in order to achieve a complete, irreversible, and verifiable dismantlement of North Korea's nuclear weapons program. At the first six-party talk in Beijing a couple of months ago, all six parties, to include North Korea, committed themselves to the denuclearization of the Korean Peninsula. In the past 24 hours, President Bush has met with President Hu Jintao of China and presented some expanded ideas of the kinds of security assurances that we might be able to offer North Korea that would persuade them that nuclear weapons are not what they should be pursuing. Instead, they should be working with their neighbors and with the international community to improve their economy, that we are not threatening them, and we presented some new ideas on as to how we might capture those assurances in a way that would persuade them to end, in a verifiable manner, their nuclear weapons program.

We also discussed this with President Roh of South Korea this morning. And in the course of the next days and weeks, we will be fleshing out these ideas with our partners in the six-party framework and pursuing them with the North Koreans.

There are other challenges in the world that dominate the headlines. Iraq, of course, is on everyone's mind and is a subject of discussion in every meeting. We know fully that we will be successful in Iraq. There has been much debate over whether or not it was appropriate to go to war or not. And that debate will be continuing for many, many years into the future and historians will write about it. But there is no doubt in President Bush's mind and the mind of those coalition leaders who went into that conflict with us that the right thing was done -- that a terrible dictator has been removed, his regime has been removed, and the Iraqi people are facing a brighter future, a future of hope. A future where their oil wealth can be used for their benefit, not for the purpose of developing weapons of mass destruction or armies which will threaten neighboring countries.

We are working with our friends in the UN again. The unanimous resolution that was passed earlier this week, or last week, I guess it is now, 1511 shows the international community coming together and rallying behind the plan that is now unfolding -- to write a constitution for the people of Iraq, to prepare them to elect their own leaders, to rebuild the infrastructure of the country, to build up their army, to build up their police forces, and to steadily and surely pass power back to the Iraqi people as their institutions are able to receive that authority and use that power in a proper way. We are anxious for the day when the Iraqi people, with freely elected leaders, elected on the basis of a constitution, are once again in charge of their country. And the United States will be able to return home, as we have done a number of times in our history in the past fifty or sixty years, having liberated a nation, putting it up on its own two feet and then remaining friends with it and partners with it as we have seen here in Asia, as well as in Europe.

The same sort of approach is being taking in Afghanistan, where another terrible regime was removed and now, under President Karzai's leadership, we see that country getting up on its feet. Both of these places, Iraq and Afghanistan, need a large amount of money invested in them. That's why the President of the United States, President Bush, went to the American Congress and asked for $20 billion dollars. And I'm pleased that the Congress will be providing this money. And later this week I will be attending the Donors' Conference in Madrid with leaders from all around the world and I hope they will come in a generous manner to help the people of Iraq, to make a statement to the Iraqi people that the international community is there with them and for them. That the international community will come together not only to give funds, but to give them hope, hope for a better future.

The security situation is still difficult. We are still losing young men and women who proudly went as members of this coalition to free the Iraqi people. There are still remnants of that evil regime that are lurking behind and some terrorists have come to the region to see if they could stir up trouble. But I have every confidence that our military personnel will be able to deal with this threat, and this threat is not stopping us from moving forward. It is not stopping the economy from starting to get going again. It is not stopping children from going to school. It is not stopping the electrical system from coming back up and the petroleum system infrastructure being repaired and put back in place.

So we will be successful, we will be successful in Iraq, let there be no doubt about that. But it does require the assistance of the international community and I am pleased the response that we are receiving, not only for the Madrid conference, but on the part of the thirty-two nations that are standing alongside us with troops in Iraq, and the part of the Security Council that passed that unanimous resolution last week.

This is an exciting time to be in Asia. It is an exciting time to be at this conference and to hear the discussions that are taking place. It's an exciting time to be with partners. People often say, well the United States, you are unilaterals. On the contrary, we are desirous of strong partnerships, we have demonstrated that. We have demonstrated that by supporting the expansion of NATO. We demonstrate that by our presence at conferences such as this. We demonstrate that by the strong alliances that we have in this part of the world and how the President devotes his time to these alliances. Partnership is important to us. Ours will be a century where old enemies have become new allies and partners.

This will be a century where increasingly we agree on the ends to be achieved even as we debate the means. This should be a century where nations have a chance to compete in peace through partnership instead of continually preparing for war. And partnership is at the heart, therefore, of American foreign policy. Some mistakenly think that our foreign policy is only about preemption. Preemption sometimes is necessary. Preemption can save lives. Preemption is not new and revolutionary. When you see a threat coming right at you and it is immediate threat, preemption is sensible policy. But preemption is only one facet of a much larger, richer, broader American foreign policy. A foreign policy that seeks to champion the aspirations of human dignity, that seeks to ignite an era of new economic growth and develop agendas for cooperative action.

President Bush just completed a successful visit to Japan. That was where he lauded Prime Minister Koizumi's determination to reform Japan's economy and put it back in the path to growth. With sustained effort to advance structural reform, Japan can once again play its crucial role as an economic engine for the Asia Pacific.

As I mentioned earlier, President Bush has met with President Hu of China. In the past two and a half years, we have worked to achieve a candid, constructive, and strong relationship of the kind that might not have imaginable just a few years ago. Of course, the United States and China still have differences on human rights and proliferation and Taiwan, from time to time. But basically, our relationship is now marked by complimentary policies in a broad range of issues from trade to regional security. The beauty of it is that even when you have disagreements, you can work through them in a spirit of cooperation. And that is the approach we are taking to all of our friends and colleagues in the world.

As President Bush has said, our nation's cause, America's cause, has always been larger than just America's defense. Our cause was larger when we created the Millennium Challenge Account, the largest increase in U.S. development assistance since the Marshall Plan. It will provide aid to those countries that are in need but who have also made a commitment to govern justly, to invest in their people, and to encourage economic freedom. Our cause was larger when we launched the Congo Basin Forest Partnership in Africa, an initiative aimed at protecting 700,000 square miles of endangered land. Land the size of California, Texas, New Mexico, Arizona, and Utah combined. And we are providing money to the countries of the Congo Basin forest region in order to help them protect this valuable resource for future generations.

Our cause was larger when we rolled up our sleeves with our Chinese friends to end the threat that SARS posed last year to the health and economic activity of this region. Our cause was larger when the President realized that the greatest challenge facing the world right now is a challenge posed by HIV/AIDS, the most significant weapon of mass destruction on the face of the earth, destroying families, destroying societies, destroying democracies. And the President stepped forward in response to that need and our cause is to do everything we can, $15 billion dollars in a new initiatives, many other sums of moneys, billions and billions of other funds and other accounts, all for the purpose of going after this terrible disease.

Our cause is larger every time America gets directly or indirectly involved with challenges around the globe. Our resolving conflicts from Sarajevo to the Sudan.

Our good friends, ladies and gentlemen, the realities of our new century are sobering. But amid the present peril, there is boundless promise. And we must seize their promise.

Governments can put opportunity within reach, but only businesses with the help of good government can turn opportunity into reality. And that's exactly what you do when you lead your companies to buy and sell, to take risks, to trade, and to invest, when you create hope by your trading and by your investment.

In towns and cities all across the globe, you are giving people optimism and opportunity and hope -- not just through your investment in goods and services, but through your investments in people and in communities. People who are hungry are easy fodder for extremism. That's why every time you inject growth into the global economy, you inoculate our world against evil. Growth fosters the promise of a better life and insures that one less cry of despair is another victory for hope.

I congratulate you once again for this CEO summit, but I also lay out a challenge for you. I challenge you to remember why we are all here. We are here because history has taught us that freedom, political and economic freedom, promotes peace and prosperity across the globe. We are here because wherever people feel left out, overlooked, and unrepresented, mischief lurks and terrorists are standing by.

But mainly we are here because if we were not, millions of people around the world would begin to wonder if we were deceiving them when we promised that democracy and free markets would make their lives, and the lives of their children, better. There is no doubt in my mind that with governments and businesses working together, we will honor our promise. That, ladies and gentlemen, must be our goal within APEC and within the world community.

Thank you so very much. (Applause).

MR. BOUCHER: Ladies and gentlemen, I am sorry. The Secretary only has time for one or two questions so who wants to start.

QUESTION: Mr. Secretary of State, I am Susan Leo from GIO Financial Group, New York. My question is, if you review the U.S. economical policy of East Asia for the past three years, what do you think could be done differently.

SECRETARY POWELL: Compared with our policy with the past three years?

QUESTION: Yes.

SECRETARY POWELL: I think that our policy for the last several years has been a good policy, and I expect that we will continue it. The President is committed to continuing to find ways to move the world trading agenda forward with multilateral trade agreements. In our own hemisphere, which affects Asia as well, he is pursuing the free trade area of the Americas. He wants to see the disappointing results of Cancun now transformed into progress and the community coming together again. He is pursuing free trade agreements with nations in Asia on a bilateral basis. We have started discussions with Thailand and recently concluded one with Singapore and others are possible.

And so the President will remain committed to open trade, free trade. He understands the difficulties that many nations have with policies of their own, as well as our, in the areas of agriculture and how difficult that is. But he is committed to try to do everything he can to move that along. And I think you will see the President remain consistent. I know you will see him remain a consistent advocate of open markets. Its no secret to anyone in this room that he believes that with respect to currencies, everything should be done to see if they can reflect actual market conditions. But we also know that in some countries this is a complex issues, and structural adjustments have to be make before you can reach the goal that he has with respect to market conditions as the best measure of the value of a particular currency.

I am frankly quite pleased at what we've been able to do in almost three years now, of this Administration, with respect to concluding a variety of trade agreements and making our commitment to the world so everyone knows that the United States is committed to free and open trade, removing all barriers to trade possible, as the surest way to bring hope to the undeveloped world.

(Applause).

QUESTION: Mr. Secretary, the U.S. is moving towards an agreement, with the mediation of China, to do with North Korea a non-aggression agreement of some kind. Is that a change of policy? And you did more towards China in a way, but China did not more towards the U.S. by granting a more flexible foreign exchange rate by revaluating the yuen. What do you have to say about that?

SECRETARY POWELL: We would not like to link the two issues. Both issues stand on their own merit. We ought to deal with each individually. With respect to the first issue that you mentioned, our security assurances for North Korea, the President has said for the past year, we have no intention of invading, that we were confident that we could find ways to provide assurances to the North Koreans. And we have now some new ideas that we want to introduce into the six-party dialogue. And those ideas, I think, will be received well by the other four members of the dialogue that feel exactly as we do. We'll have to see what the North Korean reaction is once we flesh it out a little more and show them what we have in mind.

On the North Korean side, however, before they can benefit from any security assurance -- if that's what they call it, a benefit -- they have to make it clear to the international community that they will end their nuclear weapons program in a verifiable way. And the IAEA, the international community, in every manner in which you measure the international community, has said the same thing.

With respect to the currency issue, Secretary of Treasury Snow had open, candid conversations with the Chinese not too long ago. And President Bush and President Hu spoke about it yesterday. So they believe they have to move about this in a certain way, we will be encouraging them to move more rapidly and more aggressively.

It is a sign of a mature relationship between two nations where you don't hold one issue hostage to another issue. You represent your interests strongly when you feel strongly about issues, such as human rights, such as religious freedom, proliferation. We speak very candidly to our Chinese colleagues. But where we can cooperate on issues, we cooperate just as closely and just as candidly. And in this particular area, in respect to the six-party agreement, we are very pleased that China is playing a leadership role, stepped forwards, and said we have as much responsibility for the solution with this problem with North Korea as the United States does, which was the message we were trying to convey to the region. For a long time after this problem developed last year, everyone was saying only the United States and North Korea can solve this, it is strictly a bilateral problem. We kept saying why? The neighbors should have as great a concern about North Korea's nuclear weapons development as we do. And finally, the neighbors agreed with that proposition and now we're all working together in partnership to persuade the North Koreans that not only is nobody planning to invade you, but so much more can be done for you if you get rid of this weapons program that will achieve nothing for you and really would just keep you in a continuing position of despair and failed economic policy and a hungry people.

(Applause)

QUESTION: Mr. Secretary (inaudible) you've touched on the environment, and from my last reading, I was informed that the size of the ozone layer, the whole in the ozone layer, has grown to the size of North America. Earlier today the President of Chile also mention that South America is suffering from this development. Why hasn't the U.S. signed the Kyoto Protocol, or do you have any alternative to this development?

SECRETARY POWELL: Because we don't think the Kyoto Protocol that was presented for us to ratify solved the problem in an efficient way and in a way that was consistent with, not only our economic needs but the economic needs of the world. We believe that there are better solutions. We are pursuing new technology, we are pursuing energy efficient technologies in our country. We will be sharing them with the world.

President Bush has a strong and solid commitment to protecting the environment, preserving that which has been given to us. The Congo Basin Initiative is one example of it, but beyond that example, large sums of money are being put into technology projects that will show us how to save energy, show us how to reduce pollution.

We just didn't feel that the Kyoto Protocol was the best way to go, and there are other nations in the world that are coming to that conclusion or who have already come to that conclusion. So we had a disagreement on this and it was a major source of tension in the early part of this Administration. But I hope that the President's policies, his energy policy and the investments we are making in clean air, clean water, and preserving the environment will demonstrate to the world that this is a president who is committed to the environment, who is committed to reducing the demands on energy, just didn't believe that the Kyoto Protocol was the best way to go about it.

Thank you all very much. (Applause)