DPB #3 MONDAY, JANUARY 6, 1997, 1:10 P.M.

1-2 Cyprus Signs Contract to Purchase Russian Missiles

3-7 Effect of the Contract to Purchase Russian Missiles on Peace Negotiations
4, 6 --Turkish Reaction
6-7 --U.S. Disapproval of Russian Role

19-20 U.S. Company Cargill Granted License to Export Grain to North Korea

I do have a couple of statements to give you today, and then I'll be glad to go to your questions. The first statement pertains to Cyprus.

The Government of Cyprus has signed a contract, January 4, to purchase the Russian S-300 anti-aircraft missile system. This is commonly referred to as the SA-10 in the United States but the Russians call it the S-300 anti-aircraft system.

The United States regrets this step. We have made it clear to the Government of Cyprus and others that we believe that this will complicate efforts to achieve a lasting peace in Cyprus. The Cypriot decision introduces a new and destabilizing military element on the island and in the region at the very time that the international community is exploring ways to foster political cooperation to significantly advance a settlement.

Cyprus is already one of the most militarized regions in the world. Turkey maintains a very large military force on the island and both sides are already heavily armed. Lasting security and peace for the people of Cyprus can only be achieved at the bargaining table with all sides committed to finding a solution.

The past has shown that importing weapons has brought only arms increases from the other side. This new missile system is even more troubling as it threatens to take the arms buildup on Cyprus to a new and disturbing qualitative level.

The United Nations Security Council only last month warned that the importation of sophisticated weaponry threatens to raise tensions and complicate peace efforts. Regardless of when this system might be deployed, we believe the conclusion of this sales contract makes any mediation effort that much more difficult and it harms the political atmosphere. The action of the Government of Cyprus is a step down the wrong path.

The United States remains committed to pursuing efforts to resolve the Cyprus problem. Working with the international community, President Clinton is determined to move forward for these efforts to succeed. The parties and their partners in the region must also be prepared to make the tough choices necessary in negotiations. All parties bear responsibility to adopt concrete measures to decrease tensions such as reducing defense expenditures, ending provocative military exercises, and improving safety along the cease-fire lines - all of this necessary to advance a political settlement on Cyprus.

QUESTION: Nick, a few questions on the Cyprus missile situation. The obvious question, was the U.S. advised in advance? Is there any prospect of rolling back the steel? Have you said anything to the Russians? What motivated them? I suppose money. Do you have answers to any of those things?

MR. BURNS: The United States was apprised of this sales contract in advance. In fact, our Ambassador Ken Brill met with President Clerides in Nicosia over the weekend to express the very strong disappointment of the United States in this sale. We have expressed our similar disappointment to the Russian Government. We've been in touch, as you can imagine, with the Greek and Turkish Governments and others about the ramifications of this sale.

We've issued a very strongly-worded protest today. It is somewhat unusual for us to do this, but I think you should take that as a sign of the displeasure of the United States and for what we think this will do - the negative consequences it will have for the peace negotiations.

QUESTION: Let me ask you, please, about the notion that these are defensive missiles; that by acquiring them, Cyprus can possibly neutralize overriding Turkish air superiority. The

United States, certainly, is very actively in the business as the world's biggest arms merchant.

You speak of the negotiations as if this development will puncture something that's very promising and very active. I haven't got the notion that there's much going on to resolve the Cyprus problem. I'm sure you guys want to. But are negotiations at some critical point that this will now upset?

MR. BURNS: Barry, I think that technically this system - the S-300 or SA-10 system - can be described as anti-aircraft system. That's what it is, technically. The fact is that no matter what stage the negotiations are at, Cyprus is heavily militarized. The addition of a sophisticated anti-aircraft system will not help the situation. We don't believe it will improve in any measurable way the security of Cyprus. In fact, we think it could provoke the kind of continued recalcitrance and continued difficulties in the peace talks that have been at the heart of this issue, as you well know, Barry, for more than 20 years.

The United States maintains a very active, diplomatic posture on the peace negotiations. You know that Mr. Beattie is the President's Special Emissary and travels there frequently. He's frequently in touch with the governments. You know that Ambassador Brill and Ambassador Niles and Ambassador Grossman are all involved with the Cypriot, Turkish, and Greek Governments on this issue.

Carey Cavanaugh, who is our Director for Southeast Europe Affairs, has made repeated trips to the region - trips to New York. He's had people here to Washington. We haven't given up on the negotiations. But we do oppose unilateral attempts by one of the parties to take measures which we believe will destabilize those negotiations.

QUESTION: The Turkish position is unacceptable. They won't let this stick. Have you said anything to Turkey about its reaction, and potential reaction to it?

MR. BURNS: We certainly hope and believe that there will be no military reaction. That would be absolutely beyond the bounds. We're worried about the effect on the negotiations themselves. I would also want to draw some attention to other measures that we think all the parties - all of them - have to be aware of: reducing military expenditures, ending provocative military exercises, and improving safety along the cease-fire lines.

Just in the last six months, we've seen several incidents where people have been killed or injured - innocent civilians - and sometimes Turkish soldiers because of attacks along the cease-fire line. So in addition to our criticism of this particular move, Barry, we are asking all of the parties to take some steps that we hope would improve the climate on Cyprus.


QUESTION: I have a question. As you know, there is a long-standing proposal by the President of Cyprus for the complete demilitarization of the island. As you can see, the acceptance of this proposal by Turkey will solve all of these problems with the military buildup and the tension. What's the U.S. position on this proposal, and why don't you push Turkey to accept this proposal?

MR. BURNS: The United States would certainly like to see a decrease in the level of military arms on all sides of this conflict. That is a long-held U.S. position. But because one side feels aggrieved, it does not give that side, we believe, the right to up the ante. Measures like this will simply lead, we believe, to counter-measures by the opposing sides which cannot be in the interest of anyone.

QUESTION: Does the U.S. know that Turkey bought a lot of weapons from the same company in Russia?

MR. BURNS: When we see actions by other parties to the conflict with which we disagree, as you know, we've been very quick to say so publicly. Just in this briefing, we've asked for all parties to make some decisions and to take some steps which we hope would lead to an increase in stability.

So, in general, the Cyprus conflict is the responsibility of everybody involved, not just one party.


QUESTION: I think you missed Barry's question about the defensive nature of anti-aircraft systems. For example, in the Middle East the United States has supplied defensive anti-aircraft batteries to both Jordan and Israel, for example. The argument then was made that these can, in fact, be stabilizing weapons because they supply a protective layer under which negotiations can take place. Why does not this same argument apply in Cyprus?

MR. BURNS: As you well know, Jim, no two situations around the world in any two regions are similar. In fact, they're dissimilar in this case. We believe that the introduction of this particular system will be destabilizing. We don't believe it's going to add to the predictability of the military posture of the Cypriot Government. We don't believe it's going to add any measure of confidence on either side about the military balance. In fact, if the past is any indication of what's going to happen in the future, it will just invite the other side to take a reciprocal move. That can't be in the interest, we believe, of any of the parties.

QUESTION: Is there a military balance now?

MR. BURNS: Excuse me?

QUESTION: Do you think there's a military balance between Turkey and the Greek Cypriots?

MR. BURNS: There's a multi-equation. I wouldn't submit that there is an exact balance among the military forces. Absolutely not. But there's a military equation that has to be considered. In that sense, the balance or imbalance has to be considered. We don't believe that this is a productive set.

I think Savas had a question.

QUESTION: President Demirel has - in Turkey, yesterday, he made a statement: This missile is different than the U.S.-made Patriot missile. The range is so far that it's reaching inside the Turkish territory. For that reason, he said that when they put this missile in southern Cyprus, the Turkish national security will be in danger, and Turkey would most probably be attacked and destroyed by these missiles. Did you hear and did you check on this kind of statement? Did you react other than you said before?

MR. BURNS: I have not seen President Demirel's statement, so I don't wish to react to it specifically, except to say I want to repeat something I said earlier. No party to the Cyprus conflict should conclude from this particular action that they have a right to take corresponding military action. That is simply out of the question. This issue has got to be dealt with peacefully without resort to the use of military force by any of the parties, and that includes the Government of Turkey.

QUESTION: When you see this kind of deal and trade, they're after this kind of deal, the Russian is very effective to enroll the Cyprus issue, and is there some kind of - giving of something to put Russia the Cyprus negotiation? Did you see it this way?

MR. BURNS: We have expressed our disappointment to the Russian Government with its action in the sale of this particular anti-aircraft missile system. However, we will continue to work with the Russian Government, as we do with the British Government and the United Nations and others, toward a resolution of the Cyprus problem.

Still on Cyprus? Dimitri.

QUESTION: I want to come back on my question of the demilitarization proposal. Can you give me the specific position of the U.S., because this proposal, as you know, won a lot of support to the U.S. Congress - from the U.S. Congress.

MR. BURNS: Let me take that question, Dimitri, and give you a specific response on that proposal. But I gave you a general response, which I do think I know represents U.S. policy, but we'll get a specific written response, should you like that.

QUESTION: Can we go back to - are we on another subject?

MR. BURNS: We're still on this subject.

QUESTION: (Inaudible)

MR. BURNS: Sir, are you on this subject or another one? Another one. Okay.

Yes, Ugur.

QUESTION: (Inaudible), Nick, also our building a naval and air base in Cyprus, do you think this also contributes to increasing instability on the island concerns? Were they expressed to the Greek Cypriots?

MR. BURNS: My statements today are limited to the anti-aircraft missile system.

QUESTION: What do you think about this new base? Is it something that would contribute to the instability?

MR. BURNS: I'd be glad to take that question for you.

QUESTION: What is your (inaudible) on the Russian responsibility on this? They have been party to the U.N. Security Council resolutions about the reduction of arms in the island for so many years.

MR. BURNS: As I said, we're disappointed in the Russian action. We've expressed that directly to the Russian Government. We would hope in the future, Russian Government actions would be consistent with the international principle that all of us must do everything we can to minimize and decrease military tensions and the level of armaments on Cyprus, so that we might be successful politically in the talks.

QUESTION: The protest -

MR. BURNS: On this issue? Yes.

QUESTION: The protest that you mentioned, was that to the Russians as well?

MR. BURNS: Ambassador Brill - Ken Brill, our Ambassador to Cyprus - met with President Clerides over the weekend. We have been in touch with the Russian Government.

QUESTION: Was that a protest?

MR. BURNS: We certainly expressed our displeasure. You know, a protest is a loaded word, because it sometimes has a connotation of something in written form. I believe our officials in Moscow as well as our officials here have expressed to the Russian Government our great disappointment.

QUESTION: Nick, do you have any information that the Cyprus side or Cypriot side approached any other company or country with respect to buying a similar system, say any U.S. company?

MR. BURNS: I don't know the answer to that question. You'll have to ask the Cypriot Government.

QUESTION: Are we still on this or -

MR. BURNS: I think we've finished.

... ... ...

QUESTION: Cargill has apparently been granted license to ship grain to North Korea. Is this part of the whole apology?

MR. BURNS: I understand the Treasury Department has issued a license for Cargill to export food to North Korea. I believe this is the first time an American company has been granted a license by the Treasury Department to export anything to North Korea since the September 28 submarine incident. But prior to that incident, there are many, many examples of American companies having been given licenses to export a variety of products to North Korea.

As you know, Judd, we're working on this. As Winston Lord told you last week, we hope very much that we can schedule a date and venue for a briefing on the Four Party Talks. The North Koreans have agreed to that. We just need to schedule it.

You know that KEDO and North Korea will sign protocols in New York this week on the construction of a light-water nuclear reactors that are part of the Agreed Framework. We're working very closely with the South Korean Government on all these issues. We hope very much that the statement made by the North Koreans eight/nine days ago will lead to progress on the Agreed Framework, on KEDO issues, on the Four Party Proposal that was offered by President Clinton back in April.

QUESTION: Was that statement satisfactory to the South Koreans, or the South Korean Republic?

MR. BURNS: I think the South Korean Government has spoken for itself on that issue.