Second, promoting free market principles and strengthening US competitiveness. Sustainable economic development cannot be separated from the pursuit of sound, growth-oriented policies; together, these can promote US economic interests abroad. By fostering market forces through deregulation, privatization, and promotion of free trade and investment, reform-minded countries can establish an appropriate complement to building and securing democracy. They also can develop into thriving markets for US exports and the jobs they represent. Indeed, US exports to four aid graduates - Colombia, Chile, Taiwan, and Korea - total more than twice the value of our entire worldwide foreign assistance budget. Our long-run goal should be to graduate more countries from foreign assistance toward mutually beneficial trade and investment relationships with the United States.

       Third, promoting peace by helping to defuse regional conflicts, strengthening the security of our regional partners, and pursuing arms control and nonproliferation efforts.

       As the crisis in the Persian Gulf has demonstrated, there is no substitute for strong US leadership. We continue to play a vital role in bolstering the security of regional allies around the world. Egypt and Turkey - two long-standing beneficiaries of US security assistance - are bulwarks of the coalition against Saddam Hussein.

       National and regional security are preconditions for democracy and free enterprise to flourish. Saddam Hussein's aggression is a dramatic reminder of the continuing need to protect the security of regional states of vital interest to the United States and our allies. The proliferation of missile system and chemical and biological weapons further sharpens our interest in promoting regional stability.

       Fourth, protecting against transnational threats, especially to the environment and from narcotics and terrorism.

       As I noted in my first statement to Congress two years ago, "The future of our civilization demands that we act in concert to deal with a new class of problems, transnational in nature." This includes curbing proliferation, protecting the environment, and countering terrorism and narcotics.

       We have made progress in all of these areas. We have led the international effort to tighten nonproliferation export controls on a global basis. We continue to work to advance our environmental agenda.

       We are actively pressing state sponsors of terrorism in an effort to thwart terrorism around the globe. And our international narcotics efforts to counter supply are complemented by reports of declining demand at home.

       But progress is sometimes slow, unheralded, and hard won. Iraq's conduct following its invasion of Kuwait is a brutal reminder of the danger posed by the interaction of these transnational threats. Saddam Hussein's most recent actions illustrate how traditional concepts of threats to national security need to be extended. Indeed, Iraq has combined:

A credible threat of the use of chemical and biological weapons.
A contemptible use of missile technology as a weapon of terror against innocent civilian populations.

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