 The scope of events over this past year reflects the extraordinary range of challenges and opportunities for America that sometimes appears overwhelming. And it is tempting for us to step back from robust engagement to simplify our presence in a complex world, to limit our definition of what is important to America to that which seems most easily achievable. I think that would be a profound mistake. For the threats to America's interests only grow more dangerous if neglected. More important, this is a time of unprecedented opportunity for us as we stand at the height of our power and prosperity. An honest assessment of how we've used that strength must begin with an acknowledgement of what has changed since Bill Clinton was first elected president. I want you to consider the convention of wisdom about America in the fall of 1992. A magazine which reflected a widespread view across the spectrum of opinion makers asked, is the United States in an irreversible decline as the world's premier power? Today, as President Clinton leaves office, America is by any measure the world's unchallenged military, economic and political power. The world counts on us to be a catalyst of coalitions, a broker of peace, a guarantor of global financial stability. We are widely seen as the country best placed to benefit from globalization. Clinton understood before most the challenges globalization posed to how we think about the world. First, for half a century of Cold War struggle, we viewed the world largely through a zero sum prison. We advance, they retreat. We retreat, they advance. Today, zero sum thinking increasingly must give way to win-win thinking. A stronger Europe does not necessarily mean a weaker U.S., indeed a stronger Russia and a stronger China, if they develop in the right way, could be a lesser threat than if they unravel from internal strains. Second, while globalization is inexorable, it is not an elixir for all the world's problems. What is important is that we can benefit and we can harness the desire of most nations to benefit from globalization in a way that advances our objectives of democracy, shared prosperity and peace. Some of the most hopeful developments in the world have come about because we sought to do that, not simply because globalization preordained them. For example, if China has begun to dismantle its command and control economy despite the huge risk, is it simply meeting the demands of global markets in part yes, but it has also decided to fulfill the terms we negotiated for its entry into the WTO? If people from Croatia to Macedonia are rejecting hardline nationalists and embracing democracy, it is in part because they have concluded that is the best way to join NATO and the EU, an opportunity made possible by our expansion of NATO and more attractive by NATO's victory in Kosovo. If the dividing line of the Cold War was represented by the Berlin Wall, the dividing line of the global age is between those who seek to live within the international community of nations, respecting its rules and norms and those who live outside of it either by choice or circumstance. We must ensure that those international systems are open to all who adhere to accepted standards. We must defend those standards when they are threatened and we must isolate those who choose to live outside the system and disrupt it. These foundations of a foreign policy for the global age are reflected in the principles that have guided us these past eight years and hopefully will serve as the touchstone as our next president takes office on Saturday. The first principle is that our alliances with Europe and Asia are still the cornerstone of our national security, but they must be constantly adapted to meet emerging challenges. Eight years ago in Asia, it was far from certain that we would maintain our military presence at the end of the Cold War or that allies there would continue to see its legitimacy. In Europe, NATO's continued relevance was seriously questioned ironically at the very same time that the security and values it defends were threatened by an out of control war in Bosnia. So in Asia, we formally updated our strategic alliance with Japan. We stood with South Korea to meet nuclear and missile threats while we moved together to test new opportunities with North Korea. We dispatched naval forces to ease tensions in the Taiwan Strait and helped our allies to deploy an international coalition to East Timor. Today, no one questions the legitimacy of America's military presence in Asia, not even Kim Jong-il. In Europe, we revitalized NATO with new partners, new members, and new missions. After agonizing differences with our allies over Bosnia, we came together to end a ghastly war and later acted decisively to end the carnage in Kosovo. Today, we are closer to ever than building a Europe that is peaceful, democratic and undivided for the first time in history. Southeast Europe, which has been the flashpoint for European conflict throughout the 20th century, now has the potential to become a full partner in a peaceful Europe if we don't snatch defeat from the jaws of victory. Our European allies already are carrying the overwhelming share of this burden, 87% of the peacekeeping troops and 80% of the funds. We can't cut and run, or we will forfeit our leadership of NATO. NATO's future and that of Europe's new democracies also depends on the future answer to another question. Will more of Europe's new democracies be invited to walk through NATO's open door at its next summit next year? To stop at Poland, Hungary and the Czech Republic would defeat the very purpose of NATO enlargement. To erase the arbitrary dividing lines and to use the strength and magnetism of NATO membership to strengthen the forces of democracy in Europe. A second principle is that peace and security for America depends on building principled, constructive relations with our former great power adversaries, Russia and China. Now with Russia it is tempting to focus on what this troubled company has failed to do in the last decade. It has not developed a full feathered democracy or demonstrated consistent respect for the rule of law. It has not rooted out corruption or learned that brute force cannot hold an ethnically diverse country together. But we should not forget what it has done. Russian people have rejected a return to communism or a turn toward fascism. In five straight democratic elections they have voted for a democratic society that is part of the modern world. And it is largely for that reason that we have been able to work with Russia to safeguard its nuclear arsenal, to secure the exit of its troops from the Baltic states and to cooperate in the Balkans. What now? I believe that President Putin seeks to build a modern Russia plugged into the global economy and that he realizes that the only outlet lies to the West. What we don't know yet is whether he will do that while tolerating opposition, respecting the independence of his neighbors and conducting a foreign policy that does not revert to a Soviet era mentality. What can we do? If Russia seeks to exert coercive pressure against neighboring states like Georgia or Ukraine, we must do all we can to strengthen their independence. But at the same time, when Russia seeks partnership with the international community and membership in international institutions, we should welcome it, insisting that Russia accept the rules as well as the benefits that go with integration. And when the Russian people work at home to build a free media, to start their own businesses, to protect human rights and their environment, we must continue to sport that effort in dollars and deeds and not cut back on these programs as has happened in the past several years in the Congress. For a little else will be possible in our relationship with Russia unless it builds a pluralistic, prosperous society inexorably linked to the West. With China, our challenge has been and will remain to steer between the extremes of uncritical engagement and untenable confrontation. That balance has helped maintain peace in the Taiwan Strait, secured China's help in maintaining stability on the Korean Peninsula. The passage of PNTR last year represents the most constructive breakthrough in U.S.-China relations since normalization in 1979. For China, it is a declaration of interdependence and a commitment to start dismantling the command and control economy through which the Communist Party exercises much of its power. Can China manage this economic transition at a time of uncertain political transition? For countries seized by a history of intermittent disintegration, will China seek stability in greater control over its people or in giving its people greater control? Only China can decide, but we can help it make the right choice by holding it to its commitments made to join the WTO and continuing to make clear that we believe China is more likely to succeed in this information age by unleashing the creative potential of its 1.2 billion people than trying to suppress it. A third principle that must guide American foreign policy is that local conflicts can have global consequences. I don't believe any previous president has devoted more of his presidency to peacemaking, whether in the Middle East or Balkans or Northern Ireland, between Turkey and Greece, Peru and Ecuador, India and Pakistan, Ethiopia and Eritrea. It is more important than ever that America remain an energetic peacemaker, not a meddler, but a force for reconciliation even at times when our interests are not directly involved. Why do I say that? First, because the challenges of foreign policy in any age is to diffuse conflicts before, not after they escalate and harm our vital interests. But because in this global age, as we witness distant atrocities, we can choose not to act, but we can no longer choose not to know. While we should never, in my judgment, send troops into conflict where our national interests are not at stake, where our interests and values are challenged. The American people increasingly expect their government to do what we reasonably can. Those who ignore America's idealism are lacking in realism. What's more, the disproportionate power America enjoys today is more likely to be accepted by other nations if we use it for something other than self-protection. When our president goes the extra mile for peace, as he has been doing these past weeks in the Middle East, as he did in Belfast last month, or in Africa last August when he joined a fractious conference seeking peace in Burundi, it defies perceptions that an all-powerful America is a self-absorbed America. It earns us influence that raw power alone cannot purchase. The fourth principle is that while old threats have not all disappeared, new dangers accentuated by technological advances and the permeability of borders require expanded national security priorities. Indeed, I believe one of the biggest changes we have brought about in the way America relates to the world has been to expand what we consider to be important. We intensified the battle against proliferation of weapons of mass destruction and the complete denuclearization of Ukraine, Belarus, and Kazakhstan to the agreed framework with North Korea. We are diverting billions of dollars in Iraqi oil revenues from the purchase of weaponry to the provision of food and medicine. We persuaded the Senate to ratify the Chemical Weapons Convention and I hope that President Bush will work with the new Senate to address the concerns raised in the debate over the comprehensive test ban treaty and ratify. One of the most important decisions America must make is how to meet the future ballistic missile threat from hostilations. The emerging threat is real, but national missile defense is a intensely complex issue, technically, internationally, and strategically. I earnestly hope the new administration will not be driven by artificial deadlines. And it is inconceivable to me that we would make a decision on NMD without fully exploring the initiative with North Korea and its potential for curbing the missile program at the leading edge of the threat driving the NMD timetable. A fifth and final principle that should continue to drive our foreign policy is that economic integration advances both our interest and our values, but it also increases the need to alleviate economic disparity. During the last eight years, America has led the greatest expansion of world trade in history. With the completion of the Ergway Round, the creation of the WTO, approval of NAFTA, PNTR with China, our conscious decision to keep our markets open during the Asian financial crisis, notwithstanding the impact on our trade deficit in no small measure is responsible for Asia's recovery. In the last two decades, more people than ever before have been lifted from poverty around the world, but yet 3 billion people still struggle to survive on less than $2 a day. Globalization did not create the gap between rich and poor nations, but there is a gap in globalization. To dismiss global poverty and disease as soft issues is to ignore some hard realities. Few nations can survive the onslaught of AIDS that already has hit Southern Africa, where half of all 15-year-olds are expected to die of that disease. And this epidemic has no natural boundaries. The fastest rate of growth today is in Russia. Working to bridge the global divide is not merely a matter of national empathy. It is a matter of national interest. These are basic principles that I believe must define the contours of America's role in this new global age. And some of the specific challenges we will continue to face. Many are daunting, but the new administration takes the reins of a country at the zenith of its power with the wind at its back and clear objectives to steer toward. And there are several steps it could immediately take both to seize the opportunities so plainly ahead and to signal to the world that there will be no fundamental shift in America's purposes as it reviews our global role. Let me respectfully and briefly mention just a few. You might call them five easy pieces for the next administration. Give our European allies a clear sign that there will be no change in our commitment to NATO, its Balkan mission, and its next round of expansion. Make clear to our allies in Asia that we will explore the opportunity presented by North Korea's emergence from isolation. Tell our partners in the hemisphere that we want to finish negotiations on a free trade area of the Americas by 2005, by 2003, so it can enter into force by 2005. In preparing its first budget signal to the world that our determination to win the fight against global poverty will continue to rise. And finally seize the chance to work with Russia to reduce nuclear arsenals without abandoning negotiated agreements. One good way would be to move with Congress to repeal legislation that prevents us from going below the start one level of 6,000 warheads while we bring start two into force and negotiate much lower levels in start three around 2,000 warheads. Our extraordinary strength is a blessing, but it comes with a responsibility to carry our weight instead of merely throwing it around. That means meeting our responsibilities to alliances like NATO and institutions like the United Nations. It means whenever possible shaping international treaties from the inside, as President Clinton recently did with the International Criminal Court, instead of packing up our marbles and going home. Otherwise we will find the world resisting our power instead of respecting it. Let me conclude with a distinction that I think goes to the essence of America's role. There is a difference between power and authority. Power is the ability to compel by force or by sanctions and there are times when we must use it for there will always be interests and values worth fighting for. Authority is the ability to lead and we depend on it for almost everything we try to achieve. Our authority is built on qualities very different from our power. On the attractiveness of our values, on the force of our example, on the credibility of our commitments and on our willingness to listen to and stand by others. In the last eight years, I believe President Clinton's most fundamental achievement is that he steered America into a new area of globalization in a way that not only enhanced our power but our authority in the world. And I have been proud to be part of that journey. As the new administration builds on that achievement, no one will work harder than its processors and turn common goals to reality. Thank you very much.