The President. First of all, we are part of the Pacific island region. Hawaii, American Samoa, Guam, and the Northern Mariana Islands, which soon should formally acquire commonwealth status, make the United States of America a permanent part of the area. In addition, we continue to have a special relationship with the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

Our relationship with the Pacific island region is a partnership. We share a strong belief in freedom and democracy, respect for human rights, and faith in the power of the free market. We want to build on these values to establish even better relationships with the new nations of the Pacific. And we want to help the islanders keep the region free from tensions and rivalries as it has been since World War II.

Q. Is there any likelihood that in the future there will be more U.S. aid to the Pacific island nations, possibly on a direct bilateral basis?

The President. We intend to maintain a helpful development assistance role, supplementing the larger programs of Australia and New Zealand. We anticipate that future U.S. aid to the region will be at modestly increasing levels.

Our assistance is available indirectly through the Asian Development Bank, the United Nations, and various regional institutions. There are grants to local and U.S. private voluntary organizations for programs in the individual countries, and of course, we have the U.S. Peace Corps. This system seems to work quite well. This approach provides a broad range of U.S. assistance on a regional and individual country basis.

I should also add that private business can and will play a larger role in the economic development of the Pacific island region than aid from any government. This theme was stressed in my message to the South Pacific Conference held in American Samoa 1\1/2\ years ago. The free enterprise system is the best way to promote growth and development. As far as Micronesia is concerned, we are the primary donor, and if Congress approves, we will continue to support the economic development of the Micronesian States under the Compact of Free Association.

Q. Vanuatu has recently established full diplomatic relations with Cuba. The Solomon Islands has adopted a policy of looking to Southeast Asia for partners in its economic development. Western Samoa has full diplomatic relations with the People's Republic of China and a significant cultural exchange program. Kiribati is receiving some material aid from the People's Republic of China. Do you regard these events as a trend that may cause the United States to reassess its Pacific islands policies?

The President. As independent countries, Vanuatu, the Solomon Islands, Western Samoa, and Kiribati have the right to choose their friends. We share a community of values and interests with the islanders. We try to understand their activities in light of our common interests. We hope they take the same approach with us.

Q. Some heads of state from South Pacific nations have complained that not enough attention is paid to them in Washington. Is there still a residual attitude in Washington that writes off the islands because of their comparatively small populations?

The President. Direct U.S. involvement in the South Pacific was very limited until the middle 1970's, since almost all of the islands were colonial dependencies of other states. Nevertheless, the United States began responding to the changing situation in the South Pacific more than a decade ago. We initiated Peace Corps programs, educational and cultural exchanges, and established consulates. As more states became independent, we upgraded the consulates to embassies and accredited ambassadors. This process is continuing. We are now considering additional diplomatic representation in the area. These posts symbolize our recognition of the importance of the Pacific island nations. Also, recently, we began a regional development assistance program and stepped up our contributions to the work of the South Pacific Commission.

I can assure you that the U.S. Government is very conscious of the island states and sensitive to their needs and aspirations.

Q. Now that the Compact of Free Association between the United States and the Federated States of Micronesia, Marshall Islands, and Palau is close to completion, do you foresee anything that could block approval of the Compact in the U.S. Congress or the United Nations?

The President. Because the Compact reflects the will of the people, I hope that both the United States Congress and the international community will recognize that self-government for the peoples of the Trust Territory should not be delayed. I have sent the Compact to Congress with a message urging its approval. We expect close examination of the Compact by the Congress. The democratic process and public review of the Compact will benefit the Compact and the people of the region.

There is an outstanding issue that could delay implementation of the Compact with respect to Palau. It is an internal constitutional problem that has prevented Palau's government from approving the Compact and implementing the mandate of the Palauan people. The primary issue has to do with nuclear materials.

Free association is a partnership. Under the Compact the United States has responsibility for regional peace and stability, while Palau would have self-government, substantial economic assistance, and autonomy in foreign affairs. This partnership requires the United States to perform a security role. Therefore, I have asked the United States Congress to approve the Compact with the Marshall Islands and the Federated States of Micronesia at this time. I will request congressional approval of the Compact with Palau only after that government has confirmed that its internal constitutional approval process is complete. We will cooperate with the Palauan Government, but ultimately it is an issue for the Palauans to decide.

Partnership requires resolution of this issue. Last October the President of Palau joined the Presidents of the Federated States of Micronesia and the Marshall Islands in signing the Saipan accords, which call for prompt approval of the Compact by the U.S. Congress and early termination of the trusteeship.

Q. Leaders in these islands -- the Federated States of Micronesia, the Marshall Islands, and Palau -- generally give the United States high marks for promoting democracy. However, they have often criticized its effort in promoting economic development. Is your administration addressing this issue?

The President. We are meeting that challenge head on. The United States supports the operations and economic development of these governments under U.N. trusteeship. A long-range capital improvement program devoted to basic requirements such as power, water and sewage systems, docks, roads, and airports, is near completion. Looking to the future, the Compact of Free Association provides substantial grants for government operations, social services, capital improvements, economic development programs, health, education, telecommunications, energy self-sufficiency, and other needs.

This assistance will enable the Federated States of Micronesia, the Marshall Islands, and Palau to work toward the economic goals they have established for themselves. I would like to highlight the point that the elected leaders of the Micronesians will establish the economic policies under the Compact. This will put decisionmaking authority and economic resources in the hands of Micronesians and their leaders.

Q. How does your administration evaluate the prospects for economic independence of these island nations after the expiration of the U.S. Compact-related funding?

The President. During the initial term of free association, the Micronesians will have the tools and resources to make significant progress towards economic self-sufficiency. Much will depend on the priorities they establish and their ability to exercise fiscal restraint. The Compact provides an opportunity for them to move toward their goals and objectives.

Again, however, I want to stress the important role of private business. A free enterprise system offers opportunity and rewards, initiative, imagination, hard work, perseverance, and productivity. The governments of the Micronesian States will find that the private sector is the key to a promising future.

Q. Is it likely that the United States will require more naval, air, and ground force bases in the Pacific islands in the future than it now has?

The President. The short answer is no. However, it is always wise to preserve our options. The United States already has important air and naval bases on Guam. They will continue to be the principal U.S. facilities in the Central Pacific. In addition, we exercised our option for a long-term lease of land in the Commonwealth of the Northern Mariana Islands, which will ensure added flexibility to meet any change in our base and logistics requirements. Although current plans are to use the area only for training, we will also have the option, under the Compact, for limited harbor, airfield, and training sites in Palau. The only other defense installation in Micronesia is our testing facility at Kwajalein. Use of this facility is set by the Compact for 15 years, with an option for an additonal 15 years. We do not anticipate the need for any major changes.

Q. A tremendous amount of attention has been given to the Federated States of Micronesia, the Marshall Islands, and Palau during the years of negotiating the Compact of Free Association with them. In the meantime, many people in the U.S. Pacific territories of American Samoa, Guam, and the Northern Marianas are complaining that they are being overlooked -- not enough U.S. private capital, not enough technical assistance. Do you think these complaints are justified?

The President. I can understand why the American territories view the negotiations in Micronesia with great interest. Guam has been a loyal part of the American political family since 1898; American Samoa since 1900. The people of the Northern Marianas chose to become Americans in 1975. The Compact of Free Association has been negotiated over the past 14 years. It is an agreement that recognizes the sovereignty of the people of Micronesia.

Although Americans in the territories have watched these negotiations with interest, I hope they share my pride in their own permanent role in America's future.

American Samoa, Guam, and the Northern Marianas are parts of the American family. We have done much to guarantee that their specific problems receive special assistance. And we will do more. We are working with the three territories to diversify and expand their economies, particularly with the help of the private sector.

The territories do need more technical assistance and a major effort is underway to establish long-range technical assistance objectives for major programs in each territory. Once the objectives are established, needed resources will be better defined. During the last 2 years the U.S. Congress has been supportive of increased technical assistance programs, and I hope this welcome trend continues.

But there still is not enough U.S. private capital available to the territories. We are exploring ways to make financial capital more available and accessible. We are working closely with the territories to identify and make changes in Federal regulations and legislation that will promote economic development.

The most important thing to remember is that the people there are our fellow U.S. citizens and nationals. They enjoy great benefits and carry the responsibilities of citizenship. They have, and should have, the full resources of the Federal Government available to them. The challenge -- and one I'm sure we can assist -- is to tailor those benefits to their unique circumstances.

Q. The United States has not yet signed the Law of the Sea Convention. Why not? Is it possible that the United States would sign it if it were in any way amended?

The President. When we announced that the United States would not sign the convention, I stated that the deep seabed mining section did not meet U.S. objectives. Our problems with the deep seabed mining regime include:

-- provisions that would actually deter future development of deep seabed resources, when such development should serve the interest of all countries;

-- a decisionmaking process that would not give the United States or others a role that fairly reflects and protects their interests;

-- provisions that would allow amendments without United States approval. This is incompatible with our approach to treaties;

-- stipulations relating to mandatory transfer of private technology and the possibility of national liberation movements sharing in benefits; and

-- the absence of assured access for future qualified deep seabed miners to promote the development of these resources.

In spite of our well-known objections and renewed negotiating efforts in early 1982, the Law of the Sea Conference adopted the convention on April 30, 1982, although, after nearly 2 years, it has not yet come into force. I would also point out that many major industrialized nations share our concerns. As to amending the convention, at this point it would be most difficult, and we are not aware of any move to do so.

Nevertheless, the convention contains many positive and significant accomplishments. We are prepared to accept and act in accordance with international law as reflected in the Law of the Sea Convention that relates to traditional uses of the ocean. We are willing to respect the maritime claims of others, including economic zones, that are consistent with international law as reflected in the convention, so long as the international rights and freedoms of the United States and others in such areas are respected.

Q. The nuclear issue is a big one in the Pacific. Could you clarify the U.S. position on the testing of nuclear weapons and on the dumping of nuclear waste in the South Pacific?

The President. The United States is sensitive to the nuclear concerns of the island people. We share the desire to protect the ocean from pollution. The United States is a party to the London Dumping Convention and other international agreements aimed at protecting the health of the oceans. Our domestic laws regulating ocean dumping are even more stringent and are vigorously enforced. The United States is also a member of the Nuclear Test Ban Treaty, which bans nuclear weapons tests in the atmosphere, in outer space, and under water.

Q. The passage of U.S. Navy ships that are nuclear powered and that are capable of carrying nuclear weapons is also of concern to the people of the South Pacific. Can you clarify the U.S. position in this regard?

The President. U.S. nuclear powered warships have an unparalleled record of safe operation since the first nuclear-powered ship became operational in 1955. U.S. nuclear-powered ships have accumulated over 2,700 reactor years of operation without a single nuclear mishap. This record reflects the very strict control exercised over the design, construction, operation, maintenance, and repair of our nuclear-powered ships and the careful selection, training, and qualification of the personnel manning the ships.

Over 40 percent of our Navy's major ships are nuclear powered, and they are among our most effective ships. Access to all areas of the oceans by U.S. nuclear-powered warships is essential to maintain the peace.

The ability of the United States to deter aggression and to help maintain peace throughout the world depends on the ability of its ships and aircraft to travel the ocean spaces, including the South Pacific. The presence of the U.S. Navy ships does not pose a danger to the interests of the people of the South Pacific; rather, it helps guarantee their continued peace and freedom.

Q. You are a man from California -- the Pacific State. What would you like the Pacific people to remember you and your administration for having accomplished in the Pacific?

The President. As a Californian, I am particularly aware of our Pacific interests. I would like to have our administration remembered as one which fully recognized the importance of Asia and the Pacific. Focus is shifting increasingly to the Pacific, which is now -- as I said earlier -- the fastest growing economic region of the world. We want to build on the good relations we already have and make them stronger. We want to do our part to encourage regional cooperation. And we want to continue our security role, a role that permits the islands to develop politically and economically according to the wishes of the islanders themselves.

Recently, meeting at the White House with a group of Americans of Asian and Pacific heritage, I had a chance to reflect on the contributions to American society that derive from the people of this region. It's part of what you might call ``the spirit of America.'' Back in the fall of 1980, I attended a rally held in the shadow of the Statue of Liberty. And there were many nationalities and ethnic groups there, all reminding us that we're all descendants from immigrants who came here looking for freedom and opportunity. And, while our country had its flaws and we still have them, the American dream was real.

Asian and Pacific Americans have helped preserve that dream by living up to the bedrock values that make us a good and a worthy people. I'm talking about principles that begin with the sacred worth of human life, religious faith, community spirit, and the responsibility of parents and schools to be teachers of tolerance, hard work, fiscal responsibility, cooperation, and love. After all, it is values, not programs and policies, that serve as our nation's compass. They hold us on course. They point the way to a promising future.

America needs its Asian and Pacific American citizens. They've enriched our national culture and our heritage. They've held the beliefs that account for so much of our economic and social progress. They've never stopped striving for excellence, despite times in the past when they experienced terrible discrimination. We will continue to fight against discrimination, wherever there are any vestiges of it remaining, until we've removed such bigotry from our entire land.

And when we look toward that great and grand Pacific Basin, there's a promising future. Americans may not hear much about our Pacific and Asian foreign policy, but then there's a lot of good news that they don't seem to hear about.

Our relations with our Pacific and Asian friends and allies have never been better. First of all, as I indicated in answering your first question, it's not all foreign policy. The United States of America is part of the Pacific. There's Hawaii, American Samoa, Guam, and the soon-to-be commonwealth status of the Northern Mariana Islands and our special relationship with the Federated States of Micronesia and the Republics of the Marshall Islands and Palau. It is my hope that our administration will be remembered as helping the people of the Pacific Basin achieve their hopes and aspirations, and that together, we will bring a pacific, tranquil future to the region.

Note: As printed above, the questions and answers follow the text of the White House press release.