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  • Mr. Carney: Thank you for being here.

  • Thank you for joining us on this trip.

  • Ben Rhodes, the President's Deputy

  • National Security Advisor for Strategic

  • Communications, is joining me today.

  • He can go over the meetings the President has

  • had today thus far as well as preview some of the

  • meetings he will have later today.

  • He'll take questions on those subjects or any

  • other subjects that you have for him and I will

  • stand by for questions on other matters.

  • With that, I give you Ben Rhodes.

  • Mr. Rhodes: Thanks, everybody.

  • And thanks for people joining us virtually.

  • I'll just give a brief readout of the President's

  • meetings this morning.

  • You saw his comments with the Prime Minister of the

  • Netherlands after their meeting.

  • I'd just note in particular that there was

  • strong agreement in their meeting about the need

  • to support the Ukrainian people, the Ukrainian

  • government; to continue to impose costs on Russia

  • for its actions.

  • And as one of our key allies here in Europe

  • and in NATO, we'll be consulting closely with

  • the Dutch going forward.

  • We also very much welcome the announcement made

  • today by the Dutch to join the effort that the

  • United States is leading to end financing for coal-fired

  • plants abroad as part of our efforts

  • to combat climate change.

  • Turning to the meeting with President Xi

  • of China, first of all, the President expressed

  • his thanks, as he did publicly, for the welcome

  • and hospitality the First Lady and his family

  • has received in China.

  • The President also indicated his condolences

  • for the loss of life in the recent terrorist

  • attack in China, and also noted our determination

  • to work with the Chinese to continue to try to locate

  • the Malaysian airliner that has gone missing,

  • and expressed his sympathies to the Chinese families.

  • In terms of issues, the President reviewed

  • a number of global and bilateral

  • issues with China.

  • On climate change, the President stressed

  • a need for the United States and China to work together

  • to set a strong example in terms of reducing

  • our emissions as we head into the 2015 climate

  • negotiations; also noted the importance

  • of continuing to work together to phase

  • out HFCs, something that was committed

  • to at Sunnylands.

  • And we're working to bring other countries

  • into a global effort to phase out the use of HFCs.

  • On the situation in North Korea, the President

  • underscored the need for close coordination

  • in sending a clear message that there needs

  • to be denuclearization on the Korean Peninsula and

  • that any discussions or dialogue among the six

  • parties around the situation in North Korea

  • needs to be based upon actions taken

  • by North Korea, which has not yet demonstrated

  • its willingness to come to the table seriously.

  • We've had good cooperation with China in applying

  • some pressure on North Korea,

  • but we as an international community need to continue

  • to insist that North Korea abide by its obligations.

  • On Iran, the President welcomed China's

  • leadership within the P5-plus-1,

  • where they've been a constructive partner.

  • The two leaders agreed that we have a good

  • opportunity here to reach a diplomatic resolution

  • to the Iranian nuclear issue.

  • The President reviewed a number of bilateral

  • economic issues, including our desire to continue

  • to see China move to a more flexible and market-based

  • exchange rate, expressing our concerns

  • in that regard.

  • The President also discussed a range

  • of other economic issues, including our continued interest

  • in seeing China move forward with the economic reform

  • package that President Xi has put forward,

  • the importance, for instance, of transparency

  • in Sino enterprises, and also the potential for greater

  • energy cooperation between our two countries.

  • On cybersecurity, the President once again

  • underscored the need for the U.S.

  • and China to cooperate closely on this issue.

  • He raised, again, our concerns about the theft

  • of trade secrets for commercial purposes,

  • reiterated that the United States does not engage

  • in intelligence for the purpose of gaining

  • a commercial advantage.

  • The two leaders welcomed the good progress

  • that's been made on military-to-military

  • exchanges and agreed to continue

  • to expand those exchanges.

  • On maritime security and regional security issues,

  • the President reiterated our concern over

  • the Chinese ADIZ that was recently announced.

  • He also expressed a concern over the need

  • to reduce tensions in the East and South China Sea,

  • noting that the United States is not a claimant.

  • He underscored the need for resolutions to these

  • issues based on dialogue and international law,

  • and expressed continued

  • U.S. support for that effort.

  • In that context, of course, the President

  • reiterated his support for the security of our

  • allies, Japan and the Philippines.

  • The two leaders also discussed the need to

  • cooperate on counterterrorism issues.

  • The President also raised issues related to human

  • rights and the rule of law in China, specifically

  • expressing concern over the recent

  • lack of visas to U.S.

  • media outlets like The New York Times and Bloomberg

  • and Voice of America.

  • On Ukraine, the President reiterated our interest

  • in seeing the sovereignty and territorial integrity

  • of Ukraine respected, reaching

  • a diplomatic resolution that deescalates the crisis

  • and allows for the Ukrainian people to make decisions

  • about their own future.

  • With that, we'd be happy to take your questions

  • on this or any other matters.

  • Yes, Steve.

  • The Press: Did it come up, the NSA report having

  • to do with China?

  • Did the Chinese President bring that up?

  • And, secondly, how do you interpret

  • this Russia troop buildup along the border?

  • Is that an ominous sign?

  • Do you see signs of --

  • Mr. Rhodes: Well, President Xi did raise

  • those recent reports in the context

  • of their discussion on cybersecurity.

  • What President Obama made clear to him is that,

  • again, the United States does not engage

  • in espionage to gain a commercial advantage.

  • We don't share information with our companies.

  • Both the United States and China, understandably,

  • like other countries in the world,

  • engage in intelligence activities on behalf

  • of our national security.

  • But there's a clear distinction, in our view,

  • between intelligence activities that have

  • a national security purpose versus intelligence

  • activities that have a commercial purpose.

  • And what we've tried to stress to the Chinese

  • in our cyber dialogue is that while we understand that

  • different nations are going to have approaches

  • to cybersecurity and intelligence collection,

  • that we need to cooperate in setting clear rules of

  • the road that wall off theft of tradecraft

  • related to commercial entities,

  • theft of intellectual property.

  • And so that was President Obama's message on those

  • issues generally, including

  • when those recent reports were raised.

  • With respect to the Russian troop movements,

  • we've been very concerned by the potential

  • for escalation into eastern and southern Ukraine.

  • We've monitored very closely Russian troop

  • movements along the border of Ukraine and,

  • frankly, it underscores the need for there

  • to be a de-escalation because any further steps into eastern

  • and southern Ukraine would represent

  • a very dangerous escalation of the situation.

  • At the same time, I think we've sent a clear message

  • that we are prepared to continue escalating

  • our response to Russia and imposing costs

  • for that type of activity.

  • To take one example, the executive order

  • the President signed gives us the authority

  • to sanction and designate major significant sectors

  • of the Russian economy.

  • And the message to Russia is clear:

  • They're already facing consequences.

  • They're already going to face costs.

  • Should there be any further escalation,

  • we have the ability, together with our partners here

  • in Europe and around the world,

  • to dramatically escalate those costs on Russia.

  • Jim.

  • The Press: In his interview with

  • de Volkskrant, the President was asked what

  • he would say the members of the EU with regard

  • to imposing heavy sanctions against Russia and he said,

  • "There have to be consequences.

  • And if Russia continues to escalate the situation,

  • we need to be prepared to impose a greater cost."

  • What the EU has announced has been short

  • of what the U.S. has --

  • the steps the U.S. has taken.

  • The economic sanctions are not as specific

  • as the executive order the President signed.

  • So I wonder what will we see from the G7 today

  • and the EU tomorrow that goes beyond just harsh rhetoric

  • against the Russians?

  • Mr. Rhodes: Jim, I'd say a few things.

  • First of all, the EU has moved with

  • us in a coordinated fashion and imposed

  • sanctions on Russia.

  • They've implemented visa bans, asset freezes,

  • designated individuals,

  • often in coordination with us.

  • Their lists coordinate broadly with ours,

  • for instance, in terms of the individuals

  • who we've designated.

  • They've also moved to politically isolate

  • Russia, cancelling several upcoming

  • meetings and engagements.

  • So we've had good cooperation to date.

  • And in that European Council statement,

  • they indicated clearly that there would

  • be broader for the Russian economy going

  • forward if the situation continues.

  • In terms of the meetings coming up with the G7,

  • I think what we want to send is a strong message

  • in several respects -- number one, that there will

  • be growing costs for Russia for its actions.

  • And frankly, Jim, the type of consequences

  • we'd like to see are what the President foreshadowed

  • in his executive order.

  • So we identified sectors of the Russian economy.

  • We believe that those broader sanctions have

  • the ability to send a powerful message to Russia

  • that it will face costs.

  • And so, consistent with the European Council's

  • statement that foreshadows consequences

  • for the Russian economy, I think out of that G7 meeting

  • we're looking to send a message that we're

  • not done with building out the types of sanctions

  • that we would impose upon Russia for its actions.

  • We'd also, though, I think, importantly,

  • with the G7, want to underscore our support

  • for the Ukrainian government and people,

  • our support for a very robust IMF package getting done as soon

  • as possible, and our support for individual member

  • states of the G7 and of the EU providing

  • assistance to the Ukrainians as well.

  • The Press: Is there any talk -- obviously a lot

  • of those sanctions are something

  • for the EU and in those countries.

  • Is there any talk in the conversation

  • with the Chinese President about China putting any economic

  • pressure on Russia?

  • Mr. Rhodes: They had a good

  • discussion on Ukraine.

  • Again, what the President said is China has always

  • held sovereignty and territorial integrity

  • as a core of its foreign policy and national security

  • approach and that that principle needs

  • to be applied to Ukraine, and that China's interest

  • should be in working with us to deescalate

  • the situation in a way that respects

  • Ukraine's sovereignty and territorial integrity.

  • The Chinese leader did affirm again

  • that the principle of the independence

  • and sovereignty of nations was fundamental

  • to their approach and that they did want

  • to see a de-escalation and a political

  • resolution to the conflict.

  • In terms of economic pressure,

  • the Chinese have not generally moved to the types of sanctions

  • that we have with the Europeans, so I think that would

  • be a more dramatic action on their part.

  • I think we would find it as a constructive step

  • for them to continue to refrain from

  • supporting Russia's action, and to speaking

  • out for the principle of the rule of

  • law, international law, and the sovereignty and

  • territorial integrity of Ukraine.

  • Doing so I think further isolates Russia

  • on the international stage, as they were at the U.N.

  • when it was a 13-1-1 vote in the Security Council.

  • The Press: Is there anything specific

  • that the President asked the Chinese

  • to do vis-à-vis Ukraine?

  • Mr. Rhodes: Well, I think his specific request

  • is one that he would make of any country,

  • which is that all of us have an interest

  • in an international system that upholds

  • the sovereignty and territorial integrity of states,

  • and that that is the position that we would like to see China

  • stand behind in its international engagements.

  • And we're going to continue to work with them

  • to try to deescalate the situation.

  • Furthermore, China has a relationship with Russia

  • insofar as they can be constructive in urging

  • de-escalation and a political resolution --

  • they could play a constructive role in that

  • regard as well.

  • The Press: On the G7 meeting (inaudible) --

  • Mr. Rhodes: We'll also be discussing

  • that at the meeting.

  • I don't want to get ahead of it, but clearly

  • we believe that there's no reason

  • for the G7 countries to engage with Russia going forward based

  • on its behavior.

  • So I think the leaders will discuss

  • the upcoming future of the G7 and the G8.

  • I think the very fact of a G7 meeting here in the

  • Netherlands -- which is extraordinary

  • in its own right; it's not common for the

  • G7 to meet in a country that is not a G7 country itself --

  • I think speaks to both the need for the G7 to mobilize

  • as an entity to isolate Russia and support

  • the Ukrainian people, but also speaks

  • to Russia's isolation from an organization that they've

  • been a part of now for almost two decades.

  • The Press: Are you looking for any G7 sanctions --

  • Mr. Rhodes: No, we wouldn't.

  • We are looking to coordinate our sanctions

  • in the G7.

  • The G7 as an entity doesn't impose sanctions,

  • but every member state of the G7 has already imposed

  • sanctions -- because in addition to the United

  • States, the United Kingdom, France, Italy,

  • Canada and Japan have also come along with us in

  • imposing sanctions as well -- Germany, of course.

  • So what we want to do is take the G7 as a platform

  • to coordinate the national actions that we're taking

  • and then to work with our European partners

  • as they formulate responses through the EU

  • and European Council so that we have the strongest

  • unified voice in imposing sanctions --

  • because the more we coordinate the designation of individuals

  • and entities and potentially sectors

  • of the Russian economy, the more that's going to have

  • an impact on Russia.

  • The Press: (Inaudible.)

  • Mr. Rhodes: I think what you'll have is you've seen

  • a steady ratcheting up of the pressure on Russia.

  • You've seen a response to that ratcheting up,

  • continued market plummeting in Russia,

  • downgrading of Russia as a place to do business,

  • investors staying away from Russia.

  • So we are already seeing the impact of sanctions.

  • I think we would like to see a steady ratcheting

  • up of that pressure.

  • I think the outcomes that we're seeking

  • in the coming days are a continued unified front

  • in terms of our ability to impose sanctions and

  • to go further as necessary; continued support

  • for our Eastern European NATO allies to reassure them

  • of our commitment to their security;

  • and also, importantly, robust economic assistance

  • from the IMF to individual member states

  • to provide the support that the Ukrainian people

  • in government really need at this time.

  • The Press: So two questions --

  • and it was hard to hear some of the questions,

  • so I apologize if I repeat, but are there specific things

  • that you want to come out of

  • this G7 meeting tonight, specific statements?

  • Are you hoping that there will be a formal

  • declaration that Russia is no longer a part

  • of the G8 and it's now the G7?

  • And is there some way to measure how well

  • the discussion goes by trying to get a sense

  • of what you're hoping the seven nations actually agree

  • to coming out of it tonight?

  • Mr. Rhodes: Well, what I think we'd like

  • to see coming out of it is, again, a foreshadowing

  • of what economic sanctions Russia will be faced

  • with if it continues down this course; a commitment

  • to provide support to the Ukrainian people

  • that's going to lead to concrete outcomes --

  • an IMF package, economic assistance that reaches

  • the people and government of Ukraine --

  • reassurance for the allies here in Europe who are eyeing

  • very warily the events in Ukraine;

  • continued political isolate of Russia.

  • And with respect to the future of the G7,

  • that's something that the leaders will discuss tonight.

  • Our view is simply that as long as Russia

  • is flagrantly violating international law

  • and the order the G7 has helped to build since the end

  • of the Cold War, there's no need

  • for the G7 to engage with Russia.

  • And so I'm sure that that's a topic

  • that the leaders will take up as well.

  • The Press: Not to put too fine a point on this,

  • but are you saying that the President will be seeking

  • expulsion of Russia from the G8?

  • Is that what you're saying?

  • I know you're saying you don't want to get ahead,

  • but it sure sounds like

  • that's what you're suggesting.

  • Mr. Rhodes: I don't want to suggest --

  • what we're looking at is how we engage with Russia

  • in the coming months and years.

  • The G7 is an entity.

  • If there came a point where Russia would

  • deescalate the situation and abide by international

  • law, we would not want to foreclose the potential

  • that the G7 would engage with them.

  • So I'm speaking more about how do we engage

  • with Russia going forward here in the context

  • of the crisis in Ukraine.

  • Again, the door is open for Russia to deescalate

  • the situation, to abide by international law,

  • to come back in line with the international community.

  • I think the message is, so long as they don't

  • do that, they're outside the rules of the road.

  • And I'd just note one other thing,

  • which is that people speak of a new Cold War.

  • The fact is Russia is leading

  • no bloc of countries.

  • There's no ideological entity,

  • like communism, that Russia is leading that has global appeal.

  • There's no bloc of nations,

  • like the Warsaw Pact, that they're leading.

  • They're isolated in what they're doing in Ukraine.

  • And I think that's very much the message

  • that we want to send at the G7, with the EU,

  • with NATO over the course of the next several days.

  • The Press: On flight 370, Malaysia flight 370 --

  • has the Malaysian government communicated anything

  • to the White House in terms of what has happened

  • to that flight?

  • What have you heard?

  • Mr. Rhodes: Yes, we've been in very regular

  • contact, as you know, with the Malaysian government.

  • We have teams on the ground that

  • are working with them on a daily basis.

  • The Prime Minister's announcement today tracks

  • with, frankly, where we've dedicated our assets,

  • which is in the Indian Ocean, in pursuit

  • of recovering the flight.

  • So we feel like we have very good lines

  • of communication with the Malaysians.

  • We're going to continue to support them.

  • We have resources dedicated, as we speak,

  • not just to the investigation,

  • but also to the recovery of the plane if we can locate it.

  • And we're focused, as the Prime Minister said,

  • on that southern corridor.

  • The Press: How concerned are we about

  • the Russian military movement on the border with Ukraine?

  • The comments from NATO military commander,

  • concern about what they may be doing.

  • The Ukrainian Foreign Minister yesterday

  • said he thinks chances of all-out war with Russia are

  • higher than they have ever been.

  • And there was also the suggestion out of NATO

  • that Russia may reposition itself

  • to move into Moldova.

  • What is our current sense of how concerned

  • we are about Russia's next step?

  • Mr. Rhodes: Well, again, our current sense

  • is that we are deeply concerned about Russian movements

  • along that border.

  • We are watching it very closely, as is NATO,

  • as is the Ukrainian government.

  • And again, we believe that Russia stands an enormous

  • amount to lose in terms of economic pressure,

  • international isolation should they take

  • this escalatory step of moving into Ukraine.

  • There is a pathway to deescalate, but if they

  • don't want to take that they're going to be faced

  • with growing pressure, condemnation, sanctions

  • from the international community.

  • With respect to Moldova, similarly,

  • the President met with the leader of Moldova recently

  • at the White House.

  • So did the Vice President.

  • We've expressed our support for their

  • sovereignty and territorial integrity,

  • and we believe that there, too, we would strongly

  • stand up for the principle that Moldova should

  • be able to make determinations

  • about its own future.

  • Again, that's further down the line.

  • We have not seen actions taken yet

  • that directly compromise Moldova's security,

  • although we would note that we watch very closely

  • the situation in Transnistria and our position is going

  • to be very clear in support of Moldova

  • and its sovereignty and territorial integrity.

  • The Press: -- an army preparing to invade

  • or is it consistent with the Russians' plan,

  • which is military exercises?

  • Mr. Rhodes: Well, the Russians have claimed

  • a lot of things in recent days that didn't bear out.

  • So they've said that these

  • are for the purposes of exercises.

  • We'll see whether or not the troop movements

  • are consistent with military exercises.

  • We believe that there's every reason

  • to be skeptical of Russian assertions,

  • which is why we're watching the situation very closely,

  • as are the Ukrainians.

  • I'd note that to date the Ukrainians have shown

  • extraordinary restraint in how they've responded

  • to the situation in Crimea, in particular,

  • but also more broadly.

  • And that continues today with the manner

  • in which they are pulling back their forces in Crimea.

  • The Press: This is the first time a lot of these

  • leaders have gotten together since the crisis

  • in Crimea, and I wonder -- any atmospherics

  • in the sense of either shock or dismay about what

  • Russia has done, and if the President is bringing

  • to this meeting a sense of urgency about what's

  • at stake for all the things he's talked about,

  • like collective security and international law,

  • taking a stand against Russia.

  • Is he using this as an opportunity to identify

  • this as a huge turning point, potentially?

  • And is that working?

  • Mr. Rhodes: Absolutely, we come here, Major,

  • with a sense of urgency.

  • And it's not just because these are things

  • the President has spoken about.

  • These are things that all of these institutions

  • have built over many years in terms of respect

  • for international law, respect for nations to make

  • their own decisions, leaving behind the days

  • in which major powers made decisions about

  • the futures of other countries over their heads.

  • That's what the EU is

  • about. That's what NATO is about.

  • That's, frankly, what the United Nations is about.

  • And so what Russia has done is in violation

  • of that entire international order that

  • has been built up over many decades.

  • And it's for that purpose that we are focusing

  • on this issue here.

  • We have the right people at the table to have

  • that discussion at the G7 here today, and on Wednesday

  • in Brussels, the President will meet with leaders

  • of the European Union, with the leaders of NATO,

  • to underscore that message.

  • And we do feel that leaders are coming

  • to the table with a sense of urgency because this

  • is a matter of not just European security,

  • it's a matter of whether the international order

  • that all of us are so invested in can stand

  • up to this Russian aggression.

  • And as I said, what's different about the past,

  • what's different about now versus the Cold War,

  • is that Russia is finding itself totally alone.

  • It does not have some bloc of nations

  • that is standing with it in support of its position

  • in violating Ukraine's sovereignty.

  • They are isolated among these nations

  • that are gathered here at the Nuclear Security Summit

  • and they are going to find themselves more isolated

  • if they do not take steps to de-escalate

  • this crisis and engage in dialogue with the government

  • in Kyiv and to pull back their forces.

  • The Press: Quickly back to the plane.

  • I just wanted to specifically try --

  • the Malaysian Prime Minister also said that he believes

  • all lives have been lost on that plane based

  • on the new analysis they've had.

  • I just wonder, specifically,

  • has the President been briefed on that piece of information

  • either by the Malaysians or by White House

  • officials, and does that assessment

  • square with what the U.S.

  • believes about the flight?

  • Mr. Rhodes: Ed, we'll have

  • to get our own independent confirmation on that.

  • We obviously noted the

  • Malaysian Prime Minister's statement.

  • They are very much in the lead

  • for this investigation.

  • We're sharing information.

  • But I don't want to indicate that

  • we have independent confirmation of the fate

  • of the passengers on that plane.

  • What we are focused on is the same southern

  • corridor space where we've dedicated our resources

  • in trying to recover the plane.

  • And so that's where our current focus is.

  • The President is briefed on a daily basis about

  • our efforts to support the Malaysian government

  • and to locate the airliner.

  • We'll continue to do that.

  • The Press: This is on Ukraine.

  • Mitt Romney went on CBS yesterday and claimed

  • that he believes the President is naïve

  • on Ukraine and Russia.

  • Dick Durbin, another Democrat, pushed back

  • on that, but I wonder if the White House wants

  • to weigh in.

  • Mr. Rhodes: Well, look, we've been very clear-eyed

  • about our Russia policy from when we came

  • into office, which is that we will cooperate when

  • we have common interests and we can form common

  • positions, but we'll be very clear

  • when we have differences.

  • And it was the right thing to do to pursue

  • cooperation in the beginning of the

  • administration that helped us put in place Iran

  • sanctions; that helped us supply our troops

  • in Afghanistan; that helped us reach the New START

  • Treaty; and frankly, helped us to advance

  • in some of the nuclear security objectives

  • we were talking about here at the summit,

  • like the removal of highly-enriched uranium from

  • a number of countries.

  • At the same time, we've stood up to Russia

  • when we've had differences.

  • And there's nothing new about

  • the United States and Russia having differences.

  • I would note that, as we've said before,

  • we've heard this criticism that somehow the President's

  • inaction in terms of taking military --

  • using military force in Syria has anything

  • to do with the situation in Crimea or Ukraine.

  • When George Bush was President we went

  • to war in Iraq, we went to war in Afghanistan;

  • that did not in any way deter Russia from going

  • into Georgia in 2008.

  • So time and again, we have seen the Russians

  • push the boundaries of international law,

  • particularly when it relates to countries

  • that are near their borders.

  • And what we're doing is standing up to that

  • aggression and mobilizing the entire international

  • community to stand up to that aggression.

  • And, frankly, in terms of the steps

  • that we've outlined and the steps that we're taking,

  • they go far beyond any previous steps that have

  • been taken in response to Russian aggression.

  • In terms of the sanctions that you saw not just

  • on Russian officials but on members of Vladimir

  • Putin's inner circle, in terms of designating

  • for potential sanction sectors to the Russian economy,

  • that goes well beyond any response, for instance,

  • to the incursion into Georgia.

  • So we believe we have a record of standing

  • up for our interests.

  • Again, that means working with countries

  • when we have overlapping interests, which was the

  • case with Russia earlier in the administration.

  • But, increasingly, as Russia has taken a different turn, particularly under

  • President Putin, that involves standing up and

  • mobilizing the international community

  • to isolate Russia when they take the types of steps

  • that they've taken.

  • The Press: Hey, Ben, I want to go back

  • to your readout on China.

  • When you were asked specifically if China

  • would participate in any of the sanctions,

  • you essentially said, no, that they'd talked about

  • the importance of sovereignty.

  • And then you said before that everybody that's

  • attending this summit is basically

  • of the position of isolating Russia.

  • Is there something substantial that China

  • is going to do vis-à-vis Russia

  • in punishing them in some way or participating

  • in this isolation, beyond this readout?

  • Is there something tangible that

  • you can point to?

  • Mr. Rhodes: Look, I think it matters --

  • Russia cares a lot about its standing in the world,

  • its world position.

  • And it matters if traditional friends of

  • Russia cannot express support for their

  • position, and indeed -- or express support for the

  • principle of sovereignty and territorial integrity

  • that Russia is currently violating.

  • We've said that the costs that Russia is going

  • to face run across the board.

  • A big piece of those, and the most significant thing

  • we can do, frankly, is impose economic

  • costs on Russia.

  • And that's what we're doing with our sanctions,

  • and those are already sinking in.

  • We've said we can politically isolate them

  • by separating them from institutions like the G7;

  • by cancelling the types of engagements that the U.S.

  • and the EU traditionally has with Russia.

  • But also, it's a blow to their international

  • standing when they are not able

  • to look and find support for their positions.

  • That's what happened at the United Nations.

  • So that is a consequence for Russia.

  • It is going to lead to an erosion of Russia's

  • position in the world.

  • And I think the reason is, is because they're

  • in violation of the international order.

  • And as I said, China, as they speak to their

  • own national security interests, has always

  • put front and center this notion of sovereignty

  • and territorial integrity when you look at different

  • regions of China, like Tibet.

  • And so it's very much in their interests to stand

  • up for the notion that a nation should make

  • decisions about its own future and not have

  • external actors come in and make

  • those decisions for them.

  • And that's the conversation we'll

  • continue to have with China going forward.

  • The Press: So you're saying because China

  • is not supporting the Russian government in their move

  • in Crimea, that that in itself is significant?

  • Mr. Rhodes: I would say that if you look

  • at the pattern, Chuck, just of voting at the

  • U.N. Security Council, generally

  • China and Russia are aligned.

  • Generally, they're aligned on political and security

  • issues on the world stage.

  • And it says something when Russia is completely

  • isolated as they were

  • at the United Nations Security Council.

  • And it, I think, foreshadows a future that

  • Russia is going to face if they continue down this

  • course where they can't even look at traditional

  • places for full support for their positions.

  • And they're just going to face continued

  • isolation if they don't take this opportunity to deescalate

  • the situation.

  • The Press: (Inaudible.)

  • Mr. Rhodes: We are -- the way -- we are in the sense

  • that when you target certain individuals

  • and entities, it has a chilling effect

  • on the broader economy.

  • So I think it's important to understand that when

  • we sanction individuals with significant resources

  • who are in President Putin's inner circle, when we

  • sanction a bank that is associated with one of

  • those individuals, not only does that have

  • a direct impact on them, but it has a broader chilling

  • effect on the Russian economy that makes

  • investors think twice about putting

  • their money into Russia.

  • That has an effect, a knock-on effect on the

  • ruble, on the Russian market in ways that

  • sanctioning me does not have

  • on the U.S. market

  • and the U.S. currency.

  • The Press: I know we talked a lot about

  • the possibility still of de-escalation,

  • but can you give us a sense, even a general sense,

  • of what de-escalation would be at this point?

  • Because wouldn't you agree that there's really

  • no way Russia is going to leave Crimea at this point?

  • Mr. Rhodes: Well, again, the path to de-escalation

  • is open to Russia in part because the government

  • in Ukraine has indicated a willingness

  • to have a discussion about how to ensure that ethnic

  • Russians, for instance, are protected

  • within their territory.

  • For instance, the government of Ukraine

  • has indicated an openness to having a dialogue

  • on constitutional reform.

  • As a part of that, they could look at autonomy

  • for regions like Crimea.

  • They can look at different solutions to provide

  • an assurance that people in different regions

  • and people of different ethnicities

  • are being protected.

  • But, frankly, they should not have that conversation

  • in the context of military threats and coercion.

  • So what we've said to the Russians is:

  • Deescalate the situation; put it back onto a political

  • and diplomatic track; pull back your forces;

  • engage in a discussion directly with the government

  • in Kyiv -- not over their heads.

  • The international community

  • will support that process.

  • And precisely because the government of Ukraine

  • has indicated a willingness to pursue

  • constitution reform, and precisely because

  • they have an election coming up in the spring,

  • there is a pathway that could be taken that could

  • lead to a de-escalation of the situation.

  • We have not seen Russia take that pathway yet,

  • which is why we've pivoted to the pressure that we've

  • applying, but we've kept the diplomatic lines open

  • and we'll continue to urge the Russians to engage

  • in that dialogue directly with

  • the Ukrainian government.

  • The Press: Just one quick question, Ben.

  • There are 58 leaders here; is the President going

  • to try to build consensus among them so that maybe

  • something can be written up against what

  • Russia has done in Crimea?

  • Something will appear in the declaration

  • or on the side of the declaration?

  • Mr. Rhodes: Well, I think we're engaging with

  • enough nations and entities that we can send that message

  • through the outcome of the G7 meeting,

  • through the U.S.-EU Summit that is upcoming on Wednesday,

  • through the meeting with NATO on Wednesday,

  • and some of the President's bilateral engagements.

  • The Nuclear Security Summit is going to remain

  • focused on the agenda at hand,

  • which is securing nuclear materials so they can't fall

  • in the hands of terrorists.

  • We had some important announcements today,

  • including Japan taking an historic step

  • to get rid of an enormous quantity of

  • highly-enriched uranium and plutonium.

  • We want to continue to encourage other nations

  • to take similar steps and build

  • up their security practices.

  • I'd note that Ukraine was one of the countries

  • that showed leadership in recent years in getting

  • rid of its highly-enriched uranium as well.

  • So the Nuclear Security Summit is going to

  • continue to tackle that agenda, but if you look

  • at all the President's other engagements with the

  • relevant transatlantic and European security

  • and political entities, as well as his bilateral

  • engagements on the margins of the summit,

  • we will be able to touch a broad representation of that

  • leadership that is here at the summit in The Hague,

  • and I think sent a clear message on where

  • we are in Ukraine.

  • The Press: I want to talk real quick

  • on the plane crash.

  • Is the announcement by the Malaysian Prime Minister

  • today -- and I know Malaysia is handling

  • the investigation primarily, but does the announcement

  • this afternoon give you guys any more clarity

  • on what presumably happened to this plane,

  • whether it was a mechanical failure

  • or something more sinister?

  • Mr. Rhodes: I don't want to get ahead

  • of that determination yet.

  • I think the Malaysian Prime Minister was

  • speaking above all to the location in which

  • they're focused now in the southern corridor.

  • So I don't think determinations have

  • been made about the cause.

  • But we'll continue to support them as they

  • work to locate the plane and also to try

  • to make a determination on the cause.

  • The Press: Is the FBI still investigating?

  • Mr. Rhodes: The FBI is still working with the

  • Malaysians, as is the NTSB, the FAA,

  • and all our other entities.

  • The Press: Are you facing any reluctance from the

  • Europeans to go along with the sort of wide sanctions

  • that you're wanting to do against Russia --

  • financial sector, energy sectors?

  • Mr. Rhodes: Well, look, clearly, we know that

  • those have an enormous impact.

  • And as the President said in his own statement,

  • those would be an impact on the global economy;

  • those would have an impact on the European economy.

  • But we believe it's necessary to be prepared

  • to use that leverage and to impose

  • those costs on Russia.

  • And we've had, frankly, good talks with the

  • Europeans about it.

  • Their announcements, again, the other day

  • tracked roughly what we were announcing in terms

  • of political isolation, individual designations,

  • but also an indication that we would move towards

  • broader consequences for the Russian

  • economy going forward.

  • So I think they get it.

  • Obviously, they are critical in making that

  • cost higher for Russia, given the interconnection

  • between the European and Russian economy.

  • But we believe we've had good cooperation.

  • The President has talked to Chancellor Merkel

  • about this, Prime Minister Cameron,

  • President Hollande.

  • We believe that they are moving with

  • us in lockstep in terms of how we're looking at sanctions.

  • We're also looking at things like energy

  • cooperation in terms of how we deal

  • with the current situation.

  • And the President has designated

  • Secretary Kerry and Secretary Moniz to engage

  • in a dialogue with Russia -- sorry, with Europe about how

  • they can continue to diversify some of their energy sources,

  • which could be a mitigating factor

  • in terms of their concerns about the sanctions that

  • may be imposed on Russia, including

  • on the Russian energy sector.

  • So we'll continue that side of the dialogue

  • as well in the days to come.

  • The Press: In stressing economic sanctions

  • to Ukraine you're still facing a problem with

  • Congress in trying to get that package through,

  • and reluctance from House Republicans to accept

  • the IMF quota reforms.

  • two in order to get this through quickly 0:39:05.834,1193:02:47.295 Is the administration willing to decouple those

  • and to provide an example to the rest of the Europeans?

  • Mr. Rhodes: The fact is, Jim, that you can't

  • decouple the IMF quota reform from the support

  • package to Ukraine because it has a direct impact

  • on the ability of the IMF to provide a more robust

  • assistance package to the Ukrainian government

  • on the order of several billion in additional

  • funds that could be available

  • in an IMF package.

  • So we believe that the bill that is making

  • its way through the Senate is, frankly,

  • the right approach, because it couples, again,

  • both punitive measures on the Russian government,

  • $1 billion in loan guarantees and additional technical

  • assistance for the Ukrainian government,

  • but also that quota reform, which is going to allow

  • for a substantially larger IMF package

  • for the Ukrainian government.

  • So people in the House who talk about supporting

  • Ukraine can't decouple the IMF piece from what

  • the Ukrainians need because, frankly,

  • the best thing that could happen for the Ukrainian economy today

  • is for a very robust IMF package

  • to be put in place.

  • That would stabilize their economy.

  • That would strengthen the government in Kyiv.

  • That would allow them to move forward with reform.

  • That would allow them to meet the basic needs

  • of their people and strengthen

  • them vis-à-vis any Russian attempt

  • to destabilize the government.

  • So our message is clear to Congress:

  • If you want to support the Ukrainian government,

  • you need to support this IMF package as well as the loan

  • guarantee program that is making

  • its way through the Senate.

  • The Press: Hey, Ben, it's Julie.

  • Mr. Rhodes: Double AP here.

  • The Press: Double AP.

  • You guys have glossed over this a little bit,

  • including in Michelle's question here --

  • but is Crimea gone?

  • Can you just lay that out for us?

  • Mr. Rhodes: If you look at the nations of the world,

  • there is a broad rejection of the referendum.

  • So the United States doesn't recognize the

  • results of the referendum;

  • Europe doesn't recognize the results of the referendum.

  • I think if you look across Asia, Africa and the

  • Americas, there are not a lot of takers

  • for recognizing an illegal annexation

  • of a part of another country.

  • So, in that regard, we're just not going

  • to recognize a new status quo that allows for the

  • annexation of one piece of Ukraine over the heads

  • of the Ukrainian government.

  • The Press: If the U.S. and

  • other countries don't recognize it,

  • does that change anything for Russia?

  • Is Russia going to in any way change the treaty

  • that they signed for annexation?

  • Mr. Rhodes: Well, what I will be candid about,

  • Julie, is that clearly we have to affect the

  • calculus of the Russian government here over time.

  • And the tools that we are giving ourselves

  • with these sanctions have the ability to do that.

  • And, frankly, what has to happen is the Russian

  • leadership needs to see that ultimately this

  • is leading into a dead-end for them of greater

  • economic pain, of greater international isolation.

  • But we see Crimea as part of that.

  • To be clear, we've already taken steps based

  • on what they've done in Crimea.

  • So while we're deeply concerned about escalation

  • into eastern and southern Ukraine, which would

  • be a very dangerous and destabilizing move

  • by the Russian government, our concerns about what

  • they've already done in Crimea stand.

  • The Press: Just to go back to the readout of the

  • meeting with President Xi, are China and the United

  • States on the same page regarding Russia

  • and Ukraine, or is there a difference there?

  • How would you describe that half of the meeting?

  • Mr. Rhodes: Look, Jeff, candidly,

  • obviously the United States in general is far more willing

  • to move towards the use of aggressive,

  • punitive actions like sanctions not just with respect

  • to the situation in Ukraine, but with respect to other

  • international issues -- precisely because,

  • by the way, the Chinese have a principle

  • of respecting the sovereignty of other countries.

  • So, clearly, we are going to go farther in terms

  • of the punitive measures that we're going

  • to impose on Russia.

  • Where we want to be on the same page

  • is on this principle that sovereignty and territorial

  • integrity and the independence of nation states

  • is the abiding principle of the international system

  • and needs to be the abiding principle that deescalates

  • and resolves the situation in Ukraine.

  • And there we believe the Chinese have been very

  • clear in their expressions of support for

  • de-escalation, a political resolution,

  • and their general commitment to the territorial integrity

  • and sovereignty of nation states, including Ukraine.

  • Carol.

  • The Press: (Inaudible.)

  • Mr. Rhodes: I don't have any update on that.

  • You will have to go to State on that.

  • The Press: Can you talk about how (inaudible)

  • Russia's ability to veto efforts on other issues

  • like Iran and Syria?

  • In the President's interview, he said that

  • it was Russia's responsibility to

  • (inaudible) on chemical weapons in Syria.

  • So you have to acknowledge the power that Russia

  • has of -- its ability to (inaudible)

  • transition in Syria.

  • So do you anticipate or have you seen

  • any change in their posture (inaudible)

  • in terms of Iran or Syria?

  • Mr. Rhodes: Well, if you look at the Syria chemical

  • weapons issue, that's actually moving in very

  • good pace, and we're about at the 50-percent

  • milestone in terms of Syrian chemical weapons

  • being removed from the country,

  • taken into the custody of the international community.

  • So on the chemical weapons issue

  • we've seen continued cooperation.

  • Russia has invested a lot in that project.

  • Frankly, they have nothing to gain from seeing that

  • project go off the rails, in large part because

  • there are extremists in Syria that Russia

  • doesn't want to have -- gain access to chemical weapons

  • who might pose a risk to them.

  • So on the chemical weapons issue

  • we've had good cooperation.

  • Frankly, more broadly, Russia has not been

  • cooperative on Syria in general in terms

  • of the political resolution, in terms of some of the

  • humanitarian access that we sought.

  • So we'll continue, again, to try to pursue those

  • ends, but it's not as if we were dealing from

  • a position of very strong cooperation

  • from Russia on non-chemical weapons-related

  • issues in Syria.

  • Similarly, on Iran, Russia has no interest

  • in destabilization or nuclear proliferation

  • or conflict in the Persian Gulf.

  • That's why they've been invested

  • in the P5-plus-1 talks.

  • To date, we've seen no change in their

  • posture in those talks.

  • The political directors just

  • met last week in Vienna.

  • So we haven't seen a change.

  • And, frankly, Russia would only be isolating

  • themselves from the world further if they were

  • to walk away from an entity like the P5-plus-1

  • that they've been a part of for several years now.

  • And the last thing I'd say on this is that the

  • Iranians, they have an interest in gaining access

  • to the global economy, to European

  • and other markets.

  • So the incentive for them is to not just

  • make some agreement with Russia.

  • The incentive for Iran in these discussions

  • is to reach a comprehensive resolution with

  • all of the parties that are at the table.

  • Ultimately, that's what's going to bring

  • the sanctions relief that they're seeking.

  • The Press: Ben, you just mentioned the Russian

  • interests, and you've been telling us about how this

  • really upended a lot of the architecture

  • that's been in place and a lot of assumptions made about

  • Russia based on their behavior.

  • Ambassador McFaul argues that Putin pivoted away

  • from his strategy, becoming more integrated

  • in the world economy by doing this.

  • And I'm wondering if you have a clear sense

  • anymore for what their interests are, and if the interests

  • are the same of what you thought they'd

  • be in a place like Iran or anyplace else.

  • Mr. Rhodes: Well, I think Ambassador McFaul

  • made a number of good arguments that, frankly, represent

  • the type of analysis that we've had,

  • which is that clearly by doing what he's done in Ukraine,

  • President Putin and the Russian leadership is acting with

  • the knowledge that they're going to face pressure

  • from the international community

  • and the United States.

  • Frankly, we believe that we can over-perform

  • in terms of the types of sanctions that

  • we put on Russia.

  • We believe that the types of sanctions that we put

  • in place last week, for instance,

  • went far beyond anything that Russia has faced

  • in the post-Cold War era.

  • So they're in new territory here, too.

  • The question is, to what lengths

  • will President Putin and the Russian government

  • go to, particularly in the countries that

  • are on their borders, what lengths will

  • they go to and at what cost to them in terms

  • of international isolation and economic pressure.

  • Ultimately, what we've said very clearly

  • since the Cold War is that we want to integrate Russia

  • into the global economy, that Russia has a place

  • in the community of nations and a significant place,

  • given their role in the world.

  • However, that's got to be based on them playing by

  • the rules.

  • So they can't have one set of rules in the former

  • Soviet states and another set of rules

  • in the rest of the world.

  • And I think that's what's at stake right now --

  • is that the same rules that apply in any country

  • in the world have to apply in Ukraine, have to apply

  • in Moldova; certainly apply in NATO allies

  • like Estonia, Lithuania and Latvia.

  • And that's really what's at stake in this conflict.

  • And I think President Putin needs to understand

  • over time that the costs to him are going

  • to be extraordinary in terms of Russia's international

  • standing and its economic position.

  • So we'll have the G7 meeting this evening.

  • And then the President has dinner hosted by the King

  • and with the other leaders here at the summit.

  • And we'll get you additional readouts

  • of those meetings to come.

  • Mr. Carney: Thanks, everybody.

  • Thanks to everyone in the filing center.

Mr. Carney: Thank you for being here.

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