But, our alliance has not been seamless in recent months. Our longstanding friendship has been tested by undeniable differences over our conception of the threat posed by Saddam Hussein, and the methods taken to address that threat. But the Bush Administration has never underestimated the importance of our relationship with Germany, and has worked hard to contain and repair any damage to our mutual friendship. We know how important it is to work closely with Germany on critical issues such as rolling back proliferation, fighting global terrorism, and helping Iraq establish a representative government and a free and prosperous society.

Although we had strong differences over Operation Iraqi Freedom, which the United States, Great Britain, and thirty other Coalition partners carried out last winter, America and Germany can certainly agree on the importance of the development of a stable, democratic, and prosperous Iraq that does not seek to possess weapons of mass destruction (“WMD”). Here, our joint efforts will greatly aid the Iraqis in forging a government of their choosing and an economy that makes the most of their substantial resources.

We appreciate Chancellor Schroeder’s agreement to work closely with us and other countries in the Paris Club to achieve substantial debt reduction for Iraq in 2004.

We are also pleased that Germany will be helping to build a professional Iraqi police force. We note recent indications by Chancellor Schroeder and Foreign Minister Fischer that Germany will not stand in the way of a possible wider NATO role in Iraq following the transfer of power from the Coalition Provisional Authority. And we look forward to Chancellor Schroeder’s visit to the United States on February 27.

Saddam's removal from power has unquestionably improved the international security situation. But we face significant challenges in other parts of the world from terrorist-sponsoring regimes that are developing weapons of mass destruction. Rogue states such as Iran, North Korea, Syria and Cuba, whose pursuit of weapons of mass destruction programs makes them hostile to U.S. and others interests, will learn that their covert efforts will not escape either detection or consequences.

In June, President Bush will welcome Chancellor Schroeder and the other leaders of the G-8 to the Sea Island Summit, where WMD proliferation will be one of the major topics for the leaders to discuss. We are already considering a number of initiatives for the G-8 to consider, some of which the President discussed yesterday, building on the policy and program successes of the Kananaskis and Evian G-8 Summits in the field of nonproliferation.

We have been working closely with our European allies to achieve progress in pressing Iran to abandon its ongoing nuclear weapons program. Diplomatic efforts last fall by Germany, France, and the United Kingdom led Iran to make substantial revelations about its covert nuclear weapons program and led the IAEA Board of Governors to issue an ultimatum that Iran must end this program verifiably or face international condemnation. While I applaud the hard work of our European friends in getting the Iranians to admit to having a nuclear weapons program, the United States is not yet convinced that Iran has come completely clean.

Similarly, we value the efforts of the European Union to help achieve this shared objective of the complete, verifiable, and irreversible dismantlement of North Korea’s nuclear program. Through public statements and communication with the North Koreans, the EU has reinforced the message that the world is united in seeing the elimination of Pyongyang's plutonium and uranium-based nuclear weapons programs, both of which are violations of its international commitments. Such actions show that we can work cooperatively together to achieve our common objectives. In particular, we appreciate the efforts that European countries have made to stop the export of sensitive technologies to North Korea -- technologies that would have accelerated North Korea's nuclear weapons program.

Dictators around the world must learn that weapons of mass destruction do not bring influence, prestige, or security -- only isolation. Libya has recently taken this lesson to heart and has voluntarily pledged to dismantle its WMD programs -- including a uranium enrichment project for nuclear weapons -- and submit to inspections. And the leading Pakistani nuclear scientist, Dr. A. Q. Khan, publicly admitted last week what our intelligence services have known for some time, namely that he had been systematically transferring nuclear technology to rogue states. These can be counted as well-earned successes in President Bush’s strategy -- and what we hope will be our common strategy -- to combat the spread of weapons of mass destruction.

It is worth noting that our successes in Libya’s decision to give up weapons of mass destruction, and efforts to uncover, track, and begin the dismantling of the Khan network are major intelligence victories. For well or ill, much of what we do in the WMD field necessarily remains hidden from public view, but the absence of visible activity in some fields does not necessarily mean that there is not an active, if very quiet, effort underway to roll back some of the most troubling proliferation threats.

But as President Bush said in his State of the Union address last month, “Different threats require different strategies.” While we will pursue diplomatic solutions whenever possible, as we did with Libya, the United States and its allies must be willing to deploy more robust techniques, such as the interdiction and seizure of illegal goods, the disruption of procurement networks, sanctions, or other means. If states show a comprehensive, consistent and transparent commitment to nonproliferation, the international community will welcome this positive contribution to global stability. If, however, rogue states are not willing to follow the logic of nonproliferation norms, they must be prepared to face the logic of adverse consequences. This is why we repeatedly caution that no option is off the table.

I’d like to talk about our newest and most promising multilateral nonproliferation effort, the Proliferation Security Initiative (“PSI”), which Klaus Scharioth also touched on, which President Bush announced on May 31 in Krakow, Poland. The United States, Germany, and nine other close allies and friends worked assiduously from that moment to develop this initiative, which seeks to combat proliferation by developing new means to disrupt WMD trafficking at sea, in the air, and on land. Our goal is to create a more robust approach to preventing WMD, missiles, and related technologies flowing to and from would-be proliferators.

The PSI has been a fast-moving effort, reflecting the urgency attached to establishing a more coordinated and active basis to prevent proliferation. On September 4, we published the PSI “Statement of Interdiction Principles” and shared it with countries around the world. More than 60 countries have signaled that they support the PSI and are ready to participate in interdiction efforts. States are becoming involved in PSI efforts in a number of different capacities – operational, political, or both – to help build the initiative. Three additional countries -- Canada, Norway and Singapore -- will be joining us at the next PSI plenary meeting in Lisbon in early March.

As PSI has developed as an initiative, countries have worked together under PSI auspices to prevent additional shipments of illicit materials. The most recent example of this cooperation, noted by the President yesterday, involves the United States working with the United Kingdom, Italy -- and significantly for our purposes here today, Germany -- to stop and seize a shipment of centrifuge parts for uranium enrichment bound for Libya.

To date, PSI participants have agreed on a lengthening series of sea, air, and ground interdiction training exercises. Five have already taken place, and five additional exercises will occur in the coming months. Australia conducted the first exercise in October in the Coral Sea, involving both military and law enforcement assets. The United Kingdom then hosted the first PSI air interception training session, a table-top exercise to explore operational issues arising from intercepting proliferation traffic in the air. In mid-October, Spain led another maritime exercise, this one in the western Mediterranean Sea, and France led a third maritime exercise, also in the Mediterranean. The United States led a just-concluded exercise in the Arabian Sea, known as “Sea Sabre,” meaning that PSI nations have now trained for maritime interdictions in the Mediterranean, the Arabian Sea, and the western Pacific Ocean, all areas that are particularly prone to proliferation trafficking.

Germany, as a PSI “core group” participant, is actively contributing to efforts to enhance collective interdiction capabilities worldwide. Not only has Germany participated in the training efforts hosted to date, it will host the first airport-based ground interdiction training exercise, Operation Hawkeye, next month.

As the PSI moves forward, we expect other countries will join in training exercises to enhance global capabilities to respond quickly when governments receive intelligence on proliferation shipments. We anticipate expanded cooperation by European partners on such interdiction efforts. NATO is also examining its role in maritime interdiction operations and its potential for stopping shipments of WMD.

President Bush has made clear that the long-term objective of the United States is to create a web of counterproliferation partnerships through which proliferators will have difficulty carrying out their trade in WMD and missile-related technology. As the President has said, “We're determined to keep the world's most destructive weapons away from all our shores, and out of the hands of our common enemies.”

Our PSI interdiction efforts rest on existing domestic and international authorities. The national legal authorities of each participant will allow us to act together in a flexible manner, ensuring actions are taken by participants with the most robust authorities in any given case. By coordinating our efforts with other countries, we draw upon an enhanced set of authorities for interdiction. Experts will work to enhance our ability to share information with law enforcement and military operators in a timely and effective manner, in order to allow operators to increase the number of actual interdictions.

Properly planned and executed, the interception of critical technologies can prevent hostile states and terrorists from acquiring these dangerous capabilities. At a minimum, a well-known and vigorously conducted campaign of interdiction can lengthen the time that proliferators will need to acquire new weapons capabilities, increase their cost, and demonstrate our resolve to combat proliferation. In addition, we believe that PSI can play a major role in deterrence and dissuasion, convincing would-be proliferators that the potential costs -- political as well as economic -- are simply too high for them to risk.

In addition to the PSI, we work in concert with Germany on a variety of nonproliferation issues. Germany and the United States exchange views and information to prevent the spread of WMD and missile technology, as well as illicit conventional weapons. Our cooperation has resulted in the interdiction of illegal shipments to rogue states, and the prevention of the illegal diversion of controlled U.S. technologies.

Germany has been involved in several WMD interdiction efforts over the past year. Last April, German authorities worked with French authorities to stop a shipment of aluminum tubes bound for North Korea. And in May 2003, German authorities halted a shipment of sodium cyanide also destined for North Korea.

Many countries around the world are just beginning to establish necessary and appropriate export-control systems, and will look to Germany, the United States and others for advice and examples. We should seek to present these countries with a clear, common message about the need for effectively enforced export controls that meet international standards, and the need to make tough policy choices to halt the illicit flow of arms and technologies.

The United States and Europe complement each other in our nonproliferation efforts, and we value our collaboration with Germany as we continue to seek new and effective ways to contain the dangerous proliferation of WMD.

Obviously, another important area of joint cooperation between the United States and Germany has been the effort to combat global terrorism. Since the terrible events of September 11, the law enforcement communities in the United States and Germany have worked together to detect and thwart the menace of international terrorism. Every tool of intelligence, every instrument of law enforcement, and every financial mechanism has been employed to this end.

For example, German and U.S. investigators worked together to unravel al-Qaida's Hamburg cell and other terrorist organizations. Germany has shut down extremist organizations that provide ideological and material support for terrorists. Judicial cooperation has been productive as well: in November, Germany extradited to the United States suspected al-Qaida financier Sheik Mohammed ali Hasan al Moayad and an associate.

The German armed forces have played a crucial role in helping to bring stability to Afghanistan, once the training ground of al-Qaida and other terrorist groups. German police are on the front lines there, leading international efforts to train an Afghan police and border police force -- a very important task with its own dangers. The establishment of a Provincial Reconstruction Team in Konduz makes Germany a key partner in our effort to expand security outside of Kabul. The Bundeswehr has also taken on other major commitments in the Balkans and the Horn of Africa.

Still, we must be vigilant to the new and emerging threats against our security, wherever they occur. Terrorist attacks continue around the world, and we must guard against the very real possibility that terrorist groups could acquire weapons of mass destruction and unleash death and destruction on a scale the world has never before seen. As President Bush said recently in London: “The greatest threat of our age is nuclear, chemical, or biological weapons in the hands of terrorists, and the dictators who aid them. The evil is in plain sight. The danger only increases with denial. Great responsibilities fall once again to the great democracies. We will face these threats with open eyes, and we will defeat them.”

The United States and Germany have stood together since World War II against threats to liberty. As Secretary Powell wrote recently in Foreign Affairs and as Klaus Scharioth just quoted and it so important I will quote it again: “The transatlantic partnership is based so firmly on common interests and values that neither feuding personalities nor occasional divergent perceptions can derail it.” Now, our liberty faces new threats in the form of global terrorism and the proliferation of weapons of mass destruction. Just as we had different views on lesser issues during the tensest days of the Cold War, and as we do today, we must nonetheless, in the American phrase “keep out eyes on the prize.” We must work together, for our own safety’s sake.