Houston -- NATO expansion will go ahead, in part, because the United States believes that Central and Eastern Europeans should understand that "they are not to be second class citizens within Europe," according to Secretary of State Madeleine Albright.

Albright made her remarks during a question-and-answer session with students following a speech she made February 7 at Rice University in Houston, Texas.

She emphasized that the expansion of NATO will help create stability in Europe and will, ultimately, benefit Russia, which currently opposes the plan.

"It is very important to eliminate any artificial Cold War dividing line in Europe," Albright said. The Russia-NATO charter under negotiation would, she said, "have the Russians understand that NATO itself is not an adversary."

Following is the State Department transcript:

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Q&A SESSION FOLLOWING ADDRESS ON "BUILDING A BIPARTISAN FOREIGN POLICY" BY SECRETARY OF STATE MADELEINE K. ALBRIGHT AT THE BAKER INSTITUTE OF PUBLIC POLICY RICE MEMORIAL CENTER, RICE UNIVERSITY, HOUSTON, TEXAS

EDWARD DJEREJIAN: Secretary Albright has graciously accepted to take questions from the students. To kick it off, I'm going to read the first one, and will go directly to the floor.

Madam Secretary, this is a question from Sebastian Good, a Rice student. It is clear that NATO's role must change in the post-Cold War era, but why does the administration think that expanding NATO's unilateral defense agreements into the former Soviet Bloc is a good idea?

Russia's recent pressure on Belarus and some warmongering by its Generals indicate that even an unsteady Russia is not keen on the idea. In this century, Western Europe has offered defense of nations of Eastern Europe before and then reneged on those promises. Why emphasize military inclusion now rather than concentrate on economic inclusion and/or aid?

ALBRIGHT: Had I known the first question was written out, I could have practiced. This is a very important question and it is clearly among the highest priorities that President Clinton has. He has stated that an undivided and stable Europe is very important to the United States.

I think that we all know as students of history that Central and Eastern Europe have, in fact, been the breeding ground of two World Wars. An instability in that region is something that concerns us all. We have made the decision that it is important to expand NATO to cover that region. We, however, also know that it is very important that the Russians do not feel that an expanded NATO is a threat to them or an adversarial move.

The purpose of an expanded NATO is, in fact, to create, or help to create, stability and deal with problems within that gray zone, that gray area in Central and Eastern Europe. We think that that is not only to our advantage but, frankly, also to the advantage of Russia. Because we are concerned about Russia and not letting that great country have a sense that it is being left out, we are also in the process of negotiating a charter between NATO and Russia which would, in fact, have the Russians understand that NATO itself is not an adversary.

We believe that it's important not only to have the economic integration, which we also are going to be seeking, hut to have the Central and Eastern Europeans understand that they are not to be second class citizens within Europe. It is very important to eliminate any artificial Cold War dividing line in Europe, and we will be working very hard with our allies and with the American people so that people understand that an expanded NATO to Central and Eastern Europe is good for us.

Finally, I think everybody needs to understand that an expanded NATO and those countries that will be invited to come in, that they are not coming in as kind of scholarship students who are not earning their way. I think the important part here is that there is, as with students who come into a school -- and a scholarship student myself -- that you have a responsibility and a duty when you come into a great institution to carry your weight. So we believe that being a part of NATO is a privilege and a responsibility. Those countries that will be invited in will be those who can carry their share of the burden.

DJEREJIAN: I would like to go to the floor for direct questions. Would you identify yourself?

QUESTION: My name is Jay Reynolds. I'm a freshman at Lubbock College. I would like to ask the Secretary what plans the administration has for Sino-American relations.

ALBRIGHT: Again, I think that as we look at the end of the 20th Century and the beginning of the 21st, I think I'm probably going to be the last Secretary of State of the 20th Century which is a daunting thought.

But as we look out at the next century, we understand that it is very important for us to develop a multifaceted relationship with China. China is a huge and developing country that needs to understand that it is welcomed into the international system and that it has responsibilities within that system.

It means that we have to understand our relationship with China as it deals with a number of issues. We have a tendency in looking at China to focus at it through the prism of only one issue and decide whether behavior on one particular issue is the mark of the importance of the whole relationship. I think that we cannot hold our relationship hostage to any one issue.

The one issue that people talk about a lot is human rights. I am a great believer in human rights and I believe it to be the signature element of American foreign policy. We need to press our case in human rights.

But we also need to be a part of developing China, of that huge market, and not just for the sake of selling goods there but because we believe that our entrance into the market and investments in China will help to create a different kind of China, one in which there develops a middle class; that, in fact, presses for changes also.

There is a lot of focus being given to areas where we disagree with China. Frankly, we have found that there are many areas in which we agree with China, where they have been very helpful and very cooperative. They have signed the Nuclear Non-Proliferation Treaty and the Comprehensive Test Ban Treaty. They are of assistance to us in negotiating some changes on the Korean Peninsula, and they have been helpful to us in dealing with Cambodia.

The important point is that we must engage China. We cannot isolate it. We have to understand that our relations with China are complex and that they cannot be held hostage to one issue.

Q: Will you initiate change in the composition of foreign aid from military to humanitarian purposes?

ALBRIGHT: We need to understand the whole role of foreign aid as we move forward into the world of the 21st Century, and understand that the few dollars that we do have for foreign aid need to help in the evolution of our foreign policy, generally. I happen to believe that the only way to prevent future conflict is to give development assistance in a very directed way so that the kinds of conflicts that arise in many of the developing countries -- some of them coming from deep poverty, ethhic disputes as a result of people chasing too few resources -- that our development aid money needs to be directed in a way for conflict prevention.

It is important to have some -- I am not opposed to military assistance, I have to tell you. At certain times, it is important to have that kind of function also. But primarily I do believe that American aid go for development.

Q: You talked earlier about how NAFTA was helping the Mexican and the American economies. But I've also heard that it's hurting essential American economies because many of the businesses are leaving there and taking their businesses to Mexico because of the free trade with the United States. Is this problem really that bad? Are these Central American countries suffering as much as people are making it seem? And, if so, what does the administration plan to do about this?

ALBRIGHT: I think the issue here is that we have to look at all of Latin America differently. I think that we have a great opportunity for the first time in our lifetimes, all but one country in this hemisphere is democratic with evolving market systems, and it's important for the United States to support those systems. We're very proud of NAFTA, and I do think -- and with Secretary Bentsen in the audience, who took an incredible role in this, and a great deal of credit goes to him -- we should be very proud of what we have done in terms of creating more jobs, increasing our exports while Mexican exports have also increased and holding out the promise of a freer trade area throughout the hemisphere.

We need to make sure that others can enter into the possibilities of freer markets. I think that there clearly still is, not an equivalence in terms of the economies of the countries in Latin America, but the future is in regional and open market systems, not in protectionism.

Q: ...I was wondering in light of the recent recurring health problems that President Yeltsin has been having in Russia, whether or not the administration is particularly confident in the stability of the Russian government and Russian politics in general; and if there is even a hint of instability, are we confident in the fact that Russia will remain as democratic and an important ally in Europe.

ALBRIGHT: We are very encouraged by the evolution of Russia in a democratic direction and in terms of market reforms. They have a long way to go. But we believe that the process there is entrenched and developing in what we very much hope is an irreversible way.

We have a very close relationship with President Yeltsin. I think, as you know, he and President Clinton see each other frequently, talk on the phone and have developed a very good personal relationship. We wish him well in his recovery and the signs recently are very good and plans are being made for a summit, and he is very important to the whole process.

But I think it's very important also that we understand that our relationships are with the government, and that we are able to function in what is really a new way across the board with the Russian government.

I was in Washington yesterday and attended some meetings of the Gore-Chernomyrdin Commission, which now does business every six months. These two men get together, whose personal chemistry is also quite terrific, to go through a whole host of issues on technical, economic and now some security subjects.

We also know a great many new young leaders In Russia and part of the whole series now of exchange programs or various ways that we are all working with Russia, we are developing contacts with a whole host of new young Russian leaders. So I feel very positive about the evolution of Russia, and while I, along with President Clinton, wish President Yeltsin good health and long life, we have to remember that our relations are with governments.

Q: Hello. I'm Dan Manchester. I'm a senior here at Rice. My question, Mrs. Albright, what is your opinion on the Helms-Burton agreement and other attempts by the U.S. Congress to strong arm trade policies of foreign nations to sanctions here in the U.S.?

ALBRIGHT: I believe that it's very important for us to put as much pressure as we possibly can, along with our friends and allies, to move Cuba into a democratic transition. As I said earlier, there is all but one nation in this hemisphere that has become democratic. I'm not very romantic about Fidel Castro. He is a dinosaur. He basically is the representative of a system that does not work and that is suppressing the creativity and possibilities for the Cuban people.

The Helms-Burton Act was enacted primarily because of the fact that there was not -- a sense that there was not enough action being taken under the Torricelli bill, which in fact did have elements of an embargo and also the second track of a democracy track with Cuba; and it was enacted also because of the horror that we all felt when the Cubans shot down four unarmed -- two planes with four unarmed civilians in them.

A lot of people say these people were Cubans. They were Americans. And I find it horrifying that this kind of a thing should happen, so I support the Helms-Burton Act. But I also support the part of it that says that our allies must help us with trying to move Cuba towards democracy, because ultimately what we must do is try to figure out a way to help the Cuban people, so that they can join the rest of us in what I see as the solidarity of the Americas.

Q: Hi, my name is Leslie. I'm a senior at St. Agnes Academy. I'd like to ask you, considering the United States' leadership role in the international community, why haven't we taken a more active stance in entering Peru's hostage crisis?

ALBRIGHT: This is an issue in Peru that is between the rebels and the Peruvian Government and those who are in the Japanese Embassy. We have been supportive of President Fujimori in his dealings, and he met with President Clinton just earlier this week, in which we indicated our clear support for a peaceful resolution of this crisis. We have made it known that it is important for there to be a peaceful resolution, and we think that our role in this particular way is the most useful way to approach this.

If I might, in conclusion, say what a tremendous pleasure it has been for me to be here with all of you and to have the opportunity to begin my tour as Secretary of State in this great city with a lot of friends and with students. I was a professor. I imagine I'll become a professor again some day, and what I have always loved most of all is being able to teach and talk about America's responsibilities and America's opportunities. We live in a magnificent era, and America is strong. Our economy is strong, and we are a very special and indispensable nation.

My desire, as I take on this job, is to do everything I can to repay the generosity of the American people for having taken my family in as refugees and to do the best I can to represent you and the United States in this era of hope. Thank you very much.

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