Daniel R. Russel
Assistant Secretary, Bureau of East Asian and Pacific Affairs
U.S. Department of State
April 1, 2015
Thank you, President Ellings, for the kind welcome, and for bringing together this distinguished group.
It’s good to be in Seattle, and with the National Bureau of Asian Research. Congratulations on NBR’s 50th anniversary. For half a century now, you have provided high quality, independent research on issues facing the U.S. and the world, from energy trade to security strategy and beyond. The strength of America’s academic community and think tanks is envied around the world. It’s particularly beneficial to have institutions like NBR around the country, so that the voices in our national foreign policy conversation reflect the diversity of views across our land. So thank you for all that you do.
Let me start by telling you about why I’m here in Seattle. It’s crunch time for the Trans-Pacific Partnership. Secretary Kerry has asked his team to get out around the country, talk to people who are interested in trade with Asia, address any concerns folks may have, and spread the word about TPP’s benefits. So, in addition to meeting with you, I’m talking with major exporters, including member companies of the Business Council for International Understanding, and meeting with local press. I’m also giving remarks later tonight at the University of Washington Jackson School to talk about the larger context of U.S. relations with Asia, beyond trade.
So here, I’ll summarize that context briefly and then focus on trade.
The Asia-Pacific region — and you know the U.S. is a Pacific power — is one of the world’s most dynamic regions. It contains the top four most populous countries, the three largest economies, many of the world’s fastest growing economies, and a rapidly growing middle class of over half-a-billion consumers. U.S. trade with the Asia-Pacific region was $2.9 trillion in 2013.
Nations across the region face choices: Are they going to move toward greater political freedom and respect for universal rights and values? Are they going to open their economies while protecting workers, investors, and the environment? Are they going to strengthen the international and regional system of rule of law to treat all countries fairly? And by doing that, avoid conflict that could lead to loss of life and crippling economic consequences for all of us?
We can’t take the answers to any of these questions for granted, and they’re all interconnected. Our ability to shape the answers depends on our economic, diplomatic, and military strength. So when we lead on trade and investment, it helps us across the board. Free trade agreements, like the ones we have with Australia, Singapore, and the Republic of Korea, benefit many American businesses and our relationships with those countries.
Trade is good for your local economy, as you know. Goods exports support about 402,000 jobs in this state — the third highest of any state, according to the Department of Commerce’s most recent estimate — so you’re very well-integrated into the global economy. Of your exports, thirty-six percent already go to Asia, including over $2.6 billion in exports of goods. And in a recent five-year stretch, jobs in Seattle based on the export of services, like software, grew 54%.
Concluding TPP is essential to President Obama’s top priority of creating good jobs in America. It also is the most important thing we can do for U.S. relations with Asia this year.
This agreement will include 11 other countries that already account for 33 percent of your state’s goods exports, worth $26 billion (average from 2012 to 2014). It will grow America’s overall exports by more than $123 billion by 2025, according to a study by the renowned independent Peterson Institute. And those exports will support many more high-paying jobs.
Just consider the barriers that our workers and businesses are currently facing in the Asia Pacific, the world’s fastest-growing region. American autoworkers are handicapped by tariffs that can reach 30 percent in Malaysia. American farmers are forced to contend with tariffs as high as 40 percent on poultry in Vietnam. Meanwhile, foreign competitors have struck trade deals that give their own exporters an advantage, getting their products to consumers in those same markets with significantly lower or even no tariffs.
TPP also gives us the opportunity to protect workers and the environment with the highest and most enforceable standards of any trade agreement ever. The TPP will include groundbreaking new commitments to protect our oceans, forests, and wildlife. And it will allow us to address specific concerns about labor conditions in certain TPP countries, bringing improvements on the ground to workers across the region.
In addition, TPP will allow us to tackle a number of issues that have never been addressed in trade pacts — for instance, it will help ensure that state-owned enterprises compete fairly with our private companies.
It also will ensure that Americans whose businesses and jobs depend, either directly or indirectly, on innovation, invention and creativity enjoy the benefits of that work. This includes 40 million workers across the country, and a lot of them are here in Seattle. We have focused a lot of attention on ensuring strong outcomes in the TPP that will promote the digital economy and ensure a free and open Internet. We also have developed strong and balanced intellectual property rules that protect and promote invention and the creation of new products and services, while enabling consumers to access the full benefits of scientific, technological, and medical innovation, as well as new media and the arts.
Our competitors’ growing number of FTAs in the region promote rules that reflect their values, vision of the future, and competitive strengths–not ours. This doesn’t promote sustainable, shared economic growth, intellectual property rights, or maintenance of a free and open Internet. These other rules don’t tackle the growing problem of unfair competition from state-owned enterprises.
In short: We need TPP to promote economic growth and support high-paying jobs, and to advance our values and show that our ongoing commitment to the region extends beyond security. TPP is important to the long-time partners I mentioned with whom we already have FTAs. It’s important to new partners like Vietnam and Malaysia as they seek to further reform and develop their economies. And it’s important to Japan as Prime Minister Abe works on structural reforms, the “third arrow” of his domestic economic recovery programs. While we have more work to do with Japan, to resolve differences in areas such as agriculture and autos, we’re confident we can get this done.
TPP is about giving Americans a fair shot in these markets. Because we know one thing beyond doubt: with a level playing field, when trade is fair, our workers; our businesses do very well. And the businesses and workers here in the Seattle-Tacoma area and in Washington State prove that each and every day.
As my friend and colleague Ambassador Mike Froman, our U.S. Trade Representative, has said, “the finish line for TPP negotiations is in sight.” Negotiators are meeting around the clock, and countries are moving on issues that seemed intractable months ago.
More good jobs and a stronger American middle class are on the table. So I hope we can count on your support, and the support of people around Seattle and across Washington for the Trade Promotion Authority we need to bring this agreement home, and for the TPP agreement itself.
We also see TPP as the best pathway to a larger Free Trade Area of the Asia-Pacific. But in the meantime, we’re continuing to move forward with partners outside the TPP. The biggest, of course, is China.
Exports from the Seattle-Tacoma area to China went up nearly $5 billion from 2009 to 2013 alone. And we’re working to help you increase that number.
Our diplomacy with China has allowed us to expand the areas where we work together, while managing our clear differences. And that diplomacy over many years, including bringing China into the WTO, has supported China’s economic rise, enabling trade and increased exports to China. In 2014 alone, we made important progress in at least four specific ways:
Let’s start with the Joint Commission on Commerce and Trade meetings in Chicago. There, Commerce Secretary Penny Pritzker and U.S. Trade Representative Mike Froman made great progress in getting China to open to imports of U.S. biotech corn and soy; medical devices and pharmaceuticals; and to give fair treatment to U.S. businesses facing the competition regulators.
Second, at the 2014 Strategic and Economic Dialogue, our biggest bilateral annual gathering, we intensified negotiations on a Bilateral Investment Treaty. The “negative” list is next, and we’re asking that it be very high quality — narrowly tailored and widely open to foreign investment, especially since our openness to Foreign Direct Investment (FDI) has allowed new Chinese FDI into the U.S. to surpass our FDI in China.
While we remain concerned about China’s recent tightening of its foreign investment climate and its seeming disregard of certain principles of a free and fair market, we strongly believe that a U.S.-China Bilateral Investment Treaty holds the promise of further opening China’s market to foreign investors and creating an improved investment environment for U.S. companies.
Third, during President Obama’s trip to Beijing, we reached a key agreement to expand visa validity for business visitors to ten years, a boon for our tourism industry and a win for our companies with interests in China. We also achieved an important bilateral understanding to help the WTO’s International Technology Agreement move forward. We subsequently suffered a setback and there’s still a lot of work to do, but we remain hopeful.
Fourth, our landmark climate progress, also during the trip, is important for long-term public health, and economic health, and it supports the green economy.
As you can see, we have a very full economic docket with China, and as I’ll detail in my remarks this evening, a much broader agenda in our bilateral relationship. Together the United States and China have launched a range of new initiatives to boost clean energy research, make carbon capture and storage a reality, link up our cities as they pursue low-carbon solutions, and promote green trade between our countries.
All of you, and the entire Seattle area, have many important roles to play in America’s economic relationship with Asia. Seattle’s impact reaches well beyond the quantity of your trading and investments — many of your companies are known and lauded for the quality of your relationships, the ethical standards you adhere to, and work to instill throughout your supply chains. It’s not just protecting workers, it’s providing them with skills training while protecting the environment and countering corruption.
And later tonight, I’ll speak to Seattle’s role beyond economics — as a center of academic research, a welcoming host of students from the region, and a home to vibrant Asian diaspora communities. With your continued help, the U.S. and Asia will continue to grow and prosper together.
Thank you. Let’s open it up for discussion.
The National Bureau of Asian Research is a nonprofit, nonpartisan research institution dedicated to informing and strengthening policy. NBR conducts advanced independent research on strategic, political, economic, globalization, health, and energy issues affecting U.S. relations with Asia. Drawing upon an extensive network of the world’s leading specialists and leveraging the latest technology, NBR bridges the academic, business, and policy arenas.