Secretary Clinton Celebrates Economic Partnership with Asia

Excerpts for Release to Press
Secretary of State Hillary Rodham Clinton
U.S. Chamber of Commerce Hong Kong

July 25, 2011

I have come here today to talk about how the nations of this region and the United States can intensify our economic partnership on behalf of ourselves, each other, and the world.

But before I talk about where we need to go together, let's consider how far we have come. The economic rise of the Asia-Pacific region is an astonishing historic achievement that is reshaping our world today and into the future. Never in history have so many people climbed so far, so fast.

Though this progress is largely due to the hard work and ingenuity of the people of Asia themselves, we in the United States are proud of the role we have played in promoting prosperity.

And we continue to contribute to Asia's growth as a major trade and investment partner, a source of innovation that benefits Asia's companies, a host to 350,000 Asian students every year, a champion of open markets, an advocate for universal human rights, and a guarantor of stability and security across the Asia-Pacific.

These efforts reflect our optimism and enthusiasm for what is happening in Asia today. Yes, countries in this region are grappling with challenges. But we are bullish on Asia's future. And while the United States is facing its own challenges, make no mistake: we are bullish on America's future, too.

America remains an "opportunity society" - a country of possibility and mobility where a brilliant idea hatched in a college dorm room or a product invented in a garage can find a global market and grow into a multi-billion dollar company.

Many have questions about how the United States is going to resolve our debt ceiling challenge. The political wrangling in Washington is intense right now. But these kinds of debates have been a constant in our political life since throughout the history of our republic. This is how an open and democratic society ultimately comes together to reach the right solutions. So I am confident that Congress will do the right thing and secure a deal on the debt ceiling and work with President Obama to take steps necessary to improve our long-term fiscal outlook.

As we pursue recovery and growth, we are making economics a priority of our foreign policy. Increasingly, economic progress depends on strong diplomatic ties, and diplomatic progress depends on strong economic ties.

Naturally, much of our economic diplomacy is focused on East Asia and Pacific. America's future is closely linked to the future of the Asia-Pacific region. And the reverse is true as well: the future of the Asia-Pacific is linked to America's future. We are a resident power in Asia - not only a diplomatic or military power, but a resident economic power. And we are here to stay.

Prosperity is not a birthright, it's an achievement. Whether we achieve it will be determined by how we answer a defining question of our time: How do we turn a generation of growth in this region into a century of shared prosperity?

We must start with the most urgent task before us: realigning our economies in the wake of the global financial crisis. This means pursuing a more balanced strategy for global economic growth. We in the U.S. must save more and borrow less. Our partners must meet this change with changes of their own. Long-term growth requires stronger and broader-based domestic demand in today's high-saving Asian economies.

Above all, we must reach agreement on the rules and principles that will guide our economic relationships into the future. Last March in APEC meetings in Washington, I laid out four attributes that I believe characterize healthy economic competition not just in Asia but across the world: open, free, transparent and fair.

  • We seek an open system where any person anywhere can participate in markets everywhere.
  • We seek a free system - one in which ideas, information, products and capital can flow unimpeded.
  • We seek a transparent economic system. Rules and regulations need to be developed out in the open through consultation with stakeholders. They must be known to all and applied equally to all.
  • Together, openness, freedom and transparency contribute to a fourth principle: fairness. Fairness sustains faith in the system. Sustaining that faith is hard to do when companies are forced to trade away their intellectual property just to enter or expand in a foreign market, or when vital supply chains are blocked.

The United States believes in these principles because their value has been proven to us again and again, not only in times of prosperity but also in times of hardship. At the end of the Vietnam War, there was a thriving commentary around the world on the idea of America's economic decline. Meanwhile, these principles were nurturing a system of entrepreneurship and innovation that allowed two college students to found a small tech startup called Microsoft.

No nation is perfect when it comes to safeguarding these principles, including my own. We all recognize the temptation to bend them. Some nations are making short-term gains doing just that. Some developing countries - admirably focused on fighting poverty - might be slow to implement at home the same rules they benefit from abroad. A number of nations - wealthy in the aggregate but often poorer per capita - might even think the rules don't apply to them.

All who benefit from open, free, transparent and fair competition have a vital interest and a responsibility to follow its rules. Enough of the world's commerce takes place in developing nations that leaving them out of the rules-based system would render the system unworkable - and ultimately that would impoverish everyone.

These principles are easy to utter and embrace, but they don't implement themselves. So our challenge now is to translate them into practice. My country is hard at work doing that, and we urge other governments to join us in this effort.

The United States is taking steps to promote these principles in Asia and around the world through multilateral and regional institutions, new trade agreements, and outreach to new partners, to enlist us all in the quest for inclusive growth. These steps are connected to and build upon the work we are doing to revitalize our own economy.

Just as the WTO eliminated harmful tariffs in the 1990s, today we need institutions capable of providing solutions to new challenges - from some activities of state-owned enterprises to the kinds of barriers emerging behind borders.

We also support innovative partnerships that develop norms and rules to address these new concerns. We should build on the model of the Santiago Principles on sovereign wealth funds, which were negotiated jointly by host governments, recipient governments, the World Bank, IMF and OECD, and the sovereign funds themselves. This code of conduct governing sovereign investment practices has reassured all stakeholders - investor nations, recipient nations, and the private sector. And it may prove a useful model for other shared challenges, like ensuring that state-owned companies and enterprises compete on the same terms as private companies.

We are pursuing new cutting-edge trade deals that raise the standards for fair competition even as they open new markets.

President Obama is pursuing Congressional approval of KORUS, the Republic of Korea- United States Free Trade Agreement, together with necessary Trade Adjustment Assistance, as soon as possible. We consider KORUS a model agreement, and the benefits of KORUS extend far beyond the economic bottom line. It represents a powerful strategic bet by signaling that America and South Korea are partners for the long term - economically, diplomatically, and people to people.

We hope to outline the Trans Pacific Partnership by the time President Obama welcomes the 21 leaders of the APEC economies to Hawaii in November. This agreement will bring together economies from across the Pacific into a single trading community. The idea behind the TPP is to create a new high standard for multilateral free trade and to use the promise of access to new markets to encourage nations to raise their standards and join. The TPP needs to include strong protections for workers, the environment, intellectual property and innovation. It should also promote the free flow of information technology and the spread of green technology, as well as the coherence of our regulatory system and the efficiency of supply chains.

We look to the private sector to become champions of socially responsible practices. Wherever you work, especially in the developing world, I urge you to consider not just the short-term benefits but the long-term consequences of your investments. Your work can help lift people's lives, promote human rights and dignity, and create new markets for the future - or it can further ensnare people in poverty and environmental degradation. Supporting sustainable growth is the right thing to do, and smart business as well.

This agenda is good for Asia, good for America, good for business, and most importantly, good for people. And it will help us create a more peaceful, stable, and prosperous world for the rest of this century.