Preview of the November APEC Meetings in Singapore

Press Availability
Kurt Tong
Senior Official for APEC, Bureau of East Asian and Pacific Affairs
Foreign Press Center
Washington, DC
November 3, 2009

MODERATOR: Good afternoon. Welcome to the Foreign Press Center. I believe Mr. Kurt Tong is known to many of you from his days on the Korean desk or in Beijing or in Tokyo. We are very lucky to have such a distinguished person knowledgeable on the whole of Asia, and he is now the U.S. senior official for the Asia Pacific Economic Cooperation summit, talks, negotiations. And this is the topic of his briefing here today. He would like to stick to the topic of the APEC meetings coming up. Unfortunately, there are many other topics, I know, but he is not going to address those topics. I wanted to be clear beforehand.

And with that, I will – oh, when we ask the – when you have the questions, I’d like you to please identify yourself and wait for the microphone before you ask the question. Thank you.

MR. TONG: Hi. Well, good afternoon, everybody. It’s nice to see you all. Did I set that off? I would like to talk to you briefly – am I doing that?

MODERATOR: I don’t know.

MR. TONG: Okay. I’d like to open up with a few comments about the U.S. view about the upcoming APEC meetings and what we hope to achieve in Singapore together with all of our colleagues in the other 20 member economies of APEC. In about two weeks, President Obama will make his first trip to Asia since taking office and participate in his first APEC leaders meeting in Singapore. There will be quite a raft of senior U.S. Government officials going to Singapore. Secretary Clinton is going to and participate in the annual ministerial meeting. U.S. Trade Representative Ron Kirk will be going to participate in that same meeting. Secretary – Treasury Secretary Geithner will go to participate in the finance ministers meeting, and Commerce Secretary Locke will also go to Singapore for meetings with business officials and to participate in the CEO – APEC CEO summit which takes place on the edges of the official government-oriented APEC meetings.

So we have quite a large presence going. We may even have some members of Congress joining us for the APEC fiesta. So it’s really quite a concerted and very enthusiastic embrace of the APEC meetings and APEC as an institution by the United States, as evidenced by that participation.

This meeting this year will mark the 20th anniversary of APEC. The organization started 20 years ago with a ministerial meeting in Australia. It’s also the beginning of an important two-year period for APEC which starts next year, with our good friends and allies in Japan hosting APEC in 2010 and the United States hosting here in 2011. We have high hopes for what APEC will achieve in those two years. We’re cooperating extremely closely with our counterparts in Tokyo to try and arrange a very concerted and coordinated and effective two-year approach to achieving the best possible outcomes in APEC in 2010 and 2011.

Hosting APEC in 2011, I think will be a tremendous opportunity for us to promote U.S. business and investment opportunities which will benefit American workers, farmers, and businesses of all sizes. I think it will also be an important opportunity for the United States to define a new 21st century economic policy agenda for the Asia Pacific region.

And what I’d like to do today is just give you very briefly a sense of the major themes that you’ll be hearing about coming out of the various meetings in Singapore. There’s a senior officials meeting which takes place on Sunday and Monday, followed by the annual ministerial meeting, which is a meeting of both Secretary Clinton and USTR Kirk and their counterparts from the other 20 economies, and then the leaders meeting on the 14th and 15th. There’s also a finance ministers meeting on the 12th in Singapore, which will be contributing a lot, particularly this year, to the APEC dialogue and outcomes.

But some of the major themes which you can expect to hear a lot about coming out of the APEC meetings in Singapore include the following:

Economic recovery. Now, clearly, given where the global macro economy stands in these days, it’s a very pressing issue for everyone to discuss the ways that we can achieve economic recovery and growth. There was, in the U.S. opinion, an extremely productive G-20 meeting in Pittsburgh which we hosted, and we hope to have the outcomes of that G-20 session and its focus on economic recovery and growth reflected in the discussions in APEC and the outcomes in Singapore. There are, by my count, nine G-20 members who are also members of APEC, so there’s a good opportunity here for some back and forth between the two groupings, the G-20 discussing issues, APEC discussing issues, and pushing it forward and having the ideas which, for example, in this case, the ideas which are discussed and endorsed in the G-20 context then endorsed by the broader APEC grouping, and then giving feedback into the G-20 process.

A second very important theme, which was also a major theme in Pittsburgh, will be resisting protectionism. This is something that’s been discussed throughout the year intensively. The track record, we believe, is quite good, and that’s in large part because of the intense discussions which the major economies of the world have had over the past year to make sure that we don’t slip down into the road of protectionism in a negative macroeconomic environment.

Undoubtedly, the trade ministers will discuss the Doha round of trade negotiations in their retreat on the 11th. I expect that discussion to be intensive and hopefully productive.

Another extremely important theme, an APEC specific theme, is that of regional economic integration. In some ways, regional economic integration, or REI, as we affectionately call it, is the core agenda for APEC. What that refers to is the work that is done within APEC to try and accelerate trade and investment liberalization among the APEC economies so that the economies will have fewer barriers between them as they trade with each other and invest in each other. The APEC year by year has made important contributions to this regional economic integration agenda, and we hope that this year will be no different. In particular, we’re hoping for some progress in the area of environmental goods and services, and services. We’re hoping that there will be a consensus among the APEC members that we can push forward in those areas as an organization and as a region and improve our level of integration in that area.

I’d like to mention three more themes which are conceptual in nature but very important and hopefully will be reflected in the APEC work program going forward. The first is balanced growth. It was a major theme at the Pittsburgh meetings and a very important one as we think about the challenge of economic and recovery and growth going forward. We really see APEC as having an opportunity to reinforce the G-20’s pledge to establish a pattern of global growth that is more balanced by region and less prone to destabilizing booms and busts.

A second theme is sustainable growth. There’s a real opportunity within APEC to push – and particularly in capacity building, to help the economies of the APEC region develop in ways that have less of an impact on the environment and in particular on climate change worldwide. I expect that in 2010 in particular there will be quite a strong emphasis on finding ways that we can make sure that all of the APEC economies are participating in constructive ways in a green growth agenda.

And finally, inclusive growth. This is a relatively new theme within APEC, but quite an important one. The concept behind inclusive growth – and this probably takes just a minute to explain – is that as economies have gone about liberalizing the rules governing trade and investment, they’ve come to the realization that they also need to give concerted attention to the question about how to assist workers or businesses which have not yet had an opportunity to participate in the growth that results from liberalization in that growth. So that means that as an organization and as governments within APEC, there are ways that we can do more to create opportunities for those participants that have not been able to take advantage of growth yet. That means that, in practical terms within APEC, we’re going to try and reinforce and expand our work program in areas like education, worker retraining, microfinance, and small and medium enterprise development, as well as creating opportunities for women.

Just as a final note about APEC in general, it’s an organization which the U.S. finds extremely valuable. For one, we’re a participant in it, which makes it, from our perspective, extremely important. But more – beyond that, there are – it’s quite a powerful alignment of economies. If you add up the size of the APEC economies, it comes over to well over one half of global GDP, well over one half of the trade which takes place on the planet. And so when APEC works together in a concerted fashion, it can have a real, very significant impact on global rules of engagement in trade and investment and on global growth. So the lineup is a good one.

And second, there’s a proper balance or a useful balance within APEC between the policy work and the capacity building work. We have found that together with the other economies that working through APEC by emphasizing both policy dialogue and encouraging – through peer pressure, through mutual encouragement – getting economies to take steps which open up their economies and leave them to the more open economic structures which advantage all the economies is useful, but it also needs to be matched with the capacity-building work. And the United States has made funds available. We intend to continue to do that, to try and spur the kind of very specific and pragmatic capacity-building work that allows all the economies to actually follow-through with commitments that they're making in the policy dialogues.

So that is – as an opening discussion, I am happy to take your questions.

MODERATOR: Okay, we'll start here in the front.

QUESTION: Hi. Thanks for agreeing to talk to us today.

MR. TONG: Sure.

QUESTION: Daniel Ryntjes from Channel News Asia. I wanted to ask you about sort of concrete free trade agreements. There is, it appears, some pressure from Asia to see the American side come up with something concrete in terms of free trade agreements, but also concern that there isn't the political will in Washington to be able to do that. If this issue comes up, what sort of message do you have for your Asian partners?

MR. TONG: Well, the United States believes that there are a number of ways to pursue trade investment liberalization. Obviously, the most important is the Doha round and multilateral trade negotiations. There are also bilateral and multilateral approaches which can be envisioned and that the United States could participate in.

I don't want to send today any specific signals about any specific agreement. That's one of my main goals for this session today, because I don't want you to misread anything I say as saying one thing or another about either the pending FTAs that we have or any possible arrangements that we might participate in in the future.

But just let me state as a general principle, that if these agreements are high standard and have – and reach real market opening outcomes, which we believe is possible, then they are of value to the United States and they're of value to our partners. And so that is our objective is to see not only, as the United States participates in these kinds of arrangements, but as other economies do so among themselves, that they do so with ambition.

MODERATOR: Okay. The gentleman in the back.

QUESTION: Kemsam Kim from Voice of America. Could you elaborate a little bit about how will you work with APEC member-countries and utilize these opportunities in the meeting to make North Korea get back to the Six-Party Talks and abide by its previous commitment of denuclearization? Thank you.

MR. TONG: The APEC is – the E in APEC stands for economic. And so the discussions within the APEC forum themselves generally concentrate on the economic agenda that the APEC economies want to talk about amongst each other. Now, there are – as particularly the leaders and foreign ministers gather, they – these people obviously have agendas and areas of responsibility that extend well beyond the economic realm. And so there are opportunities which happen on the sidelines of the main APEC meetings for discussions between leaders, between foreign ministers to talk about issues like the very important question of how to achieve denuclearization of the Korean Peninsula. But I don’t anticipate that it’s going to be a specific topic for discussion within the APEC meetings themselves.

MODERATOR: Here – the center.

QUESTION: Okay. Yeah. Thank you. Jim Berger from Washington Trade Daily. Just getting back to the themes for the APEC meeting. You mentioned an economic – regional economic integration. You mentioned environmental goods and services. I assume those are two initiatives that the United States will pursue. Could you give a little bit more meat on that?

MR. TONG: I’d like to refer you to USTR for the details on those. These are – because I don’t want to get it wrong, and they’re in charge of these initiatives, but the idea is to try and push forward in an APEC context on – in an ambitious way to get economies to sign up for further services, liberalization, and action on environmental goods and services.

The – a word about APEC commitments. The – APEC is a non-binding voluntary organization that operates on consensus. There are real benefits to that and the ability then to set what – set the agenda within APEC. Economies are less resistant to a broad agenda, precisely because APEC operates according to those principles. On the other hand, it doesn’t often result in legally binding commitments in and of themselves, but rather, decisions to then take back the outcomes of APEC and implement them on a sustained and voluntary basis. It tends to work, but it also tends to be a gradual process. So these are a couple of areas that we’re making a particular push on this year. We’ll see what the specific outcomes are.

MODERATOR: Okay. This gentleman here. There. No. No, this one. (Laughter.)

QUESTION: My name is Vincent Chang (ph) with the United Daily News. I’d like to follow up on that – on the previous FTA question. Well, it seems to me that you did not want to talk about that issue, especially the creation of the – of a Free Trade Agreement in the Asia Pacific region. But for the past two or three years, the United States has been pushing very hard to try to form an FTA in the Asia Pacific region. Does – you know, judging from what you have just said, does that mean that – did that imply that the United States has given up the kind of idea of forming an FTA in the Asia Pacific region?

MR. TONG: No, I don’t think that’s right. The free trade area of the Asia Pacific is – and it’s not really an FTA of the Asia Pacific, it’s a free trade area of the Asia Pacific – is an aspirational, long-term objective. And the leaders of APEC have agreed amongst themselves to consider and work towards it as a – quote, unquote – “long-term prospect.” What that means is that the FTAAP, or FTAAP, is a – is kind of a guide, if you will, that – or an objective, a long-term objective that we’re working toward and figuring out how to get to as an organization. Obviously, an actual FTA, signed, sealed, delivered free trade agreement of all 21 APEC economies would be an enormous undertaking and a very, very large project.

But what we can do year to year is figure out – is two things. One is to sort of map out how might we get to that tactically, organizationally. And there’s discussion among the senior officials within APEC about what will be the best strategies to try and get to that goal as a long-term prospect. And the other thing we can do is to keep – continue making progress year by year in trade and investment liberalization which gets us, in practical terms, in pragmatic terms, closer to that objective, that aspirational goal.

Now, there’s another set of goals which I haven’t mentioned yet, which are extremely important to APEC. And that is the Bogor goals of – the leaders in 1994 in Bogor, Indonesia set for themselves the objective of free and open trade and investment in the region by 2010 for the developed economies, and 2020 for the developing economies.

Now, how exactly you define free and open trade and investment is something that we’re going to be discussing and evaluating over the course of this coming year. But that – this is kind of the Bogor – the point that I want to make is that the Bogor goals and the FTAAP are both similar in the sense of pulling APEC as a group in the same direction towards a higher standard of trade and investment liberalization to the benefit of all the economies and citizens of the economies in the region.

MODERATOR: And now the – now your turn.

QUESTION: Thank you. John Zang with CTI-TV of Taiwan. Will there be opportunities for bilateral talks on bilateral trade issues? I’m asking this because the United States and Taiwan have recently signed a beef import agreement, which has generated a lot of controversy in Taiwan. Will there be opportunities for the two sides to revisit the issue during – on the sidelines of the APEC? Thank you.

MR. TONG: Well, on that specific issue, I don’t know whether the right personalities, the right officials will be in Singapore or not to discuss that specific issue. Generally every time that I participate in APEC meetings as a senior official, I always meet with my counterparts from Chinese – Taipei. And we review the entire range of issues related to APEC. And so there will probably be opportunities for the U.S. to meet with a number of economies bilaterally in Singapore and have a chance for discussions. That takes place sometimes in a formal setting, sometimes an informal setting. Sometimes you’re walking down the hall and a counterpart from some economy comes up and says, hey, what about this. So there’s lots of opportunities for people to bounce ideas off each other.

MODERATOR: Thank you. This gentleman.

QUESTION: Thank you. Donghui Yu with China Press. You are talking about a leadership that the United States and Japan will play in the next couple of years to define the evolutions of APEC. But in G-20 summit, I know many people actually are talking about the United States and China, that is, even the concepts of G-2. So I just wonder what do you think that – what role China will play in the process of the APEC evolution. Thank you.

MR. TONG: Well, think China has an extremely important role in APEC. As a very large economy, certainly the most populous economy in APEC – it’s also depending upon your method of calculation – the third-largest economy in APEC and in the world. The – and it’s – it gets a very good – because of that, people are obviously very interested in working with China bilaterally in expanding their trade and investment relations with China. It also – but China’s pure size as well as the high caliber of its officials who participate in APEC, give it quite a voice within the discussions, and so we – I personally consider China to be a real leader within APEC and absolutely embrace that. It's one of the real valuable aspects. As I said at the beginning, one of the real valuable aspects of APEC is the importance and the significance of the economies that are – that participate in the organization, and China is certainly one of the leading members.

MODERATOR: Back here. Yeah.

QUESTION: Thank you. Zengxin from Caijin magazine. Just talking about recovery and sustainable growth, will there be new stance by the United States in this meeting? I mean, in the short term we see that U.S. GDP is coming to growth in the third quarter. But also we see that Australia, Brazil, once they raise their interest rates (inaudible) money is coming to flow in. So for countries – they are afraid of exit, taking their exit strategy before the United States in the shorter term. In the longer term, about this sustained balance to growth, will that time – say exchange rates come back to the table again?

MR. TONG: Well, a lot of what you've asked is not in – within my purview. There's a finance minister's process within APEC that – and I have a counterpart in the Treasury Department who manages that. The – and also, just as a general rule, don't comment on anything that has any remote connection to currencies or interest rates or any of that sort of thing.

But I would say that I – precisely because of where the position that the global economy is in this year, you can definitely expect that recovery and growth will be a major topic of discussion for the leaders, and I would imagine also for the finance ministers when they gather in Singapore.

MODERATOR: Come down here and to the front for a change.

QUESTION: I'm Toshihiko with the Asahi, a Japanese newspaper. I have two questions. One is about APEC significance. So it seems to me United States is now trying to put more and more priority on APEC than it did before. So I'm just wondering why at this time. Does it have something to do with the fact – recent trend that – after the financial crisis, Asia originally had – is coming out of (inaudible) and also people are now talking about the economic power shift is now occurring – power of the Asian region. So maybe U.S. is now thinking about U.S. should be more involved in the Asian region framework.

And second question is about the trade issue, you touched on the trade – they're going to talk about trade. But we haven't heard anything from major initiative from this Administration when it comes to the trade issue. So is the Administration is thinking about they're laying out those initiative before APEC or at APEC?

MR. TONG: On the second question, I don't really want to preview in any detail the exact positions, which will be outlined by USTR Kirk or by President Obama in APEC at this time. Just let you hear it from them directly.

The – on the question of your perception that the U.S. is ramping up its attention paid to APEC, I'd welcome that perception. That's certainly the perception which we wish to convey. I think that you've actually hit on one of the principal reasons of it, is that because the Asia Pacific region is one that is experiencing rather consistent economic growth, creating enormous opportunities for the United States, that we see it as a region that we very much want to be in. We want to be in it as traders, as exporters, and as beneficiaries of the growth which takes place in that region. So from that perspective, APEC is extremely important to us. It's been important to us for quite a while.

I'd remind you that the United States was the first to host a leaders in APEC back in Blake Island in 1993, raising the organization up to the leaders level, and it's been something that we've given consistent attention to over the years.

QUESTION: Why are you changing the priority or it has stayed the same for APEC?

MR. TONG: I think it's been a consistent priority, but I certainly welcome your perception that we're giving it a lot of attention.

QUESTION: But how about your view on that?

MR. TONG: Well, I'm relatively new to my job, so I, of course, think that we're doing a great job. (Laughter.)

MODERATOR: Okay, here in the middle.

QUESTION: Hi. Xiong Min from 21st Century Business Herald China. It seems that the U.S. wants to also among all the – aside from all the agenda you just mentioned, U.S. also helps to use the Singapore APEC as a platform to prepare yourself for the 2011 APEC in the U.S. I wonder if you can elaborate more about what you're going to do on this occasion in Singapore to prepare for that.

MR. TONG: Well, I think that thematically the themes which I outlined to you at the start are ones that I believe that we'll pursue through Japan's leadership in 2010 and the U.S. leadership in 2011. And our goal in this effort that we – we've actually for some time been doing coordination among Singapore, Japan, and the United States, thinking about, a sort of, three-year progression and how we can achieve good outcomes in areas that are important to APEC. And I think we're on track to do so. It requires a lot of coordination and a lot of discussion to achieve that.


QUESTION: Hiro Watanabe from Japanese newspaper Sankei Shimbun. You said APEC is the only organization in Asia Pacific, U.S. participating. And also you might say it is crucial that the U.S. remain leader for further (inaudible) in Asia Pacific. But Japan has currently launched another framework, so-called East Asian economic community to (inaudible) further economic integration in Asia. So I want to confirm your stance to that idea. Do you think it's compatible with U.S. policy in Asia Pacific region?

MR. TONG: The – well, I want to clarify one thing. APEC is not the only institution in the Asia Pacific region that the U.S. participates in. We have a lot of interaction with ASEAN in a bilateral context – the Association of Southeast Asian Nations, in a bilateral context. We also are regular participants in the ASEAN Regional Forum, which is another important regional institution which is not economic – primarily economic in nature. But APEC – we view APEC as the premier economic organization in the Asia Pacific region, and we're very enthusiastic participants in it.

Now, you spoke about Japan's priorities. I've had myself, and others, have had extensive discussions with our Japanese colleagues about APEC, and we think that we really have a shared view about the importance of the organization and of our two-year effort in 2010, 2011 to achieve strong outcomes within APEC.

QUESTION: What is it about (inaudible) to create East Asian economic community? Could you comment on that?

MR. TONG: I'd like to say that the – it's an interesting idea and address it kind of at the level of general principle. The United States understands that there are good reasons for the Asia Pacific – East Asian economies and governments to associate with one another in a number of different ways, so there's the Association of Southeast Asian Nations, there's the ASEAN Plus Three, there's the ASEAN Plus Six, which is sort of an economic approach. There's the East Asia Summit. There's the Plus Three Group. Recently there was a meeting amongst Japan, China, and the Republic of Korea in sort of plus-three format. And so there's a lot of different groupings. And similarly, the United States participates in a lot of organizations with our own hemisphere or with Europe.

But the – I think the point to take home is that transpacific organizations like APEC are crucially important. They add to the prosperity of the region. They result in higher-level outcomes in specific economic policy work, and by nature, they tend to stabilize the Asia Pacific region in extremely valuable ways.


QUESTION: Hi. Sandra Sun from China Business News. Will climate change and clean energy in Copenhagen – will it be on the U.S. Government agenda?

MR. TONG: Climate change is always on our agenda. It's a critical challenge. The approach that's being taken within APEC to address climate change is largely one of capacity building and, again, peer pressure. Peer pressure is not the right word – peer encouragement – (laughter) – to do a – to take on and do a good job in trying to mitigate the effects of climate change.

So one of the things – just to give you a practical example, within APEC there's something called the peer review mechanism for energy efficiency, and economies can volunteer to participate in this and have the other economies of the region sort of look at their policies on energy efficiency and suggest changes, or suggest improvements to those. That's a very practical way that APEC can contribute. There's also within the energy working group within APEC there are a number of very specific projects in the capacity building area to help economies learn more about efficient transportation technology, it even gets – it gets down to the very specific level – like what – how should we make sure that people are producing the most energy efficient refrigerators. I mean, it gets quite specific in the various working groups within APEC, and that capacity building work is really quite valuable to the economies.

MODERATOR: One last question. No? If not, then thank you very much.

MR. TONG: Great. Thank you all.