Remarks at AmCham APEC CEO Reception

Remarks
John Kerry
Secretary of State
Northeast Marriott
Beijing, China
November 8, 2014


AMBASSADOR BAUCUS: (In progress) so much on the economics. And basically, made the point that if we get the economics part right, that's going to help get other parts and relationships right after that.

So, I'm not going to say any more, except to say it's a great honor to introduce a very good friend of mine. We served I don't know how many years together in the Senate, 20-plus years in the Senate, same finance committee. We fought to get on the Finance Committee. I was then chairman, and I thought he's a very good guy, let's make sure he gets on the Finance Committee. (Laughter.)

And you might not know this: He's an entrepreneur. When he was younger, he ran a cookie manufacturing company in Massachusetts. I think it was named after his mother. He can correct me if I'm mistaken. And he kept it for a while (inaudible), then sold it, made a lot of money on it. He's got a real good business sense.

So, let's give a big, big round of applause to our Secretary, John Kerry. (Applause.)

SECRETARY KERRY: Thank you very much, Max. Good evening, everybody. AmChammers, all. Nice to see you all. (Inaudible.) (Applause.)

Now, is it true that you all (inaudible)? (Laughter.) Actually, it is. All right. Well, that's your homework, you are going to leave here and go read it, right?

This is very dangerous, to give a speech or a talk or greetings to a bunch of AmChammers, most of whom are holding a glass of something in their hands. (Laughter.) But I am very, very pleased to be here with you, and particularly grateful for the introduction from my friend, Max, who I do remember served with me, and we served together for 28 years and 2 months. (Laughter.) Oh, and we both celebrate our birthday on the same day. (Laughter.) (Applause.) Every year for the last 28 years we've talked to each other on December 11th. (Laughter.) Even if we were mad at each other, we hadn't talked for weeks, we always talked to each other and called and said, "Happy birthday." Share those great -- December 11th, for anybody who wants to (inaudible). (Applause.)

It is true, the story about the small business venture. I was practicing law briefly in Boston. I was a public prosecutor, then I went into private practice. And I had a wonderful dinner one night with a friend of mine, and we probably had one bottle of wine too many, and I came out after the dinner and had this yearning for a great chocolate chip cookie. And we couldn't find any place that was open. This is absolutely a true story. And we looked at each other, and we said, "You know, this is crazy. Boston at this time of night, you ought to be able to find some sweets and get a chocolate chip cookie."

We looked in Faneuil Hall Marketplace. Any of you been there, Faneuil Hall Marketplace? And there, this old Faneuil Hall had been renewed by a company down in Baltimore, and they had all these boutique stores in it, an incredible place attracting huge traffic of people. But one of them was vacant, and we looked and Joe said, "That would be a great place for this cookie emporium." Literally, the next day the line had not faded, and I went to see the head of the company.

And, before I knew it, by the end of the week, I said, "I want to start this cookie thing," and he said, "We don't want another fast food place. We want something gourmet." And I said, "Well, that's what I'm going to do, gourmet." (Laughter.) Gourmet food. And so I talked my way into it. By the end of the week we had a lease signed, and I, all of a sudden, had to open a store, and began the small business enterprise of getting all of my permits and paper and health certificate, and this and that, and finding employees.

About a week before we opened, I realized, you know what? I need some recipes -- (laughter) -- if we're going to be able to do this. So, so help me God, I went home, and on our home oven I -- I was a great Toll House cookie maker, and this is what got me into this in the first place -- we started baking and baking and baking, and I had no knowledge of the chemistry of food and what happens when you do it in a much bigger amount.

But we did it, and we opened, and within a few months I was negotiating with some guys from New York and elsewhere, and we were talking about opening at Harrods in London and in airports, and this was going to be a major enterprise, like David's Cookies of New York, and some of you may have been familiar with it. But I decided, instead, to go into public life, and run for lieutenant governor. And so, I did not sell it for 10 times earnings with 40 franchises, but it was a great -- we won the Best of Boston each year for the next two or three years, and I sold the company when I became a public servant, because I didn't want anybody accusing me of having a sweetheart relationship with the company. (Inaudible.) And the rest is history. But today you can walk into Faneuil Hall Marketplace and see a store that has my mother's name on it and the name of my partner, who walked out of that restaurant with me. It's still in business, 25 years later. It's a great (inaudible). (Applause.) That is not what you came here to hear. (Laughter.)

I am delighted to be here with our U.S. Trade Representative, Michael Froman, and he's going to share some thoughts with you after I've had a chance to give you a little bit of a lowdown on what we're thinking about in terms of China-U.S.

But, Mark, thank you very much for inviting me here to AmCham. Thank you all for taking a moment to share some thoughts. Thanks to Bob Ferguson, who is here, for -- he's the senior vice president of General Motors, which has just chosen to participate in the Department's Veterans Innovation partnership, and we're very grateful to that. And I really thank all of you for taking time out of very busy schedules to share some thoughts with all of us today.

This could not be a more important moment in China-U.S. relations, and there could not be a more important relationship than the relationship with China for the United States. And I said that in the speech. The State Councilor, Yang Jiechi, who came to visit with me in Boston recently, talked about the various aspects of our relationship which are so important. But I would add to that that, really, it is consequential, beyond lots of people's understanding. And I predict that, really, in this relationship, it could be defined -- certainly, the history of the Asia-Pacific for this century -- if we get this right. And getting it right is critical.

I'm very happy that Max Baucus is here as our ambassador. He was the chairman of the Finance Committee. And, indeed, had he not approved, I would never have become a member. And it is one of the most important committees, if not the most important committee in the Senate, because it decides all your tax policy, your health care policy, trade policy. It just has an enormous amount of jurisdiction. And, in the end, it is the most important committee, with respect to the economy of our country.

Max was a great steward of that, and he is here in China because he wanted to be here in China. This was a case of our choosing him, but him choosing the place he really wanted to go to, and both of those requirements and thoughts coming together simultaneously. So we believe we are extraordinarily well represented here.

And I want all of you in business here to feel free to call Max, talk to our embassy, and I will tell you why. In my nomination hearing, when I became Secretary of State, I made it clear that I believe deeply -- and I do believe this -- that foreign policy is economic policy in today's world. And economic policy is foreign policy in today's world. And nobody should underestimate that or sell it short. It is absolutely critical for us to do everything possible in a globalized, competitive marketplace that is increasingly changing, where many more countries have leverage today because they have economic power than they did before, that we maintain our awareness and sensitivity to the need to fight and help our own companies gain market share, and build out the rest of the world in their infrastructure, in their governance capacity, in their health care capacity, their overall ability to deliver to their citizens.

There is no greater antidote to today's fragility, to the challenge we face with respect to terror, the ISILs of the world, the Aral Sharams the Al-Shabaabs, Boko Harams, run a long list of them, they're filling a void. And the void they're filling is usually a void of bad governance that is not offering the people of those particular places a full set of opportunities and engagement that they see the rest of the world has.

Max made a comment about the smartphones and mobile devices that everybody has today. Well, in many parts of the world where they don't have jobs, they still have those, and they see what other people in the rest of the world have. And so, aspirations have grown all around this planet. And the demands on government are greater. And it is harder to build consensus where there is many different places from which people are getting information. Politics is tougher, governing is tougher. And, frankly, all of you play a much more important role in terms of the choices we make than ever before. Because public -- the public sector, in many cases, is not able to validate on issues as effectively as you can.

So, you have to accept that responsibility. The private sector is both a driver of economic growth, and it's obviously a key contributor to the goals of development and of international understanding that are central to the concern of the United States Department of State through our Trade Representative, through our Commerce Department, and all of us who work hand in hand in order to open up these new opportunities and try to channel our activities towards a more productive future.

So, here we are at APEC, 25th year anniversary. It's a big deal. And APEC is more than just an economic conference nowadays. It's also a security conference. You noticed yesterday the announcement between China and Japan about trying to resolve differences. Today I met with Foreign Minister Lavrov. We talked about Ukraine, we talked about Syria, we talked about Middle East, we talked about the challenges of ISIL. There is much more that's going on in this world, and it's all linked, believe me, in ways that we never imagined that it would be.

So, I want to emphasize that what we are engaged in, the United States of America, and President Obama's leadership, is this thing called The Rebalance. It's real. This is my ninth trip to the region since I've been Secretary of State, my fourth trip to Beijing, and there will be more. And the President is coming here not for a day, not for two, but for eight days the President of the United States will be in a combination of APEC, bilateral meetings with the Chinese leaders, and then going to ASEAN meetings, the East Asia Summit, and then to the G20 in Australia.

That's a lot of investment of time, but it's there for a purpose, and the purpose is that the relationship out here begins with our key allies, obviously, with Japan, South Korea, Australia, but we are focused on building a strong and mutually beneficial relationship with China, a relationship that can manage our differences effectively, and harness our energies to cooperate effectively wherever we can find that ability to be able to cooperate. And there are big things we are cooperating on.

Right now we're engaged in discussions on climate change, which began last year at a ministerial level. And we are engaged deeply together in the P5+1 talks, in an effort to try to deal with Iran's nuclear program, which will have a profound impact on global stability and on the future.

Sustaining long-term economic growth is also a focus of our energies. I just want to say a couple of words about that for a minute. Strong relationships between big countries, big economies like ours and China's, are the result of a lot of hard work, a lot of hard work. And that's why we are in constant touch with our Chinese counterparts. It's why President Obama hosted the Sunnylands Summit earlier, shortly after President Xi took office. It's why a couple of weeks ago I invited State Councilor Yang Jiechi to come to Boston, spend a day-and-a-half together with he and the delegation he brought, where we spent hours discussing the potential directions of our relationship. And that underscores why we are here now, and will be here in such force in the next few days.

Given the size of our two countries, whenever we get together, there are obviously a host of items that are on the agenda. And very high on the State Department list is ensuring that U.S.-China trade and investment policies are productive and equitable. I just came from a meeting with 10 of the biggest CEOs in this country, major companies that all of you know and have heard of, and leaders you've heard of, who are doing extraordinary work. And they are investing in the United States. We now have about $600 billion of trade between our countries. We have a quarter of the world's population, and a third of the world's trade. And I think it's something that -- about a third or a fifth of the world's GDP, in total. It's extraordinary, what we have.

And the fact is that Chinese investment in the United States has been growing. We have about $100 billion in mutual investment between us. But as the Peterson Institute recently said, if we were able to restrict and get rid of some of the barriers to trade, if we were able to have greater trust between us, and begin to have a more even playing field between us, there is about a half-a-trillion dollars out there, 10 percent of GDP, that could be added almost immediately for women, and about a half-a-trillion dollars of trade that could be added for companies across the board. Think what that would do, in terms of a standard of living.

That is why the Obama Administration -- and you will hear from Mike Froman -- is working so hard on an effort initiated by President Bush, which is to successfully complete the negotiation on a U.S.-China bilateral investment treaty. And we want a high-standard agreement that's going to ensure that American companies and their Chinese competitors are able to compete in both countries on a non-discriminatory, fair, and open manner, and a transparent basis. And a high standard BIT would promise the type of market-based innovation and competitiveness that will benefit both economies.

We are also determined, obviously, to try to deal with a bunch of other issues that matter to us, such as cyber policy, Internet governance, the protection of all categories of intellectual property. And here, again, our approach is careful, it's got to be based on reciprocity and on fairness. That's our standard.

Another key aspect of our relationship is a focus on clean energy. I'm not going to go into a long deal on this, and I will wind up very, very quickly, but I will just say to you climate change, as you all, I hope, will read in the most recent UN report, is not mythology, it's not pie in the sky, it's not something in the future. It's here now. And it is deadly serious. And it is having a profound impact on agriculture, on populations, on health, ultimately, on our oceans, our fisheries, you name it. There are impacts. The potential downside of the costs of it are in the hundreds of millions of dollars and, literally, hundreds of millions of people who could become refugees, be moved, food insecurity, dislocation, et cetera. President Obama is deeply focused on this, as am I, and we are determined to try to make a response over this next year.

But the key to all of you is this -- and many of you may already be in this enterprise. The solution to the problem of climate change is not way out there, it's here. It's staring us in the face. It's called energy policy. Make the right choices about energy policy, and we can eliminate the problem. But, more importantly, it's the only public policy I can think of today -- you know, most policy issues are kind of marginal, and you struggle with them, and you may have a win here, you got a loss here, and you balance it out. This is a win-win-win-win-win, because in every aspect -- you gain in health of your population, you gain in environmental protection, long-term responsibility. You gain in security, you gain in energy independence, energy capacity. You gain in health, where you have air that's cleaner. In Beijing that is an issue. You have air that's cleaner, and you don't have kids that are hospitalized because of asthma-induced -- that's, in America, in the summertime, the greatest cause of children being hospitalized, is environmentally-induced asthma, as a quality of diesel trucks and other things magnified (inaudible).

So, I would just say to all of you this is a moment of great opportunity, and we are also fighting hard to get other trade agreements nailed down, because we believe there should be a race to the top, not a race to the bottom. Because when you have transparency and accountability, and when you have fair norms that everybody is operating by, everybody benefits more. You have greater stability, greater assurance in the business world, greater capacity to attract capital. You have more investment, and better outcomes for the populations, as a result.

So, we have a great team, I want to tell you, in Max Baucus, here, as the ambassador; in our Under Secretary, Cathy Novelli, who came from Apple Computer; in our Assistant Secretary for Business, Charlie Rivkin, who was the CEO of a billion-dollar-plus company before he came in to become Ambassador to France, and now is in the State Department as our Assistant Secretary. We have people who have been in business -- Scott Nathan, who ran a big fund in Boston, major investor -- these are folks who know what you're going through, who know about your decisions, and those are the kind of people I want in the State Department to help us be able to help you to be able to help define the future.

So, when we say that foreign policy is economic policy and economic policy is foreign policy, we mean it. And I'm telling you that I want every person in the State Department to be an economic officer. And we're going to work with you to help try to guarantee that we can create the jobs, build the relationship between the United States and China that provides the leadership necessary across the Asia Pacific. We make a lot of money for everybody in the doing of it, but we also create a stability, and a guarantee about a better life that helps all of us to fulfill our promise to the next generation.

So, AmCham, thank you for what you do. Thank you for being here. And let's make the future happen the way we want it to. God bless. Thank you. (Applause.)