Remarks by U.S. Trade Representative Michael Froman at the 2014 ASEAN-U.S. Business Summit
August 27, 2014
*As Prepared for Delivery*
“It is a pleasure to be here today with all of you as part of a very productive ASEAN ministerial. And it’s a pleasure to be back in Myanmar.
“I was last here in 2012, when President Obama became the first sitting U.S. president to visit this country. He came to express his belief that “the will of the people can lift up this nation” and to commit the United States to supporting reform.
“Over the last few days, I’ve had the chance to meet with a variety of businesspeople, labor leaders, government officials, parliamentarians, and representatives of international non-governmental organizations to discuss the transition in this country.
“What I heard in all my conversations was a recognition that important initial progress has been made. There was also a recognition that the road ahead is long and that many of the most difficult issues remain unresolved:
- How to achieve peaceful and just resolutions of internal conflicts;
- How to ensure that the Burmese people have the voice they deserve, in the press, at the polls, and in the government;
- How to secure the full range of human rights and freedoms of a diverse democracy;
- And how to achieve truly inclusive, environmentally sustainable economic growth;
“These issues will require hard choices and there will be setbacks to overcome. In some areas, progress will be too slow. In other areas, progress will come more quickly and require vigilance and persistence to sustain over time. We know these lessons well from history.
“But we also know that the size and complexity of the challenges we face should not weaken our resolve.
“In Myanmar, in Southeast Asia, and around the world, we have the opportunity to demonstrate the essential connection between economic progress and political liberalization – to recognize the fundamental truth that human dignity demands both freedom from want and freedom from fear.
“To take just one example, consider labor rights. Myanmar has made initial progress in the right direction on issues ranging from the right to organize to the use of forced labor, including children. Over a thousand unions have registered and more are on their way. But significantly more work remains.
“Where laws are weak, they need to be strengthened.
“Where laws are strong, they need to be fully enforced.
“Complementing the legal effort, we need to help build the government's capacity to ensure workers' rights and decent working conditions, as well as the capacity of businesses, workers and government to work together.
“These efforts are the right thing to do because they will improve conditions on the ground for workers, but they are also important because they will attract the investment needed for longer-term growth of this country.
“It is this sensibility that defines ASEAN. While we are each unique in the challenges we face, none of us is alone, and we all have a part to play.
“We are all here today because we believe in the power of economic engagement and regional integration to change the lives in our countries for the better, from Mandalay to Milwaukee.
“This belief is well-founded.
“Over the last ten years, trade between us just in goods alone has grown by more than 60%, and now supports hundreds of thousands of jobs in our countries. In 2012, we exchanged more than $230 billion in goods and services, and last year, U.S. foreign direct investment in ASEAN countries totaled more than $200 billion.
“But this is still only scratching the surface of our collective economic potential.
“The focus of today’s meeting is on the export potential for small- and medium-sized businesses – and rightly so. These businesses make up the bulk of employment in all of our countries and research shows that SMEs that export grow faster, add more jobs, and pay better wages than firms in the same sector that serve purely domestic markets. They are also important vehicles for gender empowerment.
“Yet SMEs account for only around a third of ASEAN economic output and only a fraction of that from exports.
“To realize this region’s full economic potential, we must do more to connect ASEAN’s small businesses with global markets.
“There are a number of opportunities to do this. One of the most promising is the WTO Trade Facilitation Agreement that was agreed to in Bali last December.
“The Trade Facilitation Agreement would boost trade by making border and customs procedures more predictable, simple, and uniform. According to the OECD, the Trade Facilitation Agreement would reduce trade costs for developing countries by around 15 percent and for developed countries by 10 percent.
“Unfortunately, a small handful of countries blocked implementation of the TFA, walking back from their Bali commitments and potentially undercutting these global, broad-based gains. In doing so, they have jeopardized not only the future of a multilateral trade facilitation agreement, but also the post-Bali role for the WTO itself as a forum for trade negotiations. We all need to think through the implications of this development as we look forward.
“In ASEAN, we are working to create opportunities for businesses across the region, both through ASEAN-wide initiatives as well as initiatives with individual ASEAN countries. Small businesses face many of the same issues as large companies, but they also face unique challenges. In our discussions with small businesses, we have been told that they key issues you face include regulatory barriers, investment restrictions, intellectual property theft, customs issues, lack of transparency, and the need for e-commerce policies that harness the commercial potential of the internet.
“We are seeking to tackle these issues through our ASEAN dialogue and the Enhanced Economic Engagement initiative, or E3. We also are working to address these issues through our bilateral dialogues with ASEAN countries from Manila to Jakarta, from Bangkok to Phnom Penh. And in TPP, of course, we are seeking a regional standard that considers 21st-century issues through the prism of small business.
“We support ASEAN integration, including the ASEAN Economic Community, a development that will make ASEAN countries stronger economically and more competitive than they would be individually. And as ASEAN countries open up to each other, it is important that they also become more open to the rest of the global economy. A liberalized ASEAN – through bilateral agreements, trilateral agreements, and plurilateral efforts like TPP and R-CEP – is one that not only integrates the region but also becomes a driving force of global competitiveness.
“And by creating more liberalization and more opportunity for competition, you are opening the door not just for large businesses, but for small businesses with big ideas.
“The sum of these efforts is a comprehensive approach to unlocking the economic potential of ASEAN SMEs and in doing so further strengthening the U.S.-ASEAN economic relationship as well.
“The United States is committed to playing its part in this region. It is no accident that President Obama has made the U.S.-ASEAN Summit a key component of his engagement with the region, that he decided to participate personally at the Leader level in the East Asia Summit as an indication of the importance of ASEAN to the larger region.
“125 years ago, a foreign visitor traveling through this region, scribbled something interesting in his journal. He wrote of a “coming together and revision of tariffs.” He imagined a world without “rancorous protection” and predicted that while “we are not strong enough yet, but some day we shall be.”
“This turned out to be prescient in making clear trade’s potential for bridging long distances, forging relationships, and unlocking the economic potential of this region.
“There’s no better testament to that truth than this summit, which has brought together hundreds of people from across the region with those objectives in mind.
“This is an exciting time for this region. From a U.S. perspective, we look forward to continuing to work closely with all of you and to being a part of ASEAN’s future.
“Thank you very much.”