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February 3, 2010
American Chamber of Commerce
Kuala Lumpur, Malaysia
U.S. Trade Priorities in the Asia-Pacific: TPP and Beyond
*As Prepared for Delivery*
"When I first visited Kuala Lumpur seven years ago, I, like so many visitors, was awed by the gleaming Petronas Towers. I quickly arranged to visit what was then the world's tallest building and rode up 42 floors to look out from the skybridge. As I learned more about the towers' design and construction, I became intrigued not by the building's awesome height, but by its foundation. And on every return visit to KL, I am reminded that those 88 stories rest on an ingeniously crafted foundation, and on the traditional Islamic geometric design of an eight-pointed star.
"Visiting Malaysia today, representing the Obama Administration as Deputy United States Trade Representative, I am again reminded of that foundation. And I am reminded that neither these gleaming twin towers of progress, nor any structure or relationship, can stand and endure without their foundations. One year into his term, President Obama and his Administration have been hard at work strengthening America's foundations - the foundation of our relationship to nations around the world, the foundation our domestic economy, and the foundation of our economic engagement with the world.
"President Obama has made it a priority to rebuild and bolster the foundation of our partnerships with countries like Malaysia. He has made clear that for the United States, the diversity of the world's nations is a strength, and that there must be a sustained effort to listen to each other, to learn from each other, to respect each other, and to seek common ground. And President Obama marked a new beginning - a new foundation - between the United States and Muslims around the world, "one based on mutual interest and mutual respect, and one based upon the truth that America and Islam are not exclusive and need not be in competition." Instead, we share common principles - principles of justice and progress, tolerance and the dignity of all human beings.
"As our political, social, and cultural relationships grow, the global economic crisis demands we rebuild our economic foundations. In the United States - as in many other countries - we are emerging from an historic economic recession. Unemployment remains unacceptably high. To return America to growth, the Obama Administration has worked with our Congress to spur economic recovery and lay a new foundation for our economy. Together we are seeking to give our workers the skills and education they need to compete, to invest in renewable energy and the jobs of the future, and to make health care affordable for families and businesses. These and other domestic reforms promise to make America's economy more competitive and prosperous for generations to come.
"Our trade agenda is part of our jobs agenda. The economic foundation we build at home must also be a commitment to engage the global economy. And so trade with the Asia-Pacific and exports to the region's dynamic markets are key to America's new economic foundations and a priority for the Obama Administration.
"That is why President Obama has launched negotiations for the Trans-Pacific Partnership agreement or TPP. The initial group of eight TPP countries - Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, Vietnam, and the United States - are working together to shape a high-standard, broad-based, 21st century regional trade agreement. But these countries are just a start. We will consider and welcome new negotiating partners, like Malaysia, based on their readiness and ability to bring commercial value, balance, and ambition to the negotiations. It is our aim for TPP to create a platform for economic integration across the Asia-Pacific region. And it is our aim to advance our mutual economic interests with the fastest-growing economies in the world.
"Simultaneous to our work in the TPP, the Obama Administration is already planning for an ambitious and historic Asia Pacific Economic Cooperation (APEC) host year in 2011. During Singapore's 2009 APEC host year, we achieved significant steps to improve regional services trade, eliminate non-tariff measures, simplify customs measures, and improve transparency. This year we will work with Japan's leadership to build momentum in the months leading up to 2011, and our APEC efforts will further enhance our engagement with Asia and create jobs at home.
"At the same time, we are working to further deepen our economic ties to the ten countries of the Association of Southeast Asian Nations (ASEAN). ASEAN countries together already are the United States' fifth largest trading partner, and the Obama Administration has made it a priority to build this relationship further. The United States and ASEAN have agreed on a number of initiatives for the coming year to do this. Among these are a government-business dialogue, which will begin with a traveling tour in the United States featuring Ambassador Kirk and ASEAN trade ministers aimed at showcasing ASEAN to the American public and identifying the new opportunities available to businesses large and small in all our countries.
"In addition to our regional and multilateral economic work, the Obama Administration is laying the foundations of our bilateral economic ties with Malaysia and other countries in the region. Malaysia's openness to international trade and investment has led to over three decades of economic growth, a spectacular decline in poverty rates, and shrinking inequality. By liberalizing its manufacturing sector, Malaysia created jobs, spurred economic growth and made itself synonymous with quality industrial production, including electronics, and world-class semi-conductors and electronic components. As Malaysia opens its services sector, it will further strengthen its economic base and position itself for leadership in the global services industries.
"Throughout Malaysia's development, Malaysia and the United States have developed a strong and mutually beneficial trade relationship, with trade in intermediate and final goods, agricultural produce and services flowing in both directions. The United States exports machinery, medical instruments, iron and steel, and aircraft as well as dairy products, soybeans and other agricultural products. At the same time, Malaysia exports machinery, ICT products, medical instruments, rubber, palm oil and cocoa. Unfortunately, we have yet to see Malaysia's prize fruits in the United States, but I am looking forward to seeing hopefully one day soon its mangosteens and maybe even its durian.
"Malaysians understand that an expanded trade agenda is a domestic jobs agenda. Much like America's economic growth relies on greater engagement with Asia, Malaysia's economic growth and development will accelerate as you expand ties to large markets like the United States, through initiatives like the TPP. Until the global recession hit in 2009, Malaysia's exports to the United States grew more than 120 percent in the last 15 years, becoming one of the top trading partners of the United States. This trade as well as high levels of foreign investment helped generate the strong economic growth that Malaysia has seen over the past couple of decades. And deeper economic integration will further solidify our vibrant trade and investment relationship and help Malaysia position itself competitively in the 21st century.
"The economic foundation Malaysia and the United States have built is already strong and stable. It is a foundation sturdy enough to build boldly upon. The synergies between our economies can help both of our nations to soar like your twin towers. I was excited to hear of Prime Minister Najib's plans to reform and restructure the Malaysian economy to rely less on manufacturing and more on innovative services- and knowledge-based industries as the engine of growth and source of jobs in the future. Expanding ties to the United States will support this agenda.
"On a unique and stable foundation, Malaysians built the shining Petronas towers that continue to inspire the world with their beauty and innovation. President Obama and his Administration are committed to building upon our own unique foundation of bilateral engagement and cooperation with Malaysia. I hope that you will join us in that commitment and build a future that will inspire generations to come."