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Monday, November 10, 2014

SECRETARY KERRY'S REMARKS AT NATIONAL CENTER FOR ASIA-PACIFIC ECONOMIC COOPERATION LUNCHEON

FROM:  U.S. STATE DEPARTMENT
Remarks at the National Center for Asia-Pacific Economic Cooperation Luncheon
Remarks
John Kerry
Secretary of State
Intercontinental Beijing
Beijing, China
November 8, 2014

SECRETARY KERRY: Scott, thank you. Thank you very much. I apologize for being a little bit late. And it’s an honor for me to be able to be here. I’m delighted to be here with everybody. I’m particularly happy to be here with my good friend and colleague, the Foreign Minister from the Philippines, Albert Del Rosario. Albert, always good to be with you, and thank you very much. Albert said to me he was deathly afraid he was going to be late and he was glad I was the guy who was. (Laughter.) Modern diplomacy.

Scott, I’m really grateful to you. Monica sort of described it in her introductory comments, but we’re really delighted with what you have done to make NC-APEC what it is at this moment at the 20th anniversary celebration. And I think nobody who knows Scott is going to be surprised by what he has been able to accomplish, congratulate you on your new and large role. But through programs like Direct Farm at Walmart, he’s made it his mission to balance the needs of customers with corporate social responsibility, and I think all of us are very grateful to him for the leadership that he has shown.

I also want to thank Monica. When you think about the progress that we have made in building a public-private partnership here in the Pacific, it’s fair to say that Monica has been there every single step of the way. And I’m delighted that she is able to be here with us this afternoon. I also want to acknowledge a few folks that are in the APEC Business Advisory Council. All of them contribute significantly. I had the pleasure to be starting a conversation last year in Bali. Particularly from an American point of view, I want to single out Bart Peterson of Eli Lily, Peggy Johnson of Microsoft, Ed Rapp of Caterpillar, and we’re delighted for all that they represent in terms of their corporate engagement and the ability of their companies.

When you consider the long list of challenges that we are discussing here at APEC, it’s interesting for me to note how APEC itself has been somewhat transformed not just into an economic forum, but frankly, it has also evolved so much and has become such a competent place of discussion of important issues, and it’s also security (inaudible). And I think it’s fair to say that in today’s world, a world with ISIL and Ebola, Ukraine, Syria, climate change, it’s impossible not to recognize the relatedness of a lot of the choices that we make economically with the choices that are also (inaudible) at the same time integrated into a security matrix.

Nowhere is the unprecedented set of challenges, but also opportunities more clear than here in Asia and throughout the Asia Pacific. And it is important for people to focus on the fact that even as there are the challenges that I listed, we are staring at a world with absolutely unprecedented opportunity. I think that’s part of the attraction in putting so many of the businesses here, not just to APEC, but to the region, and has brought so many more over the last years. We are literally building prosperity and stability in the long term, and that’s why, unabashedly, economic policy is at the center of President Obama’s rebalance to Asia.

This is my fourth trip right here just to Beijing, my multiple trips to the region over the course of the last year and a half that I have been Secretary. And it will be one of many trips of the President when he arrives here on Monday and spends not one day or two days, but I think about eight days going to the ASEAN meeting and to the G20 meeting, ultimately, in Brisbane. There is no doubt that how this region grows and how we engage the 2.7 billion customers who live here is going to shape the future of the global economy, and it will do much to define the 21st century.

The numbers themselves of the last years of development actually define this story. The fact is that more than half the world’s GDP is represented in this region. Fully half of America’s top 10 trading partners are APEC economies. And we send the majority of our exports here to the Asia Pacific. And outside of America over the next five years, this region is expected to grow as much as all other countries combined. Just think about that. So if we put it all together, it’s pretty obvious why we all have a huge stake in the choices that are made here.

But getting these choices right is not automatic. That means to have to develop even closer cooperation between the public and the private sectors. And what you sell, how you invest, how you operate – these are all major parts of the equation. Our ambassadors throughout the region, including our outstanding Ambassador to China, Max Baucus, are completely at the disposal of all businesses. And I have said since day one, when I became Secretary of State, that foreign policy is economic policy, and economic policy is foreign policy. We’re living in that much of a different world in many ways.

And I have directed all of our embassies, under the good stewardship of our Assistant Secretary of State Charlie Rivkin, who’s sitting over here, Assistant Secretary of State for Business Affairs, and our Assistant Secretary of State Danny Russel, who’s over here, for East Asia and Pacific, that I want all embassies and every official within our embassies to be economic officers. That’s how important it is for us today to be able to promote and help to marry businesses with opportunities.

President Obama has set the tone by saying again and again that the way to grow our economies is to grow our exports. And that’s exactly what’s happening. Since the President took office, U.S. exports have increased more than 50 percent, and the two-way trade between the United States and other APEC countries, economies has grown by nearly the same amount during that period of time. That’s five, six years now (inaudible) growth nearly 50 percent. Every single one of you here, almost all of you, have been involved here for decades, frankly. I know this. So you’ve seen with your own eyes how dramatic the transformation is. Many of you are the transformation. You understand it. And it’s been a remarkable transformation in the 25 years since APEC was founded.

Back when it was founded, real GDP was 15 trillion in the region. Now it’s doubled to 30 trillion. Back then, when it was founded, trade was around $3 trillion. Now it’s grown to nearly seven-fold more than 20 trillion and growing. Back then, the average tariffs were 17 percent. Now, they’re under 6 percent. And that is a fundamental of the kind of growth that has taken place. And today, the 1.1 trillion in U.S. foreign direct investment in other APEC economies is a tremendous vote of American confidence in the region. Investment coming the other way – from APEC economies into the United States – now tops some $660 billion and it has created tens of thousands of jobs throughout the region and in the United States. The mutual benefits are absolutely undeniable.

So we have made extraordinary progress. The question now is: What do we do with the next 25 years? How do we guarantee that what we can do together, the steps that we take together, are going to build an even more prosperous future for all of the APEC countries? Well, today, I’d argue that we have to organize ourselves fundamentally around four principles of growth: We need to grow openly and accountably. We need to grow green. We need to grow just. And we need to grow smart. Now let me tell you what I mean about each of those.

First, openly and accountably. As any business leader would agree, freer markets create more opportunity, more competition, more growth, and more innovation. And that means that we need to do everything we can to open up trade and investment in every single corner of the globe, particularly here in the Asia Pacific. And that’s why President Obama and I are laser-focused on the Trans-Pacific Partnership agreement.

The TPP represents a state-of-the-art, 21st century trade agreement that will connect more than 40 percent of the global GDP and one-third of global trade. But more than that, it doesn’t just connect it; it raises standards. It creates a race to the top, not a race to the bottom. And any of you who are wondering today about the security challenge of increased level with extremism, just look to those places where it is most taking hold, and you’ll find places that aren’t just racing to the bottom; they’ve been stuck at the bottom. And if you stay stuck at the bottom, your people are going to find something to latch on to that they will organize themselves around.

Governance is a critical component of being able to grow effectively and have this race to the top, where all people do better, and any one of you in business here in this part of the world understands the difference that moving to the top has made to the sense of quality of life and the opportunities that citizens have in the countries that are affected. And that’s true whether we’re talking about agriculture, manufacturing, or intellectual property, or the challenge of ensuring that state-owned enterprises compete fairly with privately owned companies. TPP will build prosperity and ensure prosperity and stability throughout the region, and it will do so based on shared principles and shared values. It is not just a technical trade agreement. It is a strategic opportunity for all of us, and we need to make sure we seize it. That’s why we need every single one of you here to make the case – with all of the leaders and all of the population that you come in contact with, particularly all the opinion leaders – make your case for TPP in every country and in every capital. This is a battle that we need to be prepared to make, and make no mistake, it is a battle that we absolutely must win, because if you don’t, the levels of unfairness and the shut doors will create inequities that will encourage corruption and begin to insidiously invade populations of countries that are affected.

Secondly, we need to grow green. That means stepping up our engagement on clean energy and oceans conservation. Cleaner energy means more sustainable sources of energy. It means reduced air pollution. Reduced air pollution means healthier populations. In America in the summertime, the greatest single cause of young kids being hospitalized is environmentally induced asthma. You want to reduce the cost of hospitalization, the cost of healthcare? Breathe cleaner air. Reduce the level of long-term illness that comes from carcinogens in the air that give people cancer.

There’s a long list of benefits – your healthier populations, your reductions in greenhouse gas emissions. The latest UN panel report of just a week or so or two weeks ago is chilling, and I urge everybody here to read it. It’s not a political document. It’s a scientific document. And most of us learned at the elementary stages in school science has value. It’s not everything in life, but facts are facts. The latest report tells us that those who deny climate change are playing with fire. And all of the evidence that has been predicted for the last 20 or 30 years is not just coming back the way it was predicted; it’s coming back faster and it’s coming back with bigger consequences than were predicted.

For anybody in public life, the warning is clear. It means the precautionary principle has to be applied, and you need to take steps to deal with them. Scientists now predict that by the end of the century, the sea could rise by a full meter. Now a meter, 39 inches, may not seem like a lot to everybody here, but I got news for you: It is enough to displace hundreds of millions of people, and it is enough to throw a multi-billion dollar monkey wrench into the global economy.

That’s why we are promoting the use of electric cars throughout the APEC region, and that’s why more countries are reconsidering the wisdom of fossil fuel subsidies. And this week, I am proud to say that we are set – that we set the ambitious goal of doubling the share of renewables in the region’s energy by mid-2030. We’re also strengthening our partnership on oceans. Now oceans are affected by climate change. The amount of acidity in the ocean, which is affected fish populations, food, coral reefs, plankton, comes from greenhouse gases that dump into the ocean. And we are seeing significant increases in various parts of the planet. Scientists have even noticed that in the Antarctic, the ocean has regurgitated carbon mass out that it once upon a time could contain and now isn’t – another warning signal.

This fall, President Obama declared the world’s largest marine sanctuary in the Pacific, and that is critical. APEC Ocean Ministers have pledged to conserve at least 10 percent of coastal and marine areas by the end of this decade, and we’re improving the transparency of the reporting of subsidies that contribute to overfishing. I’ll tell you something: I’ve been chairman of the fisheries subcommittee for years in the United States Senate. I have major fisheries in New England. We no longer have the same cod fishing we used to have. Our fisherman are now in port most of the days of the year because of what’s happened to the stocks. And most of the fisheries of the world are overfished. There’s too much money chasing too few fish, and unless you fish in sustainable ways, unless you engage in sustainable agriculture on land, we are all going to be challenged by this onslaught coming at us.

I’ve got good news for you, though. The solution to climate change is really very simple and it’s staring us in the face, and it’s not something that’s somewhere down the road. It’s here now. The solution is energy policy. Make the right choices in your energy policy; you solve the problem of climate change. And guess what? It happens to be the biggest marketplace the world has ever seen. The market that drove America’s great wealth production of the 1990s – I don't know how many of you know know this – America got richer in the 1990s than we did in the 1920s when we had no income tax. Greater wealth was created in the 1990s for every single income-earner in America, every single quintile of American taxpayer went up in their income when we had a $1 trillion market with 1 billion users. It was the high-tech telecommunications computer revolution. Well, guess what? The energy market is a $6 trillion market with 4-5 billion users, and it’s going to grow to something like 9 billion in the next 30, 40 years. So there’s an enormous opportunity staring us in the face. We need to grab it.

The third thing we need to do is grow just, and that means avoiding bribery and corruption. Obviously, that has a terrible impact on the ability of businesses to do business. We’re all hurt by it, and we can’t level the playing field if there’s corruption. And I know that a number of countries around the world are increasingly focused on trying to eliminate corruption, and we have made that partnership very key in APEC.

And finally, we need to grow smart, and that means empowering women and promoting educational opportunities all across APEC economies. I’m very proud that the United States is contributing to the APEC Scholarships and Internships Initiative. We have commitments from Caterpillar, Eli Lilly, Microsoft, General Electric, EMD Merck Serono, as well as three universities: Colorado State University, the University of Colorado, and the University of Washington Evans School, and they’re making contributions that can help us bring more students back and forth.

Finally, let me just say that it is clear that APEC really has the ability to define the future here. There’s no business sector over here and government over there; it is really all one and the same now. We’re all connected. And it is absolutely vital that we create greater opportunities for this generation and the next. Twenty-five years of APEC, 20 years of the National Center have done an extraordinary job of really defining the possibilities for the future. That’s what’s happening here. And I’m excited by the notion that we’re going to recommit ourselves to making certain that we live up to our responsibilities but seize the opportunities at the same time, and that’s how APEC is actually going to help define the 21st century.

Thank you all very much. (Applause.)