The Economic Relationship between the U.S. and Asia/Singapore
(Remarks as prepared for delivery)
Ambassador David Adelman's Remarks to UNLV
Jubilee Hall at Raffles Hotel
“The Economic Relationship between the U.S. and Asia/Singapore”
December 1, 2011, 1:00 pm
Thank you Jonathan for that kind introduction.
It is great to be here with the faculty and students of one of America's great higher education institutions, UNLV.
UNLV is a great example of a well known American brand name, one that people around the world recognize, particularly for excellence in hospitality and hotel administration.
I think UNLV students, in the field you have chosen, are affected by globalization as much as anyone. Specifically, I've been asked to speak about U.S. economic policy in Asia and Singapore.
It used to be when an Ambassador said he was giving a speech on economic policy, that people viewed it as only giving a small slice of the country’s overall foreign policy.
Well, as I hope to make clear this evening, for the United States, in Singapore, in 2011, our economic policy is deeply intertwined with our broader foreign policy.
So what I'd like to do this evening is break down U.S. economic policy into two parts: first, the big picture overview of our broader Asia policy; then I want to get more into specifics about what that means for Singapore and Southeast Asia.
When President Obama came to office, he had three principal foreign policy goals.
First, to reframe the wars in Iraq and Afghanistan.
Second, to reset relations with Russia.
And, third to fully engage in Asia.
This third goal has been grabbing headlines lately. As you may know, President Obama hosted the annual APEC Leaders Meeting, and then followed it up by a trip to Australia and Indonesia.
As President Obama said at APEC, "No region will do more to shape our long-term economic future than the Asia Pacific region. As I've said, the United States is, and always will be, a Pacific nation. Many of our top trading partners are in this region. This is where we sell most of our exports, supporting some 5 million American jobs. And since this is the world's fastest growing region, the Asia Pacific is key to achieving my goal of doubling U.S. exports -- a goal, by the way, which we are on track right now to meet." Unquote.
After the President gave those remarks in Honolulu, he traveled to Australia and Indonesia to reinforce the message, announcing a major commitment on security cooperation with Australia, where the U.S. force posture will now entail several hundred Marines operating out of Northern Australia, and in Bali the President announced specific initiatives with ASEAN countries to secure closer cooperation in this region.
At the same time, Secretary of State Hillary Clinton was visiting our other treaty allies in the region, Thailand and the Philippines, in addition to joining the President at the US-ASEAN summit in Bali. In Hawaii and Bali, the United States emphasized our foreign policy "pivot" toward Asia. As Secretary Clinton said, "The future of politics will be decided in Asia, not Afghanistan or Iraq, and the United States will be right at the center of the action."
It is no coincidence this pivot to Asia comes at a time when economics are so important.
You are all aware of the state of the global economy, and its effect on those individuals in the U.S. and many other countries who are out of work or struggling just to get by. In a flat world, economics cuts across both domestic and international affairs.
From fostering reform and democratic transition, to freedom of navigation in the South China Sea, economics plays a central role in shaping political reality. This past year we've seen this play out on the streets of places varying from Egypt, Tunisia, and Libya to Greece, Spain and Italy.
That's the big picture.
Harry Truman once said, quote “Our relations, foreign and economic, are indivisible.” That fact is more evident today than at any time in recent history.
You have seen this mixture of economics and security in concrete initiatives. In October, President Obama passed three new free trade agreements through a challenging U.S. Congress, including one with one of our key markets in this Asia, South Korea.
He then followed that with several announcements at APEC which have direct consequences for Singapore.
First, on the very important TransPacific Partnership, or TPP as it's known, the President emphasized that the United States will intensify efforts to quickly complete negotiations on this free trade agreement which should become a model for the 21st century and has the potential over the long term to include the United States and Singapore in a free trade area spanning the Pacific Ocean.
The TPP is, of course, in addition to the gold standard bilateral free trade agreement between the United States and Singapore.
In the first 7 years since our FTA went into effect in 2004, bilateral trade was up nearly 50%, and U.S. exports increased over 75%. The FTA has produced the fourth largest trade surplus with any country for the United States and we have established the mechanism to eliminate most, but not all, of our bilateral trade frictions.
This means jobs for Americans, jobs for Singaporeans, and a contribution to global economic growth which has occurred during some very challenging years for the global economy.
The President also announced two new programs which should make it easier for people to travel between the United States and Singapore, and in this region.
The first agreement was the approval of the APEC Business Traveler Card for American citizens to use. The second was an agreement for what's called a Trusted Traveler partnership.
With both of these agreements, frequent travelers, including businesspeople and consumers, will soon be able to clear immigration and customs expeditiously using automated kiosks.
Singapore is the first country in this region with which we have this partnership, and I find it telling that this latter program is called Trusted Traveler, as I see this agreement as a true indication of the trust between our two countries.
The good news for everybody here is all if this is part of an APEC Travel Facilitation Initiative which is a bigger program designed to make the travel process faster, easier, and more secure for all travelers in the coming years.
The reason the United States wants to work so closely on economic issues with a country as small as Singapore, which has such a tiny domestic market, is simple.
Singapore is at the center of this most dynamic region in the global economy. In fact, I would argue there are few places where America's economic policy and our economic relations with partners play a more important role in the bilateral relationship than here in Singapore.
Working with like-minded partners such as Singapore, we will be intensifying our diplomatic efforts to which produce conditions favorable to free trade.
A few important data points make clear the importance of Singapore and Southeast Asia to U.S. economic policy.
Despite its small size and population, Singapore was America's 13th largest trading partner and 10th largest export market in 2010.
Foreign direct investment also underscores the importance of Singapore to the American economy. At the end of 2010, cumulative FDI into Singapore topped $106 billion.
That's more than U.S. business invested in China, nearly double that of Hong Kong, greater than all of Africa or the Middle East. Singapore remains one of the most attractive destinations in the world for U.S. investors.
And of course not just Singapore, but all of Southeast Asia is one of the most dynamic regions in the world.
One very important development which went largely overlooked exemplifies the importance of Asia for the United State. In the first quarter of 2010, U.S. exports to Asia surpassed our exports to Europe for the first time ever. And it is likely that trend is irreversible.
The ASEAN market alone, taken as a whole, would be the fourth largest trading partner of the United States.
Taking it out to the larger region now, 60 percent of U.S. goods exports go to APEC economies. Last year U.S. exports to APEC members grew much faster than exports to rest of the world.
As Jonathan mentioned, America, still by far has the world’s largest economy. To ensure our continued security and prosperity we must work with our friends in this region to advance our global leadership, promote free markets and the rule of law in order to enable shared prosperity across the globe.
To do so, America, which in the past relied heavily on domestic spending, will have to increasingly depend on our ability to compete and win overseas.
That is why I also want to take a moment to mention THE key component to President Obama's trade policy: the National Export Initiative, or NEI.
In his State of the Union Address in 2010, President Obama announced his intention to double U.S. exports within 5 years. In Honolulu at APEC, he announced that we are on pace to do so.
Doubling exports is not really a government function, and no doubt every American company around the world would have no trouble agreeing that doubling their exports is a good thing.
Governments can work to promote fair access to foreign markets, that they can operate in an environment free of corruption, and that there are no policies which adversely affect their ability to do business. That is part of our core mission in Singapore.
I have made implementing the NEI a top priority of our embassy, and have led several trade delegations in an effort to match potential exporters to markets.
Working with the American Chamber of Commerce here in Singapore, I have traveled with our business leaders to key markets such as Vietnam, India, and Indonesia, to help our companies get their government issues resolved and make the contacts they need to succeed in the marketplace.
I should add that the NEI doesn't just benefit American exporters; the NEI benefits Singapore and our other trading partners as well through increased trade opportunities. In today's global economy, what's good for America is generally good for Singapore, and vice-versa. Economic growth can be a win-win for both our people.
To conclude, Asia is front and center in America's foreign policy, and increasingly that foreign policy includes the belief that our national security is inseparable from our economic policy. In fact, America believes its strength comes from an economic system which encourages and rewards ingenuity, entrepreneur spirit, and innovation. The American economic model remains the single greatest engine of growth and shared prosperity that the world has ever known.
I believe there is a part of the American brand that speaks to people and wins them over to the values we promote around the world – the free markets, the rule of law, the free exchange of ideas. As I work to manage the U.S.-Singapore relationship, I see this renewed emphasis on economic policy as a win-win for us, as the U.S. and Singapore see eye-to-eye on nearly every aspect of economic liberalism.
My impression is that there is every incentive for us to help each other, and if we do, a great relationship will only improve.
If we do succeed, more people around the world will feel richer, which will lead to more people wanting to travel, which will mean more customers at hotels, resorts and restaurants that UNLV graduates will be running.
I want to thank UNLV once again for inviting me to speak to you all this evening, and now I would like to get to what I think will be the most entertaining part of my time here with you, and that is our question and answer period.