Ambassador Philip S. Goldberg
Welcoming Remarks as Prepared
to APCAC Attendees
New World Hotel Ballroom
March 20, 2014
Thank you, Dan, for that kind welcome and introduction. Let me start by thanking the American Chambers of Commerce for deciding to hold the Asia Pacific Council of American Chambers of Commerce here in Manila. It’s a pleasure to have all of you here, and I enjoyed meeting so many of you last night.
You are here at an interesting time: The Philippine economy grew by over seven percent last year, the second-highest rate of growth in the region. Coming on the heels of similar growth in 2012, the country is on an economic winning streak, and is experiencing is greatest economic boom since the 1960s.
At the same time, the Philippines is in the midst of recovering from the devastation caused in November by Typhoon Haiyan, or Yolanda, as it is known locally. Yolanda devastated the central Philippines, leaving over 6,000 dead. The strongest typhoon in recorded history to make landfall, Yolanda displaced 4.1 million Filipinos and destroyed 1.1 million homes.
The response to Yolanda by the local and international business community was overwhelming. At the Embassy, we were inundated, not with typhoon-borne wind and rain, but with phone calls from American companies offering to help the Philippines in its time of need.
Many of those companies are represented here today, and so, before I plunge into the bulk of my speech, I want to thank all of you for your generosity and public spirit. It’s worth noting that the work of rebuilding from Yolanda is not over – in fact, it has just begun. I’m pleased to note that many American companies and businessmen continue to be engaged in Yolanda relief and are collaborating with the Philippine government to aid in the success of efforts to “build back better.”
The American business community’s response to Yolanda highlights the important role that business plays in our relations, not only with the Philippines, but with Asia as a whole.
Many people have heard about the “rebalance to Asia” that is a key tenant of President Obama’s foreign policy. When we talk about this, what most people often focus on is the military or security aspect of our relationship with Asia. And it’s easy to see why. For the media, it’s an easier story to talk about disputes in the South China Sea. So it’s a sexier subject.
What most people may not realize is that the genesis for the rebalance to Asia is based in economics. The rise of Asia, including China and the rest of Southeast Asia, has a deep connection to our own prosperity and development. Global trade has tripled over the last decade and it is scheduled to double over the next decade. Approximately half of this increase will occur in developing countries in Asia. So you can see the possibilities.
Tapping into the economic dynamism of the East Asia-Pacific is vitally important for U.S. interests. Even as we continue to lay the foundation for future economic ties, we are already seeing progress in many areas. For instance, trade with the East Asia-Pacific region grew by 22 percent between 2008 and 2012, far outpacing the 13 percent growth in global U.S. trade. In 2012, two-way trade with the East Asia-Pacific the region reached $1.2 trillion in 2013, up by over 23 percent from 2008, and supports almost 3 million U.S. jobs.
Direct investment in both directions has helped solidify our bond with the region and demonstrates the lasting commitment of U.S. businesses to the region’s development and economic integration. The United States is by far the leading foreign investor in the East Asia-Pacific region with the stock of U.S. foreign direct investment (FDI) standing at around $622 billion in 2012, up 35 percent from the U.S. investment position in 2008, with nearly one-third located in ASEAN member countries. Investment into the United States from economies of the East Asia-Pacific is also growing, increasing by 31 percent since 2008 to reach $422 billion by the end of 2012.
In the United States, we recognize that the economic development of our country is directly intertwined with the economic development of Asia. To ensure that the American economy prospers, we need to work with our Asian counterparts to create a robust, global economy.
So at U.S. Embassies across Asia, our goal is clear: we want to take the already strong economic relationship between the United States and Asia to the next level and to create stronger, deeper economic ties.
These trade statistics just provide a snapshot of our economic relationship with Asia. In order to sustain the growth in our economic ties to Asia, we are also engaged in efforts to promote economic and governance policies that will make it easier to do business in the region, both for American businessmen such as yourselves, who are resident here, but also for American exporters who want to be able to get their goods to Asian markets, quickly, efficiently, and with a minimum of bureaucratic fuss.
Even before the rebalance, we were actively promoting a more open trade and investment environment in the East Asia-Pacific through our collaboration with economies of the region in APEC, and through the full implementation of free trade agreements with Singapore, Australia and the Republic of Korea (ROK).
These efforts have paid off. Our economic relationship with Singapore is flourishing, with bilateral trade having increased almost 60 percent and U.S. exports by 85 percent since the United States-Singapore FTA entered into force in 2004. Similarly, the United States-Australia Free Trade Agreement has also led to increased trade and investment and the United States is now Australia’s leading investment partner, with $132 billion of U.S. investments in Australia. The United States-Korea Free Trade Agreement is also benefitting U.S. manufacturers, workers, and farmers and has led to a dramatic increase in trade, with more to come. By January 1, 2016, Korean tariffs on over 95 percent of exports of U.S. industrial and consumer goods to Korea will have been eliminated. We are working closely with the Korean government to ensure that the FTA is implemented smoothly and fully and that American companies can take full benefit of the trade pact.
Of course, not all of us get assigned to Singapore, Australia, or South Korea!
In countries that are emerging in the lower-middle income bracket, the State Department, USAID, and other interagency partners such as the Millennium Challenge Corporation, are working to consolidate economic reforms and competitiveness and help the poorest nations in the East Asia Pacific region reduce poverty.
Here in the Philippines, under the Partnership for Growth framework, the United States is addressing the most binding constraints to broad-based economic growth and investment, including helping to promote broad-based, inclusive, and sustainable growth, and improve peace and stability in the southern Philippines. Although Indonesia has experienced robust growth, 50 percent of its population still earns less than $2 per day. In response, U.S. assistance to Indonesia encourages policies that increase competitiveness across a number of sectors and encourage labor-intensive economic activities. Programs in Vietnam have promoted judicial reform and the implementation of its World Trade Organization commitments. These regional and bilateral economic development programs are designed to work in tandem to help build the economic foundation and capabilities needed to support regional economic integration and increase opportunities for American businesses.
Despite all of the agreements we have signed and technical and development assistance programs we have underway, the fact remains that you – the American business community – also have a role to play in advancing our shared economic interests in ASEAN and throughout Asia. As investors, taxpayers, employers, and job-creators, you have a unique credibility when it comes to economic issues. Although it may seem to be a thankless task at times, I urge you to remain engaged in support of efforts by the U.S. government, ASEAN, and other bodies to promote more economic policies that will stimulate economic growth and enable more people to experience the benefits of that growth.
One initiative I’d like to point to is the publication by the American Chamber of Commerce in Indonesia, which recently published “Partners in Prosperity,” a report that quantifies the positive economic impact of investments by U.S. companies in Indonesia. This report, funded by AmCham Indonesia, the U.S. Chamber of Commerce, and USAID lays to rest many of the misperceptions surrounding foreign investment and shows the extraordinary benefits that can accrue to countries that are open to investors. The report is on AmCham Indonesia’s website and I encourage all of you to take a look at the report and to undertake similar efforts.
As business men and women, you know that strong trade and investment will create needed jobs in our communities and build resilient and enduring ties between our countries. We also know that building a solid backbone for business requires transparency and accountability that will set into motion a chain reaction of opportunity and inclusive growth.
As leaders in the business community, you uphold laws and regulations, demonstrate exemplary business and environmental habits and ethics, and show commitment and dedication as stakeholders in the region.
As you all know, the rebalance to Asia also has a security component. There is, it turns out, a balance within the balance. Despite all of the press that each ship visit receives, I want to underscore again, that the security component of the rebalance is not the driving force behind the policy. Our view is that the stable and peaceful environment fostered by our treaty alliances with Japan, South Korea, Australia, the Philippines, and Thailand facilitates an environment in which economies have a stable foundation upon which to grow and in which we can achieve our shared goals of a future of shared prosperity that benefits us all.
Looking forward, the United States will continue to be a dedicated friend and partner. The people-to-people ties between the United States and Asia are strong and deep. There are over 16 million Americans of Asian descent living in the United States. In fact, Filipino-Americans represent the second largest group of Asians in the United States. There are also over 350,000 Americans living in the Philippines and many more living in other countries in the region. These people-to-people bonds are constantly growing and bringing us closer together.
Thank you again for inviting me to speak today – it’s always a pleasure. I hope you all enjoy the remainder of your time in Manila and the rest of the conference.