tv U.S. Investments in Asia - Sec. Pompeo Sec. Ross Remarks CSPAN July 30, 2018 4:59pm-6:12pm EDT
media platforms. at the senate intelligence committee cannot live at 10:00 a.m. eastern's c-span. >> next, mike pompeo and wilbur ross outline the trump administration's strategy in india and the asia-pacific. pompeo announced initiatives aimed to support the digital economy, energy, and infrastructure. u.s. chamber of commerce, this runs an hour and 15 minutes. >> ladies and gentlemen, now taking the stage, tom donahue, president and ceo of the u.s. chamber of commerce. mr. donahue: good morning, ladies and gentlemen. [applause] mr. donahue: do not do that. you have not heard what i have
had to say it. it is a my -- it is my players are -- pleasure to welcome you today. we have extraordinary speakers. we are brought together leaders from business, government, and others to discuss issues of importance to all of us. america's engagement in one of the most significant regions of the world. we are looking forward to hearing directly from top administration officials about their vision of the region, and there will be opportunities to ask questions and network. the forum today symbolizes increasingly important role that india and the subcontinent plays in our economic relationship with asia. the goodwill that has been established between the administration and the business community on these type of activities and our shared desire
to seize historic opportunities in the indo-pacific. i don't need to tell anyone here why this region is important. we've all read the reports. we've heard the statistics. the indo-pacific is the fastest growing and most dynamic region on earth. by the end of the next decade, it will represent 66% of the world's middle class. 59% of all the goods and services sold to middle class consumers, and it will raise serious questions here in the united states about where we go next. that means that trade with this region is not just a historic opportunity, it is a requirement for any nation that hopes to compete and lead in the world's economy.
the same can be said for that of investment. developing nations in the region will need about $1.5 trillion in investment every year for the next 12 years to develop the infrastructure needed to sustain all of that growth. their governments can't fund it alone. it will require private capital. this presents another opportunity and also an urgent calling for american firms. funding for these projects will come from all around the globe, but america needs to be able to have a significant seat at the table with the financial resources to match our individual and corporate ambitions. the bottom line is our nation's economic future depends in no small part on the ability of our
companies to compete in the indo-pacific, but here is the problem. u.s. businesses have been steadily losing market share in the region for years. one reason, as the administration points out, are protectionist policies from local governments. a typical southeastern asian country imposes tariffs five times higher than we impose and also has a web of regulations that block market access. we're also seeing an increase in non-tariff measures such as local content requirements that hurt many american service providers trying to operate in the region. another challenge is economic nationalism. we've seen the state capitalist model become more prominent in the region over the past decade,
and not just in china. despite all of this, there are more reasons for optimism than pessimism. there are many bright spots in the region. india, for example, has become an increasingly close commercial partner to the united states. in fact, i'm heading there, along with a good number of you, for a series of meetings with industry and government leaders. hard work still lies ahead in india and throughout the region. everyone here can agree that we have enormous opportunities to seize, and everyone here can agree that there are challenges standing in the way. what we don't always agree on is how to solve these challenges, but the most important thing is that we remain determined to work together to achieve that
objective. the event today is evidence that the trump administration and the business community are determined to keep the discussions going between us and to work towards common solutions to our shared challenges. before we welcome our first speaker in a few minutes, let me take a moment to share the business community's perspective on how we might solve the challenges we face. there are, for us, there are three priorities that we believe should govern our approach. first, we must recommit to openness. we need to strengthen our existing partnerships in the region by lowering, not raising, barriers to trade.
and when we run into barriers in other countries, we must overcome them through tough, fair, and enforceable trade deals. when we stop pursuing these deals, when we stand still on trade, we inevitably fall behind. consider the fact that the trans-pacific partnership is moving forward without us, despite our significant role in bringing it to fruition. the e.u. has signed a deal with japan and is pursuing talks with others in the region, such as vietnam. the belt and road initiative is promising to connect china to dozens of nations throughout asia, europe, and africa. indo-pacific countries have signed more than 150 bilateral or regional trade agreements. meanwhile, the united states has just three trade deals in the indo-pacific with australia, singapore, and south korea. obviously, if we don't get busy
inking more deals and opening back up to the region, we'll be left somewhere on the outside looking in. the business community is eager to work with the administration to negotiate new trade agreements with higher standards. these should include intellectual property protection and should be crafted with all industries in mind, from the digital economy to financial services, to energy. in addition to trade deals, we have a range of tools that can allow the u.s. to establish a posture of openness in the
region and some of them will be discussed today. for example, later this morning, we'll hear from ambassador jeff garsh, on the administration's goals for its future. it is essential to our moving forward in a way that gets us to where we must be. a fully function x-m bank is critical to empowering u.s. businesses of all sizes to benefit from trade. we'll also have a discussion with members of congress about how legislation can open the flood gates of investment and trade. the case in point for today would be the build act, which the chamber supports. it helps put private sector dollars to work in developing countries, building infrastructure, creating first-time access to electricity, and even starting up local businesses. let me parenthetically say, a
good place might be to start might be here in washington, d.c. and it not only improves lives for citizens of developing countries, but opens up the playing field for u.s. businesses. if we use these tools in addition to trade, investment, and more to signal our openness, it will encourage indo-pacific nations to open themselves to us. that is why openness is the first priority for american business in the region. second, we very much believe bedrock american principles should govern our engagement starting with free enterprise, innovation, and the rule of law. the u.s. was founded on free enterprise and free markets, and we started a global trend towards liberty that has led hundreds of millions out of
poverty worldwide, but today we face a challenge in china's model of state capitalism, beijing's subsidies, industrial policies, and trade practices favor domestic firms and put foreign enterprise at a disadvantage, not only in china, but in global markets. as the administration has rightly pointed out, this model has given china economic advantages at the expense of other countries. we should not hesitate to challenge china's model, but we must do so in a way that adheres to our own free market principles and avoid self-harm. unilateral actions without support of our allies will only weaken our own negotiating hand by squandering international good will. that doesn't mean we shouldn't be tougher and smarter than
we've been in the past. and it doesn't mean we can't try new things. it simply means we need to stay true to who we are and who we were founded to be. that leads me to a third priority. we must remember the lessons of history. in the aftermath of the second world war, the u.s. took the lead in creating a global rules-based training system based on mutual openness. successive rounds of tariff cuts over a half a century helped increase world trade 40-fold. america's greatest generation established the post-war trading order because they knew the cost of protectionism. the disastrous smoot hawley tariff act of 1930 triggered a 66% decline of world trade
, contributing to the great depression, which set the stage for war. they vowed not to let history repeat itself, and trade has played a huge role in a massively successful undertaking. the strong ties between the united states and the other nations of the indo-pacific have been at the fore of these efforts. our commerce has forced an economic growth and good jobs, but it has also strengthened ties of peace, cooperation, and friendship between nations. peace and prosperity have often gone hand in hand throughout history, but now they are more closely related than ever. today, american businesses are not just in competition with their rivals across town or
across the state, but particularly across countries. they are in competition with foreign visitors they have never heard of. if our companies lose access to foreign markets, they will struggle to remain competitive in this global economy, especially if other nations are increasing their own access at the same time. today, foreign policy is domestic policy. that is why we're so glad to be engaged in this discussion today with the administration, and it's why i'm honored to introduce our next speaker. i can't see with the lights on me, but i've got it. all right. secretary of state mike pompeo is a true leader. he's guided by a vision, by intellect, and also by faith and
trust in his team and the administration. this is why he excelled as an army officer leading his men during dangerous deployments at the height of the cold war, and it's why he became successful as a businessman founding a thriving airplane parts company in wichita. it's why he quickly set himself apart on capitol hill after being elected to the congress and earned president trump's nomination to be the director of the cia. he led that agency like a true businessman, streamlining unnecessary bureaucracy, boosting work force morale, and setting a clear northern star while he turned the commander's intent. now, as we all know, he's been tasked with doing the same at the state department, and so far, my judgment, he's knocking it out of the park.
he revitalized the feeling and effectiveness of the diplomatic corps. he tightened our relationships around the world, and, by the way, he's doing it in person with a travel schedule like nothing i've ever seen. and it's too bad there are no frequent flyer miles on military aircraft. ladies and gentlemen, we're honored to have him here, and we're excited to hear his vision for america's future in the indo-pacific, including what all of us in the business community can do to help. please join me in welcoming the secretary of state, mike pompeo. [applause] secretary pompeo: good morning, everyone. it's great to be with you. thank you, tom, for the kind introduction. thanks to the u.s. chamber of commerce for having me here hosting this important
indo-pacific business forum as well. i'm glad to see, too, many of american business leaders with us here today. i did this for a long time. people forget this is what i did for a living before i ran for congress. i know there's also folks from state department here, from the administration, and i also see a number of ambassadors that are stationed here and those from foreign capitals. thank you all for being here and partnering with the united states and our businesses as we pursue prosperity for people across the world. i also want to thank my colleague, secretary ross, secretary perry, administrator green, ambassador garash, ray washburn at opec, a good friend of mine from my business days. your president helped solidify our economic approach to the indo-pacific has a truly whole of government mission.
i wanted to come here this morning to talk about the trump administration's strategy for advancing a free and open indo-pacific and why u.s. business engagement is at the center of it. it's a staple of our mission to promote peace, stability and prosperity. president trump first outlined this in vietnam just last year. the national security strategy also detailed that vision. make no mistake, the indo-pacific, which stretches from the united states west coast to the west coast of india, is a subject of great importance to american foreign policy. as i will detail in a bit, this region is one of the greatest engines of the future global economy, and it already is today. the american people and the whole world have a stake in the indo-pacific's peace and prosperity. it's why the indo-pacific must be free and open. and for those of you who might not be familiar with our terminology of free and open, i
want to just spend a minute talking about what it is this administration means when it uses that language. when we see free indo-pacific, it means we want all nations to be able to protect their sovereignty from coercion from other countries. at the national level, free means good governance and the insurance that citizens can enjoy their freedoms and liberties. when we open in the indo-pacific, we want all nations open access to seas and airways. and the peaceful resolution of disputes, and it's key for each country's attainment of its own national aims. economically, open means fair and reciprocal trade, open investment environments, transparent agreements between nations, and improved connectivity to drive regional ties, because these are the paths for sustainable growth in the region. the u.s. commitment to free and open indo-pacific is deeply
rooted. the state department, which i represent, established a presence in calcutta in 1794. american entrepreneurs whom most of you in this room represent have been trading and investing in the indo-pacific even longer than that, and i won't give you a full history today, but i will note how the united states has played a foundational role in enabling the growth, development, and wealth we see across the entire indo-pacific today. the great theme of our engagement is this -- where america grows, we seek partnership, not domination. after world war ii, we worked with japan to forge a great alliance and stimulate an economic boom.
south korea in the 50's was ravaged by conflict. american assistance and investment in railways, ports and other infrastructure helped create a foundation for our south korean friends to recover, thrive and build one of the world's most prosperous economies, one now strong enough to aid other countries in their development. in the 1960's, we grew partnerships to address basic developmental needs. we supported transformational agricultural efforts such as the green revolution, which forever improved farming of wheat and rice worldwide and nowhere more than in the indo-pacific. we helped hong kong, singapore, and other southeast asian economies rise from the 1970s onward. in taiwan, economic development went and in hand with creating an open, democratic society that blossomed into a high-tech powerhouse. and america was proud to support foundational institutions like apec, the asian development bank among others. thanks to this history of economic and commercial engagements, america's relationships throughout the indo-pacific today are
characterized by mutual trust and respect. american friendship is welcomed and american businesses are recognized for their ingenuity, reliability and honesty. today no country does more two-way trade in the indo-pacific than the united states. in southeast asia, the u.s. is the single largest form of investment larger than china, japan, and the european union. open a map of the indo-pacific today and it's dotted with u.s. and efforts to build self-reliance, business institutions, and promote private sector growth. in the philippines, there was a business that helped the country return into a crucial part of the semiconductor supply chain. in malaysia, general electric invested in a sales and service
center in 1975, and today, 1300 employees in the country from kuala lumpur. when malaysians recently elected a new government, i want them to know the united states stands ready, to deepen government, people to people ties, based on our shared democratic values, i'll travel there in the week ahead. chevron was the first company ever branded oil expiration rights in thailand, and in 1973, they discovered the first hydrocarbons in thai waters. this gave birth to a major local industry. today chevron is thailand's top natural gas and crude oil producer and its investments support more than 200,000 jobs. meanwhile, their size project local teachers in science, supports technology, engineering and math, to strengthen thailand's capital to make greater returns on investments. chevron's thailand unit provided equipment and technical advice for the recent rescue for the
courageous boys and coach trapped in a flooded cave. u.s. companies literally helped indo-pacific partner nations reach for the stars. spacex recently launched one of bangladesh's satellites. to be clear the u.s. government , doesn't tell american companies what to do, but we help build environments that foster good capitalism. we help american firms succeed so that local communities can flourish and bilateral partnerships can grow. that's why the united states supports educational efforts such as bo bright university vietnam and young south asian leaders' initiative. this is the same commitment we showed in the past when we helped to establish the first indian institute of technology along with 14 engineering colleges and eight agricultural universities all across india. development of finance is
also important. our overseas private investment corporation portfolio of $3.9 billion invested in the indo indo-pacific alongside firms from energy to health care to banking. for every dollar that opec has invested, the private sector has invested $2.76. in indonesia, opec has teamed up with usaid and renewable wind farms for clean power to 75,000 indonesian households, and our challenge corporation is promoting good government in indo-pacific nations. right now mcc is spending $500 million to build
hundreds of kilometers of lines into nepal and recognizes that country's energy potential today at the forum. $350 million contract with the government of mongolia to develop new long-term sources of water supply. in addition to helping mongolia fulfill a critical human need this will position the country to attract new investment and stimulate private sector-led growth. i know that the mongolia foreign minister intended to be here today, but unfortunately was called away for business. this mcc program will benefit mongolia, the region, and the world. i could go on much longer and give you more examples. american companies have been a force for prosperity and good throughout the indo-pacific region. our good faith as partners are evident in support of economic development that honors local autonomy and sovereignty. the united states doesn't invest for political influence, but rather practices partnership economics. this is a prelude to what i expect in the future. i'm here to say emphatically the
trump administration is committed to expanding our economic engagement in the indo-pacific region. we seek to capitalize on opportunities in accordance with the principles of freedom and openness. as president trump said in vietnam last year, the indo-pacific is a beautiful constellation of nations. each its own bright star. satellites to none, and each one, a people, a culture, a way of life, a home. to burn the brightest, this constellation needs sustainable growth and this is what our indo-pacific strategy will promote. we believe in strategic partnerships, not strategic dependency. as president trump said last year, we want you to be strong, prosperous, and self-reliant, rooted in your history, and reaching out toward the future. today, i echo that message. i speak for president trump when i say every nation in business can have confidence that the united states will continue to
create the conditions for mutual prosperity in a free and open indo-pacific. it is clearly in america's strategic interest to deepening engagement in the region. more than one third of the global population is there. four of the world's six largest economies are there as well, in china, japan, and india, and, of course, the united states. the ten countries of the community are the fastest growing economic zone in the world and are major buyers of u.s. products. president trump will strike while the iron is hot because there are clear economic benefits at hand for the american people. our indo-pacific vision excludes no nation. we seek to work with anyone to promote a free and open indo-pacific, so long as that cooperation adheres to the highest standards our citizens demand. the united states is committed to growing our presence in the region because we want americans and all people of the indo-pacific to share in the
economic growth of 2020, 2030, 2040, and beyond. i know some are wondering about america's role in the region in light of president trump's decision to pull out of the tpp. while we work with our partners to craft better and higher standard bilateral trade agreements, our companies are continuing to advance u.s. economic interest by growing their presence in the region. for example, the number of u.s. companies in singapore has increased 10% over just the past two years. finally, we remain committed to economic engagement in the indo-pacific because of the national security benefits for the american people and our partners. as president trump's national security strategy states, economic security is national security. it's clear, a big part of america's international economic future is in this region. so just as the united states made foundational contributions in the past, today i'm
announcing $113 million in new u.s. initiatives to support foundational areas of the future -- digital economy, energy, and infrastructure. these funds represent just a down payment on a new era in u.s. economic commitment to peace and prosperity in the indo-pacific region. our strategy seeks to catalyze americans businesses to do what american businesses to do what they do business. supports trump indo-pacific for all companies to share our vision of a region ruled in sovereignty, the rule of law, and sustainable prosperity. the first initiative is the digital connectivity and cyber security partnership. this will start with a $25 million initial investment to
improve partner countries' digital connectivity and expand students for u.s. technology exports. the u.s. will support communications infrastructure development through technical assistance and public-private partnerships, promote market driven, regulatory policies and build partners, cyber security capacity to address common threats. we do this because we recognize the tremendous economic and social benefits to come with an open, secure, and reliable internet. the secondary initiative is asia edge. it stands for enhancing development growth through energy. energy is of course the life blood of a modern economy. and we'll invest $50 million alone to help import, produce, store, and deploy their energy resources. america's energy includes vast natural resources, world leading private firms, sophisticated development of financial tools and peerless technical expertise. we will draw on all of these to grow sustainable and secure energy markets throughout the indo-pacific. third, next, infrastructure.
the united states is committed to conductivity that advances national sovereignty, regional integration, and trust. this occurs when infrastructure is secure, financially viable, and socially responsible. today the u.s. is launching an infrastructure transaction and assistance network to boost the development of infrastructure done right. this whole of government initiative seeded with nearly $30 million establishes a new interagency body to coordinate, strengthen, and shares u.s. tools for project scouting, financing, and technical assistance and establishes a new indo-pacific advisory fund to help partners access private, legal, and financial advisory services. in each of these areas, digital economy, energy, and infrastructure, we look forward to working with allies and partners. we also look forward to
leveraging the new and modernized tools, improved programming from the build act, that recently passed the house and now is before the senate. this is a big one. under the house bill the u.s. government's developed finance capacity would more than double to $60 billion. let me say another word about money. president trump, and i know most of you in this room, don't like to waste a single penny. and this investment is not waste. nor is it about giving money away. this is a strategic investment in the most competitive part of the world for years to come. we're proud to support the build act and allocate $113 million in immediate new funds to expand economic engagement in the indo-pacific. later this week, i will make further announcements on security assistance, but we also know government spending alone cannot address the indo-pacific's needs. according to the asian
developing bank, countries need $26 billion of infrastructure by the year 2030. no government or combination of governments have at that kind of money, only the private sector does and only if countries make themselves welcoming to private investment will those trillions of dollars get off the sidelines, into their economy and into productive enterprises to bring jobs and prosperity to their people. for that to happen, indo-pacific leaders must prioritize transparency, anti-corruption, and responsible financing. the u.s. government's indo-pacific initiatives will be shaped by these values and buttressed by partnerships with american companies. this will reflect american values and the high standards, transparency, and adherence to the rule of law. with american companies, citizens around the world know that what you see is what you get. honest contracts, honest terms,
and no need for off-the-books mischief. integrity in business practices is an essential pillar of our indo-pacific economic vision and what each country in the region needs. as i close today, i want everyone to understand something. this is a commitment. i personally pledge as secretary of state that i will engage with you, i will engage with congress and our foreign counterparts, so will our ambassadors and other u.s. officials. i was delighted to make my first trip to vietnam a few weeks ago, and there will be many more trips to the region even yet this year. one such trip starts on wednesday of this week. i will travel to malaysia, to singapore, and then on to indonesia for the weekend. i look forward to discussing everything that i've shared with you today with political and business leaders in the region. this is literally at the center of the indo-pacific and plays a central role in the indo-pacific
envisioning.a is and this is one reason out of $113 million will come a package of u.s. support for important regional regions like osia, apec, the lower mekong, and the lower rim association. more on that later this week. the trump administration has a clear vision for the indo-pacific in the 21st century. it is an american -- it is an american vision that is deeply engaged in the region's economic, political, cultural, and security affairs. like so many of our asian allies and friends, our country fought for its own independence from an empire that expected deference. we will never seek domination in the indo-pacific and oppose any country that does. rather, we aspire to a regional order, independent nations that can defend their people and compete fairly in the international marketplace. we stand ready to enhance the security of our partners and
to assist them in developing their economies and societies in ways that ensure human dignity. we will help them, help them keep their people free from coercion or great power domination. and today, i want to close by inviting any nation, and any business that wants those values enshrined in this region, to partner with the united states government. a free and open indo-pacific is america's chosen course, and we hope that it will be yours, too. thank you, god bless you, and have a great day. [applause]
>> i would like to thank secretary pompeo for joining us today and for providing us with the administration's vision for the indo-pacific economic relationship. for the next session, i have the honor of introducing two secretaries of commerce at the same time. secretary wilbur ross and former secretary carlos gutierrez. given their long and decorated careers, they're both well-known to the group assembled here today, so i'll be brief in describing their many accomplishments so we have more time to hear their insights on expanding commercial opportunities. wilbur ross is the 39th secretary of commerce, having assumed his post in february, 2017. prior to joining the trump administration, secretary ross had a prosperous career in banking and investing. first at nm rothchild and sons and then at his own private equity fund, wl ross and co.
secretary ross has been chairman or lead director of more than 100 companies operating in more than 20 different countries. and he's an avid art collector. carlos gutierrez served as the 35th secretary of commerce from 2005 to 2009 under the george w. bush administration. secretary gutierrez spent a very productive 29 years at kelloggs, culminating in the chairman and ceo roles in his final five years at the company. he is currently co-chair of the albright stonebridge group and serves on the boards of multiple councils, associations, and corporations -- full disclosure, including metlife's board. in this session, secretary gutierrez will moderate a discussion about the work underway to strengthen
commercial opportunities for u.s. companies in the indo-pacific. the region is critical to the future of nearly all the companies in this room, and this is a crucial moment for the economic and political relationships between the indo-pacific and the united states. to take metlife as one example, it is our fastest growing region and already generates more than 40% of our global revenues. all u.s. companies need the support of the u.s. government in maintaining constructive relationships with foreign governments and establishing a level playing field for business. the commerce department plays an integral role in that process, and we look forward to hearing about current efforts in that regard. of course, the membership of the chamber stands ready to partner with you in achieving these objectives. now, mr. secretaries, 35 and 39, the floor is yours. [applause]
>> thank you. thank you, good morning. secretary, thank you for being with us, and before i get started with some questions, i just want to congratulate secretary ross, the president for a great quarter of gdp growth, so, congratulations to you and the economic team. we're looking forward to a lot of those. secretary ross: thank you. secretary gutierrez: so getting on with indo-pacific, it features prominently in the president's national security strategy.
from a strategic logic, what is the rationale for indo-pacific from a commercial point of view? secretary ross: well, indo-pacific as an important region actually goes back to 1794. state department opened a branch location in calcutta, so that's how far back it goes, but relationships have gone up and down in between. it was part of the nsc national security plan in 2017 that president trump announced in danang, vietnam. that's really what kicked off the tremendous momentum we now
have underway. from a commercial point of view, there are all sorts of reasons for it. we import from the region about a trillion dollars, and we export to it around $450 billion. that trade deficit of 550 is an issue, but the total volume is also very, very important, and of that trade deficit, china is about $376 billion. so, the vast bulk of it is with china. those exports to the region support some 550,000 jobs in the u.s. 40,000 u.s. companies sell over $100 billion of products to the indo-pacific region, so it's a very, very important economic factor for us. exports to the region grew by 10% last year, which is a pretty good performance for any region.
and perhaps most importantly of all, the brookings institution believes that of the next billion people to come into middle class economic status, 88% will be in the indo-pacific region, so that's a pretty staggering statistic from a consumer consumption point of view. secretary gutierrez: absolutely, absolutely. i think, as secretary pompeo was saying, it's the largest and fastest growing. so pretty special. so, many of us in the business community had quite a bit of anxiety when we pulled out of tpp and were left with three trade agreements in the area, in the region. does this commercial strategy as part of the indo-pacific
strategy, does that substitute for what would have been tpp? is there another way of thinking about our commercial strategy going forward? secretary ross: well, when we withdrew from tpp, we withdrew from a potential potential agreement with which we disagreed. it was not a withdrawal from the region. to the contrary, one of vice-president pence's first trips, which i had the honor of accompanying him on, was through japan, and he then went on to other countries. i went on to thailand, to laos, to a whole bunch of countries. so people should not misinterpret withdrawal from the particularly potential agreement as withdrawal from the region. nothing could be further from the truth. and you've seen, the president was in danang for the
conference. everybody has been out there, secretary of state, secretary of defense. so, if anything, there's much more intensified diplomatic, military, and commercial activity than there ever has been. do youry gutierrez: worry about arsep, the osian plus three or four and japan and ?u moving forward is that a concern? does that put any -- is there an implication to how fast we move given that others are moving as well? secretary ross: well, at the end of the day, our relationships tend to end up being bilateral. we have indicated, the president has indicated on many occasions, a willingness to enter into more agreements with countries in the region, so it's a question of
format rather than a question of desire or substance. secretary gutierrez: so you would see more bilaterals? secretary ross: i think so. secretary gutierrez: taking place? secretary ross: it's not inconceivable that with we could end up in multi-laterals. the president's concern of multi-laterals is several-fold. they take forever to do. you're well aware of that with your history as secretary of commerce. second, they're very, very complicated because you have to make a concession to this individual country to get what you want from it in the agreement. then you go to the next country. they want a different concession. now you've been nicked twice, and each one gets the benefit of the deal negotiated by the other one. you go through ten or 12 of these, and you're pretty well nicked up, so that's one concern we have. the other one, which is related to the duration of the
negotiations, is if you've been working on something for six years, eight years, and it now comes down to a couple of really big issues at the very end, do you really want to walk away from the agreement and go back to your loved one and say, you know, dear, i just blew eight years of my life and came away empty? there's a kind of deal fatigue that can set in that doesn't necessarily result in an optimal deal, so those are some of the concerns that we have. but he has not taken them totally off the table. that is just, we think it's easier and faster, perhaps, to do bilaterals. secretary gutierrez: around wto is a good example trying to bring 140 countries together and pretty difficult. so, i think the business community and most people in the audience agree that we have to do something about the commercial practices, business
practices in china. there's concern about how we're going about it. there's some concern about price increases, cost increases, potential impact to u.s. companies doing business in china, unintended consequences. you've heard all of that. how do you see this ending? how do you see this evolving? i think everybody would like to see it go away and fix the problem and -- secretary ross: well, we well understand that fear of the unknown is the worst fear of all. business hates uncertainty. business can adapt to good news. business can adapt to bad news. uncertainty is hard for it to deal with. so we understand that. on the other hand, it is our very strong feeling that the abuses are too severe, are
unaffordable, and cannot continue forever. so the real question in our mind is what is the best way to try to deal with the abuses of which everybody in this room is quite well aware? and our conclusion was that one had to take a very aggressive stance, and that if you were ever going to take an aggressive stance, that clearly the right time to do it is when your economy is really strong, when we're pretty much close to full employment, when the gdp numbers were just the 4.1% that you mentioned. if you ever have to get into some sort of a spat with someone, that's the right environment within which to do it because there's more ability for the economy to absorb whatever short-term problems may come. i liken it a little bit to going on a diet.
it's no fun in the very beginning, gets maybe a little bit painful, but at the end of the day you're kind of happy with the end result. we think that's the way this will evolve and that it ultimately will come down to negotiations. will we get everything we want? probably not. will we make a lot more progress than has been made in the prior decades? we're quite convinced we will because, at the end of the day, it's not in anyone's interest to have this go on for 100,000 years. secretary gutierrez: yeah, for sure. and the idea is to get a deal with nafta, get the eu issues resolved so that the focus is china. secretary ross: well, there are lots of focuses, but our immediate, most close to completion negotiations are with nafta, particularly with mexico.
we're very pleased that the new president in mexico wasted no time at all in appointing his new trade team, which is a combination of the old team and new people. he didn't wait until his inauguration, which will not be until december 1. he did it within the first couple of days after the election. that speaks -- and his rhetoric has become pretty constructive, as has the rhetoric of his team. so we think that there's a pretty good chance that we could be on a pretty rapid track with the mexican talks, and there are fewer issues with canada. mexico is intellectually the more complicated of the two. so, we can solve that, we should be able to fill in with canada. secretary gutierrez: great.
good news. thank you. so there's been a lot of talk and excitement, i would say, given the president's energy reform and the production that we have in the u.s. and the unconventional methods that we're using to produce oil and gas. a lot of excitement about the potential to export, to indo-pacific. is the infrastructure really there? is there something we have to do first to actually get to the point where, you know, a lot of money's flowing from the east to the west because we've got the energy? secretary ross: right. well, i frankly hate it when they call it unconventional. the shale phenomenon is becoming quite conventional. secretary gutierrez: right. secretary ross: and it's quite sophisticated and quite well-developed. and my guess is we'll find even
more efficiencies as we go forward. i believe secretary perry is going to be here later, so i don't want to steal his thunder. but the main reason why i think there aren't even bigger exports right now is the prior administration had been very, very slow on granting export licenses. you need licensing to get to countries with whom you do not have free trade agreements, and since we have so few, particularly in this region, that's been a real handicap. so that's one problem. there's no lack of capital in the u.s. for expanding the lng export facilities. that's going ahead pretty well. a lot of capital devoted to it. there is capital needed for the re-gasification facilities at
the other end, and that's are coming along well. so i think both to indo-pacific and also, as to europe, they're very, very strong prospects for lng. and that's one of the best ways to reduce our deficit is to fill a need that the countries already have as opposed to struggling over things that are extremely competitive. truth is, indo-pacific does not have the hydrocarbon resources that it needs to sustain its growth rates, and we are the very logical provider, maybe the most logical provider of that. so there's no reason that won't help a lot to reduce the trade deficit. secretary gutierrez: absolutely. so the u.s., australia, japan, and india are being viewed as the quad, and a lot of
similarities across the countries, democracies, but they are different countries, and they often disagree, and they don't see things in the similar fashion. are you doing anything, commerce department, to align the group a little bit more, and what does the quad mean for u.s. business and will that make it easier? will it facilitate doing business in these four countries or in these three countries? secretary ross: well, we think so. for example, in infrastructure, australia, japan, and ourselves have joined forces in a very big infrastructure financing activity. the japanese bank for international development has already committed some 26 billion dollars to the project. you'll have here later today ray washburn from opec, and he'll explain to you some of the new things going on there. opec already has something like a $3 billion portfolio in
indo-pacific, and that's matched by some $11 billion of private sector money, but it will be getting quite a lot of new funding, assuming that the builds the uild program goes through the second house of congress. it already passed very well in the first house. so that will be another tool for development in the region, and that's potentially some $33 billion. then you have the asia development bank, which is already quite an active phenomenon, some $26 billion. you have the millennium challenge corporation, so there are lots and lots of tools being brought to bear very much in the region. and they are being brought to
bear in electricity, both renewables and conventional, especially transmission lines. it's also being brought to bear on water, another very, very important issue, especially in this region. secretary gutierrez: is the one belt, one road good for u.s. business? has it been? i mean, are u.s. businesses participating in that? secretary ross: as far as we can tell, the chinese content, both in terms of labor and materials, is virtually 100% in their one belt, one road program. broke collapsed those are the kinds of problems that countries don't need because that leaves them with the debt from the first infrastructure project and the need to redo it all over again.
so our feeling is there are more than one belt, and there's more than one road. there are many belts and roads to the indo-pacific. secretary gutierrez: the quad also be ignited from an infrastructure point of view? secretary ross: well, that's the hope. now, the geography is such that there won't be too many physical linkages telecom digital is certainly one big set of linkage and we work quite actively to try to fill at a time that as 5g cools into telecom.
secretary gutierrez: so all of us know, we, you know, better than all of us, you business part of the idea is -- you start with the strategy and that's a very complicated thing to do but then there's the execution. can you take us inside administration? how does something like this get executed? is it an interagency process? is the cabinet -- they get together and discuss? are the ambassadors in here? you know, how do you execute a strategy with so many components and variables? secretary ross: well, first of all, the development of the strategy came about through the nfc convening interagency groups and started at a relatively low level and gets to the depth level and then it gets to cabinet level, then it gets to the president for approval. so it's a very thorough, very meticulous, detailed process by
which the strategy is developed. that's important because along the way, you get the buy-in of all of the different departments. it literally comes from the bottom up, therefore everybody is intellectually and hopefully emotionally committed to the end result. secretary gutierrez: ambassadors, everybody else -- secretary ross: everybody -- in fact in terms of the all bass doors we're doing a number of things, commerce is now putting a digital into the endopacific -- digital attache into the indo-pacific region. because there's so many problems with digital, with the the e-commerce constraint of many countries, with the localization of data, with the issue of privacy, we're going to have some specialized talent in the region.
second thing we're doing, we already have foreign commercial service people in more than 30 countries in this city, in this region. we will be adding some to them, and we're entering into a pilot program with state department to try to figure out how to get better leverage at the ambassadorial level, introduction to the business community rather than just totally focusing on strategic defense and geopolitical concerns. so there's very good cooperation particularly between state department and ourselves. in addition, we've taken a very specific move, which i'm announcing now, that we have granted to india strategic trade authorization status sta one,
and that's a very important change in their status under our export control regime. it acknowledges the u.s.-india security and economic relationship, and what it does is it comes under the exported administration rules, and it authorizes the export, re-export and in country transfer of specific items to destinations that the u.s. regards as low risk. currently, 36 countries, mostly all of the nato countries have this status, so it's a very elevated status from an export control point of view. and it's because india has partnered with us to improve its own export control regimes and has met most of the multilateral
export rules that we think are useful. it finally reflects india status as a major defense partner of the u.s.. sta one provides india greater supply chain efficiency, both for defense and for other high-tech products. it will increase the activity with the u.s. systems, the interoperability of the systems and reduce time and reare -- resources needed to get licensing approved. we calculate that it will be a competitive advantage for the u.s. in terms of supplying both kinds of products to india.
it looks as though that over the last seven years some 7.7 billion of products would have been affected. so it's a meaningful size number. and probably it will be much more than that because a lot of things they knew would not be exported they didn't order from us. we are exporting to india. to just about every place in the region. so far relatively limited quantity, and part of that is a strange problem in the u.s. side. there has been so much activity in the permian basin that the transportation for getting from the permian over to export force ports is lagging behind. so there's a tremendous amount of road construction, tremendous amount pipeline construction, tremendous amount of even more detailed infrastructure like schools, housing, to deal with this incredible boom in the permian.
secretary gutierrez: secretary, we have got to more questions. one related to pompeo. partnership not domination, and that was interesting concept, we've sort of set up china as our rival, as our competitor. is the idea to achieve this partnership not domination within our two systems? or does china first have to make the adjusts to be more like a western type economy? can you just talk about the partnership not domination as it relates to china? secretary ross: well, what we mean by it is something that also has quite relevance to the rest of the indo-pacific region. we're looking for commercial relationships that are
commercially based, that are not driven by other kinds of impulses. for example, protection of intellectual property rights. to us that's a very fundamental activity and a very important one. recently, the u.s. patent office, as you know, secretary, is part of department of commerce, we recently issued our ten millionth patent, no country in the history of the world has ever approached anything like ten million patents. and most interestingly, more than half of them were issued in the last 30 years. so the entire history of the u.s. prior to 30 years ago produced fewer patents than we have in the last 30. and if we calculated the last five, that would be even a huge percentage.
so ipr is really important because it's the future. so we have a great deal of difficulty with forced technology transfers, we have a great deal of difficulty with cyberattacks. we have a great deal of difficulty with outright theft of ipr. so our strategy has two components to it. one is to deal with today's world, and that's things like steel, aluminum, possibly automobiles. another part is to deal with the future. and that's largely the high-tech areas, so we feel there's a need to normalize dealings and level the playing field both in terms of the traditional industries and in terms of the future industries. secretary gutierrez: thank you. so i thought that the audience would like to hear and maybe give you a chance to tell them why they are not going to look
back five, ten years from now and say -- boy, i wish we wouldn't have gotten out of tpp. secretary ross: well, unfortunately in big geopolitical things like tpp, there is no way to do a controlled experiment. so no one will ever know what would have been the outcome from tpp. i think what people, in some cases, have already forgotten tpp was dead regardless of won the election. both hillary clinton and president trump campaign act -- actively campaigned against tpp. the congress votes weren't there in any event. so it's a little bit of reformist thinking to say well trump killed the tpp. he did. but tpp was going nowhere.
real question isn't looking backward but looking forward, and how do question develop better relations with the individual countries? how do we maximize total trade while at the same time dealing with the imperfections in their systems? government procurement problems, the corruption problems, the standards that are not science-based problems, and myriad problems that contribute to the trade deficits and that are not part of free trade. that's the last point that i would like very much to make. the president has made extremely
clear, both at the g7, more recently when we were talking with the eu, is an objective at the end of the line is zero tariffs, zero nontariff trade barriers, and zero subsidizing businesses. if we can get to those three, we believe that american business can be very, very competitive anywhere. but we do need a levelized playing field, and many of these countries, including in the indo pacific region, are far better at the rhetoric of free trade than they are at its practice. they are, in fact, far more protectionist than the u.s., and so when i was at the oecd, they had a panel. and my first question to the panel was -- if the u.s. is not, in fact, the least big nation tell me who is? and you know what, they have no answer. because we are the least protectionist nation.
secretary gutierrez: and i think everybody would agree with the -- three zero strategy. that sounds great. [applause] >> ladies and gentlemen, secretary wilbur ross, thank you for your service and thank you for your time. [captions copyright national cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> this event continues out with remarks from energy secretary rick perry. he talked about the administration's newly announced initiative worth $113 million, aimed to support the digital economy,