Arms Control and International Security: U.S. Foreign Policy Priorities in 2015 and Beyond

Thank you very much, General Myatt, for that very kind introduction. And thanks also to Philip Yun who will moderate the question-and-answer session. I’d like to thank all of you for taking the time to come out tonight – business and nonprofit leaders; professors, and students under the false impression there’d be free food.

Let me especially thank the Marines Memorial Association and the Commonwealth Club for hosting me here this evening. Both are esteemed organizations that do a tremendous public service for this city and this country, by elevating the discourse we have on important public policy issues. And after my remarks, I’m very much looking forward to engaging in a conversation with all of you, and doing my best to answer any questions you may have.

When I heard this was a sold out event, I told my two sons I had finally joined a pantheon of greats – Santana, the Grateful Dead, the Rolling Stones – all who sold out venues in San Francisco. They were not impressed. But like the Grateful Dead, tonight I will take one decent theme and stick to it without a break for several hours… until you have all passed out.

It’s always a pleasure to get out of DC for a few days and to be here on the West Coast. We’ve had a great day here in San Francisco. We actually got a fascinating tour of Twitter earlier, and I also had the chance to visit with some industry leaders out in Palo Alto and get a first-hand view of the new tools people are using to communicate across borders.

One of the main reasons I’m here is because the State Department really values its relationship with industry. In today’s world, where the impact of technology is rippling across the globe, it’s incredibly important that industry, NGOs, and government not only understand each other; but also work together on some of the challenges we’re facing across the globe.

And in my current job, as Assistant Secretary of State for Political-Military Affairs, I oversee many of our important relationships with the private sector. I also have the privilege of working closely with our colleagues at the Department of Defense. And I manage about $6 billion in security assistance that we invest to build the capabilities of our partners around the world, from Korea to Colombia. We also facilitate $100 billion in defense related exports.

In fact, being here in San Francisco got me thinking about my own career trajectory, because I actually got my undergraduate degree in engineering. My parents would probably have preferred that I get a job at Google or Twitter or Dropbox, rather than one where the salary is… subject to Congressional approval.

Before coming here, I was taking a look at the impressive roster of previous speakers you’ve had at the Commonwealth Club since 1903, and it’s really quite remarkable, from Leader Pelosi to David Brooks to President Clinton to President Reagan.

I’d actually like to begin my remarks with someone who spoke here over a century ago, President Teddy Roosevelt. In Roosevelt’s time, the world looked very different than it does today.

Roosevelt was the first president to take an international trip as President. He went to Panama to observe the building of the canal in 1906.

He was also the last president to work in a rectangular office, which we has very fond of. After his presidency, when he returned to the White House to see the renovations that President Taft had done, Taft very proudly showed him that he had knocked down the old tennis court and had the Oval Office built in its place. Roosevelt said he preferred the tennis court.

So times were different then. The world looked different. Even the Oval Office looked different. But one thing was constant in the fast-moving current of international affairs. And that’s American leadership.

In 1911, Teddy Roosevelt said something that remains as true today as it was then. “The United States has not the option as to whether it will or will not play a great part in the world. It must play a great part,” he said. “All that it can decide is whether it will play that part well or badly.”

President Obama has echoed that same sentiment, most recently in his State of the Union Address a few months ago. “The question,” he said, “is not whether America leads in the world, but how.”

And that’s what I’d like to discuss today: how America is leading in today’s world. I will speak briefly about the changes taking root across the Middle East.

And I’ve spent much of the last two decades working on Middle East policy… for then-Senator Joe Biden when he was Chairman of the Senate Foreign Relations Committee, and for President Obama at the White House for five years.

But in my current job, I oversee a portfolio that extends beyond the Middle East. And I think it’s important, as President Obama likes to say, to not only focus on the headlines, but also the trendlines.

And so today, I’d also like to spend a few minutes talking about some of our other interests, particularly in Asia.

But let me start with the greatest threats to our national security, which emanate from the Middle East.

Having worked closely with President Obama at the White House for five years, I can tell you that his highest priority is the security of the American people. And he has been aggressive in taking the fight to terrorists who threaten the United States and our interests.

But just as our effort to combat terrorism has evolved, so have our enemies. Today, ISIL… a terrorist group that beheads and crucifies and rapes and burns alive those who oppose its barbaric ideology… has seized territory in western Iraq and eastern Syria.

Last year, President Obama outlined a comprehensive strategy that involves working with the Government of Iraq, the moderate opposition in Syria, and an international coalition of over 60 nations to degrade and ultimately defeat ISIL.

The coalition, including several Arab states, has conducted over 3,000 airstrikes against ISIL terrorists. These strikes have had a significant impact, taking out thousands of ISIL fighters, numerous commanders, nearly 1,500 vehicles and tanks, over 100 artillery and mortar positions, and nearly 3,400 fighting positions, training camps, and bunkers in Iraq and Syria. The strikes have damaged close to 200 oil and gas facilities – infrastructure that helps fund ISIL’s terror. We’ve begun training Iraqi Army brigades at four sites in Iraq, and we’ve helped enable more than two dozen ground operations against ISIL strongholds across Iraq.

The cumulative effect of all this has been substantial. The allure of the so-called caliphate has been shattered. ISIL can no longer operate freely in roughly 25 percent of the populated areas of Iraqi territory where they once could. Simply put, its momentum has been blunted.

But this is not just a military effort. Together with our coalition partners, we are using all elements of our power in this fight – because that’s how America must lead in today’s world. Yes, we are using our military might. We are building the capabilities of our partners in the region. But we are also working to cut off ISIL’s financing; to stabilize Iraqi communities; to vet and train moderate Syrian opposition members. And we are working to counter ISIL’s ideology and propaganda. This is a whole of government effort, and it must be for us to succeed.

Going forward, as the President has said, this is going to be a long fight, but it’s one that we are committed to winning with the help of our partners, in a global coalition that continues to grow.

I also know you’re all keen to hear more about the latest on Iran, but our team is still on the ground in Lausanne right now trying to come to an understanding with the P5+1 and Iran to prevent Iran from acquiring a nuclear weapon. So I don’t want to say anything further about that right now at this particularly delicate moment.

But as I said before, if we only look at American leadership through the lens of some of these headline issues, we would miss some of the major stories that are shaping the 21st century.

I’d like to discuss one of those major trendlines today, and that’s the emergence of the Asia-Pacific region as a global economic powerhouse. It’s a region I’ve been very focused on over the past year at the State Department, even as we remain engaged in the Middle East and in Europe.

And here’s why. Asia accounts for 60% of the world’s population. Over the next four years, nearly half of all economic growth outside the US is expected to come from Asia.

I think it’s fitting to be talking about Asia here at the Commonwealth Club because California is the perfect example of why Asia’s future and America’s future are bound together.

For decades, the West Coast, and California especially, has been at the forefront of our economic engagement with Asia. And the rest of the country, including DC, is now catching on.

Since 2009, California’s exports to Asia are up nearly 50 percent. Last year, according to the Department of Commerce, this state exported $71 billion worth of goods to Asia. And those exports supported over 800,000 good-paying California jobs. This state exports more to India and Japan than any other state. And 5 of the top 7 export markets for California are in Asia. So here in California and in the Bay Area, you know first-hand the benefits of trade with Asia.

To build on that progress, one of our highest priorities this year is to complete the Trans-Pacific Partnership agreement, which would open new markets and set high standards on labor and the environment for 12 countries, which together account for almost 40% of global GDP.

You may be wondering why someone who works on security issues is talking to you about our economic relationship with Asia? The reason is simple: trade doesn’t just happen. It’s security that forms the foundation for a successful economic relationship.

Since the end of World War II seventy years ago, the United States has been the bedrock that has underpinned security in the Asia-Pacific region. In Northeast Asia, our alliances with the Republic of Korea and Japan have helped both nations prosper. We have also worked to ensure that waterways are open and secure. Nearly half the world’s maritime commerce flows through the South China Sea every year. So you could imagine the global ripple effects if the South China Sea or Malacca Strait – central arteries of our international trade system – were choked off.

That’s why the United States is playing a leading role in the effort to uphold regional and maritime security in Asia, which underpins the global economy.

In South Asia, we’re strengthening our security, economic, and people-to-people ties with India. I traveled to New Delhi for very productive talks late last year, and President Obama made an historic visit on India’s Republic Day in January.

That visit made President Obama the first sitting president to have visited India twice during his presidency.

Even while India is one of the world’s oldest civilizations, it has the world’s most young people, with a median age of 27 and 600 million people under the age of 25. As the oldest and largest democracies, the United States and India are seeing a natural convergence not only of our values, but of our vision for the future. In my view, India’s revival and deepening US-India ties are among the most significant strategic developments of the past several years. They will shape the global balance of power for many years to come.

In East Asia, my team recently negotiated defense agreements with the Republic of Korea, the Philippines, and Australia. We’re deepening our ties with Singapore and looking to broaden our partnerships with Malaysia and Indonesia. We’re especially focused on building the capabilities of these and other countries, so that we can keep trade routes open, and also so that we can respond to natural disasters, improve readiness, and continue to be a stabilizing force in the region.

Earlier this year, I visited Vietnam as we mark twenty years of normalized diplomatic relations. It’s an historic and exciting time in that bilateral relationship. We’re expanding trade. We’re deepening our security partnership. And thousands of American and Vietnamese students are studying abroad, forging friendships, and exchanging ideas and cultures, dreaming of the future rather than being shackled by the past.

Just think for a moment about the transformation of this relationship. Over 40 years ago, General Myatt, along with Secretary Kerry and so many others, bravely served in Vietnam. Today, thanks to the vision of so many leaders, from President Clinton to Senator McCain to Secretary Kerry, we are passing on to future generations a new chapter in this relationship.

Strengthening our relationship with China is also part and parcel of the rebalance. We seek a relationship with China defined by practical and tangible cooperation on challenges that face both of our nations. And our joint announcement on climate change last year is the perfect example of this. The more we can work together, and be seen as working together, the better chance we have in tackling some of the world’s most daunting challenges.

As Californians, you know that our relationship with the Asia-Pacific is critical. It’s a crucial engine of American economic growth. It is essential to this city and this state.

And it’s the perfect example of the types of opportunities we as a country can seize… if we can look beyond the headlines and also see the trendlines that are already shaping the future.

That’s true if we’re talking about the Asia Rebalance. It’s also true for other trendline issues. We’re leading the global effort to combat climate change in the lead-up to the Paris Conference later this year. We’re leading the international community in dealing with infectious diseases. We’re leading on the issue of food security, which has a huge impact on millions of people around the world. And the same is true on so many other long-term challenges.

It’s true that the world is changing at an accelerating pace. And it’s true that new threats are emerging. In an uncertain world, American leadership is the one constant – that’s true in Europe, it’s true in the Middle East, and it’s true in Asia. It’s true on the urgent issues and it’s true on the longer-term issues.

The challenges we face today – from combating terrorism to confronting regional aggression; from climate change to global health – these are issues that cannot be solved by any nation alone. That’s why it’s so important that we empower and mobilize our allies and partners, to work with us to address these shared challenges.

That’s the smart type of American leadership that President Obama has advanced. As he has said, “We lead best when we combine military power with strong diplomacy; when we leverage our power with coalition building; when we don’t let our fears blind us to the opportunities that this new century presents. That’s exactly what we’re doing right now – and around the globe, it is making a difference.”

So today, despite the problems we face and the difficult issues we see in the headlines, let’s not forget that our economy is still the most dynamic and prosperous in the world. Our military might is unrivaled. We are strengthening our alliances and building new partnerships across the world, and we are bending the trendlines in our favor.

As Teddy Roosevelt said a century ago and President Obama said just this year, the question is not whether America will lead, but how. Today, whether you look at the headline issues or the trendline issues, America is in the lead.

We’re leading with strong allies and capable partners.

We’re leading with a long-term perspective.

And we’re leading with all elements of American power: with force when necessary; with principled and clear-eyed diplomacy; with our unparalleled economic power; and always with the strength of our values.

Thank you very much, and I look forward to your questions.

Speeches: National Bureau of Asian Research Roundtable

As prepared

Thank you, President Ellings, for the kind welcome, and for bringing together this distinguished group.

It’s good to be in Seattle, and with the National Bureau of Asia Research. Congratulations on NBR’s 50th anniversary. For half a century now, you have provided high quality, independent research on issues facing the U.S. and the world, from energy trade to security strategy and beyond. The strength of America’s academic community and think tanks is envied around the world. It’s particularly beneficial to have institutions like NBR around the country, so that the voices in our national foreign policy conversation reflect the diversity of views across our land. So thank you for all that you do.

Let me start by telling you about why I’m here in Seattle. It’s crunch time for the Trans-Pacific Partnership. Secretary Kerry has asked his team to get out around the country, talk to people who are interested in trade with Asia, address any concerns folks may have, and spread the word about TPP’s benefits. So, in addition to meeting with you, I’m talking with major exporters, including member companies of the Business Council for International Understanding, and meeting with local press. I’m also giving remarks later tonight at the University of Washington Jackson School to talk about the larger context of U.S. relations with Asia, beyond trade.

So here, I’ll summarize that context briefly and then focus on trade.

The Asia-Pacific region – and you know the U.S. is a Pacific power – is one of the world’s most dynamic regions. It contains the top four most populous countries, the three largest economies, many of the world’s fastest growing economies, and a rapidly growing middle class of over half-a-billion consumers. U.S. trade with the Asia-Pacific region was $2.9 trillion in 2013.

Nations across the region face choices: Are they going to move toward greater political freedom and respect for universal rights and values? Are they going to open their economies while protecting workers, investors, and the environment? Are they going to strengthen the international and regional system of rule of law to treat all countries fairly? And by doing that, avoid conflict that could lead to loss of life and crippling economic consequences for all of us?

We can’t take the answers to any of these questions for granted, and they’re all interconnected. Our ability to shape the answers depends on our economic, diplomatic, and military strength. So when we lead on trade and investment, it helps us across the board. Free trade agreements, like the ones we have with Australia, Singapore, and the Republic of Korea, benefit many American businesses and our relationships with those countries.

Trade is good for your local economy, as you know. Goods exports support about 402,000 jobs in this state – the third highest of any state, according to the Department of Commerce’s most recent estimate – so you’re very well-integrated into the global economy. Of your exports, thirty-six percent already go to Asia, including over $2.6 billion in exports of goods. And in a recent five-year stretch, jobs in Seattle based on the export of services, like software, grew 54%.

Concluding TPP is essential to President Obama’s top priority of creating good jobs in America. It also is the most important thing we can do for U.S. relations with Asia this year.

This agreement will include 11 other countries that already account for 33 percent of your state’s goods exports, worth $26 billion (average from 2012 to 2014). It will grow America’s overall exports by more than $123 billion by 2025, according to a study by the renowned independent Peterson Institute. And those exports will support many more high-paying jobs.

Just consider the barriers that our workers and businesses are currently facing in the Asia Pacific, the world’s fastest-growing region. American autoworkers are handicapped by tariffs that can reach 30 percent in Malaysia. American farmers are forced to contend with tariffs as high as 40 percent on poultry in Vietnam. Meanwhile, foreign competitors have struck trade deals that give their own exporters an advantage, getting their products to consumers in those same markets with significantly lower or even no tariffs.

TPP also gives us the opportunity to protect workers and the environment with the highest and most enforceable standards of any trade agreement ever. The TPP will include groundbreaking new commitments to protect our oceans, forests, and wildlife. And it will allow us to address specific concerns about labor conditions in certain TPP countries, bringing improvements on the ground to workers across the region.

In addition, TPP will allow us to tackle a number of issues that have never been addressed in trade pacts – for instance, it will help ensure that state-owned enterprises compete fairly with our private companies.

It also will ensure that Americans whose businesses and jobs depend, either directly or indirectly, on innovation, invention and creativity enjoy the benefits of that work. This includes 40 million workers across the country, and a lot of them are here in Seattle. We have focused a lot of attention on ensuring strong outcomes in the TPP that will promote the digital economy and ensure a free and open Internet. We also have developed strong and balanced intellectual property rules that protect and promote invention and the creation of new products and services, while enabling consumers to access the full benefits of scientific, technological, and medical innovation, as well as new media and the arts.

Our competitors’ growing number of FTAs in the region promote rules that reflect their values, vision of the future, and competitive strengths—not ours. This doesn’t promote sustainable, shared economic growth, intellectual property rights, or maintenance of a free and open Internet. These other rules don’t tackle the growing problem of unfair competition from state-owned enterprises.

In short: We need TPP to promote economic growth and support high-paying jobs, and to advance our values and show that our ongoing commitment to the region extends beyond security. TPP is important to the long-time partners I mentioned with whom we already have FTAs. It’s important to new partners like Vietnam and Malaysia as they seek to further reform and develop their economies. And it’s important to Japan as Prime Minister Abe works on structural reforms, the “third arrow” of his domestic economic recovery programs. While we have more work to do with Japan, to resolve differences in areas such as agriculture and autos, we’re confident we can get this done.

TPP is about giving Americans a fair shot in these markets. Because we know one thing beyond doubt: with a level playing field, when trade is fair, our workers; our businesses do very well. And the businesses and workers here in the Seattle-Tacoma area and in Washington State prove that each and every day.

As my friend and colleague Ambassador Mike Froman, our U.S. Trade Representative, has said, “the finish line for TPP negotiations is in sight.” Negotiators are meeting around the clock, and countries are moving on issues that seemed intractable months ago.

More good jobs and a stronger American middle class are on the table. So I hope we can count on your support, and the support of people around Seattle and across Washington for the Trade Promotion Authority we need to bring this agreement home, and for the TPP agreement itself.

We also see TPP as the best pathway to a larger Free Trade Area of the Asia-Pacific. But in the meantime, we’re continuing to move forward with partners outside the TPP. The biggest, of course, is China.

Exports from the Seattle-Tacoma area to China went up nearly $5 billion from 2009 to 2013 alone. And we’re working to help you increase that number.

Our diplomacy with China has allowed us to expand the areas where we work together, while managing our clear differences. And that diplomacy over many years, including bringing China into the WTO, has supported China’s economic rise, enabling trade and increased exports to China. In 2014 alone, we made important progress in at least four specific ways:

Let’s start with the Joint Commission on Commerce and Trade meetings in Chicago. There, Commerce Secretary Penny Pritzker and U.S. Trade Representative Mike Froman made great progress in getting China to open to imports of U.S. biotech corn and soy; medical devices and pharmaceuticals; and to give fair treatment to U.S. businesses facing the competition regulators.

Second, at the 2014 Strategic and Economic Dialogue, our biggest bilateral annual gathering, we intensified negotiations on a Bilateral Investment Treaty. The “negative” list is next, and we’re asking that it be very high quality – narrowly tailored and widely open to foreign investment, especially since our openness to Foreign Direct Investment (FDI) has allowed new Chinese FDI into the U.S. to surpass our FDI in China.

While we remain concerned about China’s recent tightening of its foreign investment climate and its seeming disregard of certain principles of a free and fair market, we strongly believe that a U.S.-China Bilateral Investment Treaty holds the promise of further opening China’s market to foreign investors and creating an improved investment environment for U.S. companies.

Third, during President Obama’s trip to Beijing, we reached a key agreement to expand visa validity for business visitors to ten years, a boon for our tourism industry and a win for our companies with interests in China. We also achieved an important bilateral understanding to help the WTO’s International Technology Agreement move forward. We subsequently suffered a setback and there’s still a lot of work to do, but we remain hopeful.

Fourth, our landmark climate progress, also during the trip, is important for long-term public health, and economic health, and it supports the green economy.

As you can see, we have a very full economic docket with China, and as I’ll detail in my remarks this evening, a much broader agenda in our bilateral relationship. Together the United States and China have launched a range of new initiatives to boost clean energy research, make carbon capture and storage a reality, link up our cities as they pursue low-carbon solutions, and promote green trade between our countries.

All of you, and the entire Seattle area, have many important roles to play in America’s economic relationship with Asia. Seattle’s impact reaches well beyond the quantity of your trading and investments – many of your companies are known and lauded for the quality of your relationships, the ethical standards you adhere to, and work to instill throughout your supply chains. It’s not just protecting workers, it’s providing them with skills training while protecting the environment and countering corruption.

And later tonight, I’ll speak to Seattle’s role beyond economics – as a center of academic research, a welcoming host of students from the region, and a home to vibrant Asian diaspora communities. With your continued help, the U.S. and Asia will continue to grow and prosper together.

Thank you. Let’s open it up for discussion.