MR. McNERNEY: Mr. President, few forums are watched more closely by those of us in the business community than APEC — testimony to the extraordinary opportunity it represents for both sides of the Pacific Rim.
As you know, APEC accounts for 55 percent of global GDP and is growing faster than the global average — significantly faster. It represents 2.7 billion consumers, and purchases 58 percent of U.S. exports. So I’m honored, very honored, to represent many of the wide-ranging interests of the business community on stage with you today.
Unlocking the growth potential that exists within APEC is a huge opportunity for job creation here in the United States and for our economic partners. Secretary Clinton spoke about that yesterday within the context of greater engagement of women and small business, for example. (Applause.)
Given that you represent — and I’m working my way up to a question here. Given that you represent the largest economy in the group, your views on subjects pertinent to that growth potential are vital, and that’s what I’d like to explore with you here this morning.
Just to start at 50,000 feet, you just participated in the G20 meeting last week, where global growth was a — and threats thereof was a central topic of discussion. With the benefit of the viewpoints exchanged at the G20 session, what now is your outlook for the global economy, and maybe with just an eye toward its impact on the APEC economies?
PRESIDENT OBAMA: Well, first of all, Jim, thank you for having me here. Thanks to all the business leaders who are participating. I understand that there have been some terrific conversations over the last couple of days.
I want to thank our Hawaiian hosts for the great hospitality. (Applause.) As many of you know, this is my birthplace. I know that was contested for a while — (laughter and applause) — but I can actually show you the hospital if you want to go down there. (Laughter.) And I also have to make mention, first of all, that in all my years of living in Hawaii and visiting Hawaii, this is the first time that I’ve ever worn a suit. (Laughter.) So it feels a little odd.
Obviously we have just gone through the worst financial crisis and the worst economic crisis since the 1930s. And one of the differences between now and the ‘30s is that the global economy is more integrated than ever, and so what happens in Asia has an impact here in the United States; what happens in Europe has an impact on Asia and the United States.
At the G20 meeting, our most immediate task was looking at what’s happening in the eurozone. And if you trace what’s happened over the last two to three years, we were able to stabilize the world economy after the crisis with Lehman’s and get the world financial system working again. We were able to get the economy growing again. But it has not been growing as robustly as it needs to in order to put people back to work. And my number-one priority has been to not only grow the economy but also make sure that that translates into opportunities for ordinary people. And I think leaders from around the world are thinking the same way.
I was pleased to see that European leaders were taking seriously the need to not just solve the Greek crisis, but also to solve the broader eurozone crisis. There have been some positive developments over the last week: a new potential government in Italy, a new government in Greece — both committed to applying the sort internal structural reform that can give markets more confidence.
There is still work to be done in the broader European community, to provide markets a strong assurance that countries like Italy will be able to finance their debt. These are economies that are large. They are economies that are strong. But they have some issues that the markets are concerned about. And that has to be addressed inside of Italy, but it’s not going to be addressed overnight. So it’s important that Europe as a whole stands behind its eurozone members. And we have tried to be as supportive as we can, providing them some advice and technical assistance.
I think that we’re not going to see massive growth out of Europe until the problem is resolved. And that will have a dampening effect on the overall global economy. But if we can at least contain the crisis, then one of the great opportunities we have is to see the Asia Pacific region as an extraordinary engine for growth.
And part of the reason that we’re here at APEC is to concentrate on what you just identified as about half of the world’s trade, half of the world’s GDP, and a growing share. And so the whole goal of APEC is to ensure that we are reducing barriers to trade and investment that can translate into concrete jobs here in the United States and all around the world.
If we’re going to grow it’s going to be because of exports; it’s going to be because of the great work that companies like Boeing is doing; it’s going to be because we’ve got high standard trade agreements that are creating win-win situations for countries, the way we were able to do bilaterally with South Korea just recently. And if we can stay on that trajectory, letting this region of the world know that America is a Pacific power and we intend to be here, actively engaged in trying to boost the economy worldwide and for our respective countries, then I am cautiously optimistic that we’ll get through this current crisis and will come out stronger over the next couple of years.
MR. McNERNEY: Fixing Europe obviously a priority, but the growth is here for now. Although as I’ve traveled around the Asia Pacific region, I and others have detected a slight sense of unease and uncertainty among government and business leaders around whether the U.S. intends to maintain its role in helping to ensure the political, economic stability of this region, other forms of stability, including the free flow of communication and commerce. I do know that Secretary of State Clinton and Secretary Panetta recently delivered some very reassuring remarks, which I’m sure didn’t happen by accident. But I think your view on that, on this subject, is of great interest not only to the business community but to the community at large here in the region.
And so, how does Asia fit as a priority for our country? And where is its place — in a multifaceted way, not just business — in the Asia Pacific region?
PRESIDENT OBAMA: The United States is a Pacific power and we are here to stay. And one of the messages that Secretary Clinton, Secretary Panetta have been delivering, but I am personally here to deliver over the next week, is that there’s no region in the world that we consider more vital than the Asia Pacific region, and we want, on a whole range of issues, to be working with our partner countries around the Pacific Rim in order to enhance job growth, economic growth, prosperity and security for all of us.
And let me just give you a couple of examples. The APEC conference that we’re hosting here is going to have some very concrete deliverables around issues like regulatory convergence, which permits countries to all think about whether our regulations are as efficient, as effective as they can be, or where are they standing in the way of smart trade.
I’ll be traveling to Australia to celebrate the 60th year of the American-Australian alliance, and that will signify the security infrastructure that allows for the free flow of trade and commerce throughout the region.
The TPP — the Trans-Pacific Partnership agreement that I just met with the countries who are involved, we’re doing some outstanding work trying to create a high-level trade agreement that could potentially be a model not just for countries in the Pacific region but for the world generally.
And so, across the board, whether it’s on security architecture, whether it’s on trade, whether it’s on commerce, we are going to continue to prioritize this region. And one of the gratifying things is that, as we talk to our partners in the region, they welcome U.S. reengagement. I think we spent a decade in which, understandably, after 9/11, we were very focused on security issues, particularly in the Middle East region. And those continue to be important. But we’ve turned our attention back to the Asia Pacific region, and I think that it’s paying off immediately in a whole range of improved relations with countries, and businesses are starting to see more opportunities as a consequence.
MR. McNERNEY: You know, I don’t think the business community has fully understood the comprehensiveness of your approach out here, and I think — because it all does link together — security, business environment, bilateral trade facilitation — all these things really do link together. And I think Secretary Clinton has made a very comprehensive case for it — we’ve seen in some of her published work and some of her speeches. So this looks like –I wouldn’t say a major new direction, but it is something that is a major priority for you over the next number of years, is — am I capturing it right?
PRESIDENT OBAMA: There’s no doubt. It is a reaffirmation of how important we consider this region. It has a range of components. Now, some of those are grounded in decade-long alliances. The alliance we have with Japan and South Korea, the alliance we have with Australia — the security architecture of the region is something that we pay a lot of attention to. And we’re going to be going through some tough fiscal decisions back home, but nevertheless, what I’ve said when it comes to prioritizing our security posture here in this region, this has to continue to remain a top priority.
And on the business side, this is where the action is going to be. If we’re going to not just double our exports but make sure that good jobs are created here in the United States, then we’re going to have to continue to expand our trade opportunities and economic integration with the fastest-growing region in the world.
And that means, in some cases, some hard negotiations and some tough work, as we went through in South Korea. I think that was a great model of prioritizing trade with a key partner. It wasn’t easy. I said at the outset that I wanted — I had no problem seeing Hyundais and Kias here in the United States, but I wanted to see some Chevrolets and Fords in Seoul. And after a lot of work and some dedicated attention from President Lee, we were able to get a deal that for the first time was endorsed not just by the business community but also was endorsed by the United Auto Workers and a number of labor leaders. And that shows how we can build a bipartisan support for job creation in the United States and trade agreements that make sense. (Applause.)
MR. McNERNEY: You referenced Korea and Colombia, Panama — big, strong, pro-trade votes. I mean, it was a major legislative accomplishment. And the momentum that Ambassador Kirk talks about flowing into the Trans-Pacific Partnership — just let’s spend a minute on that. You raised it earlier. Do you see other APEC countries joining — the obvious question is Japan? And how significant is the TPP for this region of the world and for the United States? Is there anything else you’d like to say about it?
PRESIDENT OBAMA: Well, keep in mind that almost two decades ago when APEC was formed, the notion was to create a trans-Pacific free trade agreement. Obviously the membership of APEC is extraordinarily diverse. It reflects countries with different levels of development. And so for many years that vision, that dream I think seemed very far off in the distance.
What happened was, is a group, a subset of APEC countries came together and said let’s see if we can create a high-standard agreement that is dealing with tariffs and non-tariff barriers to trade, but let’s also incorporate a whole range of new trade issues that are going to be coming up in the future — innovation, regulatory convergence, how we’re thinking about the Internet and intellectual property.
And so what we’ve seen — and we just came from a meeting in which the TPP members affirmed a basic outline and our goal is, by next year, to get the legal text for a full agreement. The idea here is to have a trade agreement that deals not just with past issues but also future issues. And if we’re successful, then I think it becomes the seed of a broader set of agreements. And what’s been really interesting is how, because of the success of these first few countries joining together, we’re now seeing others like Japan expressing an interest in joining. And I’ll have a meeting with Prime Minister Noda later this afternoon and I’ll get a sense from him about the degree to which Japan wants to go through the difficult process involved.
And I don’t underestimate the difficulties of this because each member country has particular sensitivities, political barriers. It requires adjustments within these countries where certain industries or certain producers may push back. For Japan, for example, in the agricultural sector, that’s going to be a tough issue for them.
But we’re not going to delay. Our goal is to try to get something done by next year. And our hope is, is that if we can model this kind of outstanding trade agreement, then, potentially, you see a lot of others joining in.
MR. McNERNEY: Sounds like real momentum.
PRESIDENT OBAMA: Yes.
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