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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

APEC Summit

BACKGROUND BRIEFING - Senior Government Official and Senior U.S. Trade Official
Washington, DC
August 29, 2012

2:30 P.M. EDT


MODERATOR: Good afternoon and welcome to the Washington Foreign Press Center. Today, we’re having a background briefing on the upcoming Asia Pacific Economic Cooperation or APEC Leaders Meeting to be held next month in Vladivostok.

As this briefing is on background only, I need to remind you that no cameras or recordings intended for broadcast are permitted. And our briefers should be referenced as a senior official from U.S. State Department and a senior official from the Office of the U.S. Trade Representative. Following some brief comments, we will have questions and answers.

It seems as if actually our briefers have to actually travel; maybe some of them are going to Vladivostok. I’m not sure if both of you are, but in any event – so we will have to – we may have to end earlier than 3:30. So please be sure your cell phones are off, and let’s get started.

First we’ll have comments from the senior official from the U.S. State Department and then from the Office of the USTR. Please.

SENIOR STATE DEPARTMENT OFFICIAL: All right. Thanks very much. Can you all hear me? Yeah? This is working? Great.

So ladies and gentlemen, my name is [Senior State Department Official]. I really am looking forward to going out to Vladivostok. I actually leave on Friday morning, and will be engaging in the – along with my colleague [Senior Official from the Office of the USTR] in the senior officials meetings that will be taking place there on the 2nd and 3rd of September. And then we’ll have Under Secretary Robert Hormats, our Under Secretary of State for Economic and Business Affairs, who will be representing the U.S. Government in the foreign ministerial meetings, which will take place on the 5th and 6th of September. And then of course, we’ll have the Secretary of State Hillary Clinton representing the United States in the leaders meeting that will take place on the 8th and 9th of September.

So, a very robust U.S. delegation going out to the APEC summit, and I’d like to just give you a couple of thoughts about why APEC is so important to the United States Government and to the American people, and then invite my colleague to say a few remarks and then we’ll be honored to take your questions.

The most important thing to keep in mind about APEC for the United States is that it’s enormous. It’s a very large organization. It involves 21 of the most important economies in the world, almost 2.5 billion people in the economies of APEC. It is an organization that has worked very hard for the last 22 or more years to enhance trade standards, to ensure free, open, transparent, and fair trade among some of the largest economies in the world. It has resulted in a boom in trade across the Asia Pacific that has resulted in a great deal of prosperity for all of the people of the economies of APEC.

It has resulted in a great deal of foreign direct investment in both – from the United States into countries in the Asia Pacific, but also from countries in Asia Pacific into the United States. In fact, I was interested to learn that countries in Asia Pacific now contribute as much as 20 percent of the foreign direct investment into the United States. That translates into a lot of American jobs, a lot of American prosperity, and it has a direct impact on the livelihoods of many of my fellow citizens. So that’s one of the primary reasons why APEC is of such great importance to us.

Another, of course, is that by lowering trade barriers in a sustained fashion and ensuring and fostering an environment and an ecosystem of free, fair, open, and transparent trade over the course of the past couple of decades, APEC has created for its member countries and economies a system whereby exports can boom among them. And U.S. exports into the Asia Pacific region have grown in a very healthy manner over the past 20, 23 years, and have resulted in a great number of jobs for Americans – high-paying, high-value, export, and manufacturing jobs.

For this reason, the Secretary of State is looking forward very much to participating in the Russian-hosted APEC this year in Vladivostok. The Russians have done, obviously, a lot of very helpful work in framing the issues for our leaders. And there will be ministerial and leaders communiques coming out of it that I think will reflect the priorities of the group, and I know that [Senior Official from the Office of the USTR] and I will work very hard in advancing American priorities in the week to come while we’re in Russia. We’re also looking forward to the Indonesian host year afterward in 2013, and we’ll also work very hard with our Indonesian friends in the year to come.

So APEC matters. It matters to us economically, it matters to us in terms of jobs for the average American, it is a – (beep) – I must have said something wrong. (Laughter.) It is a region that includes some of the most important and strong economies in the world, countries that drive over half of global growth, represent 45 percent of global trade, and 55 percent of global GDP. So in terms of a trade arrangement, it is something of vital economic importance to the American people.

I would also like to add that APEC is a proven technology incubator. It is – in terms of trade innovation and in terms of creating an ecosystem for companies and individuals to trade with each other in a free, open, and transparent manner, APEC in many ways is one of the – it sets a high standard because business and economies work together to ensure that the outcomes of all of the deliberations of APEC across all of the many working groups result in very high fidelity, good outcomes in many of the areas that are of great importance to business and to governments. So APEC, I think, really sets the – it blazes a trail, in a way, for the other economies of the world. And APEC is working to set up the rules for free and fair commerce across the 21st century, and I would argue that it’s doing so not just for Asia Pacific, but for all the other countries that look to APEC’s outcomes and seek to emulate them.

So with these very brief opening remarks, I’ll be happy to take your questions after my colleague gives her remarks.

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: Thanks, [Senior State Department Official]. I’m [Senior Official from the Office of the USTR]. I, like [Senior State Department Official], will be going to Vladivostok in the next couple of days. I’m looking forward to that. I will be at the senior officials meeting with [Senior State Department Official] and then Ambassador Demetrios Marantis will be representing USTR at the ministers meeting where the trade ministers will be getting together on the 5th and 6th of September.

As many of you know, the U.S. hosted APEC last year, and we viewed that as – and not only we, but I think the other APEC economies did as well – viewed it as a very successful year. And this year, what we’ve sought to do is to work closely with the Russian host to really build on our agenda from last year, build on the momentum we created, and try and produce once again some concrete deliverables that really matter for the peoples and the businesses of all the APEC economies. In terms of our priorities this year, I wanted to highlight a number of issues that we’ll be working on very hard later this week in Vladivostok.

The first issue I want to highlight is the issue of environmental goods and services. As many of you remember from last year coming out of the Honolulu leaders meeting, the leaders committed by the year 2015 to reduce tariffs on environmental goods to 5 percent or below, and they instructed us this year to come up with a list of products, environmental products, to which these tariff cuts would apply. And so this year we’ve been working very hard with APEC economies to come up with what we call a credible list of environmental products. This work has been very challenging, as expected, and it’s also been very technical. We’ve made a lot of progress and are working very hard not only at the official APEC meetings but intercessionally as well. And so we are hopeful that coming out of Vladivostok we will be able to announce a credible list of environmental products that will be subject to tariff cuts by 2015.

Second, we are also – the United States – we’re particularly focused on the issue of local content requirements. These are conditions that governments impose to source parts or components from domestic suppliers which, in our view, are trade distortive, disrupt global supply chains, and have a particularly adverse impact on small and medium size enterprises. We have recently seen the proliferation of these types of measures around the world and in the region, and so what we’re looking for is for APEC to really take a leadership role in addressing these measures and see how we can work together to discourage countries from using such measures to achieve their economic objectives.

Third, we’re continuing to work on what we call in APEC next-generation trade and investment issues. And this year, Russia has put the issue of transparency on the table. And what they have – they have put forward a proposal basically of what a model chapter in trade agreements on transparency should look like with respect, for example, to notification of impending regulations, public consultation, et cetera. We and other APEC economies are working closely with Russia and we’re hoping to have a tangible outcome in this area.

And finally, I would like to highlight the work we’re doing on supply chains. This is an area where APEC has been working on for many, many years. We’ve really been on the forefront of this work. This year, we’re focusing on specific what are called choke points in the supply chain. Those are basically the points in the supply chain where the free flow of products is being hindered for some reason or another. And what we are advocating this year with other APEC economies is that we take a very holistic approach to these choke points, try and identify the policy measures that seem to be – to have created the choke points, and then work with economies through capacity building to address these choke points.

So in short, those are some of the issues we’ll be advocating and working closely with the Russian hosts on and others next week or later this week. Of course, as [Senior State Department Official] said, there are other issues as well. I haven’t touched on all of them. And so we are excited about this year and we have already started our consultations with Indonesia as they prepare to host APEC next year.

Thank you.

MODERATOR: Thank you. So we will now open the session to the floor for questions. Please wait for the microphone and start by saying your name and your media organization. Sir, let’s start with you.

QUESTION: I need to stand.


QUESTION: Okay. Thank you. Donghui Yu with China Review News Agency of Hong Kong. I’m wondering if Secretary Clinton will meet with Chinese President Hu Jintao on the sideline of this meeting. What will be the most important issue will they discuss in regard of security? Will they talk about the South China Sea issue or Diaoyu Island dispute issue?

And secondly, for the official from the Trade Representative Office, now that the United States is leading the TPP negotiation and this gentleman mentioned that the APEC actually is also a high standard trade mechanism. So why the United States need to establish another kinds of mechanism in the Asia Pacific region? Do you think the APEC standard is not high enough?

Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: So let me address your first question and then turn it over to my colleague. As you know, Toria Nuland announced yesterday that the Secretary of State would be in Beijing on her way to Vladivostok. And so I think when she’s in Beijing, she’ll have discussions with Chinese officials and they’ll talk about a wide variety of subjects. I work on economic issues. That’s what the focus of this meeting will be about. So I’m not going to touch on the strategic issues. I would refer you to the spokesperson at the State Department.

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: With respect to your question on TPP and APEC, there’s a really good synergy between the TPP negotiations and APEC. The key difference is APEC is about voluntary or nonbinding commitments, and the TPP is a trade negotiation looking at binding commitments. But as I said, there’s a real synergy between the two, because many of the issues that APEC has first addressed, such as supply chains, are issues now that are being addressed in a binding fashion in the TPP. So as [Senior State Department Official] said, we really see APEC as an incubator. And given all the business input and participation in APEC, we think we’re at a good – we’re in a very unique position in APEC to start work in a nonbinding basis on key issues facing the region in the economic realm.

MODERATOR: Okay. Next question. Right here. So just hang – wait for the mike.

QUESTION: Thank you. Thank you for your time with us today. I’m Chloe Park with RFA. My question is on regional securities. As you might know, recently Pyongyang has threatened Seoul, who has been conducting joint military exercises, with all out war. And on the agenda U.S. will raise at the meeting, is North Korea’s nuclear threat included?

And second question is on possible talks with North Korean envoy in Russia. As you might know, Pyongyang has reportedly asked Moscow to attend the APEC meeting as – with a guest status. And if it’s true, is U.S. willing to meet with North Korean envoy there? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: So I haven’t seen any – and I’m not aware of – any formal requests by North Korea to observe the APEC meetings. My understanding is that the practice at APEC meetings at that level has been always that it is an affair for the member economies, and so I would just leave it at that.

And I would argue that – I would just remind you that on the rest of the questions that you posed, my focus is entirely economic. I’m not going to address the strategic issues. There are other officials who are better placed to do that. So I would defer you to the Department spokesperson or to another official who works on those issues. But I’m not aware of any formal request by North Korea to observe.

QUESTION: Thank you. Andrei Sitov from TASS, from Russia. I apologize for rushing out, because of a technical mishap. And thank you also for doing this and thank you to our friends at the FPC for hosting this.

You listed some of your priorities at the meeting. I wanted to ask you how it correlates with the plans that the Russian hosts have. Basically, if you could go through the list again and then say where you agree, where you probably don’t see agreement with the Russians and similarly on what you know about their priorities and what you agree or not agree with. Specifically, I wanted also to ask about the food security issue, which I understand is also one of the priorities for the meeting. Thank you.

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: Well, let me say there’s a great overlap between the Russian priorities and themes for this year and with U.S. priorities and objectives for this year. We’ve been working very closely with Russia throughout the year to advance work in the areas that I mentioned. In particular, I would just say that under Russian leadership we’ve been able to make the progress we’ve made so far on many of these issues, whether it be environmental goods or supply chains or food security. The Russians have also put a great emphasis on regional, economic integration, which was also a huge theme for our year, and one that we continue to work very closely with Russia on.

And [Senior State Department Official], you want to talk about food security?

SENIOR STATE DEPARTMENT OFFICIAL: Sure. So I actually – thank you for the question. I actually went out to Moscow a couple of weeks ago, and I had excellent meetings with Deputy Foreign Minister Morgulov and with my counterpart, Ambassador Gennady Ovechko. And I briefed them on our priorities for this year and for the summit, and I thanked them for all of their hard work that they’ve done over the course of their host year in organizing many meetings in Kazan, in Khabarovsk, in Moscow, St. Petersburg, and of course in Vladivostok, and also to get to know them.

And so we discussed all these issues that [Senior Official from the Office of the USTR] has mentioned, and we also talked about some issues, where – and I think we have, to a very great extent, a very useful meeting of the minds with our Russian friends. I think we had a very healthy exchange of views, and I think that we – we certainly shared concerns about a couple of other things, including illegal wildlife trade, which is something that the Secretary of State wants to put emphasis on.

It’s very important that countries and economies recognize the very pernicious impact and effect of illegal wildlife trade, not just in the destination countries but in the source countries as well, the supply countries. It creates illegal smuggling networks that can be used for any number of things. It creates public health risks, and of course it destabilizes countries that are the sources of this wildlife. So we talked at length about that, and we certainly – I think the United States appreciates very much the emphasis Russia places on environmental protection. President Putin’s leadership is very clear on this. So that was a very good subject that I discussed in Moscow when I was there.

I also wanted to mention counterfeit medications. This is another preoccupation for us. We have a population that is aging, that has a need for reliable access to medication. One of the things we’re worried about is the increasing incidents of counterfeit medications around the world. And we want to work with Russia and with the other member economies of APEC to try to address the reasons why there’s so much counterfeit medication in the markets and to make sure that populations and their well-being and their health are really taken care of and addressed by governments.

To answer your question for a moment on food security, we discussed this, and I know that the United States has been affected by drought this year; Russia, Ukraine, other countries have also been affected by drought. I think this is one of the areas where APEC member economies can really work together in an effective way to espouse a very positive and helpful vision about economies working together to mitigate the effects of drought and to ensure that the inflationary results of drought do not impact the poorest and most disadvantaged people in the world, neither countries nor people, and that we can really work together in a collaborative way to mitigate the impact, and APEC is a great venue for doing that.

So it was a very useful set of productive meetings in Moscow, and I look forward to seeing my Russian counterparts when we get out there very shortly.

QUESTION: Can I have one follow-up? Just a specific example. The local content that you mentioned, you don’t like it. I know the Russians do. So do you expect it to be in the final documents at this point? What can you say about the final documents? Thank you.

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: We’ll have more to say next week when we leave Vladivostok about the final – (laughter) – outcome. But clearly there are issues that all economies want to discuss and put on the agenda. And what we do in APEC, we find a way – even if there are some differences and views, a way that we can move forward on these issues. So we look forward to working with our Russian host on this issue as well.

MODERATOR: I have a question from New York if I may pose that on their behalf. What’s the agenda of the Trans-Pacific Partnership during the APEC summit this time, and what outcomes do you expect? And the follow-on: Is there any timeline to include China into TPP discussion and negotiation?

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: As in past APEC meetings, the TPP ministers will meet on the margins of the APEC meeting. And at that meeting, we expect them to take stock of the progress made so far and to offer guidance for the work ahead, particularly the next round that will be held in Leesburg, Virginia beginning in early September, around September 6th, I believe.

MODERATOR: Let’s see. Let’s go back into the back – here, actually, the gentleman with the glasses.

QUESTION: Hi, [Senior Official from the Office of the USTR]. Jamie from Inside U.S. Trade.


QUESTION: Hey. (Laughter.) Could I get you to elaborate a little more on environmental goods? You stress the importance of getting a credible list, but does that mean the U.S. isn’t going to support something in terms of an agreement that it doesn’t view as credible? And can you tell us what would make it credible, I guess, in the U.S. view?

And then just a quick second question there, same topic. At this point so close to the meeting, what are you doing to try to make that list come together? Is it a question of just trying to hash out agreement on certain products, a couple sticky ones that remain? Or where are we here?

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: Okay. With respect to what “credible” means, obviously that’s kind of in the eye of the beholder and something that all economies will need to assess when they’re on the ground in Honolulu. For us, I would say that a credible list really needs to include some core environmental products, including renewable and clean technologies, water and wastewater treatment equipment, air pollution control equipment, and environmental monitoring and assessment equipment. So these are kind of the – some categories of products that are really considered in the community as being environmental goods. And so we will – we’re focused on these categories of products and some others as well.

In terms of what we’ve been doing, we have been heavily engaged with our counterparts from other APEC economies, both through video conferences, through phone calls, through emails, particularly since the trade ministers meeting in Kazan. And as you can imagine, this is really, really detailed work for those of you who are steeped in trade work in that when you talk about products, you need to actually identify tariff lines. And so a lot of this becomes very – the work becomes very technical very quickly. And so both at the technical level as well as more senior levels, we’ve been in very close contact with our APEC counterparts. And as I mentioned, we’ve made some really good progress, particularly since Kazan, the trade ministers meeting just a few – a couple of months ago. And so we’re going into Honolulu once again hopeful that we’ll be able to bring everyone onboard and come up with a credible list that can be announced in Vladivostok.

MODERATOR: We have time for two more? Yeah? Okay. So the gentleman with the white hair back there.

QUESTION: So I’m the one with white hair.

MODERATOR: Yeah. Well, sorry. (Laughter.)

QUESTION: That’s okay. Hi, [Senior Official from the Office of the USTR]. Yeah. Chris Nelson, Nelson Report with white hair. Have a seat. Following up on the TPP question, CRS put out a good issue brief on this while I was in Alaska, and to them, the APEC – the main thing is going to be forwarding TPP, and I was wondering if you agreed with that sort of basic take on it.

And possibly can you clarify, what’s up with the congressional request from some members? I thought I read either they want to be stakeholders or observers, and there’s a distinction. It makes a difference to you. What – are the congressional would-be participants at TPP happier these days, or is that still a work in progress? Thank you.

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: With respect to your latter question, Chris, I would urge you to contact USTR’s press office. This isn’t a TPP briefing. With respect to your first question, I’m not aware of this report, but I would just say that we have a robust APEC agenda, that as [Senior State Department Official] and I have discussed over the past half an hour, we think the work we’re doing in APEC is very important and has a lot of support among private stakeholders – private sector stakeholders in all the economies. And so if, indeed, the conclusion was that not a lot is going to happen in Vladivostok, we beg to differ.

MODERATOR: Yes. Please up front.

QUESTION: Thank you for the briefing. Jun Kaminishikawara with Kyodo News. Do you think the President Obama’s absence to this APEC meeting will have any negative impact to U.S. presence in Asia-Pacific? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: So we – the Russians are the host this year, and we explained to our Russians friends many months ago that because of the fact that the leaders meeting is happening a little bit early this year, that instead of November, which is, I think, as I understand, the tradition in holding the leaders meetings – it’s happening in September – that this would coincide with very important domestic political commitments. Obviously, the President has to be at the Democratic National Convention, and he is running for office. So we’ve explained this to our hosts. They’ve been very gracious about it. They’ve understood it, and I think Hillary Clinton, Secretary of State is obviously a very worthy replacement and can certainly fully advance all of America’s objectives during the APEC summit.

Obviously, the timing is not optimal and we would have very much like to have had the President there, but I think you would understand that he has some very pressing commitments. So we’ve been very clear about it and very transparent, and our Russian hosts have been very gracious.

MODERATOR: It’s up to you. Do you need to go?


MODERATOR: One more? Okay. So, actually, the gentleman here.

QUESTION: Hi, my name is Kosuke Ito from Jiji Press. Just a quick follow-up. You didn’t mention about TPP leaders meeting, so at this time during APEC TPP leaders, nine country, will not meet? They don’t – will not have a TPP leaders meeting, only ministerial?

SENIOR OFFICIAL FROM THE OFFICE OF THE USTR: Yeah, that is correct. At Vladivostok they’ll – this time there’ll just be a meeting of the APEC trade ministers. With respect to the leaders, scheduling such a meeting was not possible due to just scheduling issues.

MODERATOR: All right. Well, I’m afraid we have to let our briefers go, so we thank you all for coming and this concludes our briefing.