Thank you, Michael, for the kind introduction. And thank you for all of your work – in and out of government – on advancing our country’s ambitious trade and investment policies.
I would like to take us out of Washington for a moment and start my speech today by talking about the great state of Iowa. Don’t worry; it has nothing to do with the caucus, so please indulge me.
A couple of years ago at the World Food Prize, I had the privilege of visiting the Kimberley farm near Maxwell, Iowa. While there, I rode with farmer Rick Kimberley in the buddy seat of his John Deere combine, watching as this giant machine gobbled up twelve rows of corn at a time.
Rick’s tractor was fully enclosed, air-conditioned, WiFi-enabled, with a Dolby sound system, and guided by a satellite system with precision accuracy. The computer monitors would actually tell him if he missed a single ear of corn during the harvest.
It brought to mind fond memories of when I was just a kid visiting my family’s farm in Indiana, watching the sun drop over rows and rows of green soybeans.
It was a simpler time. But it was also a time of fewer choices. Our soybean crop was harvested with bare hands, perhaps 100 bushels at a time. Today’s technology lets farmers like Rick gather 300 bushels of soybeans an hour. Our crop went straight to other farms in the Midwest as feed for cattle. Rick’s crop goes to dinner tables around the world. And today, more and more of those dinner tables are in Asia.
Asia is now the epicenter of the world’s economic growth. In today’s economy, whether you’re a farmer in Iowa, or a lobsterman in Maine, or an automaker in Detroit, the growth of those Asian markets gives you greater choice every day.
That’s why I’m so glad to talk to you today about the Trans-Pacific Partnership. Many of you have heard, perhaps over and over again, about how TPP involves twelve countries that represent forty percent of the world’s GDP. I’ll leave it to the distinguished panelists to talk in detail about specific aspects of TPP.
Today, I’ll focus on the big picture: how TPP and its rules of the road are the centerpiece of the U.S. economic vision and strategy in the Asia-Pacific.
Our vision for U.S. economic diplomacy is about one thing: expanding choices. Individuals, businesses, and governments have a natural yearning for more and better choices and a natural tendency to resent having those choices constrained.
Our policy of expanding choice is strategic, as well as economic: If individuals and countries believe in our economic vision, they are more likely to turn to the United States rather than pursue more constraining alternatives. Belief in our model strengthens U.S. relations with partner countries around the world.
Nowhere is this more critical than in the Asia-Pacific. As President Obama has recognized in his rebalance strategy toward the region, our future prosperity and security are inextricably tied to this region.
Asia-Pacific economies have witnessed a period of extraordinary growth over the past few decades as they have liberalized trade and opened their borders. Hundreds of millions of people have been lifted out of poverty and into a middle class that’s expected to reach 3.2 billion by 2030.
However, the Asia-Pacific’s growing engagement with the world will not wait for us. If we do not take the lead, we risk ceding leadership to other countries that do not share our interests and our values.
If lower-standard agreements were to become the model for the fastest growing region of the world, it would not only put our workers and firms at a significant disadvantage, it would also result in Asian markets being carved up, removing us from supply chains, decreasing our linkages to important allies, and seeing our overall influence diminished.
That’s why TPP matters. TPP leverages the economic power of the twelve Pacific Rim economies to create and reinforce rules that result in more and better choices in the region.
Where other proposals fall short of protecting workers’ rights or environmental interests, TPP’s high standards ensure individuals are empowered rather than restricted – and the environment is preserved rather than exploited.
The high standards in TPP empower individuals to create and invent. Individuals who can count on the fact that their ingenuity will be rewarded and protected will feel empowered to take advantage of the options for innovation and creation in our economies.
TPP also brings groundbreaking new rules to the table. That means consumers and producers alike in TPP economies benefit from the full spectrum of business.
And while others try to build walls around the Internet, rules in TPP help to ensure the free flow of data across borders.
We know TPP offers an attractive alternative to the current environment because numerous economies have loudly expressed their interest in joining the agreement.
By maintaining such high standards in an agreement that countries are eager to join, TPP can spur other nations to make reforms that elevate their own standards in trade and investment. This deal will also encourage countries to lower tariff and non-tariff barriers even before seeking to join TPP.
That is why passing TPP is the single most important objective the United States can accomplish in its economic and strategic relationship with the Asia-Pacific this year.
As our prosperity and security are inextricably tied to the region, so too are foreign policy and economic policy inextricably linked to each other. Trade issues cannot be separated from larger questions about America’s global leadership.
As Secretary Kerry recently said, “If we retreat on trade, our influence on the global economy will diminish. And if our economic stature is in doubt, our ability to deliver on defense and political challenges will be increasingly questioned. In today’s world, the economic and security realms are absolutely integrated; we simply cannot retreat from one without diminishing our role on the other.”
Now, no discussion of the Asia-Pacific economy would be complete without considering the important role of China. The past 30 years have seen China undergo an unprecedented transformation. The net result is an economy that rivals that of the United States in terms of its gross size and scale of activity.
China accomplished this, however, at great expense to its environment, and in a manner that emphasized rapid growth over other development considerations.
This makes it all the more noteworthy that China’s views on TPP have evolved over the past few years – progressing from one of unease to one of interest.
I should also highlight that we are holding ongoing negotiations with China on a Bilateral Investment Treaty, or BIT. These talks offer an important opportunity to support economic reform and promote a more level playing field for U.S. investors in China’s market. We are working towards the conclusion of a high standard agreement, as announced by President Obama and President Xi Jinping last fall. A high standard BIT would help China achieve major domestic economic reforms and substantial liberalization of its investment regime.
The next step in the United States’ trade strategy is the Transatlantic Trade and Investment Partnership currently being negotiated with the European Union. TPP and T-TIP combined will open approximately two-thirds of the global economy to liberalized trade and investment supported by the highest possible standards.
Currently, transatlantic ties support more than 13 million jobs, $1 trillion in annual trade, and $4 trillion in investment. Through T-TIP we are committed to build upon the existing strength of our economic partnership to promote sustainable and balanced growth and the creation of more jobs on both sides of the Atlantic.
Liberalized trade and investment – here, in the Asia-Pacific region, in Europe, throughout Latin America, and beyond – are essential components of global economic growth because they offer greater choice to buyers and sellers alike.
Back when I was visiting my stepfather’s soybean farm in Indiana, I couldn’t have even begun to imagine the scope of today’s global economy and the tremendous strides we’ve made in technology. The soybean, a humble plant that emerged from East Asia centuries ago, is now harvested with advanced combines in fields across the United States – and much of that is exported to Asia by farmers who use digital technology to track prices around the world every day.
The global economy brings us together in so many ways, and has opened up great opportunities – as well as significant challenges – that cut across borders.
And the rules that define this global economy have a real impact on how people can access those opportunities and the obstacles they might face in doing so.
A soybean farmer in Iowa can better compete in Asia when TPP gets rid of import tariffs that reach 35 percent.
An entrepreneur from Silicon Valley can take the risks necessary to do business abroad, knowing her fledgling business won’t face a David-and-Goliath struggle with state-owned enterprises.
A singer-songwriter in Nashville can feel confident in producing the next big hit in Asia, knowing his creativity will be protected and rewarded across the TPP economies.
A consumer in Tokyo can buy a pair of jeans from the United States knowing the company that produced the jeans was held to high labor standards.
These are the opportunities that can come out of an agreement that uses rules to create more, and better choices instead of using economic power to constrain the opportunities for businesses and individuals. Real benefits for real people – that’s what TPP aims to achieve.
In President Obama’s final State of the Union earlier this week, he laid out a stirring vision of U.S. leadership in the twenty-first century – a vision based on the wise application of our power and leading by the power of our example.
When approved, TPP will be a powerful testament to U.S. leadership in the impact it has on everyone – from that Iowa soybean farmer to that singer in Nashville and beyond. I hope that day will come very soon.