MR BROWN: Thank you. Good afternoon, everyone. Thanks for joining us for this on-the-record briefing with Acting Assistant Secretary for Western Hemisphere Affairs Ambassador Michael Kozak. Ambassador Kozak will discuss the United States efforts to advance economic growth and prosperity in the Western Hemisphere. Our longstanding trade ties have made the United States and our partners engines for economic growth which has taken on greater significance as we revitalize the region’s economies to recover from the COVID-19 pandemic.
Ambassador Kozak will begin with short introductory remarks and then he’ll have time for your questions. As a reminder, the contents of this briefing are embargoed until the end of the call, and for the sake of efficiency, if you’d like to ask a question, I would invite you to go ahead and get in the queue by pressing 1 and then 0.
And with that, I’ll pass it off to Ambassador Kozak. Please, go ahead.
AMBASSADOR KOZAK: Well, thank you, Cale, and good afternoon to everyone. Thank you for joining in on the call today. A few weeks ago, I spoke to you about how the United States is partnering with government and civil society to strengthen this hemisphere of freedom. Today, I’d like to discuss our efforts to promote economic growth. This is particularly important now as the region continues to combat COVID-19 and look towards a road to recovery.
The United States is the economic partner of choice in the region. This results from the value that the United States and U.S. businesses provide and the quality work that they do. We support entrepreneurship and free enterprise. We believe in transparency and procurements that go to the best bidder. And we expect our investors will respect laws on corruption, labor standards, worker safety, and the environment. Not every country can say that.
The United States is the top trading partner for over two-thirds of the region’s countries. We are the source of over $1 trillion of investment in the region. We have free trade agreements with 12 countries in the Americas. U.S. goods and services trade with the Western Hemisphere totals nearly two trillion annually; that’s trillion with a T. The next biggest trading partner is China with 372 billion.
As the region’s economies begin to reopen, the United States is more than ever the trusted, reliable partner, and we are already hard at work. Secretary Pompeo recently visited the Dominican Republic. National Security Advisor O’Brien and Chief Executive Officer of the U.S. International Development Finance Corporation Adam Boehler visited Panama and Colombia. These trips focused on private sector-led engagement and trade based on fairness and market access.
The need to spur post-COVID economic requirement makes our Growth in the Americas or America Crece initiative all the more relevant. America Crece is a significant part of the U.S. Government’s positive economic agenda for the hemisphere. Countries of the region face a critical infrastructure gap, which drags down economic growth. America Crece channels the resources and expertise of the U.S. Government to attract private sector investment in energy, transportation, and telecommunications infrastructure across the region.
This is our basic philosophy: Traditional assistance programs can be effective in building government capability, but restoring jobs and growth requires attracting private sector investment. To date, we have signed America Crece agreements with ten partner countries: Panama, Chile, Jamaica, Argentina, Colombia, and more recently, El Salvador, Ecuador, Brazil, Honduras, and Bolivia. These agreements include commitments by the partner countries to strengthen competitiveness and transparency in line with international best practices. We expect to sign more.
The DFC is a critical tool in driving investment in support of America Crece. We expect the DFC to bring about at least $12 billion worth of investment in the region over the next five years. The DFC announced July 21st its intent to stimulate up to one billion in investment to bolster critical infrastructure, support health systems, and expand financial services for small businesses in Honduras. It has also committed up to $1 billion in investment over three years in support of development in Guatemala.
As we see DFC expand its efforts, we’re also witnessing big investments by U.S. companies. For example, U.S. energy company AES has invested more than $1.4 billion in new generation facilities in Panama. Its liquified natural gas plant and terminal, AES Colon, is the largest U.S. investment in Panama. It is the first LNG terminal in Central America, and I was honored to attend the inauguration of this facility last fall. DFC has also partnered with Taiwan through the Women’s Global Development and Prosperity 2X Initiative. This $350,000 collaboration will focus on women’s entrepreneurship and advance investment in developing countries. DFC and Taiwan will work with private sector partners to design and conduct two training programs geared towards investment officers and women entrepreneurs.
With Japan and Taiwan, we’re bringing the Global Cooperation and Training Framework to the Western Hemisphere. The GCTF’s first event in the region will take place in a virtual format on September 8th with Guatemala as the host. Expert speakers from Taiwan, Japan, the United States, and potentially Canada will focus on digital tools for COVID-19 response and recovery. We are planning additional GCTF sessions to help the region’s economies recover and attract tech sector investment.
Another important player in revitalizing our economies are the international financial institutions, and in particular the Inter-American Development Bank. It is critical that the bank’s leadership understand how to unleash economic dynamism in the region. We must support entrepreneurs, businesses and governments as they create jobs and infrastructure and solve problems in their countries. That is why we support the candidacy of Mauricio Claver-Carone. Mauricio represents a new generation of fresh thinkers throughout the region who believe the Inter-American Development Bank can refocus its efforts on its central mandate of spurring economic development. The current crises require a new approach and new energy. Mr. Claver-Carone has committed to serve one five-year term in an institution that has had only four presidents in 60 years.
Mauricio will bring with him some of the best economic minds from Latin America and the Caribbean. He is not only the nominee of the United States, but of countries in every subregion of the continent. He represents a true renewal movement. I will note that the IDB board just this July unanimously voted to hold elections in September. We deeply appreciate the vast majority of countries in the hemisphere that are determined to go forward with that election so that the region’s shared vision for an active, inclusive IDB can be implemented.
Now, the U.S. will host the Ninth Summit of the Americas as our region seeks to recover from COVID-19. The ninth summit will reinforce the region’s commitment to protecting the essential role of democratic institutions in strengthening our economies. Democracy is essential to building reliable infrastructure and a future of economic growth in the Americas. The COVID-19 pandemic has scored – underscored the importance of secure supply chains with trusted partners. Countries including the U.S. must reduce reliance on Chinese manufactured goods. The United States is turbo-charging efforts to strengthen and diversify U.S. supply chains. We’re working through the USMCA and exploring new initiatives to rebuild hemispheric north-south supply chains. The goal is to move both sourcing and manufacturing closer to home.
Now, all of these tools form the framework to respond strategically to the region’s need for growth. That in turn is essential to address the second and third-order effects of the pandemic. The United States will continue to be the partner of choice in helping the region overcome this challenge, but with or without COVID, growth is the essential condition for cementing democratic institutions and completing the vision of the hemisphere of freedom.
And with that, I’ll be happy to take your questions.
MR BROWN: Okay. For our first question, let’s go to the line of Matt Lee, please.
QUESTION: Hi there. Thank you. Can you hear me?
MR BROWN: Yes, I sure can.
QUESTION: Yeah? I got a El Salvador question. Do you – are you aware of a situation in which El Salvador may be – may lose a significant grant from the Millennium Challenge Corporation?
AMBASSADOR KOZAK: I’m not familiar with that one, no.
MR BROWN: Okay. Let’s move along.
AMBASSADOR KOZAK: Let’s look into it and get you an answer to that. Just the fact that I’m ignorant of it does not mean it’s not true, so.
MR BROWN: Okay. We’ll take that down and get back to you, Matt.
AMBASSADOR KOZAK: I’m sorry, I just got prompted. It’s – their compact is expiring by its terms. It’s not that they’re losing – I was thinking you meant that they are losing for some cause, that they had done something wrong or something. But no, it – I mean, these compacts are for a period of time.
MR BROWN: Okay. Let’s move along to the next question. Let’s go to the line of Gabriela Rosna (ph).
QUESTION: Yes, hi. Thank so much for this opportunity. This question is related to Venezuela. We would like to know if you have any comments about the last events in Venezuela, because in their release of some political prisoners, what will be the real intention of Maduro with this action? And what message does the United States – is the United States extending to the regime right now? Thank you.
AMBASSADOR KOZAK: Well, thank you. Look, I mean, we’re – on one hand, we’re always happy when a political prisoner who by definition shouldn’t have been imprisoned in the first place gets released. So yes, that is – in that sense it is a good thing. But you were right to put the emphasis on “some” political prisoners. According to reliable NGOs there, I think Venezuela holds well over 300 or has been holding well over 300 political prisoners. As best we can tell, this latest activity will reduce that by maybe 50 or so. These people are still not free; in many cases they’re threatening that if they engage in terrorist activities – which seem to include membership in one of the major political parties – that they could be re-jailed. So we don’t see anything significant.
This is a country where Maduro has not only taken over most of the bigger opposition parties and tried to replace their leadership with his puppets, he’s taken over illegally the national electoral commission so that he completely runs the elections. There’s still no freedom of the press. There’s no freedom of expression. There’s no freedom of assembly. And the numbers of extrajudicial killings that have been documented by the UN high commissioner continue at an astronomical level. So in that context, yeah, it’s great that 50 people got slightly better conditions, but the overall situation remains grim indeed.
MR BROWN: Next let’s go to the line of Will Mauldin.
QUESTION: Hi, thank you so much for having this. Just was wondering – I was on vacation near the Canadian border recently, and I was wondering, obviously the border closure for nonessential travel up there is probably having an effect on tourism and business, even though trade is typically allowed. With the USMCA coming into effect, I was wondering what’s being done to – if anything – to get that trade and economic relationship of North America back together again.
AMBASSADOR KOZAK: Great. Thank you for the question. Look, from the beginning of this crisis U.S., Mexico, and Canada have collaborated together to try to come up with a – the right balance between restricting nonessential travel so as to help control the spread of the disease, and at the same time not undermine the basis for our common prosperity, a big part of which is trade amongst the three countries. So I think what has happened thus far has been a model of collaboration amongst the three countries. That continues to occur. I think our monthly basis, our leadership is discussing whether there are tweaks or turns that can be done. Sometimes you find unique little situations that can be fixed.
But I think basically they’ve had it right so far, which is “nonessential” has been defined as going across the border to go shopping, going for tourism purposes, or something like that; “essential” has been anything that involves large commerce. So yes, there’s still a huge effect on the economies of all three countries, but I think we’ve tried to find the best compromise between those two sets of imperatives.
MR BROWN: Next question let’s go to the line of David Alandete.
QUESTION: Hi. Thank you, Ambassador Kozak, for doing this. I wanted to ask – you were talking about the leadership the Inter-American Development Bank, and you explained the reasons why you think that Mauricio Claver-Carone is the ideal candidate for this. I wanted to ask you if you have any comment regarding the letter from the top European diplomat, Josep Borrell, about this push to delay the vote, claiming that the coronavirus pandemic has taken a – made the conditions, he said, are not ideal for the vote. So I wanted to ask you if you had anything to say regarding that letter from the European Union high commissioner for foreign affairs to the Spanish Government and to actually defend that the vote should go on as it was established in September. Thank you very much.
AMBASSADOR KOZAK: Yes, thank you. Look, I mean, what I would say first: The EU has no role in the Inter-American Development Bank. It’s not a party to it. Some of the EU member states were parties and remain parties to the Inter-American Bank. They predate the existence of the EU, so EU thinking on this is whatever it is.
I would note that – just as a couple of data points – that the African Development Bank had its elections in a virtual mode very recently. That was quite successful. I think the EBRD is doing the same. So the idea that you can’t hold elections during the pandemic seems to be in the EU mind affiliated only to one institution. And the – you mentioned yourself, the date for the elections was established in July, so after the pandemic had started and everything. It was passed unanimously by the Board of Governors of the IDB, so all the countries voted for that date because they thought that it was viable, and it remains so in our view and I’d say in the view of the vast majority of countries in the region. There’s just a handful that are urging postponement.
What does a postponement mean? The term of the existing president expires at the end of this month, so that would mean, oh, let’s leave the bank without any leadership for six months just in hopes of I don’t know what. When they set the date for the election, Mauricio was our candidate. When they set the date for the election, the other candidates, who by the way not yet put themselves forward formally, were there. Everybody’s known for five years that we were going to be electing a new president at this date and so all the kind of pre-candidacies and campaigning and everything that goes on had gone on without regard to COVID.
So all of the arguments about this needs to be delayed because of COVID are, in my view, specious. They just don’t track with any reality. What does track is the picked time period for the term of the current president is up. There’s supposed to be an election, there are candidates, there will be an election. We welcome – if other people want to run other candidates, that’s great. You get competition of ideas and so on. But you don’t just say, “Well, I want to make this whole thing go away for six months.” That’s not a viable proposition.
MR BROWN: Great. Next question, let’s go to the line of Humeyra Pamuk.
QUESTION: Hello, Ambassador. On the same question, some of these countries – Argentina, Mexico, Costa Rica, Chile – they’ve all expressed some concerns about having someone from outside the region lead the bank for the first time in six decades. What would your response to that be and what is the United States doing to basically persuade these countries or change their minds? And if I may, as a second question, on immigration, given that this was one of the biggest campaign pledges of President Trump and that we’re two months away from the election, what does the United States expect Mexico to do more on immigration during this time? Thank you.
AMBASSADOR KOZAK: No, thank you. And well, on the bank – look, again, I’ll do something more general and then the particulars. The more general is: Why is Mauricio running? As I said, this is the kind of thing where people start gearing up months and months and months in advance. And as we went around the region, people were saying, “You’ve got a great candidate, why don’t you run him? We need that kind of energy,” and so on. It wasn’t just the U.S. coming up with this idea; there were a lot of people in the region who want to see renewal and youth and energy in that institution. And so in some ways, we were responding to people in the region by doing it.
Second, I’m not quite sure what the definition is. If it’s citizenship, you can – you guys can go and take a look, but you’ll find out that some of the four presidents of the bank have held dual nationality, including in one case U.S. citizenship. So if that’s a disqualifier, one of the presidents wouldn’t have been there.
If it’s place of birth, is that the determining standard? And for that matter, if it’s a hemispheric bank, why would you exclude North America and the Caribbean? Because if you say it’s only reserved for Latin countries – now, mind you, most of the Latin countries aren’t arguing this. They’re supporting Mauricio. And some of them have co-nominated him. So, I mean, it – in one way it’s understandable with Argentina and Mexico; they had both backed the candidacy of Gustavo Beliz, who’s a perfectly fine guy. They haven’t pushed forward as a nominee, I note, but that’s – that’s their prerogative. Costa Rica has its own candidate, and you can ask the others what their rationale is.
But there’s no – there’s no coherent argument here as to what the disqualifier is unless you’re just saying – I mean, you look at – you look at technical qualifications. Mauricio would be one of two people holding that position who ever served as an executive director of an international financial institution. He was our alternate rep for the IMF, and all these people worked with him in that capacity. He’s the – one of the main intellectual authors of America Crece, which is a very popular program in the region. So you can see there are a lot of things that throw people to be supportive of him, and if others can’t come up with a candidate who’s competitive with him, that’s not a good reason for saying, well, let’s just not have a president.
Oh, I’m sorry, and you – your second question? I —
MR BROWN: It was about expectations for Mexico and (inaudible).
AMBASSADOR KOZAK: Oh, Mexico. Thank you. Look, first I would say we have been collaborating extremely closely with Mexico in trying to deal with what is a common issue of security of our own citizens and securities of other countries, security of our own countries. We’re both combating the cartels who have these human trafficking arms who try to smuggle people from and through Mexico into the United States. Mexico has done a tremendous amount in terms of deploying extra national guard forces to guard its borders. They collaborate with us on returns of people and so on. And I think as we work together on this, this is not one where I think you’d find the government saying, well, we have conflicting interests, or our interests are in tension here. We’re – the more we work on it together, the more we realize that the behaviors that adversely affect one country adversely affect the other as well.
So what is our common effort? It’s to say to people: don’t listen to the traffickers, don’t listen to the coyotes. They’ll take your family’s money and mortgage your future. The – if you survive the experience, your kids may be molested and mistreated, and you get to the U.S. and you’re going to get sent back where you came from. So we’re trying to deter people from undertaking that highly risky move in the first place.
Now, on the other side, what are we doing together? We’re saying if you have genuine protection concerns – you’re being persecuted for political, racial, religious reasons in your own country – what alternatives can we put in place so that you can claim asylum in Mexico, you can claim asylum in one of the other countries, or you can claim asylum via the international system and end up coming to the U.S. There – the right way to do this is not to have everybody arrive en masse at the southwest border; it’s to – it’s to utilize all these good mechanisms that we and the international community have put in place over time. And we – we’re working together on messaging to do that, we’re working together on enforcement to do that, and we basically are very proud of and happy with our work with the Government of Mexico in this respect, and I must say also with other governments in the region. This is increasingly being seen as a common problem that we all need to work collaboratively to resolve, not as a U.S.-versus-everybody-else-type problem, because it never was and is certainly not that.
MR BROWN: Okay. Next question let’s go to Rafael Matos (ph).
QUESTION: Hi, thank you for this opportunity. Ambassador, I also have a question regarding the upcoming election at the IDB. As you were saying, there have been calls to delay the vote, and you need 75 percent of the vote to actually – of the board, sorry – to actually carry out the election. My question is: Does the U.S. actually have the votes necessary to first make sure that the election is carried out, and second, make sure that Mauricio Claver-Carone is elected as the next president of the IDB?
AMBASSADOR KOZAK: Well, yes, we are pretty confident that that will be the case. I mean, obviously you have to see who shows up virtually on the 12th of September, but I think our count is that we will be in good shape on that one.
In terms of whether Mauricio would win the election, all you need to do is look at the countries that have publicly pledged their support for him. If they vote the way they say they’re going to, he has a strong, strong majority of the countries in the region. He also has a strong majority of the weighted shareholding. Essentially there are two votes that go on. You have to – you have to be approved by a certain percent of the shares and then you also have to be approved by a certain percent of the countries or a majority of the countries in the region. So you’re right that the quorum is 75 percent, and then after that, if the voting goes on, we’re feeling like if countries do what they say they’re going to do, he will win and he will be a really great, transformative force at the bank.
MR BROWN: Okay, let’s take – we might have time for one, maybe two more. Let’s go to the line of Abigail Williams.
QUESTION: Hi, thanks so much. I recognize this is something you might be working with Consular on, but as the Cuban authorities begin this 15-day lockdown in Havana, I wondered if you had any information regarding Americans who are still there who might be affected.
And more broadly, can you provide any status update on the investigation into the incidents or attacks on the U.S. diplomats from a few years back? Is that investigation ongoing? Do you still consider them to be attacks?
AMBASSADOR KOZAK: Well, the last first: Yes, it’s ongoing. I mean, we still do not – we know people were physically injured. That’s scientifically demonstrable. What caused that, how – what the mechanism was of causation, as far as I understand, we still don’t know and therefore we continue to work with world-class experts to try to see if we can figure it out. So it’s ongoing in that sense that we’re determined to not cease our efforts to figure this out until we do, but since we can’t – we know what happened but we don’t know how it happened or from whence it happened, characterizing it is not what we’re doing right now.
What we are saying with respect to the Cuban authorities is that our investigation would be a lot easier if Cuba would make available the kinds of information we’ve asked for. For example, as a former – somebody who served in Cuba years ago, they have cameras on all of our residences, so we asked to look – let’s see who came there when these things happened. We haven’t gotten any response, and it’s that kind of thing that we find deficient on the Cuban side.
With respect to Americans there, I think we managed to get a bunch out earlier. We’ve certainly been trying to get people to leave who wanted to get out, but I think any more detail than that I would go to Consular.
MR BROWN: Okay, last question. Let’s go to the line of Paula Lugones.
QUESTION: Hi. Thank you, Ambassador Kozak, for doing this. Just to follow up on the IDB elections, I heard that some countries are a bit reluctant to vote against a possible delay of the election because they are a bit afraid of any kind of U.S. retaliation or something like that. Do you have any comment on that? Thank you.
AMBASSADOR KOZAK: Well, the U.S. has not threatened or speculated on any kind of retaliation or anything else whatsoever. I would note again as late as July – I mean, just a month and a half ago or so – that was when the entire board of governors decided on the election date, and that included the governors from Argentina, Mexico, Costa Rica, Chile. So their sudden inspiration that this needed to be delayed postdates that. You’d have to ask them what it is that they are – that’s really driving them. I’ve tried to indicate that the stated reasons don’t bear any relations to the facts, but we’re not threatening anyone, we’re not – that’s not the way we do business.
But what we are saying to people is look, do you want this institution to sit dormant for months and months and with its future unclear and all of that when we’re in the middle of trying to recover from COVID? It’s too important to let it go. So if you had a big number of countries that didn’t want to do this and we were twisting their arm, I’d say okay, you have a point, but here you have less than a handful of countries that are calling for a delay and can’t articulate a decent reason as to why that makes any sense, and doesn’t have an alternative. They aren’t putting forward an alternative candidate. It’s just basically let’s wait six months and then see if anything is different, and that’s not a very good reason for doing anything.
MR BROWN: Okay. Thanks, Ambassador. I understand – if you have any closing comments, you want to wrap things up?
AMBASSADOR KOZAK: Yeah. I wanted to go back to Matt’s first question that I fluffed, because now I have some specifics on it, and that is the El Salvador MCC compact expires on September 9th. (Inaudible) is Congress is in recess until September 8. The extension is tied up with the COVID relief bill, but we remain engaged. We understand there is support to find a way forward and we’ll keep working it, so that’s why I don’t think we’re really concerned that it’s going to be the end of the world here. We’re – it is a problem, but it’s one that we think the will exists to overcome it and that it will be overcome.
MR BROWN: Thank you so much, Ambassador. Appreciate you taking the time out to speak to everyone, and thanks to everyone who joined the call. Since this is the end, the embargo on the contents is lifted. Everybody have a great afternoon. Bye.
AMBASSADOR KOZAK: Yes, let me join in that. Thank you all for taking the time this afternoon. It was great to talk to you. Good questions. Thanks again.