Moderator: Thanks so much and good morning from Manila. I’d like to thank all of our participants from across the Pacific for joining us. Today U.S. Deputy Assistant Secretary and Ambassador for APEC Matt Matthews will provide an on the record briefing on the U.S. engagement in the Pacific. Ambassador Matthews was recently in New Zealand and Australia and traveled to Port Moresby over the weekend for the APEC Senior Officials Meetings. Before I turn it over to him, I just want to make a quick reminder that today’s call is on the record. And with that Ambassador Matthews thank you so much for speaking with us today.

Amb. Matthews: Thanks so much. Really it’s a pleasure to join all of you today from Port Moresby here for the second Senior Official Meeting for APEC in 2018. And I want to thank you all for joining us.

I got the kind of key message I want to share with all of you is the ongoing and critical importance of the Pacific Islands to the United States we are in the process of enhancing our security, economic, and people-to-people’s ties with the Pacific islands and we’re working to ensure that the Pacific remains a free and open architecture that allows for a rapid and effective development for all peoples in the region.

As an Indo-Pacific nation ourselves. The United States is inextricably linked to the region and remains as committed as ever to our shared security and prosperity. We’re seeking to respect across the region sovereignty, the rule of law, free and fair reciprocal trading frameworks, freedom of navigation and private sector-led development. It is kind of a core set of values that we try to inject into the process of keeping this a dynamic region.

We continue to be one of the top development partners. During the last fiscal year we provided more than 350 million dollars in projects, assistance, and operations that directly benefit 9 million people in the region. One of our biggest accomplishments, which I would want to really flag for you all, is finally securing $124 million in funding for the Palau Compact that is a compact agreement which Congress has finally allocated and appropriated the money for. And we are currently in discussions with Palau on how to allocate those funds to Palau to give them greater fiscal stability and sustainability going forward and room for investments in their future through funding of the trust fund. We also value our participation in regional fora and that includes our participation of the Pacific Islands Forum last year, which was. Our delegation led by the Assistant Secretary, Acting Assistant Secretary Susan Thornton. And we had a great post-forum dialogue interaction including a special dialogue with policy members including Fiji and Papua New Guinea and a lot of other members of the Pacific Islands Forum.

We also are also doing separate dialogues. As I said with Papua New Guinea and Fiji and we’re holding meetings with Pacific Island Ambassadors in Washington D.C. to explore specific areas where we can provide development assistance and coordinate efforts with other donors, including the multilateral development banks, in particular the World Bank and the ADB.

On the security side of things, we have a top priority in the region which I’m sure you’re all aware of which is stopping North Korea’s illegal and destabilizing nuclear and ballistic missile testing programs. Think all of you know that there are talks underway that are preparing the way for a meeting between the President of the United States and the leader of the DPRK Kim Jong Un. Currently the scheduled plans is for a meeting in Singapore on the 12. But I would like to highlight the fact that there was very good work done between the United States, our other partners and allies in the region, the Pacific Island nations over the past year that put this issue of North Korea’s destabilizing nuclear and ballistic missile program on the front burner. Last year at the Pacific Island Forum Pacific Island country leaders denounced North Korea’s provocations and committed to secure their ship registries from DPRK-linked entities as a part of the overall global pressure campaign on the DPRK which we believe has really had a lot of, had real impact and probably led to the current set of plans for talks that we have today. You know we’ve developed ways to share imagery with Pacific Island nations to de-register DPRK-linked vessels.

We’ve recently hosted meetings and experts to share best practices for registries that includes Fiji, Palau, the Republic of the Marshall Islands, Australia, New Zealand. And later this summer we’re going to be hosting a training program in the region with participants from all of the Pacific Island countries in partnership with Australia and New Zealand. So we are still finalizing the details on all that and ask you all to stay tuned and we’ll be getting back to you once we have finalized all the specifics.

Beyond the DPRK, of course maintaining regional security is a top priority for this administration and we will continue to be working with our allies and partners to maintain a free and open to Indo-Pacific, including through maritime security cooperation. Currently our Coastguard and the US Navy participate with many of your governments to include joint patrols, under what we call ship rider agreements, and training opportunities to stop illegal and unregulated fishing and drug trafficking throughout the region. That’s really critical because we have vast ocean states that are of course finding it difficult to track down all the fishing vessels that are perhaps involved in illegal unregulated fishing and we’re doing all we can by providing our assets to help them execute law enforcement actions against illegal unregulated fishing as well as interdicting drug trafficking. More broadly, we’re working with your governments, with your police and businesses to foster the transparency, peaceful arbitration of disputes and adherence to the rule of law that will help strengthen systems across the Pacific.

On the economic side, we are supporting an environment that supports free and open trade and investment and facilitates growth. It’s a system that we hope will welcome foreign direct investment and one that empowers innovators, entrepreneurs, and women in the region to be inclusive and to be successful in their endeavors. So we’re going to be doing all we can to help create that environment that encourages job and economic growth that is critical for sustainable development around the region.

We support free and open fair and reciprocal trade and in the Pacific we seek the same principles for infrastructure projects and development assistance projects. Regardless of the donor, they should be transparent. They should be high standards and high impact and follow international rules and norms that are designed to ensure that projects in the region provide economic sustainability and the ability of borrowers to repay loans in a timely fashion and generate greater economic potential for the countries in question. Infrastructure projects should always catalyze local countries rather than leave them saddled with debt. And it’s our position that we work with Pacific Island countries and the multilateral development banks to facilitate projects that make the most economic sense for them and attract private capital wherever possible.

We are the largest shareholder in the World Bank and the Asian Development Bank, along with Japan, where we encourage greater focus on the Pacific. During the 2017 fiscal year, the World Bank and the Asian Development Bank have provided $72 billion in financing around the world and a big uptick in their financing to the Pacific itself. We hope to see that trend continue because we believe active participation by the World Bank and the ADB will help sustain adherence to international standards and strengthen overall economic potential for Pacific Island countries. We’re also a leading donor to the Green Climate Fund, which we have contributed one billion dollars to. And as a member of the Green Climate Fund board, we are supporting a simplified proposal approval processes and we helped ensure that 10 percent of the Green Climate Fund funding that has been distributed so far has gone to the Pacific Islands. USAID is also working to ensure that the countries understand and have easy access to the Green Climate Fund as well development funds.

So we support Pacific Tourism, we know that the key element for many Pacific Island states in the development of their economies. We’re doing all we can with a tourism exchange program with East West Center in Hawaii. That program includes professionals from Federated States of Micronesia, from Fiji, Kiribati, Nauru, Palau, PMG, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu and Timor Leste. The goal here is of course to build capacity for professionals in the private and public sectors in tourism. The program includes six week placements with tourism organizations in Hawaii and reciprocal visits for US tourism professionals to the various island locations.

On the people-to-people side, I’d like to say that you know we are investing in the next generation of Pacific Island leaders. The past five years we’ve sponsored the young Pacific Island Leaders Initiative which brings together emerging leaders from the Pacific Island countries to discuss … Of issues of regional concern. This year’s program features small grant competition. There were 12 winners selected representing 11 different Pacific Island countries receiving saving up to $13550 grant funding. The program’s core themes include education, environment, resource management, civic leadership and economic and social development. I had the pleasure of speaking via VTC (video teleconference) with Pacific Islands Leaders group this year while they are in Hawaii and I thought that was a really useful exchange. We look forward to continuing to do that in future years. So in conclusion I just hope this demonstrates the ongoing commitment of the United States Pacific islands. I look forward to taking your questions. Thank you.

Moderator: We’ll now open up the question and will now begin the question and answer portion of today’s call. Please press star one to ask a question and we’ll try to get as many people in for the first question before allowing for follow ups. So please if you have a questions, press *1. The first question goes to Andrew McMartin with News Talk.

Question: Yes good morning. Thank you very much for joining us Ambassador. Does the United States think it has lost any ground, influence in investment in the Pacific Islands to China following the quite significant investment from them in a number of nations in the region?

Amb. Matthews: Look what I would like to emphasize here is that we hope that China like any other donor in the region adheres to international standards for infrastructure lending and that the goal here, of course as I said in my opening comments, is that each and every project should be evaluated against the metrics of whether or not it improves the economic sustainability and prosperity of the country which is the recipient of the grant or the loan. Particularly in cases where you have lending involved, we want to make sure that the type of projects that are going forward enable the recipient countries to be in a position to repay those loans effectively and that means that there has to be an economic plan in place for the projects that allow that to happen, right. So we don’t create greater stress on fiscal resources in the countries. That in fact the projects lead to greater economic capacity that makes it easier to do so.

Moderator: Great, thanks so much. The next question comes from the Communications Fiji Ltd.

Question: Thank you Mr. Matthews. Vijay it right here from Fiji. My question is about the Green Climate Fund. As you know that Bainimarama, the Prime Minister of Fiji, is also the COP23 President and he’s been saying that access to Green Climate funding should be a bit more relaxed so that the vulnerable nations can access more funding. What is the stand of the United States of America on this?

Amb. Matthews: [00:14:03] Well we have done what we can and we are continuing to work in this area both directly within the Green Climate fund in our role as a member of the board having provided a billion dollars to the Fund itself, but also through the USAID, ensuring that we develop approaches that make it more accessible for countries around the world but particularly we have in mind Pacific Islands nations to ensure that the process of applying for funds is simplified in a way that provides the information necessary for proper oversight of the funds but at the same time makes it as efficient and effective as possible so that we guarantee that we’re going to be able to follow up and issue funding for valuable projects that are taking place in Pacific Island countries. And I think that, as I said, out of that, out of the 90 projects that have been funded so far 10 of them are in the Pacific Islands so I think we’re off to a pretty good start when you think about the overall global footprint.

Moderator: Thanks so much. The next question comes from the Marshall Islands Journal.

Question: Good morning. This is good. Giff Johnson with the Marshall Islands Journal in Majuro. I’m interested to know if the concern about China, particularly its economic impact in the region, is having any impact on USAID or other U.S. government policy toward the Pacific Islands.

Amb. Matthews: Well I guess what it will say is that clearly China has dramatically increased its funding into the region. A lot of lending. We want to make sure that that lending takes place in a way that’s constructive and that helps grow the economies in the Pacific Islands. Makes them healthier, make them more prosperous, and if they can follow that kind of pathway, great. I think the work that you know they will look to what the multilateral development banks are doing both the World Bank and the Asian Development Bank; if they can adhere to the kind of guidelines that those institutions have in place; if they look at the approach of Australia and New Zealand, the United States, Japan, other traditional donors in the region that have been working you know over the longer term to improve economic outcomes in the Pacific, I think will be a good place. But they really need to step up and meet international standards.

Moderator: Thanks so much. Next question comes from Dorothy Wickham with Melanesian Publications.

Question: Good afternoon, Mr. Ambassador. This is Dorothy in the Solomon Islands. I am interested in a recent news article that came out in the Australian media about Chinese interest in building an international airport in Guadalcanal, the eastern end, and the airport will provide hangar services for maintenance of aircraft. How does the United States view the Chinese interest in [inaudible] in Melanesia, especially as you know they approached Vanuatu a there was a lot of speculation about the idea behind setting up a military base there. Has there been any discussions between the United States government and the Solomon Islands government about these recent stories.

Amb. Matthews: Thank you for that question Dorothy. What I would say to you is that we are supportive of a prosperous, stable and secure Pacific. We don’t want to see the balance upset in any way. And you know over since the end of World War Two, the Pacific has been a stable peaceful region. It’s been that way because of the commitment of Pacific Island nations themselves and their major cooperative partners over this period, which have been the United States, Australia, New Zealand, to ensure a peaceful and stable environment… [inaudible]. So we really don’t want to see any unnecessary steps that might upset this balance. We would view with concern steps by China if it were looking to establish military facilities in the Pacific.

Moderator: Thanks so much, the next question goes to Primrose Riordan with The Australian.

Question: Thank you so much for the call. I just have sort a double-barreled question. The first one is when will a separate US Indo-Pacific Strategy document be released and will it include allocated funding for infrastructure. And the second part of my question, sort of follows up to the last question which is what is the U.S. attitude to Chinese companies investing in projects which also include critical infrastructure such as airfields or [inaudible] in the Pacific. Thank you.

Amb. Matthews: So for the first part on the Indo-Pacific strategy, I think our overarching document has been completed. We’re now in the process of developing implementation plans and within those implementation plans there is a sub-plan specifically for the Pacific. That process is going forward. We hope to see those, those plans approved through the process that we have, an interagency process in the government, within the next couple of months and we’ll be able to talk in more detail once that’s done.

We do look to see infrastructure development, quality infrastructure development as a critical element of the work we’ll do along with connectivity and of course that will continue to expand trade in the region. I think all of you know that the United States is deeply, deeply involved in the economic development of the region. As a member of APEC we pushed over the last several decades to lower trade barriers, to drive growth and trade. In APEC alone the Asia-Pacific has got 59 percent of global GDP. It represents 61 percent of U.S. exports and 9 of our top export markets in the world are within APEC.

And within the Pacific, you know, we’re looking for opportunities to …to expand economic engagement as well. And I think over the coming year or two we hope to begin some trade and investment discussions with various Pacific Island countries. I know there is internal discussions in Washington about beginning to open up discussions with Fiji. Of course Papua New Guinea is an APEC member and the host of this year APEC so we’re in deep discussions with them as well on a broad array of economic issues. So that engagement will continue and the increased focus on infrastructure and the desire to get private sector participants involved will be there as well. We’ll be coordinating with other operators in the region and other donors in the region including Japan, Australia, and New Zealand on this and hopefully India too in the broader Indo-Pacific framework.

And then your second question was… what was the second question?

Question: China’s involvement in critical infrastructure.

Amb. Matthews: So again back to the issue of China, to the extent that China is going to be involved in developing infrastructure in the Pacific region, we want to make sure that that process and the projects they undertake meet international standards and strengthen the economic framework of the nations of which they provide project support. Simple as that.

Moderator: Thanks so much. I think we have time for one last question from Sam Sachdeva from Newsroom.com New Zealand.

Question: Thank you very much Mr. Ambassador. I just want to ask you about the New Zealand government’s recent announcement of a Pacific Reset, so increasing the amounts of funding and strategic engagement with the Pacific countries. What are the thoughts of the US on that move by the New Zealand government and more broadly how do you see New Zealand’s role in [inaudible] vis-a-vis the Indo-Pacific framework that the US is supporting.

Amb. Matthews: [00:22:43] Well the United States is very welcoming and supporting of New Zealand’s Pacific Reset policy. Similarly we’re very supportive of Australia’s Step-Up policy with regard to the Pacific and we hope in our way to be able to increase our engagement in the Pacific as well as under the Indo-Pacific strategy. We see this as kind of synergistic and renewed commitment on all these key partners. I think that Japan has just held the PALM discussions in Tokyo so we’ll be looking forward to hearing more from Japan but I believe it’s their intention to be increasing their active participation in programming in the Pacific. We see this all as extremely constructive because all these players do adhere to international standards and they’ve been good for governance and supportive of security within the region.

Moderator: Thank you so much and I know Ambassador Matthews has a packed schedule for today so sir, before we close out today, I’d like to give you one last chance to make any final remarks. Thank you very much.

Amb. Matthews: I guess I’d just like to close by you know reiterating America’s long term commitment to the region and the fact that the Indo-Pacific strategy will clearly represent this administration’s commitment to continuing our deep and abiding role in the Pacific and the Indo-Asia-Pacific. And I think you can look forward to the United States being an excellent partner across the full range of economic, security, cultural, people-to-people ties within the region. I want to thank all of you for taking the time to have this engagement with me today.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future