Click here to listen to the audio file.

Moderator:  Good morning, everyone, from the U.S. Department of State’s Asia Pacific Media Hub.  I would like to welcome our participants dialing in from across the Indo-Pacific region.

Today we are very pleased to be joined from Bangkok, Thailand, by Wilbur L. Ross, Jr., the U.S. Secretary of Commerce.  Secretary Ross will discuss the U.S. participation in the Indo-Pacific Business Forum and ASEAN meetings this week in Bangkok.

We will begin today’s call with opening remarks from Secretary Ross, then we will turn to your questions.  We will try to get to as many questions as we can during the time that we have, which is approximately 30 minutes.

Finally, as a reminder, today’s call is on the record.  And with that, I will turn it over to Secretary Ross.  Please go ahead, sir.

Secretary Ross:  Thank you very much for joining in the call today.  I’m happy to be back here in Thailand again.  This is my second big trip to Asia so far this year.  I earlier had been in – excuse me.  From so much traveling, I got a little cold.  I earlier had been in New Delhi, Bangalore, Canberra, Sydney, and Singapore.  And this trip, in addition to the present meetings that we’ve been having in Thailand, we’ll be going on to Indonesia and to Vietnam.

We have with us a very large business delegation from the U.S., all of whom are actively interested in both exporting to and investing in various countries out here.  So I think it will be a very productive set of meetings.  And it symbolizes the importance that the U.S. is placing on its Indo-Pacific strategy.

As many of you know, we exited from the TPP as one of the first acts by President Trump, and many people misinterpreted that as suggesting that we were losing interest in the region.  Nothing could be further from the truth.  What we did with that withdrawal was say simply and correctly, it was not a very good transaction from the U.S. point of view.  So all that we did was withdraw from a potential trade agreement that would not have been particularly helpful to us.

Since then, we have made some very good agreements with Japan, which was obviously the largest single country – largest single market in the TPP.  We also have renegotiated our trade agreement with Korea.  And we’re actively working on more transactions, more agreements around – in the region.  So we are here to stay.  The region is our largest single trading region.  We do far more trade with these – Southeast Asia than we do with either Latin America or with Europe.  And obviously, we do far more than we do with Africa.

Beyond that, the cross-pollenization from bilateral foreign direct investment is huge.  U.S. is the largest investor in the region by a very, very long margin.  We have several times the investment of any other country.  So we are here permanently.  We will be continuing to invest more here.  We will be continuing to have more bilateral trade.  And that’s why I’m spending so much time in the region.

So with that little preamble, we could now throw it open to questions.

Moderator:  Yes, sir.  Thank you very much.  We will now begin the question-and-answer portion of today’s call.  For those asking questions, please state your name and media affiliation and please limit yourself to one question related to the topic of today’s call.

For our first question, we’ll go to one that we’ve received in advance from Channel News Asia in Bangkok, Thailand:  Following the suspension of GSPs for products from Thailand, have there been any talks with the Thai side during this weekend on the sidelines of ASEAN?  And what needs to be done in order to reinstate the GSPs once again?

Secretary Ross:  Well, thank you.  That’s a very good question and a very timely one.  It’s a topic I discussed directly with the prime minister in my 40-minute private meeting with him.  We’ll also discuss it directly in a subsequent meeting with the finance minister.

Let’s first put the GSP into perspective.  Exports are about 70 percent of the Thai economy.  That amounts to roughly $340 billion of exports, so it’s logical that people would be sensitive to anything to do with their exports.  But to put in real numbers, the total amount of products exported to the U.S. under the GSP had only been $4.4 billion.  And of that, only $1.3 billion will be affected by the removal of GSP.

And removal of GSP doesn’t mean that those exports will stop.  It’s just that they will now be subject to a 4.5 percent average tariff.  So in numerical terms what we’re talking about is a tiny fraction of 1 percent of Thailand’s GDP – under three-tenths of a percent is all that can be affected.  And when you allow for the fact that there won’t be that much impact of a 4.5 percent tariff, it’s highly unlikely you’ll notice any noticeable impact from GSP removal in Thai’s overall economic picture.

Second point, the reason for the removal of certain products from the GSP was that the Thai Government has not quite met the workers’ rights requirements in the GSP.  The new tariffs will not go into effect until April of 2020.  So there’s plenty of time between now and then if the Thai Government wishes to try to correct the technical issues that had resulted in their removal.  So it’s a small chimerical thing.  I think it’s been blown totally out of proportion.  But we are open to re-discussing it if the Thai Government wishes to re-enter those negotiations.

Moderator:  Thank you, sir.  We will do one more question that we’ve received in advance.  This question is from Asia Pacific Daily in the Philippines:  How will the continuing trade discussion between the U.S. and China have an impact on ASEAN, U.S., and China trade in volume and dollar terms?

Secretary Ross:  Well, we’re making very good progress toward the completion of the phase one negotiations with People’s Republic of China.  Those negotiations are mainly discussing current trade issues – things like LNG, things like soybeans, things of that sort.

The more structural issues are not mainly scheduled for solution in this first round.  Those would be in later rounds.  We were quite optimistic that we could get this ready in time for the multinational meetings in Chile on the 13th of November.  Due to local problems in Chile, that conference will not occur, so we’re seeking another location.  And once we find one, we’ll firm up a date and go forward.

So directionally, I’m reasonably optimistic that we can get something done.  And I think there are two significances to the completion of phase one.  The first is obviously the direct impact on trade.  It will be a reduction in tensions between the two countries.  It will facilitate day-to-day trade.

But there’s a second and probably even more important thing that it will create, and that is rebuilding trust between the two countries.  And that’s a really important thing as we get to the more sensitive negotiations about issues like intellectual property rights, like forced technology transfers, like equal market access, all the panoply of big issues that you’ve been hearing about.  So we’re hopeful that phase one will be the precursor of a much more robust set of agreements.

Moderator:  Thank you, sir.  Our next question will go to the line of Ben Packham with the Australian.  AT&T, could you please open Ben Packham’s line?

Moderator:  Mr. Packham, your line is open.

Question:  Hi, Ben Packham from the Australian.  We have a very large debate in Australia about U.S. power now in the Indo-Pacific region.  Today we have two former air force chiefs saying we need to – Australia needs to develop long-range strike capabilities because we cannot rely on the United States as we have for quite a long time.  How long can the U.S. be expected to remain the dominant partner in the region?

Secretary Ross:  Well, we have no intention of vacating our geopolitical or our military position, but we would be delighted to sell Australia more aircraft if that’s what suits your department of defense.

I had very constructive discussions when I was in Australia a couple of weeks ago, and we continued those again yesterday.  Australia had a delegation at the ASEAN, and we mainly were talking about the problem of critical so-called rare earths, which is not really so rare, but for technical reasons are in relatively short supply.  So if anything, our relationship with Australia is becoming more intense, not less.

When your prime minister was in Washington a few weeks ago, he and I observed the signing of a new agreement in space between the Australian Space Agency and NASA.  And so we are continuing our collaboration that goes all the way back to the Apollo launchings.  We’re continuing that – not just in terms of potential terrestrially, but also in terms of potential in space.  And where I think that’s important is if and when there’s another big-scale conflict, it’s very likely going to be importantly in the space area and in the cyber area.  So while fighter planes and bomber planes and all that are always obviously going to stay important, we think that it’s equally important for your country, for ours, and for all countries to make sure they have robust defense in both cyber and outer space.

Moderator:  Thank you, sir.  Our next question will go the line of Anthony Rowley.  AT&T, please open that line.

Question:  Yes.  Hello, Secretary Ross.  And I thank you for taking my question.  The trade dispute between the United States and China has obviously had an impact on business confidence and on business investment and also, to some extent, on the structure of manufacturing supply chains.  My question is:  Even if things go favorably from here in the discussions between the U.S. and China on trade, how long is it going to take to restore confidence, do you think, restore levels of trade to what they were previously at least?

Secretary Ross:  Well, I don’t think it’s correct to blame the slowdown in trade solely on U.S.-China discussions.  You have a lot of fundamental economic weakness in Europe, for example, and a lot of uncertainty arising from Brexit.  So you have that.  You also have the turmoil that a number of Latin American countries are in – to wit, the recent election in Argentina.  So I think it’s a little bit of an oversimplification to suggest that all the trade problems arise from the discussions between U.S. and China.  But as I mentioned in the answer to the first question, I’m reasonably optimistic that we will at least get phase one together, and I think that will go a long way toward resolving the uncertainty.

I think the question that people had was largely one of duration.  Well, they were worried that this trade spat might go on for years and years and years, and therefore, create uncertainty for supply-chain decisions.  Well, I think if we resolve phase one, that will calm people down a lot because they’ll see that the endpoint is hopefully within sight.

Moderator:  Thank you, sir.  Our next question will go to Jitsiree Thongnoi with the South China Morning Post.  AT&T, please open their line.

Question:  Hello?  Hello, sir?

Moderator:  Hi, yes, we can hear you.  Please go ahead with your question.

Question:  Thank you, Secretary Ross, for receiving the call and the question from me.  My question would be:  Could you please advise on possibly a timeline or timeframe of Thailand’s entry into a renegotiation of the U.S. and its GSP decision?

Secretary Ross:  Well, we’re open to discussions starting today.  So the only real deadline in the timeline is April of 2020 is when the reduced number of products eligible for GSP would go into effect.  So there’s roughly five and a half, six months’ time during which one could negotiate, but it’s really a question whether the Thai Government wishes to get into reopening the issue about workers’ rights.

Moderator:  Thank you.  Our next question will go to Karishma Vaswani from the BBC.  AT&T, please open that line.

Question:  Hi.  Secretary Ross, Karishma Vaswani here from the BBC.  Thank you so much for taking my question.  This is a follow-on from the discussion about the U.S.-China trade negotiations.  I’m happy to hear that you’re getting to some sort of resolution on phase one, but there are reports that you’re considering whether to roll back levies on something like $112 billion of Chinese imports to get to that stage.  Wouldn’t this be a major concession given how hard the Trump administration has been pressing China on these tariffs?

Secretary Ross:  Well, to date, the one announcement that has been made was that we deferred the tariffs that were supposed to go into effect in October.  That’s the only announcement that has been made so far.  When we do have the – hopefully the signing of the phase one, all the details will come out at that point.

Moderator:  Thank you.  Our next question will go to Hui Yee Tan from The Straits Times.  AT&T, please open the line.

Question:  Good morning, sir.  This is Tan Hui Yee from The Straits Times.  I have a question about the Blue Dot Network that was launched recently.  Isn’t this Blue Dot Network from the existing [inaudible] of the World Bank and the Asian Development Bank?  And also, what kind of new money would it bring to the table for infrastructure projects in the region?

Secretary Ross:  Well, that’s a very good question.  Blue Dot is in early stages of evolution.  What it would amount to is a voluntary arrangement among the signatory countries.  We already have several countries indicated at the ASEAN conference privately that they will be very shortly announcing their willingness to participate in Blue Dot.  Blue Dot itself is interesting in that where the name came from is Carl Sagan with his observation that from outer space, the Earth is a blue dot, and the purpose of that appellation is the countries that sign up for Blue Dot will be countries that are committed to sustainable infrastructure development.  So it’s very much a sustainability feature for the huge amounts of infrastructure that are needed and will be forthcoming throughout Asia.

So we’re very excited about the implications of it, and we also think it’s important as a symbol of the U.S. commitment to being long-term environmentally sound.

Moderator:  Thank you, sir.  Our next question will go to Maha Siddiqui from CNN India.  AT&T, please open that line.

Question:  Hi.  I’m Maha Siddiqui from CNN-News 18.  This is with regards to GSP for India as well.  It was withdrawn.  Is there any likelihood that this can be reinstated?  Are there talks going on?  And what happens to the new trade deal between India and the United States?  That’s what’s being talked about, but there have been no signs of that being finalized yet.

Secretary Ross:  Okay.  Well, those are two separate but very good questions.  In terms of the concept of overall trade, we are eager to make further progress with India on that topic.  That was something we discussed with Prime Minister Modi at the UN General Assembly pull-aside in New York, and he and the President had some follow-up discussions of it at the, “Howdy, Modi” gigantically successful rally in Houston.  So that’s on a separate track independently of the GSP.

On the GSP, there are about three issues that were open.  The Indian trade people have said that they will be coming out with a proposal.  We’re eager to hear it and hopefully things can be dealt with.  There’s nothing that’s irreversible about the GSP decision.  There were a couple of specific items that led to it.  If those get resolved, there’s no reason it couldn’t be re-restored.

Moderator:  Thank you, sir.  Our next question will go to Peter Janssen with The Asia Times.  AT&T, please open that line.

Question:  Hi, Mr. Ross, thank you for talking to us.  I think one of your missions is to try and promote new investments in this region, and yet, when I talk to companies and American businessmen or other businessmen, one of the big uncertainties for investment here is what’s going to happen on trade policy, because at the moment, our trade policy seems to be in the hands of one man: President Trump.  For instance, in Vietnam, there’s been a lot of new investment going there out of China and so the trade imbalance between Vietnam and the U.S. is higher, and immediately, Mr. Trump starts talking about currency manipulation and maybe putting new tariffs on Vietnam.  How do you answer when people say, “What’s Mr. Trump going to do?”  Because it’s one of the big uncertainties for investment out here.

Secretary Ross:  Well, frankly, I think the uncertainties have been played out much more in the media than in the real world.  For example, in terms of Vietnam, there’s the Son My LNG terminal and the Son My 2 power plant, which are huge projects.  AES Corporation, an American company, just recently completed negotiations with PetroVietnam Gas Joint Stock Corp., so-called PV Gas, and with PetroVietnam to do a huge LNG terminal and a power project valued at $2.8 billion.  That’s a pretty big set of investment from American perspective and it provides for some very critical things that Vietnam needs.  So I don’t agree that there has been a big lack of activity by us with Vietnam.

I think what has happened, Vietnam has been a big beneficiary of the rethinking of supply-chain managements diversifying some away from China, and Vietnam has gotten a very good share of that activity.  So that is what has been happening there.  I had a pull-aside with my counterpart from Vietnam on the sidelines of the ASEAN.  He was very happy about the U.S. relationship and I think we will very possibly have some more announcements to make when I’m in Vietnam later on this week.

Moderator:  Fantastic.  Our next question will go to Dene Chen with the AFP.  AT&T, please open that line.

Question:  Hi.  Hello?

Moderator:  You have your phone on mute.

Question:  Oh, yeah.

Moderator:  Please go ahead.

Question:  Hi.  I’m Dene Chen, I’m calling from AFP.  Thank you for taking my questions.  I was wondering whether if the suspension of the GSP to Thailand has any connection with Thailand’s recent ban on three controversial pesticides, one of which the U.S. Government had sent a letter condemning the banning of.  So – and also the recent calls for Thailand to be marked as a currency manipulator.  Did any of these two topics come up during your talks with Prime Minister Prayut?  Thank you, sir.

Secretary Ross:  No.  They did not and they have no relationship whatsoever to the GSP.

Moderator:  Thank you, sir.  Our final question – unfortunately, we only have time for one more – [break in audio] – Dong Hyun Kim with the VOA Korean service.  Please go ahead.

Question:  Yes, thank you.  Thank you very much, Secretary.  I have a question regarding North Korea.  Department of Commerce has been focused on North Korea illegal import/exports control on several occasions in the Indo-Pacific region.  How serious is the Department of Commerce addressing this issue, and do you think China is being cooperative enough on the sanctions policy?  Thank you.

Secretary Ross:  Well, first of all, we’re quite serious about the issue.  No one should have any doubt whatsoever about that.  And we have had some constructive dialogues with the Chinese.  I think they have been at least somewhat helpful in terms of the import/export situation vis-à-vis North Korea.

The big thing with North Korea, obviously, is whether or not the talks about denuclearization will go forward.  We’re hopeful that that will occur notwithstanding these recent missile launches that they made.

Moderator:  Thank you, sir.  I’d like to turn it back over now to Secretary Ross.  Sir, do you have any final remarks you’d like to share with the journalists at this time?

Secretary Ross:  Sure.  Well, first of all, I appreciate the thoughtfulness of the questions that you put forward to me.  They show you’ve really been spending some time thinking about the topic.  And I especially appreciate it because trade is infinitely complex.  It boils down to thousands and thousands of little items, thousands and thousands of individual decisions, and very complicated negotiations.

But in terms of overall trade policy, our objective is to reduce tariff and non-tariff trade barriers throughout the world, and both on the part of U.S. and other countries.  The U.S. is the least protectionist of the major countries and that’s part of the reason that we have the trade deficit that we do.  So the reason we’ve been having to use tariffs as a tool is that our country had made so many unilateral concessions to other countries over the years that we needed to do something to incentivize those countries to reduce their barriers, and we’ve been pretty successful.

Very few countries – and certainly, historically, not the United States – have had three major trade negotiations succeed within an 18-month period, and that’s the USMCA, which is the largest trade agreement we’ve ever made; it’s the two – the agreements with Japan, both the digital economy agreement and the agreement about products, particularly agricultural products; and then the third one is the renegotiation of the Korea-U.S. Free Trade Agreement, the so-called KORUS.  That’s a lot of activity in a very short period and I think it’s easy to lose track of the fact that we have been actively negotiating trade deals, that we have been actively fixing mistakes that our government had made in prior trade deals, and we will continue to do so.

So this notion that in order to maintain leadership one has to be – allow one’s self to be a victim of predatory trade practices is just silly.  We are continuing our role in leadership and, in fact, because of the aggressive stand we’ve taken, other countries are also starting to take more aggressive stands against inappropriate practices.  I think that’s a trend that will continue because it’s fine to talk at the 40,000-foot level about a rule-based trade system globally, but if people don’t adhere to the rules, it doesn’t mean much.  And the proof that they don’t adhere to the rules, we have right now in effect about 450 trade actions – namely, anti-dumping or countervailing duty actions – against various countries, and that’s a shame.  That means that those are all entities that were committing violations of WTO rules.

So what we want is for the other countries that are very good at articulating free trade principles to start living up to them.  We’ve been living up to them throughout, we just haven’t been very good at articulating the case.  So at the end of the day, our trade policies are all about reducing tariffs, reducing non-tariff trade barriers, and getting rid of subsidized activities.  So I thank you for your participation and look forward to working with you in the future.  Thanks very much.

Moderator:  That concludes today’s call.  I want to thank Secretary Ross and I also thank all of our callers for participating today.

Due to the very high number of participants on the call today, we apologize if we were not able to get to your question.  But if you have any questions about today’s call, you may contact the Asia Pacific Media Hub at AsiaPacMedia@state.gov.  Thank you.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future