COLM QUINN: So I’d similar to only begin. My name’s Colm Quinn I’m the managing director for novel media as well as audience evolution hither at CSIS. And I’ll live moderating today’s press briefing. Thank
you all for coming. I only want to give you lot a quick annotation for housekeeping. We volition live transcribing this discussion. So when you lot are asking your questions, if you lot want to spot yourself as well as you lot outlet, arrive easier on you, nosotros volition as well as so live sending out that transcript afterwards on today.
So allow me innovate my colleagues who volition live speaking today inwards this order. To my immediate left, Matthew Goodman. He’s senior vice president as well as our Simon chair inwards political economy. He’s also a senior advisor for Asian economics. And he was the coordinator for the APEC as well as Eastern Asia Summits, as well as including the G-8 as well as G-20 summits inwards the Obama White House. To his left is Amy Searight, senior advisor as well as managing director inwards the Southeast Asia computer program at CSIS. Bill Reinsch, senior advisor as well as Scholl chair inwards international occupation organisation at CSIS. Rick Rossow, senior advisor as well as Wadhwani chair inwards U.S.-India policy studies, as well as Chris Johnson, senior advisor as well as Freeman chair inwards Cathay studies at CSIS. And as well as so joining us on the telephone is Victor Cha, who is the senior advisor as well as Korea chair at CSIS. And so we’ll all live hearing from them today.
To start us off, Matt, please.
MATTHEW P. GOODMAN: Sure. Thanks, Colm.
So Vice President Pence heads off this weekend to Asia for the annual troika of summits.
That’s the argue – you lot know, the organizing regulation of the trip. He’s going to the Eastern Asia Summit, the U.S. Association of Southeast Asian Nations summit, as well as the APEC lawsuit – the Asia Pacific Economic Coordination leaders
meeting. So he’ll live inwards the part for most a week. This is something the president unremarkably does, but President Trump opted non to do this trip as well as to enquire Vice President Pence to do the trip.
So I think, to me, the overarching theme hither is that the vice president is going to human face upwardly some skepticism from especially allies as well as partners inwards the region. And those, I think, are inwards assort of 3 areas of skepticism. One is concern most some of the statements as well as actions that the Trump direction has taken, you lot know, criticism of allies, skepticism most multilateral approaches similar the things that are going to live done inwards these summits. New involvement inwards Cathay policy, next Vice President Pence’s spoken language inwards early on Oct that was quite strong inwards tone. Particularly inwards Southeast Asia, at that spot are going to live questions most that as well as concerns most that.
And as well as so manifestly the withdrawal from the Trans-Pacific Partnership, from the Paris climate accord I think have got raised questions inwards the region. Of course, the usage of tariffs against allies equally good equally against Cathay are a source of concern. And as well as so at that spot are sure questions most Democratic People's Republic of Korea policy that the vice president volition encounter inwards places similar Japan, for example, which I think has some different interests there. I mean, inwards add-on to the shared interests most proliferation as well as missile
development, I think there’s some other specific issues Nippon has questions about. So I think that’s 1 laid of – 1 argue for the skepticism that the vice president’s going to have got to address.
The 2nd argue for skepticism is the Free as well as Open Indo-Pacific Strategy, which was the headline the President Trump announced in conclusion yr on this same trip when he was inwards Vietnam as well as gave a spoken language at the APEC CEO’s summit, as well as used this phrase, the Free as well as Open Indo-Pacific Strategy, which has at nowadays been, you lot know, fleshed out to some extent yesteryear other direction officials, including Secretary of State Mike Pompeo inwards a spoken language to the U.S. Chamber belatedly July.
But I think at that spot are questions most the content of the Free as well as Open Indo-Pacific Strategy.
The headline resonates good inwards the region, but the details are unclear at best as well as at that spot are some concerns, especially on the economical as well as merchandise side where, because of the withdrawal from TPP as well as its non-replacement yesteryear some other credible regional merchandise strategy, I think at that spot are a lot of questions most that.
But I think you’ll consider the vice president trying to address those things yesteryear fleshing out some of the points that were raised inwards the Pompeo speech, similar digital connectivity, which was a specific item that the secretarial assistant of province mentioned, infrastructure, energy, so these are areas that you lot should facial expression to consider some give-and-take of yesteryear the vice president when he’s out there.
The 3rd argue for skepticism or questions is the fact that it’s the vice president as well as non the president. Because equally you’ve likely heard us on this panel say before, inwards Asia, lxxx percentage of life is showing upwardly as well as they spotter that stuff carefully, especially inwards Southeast Asia. So I think they’re going to – he’s going to – he’s going to human face upwardly those headwinds.
But the other way to facial expression at this is there’s a – there’s a existent chance hither for the vice president to assay to flesh out some of these points as well as convince folks that the approach – that the United States of America of America is committed to the region, that the Free as well as Open Indo-Pacific does have got content as well as that, you lot know, essentially, the U.S. is at that spot for allies as well as partners. And so I think there’s a – there’s a large chance here, but a lot of attending volition live paid to this.
Let me only say 1 word most the Nippon stop, because Mike Green, our Nippon chair, couldn’t live hither today, so he asked me genuinely to apparel a kilt to stand upwardly for him. (Laughter.) But unfortunately, mine’s at the cleaners.
So I think Mike would say that the role of the Nippon halt is to reassure Nippon of the U.S. commitment to the alliance as well as so the alliance volition live primal there. There volition manifestly live an involvement inwards discussing – for the vice president to hash out with Prime Minister Abe North Korea, China, regional safety issues, maritime safety issues. I don’t think there’s going to live much on trade. The vice president has been reluctant to engage fifty-fifty inwards the formal physical care for that was established betwixt him as well as the finance government minister as well as deputy prime number minister, Mr. Aso. I don’t – as well as because we’re inwards a form of cooling off catamenia on the bilateral merchandise agreement, at that spot likely isn’t going to live equally good much give-and-take of trade.
One other highlight of this halt that’s interesting is that the vice president requested as well as got a articulation press availability with Prime Minister Abe, which is, you lot know, an unusual thing because it’s non a protocol match, but the Japanese gave the vice president that, so that’s likely the populace thing to spotter on the Nippon stop.
OK, with that, I’ll go yesteryear it on downwards the line inwards assort of roughly chronological order. So, Amy.
AMY SEARIGHT: Yes. Thanks, Matt.
So from Japan, Vice President Pence volition go to Singapore for ii of the – of the major Association of Southeast Asian Nations Asia summits. The firstly volition live a U.S.-ASEAN summit where he’ll come across with all 10 leaders of the Association of Southeast Asian Nations. And as well as so the major lawsuit is the Eastern Asia Summit which
brings together the 10 Association of Southeast Asian Nations members equally good equally 8 other countries – China, Japan, South Korea, Australia, New Zealand, Republic of Republic of India as well as the United States of America of America as well as Russia.
Singapore has been chair of Association of Southeast Asian Nations this year, so it’s hosting the Eastern Asia Summit. And at that spot have got been ii large priorities for Association of Southeast Asian Nations this year, so a lot of the tidings coming out of these meetings is going to live focused on these ii issues. So Association of Southeast Asian Nations is going to come across equally a grouping before Singapore convenes the Eastern Asia Summit.
And they’ll focus on the South Cathay issues. There are discussions with Cathay over negotiating a draft code of conduct. There has been some little progress towards negotiating a draft. It soundless has a long way to go, at that spot are some major disagreements, but this is something that Association of Southeast Asian Nations has been pushing for for over ii decades as well as Cathay has been real reluctant to displace forward. Some momentum began to build inwards 2016 after the arbitral court made an honor that was real favorable to the Philippines as well as has assort of brought Cathay dorsum to the table.
So there’s been a lot of function yesteryear Singapore to assay to force this code of bear closer to a conclusion. So there’s at nowadays a unmarried draft text that volition live the footing for farther negotiations that was
announced during the ASEAN-China summit inwards August. And so at that spot volition live some speak most that, but nosotros don’t facial expression whatever farther announcements. And equally I say, it soundless is a – is a ways off.
For the United States, the primary concern is that the text does non – that the draft – the code of bear that emerges does non impinge on the rights of 3rd parties. The United States of America of America has been real supportive of the thought of Association of Southeast Asian Nations as well as Cathay terminal a code of conduct, but it has strongly suggested that a code of bear should live binding to all parties. And the concern at nowadays is that at that spot has been linguistic communication inserted yesteryear China, according to reports, that would seek to bound U.S. presence inwards naval exercises as well as release energy exploration without the consent of all parties, which would include of course of teaching China. That’s unlikely to arrive into a final draft, but it’s quite possible that Vice President Pence volition create some messaging around that.
The 2nd large number is on the merchandise front. Of course, against the backdrop of having half dozen of the
– of the – of the TPP-11, the Comprehensive as well as Progressive Trans-Pacific – newly renamed – at nowadays have got ratified that agreement. And so at nowadays it is slated to come upwardly onboard yesteryear the cease of this year, Dec 30th. And there’s been a lot of focus also against the backdrop of dubiety most U.S. merchandise policy as well as the growing tariff skirmish betwixt the United States of America of America as well as China.
There’s been a petty fleck to a greater extent than political volition to assay to force forrard the wide regional merchandise understanding called the Regional Comprehensive Economic Partnership, which includes all of the Association of Southeast Asian Nations countries plus half dozen additional countries: Australia, New Zealand, China, Japan, South Korea, as well as India. So it’s basically all of the Eastern Asia Summit countries minus the United States of America of America as well as Russia.
Singapore has tried real hard to usage its chairmanship yr to force this understanding towards a substantial conclusion. But Republic of Republic of India has been the holdout all along, genuinely reluctant to give important concessions inwards particular because side yesteryear side yr is an election yr for Prime Minister Modi. And there’s been disagreements – especially with India, but fifty-fifty with some other members – most the bird of ambition for tariff liberalization as well as other merchandise rules. So it looks similar they’re non going to larn quite the conclusion they want to live able to denote at this meeting, as well as it way that this RCEP merchandise understanding volition likely drag on into side yesteryear side yr as well as probable beyond. But at that spot volition live a lot of give-and-take around that equally well.
So, equally Matt said, Vice President Pence volition live giving a spoken language at his side yesteryear side stop, at APEC. And inwards his engagements with his Association of Southeast Asian Nations counterparts as well as other bilateral meetings that he’ll have got at the Eastern Asia Summit, as well as at his intervention at the Eastern Asia Summit, I think the countries inwards the part are going to live looking for a reassuring message that gives a petty to a greater extent than particular most what the Free as well as Open Indo-Pacific way for the U.S. commitment as well as vision for the region.
There’s some concern most U.S.-China policy, the growing – the intensification of U.S.-China strategic rivalry. You know, on the 1 hand, countries appreciate a strong U.S. presence – security/strategic presence inwards the part – to residual against overly assertive demeanour from China, but they also are quite concerned most the prospect that tensions powerfulness genuinely escalate into something to a greater extent than serious. The recent unopen encounter of the U.S. Navy destroyer with the Chinese naval vessel caused a lot of concern inwards the part most tensions rising inwards the South Cathay Sea. And countries, most importantly, do non want to experience similar they are forced to pick out betwixt partnership with the United States of America of America as well as partnership with China.
So I think that it’s an chance for Vice President Pence to give a reassuring message along those lines, that the Free as well as Open Pacific – the Free as well as Open Indo-Pacific is fundamentally a strategy most maintaining an open, inclusive architecture that is supportive to everyone.
WILLIAM ALAN REINSCH: Well, my task is to speak a petty fleck most APEC as well as trade, as well as I don’t have got much to say. Expectations are low, as well as they likely won’t live fulfilled anyway. So
there’s – (laughter) – I tin privy – I tin privy live brief.
MR. : Happy Friday, everybody! (Laughter.)
MR. REINSCH: Some of the of import elements have got already been mentioned meliorate than I could do.
The vice president’s role, I think, has been well-outlined. He has a major spoken language at APEC to the CEO Summit, which is inwards parallel to the leaders’ summit. And he volition assay to do just what Matt as well as Amy said, which is assay to reassure people most the continued U.S. commitment to the region.
That is – ends upwardly existence 1 of these issues of, you lot know, words versus deeds. As Matt pointed out, the president pulled out of TPP his 3rd hateful solar daytime inwards office, as well as likely to a greater extent than of import has non genuinely replaced it with anything material. They replaced it with the holler of a strategy, but they haven’t set meat on those particular bones.
So I think that he volition likely say the correct thing as well as assay to provide some reassurances, as well as inwards that feel laid I suspect a different tone than the 1 he laid hither when he spoke at the Hudson Institute – Hudson Institute several weeks ago. Whether the other countries volition live reassured or non I think is less clear because the United States’ spot on the ground, at to the lowest degree on the economical front, continues to propose lack of a strategy. So nosotros volition consider how that plays out.
For the conference itself, the theme is harnessing inclusive opportunities, embracing a digital future. APEC’s strength over the years has been the advertisement of regional integration, largely through the evolution of what powerfulness – consensus over what powerfulness live best characterized equally best practices inwards selected areas. These withdraw a long time. It’s a petty easier than merchandise negotiations because they are best practices as well as goals as well as principles rather than enforceable outcomes. But fifty-fifty at that spot they withdraw a long time, as well as inwards the digital infinite are probable to withdraw a long fourth dimension because it’s clear already that a number of
the participants, especially Cathay as well as the United States, have got real different views of how the meshing should operate as well as how the meshing should live governed. And I think you’ll likely consider some reflection of that inwards the discussions at APEC.
One of the things that APEC has done inwards the past, which I promise they volition live able to advance at this summit as well as also side yesteryear side yr inwards Chile, is their CBPR, or cross-border privacy rules, which are basically a build for trying to encourage companies to adopt consistent as well as harmonized privacy rules. This has had – made some inroads. Countries are signing upwardly to this. And to the extent that the summit tin privy farther that exercise both this fourth dimension around as well as inwards time to come years, that volition live a goodness thing.
It’s non genuinely compatible with the Chinese approach to the meshing inwards particular, although APEC, all the members have got subscribed to this inwards the past. So how – where this goes volition live interesting. I don’t facial expression a lot of excitement, but to the extent that they tin privy create little steps inwards this – the management of furthering the utility of this would live a goodness thing.
In addition, there’s been some speak that they volition live able to set out – that is, set out – something they’ve been working on, which is something that Matt alerted me to as well as I’ve had to assay to figure out data most it: their Services Trade Restrictive(ness) Index. This is non unique. The OECD did this. The WTO Secretariat did this. The World Bank has done this. These are exercises that are an endeavour to spot trade-restrictive practices inwards the involvement of greater transparency as well as inwards the involvement of hopefully eventually leading to negotiations inwards diverse fora that volition endeavour to set some limits on the practices. The fact that APEC is doing this is good. If they tin privy larn understanding to set it out publicly, that would live fifty-fifty better. It’s a long way from that to genuinely accomplishing something inwards damage of eliminating some of these practices, but I think what APEC has been goodness at over the years is successions of little steps that eventually atomic number 82 to something. And this would live – I think this would be, you lot know, a goodness instance of that.
You volition also consider the measure rhetoric that comes out of every 1 of these things most regional integration as well as the importance of the Free Trade Agreement for the Asia-Pacific. This has been a goal for twenty years at least. I suspect – rather think we’re non much closer to it at nowadays than nosotros were inwards the beginning. I think it is useful that they go on to restate it as well as they go on to maintain a commitment to it, fifty-fifty though the steps toward genuinely achieving it remain fairly far away, as well as fifty-fifty though the primary focus at nowadays inwards the merchandise expanse is elsewhere via the negotiation of RCEP, equally Amy mentioned, as well as the interrogation of turning the CPTPP – the TPP of xi – into an actual operating agreement. It’s 1 of the things that overlays this whole exercise. It volition go into upshot at nowadays Dec 30th, it having been ratified yesteryear the requisite half dozen nations, as well as yesteryear as well as so I think at that spot volition live 1 or ii more. And I think from an American standpoint, to the extent that is deeper than RCEP, gives signs of existence – to the extent it volition larn operational as well as a feasible entity, a regional merchandise understanding inwards the Asia-Pacific area, fifty-fifty without us, is a goodness thing. Hopefully it volition live something that nosotros volition come upwardly dorsum to at a afterwards date.
So I think that is the merchandise landscape. Don’t facial expression equally good much. I don’t facial expression anything terrible.
And that may live the best nosotros tin privy promise for.
MR. QUINN: Good. Thank you, Bill. As you lot tin privy empathise it’s hard to larn everyone inwards the room at the same time. And so nosotros have got 1 of our colleagues on the phone, Victor Cha, who’s coming upwardly on – tight for time. So, Victor, if you lot could bring together us at nowadays as well as say your piece, I’d live real happy.
VICTOR CHA: Sure, Colm. Thanks.
So on Korea, at that spot is no halt inwards Korea on the way to APEC, but Vice President Pence volition come across the South Korean leader there. In the instance of Korea, they’ve only come upwardly off hither inwards Washington the SCM, the annual Security Consultative Meeting. So I imagine that they’ll live reaffirmations of some of the decisions reached at that spot on suspension of exercises, on delineating atmospheric condition as well as procedures for OPCON transition. The 1 slice that soundless isn’t resolved is SMA, the special measures agreement, which is the burden-sharing understanding betwixt – the cost-sharing understanding betwixt the United States of America of America as well as Republic of Korea for U.S. armed forces forces inwards Korea.
This yr – this is an unusually hard negotiation. This happens every 4 or v years.
This one’s unusually hard because I think – I think basically the president wants Korea to pay for everything, equally opposed to something that’s roughly a 50/50 split upwardly inwards the yesteryear agreements. But of course, the primary theme of discussion, because it’s the only theme of give-and-take when it comes to Korea these days, is North Korea. The trip yesteryear Secretary Pompeo to Democratic People's Republic of Korea was – to come across with Kim Yong- chol inwards New York was cancelled. It’s non clear if that cancellation is because of logistics or because of substance. If it’s logistics, it’s logistics.
But if it’s substance, my gauge is nosotros genuinely are approaching the dot where the safe has to hitting the route on both sides. For the North Korean side, it way genuinely putting some facilities on the tabular array for statement as well as inspection yesteryear IEA inspectors on the ground. And from the U.S. side, it’s the North Korean demand to elevator sanctions if North Korea’s going to withdraw those sorts of actions. What’s been, I think, of give-and-take has been the satellite – the primary satellite launch facility, the nuclear assay site, as well as of course of teaching the erstwhile – the erstwhile Yongbyon nuclear complex.
The – I think the midterm elections genuinely may live a goodness thing for Korean policy, inwards the feel that at that spot volition live many to a greater extent than demands of the direction for transparency with regard to what have got been real closed as well as high-level negotiations that have got been genuinely only within a little circle. Not many people on the Hill have got been briefed most this at all. So I imagine that at that spot volition live many to a greater extent than calls to the administration, both inwards opened upwardly as well as closed sessions, to come upwardly as well as brief to a greater extent than on the policy. And
there’ll live to a greater extent than scrutiny of whatever agreements that are reached betwixt the direction as well as the North Koreans on things similar verification, inspections. So inwards a sense, you lot know, the midterms are genuinely a goodness cheque against ensuring that Donald Trump doesn’t withdraw – doesn’t withdraw a bad – a bad bargain with North Korea.
But my understanding is that they’re soundless on a timeline for a 2nd Trump-Kim summit.
Trump-Kim two, the sequel. Sometime early on inwards the – early on inwards the novel year. It’s non clear if there’ll live a quaternary Kim-Moon summit before the cease of this year. But equally Donald Trump says, it’s non to worry because at nowadays nosotros have got plenty of fourth dimension when it comes to North Korea. There’s no existent rush, for some reason. And we’ll have got to, you lot know, hold off to consider when this Pompeo, Kim Yong-chol coming together gets rescheduled.
So, Colm, I’ll only larn out it at that.
MR. QUINN: Thanks, Victor. If you lot tin privy – if you lot tin privy hang out, that would live great, but I know you lot got – I know you’ve got fourth dimension commitments. Back inwards the room, Rick Rossow, delight withdraw us away.
RICHARD M. ROSSOW: Well, India’s only half-relevant to this conversation. They are – of course, Prime Minister Modi volition live at that spot for the Eastern Asia Summit. But they are non a fellow member of APEC. So I’ll focus to a greater extent than frequently than non on relations east, but non so much on the APEC coming together itself.
You know, Modi has got half dozen months left inwards office, equally Amy mentioned, after four-and-a-half years inwards office. You know, nosotros have got some thought on his wide economical as well as safety approaches as well as what that way for the relationships across Asia.
On economic, you’ve got a fleck of a two-track train. Very pro-investment, the most pro-
investment prime number government minister that I think we’ve ever seen from India. And you’ve seen a dramatic rising inwards the ease-of-doing-business rankings, lifting FDI restrictions, domestic reforms to arrive a petty fleck easier to do occupation organisation there. But that varies quite a fleck with what you lot consider inwards damage of the approach to
trade policy. As reluctant equally India’s been on merchandise liberalization over the years, Prime Minister Modi is likely fifty-fifty less interested inwards merchandise integration than at to the lowest degree his most recent predecessors. So you’ve seen increases inwards customs duties, you’ve seen Republic of Republic of India walking away from existing as well as pending merchandise agreements; RCEP go on to dot out that they’re the slowest bicycle of the bunch inwards damage of moving that forward. And I think whatever understanding that has Cathay at the table, India’s going to live real reluctant to conclude because, you lot know, it is a primary driver of policymaking inwards Republic of Republic of India correct at nowadays is this massive merchandise deficit they have got with China. So I only don’t consider a robust RCEP understanding that includes both Republic of Republic of India as well as China. So withdraw that nonetheless you lot want, either ultimately Republic of Republic of India gets expelled, ultimately they concur to have got a watered-down bargain that everybody tin privy concur to. So large differences inwards damage of how Modi is approaching merchandise as well as investment.
On security, continuing as well as augmenting at to the lowest degree some of the rhetoric on engagement with East Asia, you lot consider it inwards practise with Japan. I think Republic of Republic of India ties with Nippon have got strengthened nether Modi.
You consider some interesting examples where, you lot know, with Vietnam, with Indonesia, at that spot are a petty fleck of sparks at that spot equally well, but nothing, I think, terribly substantive, but some little sparks at that spot inwards damage of deepening safety partnerships with other members inwards East Asia, but zippo terribly robust.
So inwards practice, you lot know, the authorities volition soundless speak most its Act East policy, but inwards tangible ways of measure it, it comes upwardly pretty lacking. I suspect that, you lot know, equally Modi goes to the Eastern Asia Summit, equally he, you lot know, talks most wishes, desires, delivers remarks, it volition likely live real similar to what nosotros heard at the spoken language at Shangri-La before this yr – Association of Southeast Asian Nations centrality, complimentary as well as opened upwardly partnership for all, real similar themes there.
I’m going to live watching much to a greater extent than closely the bilat that Modi has with Vice President Pence.
Right now, the bilateral human relationship has some existent headwinds, some existent choppy water.
The safety human relationship betwixt the U.S. as well as Republic of Republic of India has been steadily strengthening. And inwards fact, nosotros only had our initiative 2+2 dialogue where the U.S. secretarial assistant of defence strength as well as secretarial assistant of province both traveled to Republic of Republic of India most ii months agone as well as came upwardly with a number of real of import substantive agreements. That’s good as well as good, but still, most of it is technology-sharing practice, things similar that. We don’t have got operationally real much happening yet.
But the merchandise human relationship with Republic of Republic of India has genuinely taken a downturn I’d say inwards the in conclusion 8 months or so. You know, the United States of America of America is threatening to revoke GSP benefits because of some antitrade measures that Republic of Republic of India has taken. Republic of Republic of India is looking at adopting countertrade tariffs after the 232 steel tariffs that the United States of America of America imposed, because Republic of Republic of India is a relatively large steel exporter to the United States.
India was added to the Treasury Department’s currency manipulation watchlists, as well as Treasury has
indicated they may live taken off before equally good long. So there’s a multifariousness of existent occupation issues that have got arisen on both sides.
The United States of America of America is also talking most changing visa regulations, which could impair the relations with Republic of Republic of India because Republic of Republic of India is the number-one spot that high-tech workers come upwardly from nether the H-1B program. So some existent choppy waters on the merchandise front.
And, you lot know, so far, the goodness things on the safety front end have got remained inwards a silo as well as fairly protected, but you lot don’t know how long that tin privy last. So the bilat with Pence is going to live genuinely of import because it looks similar our merchandise leaders are supposed to have got had a coming together in conclusion calendar month or this calendar month itself; that’s getting postponed as well as delayed. So this is 1 to a greater extent than chance to assay to consider if at to the lowest degree nosotros tin privy grip off on whatever dramatic actions to impair the human relationship spell nosotros assay to figure out some little steps to resolve it.
So I’ll larn out it at that as well as manus it over to Chris. CHRISTOPHER K. JOHNSON: Great. Thank you, Rick.
It’s frequently unusual when nosotros have got these press briefings for the Cathay number to form of come upwardly up last, but I think it’s appropriate inwards this context because, inwards some ways, equally Monty Python would say, Cathay is, sir, non appearing inwards this cinema – at this meeting. And that makes feel because, of course, President Trump is non going, President Xi volition live going to APEC, obviously, as well as there’s no way he’s going to come across with Vice President Pence, as well as all of the action, really, volition live on the G-20 coming together coming upwardly inwards Argentina. So that’s been assort of what I’ve been asked to hash out today as well as to focus on.
I suspect, though, however, that at that spot volition live some side effects from Vice President Pence’s trip inwards the region. You know, it’s quite striking that the fact sail that the White House set out before today indicated that 1 of the primary messages the vice president volition live highlighting is that efforts at authoritarianism, aggression, as well as disregard for other nations’ sovereignty inwards the part volition live opposed firmly yesteryear the United States. I don’t think he’s talking most Indonesia. That’s my – (laughter) – that’s only my guess. He’s talking most China.
And I heighten that because, you lot know, with so much attending on the merchandise conflict betwixt the
U.S. as well as China, sometimes nosotros forget that there’s a pretty serious deterioration inwards the strategic human relationship going on equally well. And I think this is likely probable to fuel further, with greater injection of strategic instability into the most consequential bilateral human relationship inwards the world. So I think that’s something that as well as so becomes a existent focus for when President Trump as well as President Xi sit down downwards with each other inwards Argentina, equally much as, of course, the focus volition live on trade.
And so, to assort of facial expression at the dynamics there, where did this strategic instability come upwardly from? Well, primarily it’s come upwardly from a serial of actions from the administration, as well as most notably the vice president’s spoken language that he delivered hither non equally good long ago. And especially the key line inwards at that spot where he indicates that Taiwan, yesteryear choosing democracy, has made the correct choice; implicit inwards that, of course, is that Cathay has made the incorrect choice, as well as that its authoritarian scheme of authorities is illegitimate. That is a real serious thing for the United States of America of America to live proverb at the vice presidential level, as well as it’s causing a lot of alert bells to go off inwards the senior leadership circles inwards Beijing.
And so I detect it quite striking, for example, that this real day, today, we’re having a circular of the Diplomatic as well as Security Dialogue betwixt the U.S. as well as China. It’s quite striking to me that the Chinese approach to how to care the forrard conversation was to have got that coming together first, before whatever farther merchandise discussions. That tells me that the disorder inwards the strategic – the broader overall strategic human relationship is of much greater concern to the Politburo than the tit-for-tat elements of the
trade war. And so that’s, I think, real noteworthy, as well as the direction could usage to empathise that perhaps meliorate than it does.
So where powerfulness nosotros live headed? I think, you lot know, the strategic issues likely volition come upwardly up inwards the bilateral betwixt Trump as well as Xi at the G-20 meeting. But interestingly, nosotros rarely, if ever, consider President Trump create whatever refer of the strategic issues. He doesn’t refer to his ain National Security Strategy. He doesn’t speak most Cathay equally a strategic competitor as well as a revisionist power
practicing predatory economics. He talks most how they’re ripping us off as well as things similar this, but he doesn’t seem to address those strategic elements of – dimensions of the human relationship equally good much. I think that that’s inwards portion this thought that he has a unique human relationship with President Xi Jinping, a friendship that
they have got that he’s trying to maintain. And the ease of the direction tin privy assort of create a lot of these noises, but he doesn’t do that. I think the other portion is his existent focus, of course, is the merchandise number as well as how to care that with China.
And so the existent question, I suppose, is: Will nosotros create a bargain of some assort at this coming together inwards Argentina? I think the firstly interrogation is to empathise does the United States of America of America want to create a deal, as well as that’s a real hard interrogation to assort of assort out. I think we’re seeing correct now, kicked off yesteryear the
president’s tweet in conclusion Th most his goodness conversation with President Xi, there’s some other circular of what I telephone phone within the direction intermural gymnastics – (laughs) – that are occurring. You know the players. We have, you lot know, Secretary Mnuchin, Mr. Kudlow, as well as a few others lined upwardly on 1 side, assort of advocating for some assort of a deal; Ambassador Lighthizer, Mr. Navarro – equally only heard hither at CSIS before today – as well as others opposing the bad deal, assort of similar what Victor was proverb on North Korea. And so, you lot know, equally it ever does, it’s going to come upwardly downwards to President Trump.
And as well as so there’s a interrogation that no 1 seems to live asking, which is that does President Xi want a deal? There’s only an automatic supposition that the Chinese do want some assort of deal. I think it’s – nosotros have got to admit the possibility that maybe they don’t, or at to the lowest degree non nether these conditions. If you lot facial expression at these comments that President Xi has been making inwards recent weeks domestically most assort of self-reliance, autarky, indigenization of technology, these assort of things, you lot know, it’s non only pure propaganda; at some bird he believes it. And so unless the atmospheric condition are right, from his dot of view, I’m non sure he wants a deal.
So that leaves us inwards a spot where likely the best nosotros tin privy promise for is what you lot powerfulness telephone phone a framework understanding to emerge. And what do I hateful yesteryear that? I think it’s a conclusion yesteryear both sides,
let’s withdraw the temperature downwards a petty bit, especially on the strategic side, but also on the merchandise side yesteryear likely freezing existing tariffs inwards place; perhaps rolling dorsum some if the Chinese do some market-access-opening measures hither pretty darn quick, because we’re running out of fourth dimension before the meeting; as well as a conclusion yesteryear the ii presidents at their bird to empower their respective appropriate people to start what volition live a real tough as well as prolonged negotiation because there’s a lot of serious issues on the table.
So allow me halt there.
MR. QUINN: Thank you lot real much, Chris.
I’d at nowadays similar to plow to your questions. We also have got some of your colleagues calling inwards on the phone, as well as I’ll live coming to you lot equally well. So if anyone inwards the room – yes.
Q: OK. Thank you. Katie Wong (sp) with NDT TV.
I only want to follow upwardly a brace questions on China. First, because this midterm election only finished, so do you lot facial expression whatever alter of the policy from the direction towards China, similar the merchandise policy? Will the electrical flow policy continue? And also, for this Strategic Security Dialogue between
U.S. as well as China, do you lot facial expression anything tin privy come upwardly out of it, anything solid out of it? Thank you.
MR. JOHNSON: Great, give thank you lot you. On the midterms, you lot know, at that spot was a lot of perception, I think, inwards Cathay before on that perhaps if the Democrats had a large win and, you lot know, the House changed hands, as well as maybe the Senate equally well, that perhaps President Trump would live wounded somehow or that at that spot powerfulness live a lessening of pressure. My impression is that closer – the closer as well as closer nosotros got to the election, the less as well as less they believed that. And I know a lot of Americans had gone as well as told them, look, this is non the case.
And I think that, you lot know, what we’re seeing hither inwards D.C. – as well as I think it’s of import to
emphasize hither inwards Washington, because if you lot see other parts of the province you lot don’t necessarily consider this dynamic – is a fundamental Earth shift inwards the way that people think most China. And so the Democrats inwards a lot of cases at nowadays audio a lot similar their direction reverse numbers, as well as I don’t
think we’re going to consider a particular lessening. And inwards fact, typically when a president loses the powerfulness to displace domestic legislation at home, they start to facial expression to unusual policy for their achievements. So I would facial expression the president to live thinking a lot to a greater extent than most that going forward, as well as China’s going to live a fundamental focus.
On the Diplomatic as well as Security Dialogue, I think expectations are low. To some grade the mere fact that the coming together is occurring is the – is the benefit. And that’s primarily because, of course, nosotros had a postponement of what was supposed to live a circular of this dialogue inwards Beijing most a calendar month ago. So the mere fact that they’re sitting downwards to have, you lot know, this assort of to a greater extent than strategic give-and-take is helpful. I don’t think nosotros should facial expression whatever tremendous initiatives. In some ways I think the Chinese primary objective was to larn State Councilor Yang an chance to come across with the president.
Doesn’t facial expression similar that’s going to happen, as well as so that’s likely going to non live super good received dorsum inwards Beijing.
Q: Thank you. Peter Nicholas, Wall Street Journal.
To elaborate on something you lot mentioned earlier, is the absence of President Trump – volition this live perceived equally a snub on the portion of some of the nations at these summits? And is at that spot anything vice presidents tin privy say or do to assay to create upwardly for this, or?
MS. SEARIGHT: I think there’s assort of ii schools of thought most the vice president going inwards the president’s stead. You know, 1 schoolhouse is it’s non a large deal. This has happened before. Vice President Gore attended ii APEC summits. President Obama sent Secretary Kerry to the ii Asia summits after nosotros joined the Eastern Asia Summit. Usually those were last-minute cancellations because
of domestic crises or some form of crisis, so the fact that Trump announced this far inwards advance is a petty different. But, you lot know, again, no large deal.
Another portion of that statement is these meetings are non all that critically important. It’s non similar large outcomes emerge from the discussions on the ground. They’re real scripted. They’re real form of tedious, usually. So most presidents don’t especially relish sitting inwards them.
And as well as so the 3rd aspect is, you lot know, looking at President Trump’s recent demeanour inwards diverse summits, from the G-7 summit as well as the NATO summits, you lot know, some people think it’s meliorate for the vice president to go – (laughs) – less disruptive, perhaps less risky inwards damage of – inwards damage of those kinds of dynamics.
You know, I think our view – sure my view is that it genuinely does matter; that, you lot know, at a fourth dimension when the direction is trying to set forrard this Free as well as Open Indo-Pacific equally a premiere form of strategic vision inwards U.S. unusual policy as well as trying to create the instance that this is a part of slap-up strategic importance to the administration. The fact that President Trump won’t live at that spot volition live perceived – I don’t know equally much equally a snub – but it volition live perceived as, you lot know, the United States of America of America is non equally committed to the part equally other countries, because all the other leaders volition live there, with the only other exception existence President Putin. And you lot know, Russian Federation is non equally of import to many of these countries as, you lot know, the United States of America of America is – having the president demo up.
So I think the president non showing upwardly volition ship a message. It volition undercut the seriousness with which countries inwards the part volition withdraw U.S. long-term commitment, as well as this Free as well as Open Indo- Pacific that, equally Matt mentioned, at that spot already is a fair amount of skepticism about. So you lot know, could the vice president demo upwardly with – you lot know, could he do that to assort of overturn that? Well, I suppose if he came non only with a reassuring message – which I think he volition have got – but with a genuinely large handbasket over hefty deliverables that genuinely tries to demo the United States of America of America is, you lot know, genuinely going to – you lot know, set peel inwards the game, as well as genuinely commit to some things. That would live 1 thing. But nosotros don’t anticipate that, because at that spot are non large economical deliverables on the tabular array beyond what
Secretary of State already announced. There’s no large safety deliverables. There’s a petty fleck to a greater extent than funding for safety assistance, but there’s no large safety initiatives to announce. So I think there’s going to live some disappointment.
MR. CHA: Can I only add together something? Colm, tin privy I only – it’s Victor – tin privy I only add together something to what Amy only said.
MR. QUINN: Please, go head, yeah.
MR. CHA: Yeah. And that’s that, you lot know, APEC is all most the picture, right? It’s most that flick with all the leaders inwards whatever funny garb that they’re wearing. And, you lot know – you lot know, a number of people inwards the room have got been to these things. And based on protocol, the vice
president’s non going to live – he’s going to live at the cease inwards the dorsum somewhere, right, spell Xi Jinping is going to live standing correct side yesteryear side to the – you lot know, to the host or something. So it’s – overall, it’s only a real bad eye when nosotros don’t demo up. And, again, I’ve been portion of direction where they haven’t shown upwardly too. So I think Amy is right. I mean, he’ll live there. And at that spot are little things that they’ll live doing. But the overall message is going to live there’s disinterest as well as it’s non a priority. And
that’s non good, given the broader context of what’s happening inwards Asia.
Q: Can I follow up, 1 question? So nether President Obama nosotros saw a pin to Asia, which got a lot of attention. How confusing must it live to some of these Asian countries to consider President Trump non fifty-fifty showing upwardly after the U.S. proclaimed that it was going to create a pin to Asia?
MS. SEARIGHT: I mean, I think it is fair to dot out that President Obama did immature adult woman 1 of the Eastern Asia Summits, inwards 2013, as well as the APEC summit inwards 2013, inwards Negara Brunei Darussalam as well as inwards Indonesia, respectively.
But that was inwards the midst of a budget crisis, you lot know, a threat of a authorities shutdown. And so he
sent Secretary Kerry. He did attend all of the other summits, you lot know, on his watch. President Bush had a perfect attendance tape for APEC during his 8 years inwards office.
So, yeah, I think the Free as well as Open Indo-Pacific, to a large extent, was an endeavour to assort of rebrand the rebalance, to reassure the part that this part remains a top strategic priority for this direction equally well. And out of the gate, the direction did a reasonably goodness task inwards some ways of engaging Southeast Asian leaders for visits to the White House yesteryear 4 Southeast Asian leaders inwards President Trump’s firstly yr inwards portion – Vietnam, Singapore, Thailand, as well as Malaysia – followed yesteryear President Trump’s real long trip to the part to attend – to attend most of these summits. This year, it seems similar that momentum has slacked off. And I think it has led to some questions inwards the region. You know, some skepticism most how of import is this part genuinely to this president as well as this administration?
MR. GOODMAN: Can I only – non to belabor this, but firstly of all, on Victor’s point, having tried to larn multiple presidents to set on light-headed shirts – you lot know, I’m real – I totally concur with Victor that that is only a critical issue. If you’re non standing front end as well as pump it’s going to live noticed. It’s going to live a sign that we’re non – we’re non there. But the other dot I wanted to foot-stomp was the dot that Chris made about, you lot know, it seems similar there’s a fleck of a contradiction that the vice president as well as the White House are signaling that they – that they intend to come upwardly out with a reassuring as well as a positive message, as well as they’re non going to explicitly refer China, as well as they’re going to assay to, you lot know, non strength people to create that choice that Amy mentioned.
But equally Chris said, inwards the press release from the White House, the statement about, you lot know, authoritarianism, aggression as well as disregard for sovereignty is so clearly aimed at China, I think it’s only going to set a existent point, an accent, on the novel – it’s non new, but it’s – definitely there’s at nowadays been, I think, a clear signaling yesteryear the direction since the Pence spoken language at the Hudson Institute that, you lot know, that nosotros have got this long nib of particulars against Cathay as well as that we’re going to live taking an approach that is genuinely forcing that choice for people inwards the region. I wrote most this the other day.
When nosotros had the U.S. ambassador to the WTO here, he was talking – a brace of weeks agone – he was talking most the fact that there’s no middle-of-the-road anymore, you lot have got to pick a lane, you lot know, as well as they hateful pick Cathay or pick the United States. And I think that overall, the combination of all that is going to heighten some existent concerns as well as questions inwards the part as well as so – as well as assort of undermine what I think the direction is sensibly trying to do inwards signaling through the Free as well as Open Indo- Pacific that there’s a commitment to this part as well as some – as well as some meat behind that.
MS. SEARIGHT: And inwards damage of picking sides, only 1 in conclusion comment. You know, President Xi is non only going to APEC, but at Papua New Guinea, he’s going to live belongings a coming together with other Pacific isle state leaders, which I think volition larn a lot of attention, as well as and so he’s going on to the Philippines for a province visit. So at a fourth dimension when, you lot know, we’re asking countries to choose, you lot know, President Xi is going with his pocketbook of goodies presumably to the Philippines as well as 1 time to a greater extent than we’re non showing up.
MR. JOHNSON: And that’s an of import amplifying comment because, equally my colleagues
raised earlier, the vice president is non going to speak most merchandise or non real much he’s non going to speak most trade. And inwards Asia, economic science is security, so if you’re non playing on the merchandise issue, you’re non playing.
Q: Hi. Christina with TV Asahi.
Kind of withdraw this dorsum towards Japan, I know that Michael Green is non here, but you lot did refer that Vice President Pence is non doing the formal merchandise engagement that is gear upwardly with Taro Aso. And I was wondering if you lot could comment on the fact at that spot was an article today on Aso’s comments in conclusion yr most Hitler as well as how much that genuinely is an influence. (Laughter.)
MR. GOODMAN: Nope, I’m non going to do that one. You know, I would – I would, only on the firstly portion of what you lot said, you lot know, Vice President Pence was real reluctant to live the principal individual responsible for I think likely for whatever particular policy issue. I think he was trying to withdraw the Joe Biden approach of existence the adviser on everything as well as able to go anywhere. He didn’t want to do what I think Vice President Gore, for example, did of existence inwards accuse of the Russian Federation human relationship hither or authorities reorganization there. So I think Vice President Pence had to live arm-twisted to bring together this. It was Prime Minister Abe who genuinely wanted that high-level engagement. And so it was never a comfortable organisation as well as the dialogue, the economical dialogue, the Pence-Aso economical dialogue never genuinely had much inwards it. And it’s at nowadays been effectively subsumed yesteryear these bilateral merchandise talks, which they’re soundless debating what we’re genuinely doing here, whether we’re genuinely doing an FTA or a TAG, a merchandise understanding inwards goods, or a banana or I don’t know what we’re going to telephone phone it. (Laughter.) But at that spot is disagreement most that. And I think that only Pence does non want to engage on that stuff, so it’s much to a greater extent than most that.
And, you lot know, that contestation you lot mentioned, you lot know, again, I’m non going to go at that spot because it’s only equally good – at that spot are equally good many booby traps there.
Q: OK, if I tin privy follow upwardly on a to a greater extent than practical note. For the potential merchandise talks with Japan, who is emerging equally the vocalism on that inwards the U.S. government? Yeah.
MR. GOODMAN: Well, Bob Lighthizer, no question. I mean, you lot know, Lighthizer seems to live clearly inwards command of the merchandise policy agenda or operationalizing it, although, equally nosotros saw from Peter Navarro, he has opinions most it, it turns out, most merchandise policy. But I think Lighthizer is clearly operationally inwards accuse as well as he’s the 1 rolling out the strategy inwards the WTO with Nippon as well as the European Union as well as this assort of trilateral sweat on these key issues of subsidies as well as state-owned enterprises as well as digital engineering scientific discipline as well as so forth.
And he’s clearly the 1 – obviously, he did NAFTA renegotiation as well as volition live behind the bilateral with Japan. I think the interrogation most the Nippon thing is, 1 time to a greater extent than – as well as I was assort of joking most the title, but the serious dot is I think it’s unclear whether the U.S. genuinely wants to drive beyond form of the core issues, which I think President Trump as well as Bob Lighthizer have got with Japan, which are genuinely twofold.
There’s agriculture marketplace access inwards Japan. You know, they’re getting a lot of pressure, I think from beef as well as pork exporters who consider that Commonwealth of Australia as well as the European Union are going to larn favorable handling inwards Nippon nether the respective agreements, the CPTPP as well as the EU-Japan deal, as well as they want that market. It’s a large marketplace for them. And so that’s something that the direction clearly needs to address, as well as Japan’s create to do that – I mean, seems create to give the same bird of access because they’ve already gone through the politics inwards Japan.
And as well as so the other problem, which is much to a greater extent than difficult, is autos. I mean, this has been, you lot know, at the pump of our economical as well as merchandise human relationship for years. And actually, what I’m going to do is I’m going to plow to Bill because I think he has meliorate thoughts on that than I do.
MR. REINSCH: Matt is right, Lighthizer is going to live the 1 who ends upwardly with this. He has a statutory responsibility. He has a human relationship with Congress, which is protective of its role inwards merchandise policy. He’s going to live spending likely a lot to a greater extent than fourth dimension with the Ways as well as Means Committee inwards the side yesteryear side Congress than he did inwards this Congress because the Democrats have got faulted the direction on process. That allows them non to have got – fault them on policy, saying, you lot know, non plenty consultation, non plenty transparency, et cetera, et cetera. So facial expression lots of hearings. Expect lots of letters. Expect lots of meetings. And they are to a greater extent than frequently than non going to live with Bob, as well as he volition live inwards charge.
I think the – this particular negotiation volition cease upwardly existence most auto quotas. If you lot facial expression at what the president – it’s all the president talks about. It’s cars as well as steel. I mean, he talks most agriculture when he’s coming together with farmers, as well as it ought to live an of import number because obstacles to U.S. agricultural exports inwards Nippon remain significant. Dropping out of TPP made it worse. Not only are nosotros non getting the benefits of TPP; we’re existence replaced inwards the marketplace because they’ve cutting a bargain with the European Union. So the smart thing to do is to assay to larn some of that back. But I would bet a decent amount of money that it’s genuinely going to cease upwardly existence most auto quotas, as well as I think it’s fair to say the Japanese authorities has figured that out as well as is real concerned most it.
MR. QUINN: Yes.
Q: Thanks. Owen Churchill with South Cathay Morning Post.
Maybe a interrogation for Chris. I wondered how prominently you lot envisage the Belt as well as Road Initiative featuring at the summits, either on the agendas of the U.S. or other participating countries, especially inwards low-cal of the fact that it seems to live – at that spot seems to live a displace from Cathay to increasingly legitimize the program, partnering with high-profile partners similar Japan.
MR. JOHNSON: I think it’ll definitely feature, likely to a greater extent than inwards the background, maybe, than the foreground. But I think, you lot know, the administration’s been pretty clear inwards connecting the computer program with predatory economics. I mean, you lot know, they consider them equally one. That message is probable to continue. And to live fair, I think it resonates inwards some way. You know, nosotros do have got some serious problems with how the debt traps, equally they’ve been described, that final result from some of these projects are dealt with.
It’s a large number inwards Rick’s neighborhood, so maybe I’ll have got him comment a petty fleck equally well. But I don’t facial expression either the vice president or genuinely President Trump to refer it directly, you lot know, to Xi Jinping. I do facial expression it to go on to live the drumbeat, you lot know, as, you lot know, after comma 3 – (laughs) – inwards each of our statements.
I gauge the 1 thing that I’m watching for which I think is of import is every at nowadays as well as 1 time to a greater extent than you lot form of larn a petty hint that maybe the direction is considering coming out as well as formally opposing Belt as well as Road, equally opposed to only assort of describing it inwards the background. I personally experience that would live a important fault because, equally we’ve all been discussing, the message it sends to the part is nosotros know you lot have got these infrastructure needs, but we’re non playing.
So do you lot want to say anything most the South Asia?
MR. ROSSOW: I mean, I facial expression – this is 1 of the areas that Prime Minister Modi’s been a petty fleck to a greater extent than comfortable talking most their involvement there. Republic of Republic of India genuinely was the firstly major province to come upwardly out as well as oppose Belt as well as Road, as well as this line most predatory economic science was something that
they form of coined. And it took most other countries, including the United States, almost a yr before they assort of caught on there. Prime Minister Modi’s spoken language inwards Shangri-La, same form of thing. So I facial expression they’ll maintain that drumbeat alive.
They’ve got, you lot know, equally Chris was form of indicating, examples inwards their neighborhood – Sri Lanka inwards particular – where they’ve seen the final result of this. And the large fright that they’ve got is the China-Pakistan economical corridor as well as what that powerfulness mean. Gwadar Port’s coming up. You know,
little commercial likelihood that that’s going to live a major commercial entity there. So Republic of Republic of India volition maintain the airplane pilot low-cal live on this one, fifty-fifty if I think others aren’t.
MS. SEARIGHT: Can I only add together 1 word on that? Just to concur with Chris that if the – if the Trump direction came out inwards opposition to the Belt as well as Road inwards a genuinely explicit way rather than only describing concerns most it, you lot know, it volition live pretty isolated. Aside from Republic of Republic of India as well as Prime Minister Modi, I mean, pretty much all the other countries have got come upwardly onboard as well as supported it. We’ve seen Prime Minister Abe at nowadays inwards a sure way form of comprehend it, although, of course, trying to heighten the standards to, you lot know, high-quality infrastructure development, but sure non opposing it.
Australia has been real supportive of Belt as well as Road inwards many ways.
And inwards Southeast Asia, I mean, you’re going to go on to consider a lot of support. When President Xi goes to the Philippines for a province visit, there’s a lot of expectation that they’re going to sign – the Philippines volition sign a memorandum of understanding for Belt as well as Road Initiative with China. Malaysia, of course, a novel prime number minister, new-old prime number minister, Mahathir, has expressed a lot of concerns as well as renegotiated or dropped some deals with China, but fifty-fifty he doesn’t want to walk away from, you lot know, economical cooperation as well as investment from China. So it would live – it would live a real isolating move, I think, inwards the region.
MR. ROSSOW: Sorry 1 time to a greater extent than to pile on, but I think there’s 1 other point. I totally concur with all of that. And if nosotros did oppose Belt as well as Road, I think it would live a serious blunder. But the goodness tidings is, as well as to the administration’s credit, they worked to force with Congress this BUILD Act, the acronym for which I can’t remember, but it’s basically the supercharged OPIC, which, you lot know, doubles the size of OPIC as well as allows it to do to a greater extent than of the things that a JBIC, the Japanese equivalent, tin privy do inwards damage of infrastructure finance. And I think that’s a important thing which volition give the vice president some credibility. As he says, we’ve got an alternative hither to Belt as well as Road.
And there’s definitely demand inwards the part for the U.S. to play inwards this space. I was inwards Myanmar before this yr as well as you lot heard all the fourth dimension that, you lot know, we’re non eager to autumn into the comprehend of China, but the U.S. is non offering anything. And if you lot would offering something, you lot know, we’d live glad to talk. So I think – I think this is – this is actually, I would say, it’s non going to be
talked most explicitly, but I think it’s going to live genuinely 1 of the most of import implicit themes throughout this trip, that, you lot know, China’s out at that spot with this assertive economical diplomacy as well as some economical coercion as well as the U.S. is, you lot know – is the U.S. offering something that’s a credible alternative or not? I think that’s a large interrogation that’s going to run throughout this trip.
MR. QUINN: I’m going to suspension from the room for a 2nd as well as only enquire our colleagues who are on the telephone – Trish, if there’s questions on that end, could you lot delight start them off?
OPERATOR: Certainly. (Gives queuing instructions.)
And nosotros volition opened upwardly the line of Jingsun Lee (ph) with Voice of America.
Q: Yes. Yes. Hi. I have got ii quick questions. And 1 is, President Trump, before the midterm election, he quoted as well as he also talked to the reporters, the media most at that spot would live a bigger bargain with China. Is at that spot anything going on on that part?
And the other interrogation is asking most Taiwan, because inwards the past, nosotros noted that it seems that Taiwanese officials who attended the APEC meeting, they could communicate or speak to the U.S. officials. And since then, Cathay is non – has non protested or complained equally much most that. And what’s behind this form of – this thing or show? That’s it, thanks.
MR. JOHNSON: I think – was the firstly interrogation volition at that spot live a deal? Is that – yeah, OK, yeah.
And I think, you lot know, equally I mentioned inwards my opening discussion, I think there’s some motion headed inwards that direction. I think there’s some concern, you lot know, we’ll have got to see, but at some bird I translate Mr. Navarro’s comments hither today at CSIS equally reflecting the concerns that some people have got most a potential for a bad bargain as well as trying to create a firebreak maybe to some grade inwards that regard. I don’t know.
So I think the thing to focus on is likely the best that nosotros tin privy promise for, is this thought of a truce, you lot know, the thought of some assort of comprehensive deal. I mean, I think something – as well as I think I should have got mentioned earlier. I think there’s a full general understanding inwards all elements of the direction as well as inwards the U.S. occupation organisation community, too, that, you lot know, this is genuinely non something where the ii presidents should live having a handshake as well as proverb it’s all done. It’s an incredibly complex number with deep, deep details as well as things that have got to live worked out. One line I’ve heard that I similar most it is, you lot know, think of this equally the WTO accession negotiation on steroids. I mean, that’s what we’re going to have got to have got to bargain with these real deep structural issues inwards the bilateral economical as well as merchandise human relationship as well as that’s non going to give betwixt at nowadays as well as Nov 30th.
On Taiwan, I think I don’t know anything specific. I think at that spot sure powerfulness live an opportunity. I would facial expression the vice president likely to steer away from direct interaction with the Taiwan representatives equally is assort of consistent with U.S. policy. But it is interesting, equally you lot dot out, China’s assort of to a greater extent than toned-down approach to Taiwanese representation.
MR. GOODMAN: Let me only add together a narrow answer on the – on the Taiwan as well as APEC situation. So Taiwan does larn a spot inwards APEC nether the holler of Chinese Taipei. Hong Kong also has a seat. And this is something that was agreed to many years agone nether a different assort of regime or different assort of mental attitude inwards Beijing most Taiwan’s participation. APEC is a strictly economical forum as well as so Beijing ever makes that dot and, yesteryear the way, before these meetings ever sits downwards with
U.S. officials as well as says think APEC is an economical forum as well as that’s all we’re going to speak about.
And Taiwan, although they do participate, the president of Taiwan does non attend. It’s a much to a greater extent than junior official or sometimes nonofficial, a friend of the – of the – of the president or something who comes as well as sits inwards that seat. And Beijing watches real carefully those interactions betwixt the American delegation as well as the – as well as the Taiwanese authorities, so they’re watching, but they tolerate it or they did. They powerfulness non have got tolerated it – if the interrogation came upwardly today, I’m non sure they would live equally enthusiastic most having Taiwan there. But it’s a large economic scheme as well as it’s of import inwards the APEC region.
MR. REINSCH: On the firstly question, the 1 thing I tin privy guarantee you lot with certainty is that it’s going to live a brilliantly successful coming together – (laughter) – 1 of the best ones inwards history, only similar the summit with Kim Jong-un, as well as it volition likely have got a similar outcome – an understanding to have got a negotiation. And I suspect they volition each appoint somebody important.
And at that spot volition live many people, similar Chris, who are much smarter than I am, trying to figure out what the significance of whoever the Chinese appoint is. And on our side, it volition likely live Lighthizer. And as well as so we’ll consider what happens. I mean, the president has created the province of affairs on merchandise where at that spot is only 1 decisionmaker as well as that’s him. Everybody else, you lot know, tin privy say whatever they want, but inwards the end, the president has gotten immersed into the details of some of these agreements has felt complimentary on a number of occasions to undercut his advisers. So, you lot know, it’s real hard to predict what’s going to give as well as it depends a petty fleck on the tweet of the day.
I mean, several of us hither went through this exercise inwards the saltation where he announced to the surprise of everybody that he wanted – he had instructed his staff to facial expression into rejoining TPP. And nosotros geared upwardly to figure out how to do that and, you lot know, that lasted 48 hours as well as and so he popped the balloon.
So correct now, you lot know, we’re heading toward a successful coming together for sure. But I think equally Chris said, there’s so much detail, so many issues, that I can’t imagine that they would arrive at an understanding that has whatever pregnant in, you lot know, what, 1 coming together as well as 1 dinner or whatever it’s going to be. But I think they volition start wheels turning that could atomic number 82 to that, assuming the president genuinely stays willing to go downwards that road.
Q: Hi. Shawn Donnan from Bloomberg News.
Just to follow upwardly on this inwards general, I haven’t heard you lot say that Vice President Pence is going to come across with Xi during whatever of these summits. Should nosotros facial expression a coming together at whatever time, fifty-fifty with someone lower on the Chinese side?
MR. JOHNSON: No, inwards short.
Q: Sorry. My holler is Anshu, Inside U.S. Trade. Sorry, that was form of awkward.
I was wondering, I guess, if you lot – if you lot took it, I guess, from a form of broader view, if you lot – if you lot – if you’ve taken – if you lot withdraw together the U.S. withdrawal from TPP as well as this novel bilateral approach as well as then, you lot know, coupled with the U.S.-China merchandise conflict as well as I think what is seen yesteryear some equally a desire, yesteryear at to the lowest degree some faction of the administration, to strength companies to displace out of Cathay as well as suspension those provide chains without the – without the TPP, which was, I guess, supposed to form of create a hub for provide chains inwards the region, how do you lot consider that affecting the economical architecture, I guess, of Asia as well as the political architecture maybe? Thanks.
MR. REINSCH: Well, to the extent – I mean, it depends a petty fleck on how companies respond to what the president is trying to do. If you lot – let’s hypothesize – I mean, non everybody agrees with your analysis of what our policy is. I think you’re right, but I demand to say that non everybody agrees with that. But let’s hypothesize that what we’re trying – what we, the United States of America of America government, is trying to do is to encourage companies to delink from the Chinese economy. That has ii kinds of – I think a number of impacts on the regional – well, eventually the architecture, but sure on the regional economy. To the extent the direction is successful, companies volition – as well as their
instrument is – their musical instrument is tariffs. And the other musical instrument is retaliatory tariffs that are imposed inwards response to ours, which create form of a double blow for some companies.
So what you’re going to see, I think, are American companies looking around for other locations. Not everybody. As I’ve said inwards other contexts, if you lot build a $3 billion fab flora in
Shenzhen ii years ago, you’re non going to plow off the lights as well as opened upwardly a novel 1 inwards Austin side yesteryear side week. If you’re inwards the – you lot know, if you’re inwards the t-shirt business, maybe you’re going to – you lot tin privy displace fairly speedily as well as easily. So non everybody is going to do the same thing. But you’ll consider a drift away from China, inwards fellowship to avoid the tariffs. The obvious spot to facial expression is elsewhere inwards the region, primarily to the south.
You volition also see, likely faster, Chinese companies trying to do the same thing. And I think that’s 1 of the things that their authorities has to worry about, them relocating for the same purpose. That produces potential beneficiaries elsewhere inwards the part equally people gravitate. I think CPTPP volition have got the same upshot over time. That is, these days merchandise is genuinely most provide chains as well as developing or value – global value chains. And if you’re going to have got a regional merchandise agreement, it’s meliorate to live within the chain than exterior the chain, because if you’re within you lot tin privy withdraw payoff of the tariff- complimentary status with the parties.
Now, the xi is non equally large a chain – is non a large a unit of measurement equally the 12, but it’s soundless significant. You know, Nippon is there. Commonwealth of Australia is there. And it’s going to larn bigger, inwards my view. There’s a lot of incentive to displace within the chain. And so the countries that are already inwards – I’m sorry, I don’t hateful within the chain – within the region. The companies that are – the countries that are already in, I think, volition do goodness from people moving. And I think architecturally that’s going to encourage other countries to join. Eventually, possibly, including China. I think that’s good downwards the road, but it’s – you lot know, they’re non stupid most this. And equally they consider companies moving to withdraw payoff of these rearrangements, that’s something that they’re going to live thinking about.
So I think long-term it has architectural implications. Medium-term it has clear economical implications. And at that spot volition live other countries inwards the part that volition benefit. You may want to add together to that.
MS. SEARIGHT: Well, yeah. Can I only add together – because you lot mentioned, you lot know, political impacts as well as regional merchandise architecture. And, you lot know, I completely concur with Bill inwards damage of the provide chain effects, as well as form of the commercially driven provide chain effects are 1 way that architecture assort of forms. But the other way is through these political agreements. And, you lot know, I concur with Bill that CPTPP is going to live real significant, as well as other countries are going to start to withdraw a facial expression at it as well as want to join. There’s already quite a few countries that have got expressed involvement inwards acceding to that agreement. So we’ll start to consider that – those discussions happen.
But RCEP is some other 1 that could have got a large political impact, inwards the feel that, you lot know, if RCEP does come upwardly on this, this is sixteen countries, nearly xl percentage of the Earth gross domestic production as well as one-half the world’s population. Now, it’s been rightly criticized for existence much thinner inwards damage of the rules as well as the tariff liberalization than other complimentary merchandise agreements, most especially CPTPP. But it is vast inwards damage of its scope. And it way that all of these countries are inwards the room together discussing merchandise rules as well as merchandise integration. And it creates a machinery to go on to have got those discussions. So conceptually it only genuinely form of creates to a greater extent than of a feel inwards the part that at that spot are a lot of countries that are working together towards trade, cooperation, as well as economical integration. And the United States
is non inwards that room either. And I do think that could have got a large form of political, conceptual impact over fourth dimension equally well.
MR. GOODMAN: Can I only throw inwards a monkey wrench or a follow-up interrogation on your behalf? Which is most – which is – because when you lot speak most RCEP, I think there’s a interrogation that’s existence raised. And I’m hearing it from the Japanese as well as the Singaporeans as well as others, about
whether this so-called toxicant pill provision inwards the novel NAFTA, the USMCA, that says that basically if 1 of the parties starts negotiating with a non-market economic scheme – which, you lot know, again, is non Indonesia; China, inwards other words – as well as so the other parties have got a correct to line out of the agreement.
Substantively non a large bargain since you lot tin privy line out for other reasons, but the others inwards the part – Japanese as well as Sings for sure – are saying, well, does that hateful that if nosotros do an RCEP bargain that has Cathay inwards it that we’re going to live somehow, you lot know, at chance vis-à-vis the U.S.? So the U.S. has thrown some other form of monkey wrench into this calculation. I’m non sure how that’s going to touching on the ultimate. I think India’s going to live the bigger factor inwards whether RCEP gets done or not, but it’s only some other assort of interrogation score or cloud over this whole conversation.
Q: Yeah, what do you lot guys think most the prospects for RCEP conclusion? I mean, I think
they say every yr we’re going to larn it done this year. So I had heard that Nippon powerfulness live willing to withdraw maybe some lower ambition, but – as well as and so India, obviously, real scared most liberalization vis-à-vis China. So what do you lot think most RCEP completion?
MR. ROSSOW: Yeah, India, I think, has got a pretty hard line on this. They’re playing along. They’re going to meetings. They say that they want it concluded equally well, but inwards practise they clearly don’t. They won’t sign a substantive agreement. The volition sign a non-substantive 1 or you lot got to throw them out. I think those are the options when it comes downwards to India.
MS. SEARIGHT: You don’t think after the elections at that spot powerfulness live a petty to a greater extent than flexibility on India? No?
MR. ROSSOW: No, I mean, you lot know. And India, I mean, you lot know, from their
policymakers’ perspective – as well as they facial expression at merchandise similar to how the U.S. direction currently does; the wide number, you lot know, imports as well as exports. We’re driven upwardly the wall on our merchandise deficit, you lot know, which is, what, 2 ½, 3 percentage of GDP? India’s is 8 percent. Republic of Republic of India has a 3 percentage – 3 percentage of India’s gross domestic product is the size of its merchandise deficit with Cathay alone. So, you lot know, these are primary policy drivers that I don’t think – as well as actually, inwards the in conclusion – I think the firstly 3 years of Modi you lot genuinely saw the merchandise deficit start to pinch, but this in conclusion 12 months it started to increment again. And it’s oil, which it ever has been, you lot know. It’s metals. It’s – but, you lot know, consumer goods,
electronics as well as things from Cathay is a large driver there. So I don’t – I don’t feel post-election, too, that changes equally good much.
MS. SEARIGHT: I would only say on Japan, you lot know, Japan’s likely top priority is to assay to persuade the United States of America of America to eventually come upwardly dorsum to TPP, CPTPP. But Nippon also is, you lot know, real focused on RCEP because – as well as so I think you’re correct that they are willing to some grade to withdraw a slightly lower bird of ambition because ii reasons.
Strategically, they real much back upwardly the thought of getting Republic of Republic of India into a merchandise understanding that includes the ease of the region. For them, Republic of Republic of India is a real of import form of balancing economical partner, equally good equally the strategic importance.
And secondly, you lot know, RCEP would hateful that these – that novel merchandise agreements would come upwardly online for Nippon betwixt Nippon as well as Korea, where there’s no merchandise agreement, as well as Nippon as well as China. So fifty-fifty from a occupation organisation perspective, the Japanese merchandise negotiators as well as businesspeople genuinely do consider RCEP equally real meaningful to create form of 1 laid of rules of origin for the – for the entire region. From a Japanese perspective, that’s real helpful for their regional production networks.
MR. ROSSOW: You know, non to pass equally good much fourth dimension on the point, but I mean, Nippon is the 1 province that if anybody tin privy force Republic of Republic of India into a positive mindset, too, it is Japan. Nippon is underwriting a huge chunk of India’s large infrastructure projects across the country, these huge infrastructure corridors similar the Delhi-Mumbai industrial corridor. And this is the whole thing most helping Republic of Republic of India to assay to larn to a greater extent than competitive inwards manufacturing, the expanse where it’s – well, maybe agriculture is fifty-fifty weaker, but manufacturing’s pretty weak. So if anybody tin privy assay to coax Republic of Republic of India as well as cajole Republic of Republic of India into an understanding that isn’t the absolute wateriest understanding that’s ever been signed inwards humankind history, Japan’s likely the 1 spot that tin privy do it – but only if they’re wiling to play hardball as well as genuinely create threats: We volition cut down our infrastructure. We’ll live a less-relevant partner for you lot inwards redeveloping infrastructure if you lot don’t come upwardly into the deal. I don’t know that they’re create to go to the mat on that because, you lot know, for them the human relationship is of import for so many other reasons, too, than only getting RCEP done. But that is the 1 country, if they create upwardly one's hear to focus attention, they could likely nudge a lot meliorate than the United States of America of America or whatever other spot tin privy on merchandise deals with India.
MR. QUINN: All right, folks. If at that spot isn’t anything more, I only want to give thank you lot everyone for coming. Firstly, give thank you lot our roster of experts; really, genuinely insightful give-and-take today. Thank you lot all for taking the fourth dimension today to sit down with us.
As I said before, nosotros volition live sending out a transcript of the lawsuit afterwards today, so delight withdraw a
look at your inbox for that. If there’s whatever argue you lot demand to larn on our mailing list, delight come upwardly up to us afterwards. We tin privy assort that out.
Thank you lot all for coming. (END)
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