ASEAN and America: Partners for the Future
July 28, 2014
Remarks
Daniel R. Russel
Assistant Secretary, Bureau of East Asian and Pacific Affairs
Commonwealth Club
San Francisco, CA
As Prepared for Delivery
Thank you, Phil. I’m glad to be in San Francisco, and with all of you here at the Commonwealth Club.
You’re here today because you understand the importance of Asia to America.
This is especially evident in a Pacific Coast state like California. More than 5.5 million Asian-Pacific Americans live
in California, and millions more Californians do business, study, or otherwise benefit from their ties with the region.
California exported nearly $70 billion in goods to the region last year, more than any other state. And Asia matters to
the entire United States – to our economy, to our security, to our families.
As a Pacific power and a trading nation, we can’t afford not to be in the Asia-Pacific. That’s why President Obama
decided, before he even took office, to institute a long-term, strategic emphasis on the region. And I’m confident that
strategy will extend far beyond his presidency, because we have strong bipartisan support for it – both parties
understand the importance of Asia.
Now, there is a lot going on in Asia today, from the dramatic rise of China and the historic reforms in Burma, to the
ongoing threat from North Korea's pursuit of nuclear weapons, to the dangerous tensions in the South China Sea.
And while I know that as a topic, “strengthening regional institutions” probably ties for last place with “corporate tax
policy” in its headline-grabbing power, it's one of the most consequential undertakings in terms of American interests.
And that's what I'd like to discuss with you today -- namely, the effort to shape a rules-based order that is stable,
peaceful, open and free.
First let me say that the region I am responsible for--East Asia and the Pacific--is a diverse one. Northeast Asia,
Oceania--which includes Australia, New Zealand, and the Pacific island states--and then Southeast Asia, are all quite
different.
Northeast Asia is home to two of our important treaty allies – Japan and the Republic of Korea. We’ve modernized defense
cooperation with both countries to address the very real threat posed by North Korea. And we’ve deepened economic
engagement through free trade agreements such as the one reached with South Korea.
Northeast Asia is also home, of course, to China--with which we’ve dramatically increased our engagement.
I was with Secretary Kerry, Treasury Secretary Jack Lew, and other Cabinet officials earlier this month for the annual
Strategic and Economic Dialogue covering nearly every area of our relationship with China, from concrete steps to combat
climate change and wildlife trafficking, to preventing nuclear proliferation on the Korean Peninsula and in Iran, to
facilitating business and investment between our two countries.
These exchanges show the conviction of both sides – as the world’s two largest economies, two of the strongest military
powers, and the two largest carbon emitters – to cooperate on the world’s toughest problems whenever we can. And just as
important, they show our shared commitment to tackle problem areas frankly and openly, instead of merely agreeing to
disagree on issues like human rights or intellectual property protection.
Australia, New Zealand, and the Pacific island states are extremely important partners. We’ve upgraded our defense
cooperation with our Australian treaty ally, and we’re working to create jobs and shared prosperity with both Australia
and New Zealand through the TPP trade agreement.
We’re also working with the vulnerable island states to protect the environment. Last month, Secretary Kerry hosted the
“Our Ocean” conference, a first-of-its-kind diplomatic effort rallying heads of state, scientists and advocates from the
Pacific Island nations and beyond to protect this shared resource.
But in many respects, the dynamic center of the region is Southeast Asia, and the ten countries that make up ASEAN.
Let me first say a few words about each.
Our ally the Philippines is a stable democracy with strong economic growth. We completed an enhanced defense cooperation
agreement during President Obama’s visit in April, which enables us to better address common security challenges and
provide relief for disasters, such as Typhoon Haiyan. Our economies also continue to grow closer, with two way trade
reaching $24 billion last year.
We have strong partners in Indonesia and Malaysia, both pluralistic and tolerant Muslim-majority nations with growing
economies. Indonesia’s recent presidential election shows the strength of their democracy. And President Obama's recent
visit to Malaysia highlighted our growing economic, people-to-people, and security ties.
Singapore is an influential and effective economic, diplomatic and security partner. Brunei is a major energy producer
that, while small, has been a valuable partner for us on crucial regional issues like renewable energy and free trade.
Vietnam, of course, has a complicated history with the U.S. But our relations are now flourishing. Trade is increasing
dramatically as Vietnam’s economy grows. And we’re forging closer security ties, even as we encourage greater political
openness and respect for human rights.
We cooperate with Laos and Cambodia on a range of development issues, and we also push them to adhere to global
standards of human rights.
With our longtime treaty ally Thailand, despite the recent setback of a military coup, we remain committed to our
enduring friendship.
Perhaps no other country shows the promise of this region better than Burma, which has made a turn of historic
proportions towards democracy and reform.
But that turn is by no means complete. Burma faces many challenges, and the success of its reform process is by no means
certain. Burma is working to negotiate a lasting peace to end the world’s longest running civil war. It is grappling now
with the key issue of constitutional reform, of military versus civilian control over its government, and of who it
deems eligible to serve as head of state.
It continues to face hard choices in determining how to resolve an ongoing humanitarian crisis in Rakhine State. On that
issue, we have seen some positive movement in the past week, as the government announced its intent to welcome the
return of assistance providers, like Doctors Without Borders, and put forth its strategy on how to bring access to
livelihoods and security back to populations that have been living tenuously for many months because of ethno-religious
violence and discrimination.
Secretary Kerry will be very focused on seeing how this process is proceeding, when he visits in early August. He, and
then President Obama when he visits in November, will be keen to get a sense of Burma’s preparedness for its landmark
elections next year. The world will be watching, and we will continue to stand with the government and people of Burma
as they enter this testing period. So we will continue to press Burma’s leaders to protect and respect all of their
peoples, and their human rights and fundamental freedoms. And we will continue to support that country’s transformation.
That’s the overview of Southeast Asia today. The region’s economic dynamism and strategic importance has made it a
particular focus of this administration – the ‘rebalance within the rebalance,’ if you will.
These ten countries have many differences, but they are bound by the conviction that they can achieve more together than
they can apart. But before we talk about where they’re headed, it’s important to know how they came together.
Today’s ASEAN began in 1967 when the Vietnam War was heating up, and the Cold War seemed never-ending. In this uncertain
world, five Southeast Asian nations signed a Declaration that they would support each other as they sought to build
prosperous, independent states.
Now, nearly half a century after its founding, ASEAN has doubled to 10 nations with more than 620 million people, and a
GDP of $2.2 trillion.
As Southeast Asia has grown and developed, ASEAN’s relations with the U.S. have grown as well. Under our Trade and
Investment Framework Agreement signed in 2006, we have deepened our economic ties.
Since President Obama decided in 2009 to sign the Treaty of Amity and Cooperation--a treaty that ASEAN has extended to
key neighbors--we’ve deepened our political ties as well. This is shown by the President's decision to participate
annually in the East Asia Summit, as he will again this year in November. This commitment to enhanced engagement with
ASEAN is a key feature of the rebalance.
And we're strengthening our ties with ASEAN across the entire U.S. government. Take this past April, when Secretary
Hagel, USAID Administrator Raj Shah, and U.S. Pacific Commander Admiral Sam Locklear hosted defense ministers from the
ASEAN nations in Hawai’i. This was the first-ever ASEAN meeting here in the United States--a recognition that our
security and prosperity are more intertwined than ever before.
For instance, California already sells over $11.6 billion worth of goods to ASEAN. Exports to ASEAN support more than
90,000 California jobs [in 2012]. And both of those numbers can grow a lot more. Your state also stands to gain from
more tourists and students from the region.
And ASEAN matters to the entire United States. We had $206 billion worth of trade in goods last year. ASEAN is our
fourth-largest export market and trading partner. With a diaspora reaching across America, the region contributes to our
culture. And sitting astride vital trade routes, it is important to our security.
A stable Southeast Asia that meets the aspirations of its people--for economic growth, clean air and water, education,
and a voice in how they’re governed--is in America’s national interest. And one of the best, most efficient ways for
America to help the region meet its aspirations is by investing in ASEAN.
Strengthening regional institutions is a long-term strategy. We pursue it because it’s essential to building the
foundations for progress--from ease of trade, travel and transport, to systems for resolving legal disputes, to the
ability to act together on pressing issues like environmental protection. We all benefit from a rules-based system.
Strong institutions harness a powerful force. A force you see in both daily life and in international politics--peer
pressure. In fact, ASEAN shows that the best way to create positive peer pressure in the long term is through strong
institutions.
ASEAN is working towards forming a cohesive economic community by next year through lower barriers and increased trade
volumes with each other. For the U.S. economy, this will mean easier and more efficient market access to all 10 ASEAN
countries. And in the longer term, a more prosperous ASEAN will be able to buy more American exports--from farm products
to manufactured goods, to services.
Even as ASEAN pursues its ambitious agenda of internal integration, it has taken on the challenge of bringing the entire
Asia-Pacific region closer together. This fills an important gap – APEC is a forum for economic cooperation, but there
was no forum in the region where countries could deal with political, security, and humanitarian issues.
So in 1997, ASEAN started meetings with Japan, South Korea, and China... then with Australia, India, and New Zealand...
and four years ago with the United States and Russia, bringing the number of world leaders attending what is now known
as the East Asia Summit to 18.
The growth of the East Asia Summit shows ASEAN’s measured advance on the international stage as the hub that connects
the region.
Less visible than the leaders’ summit, but even larger, is the ASEAN Regional Forum, an annual gathering of foreign
ministers and other senior officials representing 26 countries from Pakistan to the Pacific Rim, and the EU.
This is perhaps the region’s most important ministerial meeting of the year, and it takes place in a few weeks in Burma.
Secretary Kerry and his counterparts will discuss political and security issues, and begin fleshing out the agenda for
the East Asia Summit, or EAS, which President Obama plans to attend in November.
Why the emphasis on EAS? In Europe, we’ve seen for decades how a region can develop effective institutions tailored to
their unique needs, such as NATO and the OSCE. Those organizations have helped tackle regional, political, security and
humanitarian problems. We believe the EAS can become the premier forum for addressing pressing issues in the
Asia-Pacific region. But it is relatively new, and members are still trying to shape it to increase its usefulness and
effectiveness.
We joined EAS because, as an Asia-Pacific nation, we want to be at the table for a strategic discussion about how we
build and shape the institution over time.
Let me give you a little preview of the issues that will be at the top of Secretary Kerry’s agenda. We expect to advance
collaboration on issues ranging from non-proliferation to humanitarian assistance and disaster response.
Disaster response is incredibly important, since the Asia-Pacific is hit by 70 percent of all natural disasters, costing
the region $68 billion annually over the past ten years.
We have worked closely with partners, including China, on improving regional responses to problems and accidents such as
oil spills, for example. We are supporting the EAS declaration on Rapid Disaster Response, helping spread the lessons
learned in the Philippines from the recent Super-typhoon Haiyan, and working to improve the capabilities of ASEAN’s
Centre for Humanitarian Assistance and disaster relief.
We’ve also teamed up with regional partners to develop a strategic plan for exercises that will prepare us to better
coordinate delivery of life-saving relief in future disasters. And we are preparing to host an ARF climate change
adaptation workshop to help countries protect their people from this growing problem.
In addition to advancing these areas of collaboration, we will have frank discussions about pressing political and
security challenges. In recent months, the main security challenge facing ASEAN has been tensions in the South China
Sea.
This is, of course, most important to the countries with overlapping territorial and maritime claims there. Let me note
up front that the U.S. is not a claimant and does not take a position on others’ claims to land features in the South
China Sea. So the United States can be impartial. And we are impartial; we are not taking one claimant’s side against
another.
However, peace and stability in the South China Sea is important to the international community, because the South China
Sea is essential to the global economy. Up to 50 percent of the world’s oil tanker shipments, and over half of the
world’s merchant tonnage, pass through the South China Sea. National interests like freedom of navigation, international
law, the peaceful settlement of disputes, and unimpeded commerce are at stake.
Rival maritime and territorial claims have existed here for decades, as countries jostle over islands, shipping lanes,
historically rich fisheries, and more recently, oil and gas reserves.
The claimants have, at various times, shown that cooperation in the South China Sea area is possible. They have jointly
explored for and managed resources. The Philippines and Indonesia peacefully settled a 20-year maritime boundary dispute
just outside the Sea earlier this year. China and Vietnam have settled similar issues in the past. And some claimants
have jointly developed energy resources further away from disputed land features.
In 2002, the ASEAN nations and China signed a Declaration on Conduct in the South China Sea. The Declaration, among
other things, said that the parties would resolve disputes peacefully and in accordance with international law, and
would refrain from actions that would escalate disputes, such as setting up new outposts on unoccupied features. And
they agreed to work toward a more detailed Code of Conduct.
But tensions have flared over the years as well, and this year, they are running high. No claimant is solely responsible
for the state of tensions. However, big and powerful countries have a special responsibility to show restraint. China’s
recent pattern of assertive, unilateral behavior has raised serious concerns about China’s expansive claims, and its
willingness to adhere to international law and standards.
Tensions spiked recently when China sent a deepwater drilling rig and armed ships into an area near the Paracel Islands
that Vietnam also claims. The resulting weeks-long confrontation resulted in damaged ships, including the sinking of a
Vietnamese fishing vessel, and damaged relations, including anti-Chinese riots in Vietnam.
At the same time, public evidence indicates the claimants are upgrading outposts on small land features in the South
China Sea. What worries me is that China's projects are far outpacing similar upgrades that other claimants are making.
This important, resource-rich area should not be heavily militarized.
And actions off the water can raise tensions as well.
All parties should be able to bring disputes for adjudication under international law if they conclude that regular
diplomatic efforts will not succeed. The Philippines has done this in a dispute with China over the validity of its
claim that a 1948 Nationalist Chinese map “proves” that China owns the land and water within a “9 dash line” in the
South China Sea.
But instead of engaging constructively and arguing its case as the Tribunal has proposed, China has pressured the
Philippines to drop its case, and attempted to isolate the Philippines diplomatically.
International law, not national power, should be the basis for pursuing maritime claims in the South China Sea.
The United States works to lower tensions and help the parties peacefully manage their disputes in several ways. We have
told the claimants – including the Chinese – directly and at the highest levels, of our growing concern. And we’ve
encouraged all sides to avoid provocations and make clear claims based on international law.
We’re working with ASEAN and the international community to promote regional structures and arrangements, like a
meaningful Code of Conduct, to lower tensions and manage disputes.
Rules and guidelines work best when they’re agreed to by the parties, through institutions that build habits of
cooperation.
The U.S. is also investing more than $156 million in the civilian maritime capabilities of allies and partners in the
area over the next two years. This includes equipment, training, and infrastructure. And it augments our own security
presence in the region, which has been enhanced by the rebalance.
These are steps the U.S. is taking. But the claimants are the ones who must manage and settle the disputes. They are the
ones who must generate the peer pressure – who must hold themselves to high standards, and then set an example for each
other.
For instance, China and ASEAN already committed under the 2002 Declaration on Conduct to avoid activities that “would
complicate or escalate disputes and affect peace and stability.”
However, these problematic activities are not well defined. We are urging China and the other claimants to have a
conversation about what activities are acceptable to each of them – both to help reduce tensions now, and manage
differences in the long run.
We have called for claimant states to define and voluntarily freeze problematic activities. The exact elements of a
freeze would be decided by consensus among the claimants, and would not prejudice the competing claims.
We’ve offered these ideas, in greater detail, both in public and in private. And we plan on advancing this important
discussion at the upcoming ASEAN Regional Forum meeting in Burma.
Over time, strong institutions can influence the conduct of all their members, helping to avoid conflict and incentivize
peaceful resolution of disputes. We see beneficial outcomes of positive peer pressure with environmental issues, in
trade, and human rights. It doesn’t work every time, but it’s responsible for enormous progress.
The Asia-Pacific region has almost limitless potential, if it can avoid the pitfalls ahead. Strong institutions are key
– not just to avoid and resolve disputes, but also to lower barriers to trade, and protect human rights and fundamental
freedoms.
The U.S., as a resident Pacific power and participant in many of the region’s institutions, will do all we can to
strengthen those institutions even further.
We do this through our alliances and our security partnerships--and through our growing business and people-to-people
ties, in which California plays an incredibly large role. And together, the American people and our government will
continue to help provide a foundation of peace and stability on which the region can grow.
ENDS