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Remarks at the American Chamber of Commerce in Japan, Tokyo, Japan

Wednesday, November 10, 2010

Secretary Gary Locke
American Chamber of Commerce in Japan luncheon, Tokyo, Japan

Thank you for the kind words.  And I want to thank the American Chamber for your hospitality in hosting this event.

I just met with Ambassador Roos.  He told me about the tremendous effort the ACCJ has been making to ensure a successful outcome for the APEC meetings.  

As one of the most influential organizations in Japan, your active engagement in APEC is critical to developing policies and programs that strengthen our economies and better the lives of our people.     

We thank you, and look forward to your continued participation in APEC as the United States prepares to assume the chair in 2011.  

It’s been a while since I was last in Japan.  It’s a special privilege to be here now as Secretary of Commerce in the administration of America’s “first Pacific President.”  

Strengthening the ties that bind our nations has been a priority since President Obama took office.  In fact, the first foreign leader he welcomed was the Prime Minister of Japan.  

And for the first time in nearly 50 years, the first foreign trip by an American Secretary of State, Hillary Clinton, was to Asia, starting in Japan.

Like President Obama, who was born in Hawaii, I come from a Pacific Ocean-bound state, Washington, where I had the honor of serving as Governor for eight years.

And I saw up close how indispensable trade with Asia was to the well-being of my constituents.  Washington is the most trade-dependent state in the nation and one in three jobs in the state is directly or indirectly related to trade.  

In fact, it was pursuit of export opportunities for Washington companies that triggered my previous visit to Japan.

So when I took office as Secretary, in what I still call the other Washington, I was well aware of the strategic importance of Japan as a vital economic partner – and its key role as a force for peace and prosperity in the Asia Pacific.

And the trade numbers certainly bear this out.  Last year, our bilateral trade totaled nearly $147 billion.

But just looking at this trade in dollars misses its real significance.  When you get right down to it, trade between the United States, Japan and all of Asia is really about one thing.

Unlocking our full potential…The potential of our people…The potential of our businesses…And the potential we have to build a world that is safer and more prosperous for our children.

We can do this by creating an open investment and trade environment that allows businesses, entrepreneurs and policy makers to bring their respective strengths to the table and spur the type of innovation and economic growth that we could never achieve alone.

When we do that, we open up some amazing avenues for collaboration.

Like the partnership we've seen develop between Tesla Motors and Toyota, where the Toyota RAV4 will be combined with Tesla’s electric powertrain to create a cutting-edge electric vehicle for the US market by 2012.

Or look at the agreement that Bechtel and Taisei Corporation have formed to provide engineering and construction services for massive infrastructure projects in the Middle East, North Africa, Eastern Europe and other emerging markets.

You’ve got GE and Hitachi collaborating to build advanced light nuclear water reactors, and similar cooperation happening with Toshiba and Westinghouse.

In March of this year, the Japanese pharmaceutical firm Eisai signed a licensing agreement with the Brain Science Institute at Johns Hopkins University to develop small-molecule technology to treat diseases such as Alzheimer’s disease and stroke.

This is the type of cooperation that’s going to create new jobs.  It’s going to discover cures for diseases and unlock new energy technologies.  And ultimately, this collaboration is a big part of how we get the world economy back to full steam ahead.

And when countries get together at APEC, I think a simple barometer for success is whether or not our policies are making it easier or harder for our innovators to exchange ideas, to invest and to trade.  

Because if what we're doing is going to make it harder for a Japanese inventor with a new solar panel design to get the capital she needs from America; if we’re making it harder for a Japanese scientist to get his new lifesaving medical device into U.S. hospitals, then we are doing the wrong thing.

Fortunately, the governments of the United States and Japan are doing a lot of things right in our trade relationship.  And we have a lot of positive momentum to build on across a variety of sectors.

Recently, we had a very successful vaccine policy exchange with Japan’s Ministry of Health, Labor and Welfare this year, which we hope will serve as the foundation for future cooperation on vaccine issues.

Another industry where we’ve seen great progress is in the air services sector.  

Japan and the U.S. recently signed an Open Skies agreement that will lead to additional flights to and from the United States, some from regional airports in Japan.

This expansion should facilitate both trade and tourism over the long term, leading to greater prosperity for both sides.

And I’m pleased to note that the longstanding relationship between the Commerce Department and the Ministry of Economy, Trade and Industry Ministry has contributed to a regulatory environment in which U.S. exporters are thriving.

The Ministry deserves much credit for reducing barriers to entry by hiring new examiners and creating more transparent reimbursement procedures.

Going forward, we’re working to renew the U.S.-Japan Economic Framework, which will provide a focal point for our countries to address issues of mutual concern.

Commerce Department agencies are also collaborating with their Government of Japan counterparts on several programs, including:

  • A fast-track patent examination procedure and IPR protection;
  • A dialogue on standardization and conformity assessment; and;
  • Collaboration on addressing the challenges of food security, climate science and services, ecosystems, and fisheries to ensure the stability of our economies and our societies.

Japan and the United States have built up a good deal of mutual trust, and that’s why I'm confident we can make keep making progress on issues of interest to our businesses such as:

  • Increasing American exports of food and automobiles to Japan.  
  • Improving market access for our services sector, including construction and financial services.   And finally;
  • Addressing the proprietary data issues faced by American chemical companies.   

Like any complex trading relationship, the United States and Japan don't always agree on everything.  But we’ve got a very solid foundation for the U.S. and Japan to build on -- one that can serve as a model for our relations with other APEC nations.

I do believe that many APEC nations are beginning to recognize the policies and practices that move us in the wrong direction on trade.  

It's a credit to leaders throughout the Asia-Pacific region that even in the midst of this historic recession, the turns towards outright protectionist that we saw in previous economic crises have been rare.

But there is no question that that U.S. businesses continue to have concerns with policies and practices that inhibit their ability to compete in the Asia Pacific region.

No matter where they hail from, most businesses are looking for the same thing when operating in a foreign market.  

They want stability, predictability and reliability.  

They want to know that both the letter and spirit of tax and customs laws are administered in a way that promotes an even playing field.  

They want to ensure that their access to raw materials and their exposure to currency risks will be dictated by market, and not political forces.

And these business leaders get justifiably worried when they see countries making counterproductive decisions in these areas.

As a result of the reduction or elimination of tariffs in many markets around the world, some countries have been resorting to non-tariff barriers to limit foreign competition.  

They are imposing costly and redundant testing and compliance procedures, non-transparent standard-setting or regulatory procedures, and other requirements that act as impediments to free trade.

Business leader see other countries requiring standards unique to their market or region or acting unilaterally as a choke point in a supply chain.

While some of these policies may be well intended or designed to support domestic industries, the upshot is a trade environment that discourages the cooperation and the investment that is so integral to unlocking the potential of our people and our economies

Governments and businesses must be unified and insistent in opposing such policies.

If APEC countries are willing to continue making progress on these issues, they will find a willing partner in the United States.  A partner that is committed to building an international trading system that benefits everybody.

In fact, working to knock down these trade barriers is one of the key planks of President Obama’s National Export Initiative, along with making more credit available for exporters, and increasing U.S. government trade promotion.

The NEI seeks to double U.S. exports by 2015, creating millions of new jobs in America and providing the citizens of our trading partners with a wide array of new goods and services.

Japan and all of APEC will be absolutely essential to meeting this goal.  The U.S. consumer can no longer be the consumer of last resort, and we must look to the strong increase in domestic demand among a number of APEC members as a key way to rebalance the world economy.

I'm confident that we can summon the will to act on these concerns.  And I'm confident that we have an effective framework for action.

The Asia Pacific Economic Cooperation is the pre-eminent multilateral vehicle for advancing free and open trade in the region.  

Its 21-member economies account for 54 percent of world gross domestic product and almost half of world trade volume.

What we do at this gathering can and will set the pace for the entire global economy.

The U.S. is also working closely with the eight other countries participating in the Trans-Pacific Partnership trade talks.  

And we welcome Japan’s interest in the TPP, which has a goal of removing all tariffs by 2015.

If we can achieve this elimination of tariffs, it will be a signal accomplishment in a relationship which spans decades.
Fifty years ago, the United States and Japan entered into an alliance, which has been a cornerstone of our two nations’ security, as well as a foundation for peace and prosperity throughout the Asia-Pacific region.

When President Obama and Prime Minister Kan met in Canada last June, their discussions focused on security and economic issues.

And at the conclusion, President Obama spoke of their accord in promoting the kind of sustainable recovery that will create opportunities for the people of the U.S. and Japan today, and increase opportunities not just for this generation, but for future generations.

That is the goal.  

As always, in addressing these challenges, we value the counsel and advice of the American Chamber of Commerce in Japan.    

Thank you.