The United States was there at the first meeting of APEC leaders on Blake Island, where President Clinton began the interesting tradition of having us wear outfits picked out by the host nation. And when America hosts APEC in a few years, I look forward to seeing you all decked out in flowered shirts and grass skirts, because today I’m announcing that we are bringing this forum to my home state of Hawaii in 2011.
Of course, even though America was here at the inception of APEC, our ties to this region reach all the way back to the inception of our nation. It was just a year after the end of our Revolution, when our nation was not much more than a set of ports and cities along the Atlantic, that an American ship named the Empress of China first sailed into Canton, looking to begin the first direct trade with China.
Today, we are undoubtedly a Pacific nation. Our western border stretches from the tip of the Aleutians to the beaches of southern California. We have brave men and women defending our shared security from Seoul to Manila. More than 20,000 Americans are now studying abroad throughout Asia, and 350,000 Asians are studying in America – the most from any region in the world.
But perhaps no connection between Asia-Pacific and the United States runs stronger or deeper than the economic ties we share. America’s four top trading partners are now APEC members, with the countries that form the Association of Southeast Asian nations collectively making up the fifth. Sixty percent of the goods and services we export go to APEC nations – exports that currently support millions and millions of American jobs. The United States is also the largest export market for Asia, which has led to more affordable goods and services for American consumers.
These economic ties were forged in the middle of the last century, when America’s commitment to the security and stability of Japan, along with the Japanese people’s spirit of resilience and industriousness, led to what has been called the Japanese Miracle – a period of economic growth that was faster and more robust than anything the world had seen for some time.
In the coming years and decades, this Miracle would eventually spread throughout the region – from the opening of China thirty years ago to the rise of the Asian Tigers that turned Singapore into one of the busiest ports in the world. In 1965, Singapore’s per capita income was approximately $500. Today, it’s $37,500 – 75 times higher. In 1981, nearly 80% of East Asians lived on less than $1.25 a day. Today, that number is less than 18%. China alone has moved 300 million people out of poverty.
The reasons for this Miracle are many, and they offer lessons we’d do well to remember today. It was the product of rigid ideologies that gave way to hard-headed pragmatism; controlled economies that gave way to open markets; investments in the skills and education of people; and a strategy to produce and manufacture goods that could be sold around the world.
For decades, the United States has been a major consumer of goods from this region. We have maintained one of the most open markets in the world, and that openness has helped fuel the success of so many countries in this region and others over the last century.
But the recession we’re just now recovering from has clearly taught us the limits of depending on the American consumer to drive economic growth. Because when too many Americans found themselves in debt or out of work, the demand for Asian goods plummeted. When demand fell sharply, exports from this region fell sharply. Since the economies of this region are so dependent on exports, they stopped growing. And the global recession only deepened.
Now, it’s true that Asia has rebounded from this crisis more quickly than most. And thanks to the quick, unprecedented, and coordinated actions taken by many of the leaders in this room, we have pulled ourselves back from the brink. Economies around the world are beginning to grow again. And we are on the path to recovery.
But we cannot return to the same cycles of boom and bust that led to this recession. We cannot follow the same policies that led to such imbalanced growth. If we do, we will continue to drift from crisis to crisis, a failed path that has already had devastating consequences for our citizens, our businesses, and our governments.
We have reached one of those rare inflection points in history where we have the opportunity to take a different path – to pursue a new strategy for jobs and growth. Growth that is balanced. Growth that is sustainable. Growth where prosperity is shared by all who are willing to work for it. That’s where we need to go. And I believe the economies of this region have a leading role to play in getting us there.
At the G20 Summit in Pittsburgh – a forum where nearly half the members are from APEC – we agreed to pursue this more balanced strategy for growth. In the United States, families are already saving more and spending less; consumers are paying down their credit cards; and businesses are getting their balance sheets in order. And we know these actions can’t just be short-term responses to this crisis. They have to become long-term habits. We are also on the verge of reforming our financial system and putting in place new rules of the road so a crisis like this does not happen again.
And we also intend to reign in our government’s debt. Like many of you, we passed a measure to stimulate demand that has temporarily enlarged our deficit. And this was on top of the trillion dollar deficit we faced upon taking office. But as the economy recovers, I intend to take serious steps to reduce America’s long-term deficit – because debt-driven growth cannot fuel America’s long-term prosperity.
What can fuel that prosperity is a strategy where the United States consumes less and exports more. This won’t just lead to more balanced growth – it has the potential to create millions of new, well-paying jobs. For example, if we can increase our exports to APEC countries by just 5%, we can increase the number of U.S. jobs supported by exports by hundreds of thousands.
This is already happening with small businesses like Fuel Tech, a pollution control technologies company based in my home state of Illinois. Recently, this company added another five jobs to its payroll and earned over $10 million by selling its products to China and Hong Kong. It’s also happening with businesses like American Superconductor Corporation, an energy technology company based in Massachusetts that’s been providing wind power and smart grid systems to countries like China, Korea, and India. In doing so, it’s added more than 100 jobs over the last few years.
In Asia, striking this better balance will provide an opportunity for workers and consumers to enjoy higher standards of living that their remarkable increases in productivity have made possible. It will allow for greater investments in housing, infrastructure, and the service sector. And a more balanced global economy will lead to prosperity that reaches further and deeper.
Today, the United States is ready and willing to compete more extensively in APEC markets. We’ve increased our exports to Asia at a healthy rate over the last decade, but not as much as other regions have – and we intend to change that. We also know that to stand still is to lose ground, because other nations are already pursuing agreements with this region that will give their exports preferred access; agreements that will put our workers and our businesses at a competitive disadvantage.
To that end, we are working toward an ambitious and balanced Doha agreement – not any agreement, but an agreement that will open up markets and increase exports around the world. We are ready to work with our Asian partners to see if we can achieve that objective in a timely fashion – and we invite our regional trading partners to join us at the table.
We also believe that continued integration of the economies of this region will benefit workers, consumers, and businesses in all of our nations. Together, with our South Korean friends, we will work through the issues necessary to move forward on a trade agreement with them. The United States will also be engaging with the Trans Pacific partnership countries with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement.
Of course, even as we pursue a strategy for balanced growth, we must also pursue growth that is sustainable – for our planet and future generations. What we must seek, in Copenhagen and beyond, is not simply an agreement to limit greenhouse gas emissions. We must seek a solution that will allow all nations to grow and raise living standards without polluting our atmosphere and wreaking havoc on our climate.
Such a solution cannot be possible without the participation of the APEC economies. Each of us must unleash the innovation and technologies that will allow us to grow our economies without endangering our planet – and we must do it together.
This future is ours to choose. We are just now emerging from a period of great turmoil for all of our people. And as recovery slowly takes hold, it may be tempting to return to the old ways of doing business – to follow the same patters; throw up the same walls; to engage in the same debates and arguments. It’s tempting because change is hard – it involves risk, and time, and great effort.
But if there’s anyone who understands that sweeping change is possible, it’s the men and women who have come of age in the land of economic miracles – a region that, in a single generation, reinvented itself as a growing, dynamic force for commerce and industry; a place where the lives and fortunes of millions were forever changed for the better, and where millions more are still striving for a dream that their grandparents never had the chance to attain.
We in America understand that dream, and we also understand that in this new era, our ability to realize it is forever linked with yours. That’s why we are committed to this region; committed to this partnership; and committed to a shared prosperity that I have full faith we can achieve together. Thank you.