Principal Deputy Assistant Secretary in the Bureau of East Asian and Pacific Affairs, Scot Marciel, testified on December 18, 2013 about the economic aspects of the Obama Administration's rebalance to Asia, before the Senate Committee on Foreign Relations Subcommittee on East Asian and Pacific Affairs.
"Recognizing that America's future prosperity and security are very much intertwined with the prosperity and security of the East Asia-Pacific region, President Obama made a strategic commitment when he came into office to rebalance our interests and investments to this region. The President set out a clear, overarching objective for the United States in the region to sustain a stable security environment and advance a regional order rooted in economic openness, peaceful resolution of disputes, and respect for universal rights and freedoms.
The Administration remains committed to this objective and is building an increasingly active and enduring presence in the East Asia-Pacific region, including through our economic engagement. President Obama has hosted seven Asian leaders in 2013 alone, including six visits to the Oval Office; Vice President Biden traveled to Japan, China and Korea in early December; and in addition to Secretary Kerry's four trips to the region since assuming office, other cabinet members including Secretary Lew, USTR Froman, Secretary Pritzker, Secretary Hagel, Secretary Jewell, Secretary Sebelius, Secretary Moniz, and EPA Administrator McCarthy have all traveled to Asia in 2013.
We have made significant progress on the rebalance in a number of areas—modernizing our alliances, deepening our engagement with emerging powers such as China, strengthening regional institutions, and promoting democracy and human rights. But, during his first major speech on the rebalance to the Australian Parliament in 2011, President Obama framed the rebalance by emphasizing that the Asia-Pacific is critical to achieving his highest priority — creating jobs and opportunity for the American people. For this reason, the economic pillar of the rebalance is paramount and will have widespread and significant positive impacts at home and in the region for many years to come.
The past few decades have produced an extraordinary period of prosperity in the East Asia-Pacific region. It has lifted hundreds of millions out of poverty across the entire region and fostered dynamic, innovative economies that today are fueling global growth. The World Bank recently projected that the East Asia-Pacific region will contribute 40 percent of global growth this year, and some forecasters expect that nearly 50 percent of world growth over the next two decades will be generated in this region, yielding hundreds of millions of new middle class consumers.
Tapping into the economic dynamism of the East Asia-Pacific is vitally important for U.S. interests. Even as we continue to lay the foundation for future economic ties, we are already seeing progress in many areas. For instance, trade with the East Asia-Pacific region grew by 22 percent between 2008 and 2012, far outpacing the 13 percent growth in global U.S. trade. In 2012, U.S. exports of goods and services to the East Asia-Pacific region totaled nearly $555 billion, an increase of 31 percent since 2008, which supports an estimated 2.8 million U.S. jobs.
Direct investment in both directions has also helped to solidify our bond with the region and demonstrates the lasting commitment of U.S. businesses to the region's development and economic integration. The United States is by far the leading foreign investor in the East Asia-Pacific region with the stock of U.S. foreign direct investment (FDI) standing at around $622 billion in 2012, up 35 percent from the U.S. investment position in 2008, with nearly one-third located in ASEAN member countries. Investment into the United States from economies of the East Asia-Pacific is also growing, increasing by 31 percent since 2008 to reach $422 billion by the end of 2012. Between the major investments made by our private sector and the potential for U.S. industry to tap the region's growing consumer base, American businesses recognize that the future economic growth of the Asia-Pacific region and our increasing economic ties with the region are centrally important to economic growth and job creation in the United States.
While the East Asia-Pacific region offers enormous opportunities, there are certainly critical challenges as well. We have clear shared interests to address these challenges by working together towards greater energy and environmental security. For example, rapid economic and population growth has created enormous strains on the region's food, water, forest, marine and energy resources. In many areas, the increased use of fossil fuel for industries and transportation has resulted in dangerous levels of pollution that in turn pose dangers to people's health and accelerate climate change. On the political and security fronts, the resurfacing of long-standing territorial disputes threatens the stability of the region. How we respond to these challenges will determine our long-term ties to the region, as well as the region's future. The Department recognizes that U.S. economic ties to the region are the fundamental underpinning of our relationship and, for the overall rebalance to be successful, we must get the economic component right."