International economic engagement has been a defining pillar of United States leadership and prosperity for decades. It helped turn former enemies into close allies and major trading partners. It forged an international economic architecture on the bedrock principles of fair competition, open markets, and rules-based trade and investment. It lowered economic barriers and made possible the rise of vibrant middle classes abroad and in America.
Last week, Japan and the U.S. reached an agreement that moves Japan one step closer to joining the game-changing Trans-Pacific Partnership. This welcome news is just the latest evidence that, under President Obama, economic diplomacy continues to make the U.S. stronger at home and better positioned to lead in the regions where it matters most.
In President Obama's first term, our international economic policy was focused by necessity on putting a floor beneath the global economy even as we rebuilt our economic foundations at home. Early on, this meant urgent diplomacy to end the worst financial crisis since the 1930s. The U.S. sought out the partners and shored up the institutions that stabilized the global economy, from the International Monetary Fund to the G-20. The Obama administration then worked to rebuild the domestic consensus on trade, strengthened and implemented free-trade agreements with South Korea, Colombia, and Panama, and launched a government-wide push to double American exports. Each of these steps has hastened and strengthened a recovery that has created nearly 6.5 million private-sector U.S. jobs over the past three years alone.
With the worst of the economic crisis behind us, the war in Iraq over and the war in Afghanistan winding down, the U.S. is regaining the freedom of maneuver that allows us to make a set of strategic investments in our future. As the president's second term begins, the U.S. is at the center of two trade initiatives across the Atlantic and Pacific with the potential to encompass 60% of world trade. Just as our security alliances across two oceans have brought stability that extends far beyond our treaty partners, U.S. economic diplomacy today can advance global prosperity by strengthening the international rules and norms that make trade and growth possible.
To start, the U.S. is deepening economic engagement in an Asia-Pacific region where economic rules of the road are still taking shape. Nearly half of all growth outside the U.S. over the next five years is expected to come from Asia, and the choices that nations across the region make now will shape the character of the entire global system for years to come.
The economic linchpin of the multidimensional U.S. rebalancing strategy is the Trans-Pacific Partnership that the U.S. is negotiating with Asia-Pacific economies from Chile and Peru to New Zealand and Singapore. This TPP agreement is built on its members' shared commitment to high standards, comprehensive market access for goods and services exports, disciplines for 21st-century trade issues and respect for a rules-based trade and investment framework.
We always envisioned the TPP as a growing platform for regional economic integration, open to additional countries willing and able to meet its high standards. Under President Obama, the original seven TPP nations have grown to include Vietnam, Malaysia, Canada and Mexico. The TPP was already as ambitious as any trade negotiation in the world. Now we have completed bilateral work with Japan. This is an important step toward Japan joining TPP negotiations. A TPP that includes Japan, the world's third-largest economy, would represent an annual trading relationship of $1.7 trillion and a strong regional constituency for shared economic values.
A key attribute of the TPP is that it can get done in a timely fashion. The U.S. is working hard with the other parties to complete negotiations in 2013. Alongside the U.S.-Korea Free Trade Agreement and U.S. participation in the Asia-Pacific Economic Cooperation forum and the East Asia Summit, it will serve as a powerful statement of American engagement and staying power in East Asia.
Even as the U.S. is reaching to the east, we are also pursuing a Transatlantic Trade and Investment Partnership, or T-TIP, to deepen ties with our largest and longest-standing trading partners in Europe. The U.S. and Europe already account for nearly half of the world's gross domestic product, and trade and investment already supports more than 13 million U.S. and European jobs. With such a massive economic relationship, even small improvements can increase trade by tens of billions of dollars and support hundreds of thousands of additional jobs on both sides of the ocean.
It is true that previous such attempts have come up short in the face of differences over market-access barriers and other long-standing irritants. But if the necessary political will exists, the T-TIP could be one of the most important contributions to the trans-Atlantic relationship and the global trading system in decades.
In Europe as in Asia, the economic and the strategic ultimately go hand in hand. The closer integration of the U.S. and European economies will reinforce the most powerful alliance in history and underscore a common commitment to global economic norms.
Our intent is for these initiatives to contribute to rules-based trade world-wide. The Obama administration remains committed to the multilateral trading system and is leading the way in seeking achievable market-opening approaches on trade facilitation, services and information technology. The U.S. hopes to realize the gains of freer and fairer trade and investment with every region, from the new democracies of the Middle East to the fast-growing economies in Africa and our own hemisphere.
President Obama's National Security Strategy lays out two overarching challenges: Restore our strength at home and restore our standing in the world. The President's international economic policy will help us do both.
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