 Good morning and welcome to the Center for Strategic and International Studies. My name's Scott Miller. I'm the Shoal Chair in International Business. Thanks for attending our Asia Architecture Conference. I want to welcome you on behalf of CSIS and my colleagues, Ernie Bauer, the Cemetery Chair in East Asia Studies, and Matt Goodman, the Simon Chair in Political Economy. We're delighted you're here today and we also want to extend a welcome to those viewing the view of the live webcast. This entire event will be webcast live and available on the CSIS.org following the event. Also want to let you know that you can follow us on Twitter at hashtag CSIS live. That's hashtag CSIS live. Those of you in the room probably I'd prefer not to have you follow us on Twitter. I'd like to have you put your phones on silent. But thank you. In any case, thanks for coming and being part of this. We want to extend a particular note of thanks to our sponsors, the Center for Responsible and Enterprise and Trade and the National Center for APEC for their generous support for today's conference. I also want to call your attention to a working paper that was circulated as you came in entitled Enhancing Value Chains and Agenda for APEC. This is a working paper that's been produced by my colleague Matt Goodman and myself. We would welcome your thoughts and advice on this paper either today or later. You're welcome to contact us. Today's discussion and conference proceedings will be incorporated in a final publication later this fall. Thank you for your interest and welcome your input to our analysis of value chains in East Asia. To start today's meeting and in fact to introduce today's first speaker, I'd like to welcome Monica Whaley, President of the National Center of APEC. Our partner for this event, the National Center for APEC is the Secretariat for U.S. APEC Business Advisory Council. The business voice of APEC and has been the voice of APEC in the United States for a number of years. Monica herself has ably served as President of the National Center since 2009 but her affiliation with the National Center goes back to its founding in 1994. Please welcome Monica Whaley. Thanks, Scott. He's taller than I am. Thank you, Scott, for the great introduction. I appreciate that. As Scott mentioned, the National Center is the Secretariat for the three U.S. members of the APEC Business Advisory Council and these are three executives who are appointed by the President of the United States to serve in the capacity of the three U.S. representatives on a 21 economy grouping that has the responsibility of looking at APEC's agenda and providing feedback on it and so in that capacity the National Center has had the pleasure of working with our next speaker, Bart Peterson from Eli Lilly. Bart is the Senior Vice President of Corporate Affairs and Communications at Eli Lilly and in late 2012 he was appointed by the White House to serve on the APEC Business Advisory Council. At Lilly Bart serves as a member of the company's executive committee while overseeing the firm's state, federal, and international government affairs efforts. Bart and his team are responsible for everything from public policy planning and development to corporate social responsibility, anti-counterfeiting and community and public relations and reading from his bio and talking with Bart just about everything in between all those areas. Prior to joining Lilly in June of 2009, Bart served in distinguished leadership roles in both the public and private sectors, including from 2000 to 2007 when he served two terms as the Mayor of Indianapolis, the nation's 12th largest city. So APEC provides private sector input to the government APEC process and Bart's been playing a real leadership role in moving these U.S. issues onto the APEC agenda. It provides critical advice on a broad range of issues and having such an experienced and capable business executive on the council as Bart means that U.S. business interests are being well represented in APEC and Bart's experience and background as a public official has been a real bonus for us as well and he brings particular experience in the life sciences and health field to APEC which is a field that's very interested in pursuing. He's raised the profile of health on the APEC agenda and no small feat for a new member navigating the sometimes opaque nature of APEC. So please join me in welcoming Bart Peterson. Bart, we look forward to hearing your insights as a member of the APEC Business Advisory Council. Thank you very much Monica. I appreciate the kind introduction and I just want to say that the National Center for APEC is really a great champion for U.S. business in the Asia Pacific region. So good morning everyone. It's a great pleasure to be here and I want to first thank CSIS for hosting us this morning and in particular Scott Miller and Matt Goodman and Ernie Bauer for their leadership in putting together this timely conference on Asia. I also want to acknowledge the distinguished participants today including ambassadors and senior members of the diplomatic corps. We are in the middle of what some might call summit season. Leaders from the G20 nations and leaders from G20 met in St. Petersburg last week and discussed issues such as anti-corruption, financial regulatory reform and global tax policies and now the nations of the Asia Pacific region turn their collective attention to the APEC leaders meeting in Bali and the East Asia Summit meeting in Brunei which are both less than one month away. In the midst of the flurry of activity that surrounds all of these gatherings it's important I think to take a step back and consider the value that these multilateral institutions bring to various stakeholders in the member countries. From today's agenda you'll see that there's an excellent lineup of experts at this gathering who will provide perspectives on how APEC and the EAS are being used to develop a shared economic and security policy in the Asia Pacific region. I'm here to provide a business perspective on today's discussion. Specifically I'd like to talk about APEC's value as a multilateral forum and the unique mechanism that APEC has for incorporating business views into governmental deliberations. Since its inception in 1989 APEC has worked to reduce tariffs and other trade barriers across Asia Pacific encouraging efficient domestic economies and dramatically increasing exports. APEC's membership which includes some of the world's most dynamic economies accounts for approximately 41 percent of the world's population, 54 percent of the world's GDP and 44 percent of the world's trade. And according to some estimates APEC economies have generated 195 million new jobs and 70 percent of the overall increase in global economic growth in the past decade. From the U.S. perspective nearly 60 percent of U.S. exports go to APEC economies and seven of America's top 15 trading partners are in APEC. At a micro level we certainly are witnessing this growth at Lily which is why our company is now facing east more than it has in its entire 137 year history. Now inherent in the dynamism of APEC's member economies is a constantly changing business environment. The emergence of new technologies and new middle and upper income consumers has spurred companies to respond with new products and services and often new business models. Meanwhile governments typically respond to change with new policies and regulations to make sure the growth works for their people. The business community seeks to partner with the government to ensure that these policies provide protections and opportunities for citizens yes but also facilitate trade and investment. One example from Lily's sector is the efficient and safe supply of medicines. This entails a complex web of regulations including supply chain standards increasingly sophisticated regulatory approval requirements and manufacturing inspection regimes. So it's precisely at this point when new business models and new regulations are in the nascent stages of development that APEC's structure enables it to be the most effective as the public and the private sector's partner to find solutions that work for all stakeholders. In fact this is what makes APEC so unique. One of APEC's key strengths is its convening power which includes the private sector as a meaningful voice within APEC. When a new issue is on the horizon and governments need to talk about it APEC is the place they can do it with all stakeholders including the private sector. So for example when SARS struck in early 2003 APEC health ministers met to discuss the economic and trade impacts of the outbreak as well as the health impacts. APEC has responded to food safety and disaster preparedness issues as well. There are also ongoing sector specific dialogues to enhance effective public policy. In our sector it is the Life Sciences Innovation Forum which is actually a tripartite collaboration among industry government and academia. The Life Sciences Innovation Forum advances key health priorities ranging from biotech investment to public health threats like non-communicable diseases. So I'm honored to contribute to this important process through my current role as a U.S. Representative on the APEC Business Advisory Council which is also known as you heard as ABAC alongside my colleague Ed Rapp who is the group president of Caterpillar. ABAC is an all private sector body consisting of three executives the U.S. is assumed to have a third executive representing each of APEC's 21 economies. They're also asked by their governments to serve as representatives of their respective business communities and to develop policy recommendations for officials. From the business point of view ABAC has leveraged APEC's unique flexible structure to highlight a number of issues that have arisen in our dynamic business environment including the impact that innovation policy has on trade policy, regulatory coherence, secure and efficient supply chains and foreign direct investment and infrastructure investment just infrastructure development just as a few examples. So while APEC is not a forum for negotiating binding agreements it is an ideal place to raise and discuss emerging issues in a collegial environment where governments do not need to worry about quid pro quo or giving up too much to a trading partner in a negotiation. With the Business Advisory Council as the official mechanism for private sector input into APEC it's a valuable form for maintaining the ongoing dialogue with governments. Dialogue that ensures the public sector understands how government regulations and policies affect the way businesses operate today. So all this sounds great but you must be wondering where does all this talk lead to? Well it does lead to change not necessarily in the form of drastic policy reforms but rather changes that are more gradual and become apparent in long-term trends. One example I'll point to here is APEC's work on corruption. In the early days of APEC the word corruption came nowhere near the annual statements released by leaders and ministers. However over time APEC has adopted a robust work plan to promote anti-corruption efforts in the region. APEC now provides one of the only networks in the region for government officials to collaborate on these efforts and what makes this effort more meaningful is its ongoing engagement with the private sector which is particularly critical in this area. In the biotech sector APEC adopted the so-called Mexico City principles which seek to require APEC economies to adopt ethical codes of conduct. In fact a region-wide training on these principles occurred only last month at a meeting in Kuala Lumpur hosted by the Malaysian Prime Minister. Furthermore APEC has played an integral role in shaping the trade debate and developing the structural framework for future agreements in the region including the Trans-Pacific Partnership or TPP. We've been told by our colleagues in government that when the initial TPP negotiations began with nine countries they looked to APEC as a starting point for negotiations which they all could agree upon. For those of us who have invested so much time and energy into APEC it's very gratifying to see APEC's non-binding best practices and guidelines being codified in an important binding agreement like the Trans-Pacific Partnership. So I think this is one excellent example of how the Business Advisory Council's input into APEC influences economic policies in the region. We essentially provide the building blocks to governments in the form of recommendations and let them use these in developing economic or trade policy either unilaterally or through international agreements. In early October I'll join my APEC colleagues in face-to-face meetings with officials and heads of state at APEC Leaders Week in Bali. We'll discuss how we can work or how they can work with the business community to advance a number of key issues including healthcare investment, secure and resilient supply chains and steps needed to address infrastructure gaps in the region. The upcoming APEC host years in China and the Philippines in 2014 and 2015 respectively will prove to be valuable opportunities for further public-private cooperation on a number of important issues. So thank you for the opportunity to join you here today. Thank you to CSIS for hosting this gathering and I hope you all enjoy the day. Thanks. Ladies and gentlemen our next speaker is on the way but not arrived yet. It's Washington D.C. there's traffic so if you'd like to refill your coffee cup we'll get started again in about five minutes. I should say first I'm Ernie Bauer I'm the Symmetra Chair for Southeast Asian Studies here at CSIS and also co-director of the Pacific Partners Initiative with my colleague Mike Green but it's just a great pleasure to see such a vibrant crowd here this morning. I think that's due in part to the fact that this may be the one of the last meetings at CSIS and then in much larger part due to our keynote speaker here Kurt Campbell who is a good friend a former CSIS-er and really an architect of what we're talking about today which is the Asian architecture. As you all know Kurt has recently left the administration as Assistant Secretary of State for East Asian and Pacific Affairs where he did lead the team devising the pivot and is responsible for putting in place a lot of the institutions and architecture or promoting those those institutions and architecture so it's going to be a real treat to have him sort of kick off our discussion today. Kurt is currently Chairman and CEO of his new company the Asia Group it's an advisory company and investment group specializing in the Asia Pacific region. He serves as co-chairman of the board for CNOS the Center for New American Security and anybody who reads the papers including I think especially the Financial Times will see Kurt's visage up there as a special commentator and regular contributor. The rest of his bio is it goes on now for three or four pages Kurt and it's pretty star studded but I think most of you in this audience would have would have had a chance to review that and know that this man is a strategic leader. He's a great marketer and it's a real pleasure for me to introduce our keynote speaker Kurt Campbell. Before I get started ladies first of all I agree very much with Ernie's commentary it's so great to see so many friends here it's a little bit of a surprise but it's a wonderful surprise. I will say that as you look at partnerships and accomplishment if you look over the course of the last four or five years I think the outside institution has played the most important role in helping propel American strategic thinking and engagement in the Asia Pacific region. There's a lot of great think tanks a lot of great work but I have to say the person that I found most helpful most prepared to conspire most prepared to think creatively launch new programs to assist in terms of laying out a blueprint for American engagement in Asia was Ernie and I just want to say publicly how much I appreciated that and if you look at this you know five years ago we did not have these programs we had nothing on Southeast Asia very little on architecture nothing on New Zealand nothing on the future of the US Australian relationship Ernie built this from scratch and so before I get started I'd like to actually just give him a thank you so and if I can I just as I guess before I get started I want to say a word about about gratitude and what gratitude it feels like in terms of institutions that you've worked with and so two of the institutions I've worked most closely with over the last several years one was CSIS another is the State Department just around personal experience in the last couple weeks so I spoke at the young professionals meeting yesterday here at CSIS was welcome back in and literally in the middle of our talk they are coming in to take the furniture away okay because they're moving in the middle of my talk they're taking away so that's that's deep respect obviously and and and secondly I went I made my first trip back to the State Department last week to see the wonderful coronation as ambassador of our good friend Jo Yoon and there's a long line of people kind of being ushered into the State Department literally the security guide goes like this to me and goes like that and I am singled out as the person who needs extra security treatment going back to the State Department so deep respect in the institutions that I've worked beforehand and very grateful for that that real sense of my role so I want to spend a little time today to talk a little bit about next steps in institution building an agent something I know Ernie, CSIS, Mike Green, John Hamry and people in this room have thought deeply about and I want to give you at least my thinking obviously Secretary Kerry our good friend Danny Russell, Evan Medeiros the president are thinking about our engagement upcoming at both APEC and the East Asia Summit but I do think this is an unusually important time with respect to the American role so if you ask me what is the most important contribution that the United States can make in Asia over the course of the next several years you know is it on the military side is it political bilateral engagement what is it I would say twofold the two most important things that we can do one is to complete the Trans-Pacific Partnership and to set a course for phase two which I believe can and should engage more of Southeast Asia and also figure out how our existing game plan for enhanced economic engagement with Southeast Asia and with ASEAN integrates with the TPP process I would put that as number one but what I would put as number two would be taken by some perhaps as a surprise I think the American role and the role of institutions in Asia over the course of the next five to ten years is the single most important thing with regard to increasing greater trust and confidence developing a more strategic dialogue and establishing the norms and values of the 21st century so I can't tell you how important this is but I don't believe it has gotten the attention it deserves and I think part of that is because the early genesis of institution building in Asia was thought by many to be frivolous right we had performances at the ASEAN Regional Forum which I've participated in for many years but what's in fact changed dramatically in the last five years and there's a lag not among this group but among many policymakers in the United States and elsewhere there's a lag in recognition about how important these sessions at the ASEAN Regional Forum are at the East Asia summit and even at APEC and the American role in that along with other countries is almost uniquely strategic and important I will tell you that in the past I was at the ASEAN Regional Forum in its founding in the 1990s if you compared those meetings to yesterday you know 15 years ago to today the meetings that took place in Vietnam and Cambodia they are night and day and some of the sessions that I've been participant in has been have been as drama-filled as strategic and as important to larger aims of Asian community building as anything I've ever experienced and I just want to underscore that more work more creativity has to be applied in this realm I think one of the other challenges that has perhaps been a subtle block to American strategic thinking about institution building in Asia is to do it effectively the United States often has to work through other venues this is not an arena where direct overt American engagement with tonight with ideas and policies is always successful oftentimes good ideas have to be advanced through other means through other players then seconded by yet others and then a subtle American role subsequently generally speaking that's not the way American diplomacy often operates where Americans like to be more out in front but if you look at the things that have been most successful in terms of institution building they are places where other leaders particularly in ASEAN have taken the leading role and then other countries and actors have seconded and again the United States has played a role sometimes behind the scenes to that extent I have to say a word if I can about the transition that has taken place in Australia we wish the new government well and we will work very closely with the Prime Minister and his very able team but it is undeniable that we are going to miss the role of Kevin Rudd not despite personal foibles and you know a complex relationship in Australia I think in many respects Kevin Rudd has been the most important strategic thinker in Asia in the last generation has had an enormous impact on how Americans think about institution building the role of China and the like and he leaves in a sense almost ocean vessel size shoes to be filled in terms of thinking strategically about Asia and and I will tell you that when he would send in strategic you know sort of notes to the president and the like and to the secretary of state his missives his his insights perhaps more than any other leader probably more than any other leader since Lee Kuan Yew during the Vietnam War got more attention than almost anyone else he helped us join the East Asia summit he helped us think about the fact that the defining feature of modern international relations is China's arrival on the global scene and every aspect of our diplomacy has to be recreated and recreated with that in mind I think it's also the case that he helped us realize that part of what we are seeking to achieve in all of these organizations and particularly the East Asia summit and the ASEAN regional forum are conversations about that can best be described as 21st century conversations 21st century diplomacy around establishing the norms the values the mechanisms and the procedures about how complex issues will be debated discussed and hopefully resolved in the Asian Pacific region and if at all possible to take us away from what we might describe might describe as 19th century conversations about spheres of influence about division about big powers and small powers and their respective roles and so I think that is one of the most important things that institution building can do in the period ahead so how to do that how to think about that and what's important in terms of the next steps now the interesting and challenging thing of course is that we have a range of institutions some on the economic side like APEC with an enormous membership and then other organizations with cascading membership slightly different than the others I think the subtle role that the United States and other countries can help play is how to create linkages between these organizations in a manner that creates a greater degree of integration some overlapping integrating concepts and here figuring out how the ASEAN regional forum and the ASEAN core within the ASEAN regional forum can integrate more effectively within the context of the East Asia summit now we don't say that often directly and it's a more subtle set of conversations but that process is absolutely essential going forward I will also say I think one of the most important things that the United States can do on institution building in Asia really is at the declaratory level in the past our position sometimes has been look if you want to get together and talk about security and politics and trade on your own fine we're we're agnostic about that I would take a slightly different view I believe it is strongly in American security interest with the recognition that the lion's share of the history of the 21st century is going to play out in Asia right that we if there's a big conversation that's integrating that seeks to build community we want to see it at the table and we want to be there and I don't think it hurts anyone I don't think it causes any anxiety and makes us feel in any way that we are a beggar that we want to be at the table at those conversations and so I feel much more comfortable with an administration that articulates a role why we want to be at the table because trust me most countries in the region want us to be the table at the table as well and so at the same time that there are institutions with the United States at the table and others very important that do not have the United States at the table I would like to see the onus of innovation and engagement shifting to those organizations with in which the United States plays an active role and frankly to that extent we need the help of friends in ASEAN in India Japan South Korea and others I think it's extraordinarily important to make clear that real institution building on the most important issues involved the United States as well I think a second issue that's going to be critical going forward is how we can use the institutions of ASEAN and EAS to better support the views values and objectives of ASEAN and so to that extent the concepts of integration of connectivity again Ernie's team has done a fantastic job sort of illuminating what that means we have to do a better job of understanding what's important to ASEAN and to these institutions and supporting that diplomatically economically commercially and the like so I think the integration and connectivity theme is important and I think the United States has a lot to bring to the table there it is also the case that we want a diversified integration as well to the extent that we see integration in Southeast Asia to date it is mostly along a north-south access as we go forward as we develop integration greater internal cohesion in ASEAN and with surrounding states we also want to create some east-west connectivity that means linking India up more consequentially with Thailand through Myanmar and the like these are things that I think the United States can think creatively about and support going forward it is also the case that one of the most important things that has to be featured in ASEAN in forums like the East Asia Summit is to demonstrate that the United States is absolutely committed to working with China diplomatically consequently and so to do that means not only to highlight high-level diplomacy with China in these venues and I think we've done a good job there but then to make sure we have the corresponding diplomacy with the other countries and players in the region I think that's one of the reasons why it has not been announced but we're all anticipating an important trip by the president to Southeast Asia that's critically important but at the same time that we are meeting with Southeast Asians and others we have to demonstrate clearly that we are committed to a good relationship with China this is not just because of that goal in and of itself but it is a it is a fact that ASEAN and other countries want a good relationship between the United States and China and that they are better able to build their own relations with the United States in a context of greater engagement between Beijing and Washington as part of that effort I will tell you one of the areas that we struggled with quite frankly we're establishing programs and projects where the United States and China could actually work together on the ground whether it was in Timor on water purification or agriculture assistance or assisting countries with dealing with creating capacity to respond to humanitarian emergencies we've worked very hard to try to come up with projects where the United States and China could demonstrate clearly and openly that we're prepared to work together now we were careful not to talk very much about this in public because frankly we wanted to see China step up and join with us now it's been hard and I think we need to make clear now more publicly how much we're prepared we want to put an agenda out there so that so that friends in ASEAN understand that we're not in any way anxious about this we support that and we want China to join with us and that actual project of working together building habits of cooperation between the United States and China could not be more important in addition to the obvious engagements that we're going to have with ASEAN as a whole I think it is also the case that as we go forward we want to bring in other actors who have critical areas of knowledge and experience that can be applied in this institution building context too often I have to take some blame for this initially the perception was that when we were thinking more about Asia that we were somehow leaving Europe behind that is nothing could be further from the truth nothing could be further from the truth if you look at everything that the United States has every done ever done of consequence in foreign policy in the last 60 years we have done it with Europe right every single thing and the truth is Europe is also thinking more about Asia one of the most important things that the United States and Europe can do is to advance our cooperation in Asia and to work more consequentially on those issues of course we have critical areas that we have to work on on Syria on Egypt and on Iran but we must make the time and devote the energy to creating a cadre of people in the United States in Europe who are more focused on Asia one of the areas that Europeans have almost unique experience is building institutions among countries that have historical challenges and if you look at where Europe started before CSE the other institutions that were built in the 1960s and 70s and where they are today it is inconceivable the progress that has been made Europe can help in the process of institution building in ASEAN in Asia going forward the United States needs to work with ASEAN and Europe on that endeavor one of the things that my good friend Vikram here at the table has worked very hard on is the role of the military in these endeavors I think we have seen some remarkable innovation in the last several months on the part of our Department of Defense asking defense ministers from around ASEAN to come to the United States the the defense ministers meetings that take place on a every two-year basis I think there are plans for different kinds of engagement there is a military and security component to the ASEAN regional forum we need to ensure that that there is more interaction among military operations in Asia military organizations it is not realistic to expect that we will anytime soon arrive at a circumstance where there is some out of area commitment or larger commitment on the part of an organization to intervene or to respond to security challenges there just is not the trust and confidence in Asia to do that however security organizations in Asia that are multifaceted that include the United States ASEAN and China and India have the opportunity to support more transparency so there is a greater sense of what countries are up to in terms of strategy and military developments and also areas of common purpose whether it be disaster response or the like and also to seek what's possible with respect to confidence building going forward um I want to um I I want to conclude with just a couple of general observations than whatever Ernie wants in terms of questions I'm happy to do I think one of the things that we have to make very clear going forward is that we have a strong interest and we support ASEAN unity and and we want the ASEAN project uh enunciated so clearly uh in 2015 to continue and we believe that one of the foundational pieces of peace and stability in Asia is an ASEAN that is united and that uh if ASEAN ever found itself in a set of circumstances where it was divided fundamentally over an extended period of time I believe that would not be in the interest of the United States or of other countries in the region as a whole now many people point to what happened in Cambodia as a very dark and a dangerous set of developments when there was a lack of ability to come up with a unified approach on some complex issues associated with maritime security I take a different approach to that I think that is signs of a growing organization it is not the case that that that the organization will then go backwards from here any organization that is not grappled with hard organizations is not a serious organization and ASEAN is becoming a very serious component of Asian integration and so I fully expect that the process that was triggered through this kind of open debate will lead to a more healthy organization which fundamentally addresses in a positive way what goals and ambitions for ASEAN going forward I do believe that this is an area institution building in Asia where the United States has some unique roles to play we're a distant power but I think in many respects we do have a strong alignment with the larger goals of the regional actors and the institutions as a whole and I can't tell you how again how grateful I am to see such a strong turnout for what I think is and will be a signature set of initiatives for the 21st century I'll stop here Ernie and then however you want to proceed thank you very much Kurt why don't you stay there and we'll we'll open the floor to a couple questions we've got we've got about 10 minutes Al you're first metal report of State Department retired Southeast Asia has as ASEAN centric is developing a whole range of useful institutions and political security and hopefully more toward economic integration APEC is there on the economic side to some extent but still there's a kind of a large hole in Northeast Asia in so far as a lack of mechanisms some in government have said well the logical next step in Northeast integration depends on the six-party process and what happens to the DPRK we've also seen on the negative side that China South Korea Japan integration especially on the economic side hasn't gone anywhere so what kind of thinking would you apply to Northeast Asia it's an important question and it's I think very valuable and there have been times in the past where there has been some important strategic thinking about whether we'd have a five-party meeting or you know some way to get the larger powers to talk about the future of Northeast Asia I think we have to be honest that the that the current obstacles to to a more fulsome set of discussions in Northeast Asia are real and large we have an uncertain situation in North Korea it's not clear how they would respond to a five-party meeting I'm not sure China would support such an initiative at this time I think more important and more difficult is the relationship between both Japan and South Korea and Japan and China and I'm not sure in the current environment there is the appetite for a larger multilateral effort which in the best of circumstances carries high stakes with it so I'm outside of government now so if I if I would give advice I think the more important component pieces are the are the are the critical bilateral relationship so I would very much encourage a careful dialogue between Japan and South Korea and Japan and China on a variety of issues but making clear all along that the United States has a strong interest in how these conversations go and that they take place so that means a very active American role in South Korea dialogue with Japan as it goes through its important changes and of course the relationship with China I think the it is not lost on any of us that one of the most worrisome things that we're dealing with right now is the unpredictable quality of the diplomacy between Japan and China and that is exacerbated by the circumstances around disputed islands the Senkaku the Dayotai ultimately we would like to see a situation in which you have a larger engagement in northeast Asia about the critical issues that economically and politically that confront the region as a whole but I think we have to recognize that at the current time it's probably there is a ripeness issue and there probably are some preceding steps that need to take place in advance Kurt I want to take the prerogative of the chair and follow up on this what you you've focused on the the importance of ASEAN could you talk could you say what you think Indonesia can do in that in that context and what what have they done what what can we expect from Indonesia what should we expect it's it's a great question I'm sorry you know the truth is I should have touched on this if you look at the country that has played the most important role in agenda setting strategic dialogue in Asia over the course of the last couple of years I think a number of votes would be cast for Indonesia they've played a remarkable role and what I have seen in with my own eyes is you know there has always been a caution to the diplomacy that exists between the United States and Indonesia but through very hard work I saw trust and confidence build between Foreign Minister Marty and Secretary Clinton and and other counterparts and we saw in Indonesia do the most difficult of things it played a role as a staunch supporter and member of ASEAN but it is also at the same time playing a role as a leading state in Asia both as a member of the G20 Ernie but also in a country in its own standing and so it has played a role both to support ASEAN but occasionally when necessary to speak out in an individual role in a leadership manner much in the way that you know Kevin Rudd assisted us in some of our diplomacy and Julia Gillard and we expect that to continue in Australia I think we have to recognize that some of that diplomacy can be attributed to the remarkable role that SBY has played in the region as a whole on so many issues climate change institutional innovation and the like and we want that process to continue but we recognize that it is still on a foundation that is being if you will fleshed out so I think the Ernie's general point is we have come to rely all of us on Indonesia's leading role in ASEAN at a time of fundamental transformation in the organization as a whole time for one more question right here Michael Clark LMI C Global I was happily struck by your point about we have to give better signals to China and Asia about cooperation but it's my understanding that at least academically there's a strong view in China that cooperation in the United States and global governance is not in China's best interest because of two reasons but the most important one is it sucks China into the western style government and there's a big academic argument that there's an eastern style that they should be following I just like your comments if that is a problem hey guys I'm sorry I'm certainly familiar with those debates within China but I would simply say that that the arguments or answers that begin with either what does China want or this is what China wants I think don't reflect that on many of the critical issues there is a robust there remains a robust debate and just as there are discussions about you know China's role in the world and the most recent innovation really is Xi Jinping's determination to reflect to China as a great power and not to not to resist that right and I think with that is a recognition as a great power that comes both advantages and some responsibilities I think previously China had perhaps been more interested in in being described as a great power when it was in their interest but perhaps as a developing country when when perhaps more burdens were in play I personally do not believe that China will reject efforts to work with the United States and other countries because I think many of the things that we're talking about are not as value laden as you described the notion of greater capacity in agriculture or dealing with humanitarian crises or preparing for how to deal with piracy these are things that affect all of the countries of Asia and Asians want to see practical cooperation and they want to see countries leading forward there and so I think that if the United States is sustained in our effort and making clear that we're prepared to work on the definition of how this cooperation goes forward to be sincere in our effort in doing it to not just talk to the foreign ministry but other aspects of the Chinese government I think we will have success there I have no doubt that there are both bureaucratic impediments some concerns about how the leadership will address these things but I would simply say it was taken as an article of of fact four months ago that the only kind of meetings that ever would happen between the United States and China were either those institutions that involved all the bells and whistles you know state summits which are high stakes difficult hard to plan or the rushed always unsatisfying 30 minute the turn into an hour and 30 minutes and we're rushing through the agenda at multilateral summits it was basically one or the other and then a decision taken really by the Chinese leadership that we're ready for a sit down and really without a lot of you know bells and whistles to run through the agenda in a productive way now that meeting was tough a lot of hard issues and cybersecurity and the like but that sets a very clear message that that China is interested in constructive cooperation with the United States I think the key here is is how the case is made and how it's sustained if the United States doesn't our problem is often that we have one idea one year and the next year out we're off to a different idea we have to be sustained in this effort over a series of years but we need help from ASEAN we need ASEAN to make clear to both us and to the Chinese what their expectations are they want to see manifestations of US China cooperation on the ground in ASEAN in Timor in the Pacific and elsewhere demonstrating that both sides are prepared to take the political risks and do the hard work to build actual true cooperation not just talk about it not just debate about what a great new strategic relationship is but actually to do real on the ground productive cooperation I believe with that kind of larger framework of reinforcement we have a very good chance in accomplishing that despite the inevitable debates about China's role in American staying power that are occurring in China today thank you guys very much thank you