 But a good friend of mine, Kurt Tong, who I think most people in this room know because Kurt has done just about everything on Asian economic integration that it's possible to do in the U.S. government. He is the principal deputy assistant secretary of state in the Bureau of Economic and Business Affairs. That's his title. But in reality that means he is the senior most civil career official at the State Department working on economic issues across the world. His own background, though, he's served in China, Japan, Korea, the Philippines, and knows in many different capacities of various aspects of Asian economic issues. So he is the best you could have in this kind of forum to talk about a perspective on Asian Pacific economic integration and the role of the U.S. and Japan. And so please join me in welcoming Kurt Tong to the stage. Well, thank you, Matthew, and good afternoon, everybody. It's a real pleasure to be here. I have my friend, Mr. Coffey, you need your coffee, too. And thank you very, very much, Matthew and Mike, and also Yashige San for hosting this event each year. As I understand it, this is the 10th iteration of the CSIS JETRO forum, and it's become a bit of a recognized institution in shaping people's thinking in Washington and in Tokyo about how the United States-Japan relationship can contribute to the very important economic agenda in the Asia Pacific that both of our countries share. So my deep respects to you for continuing your support of this initiative by both organizations. I think you've all had an interesting morning. I watched it from the comfort of my office due to the revolutionary technology that CSIS is invested in. And so I'll try today not to belabor many of the points that you've all already gone over in great detail and with considerable insight. What I'd like to do is talk a bit, broaden out the discussion, and think about the role of the United States and Japan in the region in shaping regional economic integration and shaping the direction that the Asia Pacific economy should be going in the years ahead. And this conversation, of course, happens at a very interesting time. At this juncture, I think there is no longer any reason why anyone in this room should stand up later and ask me a question, is the United States committed to Asia? Maybe there will be no one asking, is the President committed to the Trans-Pacific Partnership and getting it done? Because you can see the evidence thereof and the action on Capitol Hill this week and the action in the negotiating room over the coming weeks I think will be testament to the enormous commitment of the United States to be a shaping factor in the Asia Pacific political economy. As this momentum builds, it's important to think about what are the key institutions and the key players that are working with the United States and Japan in complementary fashion and what are our broad objectives in this joint enterprise. I say actors and players, because all of the main challenges for the Asia Pacific region, if you think about them going forward, are by nature transboundary and by nature multifaceted and by nature extremely complex. And that means that the United States and Japan and the lead, but many other nations and institutions are going to need to be actively engaged in setting out shared solutions to complex problems. But I stand with a very firm sense that the United States and Japan have both a critical leadership role in this enterprise, particularly in strengthening those institutions and in pushing forward as rapidly as possible this enterprise of regional economic integration, bringing the economies of the Asia Pacific and knitting them together in increasingly significant ways so that they accomplish more together. So three things I'm going to do today, and I'll try and do this quickly, and at some point you can just ring the bell or hit me over the head with something heavy. But I'll first talk a little bit about the goals for the region because I think it's important to have goals. Everything in life you need to have goals, right? My main goal right now is paying my mortgage, but as institutions and as nations we need to have goals. Second, think about the tools for achieving them, and then finally think a little bit more concretely about what is the agenda for the United States and Japan in the near term. So goals. You all are having dessert. I had some, thank you very much. It was delicious, so I will refer to pie and considering the roles of the region. And maybe only the Americans will get this, but there are three aspects of this and they all relate to dessert. They all relate to pie. First thing, we got to increase the pie. We need a bigger pie in the Asia Pacific. The economic pie needs to be bigger. And how do we do that? The best way that we can do it is by expanding trade and investment around the region, increasing efficiencies so that there's greater productivity in the economy as a whole. And how do we achieve that? And you've heard this mantra before, but we do that by setting up a region where the rules of the road are open, free, transparent, and fair. Open to all comers, including players from outside the Asia Pacific region, free in the sense of having the minimum number of barriers to trade and investment in the region, transparent, and that everybody knows the rules of the road and has access to the rules of the road. And we're facilitated in that regard by technology, but we need to have agreements to make, to utilize that technology to make sure that the rules are available to everyone. And fair in the sense that competition should be fair, regardless of the ownership of a corporation or the nation that any private sector player comes from, that it should be a fair competition on the playing field of East Asian economics. So the second part of the pie, we've got a big pie. Now what are we going to do with it? It's important, and we need to recognize that the rhetoric of inclusive growth is not just rhetoric. It needs to be a specific objective of the United States and Japan in making sure that the Asia Pacific region is not just prosperous on average, but actually reaches the pockets of poverty around the region in an effective way so that we realize the stability and the political gains and the democratization gains of economic activity around the region. That means increasing the role of women. It means specific actions aimed at poverty reduction for disadvantaged populations. And it also means paying attention to the environment because the environment sneaks up on growing economies and it tends to punish the poorer parts and weaker parts of economies disproportionately and more quickly. All of that needs to happen at the same time as making the pie bigger. We're making the pie bigger, we're sharing the pie, what's the last part? Americans in the room? We're going to eat the pie, right? Okay, this is not just a altruistic exercise from the perspective of the United States. We need to link the American economy deeply to this dynamic region in the Asia Pacific so that we're getting our share of this dynamic growth and activity that's taking place across the ocean. So the tools for making this work, you all have talked quite a bit about TPP. I'll mention TPP, of course, probably the most powerful tool currently being pursued. APEC as an institution, ASEAN as an institution, the financial institutions as institutions, and then finally and most importantly the private sector itself as a tool for accomplishing this mission. Now the Trans-Pacific Partnership, you all know that TPP will boost economic growth and competitiveness around the region. What people don't necessarily, many of people in this room probably get it, but not everyone does, understand that we are in a, David Ricardo was a brilliant economist but he's kind of old and he's been dead for a while. And we need to be thinking about economics in a much more sophisticated way. And the fact of the matter is that the way global supply chains work now and the integration of economies already and the amount of intense intellectual property that is invested in every piece of property, each good that is produced, and the fact that goods and services are so deeply linked in the current global economy. We need more complex rules. And just thinking about tariff elimination as important as it is and it's critical to making agreements work, the non-tariff aspects of TPP are really where the goldmine is from the perspective of advanced economies like the United States and Japan. And this means rules like on areas such as labor, on the environment, intellectual property, state-owned enterprises, the investment rules, financial services issues, all of the transparency and regulatory aspects of TPP. Those things are what people really need to be very excited about as they convince each other that the Trade Promotion Authority and by extension the Trans-Pacific Partnership are essential for the United States and for the region. Of course, TPP goes beyond economics and there are strategic benefits as well. The common characterization of those strategic benefits is that it's a demonstration of commitment by the United States and that I think is manifestly true and is being exhibited by U.S. leadership at this time. But there's another aspect of this, which is economic policy leadership, which is extremely important. And the TPP is the most important expression of economic policy leadership currently taking place on the planet. And through this joint exercise, there's just no way to overestimate the strategic importance of 40 percent of the global economy, including developing countries as well as developed countries, speaking numerous different languages, different religions, widely separated from one another geographically, speaking with one voice that they are on board with rules that are open, free, transparent and fair for trade and investment. And that strategic aspect in the economic realm is going to have a magnetic effect. And I think you've talked a lot about that already this morning, how some of the other countries in the nation, countries in the region are viewing TPP and the magnetic effect that this agreement will have on both sides of the Pacific. There's also the fact that the TPP, particularly for the United States and Japan, is an expression of our values, values favoring fair play, transparency, fighting corruption, protecting labor, protecting the environment. These are all important values, protecting private property, that we're finding expression in, through the, through the Trans-Pacific Partnership, which really makes this a powerful tool. Let me say a word about APEC. APEC is, of course, I think Matthew shares this, my favorite institution in the Asia Pacific, because I used to work on it. And it's also just, it's not just, it's just a lot of fun people getting together. But it's more than that. It is really a, the best way to describe it is the design room for progress in economic policy in the Asia Pacific region. Everyone gets together and they focus on the leaders meeting that takes place each year, which has both economic and political significance. But the real value of APEC has been in pushing forward initiatives in areas where the region is not yet ready for binding commitments. In areas like anti-corruption, regulatory practices, thinking about supply chains, improving customs enforcement and customs facilitation, APEC plays an absolutely critical role. And it's also just kind of a meeting place where the nations and economies of the region can get together and think about future plans. APEC is also a critical piece of the U.S.-Japan equation. If you think about Japan's role as a founding member of APEC and a real leader in its fostering and development over the years, it's quite impressive and quite significant. And I go back to 2010 in Yokohama when it was Japanese leadership and no offense to Chinese friends who rightly emphasized the free trade area of the Asia Pacific as a major idea at the 2014 APEC in Beijing. But it was in 2010 under Japan's leadership in Yokohama where this idea of using TPP, RCEP and other mechanisms to push towards a shared goal of the free trade area of the Asia Pacific was firmly solidified. And Japan's leadership role in APEC continues. It's currently pushing us all forward on the nexus between infrastructure and public-private partnerships. Japan is pushing APEC in the direction of thinking about how to make economies more resilient based upon some of the lessons of the major earthquake in Japan three years ago. Japan has been actually maybe ironically but truthfully a leading force in pushing women's empowerment and economic empowerment issues in the APEC context. And also the U.S. and Japan have been utilizing APEC effectively to promote the ideas of digital free trade and keeping the digital environment free from excessive government interference. So that's APEC. How am I doing on time? ASEAN, another institution that just does not get enough attention. And the fact of the ASEAN economic community being concluded at the end of this year and being launched as an entity which is headed in the direction, it's not the European Union yet, but it's headed in that direction, is just enormously significant. It's mostly most significant, of course, to the economies of the ASEAN region. But it means a lot to the rest of us as well, to the United States and Japan looking at Southeast Asia from the outside. Because the creation of a unified platform for economic activity in Southeast Asia will make those economies stronger, but it will also facilitate the participation of other economies in the regional development of Southeast Asia. It's just an enormously important development and something that we should all be both feed-in supporting as vigorously and effectively as we can. Some of the things that the United States is working on with ASEAN, we've been spending money to support the computer work and the thought work behind customs facilitation and customs enforcement through a program called the ASEAN Single Window Program, which is managed by USAID. We've launched a U.S.-ASEAN business alliance for competitive small and medium enterprises, kind of modeling the small business network of the Americas to try and get smaller companies networking across the region inside ASEAN and with partners outside ASEAN to develop more innovative solutions to corporate growth in that region. And the United States has just this year initiated new dialogues with ASEAN on aviation, on telecommunications, and on the issues related to trade and in the environment, which will, I believe, have a significant impact going forward. So I would be remiss in not mentioning another set of institutions which play an important role in the region, which is the multilateral development banks. And as you all know, the multilateral development banks have been a bedrock of the global development architecture, playing a very critical role, not just in providing capital to developing countries, but also in pushing reform and economic policy leadership, not just in the Asia Pacific, but globally. And those institutions have been particularly effective in the Asia Pacific. The World Bank, the Asian Development Bank, and other institutions active in the region have played really a vital role. Let me give you a couple of examples that people don't think about. You think about the Asian Development Bank giving big loans to build a road somewhere, or facilitate the improvement, upgrading of a port. That's all extremely important. But the ADB has also been pushing the Greater Mekong Subregion Program, pushing economic integration in a very specific environment. There are also the lead on the Central Asia Regional Economic Cooperation, which to date, unfortunately, because there's a lot more to do in Central Asia, and I just got back from Kazakhstan, but that is the best program to date in pushing regional economic integration among the economies of Central Asia. So these institutions have an enormous and important role to play in pushing development and policy. They're also well-run. They're run on principles of transparency, sound governance. They pay special care to social environmental safeguards, and there's a lot of oversight that goes into these institutions. So there's a new player on the block, the Asian Infrastructure Investment Bank. And let me start by just saying the United States is excited about this prospect. We're not angry. We're not mad. We're not churlish or surly about it. We're not a member. We don't need to be a member to welcome a new institution that's going to make a contribution to the region. There are other things going on. There's a new development bank that's been proposed by the BRICS countries. Frankly, we're in a position of wanting to know a lot more about that, because there's not that much information yet about how that institution is going to involve. And then there's the Belt and Road Initiative that was just discussed a little bit this morning among you all. And on the same trip was in Beijing, learning a lot from counterfeit parts in China. Let's be clear about the situation. It is a good thing that China is going to provide development capital to the Asia Pacific region. Do we care about how it is done and the details of how it is applied when China is an untested leader in providing development finance? Yes, we care. And we'll continue to care. But are we upset about this or is this some kind of geostrategic game where the United States and China are juggling things? No. That's just not the case. This is a bank. It's going to do good work. And the United States is going to help it be a good bank and a bank that does good work. There's some ways to do that. There's co-financing is a very specific way. And I know that the Asian Development Bank and AIB, although it doesn't exist yet, are already talking about how they could do co-financing. And the World Bank is doing the same thing. President Kim has signaled a real interest in working with the AIIB, both in terms of personnel exchange and in terms of co-financing going forward. And we can also work with the AIIB directly, thinking about how it should be structured and how it should be organized and share some ideas and thoughts going forward on that. Which brings me to my final point on the issue of tools. And which maybe we should have a quiz. What did I say was the most important tool in shaping the region? Okay, so no one's paying attention. Scott, come on. Private sector, right? Yeah, absolutely. The key to making all of this work at the end of the day, and this is where the United States and Japan really add value. And we've got to remember this. All this talk about trade agreements is great. And all these talk about institutions is great. And what government is doing is very, very important in pushing forward on policy. But if we don't have good private sector people energetically pursuing these initiatives, and this then gets, brings us back to people-to-people exchange and the importance of actual on the ground partnership and contact between people. But we have to have the private sector be actively and positively engaged on this. And the good news is that the United States and Japan have the best companies in the world. The most innovative, they have the best technology, smartest people. And they're very good at linking finance and marketing and technology in significant ways to produce positive outcomes for development. And that is something that should make us extraordinarily confident and excited about the coming decades in the development of the Asia Pacific region. So finally, what then does that leave us in terms of the U.S.-Japan agenda going forward? Clearly the United States and Japan are close partners. I've lived and breathed that throughout my career. Many people in this room have experienced that firsthand throughout their careers. We communicate a lot. We talk a lot constantly and largely have a shared vision. In business, as I said, we have the best companies. Together, we constitute 30 percent of the global economy, our bilateral trade, $280 billion. The United States has over $120 billion in foreign direct investment in Japan. Our companies are interlinked. In security, we are partners. And the visit of Prime Minister Abe, I think, manifestly demonstrated the fact that that partnership is getting closer and more profound day to day. And finally, we have shared values in democracy and transparency and free markets that will keep us together going forward. So we have this incredible capability to do teamwork based on shared vision and extraordinary capabilities. And we need to expand that and continue to go forward. And it's starting to go forward in ways that people don't talk about quite as much yet because of the focus on trade. But take, for example, the Internet economy for a number of years now and at the instigation of the private sector, the U.S. and Japan have been involved in an Internet economy dialogue, which is, and the people that work on this work with me is described by them as the most important bilateral activity that the U.S. is involved in on Internet policy in cementing common views between the United States and Japan and then making sure that those views are shared out throughout the entire global system of Internet policymakers. And it's had an enormous positive impact. And we should keep doing that. Another is, of course, in development policy, where I've had the privilege of co-chairing the dialogue between the United States and Japan, where we think very specifically about what we can do together on development policy. And it goes beyond doing a few joint projects. It's questions about implementing the financing for development goals, the post-2015 sustainable development goals, and thinking about how the development policy regimes around the world should be shaped going forward. So my point being, a huge amount of potential for the U.S. and Japan to work together. So let me leave you with then some homework. Seven items that the United States and Japan should be focusing on together in this space of Asia-Pacific economic integration. TPP, first and foremost, what's the phrase? Just do it? Is that patented? Am I allowed to say that? Let's just do it. Let's just get it done, and then we'll move on and do even greater things on the trade front. APEC, keep it strong, keep it focused, and continue to utilize it as an important tool. ASEAN, frankly, we need to do more here. The U.S. and Japan both could be even more engaged with ASEAN and thinking about how to support that. With ASEAN and the lead, of course, in developing economic integration in the region. Working on the multilateral development banks, and we have room for dialogue on this, we need to do some more thinking about it. But the goal should be to make sure that both the old and the new institutions are doing a good job in effectively supporting development in the region. Five, the inclusive growth agenda. It's talked about a lot in APEC, but we need to be thinking more specifically about how actually are we going to make sure that not just in developing countries, but also in the United States and Japan, we are effectively reaching all of our people with the benefits of economic growth. The green growth agenda, six. Again, the United States and Japan, both in a technological sense and in an idea sense, are positioned to lead the region forward in thinking about solutions to these paradoxes of economic growth versus environmental degradation and how to achieve growth at the least environmental cost. And then finally, the United States and Japan, whether it's on infrastructure or finance or environmental issues or the internet economy, the U.S. and Japan should keep the private sector in our focus out in front, working with us, and we should continue constantly to think about more and better opportunities to coordinate activity between the public sector and the private sector to achieve good outcomes going forward. So I apologize, I went over a little bit, but those are some thoughts, and remember, it's all about dessert. Thank you. Thanks. Thanks, Kurt. Come and sit over here. Well, thanks, Kurt. That was a special second dessert for all of us, or fourth, I guess, because I had three desserts before, and really validated our desire to have you here because, as advertised, you know, Kurt has this terrific breadth of experience and perspective on these Asian economic questions. I didn't mention in introducing him that, but he sort of hinted at it that he was, one of the times we've worked together was on APEC, and so there are two of us at least in the room. I know Scott likes APEC too, so there are at least three of us in the room who think APEC is important. And so just, but you're framing of this with goals and tools, and then implicitly something that you created in APEC, which was the notion of getting stuff done, which was the PG version of our motto for our APEC host year in 2011, get stuff done. He had t-shirts made, and it was fantastic. You know, in other words, you set the goal, you figure out the tools, and then you just go ahead and start doing stuff and get it done. That's the way to proceed. I thought it was a terrific way of framing this, and your focus on economic policy leadership is what we're really trying to assert in TPP, in addition to the economic benefits and the sort of what are often called broadly strategic objectives. I think this is the key. Economic policy leadership is what's at stake, really, in TPP in all these endeavors. So terrific framing presentation. Let me just ask you a question, then I'll open up to the floor. So some people give the U.S. a hard time because it doesn't match up its strategy in the region with the various developments going on in the region. So it has an APEC, and you yourself, you know, emphasize the importance of APEC, but also ASEAN. But not all of ASEAN is in APEC. I didn't say before, but for those who don't follow this, stuff closely, Cambodia, Laos, and Myanmar are not a part of APEC. And so we're sometimes the U.S. governments criticize for not somehow marrying up these issues, and specifically these institutional approaches, and specifically when it comes to TPP, you know, getting from TPP, which is an APEC initiative, even if you ultimately got everybody involved in TPP or a free trader of the Asia Pacific, you wouldn't have everybody in the region. Involved. I'm not even going to go to the point of India, but that's another question that's in the same spirit of trying to cover the entire Asia Pacific region. How do you answer that sort of, you know, it's a criticism that the U.S. engages sort of selectively in these different organizations, but doesn't have a coherent overall approach to the region in its economic strategy in the region? Thanks. That's a really good way to put what is often heartfelt and astute criticisms of the various approaches that have been taken. My response to that would be that the world is a messy place. There are opportunities that present themselves, and you seize upon them, and there are things that are doable and things that are not. And the important thing, particularly in the economic realm, and this is why I was putting that emphasis on goals, is to have a consistent vision and then grab opportunities as they come, whether it's only 12 of the 21 economies of APEC signing up to TPP in the first round, or the fact that APEC has proven to be a good organization, or the rapidly positive developing aspect of ASEAN as a group, take advantage of those opportunities as they come, and not let the tidy get in the way of the effective. And so we just have to do what we can, push forward, have long-term objectives, but at the same time, and this is a more direct answer to that criticism, be aware of what you're missing as you focus on the opportunities that are at hand, because there are other opportunities that are out there. Let me give, for example, another country that I recently visited, Cambodia. That's a happening place. They've got a lot going on there. Should they be an APEC member? I'm not going to debate that in front of people, but they are doing interesting things, and they've got some ideas and they're pushing forward. They've also got some challenges in the form of corruption, infrastructure, some governance issues. Should we be doing more with them? Absolutely. So we need to think about walking and chewing gum at the same time, I guess is the best metaphor I can think of on the spur of the moment, but doing the strategic and important and focused and difficult high-energy exercises like TPP at the same time as not neglecting those pieces that were not capturing through those initiatives and effectively following up with those opportunities as well. So it's a lot of work. So if you want to give us more money, that's great. You make a good point. Okay. Well, I said at the beginning of my remarks earlier that it is messy, and you just have to kind of get over that and get comfortable with it and work with what you've got. The fact that we say almost identical things, just I know we look alike and everything, but we were not in fact separated at birth. Right. But okay, with that, let me open the floor. Yes, there's a gentleman back there. Please wait for the microphone and identify yourself. Yes, thank you. Rob Colorena, AIAC Investments. Regarding question regarding the infrastructure bank, the developing one, you had mentioned the ability for it to have co-financings with some of the current options there. Do you know whether the mandate exists towards co-investment, and then secondly, does it touch either sectors or countries that aren't available in some of the main options? I didn't quite catch the last part. Could you just say that again? Right, it just whether the mandate would touch either sectors or countries, something differentiating versus some of the current financing options that could be available. Right. Some of those questions you're going to need to ask of the AIIB as it emerges. My understanding is that it will be organized in a way that makes co-financing possible, and that's a common practice, especially in the infrastructure area, where of course everyone wants to diversify risk by having more supporters of major projects or even less major projects. But co-financing is a well-established practice. It's also useful and by nature provides a tool for sharing best practices across institutions in designing and implementing projects so that they're guaranteed to have the desired and positive impact. In terms of reach, again, you'll need to get an authoritative view from the AIIB as it comes out. My understanding is that the positioning of that institution will be somewhat to the commercial side of where the World Bank and the ADB generally operate, but to the public side of where commercial banks generally operate, which potentially could be a useful space, although it's a very complex space because it brings projects into the realm of co-financing from private capital as well, or projects which are actually supporting directly private sector activity, and then how much skin in the game does the private sector bring to such projects, etc. So it's going to be a complicated exercise to sort out the various roles and methodologies. And that'll be challenging, but I think it's doable, but it could create some new opportunities for how infrastructure in particular gets financed in the region. That said, again, going back to the basic theme of the importance of the private sector, if you think about the scope of any of these institutions, whether it's the ADB, the Asian Infrastructure Bank, the Road and Belt Initiative, all of these, the size of them actually pales in comparison to the demand. So the primary way that infrastructure is going to get developed in the Asia Pacific region in particular, but globally, is through self-generated resources of economies, through good fiscal practices, taxation practices, and transparent utilization of their resources, and greater tapping of private sector capital, through primarily through public-private partnerships and other ways of bringing the private sector into these developments. And those are also very complex and difficult. And if you ask people that do infrastructure around the region, they say that the main impediment is not the absence of cash. There's actually quite a lot of money that's available. It's the designing of projects that have a return on capital that gets people to want to spend that cash, and designing of good projects that have a guaranteed positive impact on populations and the environment and actually result in economic growth. So it's a complex exercise, and something that we all need to just keep working on. Again, more money is welcome, but it's not like you just write a check and everything happens in the region. Seriously, I promise we didn't compare notes before. Yes, something similar. Yes, ma'am. Didn't say it as well. Hi, my name is Ping. I'm from Epoch Times Newspaper. This one's a massive cyber attack hate federal government and 4 million employees information leaked. The Washington Post said China is actually behind this. Also, CBS confirmed the CCP is part of it. And this morning, Senator mentioned we need more cooperation to brought China's behavior up to the international standard. What's your thought? And do you think that would work? And is there any other ways to prevent this kind of cyber attack in the future? Thank you. So I don't have any news to make in terms of taking the role of law enforcement and explaining what we do or don't know. Frankly, I don't know anything more than you do. With respect to the breach at the Office of Personnel Management, I was comforted to know that the State Department operates on a different computer. Although, you know, my credit card has been stolen many number of times and utilized all over the world. And could be anybody. The question about cyber security, however, is a very important one. And I think the best way to describe what we're engaged in with China as well as with other partners is a heartfelt and sincere conversation about the fact that everyone is threatened by cyber crime. Everyone is threatened by the potential for cyber terrorism. And in that context, we all need to, regardless of our approach towards freedom of information, where we have very, you know, some significant differences with China about questions related to whether the internet should be provided information in a freely available way to all citizens. Regardless of our views on that fact, and we should be very seriously trying to fight cyber crime and prevent cyber terrorism in a very concerted way. And that requires cooperation across borders, because by nature this is an international problem. Another corollary to this is really the importance of keeping in mind that even as we make concerted efforts to prevent cyber crime, the policies which are economic in nature and end up having negative economic effects on private enterprise should not be constitute an appropriate response to the threat of cyber crime or cyber terrorism. What I mean by that is that in designing ways to fight the bad guys, we shouldn't be telling the good guys that they have to keep their information in a specific location or follow or give up important private property to government and particularly a government which is not their own in support of those efforts. And so because there's no real justification for doing so as part of fighting the bad guys. So it's a complex exercise, a very good question. And we are, and you'll see this again through the strategic and economic dialogue conversation coming up later this month, engaged in a very sincere and heartfelt approach with China to try and improve how this is all done. All right, yes, sir. Thank you very much. My name is Dong Hui Yu, which is China's real news agency of Hong Kong. A follow up question on AIIB. It was reported yesterday that the AIIB has a linear structure so that the decision would be made easily and China will have a veto power. So my question is under this situation and condition, is the U.S. still willing or possible to join in the AIIB? Thank you. A lot of those details that you're describing, I think they're still under discussion among the countries and economies that are considering joining the bank. And so I don't have any particular information for you on exactly how the rules are going to be shaped. The rules matter, as I said earlier. It's important that the governance of the institution be transparent and reinforce high standards. So efficiency, and you mentioned the word lean, and Mr. Jean, the designer of the AIIB, has talked about lean, green, and mean as his vision for the institution. Lean, green, and clean. Oh, was it clean? Lean, green, and clean. Oh, I was thinking. No, no, no, clean means not corrupt. Green is environmental. I was thinking about that. Excuse me, I was talking about the Green Bay Packers. The, sorry, lean? Lean, green, and clean. Green, lean? Not corrupt. I can't even pronounce that now. Now that I'm embarrassed by my mistake. And that's an admirable vision. Everyone doesn't want to waste money. They want to protect the environment. And they don't want corruption in their institution. And that's something that is a good thing. How you achieve that is important. And so we're dialoguing with the AIIB and interested in the details as they emerge and will continue to be interested observers. And as for the question of whether the United States will join, and I've actually, at this very podium, addressed this question before, we're not now considering joining the AIIB. We've got a lot on our plate already. The United States is extraordinarily active in development finance, and the World Bank, the Inter-American Bank, the African Bank, the European Bank, Asian Development Bank, IMF, you know, just keep going. The, right now, that's not on our plate. Doesn't mean we're disinterested. It just means that what we're doing is talking to the AIIB as it is developing and to the countries that are participating in it to make sure that it reinforces, from our perspective, the positive development of the region. Okay, I'll take three final questions in a cluster. Three final questions, and then you can choose which ones to answer one there and then that gentleman. Okay, thank you. Ping Lu of China Times, Taiwan. We really enjoy the pie, and it packs a big pie or a pie of a variety. And, you know, for more than maybe four decades, U.S. and Japan were the most important trade partners of Taiwan, but now China is replacing or has replaced Taiwan. You have any worries? And I know you visited Taiwan not long ago, and so did a certain secretary, Rivkin. And what did you advise to Taiwan's high-rank officials, such as Taiwan should be more integrated with the U.S. and Taiwan instead with China? Thank you. Thank you. My name is Kunio Kikuchi, and I'm an independent, well, with Washington Research and Analysis. My question is about things that were not mentioned, mainly the country, European countries, and also Pacific countries sitting closest to Japan, namely Russia. Is it okay to ignore Russia so completely? I've sat here for four hours, and I haven't heard a word mentioned about that Pacific country. Thank you. Indirectly, we did talk about SCO and APEC, but you're right, we didn't talk about Russia. Yes, ma'am, last question. Hello, my name is Grace Rashomet, Grace Clegg, at the East West Center. My question concerns the demand side for integration. Clearly, the United States and Japan would greatly benefit with our regional supply chains to see that greater integration, the unified market, if you will. But what about the lesser-developed countries? Is there more interest in getting their domestic economic chaos in order to make it, if you will, before turning their attention to integration, or do they see that as an integrate now as a means to further development? Good question. Okay. Taiwan, Russia. Thank you. So briefly on Taiwan and Russia, and then the fascinating last question, which I think is quite profound. On Taiwan, I think our U.S. goals with respect to the Taiwan economy are very similar to our goals with other economies. We want to have a deep trading relationship. We want to have a strong investment relationship. And we want to be sharing ideas. We want to have, and we are. You talked about my boss, Charlie Rivkin's trip to Taiwan. He recently announced, I guess it was last week of the week before, a new Internet dialogue with Taiwan. He talked about improved conversations in other areas as well. And that is something that we want to continue to deepen in that aspect. And the advice that we are giving to Taiwan is again similar to advice to other economies in the region is to open the economy, diversify the economy, and increase integration with other economies as a way of promoting growth and improving outcomes for the people of Taiwan. And I think that that is something that we are, in American English, preaching to the choir, a vision that is shared by leadership there. The interesting additional aspect, of course, is the question of diversification of the Taiwan economy. As you rightly noted and appropriately so, the Taiwan economy and the Chinese economy are becoming increasingly interlinked. And that is a good thing. It's promoting growth on both sides of the straits, as well as other benefits outside the economic realm. And we don't oppose that by any means, but I think it is useful for the Taiwan economy to have strong ties to the United States and to other economies in the region. And that's something we want to help. And so we'll keep having that conversation. With respect to Russia, we could go on for hours, but let me, in this context of today's meeting, say that it's actually unfortunate that Russia's current approaches in a westward direction, I think, are obscuring the value that would accrue to Russia's economic development, as well as its broader future. If it were doubling down instead of on the issues that the leadership is currently focused on most, was instead thinking about economic development, about reaching out to Asia in a positive way, and about participating more in that positive project that is embodied in APEC and all the activity in the Asia Pacific region. And so frankly, it's a missed opportunity, is the best way to describe the situation, and the one that is missing it the most is Russia itself. With respect, you're going to have to remind me now. Demand side. Absolutely. You know, and TPP, of course, is the best example of this, where you have a communist country that's, I think, recently graduated to lower middle income status, but maybe, I apologize, I'm not sure exactly where Vietnam is, but it's on the low end of the income spectrum still. You've got Islamic nations. You've got economies of all different sizes and shapes and levels of development. You've got Peru, Chile. All of them have signed up to and bought off on a real vision of economic integration as being in their interest. So is it just then this handful of economies that feel that way? I would argue not. I mentioned Cambodia earlier, which is very interested in deepening its ties, both through its immediate neighbors as well as broader, more broadly. It's actually a very consistent theme around the world, as long as the developing country nations are in a political space and a security space that is sufficiently stable for them to think about their medium term and long term future, they almost always have an opening, market opening, free market economy emphasis in their policy as they think about the direction forward. The days of sort of state led economic growth being the primary vision for how to go forward, I think are fading, frankly. I may be drinking too much Kool-Aid, but I think it's true. If you look at the trade facilitation agreement that came together in the WTO, that was all of the nations of the WTO that signed up for that because they understood that having reduced barriers to trade across their borders was going to be in their benefit. And that's a pretty significant vote against protectionism on the part of the entire planet. So I think things are continuing to trend in the right direction. And that, again, to get back to that basic theme is primarily because people value the role of private enterprise in their economies. And we now have how many, quote, unquote, communist governments around the world that are very much valuing the role of private enterprise in how they grow. I think that's the way forward, and it's going to continue. Great. Again, great question and good answer. And I'm going to ask you to join me in thanking Kurt. But first, I forgot to say, again, another thing about him at the beginning, which is that he is a member of the Red Sox Nation, which means that he is used to disappointment. But then... So let me interrupt. The guy with the 0.61 ERE is pitching tonight. So let's see how it goes. Okay, we'll see how it goes. All right. So I couldn't resist the baseball theme at the end here. But please join me in thanking Kurt for a terrific presentation. Thanks. Thank you, sir. All right. Now, let me introduce Jettro President Yukota to come up and close us off here. Before I do, let me just say, on behalf of John Hamry, the CSA as Japan Chair, Mike Green, the CSA as Simon Chair, myself, and everybody else involved in organizing this conference, thank you to Jettro for partnering with us again. Thank you all for your attention and for really good questions. And we look forward to doing this again next year. Thank you so much. Thank you, everybody. On behalf of Jettro, I'd like to express my sincere appreciation for my colleagues of CSIS and distinguished speakers and participants everybody here today. About half a year ago, I visited here and I talked with Michael-san about today's seminar. And we have chosen, we have chosen today, maybe this is the best timing. And it is more than happy if we can send a positive message from this conference room to the Congress. In my closing, I'd like to talk about three of TPP. First of all, the negotiation of TPP is TPP. Tough pathway to proceed. However, secondly, if we can, I establish TPP. TPP is TPP. Totally productive platform for Asian-Pacific economic integration. And finally, in order to enhance the framework of TPP, U.S. and Japan should closely work TPP together with potential partners. Thank you very much.