 Good afternoon, everybody. I'm surprised to see so many people wanting to hear about the future of industrial financing in the Defense Department. This is a complete... It had no idea that it was such a popular topic. No, seriously, thank you all for coming. My name is John Hamry. I'm the president here at CSS and a lifelong admirer of Ash Carter. He was the first guy that refused to hire me. This goes back quite a few years ago. He was at P&A and E at the time, and I interviewed for a job. He decided I wasn't up for that. But it led to a lifelong friendship and our paths have intertwined through the years. I'm so grateful now that he's willing to stay on and be the continuous deputy secretary. He's doing a fabulous job. Every conversation in Washington these days, always in our area, always has kind of a central theme. Is the pivot real and is it durable? That's just the constant refrain I hear at almost all meetings. Well, a couple of days ago, Secretary Carter was in Jakarta and gave a very, very important speech on this very subject. And since very few people in Jakarta are here today, we thought it'd be safe for him to give the same speech. Well, I think it's probably going to be slightly adapted to a Washington audience. Seriously, this is the topic of the day and the secretary is, he was just chartered by Secretary Hagel to undertake the strategic management review. So all of these issues are very timely and I think that's reflected by so much interest here in this room. So let me, without delaying any further, you're here for the secretary. Let me ask you to join and welcome with your applause, Secretary Ashton Carter. Thank you. Well, thank you, John, for giving me an opportunity to be here at this wonderful institution that you run so ably. I've learned so much from John throughout my career. I had forgotten that particular, and something tells me there's something apocryphal about that, but I'll rack my brains on that. But anyway, I've had a great admiration for John Henry for many years, one that's only deepened in my current role, where I can fully appreciate what John accomplished as deputy secretary of defense. John, you made it look easy, and I appreciate your inviting me to be here. I also want to thank Rick Endefurth, CSIS's chair for US India Policy Studies, who made this event possible and from whom I've learned so much about this region for so long. Thank you, Rick. As John mentioned, I did recently return from a trip to Asia that took me to Japan, South Korea, the Philippines, and Indonesia, where I attended the Jakarta International Defense Dialogue. Purpose of my trip was to visit, first and foremost, of course, with our forces deployed there who are doing superbly, and also to make sure that our forces, our allies, and our partners in the region understand that we're serious about our defense commitments there, that we're going to walk the walk and not just talk the talk. This was my second trip to Asia since President Obama announced a new strategic concept for the United States, and it followed recent visits to the region by President Obama, Secretary Clinton, Secretary Panetta, and National Security Advisor, Donald, all of whom were emphasizing the very same thing, the central importance of the Asia-Pacific to the United States, and our commitment to making sure that the region remains safe, secure, and prosperous. Later this week, Secretary Kerry will be visiting Seoul, Tokyo, and Beijing for the first time as Secretary of State. And later this spring, Secretary Hagel, who as a senator led the first U.S. Congressional delegation to the Shangri-La Dialogue, will attend the Dialogue for the first time as Secretary of Defense. Our forces out there are also superbly commanded by Sam Locklear and JD Thurman. I say all this because I think it's important to point out how much time, energy, and intellectual capital, as well as resources we are investing in our rebalance to the Asia-Pacific across the breadth of our government. As the President has said, our investment in the region will continue to grow in the years to come. In this connection, our rebalance to Asia is mostly a political and economic concept, not a military one. But given my role as Deputy Secretary of Defense, I'm naturally going to concentrate on its security aspects today. First, I'd like to briefly address the evolving security situation on the Korean Peninsula. The North Koreans have been determined of late to create a crisis atmosphere. But just because they have a habit of indulging in extreme rhetoric doesn't mean that we don't take the situation seriously. As we've demonstrated through our actions in the past few weeks, the United States is committed to maintaining peace and security on the Korean Peninsula and throughout the Asia-Pacific region. We're vigilantly monitoring the situation. We're in close contact with our South Korean civilian and military counterparts, as well as with the governments of Japan, and Russia. Our position has been and remains that North Korea should cease its provocative threats immediately. North Korea's nuclear activities are in clear violation of UN Security Council resolutions and its international commitments. And we believe that North Korea should live up to these commitments and refrain from its provocative behavior. To this end, we are working with our friends and allies around the world to employ an integrated response to these unacceptable provocations, which include United Nations Security Council resolutions with unprecedentedly strong sanctions and additional unilateral sanctions of great effect, the result of which will be to leave North Korea further isolated from the international community. In the security sphere, the United States remains steadfast in its defense commitments to the Republic of Korea. Together, we're taking important steps to advance the alliance's military capabilities and enhance homeland and alliance security. In particular, we will continue to provide the extended deterrence offered by the U.S. nuclear umbrella, and we'll ensure that all of our capabilities remain available to the alliance. As Secretary Hagel announced, we are also taking actions to strengthen our missile defenses in order to keep ahead of North Korea and ballistic missile development. These include the deployment of 14 additional ground-based interceptors at Fort Greeley, Alaska, and the planned deployment of a second Tipi-2 radar to Japan, which will provide improved early warning tracking of any missile launched from North Korea towards the United States or Japan. In recent weeks, we have also moved the guided missile destroyers USS John S. McCain and USS Decatur to locations in the western Pacific, where they are poised to respond to any missile threats to our allies or our territory. Last Thursday, we announced that we will be deploying a terminal high-altitude area defense system, THAAD, ballistic missile defense system to Guam in the coming weeks as a precautionary move to strengthen our regional defense posture against the North Korean missile threat. In addition to these measures, we recently signed a new joint counter-provocation plan with the Republic of Korea to enhance our coordination and response in the event of a North Korean provocation and to mitigate the risk of miscalculation. And we are participating in annual military exercises with South Korea, including full legal and key resolve to make sure that our alliance is operationally ready to meet the security challenges that confront us in the region. As the President has made clear, there's a path open to North Korea to peace and economic opportunity. But to get on that path, North Korea must abandon its pursuit of nuclear weapons and abide by its international commitments. With that, let me return to the broader theme of today's discussion, which is how we are implementing our defense rebalance across the Asia Pacific region. I'd like to begin providing some strategic context. We in the United States are currently embarked upon a great strategic transition after a decade of necessary and very intense preoccupation on two wars of a particular kind in Iraq and Afghanistan. One that is finished and one that will wind down to an enduring presence over the next two years. We're turning a strategic corner and focusing our attention on the challenges and opportunities that will define our future. We know that many of these, what many of these challenges are, continued turmoil in the Middle East, enduring threats like weapons of mass destruction, and a range of new threats in new domains like cyber. We also see great opportunities, the most consequential of which is to shift the great weight of the Department of Defense, both intellectual and physical, to the Asia Pacific region to reinforce our long-standing commitments there. The logic of our rebalance is simple. The Asia Pacific Theater has enjoyed peace and stability for over 60 years. This has been true despite the fact that there's no formal overarching security structure, no NATO, to make sure that historical wounds are healed. And during that time, first Japan rose and prospered, then South Korea rose and prospered, and then many nations in Southeast Asia rose and prospered. And now China and India rise and prosper. All this has been welcomed by the United States. But none of this was a foregone conclusion when you consider where the Asia Pacific region was at the end of World War II. While the Asian political and economic miracle was realized first and foremost by the hard work and talent of the Asian people, it was enabled by the enduring principles that the U.S. has stood for in the region, which we believe are essential to peace, prosperity and security. These include a commitment to free and open commerce, a just international order that emphasizes rights and responsibilities of nations, and fidelity to the rule of law, open access by all to the shared domains of sea, air, space, and now cyberspace, and the principle of resolving conflict without the use of force. It was also enabled, and this is the theme of my remarks today, by the pivotal role of U.S. military power and presence in the region. We believe that our strong security presence in the Asia Pacific has provided a critical foundation for these principles to take root and for this prosperity to occur. And we intend to continue to provide this foundation for decades to come. Our partners in the region welcome our leadership and our robust engagement, and we're committed to answering their call. It's good for us, and it's good for everyone in the region. And it includes everyone in the region. It's not aimed at anyone. No individual country or group of countries. With this as background, I'd like to explain the various features of our defense rebalance to the Asia Pacific region. It's reflected in first four structured decisions we have made and are making. That is, what we keep and what we retire. Second, presence and posture. That is, where we put things and what we do with them. The most visible part of the rebalance. Next, investments, not just in technology and new weapons systems, but in human capital as well. Then, innovations in our operational plans and tactics. And finally, and perhaps most importantly, the work we're doing to strengthen our alliances and partnerships in the region. Let me begin by describing how we're shifting our force structure to the Asia Pacific region, and I'll start with the Navy. As we draw down from Afghanistan, the Navy will be releasing naval surface combatants and eventually carriers, as well as naval intelligence, surveillance and reconnaissance ISR and their associated processing capabilities. Already, EP-3 signals reconnaissance aircraft have moved from SENTCOM to PAYCOM. The Navy will also be releasing fire scout unmanned aerial vehicles from Afghanistan, and several electronic surveillance aircraft are available for redeployment. In addition, Navy P-3 is a type of maritime patrol aircraft, which have conducted surveillance missions in the Middle East for the past decade, will return to PAYCOM. And the Navy is also adding the fourth forward-deployed naval force SSN to Guam in this fiscal year, 2015. The Navy's shifting overall its posture to the Asia Pacific region in such a manner, as Secretary Panetta announced last year, resulting in 60% of our naval assets being assigned to the Asia Pacific region by 2020, a substantial and historic shift. The Navy's accomplishing this in three main ways. First, the Navy will be permanently basing four destroyers in road to Spain to provide ballistic missile defense to our European allies. Previously, this mission was performed by ten destroyers that rotated from the US to the Mediterranean. The six destroyers that will now be released will be able to shift their deployments to the Asia Pacific region. While the four ships in Spain continue providing the same amount of missile defense coverage for our European allies. Just an example. Second, destroyers and amphibious ships that have conducted security cooperation and humanitarian assistance missions in Africa, South America, and Europe will be replaced for these missions by new joint high-speed vessels and littoral combat ships under construction. Freeing destroyers and amphibious ships to deploy to the Asia Pacific region. Third, the Navy will generate more forward presence by fielding ships such as the joint high-speed vessel and littoral combat ship, which I mentioned, as well as new mobile landing platforms and a float forward staging bases that use rotating military or civilian crews. The Air Force, meanwhile, capitalizing on its inherent speed, range, and flexibility in the region will also shift capacity from Afghanistan to the Asia Pacific, including ISR assets like the MQ-9 Reaper, the U-2, and the Global Hawk. In addition, the Air Force will be able to allocate space, cyber, tactical aircraft, and bomber forces from the US to the Asia Pacific region with little new investment, as 60% of its overseas-based forces are already stationed there, including 60% of combat-coded F-22s. Our ability to strengthen the ongoing continuous bomber presence missions in the regions will also benefit from reduced presence in Afghanistan. As operations in Afghanistan end, for example, more B-1s will become available, augmenting the B-52s already with continuous rotational presence in the Asia Pacific region. And the capability to provide forward strategic presence with round-trip missions by the stealthy B-2 will remain a valuable option. The Army and Marine Corps also have an important role to play in our rebalance. Both services are making the most titanic transitions coming out of Iraq and Afghanistan because they've been so deeply involved in both conflicts. The Army has about 91,000 soldiers and civilians assigned to the Asia Pacific, and it maintains a forward presence of eight active component brigade combat teams, 12 batteries of patriots, and numerous theater-enabling units. The Army is ensuring that after a decade of using PECOM assets in the SENTCOM area, the PECOM commander regains command and control of the other 60,000 soldiers assigned to the broader Asia Pacific region. As part of this regionally aligned rotational concept, Army units assigned to PECOM will focus during their training cycle on specific PECOM mission profiles, such as bilateral and trilateral training exercises and building partnership capacity. I should also add that during these months of sequestration and beyond, the Army is preferentially protecting the readiness and modernization of the more than 19,000 soldiers we have in South Korea so that they are able to decisively respond to any North Korean provocation. The Marines also have an important role to play in the Pacific. Roughly 18,000 Marines are forward deployed in the region. Split between Iwakuni, where a fighter squadron is based, Okinawa, where the third Marine Expeditionary Force operates from, and Darwin, which has a new rifle company. The Marines have also put an additional two infantry battalions for a total of three on the ground in Okinawa and will put another there this fall. These are rotational battalions that will move in and out of the western Pacific every six months. All of this will be accompanied by an EA-6 Prowler Squadron in Iwakuni this fall, along with more heavy lift and attack helicopters on Okinawa. I should also mention that there are 5,000 Marines on Oahu in Hawaii. So in reality, the Asia-Pacific region will soon see more of our Army, Marine Corps, and Special Operations Forces now that they're coming home to the Pacific from Iraq and Afghanistan. In addition to shifting our own force structure, we're modernizing and enhancing our forward presence across the region in cooperation with our allies and partners. Let me start with Northeast Asia. I've already mentioned the work we were doing with South Korea. In Japan, we have added aviation capability with the MB-22 Osprey deployment. We've upgraded our missile defense posture, as I mentioned earlier, with the deployment of a second Tipe 2 radar. And we're working to revise the defense guidelines with Japan to meet the challenges of the 21st century. And as announced by Secretary Hagel last week, the United States and Japan have achieved an important milestone in our effort to realign our Marine Corps presence in Okinawa. Moving forward with this initiative sends a clear signal that our posture in Northeast Asia will be operationally resilient and politically sustainable for the foreseeable future. In addition to strengthening our presence in Northeast Asia, we're enhancing our presence in Southeast Asia and the Indian Ocean region as well. In this regard, it's important to underscore that we're not only rebalancing to the Asia Pacific, but also within the Asia Pacific, in recognition of the growing importance of Southeast Asia and South Asia to the region as a whole. Emphasizing humanitarian assistance and disaster relief, maritime domain awareness, capacity building, and multilateral exercises. In Australia, for example, our first company of Marines rotated through Darwin last year. A key first step towards using this presence to engage in bilateral and multilateral exercises with partners in the region. In the Philippines, we're working with our full and equal partner to enhance the capacity of the Philippines Armed Forces, increase our rotational presence, and capitalize on other opportunities for cooperation. In Singapore, the first of our four littoral combat ships will be arriving later this month, providing a key capability to work bilaterally and multilaterally with our partners in the region. These are but a few examples of how we're expanding our presence in that part of the region. Next, we're giving priority to our investments in our budget to the development of platforms and capabilities that have direct applicability to the Asia-Pacific region. All the while preserving and integrating the counterinsurgency and special operations capabilities that we have worked so hard to develop over the last decade in Iraq and Afghanistan. These new investments include the Virginia-class nuclear-powered submarine, including the submarine itself and the new payload module for cruise missiles, as well as the P-8 maritime surveillance aircraft and the anti-submarine MH-60 helicopter. Together, these investments will help the Navy sustain its undersea dominance. The Navy's also fielding the broad area maritime surveillance sensor aboard the Global Hawk UAV to expand the range and capacity for ISR in the region. Additional E-18G electronic aircraft and a next-generation jammer with extensive frequency range and increased agility. These provide extensive electronic warfare capability. In the Air Force, while we've made some reductions in tactical air squadrons worldwide by removing some of the older or single-purpose aircraft to make way for newer aircraft, we have made no changes in our tactical air posture in the Pacific region. In addition, we have continued to invest in the fifth-generation joint strike fighter, a new stealth bomber, the KC-46 tanker replacement and a host of ISR platforms. The Army, for its part, continues to invest in ballistic missile defense capabilities that are being deployed and improved, as I noted. And at the DOD-wide level, we are also protecting our investments in future-focused capabilities that are so important to this region, such as cyber, certain science and technology investments and space. In addition to investing in technical capabilities, we're also investing in our people in language and culture skills, regional and strategic affairs to ensure that we cultivate the intellectual capital that will be required to make good on our rebalance. And with regard to our military installations, we're making critical investments in training ranges and infrastructure, including in Guam, which we're developing as a strategic hub, as well as in the Marianas, Saipan and Tinian. We're focused on delivering capacity, managing resources, and following through on our investments. Secretary Gates and Secretary Panetta both held regular video teleconferences on Iraq and Afghanistan. Some of you remember them. Where the commanders and all the key players in the Pentagon would work on those very urgent problems associated with both those theaters. Given the priority of our rebalance, Secretary Panetta decided to use the same model for Paycom, a model that Secretary Hagel has now adopted as well to provide continuous and focused attention on the region. In fact, I just came from such a meeting. And to support the Secretary, I've been convening a series of working sessions of the Deputy's Management Action Group, which is the principal management forum in the department, that are specifically focused on our rebalance to the Asia Pacific. So we're watching every dollar, every ship, and every aircraft to implement the rebalance successfully. We also recognize that as the world is changing quickly, our operational plans need to change. And we're changing them accordingly. We're therefore taking into account new capabilities and operational concepts, advanced capabilities of potential adversaries and global threat assessments. Finally, partnerships. These many elements of our U.S. rebalance, the U.S. ones that I've talked about are really only part of the rebalance. We also seek, as we have for decades, to build partnerships in the region that leverage the unique strengths of our various partners and allies to confront critical challenges and realize emerging opportunities. I've already mentioned the work we're doing with allies Japan, Korea, Australia, and the Philippines, but we're building partnerships with many others also. For example, last November, we worked with our treaty ally, Thailand, to update the U.S.-Thailand joint vision statement for the first time in 50 years. With New Zealand, the signing of the Washington Declaration and associated policy changes have opened up new avenues for defense cooperation in areas such as maritime security, humanitarian assistance and disaster relief, and peacekeeping support. In Burma, we have resumed limited military-to-military relations and are working to ensure the Burmese military supports Burma's ongoing and dynamic reforms. With the Vietnamese, we're expanding our cooperation as set forth in a new memorandum of understanding. In maritime security, we're searching rescue, peacekeeping, and humanitarian assistance and disaster relief. In Malaysia and Indonesia, we're similarly working to build partner capacity and to conduct maritime security and humanitarian assistance and disaster relief. With China, we have invited the Chinese to participate in the RIMPAC exercise, which we host, and we're delighted that they have accepted. We seek to strengthen and grow our military-to-military relationship with China, commensurate with our growing political and economic relationship. Building and sustaining a positive and constructive relationship with China is essential to the success of our rebalancing strategy. Finally, India, a key part of our rebalance and more broadly an emerging power that we believe will help determine our security and prosperity of the 21st century with others. Our security interests with India converge on maritime security and broader regional issues, including India's Look East policy. We're also working to deepen our defense cooperation, moving beyond purely defense trade towards technology sharing and co-production. Multilaterally, we recognize the importance of strengthening regional institutions like ASEAN that play an indispensable role in maintaining regional stability and resolving disputes through diplomacy. In this regard, we've made attendance at key ASEAN ministerial meetings a priority for our secretaries, especially the ASEAN defense ministers meeting plus. We strongly support ASEAN unity and applaud the efforts of ASEAN member nations to develop a binding code of conduct that would create a rules-based framework for regulating the conduct of parties in the South China Sea and would welcome China's active participation in negotiations on it. Our position is clear and consistent. We call for restraint and for diplomatic resolution. We oppose provocation. We oppose coercion. We oppose the use of force. We don't take sides when it comes to competing territorial and historical claims, but we do take the side of peaceful resolution of disputes in a manner consistent with international law. We're also deeply engaged in ASEAN exercises planned this year, including a humanitarian and disaster relief exercise that will be hosted by Brunei, a counter-terrorism exercise that we are co-sponsoring with Indonesia and a maritime security exercise co-chaired by Malaysia and Australia. As we work to build these partnerships in Asia, we will complement them with critical new investments in our alliance and our partnerships in Europe. I mentioned the forward basing of Aegis destroyers in Rota, Spain. We have established an aviation detachment in Poland to more closely train with our allies' air forces and we will place land-based missile defense systems in Romania in 2015 and in Poland in 2018. And we'll redefine our presence in the NATO Response Force with the steady rotation of U.S. Army forces to Europe to maintain our transatlantic military links and cement tremendous interoperability gains we have made with allies and partners in that part of the world over the last decade of operations together. As we rebalance, in other words, our transatlantic bonds actually become even more important as we face common challenges outside of Europe. So, there's much that goes into the rebalance. Let me close by noting that there are those who have concern about and perhaps some who have hope for a theory that our rebalance will not be lasting or that it's not sustainable. I'm a physicist and therefore I put facts against theory and let me tell you why this theory doesn't fit the facts. The rebalance will continue and in fact gain momentum for two reasons. First, U.S. interests in the region are enduring and so also will be our political and economic presence there. This presence is accompanied by values of democracy, freedom, human rights, civilian control of the military, and respect for the sovereignty of nations that America has long stood for and that human beings welcome and relate to. And so our interest in staying a pivotal force in the region will, we believe, be reciprocated. Second, we have the resources to accomplish the rebalance. Some who wish to question the rebalance to the Asia Pacific Theater point to the current seemingly endless debate in Washington about the U.S. budget and wonder whether all this can be accomplished. I'm interested to hear this because I'm more accustomed to listening to people question why the U.S. spends more on defense than the next 16 largest militaries in the world combined. This statistic is true, in fact, and won't change much in coming years. It's also worth noting that most of the rest of the money that the world spends on defense is spent by countries that are allies and friends of the United States. These levels of defense spending are a reflection of the amount of responsibility that the U.S. and its friends and allies share for providing peace and security. You may also be wondering whether the sequester will change these facts in a significant way. It won't, and here's why. Sequester was never intended to be implemented and is very disruptive because it gives us very little managerial flexibility in where we take the budget adjustments that we have to take this year. But wherever we have flexibility, we are favoring and protecting the rebalance. We continue to review and revise our plans for executing the fiscal year 13 budget in the face of sequester, and in the face also of increased costs of the Afghanistan campaign and the fact that we only recently got an appropriation. Back in January, I gave direction about what is exempt from or protected from sequestration and the services and components are applying that guidance. It explicitly directs the protection wherever possible of activities related to the rebalance this year. The main point is that the arbitrary cuts that sequester imposes under the Budget Control Act are temporary, lasting through October of this year. In other words, sequester is an artificial and self-inflicted political problem, not a structural one. Hopefully, the turmoil and gridlock will end and the U.S. can get back to what you might call normal budget process. Now, when it does, Congress and the President will decide what DOD's budget will be in the years beyond fiscal year 13. The President has been clear about holding defense spending steady in the long run or reducing it by a few percentage points, including especially by improving efficiency in defense spending. If the drastic cuts that began with sequester this year were extended in their levels for a decade, U.S. defense spending would be cut somewhere around 10 percentage points. This is the range under debate today. None of these political scenarios changes the math I described earlier. The U.S. defense rebalance to the Asia Pacific is not in jeopardy. That said, there is obviously considerable uncertainty about where an overall budget agreement, which is needed to end the current turmoil, will lead. And what is clear to us in DOD is that we need to think and act ahead of this uncertainty and not in reaction to it. Moreover, it's not just the budget strategic necessity that requires us to examine and re-examine our defense in a fundamental way. Strategically, as I said, we're turning a corner after 10 years of war, and we need to master the security challenges that will define our future. And as you know, I believe deeply, we need to improve the way we spend the taxpayer's defense dollar, always striving for what I've called better buying power, since I was under Secretary of Defense for Acquisition Technology and Logistics. For all these reasons, Secretary Hagel asked me to lead a strategic choices and management review, working with Chairman Dempsey and all the leadership of the department to examine the choices that underlie our defense strategy, posture, and investments, including all past assumptions. The review will define the major strategic choices and institutional challenges affecting the defense posture in the decade ahead that must be made to preserve and adapt defense strategy and management under a wide range of future circumstances that could result from a comprehensive deficit reduction deal or the persistence of the cuts that began with this year's sequester. The results of this review will frame the Secretary's guidance for the fiscal year 2015 budget and will ultimately be the foundation for the Quadrennial Defense Review due to Congress in February of 2014. As Secretary Hagel said last week at National Defense University, the goal of the review is to ensure that we can better execute the strategic guidance set out by the President, including our rebalance to the Asia Pacific. Finally, it's important to stress that the strength of our rebalance is not measured only by comparing defense budget levels. The end of the war in Iraq and the reduction in Afghanistan allow us to shift the great weight of effort from these wars to our stabilizing presence in the Asia Pacific region. Next, this weight has accumulated over decades of U.S. defense spending. So you have to consider a nation's defense investments over time. It takes decades to build a military capability of the kind the U.S. has. And probably most importantly, another feature of the U.S. military today is that its operational experience is unrivaled, including such attributes as the ability to work constructively with partners, diffuse intelligence and operations, to operate jointly among the services, to support forces with logistics, all of these skills honed in Iraq and Afghanistan. So for these reasons, enduring values and increasing military power, the United States can and will succeed in rebalancing to the Asia Pacific in the years to come. Thank you. Deputy Secretary Carter. Thank you very, very much for those remarks. Let me also welcome you, as John Hamre did, to CSIS. It's great to have you here. You can see the turnout, a great audience, and a few members of the press in the back. I don't know if you can see them, but this is on the record. Did you know that? Yes, I did. Okay, good. I just want to make sure. Did you also know that we're doing live tweeting? Did you know this? Do you tweet? I don't. Well, usually a moderator is asked to give a quick little summary. I don't tweet either. But if I were tweeting, I would say the lead tweet of what we just heard is the tweet would be, US rebalance to Asia lasting and sustainable and not in jeopardy. You can use these, by the way, if you want to use them. Now, two other tweets I would give, and then we're going to go to the Q&A. Second tweet would be, rebalance primarily a political and economic one, or primarily a political and economic concept, not a military one, but lots of detail on the latter. That would be a tweet. Finally, Deputy Secretary to Asia Pacific rebalance not aimed at anyone. An important message. Some don't buy into that yet, but that's what is the policy. So, with those attempts at a tweet summary, I would like, good, good. Maybe we should both start doing this. It gets a lot of information out there. I would like to turn to the audience, and we've got about 10 minutes, regrettably we don't have more time right now, but about 10 minutes. I'd like to ask you to wait for the microphone. I'd like you to identify yourself and your affiliation. And I'd like you to refrain, we're back into baseball season, right? They just started. I'll use a baseball expression. I'd like you to refrain from any long wind-up before you deliver the question. Just go straight to the question, and only one question. So, with that, be prepared. We have people that will come with the mics. But I would like to do something that they say the prerogative of the Chair. Since I am the CSIS Wadwani Chair in U.S.-India Policy Studies, it gives me a chance, surprisingly, to ask about where India relates to the rebalance. I heard your comments at the end about the partnerships. In Jakarta, you also referred to India being a key part of the rebalance. Secretary Panetta called India a linchpin in that strategy. These are all good ways to connect the rebalance in India. But I'd like to ask you just very quickly, operationally, what does this mean? What are the practical steps that you see in the U.S.-India relationship to make this work? Very good question. And the thing I think I'd point to that's very much on my mind is the... I'm sorry. I'm sorry. I'm sorry. The thing I'd point to, there's much you could point to in the U.S.-India security relationship. And you're absolutely right, Rick, no one knows this more than you. India is, I think, destined to be a close partner of the United States. We just share so much in the way of values and aspirations and our people just seem to mix it up so easily and so well. You see that every day and that has nothing to do with the defense or military, but I think we'll be reflected there. And one area of particular importance where I think we can make a lot of progress quickly is in building the Indian military capabilities they don't want to do it, as I mentioned in the speech, just by buying things. India wants to do it with close technology cooperation and co-production. We have some examples of that with successful projects that we're doing with the Indians that way. Secretary Panetta, when he was India about a year ago, discussed this with the National Security Advisor there and came back and in a way that John Hamry would easily appreciate and ask the Deputy Secretary of Defense to take it from there. So I have my instructions in that regard and so I think co-production and technology development are the watch words there with India. I see lots of potential there and that will bring our to not only build the Indian power and capability of the Indian military but bring us closer together. Great. Good. A question right here and about halfway back and again your name and affiliation please. Paul Eckert from Reuters News Agency. When you say it's not aimed at anybody I get the sense that it's not that China doesn't always buy that and to add to that some Chinese commentators in the state media and officials telling us Reuters in China that they think that even U.S. deployments during this North Korea crisis in response to that are also sort of things that might be aimed at China. My question is how do you address those concerns when you go and do Mil-Mil talks with China and what should they know? Well, I mean I think with respect obviously the things that we're doing in response to North Korean provocations are just that there in response to North Korean provocations I do think that China could play and I wish they would play a larger role in influencing the North Koreans to stop these provocations. China has more influence than any other country over North Korea and North Korea's behavior is causing not just the United States but other countries in region to take actions which if the Chinese find them the kinds of things they don't like to see there's an easy way to address that which is to talk to the North Koreans about stopping these provocations. More broadly the rebalance as I indicated earlier is the perpetuation of the pivotal American military role in the Asia-Pacific region which has had the effect as I said in the speech of providing the peace and stability that has allowed the countries of Asia, first Japan then ROK, Southeast Asia now China and India to develop politically and economically in a climate that has been free from conflict. That's a good thing and that's been a benefit to China and my judgment as well and I think that's the best proof that the US military presence and the US rebalance is not aimed at anyone it has allowed all of that political and economic development take place and we welcome that and we have a very strong political relationship with China that's the main thing and it grows every day and our military-to-military relationship with China is also important and grows every day. I mentioned RIMPAC in the speech. Question here on the front row the gentleman right here Thank you. Press is also on the front row Gopal Ratnam reported with Bloomberg News. Dr. Carter one of the few US officials was actually traveled to North Korea from the former Defense Secretary Dr. Perry and you've in the past criticized the previous Bush administration for not doing much to stop the North Koreans from getting a nuclear capability but now we are here is all the US doing is the best that the United States can do are there more that the US shouldn't must do and secondly are you seeing any change in the rhetoric from North Korea over the last couple of weeks that gives you hope that things are actually cooling off well there's a lot that is going on to impress upon the North Koreans that their provocations are counterproductive they're not all US actions I mentioned UN Security Council led sanctions which are unprecedented I mentioned the actions and statements of others around the world and we're doing as I indicated and I gave you several examples a great deal defensively to protect ourselves and to protect our allies and partners in the region so all of this just further isolates North Korea and all of this just galvanizes opposition to North Korea and results in the kind of pressure that I think you see reflected in those Security Council resolutions over here in the front behind the podium Mike Green you can I'll jump thanks Ash for coming and for your efforts on the rebalance you mentioned partnership capacity which is probably more important now than ever but we're still living with an outdated export control system in Asia we've never defined requirements jointly the way we have a NATO what kind of structural or policy fixes do you think are necessary for that part of the rebalance to work it's a great question and you named two right there in your question one is export controls reform and those of you who know me as under secretary know that I'm a mad dog on that subject secretary Gates was secretary Panetta and secretary Hegel and the president and so forth and he's saying that everybody agrees needs to be revised our export control system I can speak in the defense department now that's a complicated problem because there are other agencies of government and other branches of government that participate in the export controls process but we in the department of defense have improved but need to continue to improve the speed and the controls decisions and then the second part was how we are organized for building partnership capacity and there's also an area where I think we can improve so I take your point and we'll take your suggestions as I always do the lady here on the second row and this will be the pen ultimate last question we'll have one more after that, are you good? Ricky Kirsten Australian National University how important is it for Japan to embrace collective self-defense for the rebalance to work effectively? Well I think Japan's increasing awareness of their own abilities their own capabilities and their increasing freeing of themselves from the strictures they imposed upon themselves some decades ago is a constructive thing they're doing that with respect to arms exports, they're doing it with respect to the kinds of activities that they're willing to engage in internationally and I think that's a good thing it's a good, it's part of the the U.S. assisted if I may be so bold process of healing and putting history behind in that part of the world and it gives Japan the opportunity to play a role that it can be a constructive one around the world in security affairs, they're already involved in counter piracy activities, maritime domain awareness and so forth and these are areas where the world has a need and if Japan could be part of fulfilling that need that's good for everyone I also want to give a tip of the hat to the Australians who are increasingly using the term Indo-Pacific as opposed to Asia Pacific that India is a part of that whole swath of the region so very good for Australia the final question please, right in front thank you thank you Dr. Carter I follow up with Dr. Green questions regarding the partnership and with the recent visit of Mr. Xi to Mr. Putin and focusing on the nuclear potential and with the current threat in North Korea and Iran and Pakistan and all other potential alliance with China on the nuclear capability what is your assessment and our current posture in the southeast Asia sea hasn't stopped China to be continually be very provocative especially to Vietnam I'm sorry a couple parts to the question there for those who weren't able to hear it one was about China's relations with Russia as they apply to the region and there I'll simply mention what I said already about in connection with North Korea I think Russia like others in this situation in North Korea would like to see China exercise more of the influence that it evidently has with North Korea that would be a great way for China to exercise its influence South China Sea I addressed earlier and I said that there when it comes to these territorial disputes they all have an individual history and so forth and as I said the United States is a matter of policy doesn't take sides in those disputes but and I said this in the speech we do take sides when it comes to how they're resolved and we believe that they should be resolved peacefully these are not situations to use force coercion we definitely prefer multilateral approaches that's the appropriate way to deal with these historic issues that's why we're so supportive of the ASEAN process we've hit that hour that we must call this to a close if you want to tweet you can tweet best event ever at CSIS best toast but I would like to say a couple of final words first of all we have some things out here for you to pick up a couple of reports on U.S.-India defense trade U.S.-India military engagement also an important study that David Berto and Mike Green did on the Pacific Command picked those up I also paid close attention to what Secretary Carter said about the assignment that he got from Leon Panetta to realize the full potential of U.S.-India defense trade and to cut through the bureaucratic red tape now I think the only thing that he needs to do that is something that I'm going to now present him the Wadwani Chair in U.S.-India Policy Studies and that is the Hindu God Ganesh who is the remover of obstacles and impediments so this you can take back with you for your next next one thank you for being here thank you all please allow us a moment stay in your seats and tweet or whatever while we get the Secretary out thank you very much