 Feel free to keep chewing, but we appreciate it if you would suspend the conversation until after we're done. I'm Matthew Goodman, as I guess you already know, since I've been introduced, the Simon Chair here at CSAS. So I know many U.S. government counterparts in other countries, especially in Asia, have a lot of frustrations about the U.S. government. One of them is that officials are constantly turning over, so they're negotiating with somebody and the person disappears and goes off to another job or lands at a think tank or something, and some new person comes in and they have to break them in and explain everything to them again. What our Asian friends don't understand is that actually we have a few secret weapons in the U.S. government, and that's people who have been around so long that they have heard all the arguments, they know what all the tricks are, they know where all the bodies are buried, and we are very fortunate to have one of those secret weapons with us today. I am using this form of introduction because I really don't think Wendy needs other forms of introduction. Formally, she's acting deputy USTR, but as most of you know, I'm sure most of you have worked with her over the years, she's been doing this stuff, trade negotiations for over 25 years, focused on a lot of different issues, but in particular she was the chief negotiator for the Korea U.S. FTA, the KORUS FTA, and is now, among other things, driving the TPP negotiations with Japan, and so we're very fortunate to have her here literally while negotiations are still going on to join us, so please join me in welcoming Wendy to the podium. She's going to give brief remarks and then take a few questions, so please join me in welcoming Wendy. Well, thanks a lot, Matt. It's great to be back here at CSIS with some old friends, many of you in the audience. It's good to see Mike Green again and my old friend Ishii Gei from now president of JETRO, but we've worked together closely through the years. I will say when I accepted this speaking engagement, I did not know I'd be negotiating with the Japanese. This is my lunch break, so be nice to me. But I thought it was important to live up to my agreement to come here and it's really my pleasure to be able to talk to you today about the TPP and Asia Pacific Economic Integration. I think I spoke at this conference last year and when I look back over the year and even when I look back over the past month, there's so much activity underway in the region with respect to economic integration. Just over the past month, we've seen a flurry of activity. I was at the recent APEC trade minister's meeting in Qingdao. We had a TPP check-in meeting in Singapore, which was preceded by a chief negotiator's meeting in Vietnam. We had a Japanese agriculture team in about a week ago. The auto team from Japan is in this week. Just last Friday, in meetings with my Chinese counterpart, we were able to have a discussion and share information on the regional negotiations we're both involved in. All of this comes following the president's successful trip to Asia, where TPP was a very important part of his agenda, not only in Japan, but also in Korea, Malaysia, and the Philippines. What I mentioned now are just the meetings in which the U.S. is involved, because over the same time period, we've witnessed a number of events, developments, negotiating sessions between our negotiating partners, including China and Korea. Just held another negotiating round. Japan is bilaterally now negotiating market access with many other TPP countries, and there'll be an upcoming round of RCEP in the next couple of weeks. And what all of this suggests is that it's quite an active time in the region on the economic front, with many different groupings of negotiations taking place. I know you've had a long morning and a lot of discussion about RCEP, TPP, and APEC, and I'd like today is just to provide some observations on all of these. And one of the points I just want to make, and I really feel strongly about this, is that we're really seeing an increasing attraction and appetite in the region for high standard trade agreements. If you look back where we were 15 years ago, there were only a handful of major trade agreements between APEC economies, and most of them just dealt with tariffs. And since then, we've seen, depending how you count, between 50 and 100, and maybe even over 100 agreements in the region, and many of them now are dealing with issues that go way beyond tariffs, including services, investment, and then when we get to TPP, a lot of these 21st century issues, which we're really dealing with for the first time in a binding trade negotiations. If you look at the region now, even just look at China, which a decade or so ago, its agreements were largely driven by foreign policy objectives with trade liberalization focused on goods, and then in 2008, in its FTAs with New Zealand and Singapore, China brought in the scope of its FTAs to go beyond tariffs and liberalize in areas such as services. And when I talk to my counterparts from Korea and Australia who are negotiating with China as we speak, they tell me that they're looking to also include other what we call rules issues in these negotiations going beyond tariffs. And we're seeing a similar developments on the Pacific coast of Latin America, where Chile, Peru, Colombia, and Mexico formed the Pacific Alliance in 2012 to liberalize trade and investment among themselves and to integrate with the Asia Pacific. The United States is an observer to the Pacific Alliance, and we will attend an observer's plenary at next week's leaders meeting in Mexico. I understand this morning there's a lot of discussion comparing RCEP with TPP and talking about whether there can be convergence between the two, or which is the pathway towards an FTA. So let me just offer a few thoughts here. When you look at TPP and RCEP, I think it's safe to say, and I'm not going out in a limb and saying, that they're quite different in their levels of ambition, their scope, and in their negotiating stage. Observers expect that the level of market access and tariff liberalization in RCEP will be similar to the agreements that ASEAN members already have in place, although we understand the modalities, the procedures for the tariff negotiations are still under discussion. And we also understand that in terms of rules, that the scope of issues that RCEP will address will be considerably more limited than TPP. Both TPP and RCEP face the similar challenge of weaving together an agreement that includes many different economies with different levels of development in different political systems. For RCEP, perhaps this challenge is even greater, but it's a challenge that both negotiations are facing. So it's not surprising that most observers see RCEP's declared deadline of 2015 for conclusion of this negotiation as more of an aspirational goal rather than a realistic deadline. But notwithstanding these differences, allow me to be clear that we don't see TPP and RCEP as being mutually exclusive. In fact, the way we count, there are seven countries that belong to both negotiations. And in fact, participation in the RCEP negotiations, just like participation in our initiative with the ASEAN countries called E3, could help some economies really prepare themselves for eventually joining higher standard initiatives like TPP. I understand maybe it was Jeff Schott this morning called RCEP, if you didn't say that someone here did, they called RCEP maybe the prep school for TPP. But we believe that high standards, comprehensive coverage, and high ambition matter. And this isn't just for the United States and our objectives, but really for the interest of all the countries who are parties to these agreements and the region as a whole. And we believe the countries are increasingly turning to high standard agreements for four reasons. First, high standard agreements generate greater economic benefits. In a recent paper published last month by Peter Petrie, Michael Plummer, and Fanger, they modeled the expected global benefits from different pathways to a free trade area of the Asia Pacific, and their analysis showed that expected income gains would vary depending on whether TPP or RCEP standards were used. And they estimated that global benefits for an FTAF based on the TPP template would be about $2.4 trillion, much higher than that for one with lower standards. Second, higher standard agreements drive domestic reforms that boost productivity and competitiveness, which often cannot be accomplished by governments on their own without an outside force to make such reforms happen. In Latin America, the gap in recent economic performance between the open, liberalizing members of the Pacific Alliance and the other more closed economic economies of the Mercasur trade blocs is remarkable. New Zealand's trade minister, Tim Grocer, said in a recent speech that New Zealand's had a real change of heart starting the 1980s from a defensive posture in trade negotiations to embracing liberalization, and he explained how this transformation made a huge difference for the New Zealand economy. And I recall before we launched the free trade negotiations with Korea that then trade minister Kim made a real point of Korea being interested in an FTA with the U.S. to really develop a first class services industry in Korea, and the only way to do this was to open their services sector to competition from the United States. The third reason for embracing ever higher standards is the desire for agreements to reflect the realities that businesses face in a 21st century value chains. This means not only pursuing regional rather than bilateral agreements, but also addressing such issues as regulatory practices, supply chain connectivity, e-commerce, and fair competition. The economists I cited earlier see this as an important reason for the much larger economic benefits of a higher standard free trade agreement of the Asia Pacific. And fourth, for the United States, we also see the pursuit of higher standards in areas such as labor and the environment as a reflection of our values, which are increasingly shared by many in the region. Let me turn now to the valuable contribution that APEC has and continues to make in promoting regional economic integration. At the recent trade minister's meeting in Qingdao, the FTAF and regional economic integration was a lively topic of discussion as the host put forward a number of ideas on how and over what timeframe an FTAF could be achieved. The United States was an early supporter of FTAF when APEC endorsed the idea as a long-term prospect in 2006. And since 2006, APEC has undertaken a lot of important work in promoting regional economic integration and in laying important groundwork for an eventual free trade area of the Asia Pacific. In 2010, when Japan hosted APEC, the APEC leaders outlined their vision for pathways to an FTAF, and they made clear at that time that APEC itself would not be the negotiating forum, but rather they pointed to other negotiations underway in the region, such as TPP and ASEAN plus three and ASEAN plus six, which now is RSAP. And at last month's trade minister's meeting in Qingdao, the APEC economies reached a consensus that APEC would focus on how it could contribute to an FTAF consistent with its role, recognizing that negotiating pathways towards an FTAF are taking place outside of APEC. And APEC's work in this area will include stepped up information sharing, capacity building, further analytical work, and working on what we call the next generation trade issues. And what the ministers discussed, but they did not agree upon during that meeting, was setting a deadline for the realization of an FTAF, nor launching a feasibility study for an FTAF, which is a tool routinely used in the region to prepare for launching free trade agreements. Given that there are promising regional initiatives like TPP and RSAP underway in the region, the ministers did not consider either idea to be appropriate. Now, let me turn quickly to the issue of the TPP negotiations and with a focus on the U.S. and Japan partnership in the TPP negotiations. Japan joined TPP less than one year ago, and their participation has added considerably to the economic heft of the TPP. We, the United States, we do not have an FTA with Japan, and TPP really gives us the best shot in a very long time to address long-standing barriers to trade in Japan, but also allows us to partner with Japan as we shape rules for the region for the decades ahead. But TPP potentially has even greater significance for Japan, and last March when the prime minister spoke eloquently and made the case for why Japan should join TPP, he said that Japan could not afford to remain inward looking while other countries were opening up their economies, and he pointed to free trade agreements being launched around the world in the region and expressed his interest in Japan joining the fray. He concluded by saying Japan has to be at the heart of the Asia-Pacific century, and now is our last chance, losing this opportunity would simply leave Japan out from rulemaking in the world. In addition to increasing the economic weight of TPP, Japan's joining has also increased the complexity and difficulty of our negotiations, and it's interesting because on one hand we've cooperated very closely with Japan to find pragmatic solutions on what we call the rules issues in TPP, so ranging from issues of state-owned enterprises to IPR to investment to services, we've been working really closely with Japan in leading other TPP countries to really lift the standards and reach agreements in these areas. But at the same time, we are also grappling with Japan as we negotiate two very challenging issues. They both begin with the letter A, one is agriculture and one is autos. We are dealing with the autos issues and other non-tariff barriers in separate parallel negotiations to the TPP, which we agreed to launch once the United States supported Japan's participation in the TPP, and we are holding these autotalks this week and are making some progress, but we still have a lot of work to do. As for agriculture, we knew from the start that this would be a challenging area for negotiation with Japan, but we were also really encouraged because Japan and joining TPP recognized that it needed to move on agriculture. It had a really intense domestic debate on agriculture, on agricultural reform, which is continuing today. We note that Japan's free trade agreements to date have largely excluded a range of sensitive agricultural products, and we are aware of the diet resolution, which is urging the Prime Minister's negotiating team not to achieve tear-off elimination in these so-called five-product areas, which when we count them, it sure sounds like six. Achieving meaningful market access in Japan's agricultural market is critical, consistent with the high standard and comprehensive TPP outcome that each country has agreed to pursue. We were working on agriculture hard with Japan for a while, but during the President's trip to Tokyo, we were able to really enter a new stage in our negotiations when we achieved a path forward on both on autos and agriculture. We made important progress during the visit. On agriculture, we started negotiating on what we call a line-by-line basis for those of you who are not familiar with tear-off schedules. That's what tear-off negotiations are about. And on autos, we moved, and continuing through this week, we're starting to discuss some of the more difficult negotiations in the negotiations, including standards, dispute settlement, and financial incentives. And what we achieved with Japan during that week in Tokyo and thereafter, it not only has propelled the U.S.-Japan bilateral negotiations with respect to TPP, but it also has provided important momentum for the overall TPP negotiations. And this is because a lot of the TPP countries were not negotiating market access with Japan, and they were kind of sitting back to see if the U.S. and Japan could make progress. And as a result, they were a bit reluctant to move in some of the outstanding and difficult rules areas. And as a result of our ability to achieve a path forward with Japan in Tokyo, Japan now is engaging in market access negotiations with other countries. And as this is happening, these countries now can see an outcome possible on market access with Japan and others, which is leading them now to reassess and try to find landing zones in the outstanding and difficult rules issues that remain. This forward momentum was apparent in what we call our check-in meeting in Singapore when the TPP ministers met following the APEC meeting. And since that time, we are continuing discussions at all levels with our negotiators and ministers level and in between. And our chief negotiators are to meet again in July. We are continuing to make progress. We are resolving issues. And we are getting closer to concluding an ambitious TPP agreement that will open markets, boost economic growth, boost exports, and create jobs. And as we are working to wrap up these negotiations with the current 12 partners, others in the region are expressing interest in joining. We've always conceived TPP as an open agreement, which countries could join over time. Korea lasts Thanksgiving. And I always remember, because I got the call during the Thanksgiving meal, that they were interested perhaps in joining TPP. We are in the process of our bilateral TPP consultations with Korea as other countries, other TPP countries are as well. Korea, with the chorus agreement, a very high standard agreement, in that regard, we're focusing on areas that are chorus plus with Korea that they need to focus on to make sure that they will be able to live up to those high standards. And we also have a number of bilateral issues that we also need to work through with Korea. And Korea also needs to formally make its own decision that it wants to join TPP. And a number of other economies have also at various times this past year expressed interest in TPP, including the Philippines, and this was discussed during the recent visit by the President there, and others as well. And with a number of these countries and economies, we are sharing information, so when they are ready to officially put their hands up, at least they are up to date with what's going on in these talks. It's also interesting how far, and I'm almost done here, how far China has come from its early suspicions that TPP was somehow designed to contain China. China is clearly studying TPP intently. It is expressing an interest in the negotiations, and I think this can be taken as a sign that it is rethinking its FTA strategy and considering how participation in trade agreements might yet again spur domestic reforms as it did when China joined the WTO. We are regularly updating China on TPP, and China is updating us on their negotiations, and as I mentioned at the outset, I led such a discussion just last Friday, so there is a very healthy dialogue going on between the United States and China on these issues. Of course, there are still many questions about China's readiness to take on the obligations of a high standard comprehensive agreement like TPP, but there are signs that China may be accelerating its progression towards pursuing higher standard agreements, and we'll be looking closely to see how their negotiations go with Korea and Australia this year, as well as the progress we make in our bit negotiations where China has agreed for the first time to negotiate a negative list. So let me conclude and just say the TPP high standard model is clearly gaining momentum and attention in the Asia Pacific as a force for regional economic integration. The jury is still out on exactly what shaped the path to an FTAF will eventually take, but our view in the United States is that TPP is the most promising prospect for an FTAF because it offers the benefits of being a high standard agreement that addresses the emerging trade and investment issues of the 21st century. It is quite far along in the negotiating process, and finally, it's just attracting a lot of interest among other economies and countries in the region beyond the 12 members. Thank you very much. Wendy's agreed to take questions. I'll come and join her. Wendy's agreed to take a few questions. There are microphones. Please wait for the microphone and please identify yourself and ask a question, Professor Uradda. Wonderful talk. I have a question which you didn't touch upon. That is a TTIP, U-S-E-U. I think rulemaking is one issue or TTIP, and of course TPP rulemaking is a big issue too. How does the U.S. look at these two frameworks from the point of view of rulemaking? You have to make rules consistent to each other, in my view. So again, what is your view on these two frameworks? Well, thank you very much, Uradda-san. It's interesting with the TPP negotiations underway and the TTIP negotiations underway, the activity on our trade agenda between these two negotiations and what we're doing in the WTO is quite exciting. And let me just say personally, for me, it's a really exciting time to be working on trade in the United States and at USTR. Both negotiating teams for TTIP and TPP are coordinating very closely, and there will be similarities between rules issues that we're seeking in TTIP and TPP. But there will be some differences as well in terms of which issues we'll be emphasizing, and a lot of that has to do with the types of barriers we face in the countries we're negotiating with and how extensive and how close our ties are with those trading partners. But whatever we negotiate will be consistent between the two, and we will need to carefully monitor both of those negotiations, but other negotiations we're involved in to make sure that we are concluding the agreements that really bring home the best deal for the United States and for the region, for the global trading system. Yes, sir. Ken Wan from Taiwan OCAC. What's the United States producing about Taiwan joining TPP? Well, as I mentioned in my remarks that we view TPP as an open platform open to the economies and countries in the Asia Pacific region who are able to demonstrate that they can live up to the high standards of the TPP and where we can work through bilateral issues of concern. To make it clear, the United States is not the one that makes the decision on who joins TPP. That's a consensus decision taken by the existing TPP members. Any new candidate at this point would need to be agreed on by the existing 12 TPP members. Okay. Ma'am, I'm André Souvezio and I'm the Chief Representative in Vietnam for a company in Detroit, the Interstate Traveller Company. Now, my question is this, you've just made an excellent place and the representative this morning, wonderful case for TPP, but my question is this, what are the best arguments to use against generally people in the United States who are generally supportive of President Obama except on TPP? And the arguments they use are basically, well, it's bad for the American worker and they make invidious comparisons of what Vietnamese make on salaries working. In short, it's bad for the working American. I was, the only arguments I could make in Hanoi when I was in a meeting with some Americans of this who believed against it and the Vietnamese support it strongly, the only arguments I could make were the geopolitical arguments, we need it for so many reasons that you've cited in others. But what are the good domestic arguments the best? Well, I could give a separate speech on that. Let me just try and be somewhat concise. Globalization and trade is taking place in the region, specifically in the Asia Pacific region, with or without the United States. And so, if the United States chooses to sit on the sidelines or if any other country does, that doesn't mean the activity of negotiating trade agreements and developing value chains and supply chains and granting preferential access to other trading partners is going to stop. So, in many ways, trade agreements are what keep us in the game and allow us in the United States as the trade negotiators to gain the benefits for our companies and for our workers and also to share our values with our trading partners to use our trade agreements to lift up labor standards, to lift environmental standards, to address 21st century issues. And finally, I would just say that TPP, and I'll point to the Peterson Institute Study, which is one of the most comprehensive studies about TPP in terms of boosting U.S. economic growth, boosting U.S. jobs, boosting U.S. competitiveness, all of those economic benefits not only will come to the United States, but will go to all TPP partners. And so, there are many economic, commercial, strategic, and other arguments one can make in favor of these trade negotiations. Thank you. John San with CTI TV of Taiwan. This is a question. It's a follow-up question to the Taiwan question. The President Ma of Taiwan has made joining the TPP negotiations one of his highest priorities of his administration. Could you suggest any practical ways for Taiwan to prepare itself for eventual negotiations with the TPP members, the U.S. being the primary member? And also on that same note, how big an issue is the port import or port export on the part of the United States for Taiwan? Thank you very much. Well, let me answer that question by just sharing the year of negotiations I had with Japan before we supported Japan's participation in the TPP. We spent about a year negotiating with Japan, and there were really two areas of this negotiation. First was to share with Japan what we were trying to achieve in the agreement so that we would have the confidence level that Japan was really ready to take on those high-level commitments. And second was to work through bilateral issues of concern, which included a number of auto issues, insurance issues, and other issues. And when we consult with TPP candidate countries, and right now, once again, Korea, they've announced their interest, we're having the same type of consultation with them, kind of the two-track consultation. And so that's the approach we follow when holding TPP consultations with prospective candidates. Okay. I'm going to take one more from over here. The gentleman, and maybe if you could take two. Why don't we do that one in the gentleman next to him, and then we're going to have to stop, I'm afraid. Yes, hi. My name is Adam B. Sudia. I'm with Politico. As you negotiate these big regional trade agreements, my question is, when you look at the market access packages, what you're negotiating with Japan, how is that going to interact with the other market access packages? Is what the concessions, the offers you get from Japan, going to apply to the beef producers in Australia that would like to probably have that same level of access, are you going to kind of mesh what you get with Japan and offer it on an MFN basis to all the other TPP members? Okay. Why don't we just take that gentleman there, and then we'll have to stop. Thank you. I'm Yoshikawa from TV Asahi. Some agriculture groups like pork producers have said a strong statement against Japan. If Japan can't open the market, you should conclude TPP negotiation without Japan. So how would you respond to such a statement? And are you considering a TPP without Japan if Japan cannot open its market? Thank you. Okay. Which one of those do I want to take first? Or take it all. Or can we get another question? I can pick which. First with respect to our market, both are really have to do with our market access and particularly our agriculture negotiations with Japan. Japan's agriculture market has been highly restricted to date. Through TPP, Japan is looking to open its market beyond what it's done in its current FTAs. And really the question is how far is it going to go? We are negotiating bilaterally with Japan and our other TPP countries with respect to market access and tariff negotiations. And so we are trying to work with Japan to achieve maximum meaningful market access through these negotiations with Japan. We understand they have sensitive products but we also remind Japan that when it agreed to join TPP, it signed up for a comprehensive high standard deal. So we are working very hard with Japan on agriculture. We are clearly in a very intensive stage of negotiations. No final agreements have been reached. We have a lot of work still to do. But as a result of the President's visit to Japan, we are clearly in the next phase and a new level in these negotiations. With respect to the second question, and I think this is pretty easy to respond to, we are really focused on concluding TPP with Japan. And that is why we are spending so much time with them. And we are working with them closely on rules issues. We are working with them closely on our parallel bilateral negotiations on autos and other non-tariff measures. And we are also working very hard with them on agriculture market access. Okay. Well, Wendy does have to get back to her Japanese counterparts to continue those conversations. So we are going to have to let her go. But I think that confirmed my point that she is a real secret weapon and a national asset, frankly, for all of us here. And we really appreciate your coming out, Wendy. I must say you said in passing this is a really exciting time to be involved in trade. And for those of us who have been following U.S.-Japan trade relations in particular for over 30 years, we have been waiting for this for a long time. And it is very exciting that we are on the cusp of an agreement that I think ultimately will be achieved and will be just a tremendous thing for both countries and for the region. So really, we are counting on you. And we are channeling a lot of our enthusiasm through you. So thanks very much, Wendy. Thank you. And please join me in saying thank you. So we appreciate you all coming. We will do this next year. We learn something every year. I think the big things we learned this year are that the general trend is convergence, not competition of RCEP, APEC, TPP. But probably not a merger. That much is clear. The pieces here in the U.S. politically for TPP and TPA are there. It's going to take presidential leadership and work from the Congress to put them together, but it's there. And it comes down to the U.S. and Japan in many, many ways. But we're getting closer. Unfortunately, we're now one hour further away because we pulled Wendy Cutler out of her negotiation. But we're getting closer. And Ishige-san, when you meet President Obama next time, you can give him a report on our conference and then ask him if he'll be done with this by next year's conference. Thank you to the assignment chair and Japan chair staff, to our interpreters, and to our friends at JETRO. And thank you to all of you.