Address by Minister Baird to the International Institute for Strategic Studies

August 3, 2014 – Singapore

Check Against Delivery

Good morning, and thank you for that kind introduction. It’s great to be here at the IISS [International Institute for Strategic Studies] with such a distinguished audience.

I’d like to thank all of you for deciding to start your no doubt busy week by listening to me tell you about how great my country is, and how much I know about Asia.

Does that kind of speech sound familiar? I can’t promise that I won’t do those things, but I did want to take this opportunity to reflect on where I see this region going, and how Canada can and will play a part in that journey.

It’s a good time for me to do so. I’m in the middle of a journey of my own: a two- to three-week tour of East and Southeast Asia.

I’ll be referencing “Asia” a lot in this speech but I’m mostly referring to the Asia-Pacific region, given the focus of my trip.

A trip of this scale gives me the opportunity to visit a few of the big partners at the same time—as well as Singapore, I’ve been to Beijing and Tokyo, and I’ll be going to Jakarta, Hong Kong and Guangzhou.

But I have also had time to get out to some of the newer, less traditional partners.

I made the first visit of a Canadian Foreign Minister to Mongolia, and the first ministerial visit to the young country of Timor-Leste. I will conclude by attending a dialogue with ASEAN as part of my second visit to Burma.

More seriously, I learn primarily through talking to people. During these travels I have listened to and learned from fellow foreign ministers, business leaders, community leaders, security experts, activists and expats.

From these conversations it’s become very clear to me that Canada and Asian nations have more common interests—and collective needs—than ever before.

And that is my message today.

Canada is well placed in the Asia-Pacific. We have strong common interests.

But in an increasingly unstable world, we also have a collective need, not just a desire, to work together.

Canada as a Pacific nation

Let me say at the outset that I am optimistic about the future for Canada and Asia—not just because of specific policies and priorities, but because of our very nature.

Those who know Canada will know that we are, unequivocally, a Pacific nation.

Asia has been, and remains, an important part of Canada’s nation building. We have welcomed large waves of refugees from Korea, Vietnam, Laos and Cambodia who were displaced by war.

When Hong Kong was reverting to mainland rule, large numbers of residents found new homes in Canada. More recently, we welcomed large numbers from India, Pakistan, Sri Lanka and the Philippines.

And we remain open to immigration from Asia today.

Some 60 percent of all new immigration to Canada continues to originate in Asia. It’s a higher number for foreign students, at almost 70 percent. And it is our fastest growing region for tourist arrivals.

Our Asian-Canadian demographics are central to our core identity. They are part and parcel of the basic fabric of our society. And they are one of our greatest strengths as we commit to deepening partnerships in the Asian region.

In fact, in demographic terms, you could say that Canada is as much an Asian country as is Singapore—5 million Canadians claim Asian origin—and that’s the same size as the entire population here.

You could also say that we have the most Asian major city outside of Asia. Almost half—43 percent—of all residents of Vancouver have Asian heritage. Even in Toronto, our biggest city, that figure is over a third.

These are not just numbers. They make a real difference.

The cultural understanding, family links, business ties and language skills of Canadians of Asian heritage are the rivets and buttresses of the Pacific bridge.

To anyone who says that Canada’s geography is a barrier rather than a bridge to deepened relations with Asia, I would point out that Shanghai is closer to the coast of British Columbia than it is to Sydney.

A flight from Vancouver to Beijing is also shorter than one from Sydney. The same is true for Tokyo and Seoul.

Modern connections with Asia and Singapore

For these and many other reasons, Canada already has a deep and growing presence in Asia. Today, Canada’s diplomatic network in Asia is stronger than in any other region. And it is growing.

In the days ahead, I will open our new embassy in Yangon, with more expansion planned elsewhere.

Our first Trade Commissioner abroad was dispatched to the region more than 100 years ago. Some of our great corporations have roots in Asia of more than a century.

I am very aware that for much of humanity’s existence, Asia has been at its centre—Asia as a leader in commerce, governance, science, literature and the arts.

Whenever there is spare time in my schedule, I always make a point of going to at least one cultural or historical site per visit, and I’ve come to develop a real appreciation for Asian art in particular.

Last week in Beijing, I toured some of the museums in the Forbidden City, looking at ceramics that were many centuries old—yet still relatively modern in the context of its ancient civilization.

But what’s changed in the 21st century, compared to the 16th and earlier, is that we are no longer a planet of largely disconnected regions.

We are now an interconnected and interdependent global society, a single pan-regional marketplace that never sleeps, and a marketplace of goods and services, but also of information and ideas.

The world of tall ships, feudal courts, distant frontiers and the occasional marauding army has given way to instant communications, global brands and multinational companies.

In this hyper-connected world, a prosperous Asia means a more prosperous world. What happens in Asia is now instantly felt across the globe.

That means we not only have a stake in Asia’s prosperity, but also in its peace and security, and in its governance.

Given Canada’s open economy and trade dependence—among the highest in the G-7 with some 60 percent of GDP and one in five jobs tied to exports—this is no small matter to Canadians.

We have learned that countries don’t prosper by accident.

Those who capitalize on global opportunities do so through sound policies, political leadership, international strategies and informed populations.

Canada’s traditional trading patterns have naturally involved the United States and Europe. We now know that we must diversify our economic relationships.

And we know that trading relationships don’t happen in isolation from political and security engagement.

We can look to our friendship with Singapore as the benchmark for this level of engagement. In 2015 we will celebrate 50 years of diplomatic relations between our nations.

Singapore is home to thousands of Canadians—a magnet for over $2 billion in Canadian direct investment and a key ally on regional security.

Canada, too, is a key gateway to North America for Singapore. Many of Singapore’s economic and government leaders have studied there. And it invests more in Canada than any other Southeast Asian nation.

I’m looking forward to meeting my counterpart later today to discuss how we can maintain this momentum.

Trading with a changing Asia

I believe that what Canada has to offer meshes neatly with the changing needs of transformed Asian societies.

As incomes rise, Asian populations are looking for safer, higher quality and diversified food products.

Export markets are transitioning into consumer markets.

Populations are demanding a more sustainable environment—in particular improved air quality, but also cleaner water and greener energy.

Families want better educational opportunities to succeed in competitive societies, and insurance services they can rely on.

And modernizing economies means a demand for secure supplies of high-quality raw materials.

Canada is a world leader in each of these fields.

We have world-class companies that are keen to deepen partnerships in the region. We also have smaller, innovative, and rapidly growing firms that are ready to get started.

In turn, as Asian firms are expanding their global reach, our doors are open to Asian direct investment in Canada in these and other sectors. And you’ll find that we have one of the most business-friendly economies in the world by any objective measure.

Our growing trade in China—across ASEAN, and with other major Asian markets—is a testament to this synergy. China has now become our second-largest trading partner after the United States.

My colleague, Minister of International Trade Ed Fast, just announced another four trade offices there, increasing our network of diplomatic and trade offices to 15 and our team of Trade Commissioners to 100.

Canada is, of course, engaged with the Trans-Pacific Partnership negotiations. At the same time, we have just completed negotiations for a free trade agreement with Korea, and are actively negotiating others, including with Japan and India.

We have the unique advantage of not only being a bridge from Asia to North America under NAFTA, but now also to Europe with the recent agreement in principle on a huge Canada-EU Comprehensive Economic and Trade Agreement.

We also know, however, that we can’t afford to be simplistic about Asia.

We know that the process of modernization and development has been uneven in the region. Some Asian nations are being left behind. And progress in some cases remains fragile.

Canada is stepping up its development support in several countries to address these outstanding challenges. We are building on development assistance to Asia over six decades, with current contributions totalling $1 billion every year.

Global instability

So I think we’ve established the reasons for increasing trade and development in Canada and Asia: our closeness geographically, historically, demographically and economically.

But I believe the collective need for this engagement comes from external reasons just as much as internal.

In the coming years it will be a constant challenge for Asia to keep its balance in an increasingly unstable world.

I won’t go through all of the global trends and crises, which an audience of this quality is more than familiar with, but I think it is becoming a fact of life.

When we met last week, my Chinese counterpart said he believed the world is now systemically unstable—and he was quoting from our former British counterpart William Hague.

An inordinate number of column inches and web pixels have been dedicated to the rise of Asian economies, and the world’s increasing dependence on them.

What I don’t think we hear enough about is the growing dependence, even vulnerability, that this creates for those Asian nations too.

I began this speech by showing off about how much time I’ve spent in Southeast Asia in recent years. But I have to admit that there is another region that has as many plane tickets with my name on it: the Middle East.

It is a priority for obvious reasons. In this hyper-connected world, instability in places like Iraq and Syria can have a direct impact on the stability of places like Indonesia and Singapore.

For example, when ISIS began to roll across Iraq, oil prices surged and Asian stock prices fell. So just as transforming Asian nations have evolving economic needs, I believe they have evolving diplomatic needs too.

Growing economies and stature on the world stage should bring with it growing responsibilities beyond domestic and regional borders.

This is already happening to some extent. In my bilateral meetings last week in China and Japan, we spent as much time talking about global issues like Ukraine and Gaza as we did about bilateral issues.

Canada is an outward-facing, open trading nation. We have a long-standing interest, and yes sensitivity, to global issues.

But if that is a problem, we are also a major part of the solution.

I believe there are three strategic areas in which Canada can make a meaningful contribution to stability in Asia: governance, energy security, and security cooperation.

Stable, democratic governance

Let me start with governance and democratic development.

“Stability” has in the past been a watchword for autocrats who seek to justify their top-down control.

But we know that this is a superficial stability, certainly in the medium to long term. My friend the foreign policy commentator Ian Bremmer, describes this well with the “J-curve” concept that the most stable countries are those that are open and democratic.

I have to say, after the seemingly inevitable march of democracy in the later decades of the last century, it often feels like progress has stalled over the past decade.

Fortunately, some of the great democracy success stories of the last generation are found right here in Asia: Korea, Japan, Indonesia and Mongolia.

I am optimistic about a fresh era in Indonesia following its historic elections last month.

This hasn’t been made public yet, but I’ll actually be meeting with president-elect Joko Widodo this evening. So I’m very much looking forward to that.

India’s recent election was also breath-taking in its sheer size, scope and complexity.

But there are clearly also continuing challenges in the region. In some cases, democratic practices are sliding backwards and reforms are stalling.

Vietnam’s restrictions on bloggers. Thailand’s military coup. Sri Lanka’s oppression of its Tamil minority. Pakistan’s vibrant civil society under assault by extremists, sometimes with the support of deep state actors.

And probably worst of all, North Korea’s insistence on remaining in its democratic and moral darkness.

This darkness is quite literal too—if you look at night-time satellite images of the region, there is a North Korea-shaped black hole next to the bright lights of South Korea and other neighbours.

We, of course, need to understand that democratic development takes time. Cultivating a culture of democracy involves entire societies, the old and the young, the rich and the poor.

And we need to engage and support societies as a whole—governments and civil society alike.

To avoid doing so risks nations being held back—both individually and the region as a whole.

Societies that fail to develop democratic checks and balances, transparency and accountability, and freedom of expression, contribute to instability and risks of conflict.

Just look at Russia.

The decline of the Russian Federation’s democratic space in recent years has contributed to a leader who is increasingly insulated from reality, and isolated from his own people.

This has resulted in an aggressive foreign policy, reckless actions, delusional justifications, and an economy in a tailspin.

Russian’s illegal annexation of Crimea was a reversion to 19th-century practices. And its dangerous provocations in eastern Ukraine resulted in the shocking downing of Malaysia Airlines flight MH17.

Successful and enduring societies of the 21st century are not built on strongmen and secrecy. They are rooted in democratic norms and standards, independent institutions, the rule of law and accountable, representative governments.

Democracy is not just about elections. And democracy takes work—from those governing as well as from the governed. It is a journey, not a destination.

Canada is committed to working together with our Asian friends and partners to ensure that this region continues to move forward as a region of democracies. The people of Asia, and the world as a whole, will benefit.

Energy security

The second strategic area I would highlight is energy security.

The IEA [International Energy Agency] projects that most energy demand growth will take place in Asia, with China and India alone accounting for half of that demand expansion.

In a time of global concern about risks in energy supply, the world is looking to Canada as a stable, reliable, resource-rich partner.

We have been blessed with enough resources to become an energy superpower.

Canada has the third-largest proven oil reserves. We are already the fifth-largest crude oil producer and the fifth-largest natural gas producer. We are the second-largest uranium producer and exporter, and a major producer of renewable and clean energy sources.

Not to mention our stable economy, society and democracy.

Secure energy supplies are key to sustained and predictable economic growth in this region, at a time when current sources are predominantly in the volatile Middle East, North Africa and Russia.

This coincides with increased energy self-sufficiency in the United States, Canada’s primary destination for current oil and gas exports.

So there is a natural and mutually beneficial potential to significantly deepening the Canada-Asia energy partnership.

Asia needs more energy—reliable energy. Canada is a natural supplier.

But we have work to do. Canada is committed to expanding our infrastructure to bring our energy to tidewater.

Energy has the potential to transform Canada-Asia relations. It is up to all parties to make that happen. It is in our collective interests to do so.

Security cooperation

Third, and not entirely unrelated to energy security, is the need for security cooperation.

The number of security fault lines and trip wires in Asia are multiplying. They are also becoming more dangerous and unpredictable.

It’s becoming widely recognized that more must be done through institutions in the region to deter, manage and respond to these security tensions.

The world’s prosperity now depends on stability in Asia at least as much as it does on a peaceful and responsibly governed Europe or North America.

The world’s most active shipping lanes are in Asia. Two-thirds of the world’s container traffic comes from here. It is difficult to overstate the importance of Asian seas to global prosperity.

Canada is, naturally, deeply concerned by the rise in tensions surrounding maritime boundary disputes.

We don’t choose sides in maritime boundary disputes. We even have a couple of our own, and we deal with these peacefully.

We do, however, call on nations in the region to refrain from provocative actions, to commit to peaceful solutions, and to strengthen the institutions and norms that can underpin regional stability.

The stakes are too high to fail.

Canada is prepared to do its part to help strengthen peace, security and stability in Asia. And we are well positioned to do so.

We are a founding member of regional institutions, such as APEC and the ASEAN Regional Forum.

Canada has a long and proud tradition of involvement in Asian security.

Whether serving in India, Burma and Hong Kong during WWII, or in the more than 60 missions in the region since 1947—including, of course, the Korean War, and most recently in Afghanistan.

We have stood with our allies and friends in Asia. And we are not turning our backs on Asian security now, nor will we in the future.

I believe that Canada can continue to make a difference in areas of defence and security of priority to the region, and where Canada can really add value—not just maritime security, but in areas like cyber security, military medicine, and counterterrorism capacity building.

A key vehicle for our support is ASEAN. We see ASEAN as a vitally important institution in the region, and welcome its work with China toward establishing a code of conduct for the South China Sea. We urge all countries in the region to embrace such a code.

While in Jakarta tomorrow, I will meet with ASEAN’s Secretary General, Le Luong Minh.

And I can announce today that Canada is committing additional funds—building on the $30 million I announced last year in Brunei—to enhance security cooperation in ASEAN. This funding will help tackle non-traditional security threats such as trafficking and radicalization.

Canada also believes that the East Asia Summit has the potential to evolve into an organization that can play a more consequential role in addressing the complex challenges—economic, socio-cultural, security—that Asia and Canada face together.

We have already signalled our willingness to join the East Asia Summit as soon as it is ready to expand its membership. And we are encouraged by the strong support that Canada’s candidacy has received from across the region.

Conclusion

If we get them right, increased democratic development, energy security, and security cooperation can be pillars of stability in this region.

A secure, stable world is something we should all care about as a value in itself, but seeking it isn’t just about liberal internationalism or being an altruistic global citizen.

The cold hard economic facts demand it too. Prosperity is inextricable from stability and security.

You can’t maximize the potential of a country when its people’s needs are not being satisfied by responsible, responsive governance.

You can’t have a free flow of crucial resources like LNG [liquefied natural gas] when a key maritime area like the South China Sea is bubbling with tensions.

You can’t have a sustainable reliance on certain Middle Eastern sources when a clerical regime in Iran threatens to start a nuclear arms race.

You can’t have open trade when it is necessary to take actions like sanctioning Russia over its provocations in Ukraine.

And frankly, you can’t have a prosperous air industry bringing the world together when planes are being shot out of the sky.

As I conclude, I’d like to reaffirm that on all of the themes I have discussed this morning, Canada’s engagement is particularly strong with Singapore.

This strength comes from the bonds of common values, joint interests and a mutual and enduring commitment to work together in advancing them.

I’d also add that this strength comes from personal connection to my Singaporean counterpart, whose advice I’ve come to greatly value.

I want this to be reflective of our relationship with the rest of the Asia-Pacific region. Canada’s common interest in this region’s peace, prosperity and role in global affairs is clear.

We have deep roots here, and as I have tried to explain today, I firmly believe that both Canada and the countries of the region can and will benefit from deepening them further.

We have an unprecedented opportunity to do so. But it won’t come about without energetic and strategic leadership.

Let’s seize that opportunity today.

Thank you.

East Asia and the Pacific: U.S. Policy Towards East Asia and the Pacific

It’s a pleasure to be here with the Baltimore Council on Foreign Affairs to discuss U.S. policy toward East Asia and the Pacific. I appreciate the opportunity to be here tonight, because I believe it’s important to explain our policies; to connect with Americans outside the Beltway and get your feedback.

I have worked on Asia policy in the State Department and at the White House for decades. Early in my career, I had the great privilege of working for former Senate Majority Leader Mike Mansfield, when he was Ambassador to Japan. And so I learned quickly, and have seen countless times since, the importance, and the contributions of the Senate, and of individual Senators in our country’s international relations.

Congress may not always poll well at home, but to nations around the world, it embodies American democracy. And when members travel and meet with world leaders, people listen. So it’s important to have thoughtful, knowledgeable, eloquent leaders, especially on the Foreign Relations Committees. Leaders who speak with force and clarity to advance American interests and values.

And Marylanders are very lucky to have such a leader in Senator Ben Cardin, Chairman of the Foreign Relations Subcommittee on East Asia and the Pacific. I’ve valued his wise counsel and advocacy for strong U.S. involvement in the region. It is a privilege to work with him. He is in Vietnam as we speak, en route to the Shangri-La Dialogue in Singapore, where he will participate in a range of foreign policy discussions.

And of course I must also recognize the contributions of Senator Barbara Mikulski, who is a strong supporter of diplomacy and development as Chair of the Appropriations Committee, and is a leader on the Intelligence Committee as well. Maryland is doubly blessed to have these two great Senators.

The Port of Baltimore below us is older than the United States – a reminder that your city has always been a player in international trade, and thus in America’s relations with the world. And that brings me to the foundation of President Obama’s policy toward the Asia-Pacific region.

That policy is built on a simple idea: the region is hugely consequential to the U.S. The broader Asia-Pacific region – from the Pacific Coast of the Americas, through the island nations of the Pacific, to Australia and the Asian continent, constitutes over half the world’s people and economic output. Within that area, the East Asia-Pacific region that I’m responsible for accounts for about one-third of the world’s people and one-quarter of global economic output… and the numbers are growing.

As a resident Pacific power and a trading nation, the United States depends on a stable, prosperous Asia. The Asia-Pacific region matters for U.S. jobs and U.S. security.

Yet, when we looked at how our government’s resources were distributed – diplomatic and development personnel and funds, military assets, and the time and attention of senior leaders – we realized that the distribution of our resources didn’t match the growing importance of the region and our goals there. The distribution was out of balance.

So over the last five-plus years, we have worked to rebalance – this means strengthening our alliances and partnerships, building up regional institutions, and engaging with emerging powers, such as China and Indonesia. Let me give you a few details on each of these three areas.

We have strengthened and reinvigorated relations with our five treaty allies in the region – Australia, Japan, the Republic of Korea, the Philippines and, despite recent unfortunate developments, Thailand.

We have upgraded our economic and trade engagement. For instance, we ratified the Korea-U.S. free trade agreement and have worked to fully implement it. We’re negotiating the Trans-Pacific Partnership, or TPP, which includes allies and other partners as well.

And we have strengthened security cooperation with our allies, from our work with Japan and South Korea to counter the North Korean nuclear threat, to the new defense cooperation agreement signed during the President’s recent trip to the Philippines, to our rotational deployment of Marines to Australia. The strength of our alliances was highlighted by President Obama’s recent visit to Japan, South Korea, and the Philippines.

Our growing ties with emerging powers were highlighted by the President’s stop in Malaysia in April. At the same time, we have rededicated ourselves to collaboration with longtime friends like New Zealand, Singapore, Taiwan, and the Pacific Island nations, as well as renewed engagement with Burma.

Second, we are helping to build up the region’s security and economic institutions.

For example, take the Association of Southeast Asian Nations, or ASEAN – a group formed not by us, but by countries in the region that see elements of a shared destiny and which also have shared concerns.

We were the first non-ASEAN member to have a dedicated mission to ASEAN. President Obama participates annually in the East Asia Summit, a meeting of 18 of the region’s leaders convened and chaired by ASEAN. In the Asia-Pacific Economic Cooperation, or APEC, forum, we work closely with 20 member economies from across the Asia-Pacific to expand trade and investment, promote sustainable growth and strengthen regional ties. And as I mentioned, we are negotiating the TPP. This is an ambitious, comprehensive, and high standard agreement that will promote growth and create jobs both at home and in the region, and includes nearly 40 percent of global GDP.

These regional institutions and agreements are becoming an increasingly important part of the international system of the 21st century. This is worth putting in context, because the international system – a lot of which we take for granted – is unique in world history. For instance, never before have people, companies, and nations been able to travel and trade more freely. Most Americans take the ability to fly overseas for granted. They think about the cost, of course, but not about the global network of treaties, agreements, and institutions like the International Civil Aviation Organization that make it possible.

This international system, these global and regional organizations, provide another long-term benefit as well. Because beyond what you read about any single meeting or accomplishment, these bodies inculcate a mindset of working together. Working together on a daily basis can help nations peacefully resolve disputes, and advance each other’s development.

As countries see the value of working together on a growing range of issues, this mindset and the structures that support it become more and more self-sustaining. And so, too, does the shared understanding that rules and norms, and not size and power, determine the outcome of disagreements. While each group and each time is different, the benefits of global cooperation and regional integration are clear.

And today, in Asia and the Pacific, regional institutions are driving real accomplishments, whether:

  • negotiating jointly toward a code of conduct for claimants in the South China Sea;
  • improving management of shared resources, like fisheries;
  • eradicating diseases; or
  • addressing pollution that crosses borders.

Our support of regional institutions will be highlighted by the President’s participation in the Asia-Pacific Economic Cooperation forum in China, and the East Asia Summit in the fall.

We also have initiatives that bring neighbors in the region closer both to us and to each other, such as the Lower Mekong Initiative. This initiative helps Burma, Cambodia, Laos, Thailand and Vietnam work together to tackle common challenges, including education, infrastructure, agriculture and the environment.

The third pillar of the rebalance that I mentioned is engaging with emerging powers. By this we have traditionally meant our engagement with countries like Indonesia (with which we have developed a comprehensive partnership and a hold annual joint commission meetings on a range of issues), India (with which I hold very productive East Asia Consultations as well as trilateral meetings on the Asia-Pacific with Japan) and of course, China. But a broader definition of emerging powers could include countries like Vietnam, Malaysia, and, hopefully someday, Burma.

Expanding people-to-people ties is important throughout the region, and especially with emerging powers. We have increased people-to-people ties through programs like the Young Southeast Asian Leaders Initiative. President Obama launched this initiative on his recent trip to Asia, with youth from across the region to develop patterns of interaction among the region’s future leaders.

These three pillars support and reinforce each other.

Strengthening our alliances provides a foundation of security for the region, giving countries the confidence and the space to move forward on their collective interests and strengthen regional institutions. Unforeseen challenges, such as the coup last week in Thailand, can strain relations with an ally.

But other challenges can bring allies closer together. Amidst the terrible loss of life and devastation of Typhoon Haiyan, our support for the Philippines, along with that of other allies, has been a bright spot.

Building up those institutions, in turn, helps the region develop the rules of the road that I mentioned. And those rules – developed by and for the nations of the Asia-Pacific – provide the environment for trade, prosperity, and for solving problems.

Our engagement with emerging powers makes clear that the U.S. seeks partnerships and collaboration. It shows that we are committed to building positive-sum relationships. And it shows that we are prepared to welcome the peaceful rise of countries like China.

As the invitation to this event mentioned, relations with China are an important component of our policy toward the region. So let me share the Administration’s approach to our bilateral relationship.

How have we pursued the rebalance with China? By committing to develop a bilateral relationship where we expand areas of cooperation and constructively manage differences. By agreeing that both sides must continue to actively develop bilateral relations and avoid a drift toward strategic rivalry. And by strengthening our engagement with China at all levels, the helps to promote mutual understanding about each other’s intentions, thereby reducing the risk of miscalculation.

By expanding engagement at the highest levels. President Obama has met with his Chinese counterparts some 19 times, and Secretary Kerry and other cabinet members meet with their counterparts on a regular basis. These meetings help us build and maintain the relationships we need to seize opportunities and address concerns:

Our high-level Strategic and Economic Dialogue, chaired jointly by Secretaries Kerry and Lew and their Chinese counterparts, is a key venue for both sides to achieve progress toward these shared objectives. We will have two days of intensive senior-level engagement in Beijing this July. We will use them to candidly address areas of disagreement, while at the same time expanding areas of cooperation.

This Dialogue brings together senior teams from across both governments to tackle some of the most vexing bilateral, regional, and global issues. Issues include the denuclearization of the Korean Peninsula, climate change, elimination of Syrian chemical weapons stockpiles, food security, maritime security, global health, human rights, economic rebalancing, and energy security.

Our economies are increasingly intertwined, with investment flowing both ways:

  • In the last decade-and-a-half, cumulative Chinese investment in the U.S. has gone from near zero to $36 billion. Our Mission in China has done a lot to facilitate that investment.
  • And the U.S. Commercial Service, under the Department of Commerce has opened new offices in China.
  • And we agreed last year to pursue a “high-standard” bilateral investment treaty – one that can level the playing field for U.S. firms operating in China and create jobs here at home.

We cooperate on protecting the environment:

  • Last year, Secretary Kerry and State Councilor Yang Jiechi created a high-level Climate Change Working Group that has made significant progress.

We cooperate on socio-cultural issues:

  • Through the U.S.-China Consultation on People-to-People Exchange we work to enhance and strengthen ties between citizens of the United States and the People’s Republic of China in fields such as culture, education, science and technology, sports, and women’s issues.
  • The State Department supports more Americans studying in China than in any other country. Approximately 700 students, scholars, and teachers will conduct research, teach, or study Chinese in China through one of our exchange programs. This is in addition to the support we provide for Chinese students and scholars to study and conduct research in the United States.
  • China is the top sender of foreign students to the U.S., with over 230,000 in 2013. We are encouraging more American students to study in China through the 100,000 Strong Initiative and Foundation.

But I believe we must do much more to expand cooperation in the years to come. The logic of our shared interest should compel greater coordination and cooperation.

We share an interest in upholding the rules-based international system under which China has achieved historic levels of economic development. The United States has advocated for and embraced China’s inclusion in multilateral fora like the World Trade Organization, the G-20, and APEC, which China hosts this year. These groups create an environment conducive to China’s continued economic growth.

And more broadly, we know that free access to information, free speech, and the rule of law have been proven ingredients for unlocking human potential in societies across the world. As China works to move up the value chain into innovative industries and the global creative economy, its incentive to reform will increase.

These are all reasons why I believe China should strengthen its contributions to the international system, accepting its constraints to gain its far greater benefits. The U.S. accepts constraints – we lose some trade cases in the WTO, and some votes at the U.N., but we accept that, because the benefits far outweigh the costs.

As the President said yesterday, “America benefits when those norms are not only being upheld by us individually, but where all countries buy in… And China now as a rising power needs to be part of that….”

We will always need to protect our interests where they diverge. We have, and will continue to have, real differences. The question is how we deal with them. The test of our engagement, of our diplomacy is whether we are able to expand practical areas of cooperation on regional and global issues and at the same time manage these differences candidly and constructively.

In fact, this is the challenge of diplomacy writ large – working together when we can, and working to resolve disagreements peacefully when they arise. And that diplomacy depends on the support of the American people. It depends on people like you, who understand that spending on diplomacy and development is just one percent – less than one percent – of the Federal budget.

You understand that we need to invest in these tools. As President Obama said at West Point yesterday, this is “one of the hard-earned lessons of Iraq and Afghanistan, where our military became the strongest advocate for diplomacy and development. They understood that foreign assistance is not an afterthought, something nice to do apart from our national defense, apart from our national security. It is part of what makes us strong.”

Because when you only have a hammer, every problem becomes a nail.

Relations with the Asia-Pacific region matter to all Americans – for our economy, our security, and the advancement of our values.

And they matter to Baltimore, and all of Maryland. For instance, international students contribute over $400 million to the Maryland economy per year. The nearly-complete expansion of the Panama Canal is expected to bring more ships from the Pacific to the East Coast; the rebirth of American manufacturing creates more potential exports, and growth in the Asia-Pacific region should create more demand for our goods, and more two-way trade.

But your involvement – as business leaders, as academics, as engaged citizens – is essential to realizing these possibilities. So thank you. Thank you for the invitation, thank you for engaging with your friends and neighbors on the value of diplomacy; and thank you in advance for your thoughts and questions tonight. Let’s open it up for discussion.