Michael Michalak "Shifting Trade Winds Remarks and Q & A"

Uploaded by PCCvideos on 16.12.2011

[electronic music] Welcome back from lunch.
Hope everyone enjoyed the lunch over there. It's my pleasure to welcome our next speaker.
He comes to us from the US State Department
where he most recently served as the US ambassador
to Vietnam where he just finished that post
in February of this year,
Ambassador Michael Michalak.
And he's also serving on the, the APEC 2011
host committee as a senior advisor,
which is, which is how we got him here
for this symposium on APEC.
And I had to pull a bait and switch to get him to come here;
I had to confuse him
and make him think he was going to Portland State
instead of Portland Community College,
So we're lucky to have him here today.
A little bit about the ambassador.
He's a career foreign service officer
who's spent most of his adult life in Asia
or traveling between Asia and Washington.
He's worked in Tokyo; Sydney, Australia;
Islamabad and Beijing.
And of course Washington.
So, without further ado,
I give to you Ambassador Mike Michalak.
>>MICHAEL MICHALAK: Thanks, Tom. I appreciate that.
Well, I certainly hope that everybody did have a good lunch.
I'm well aware of the boa constrictor effect,
so I will [laughter],
I will try to make some remarks
somewhat interesting here.
I see, yes. They want me to use this thing.
Very good.
Today what I'd like to talk to you a little bit
is first of all, I want to thank very much the PCC,
as well as the East-West Center for putting on this
in this, what is it, the second or third, I guess,
in the series of internationalization discussions here at PCC.
And I think that that, in and of itself, is a wonderful thing.
I very much enjoy coming out and talking to,
to universities, to community colleges,
to high schools,
to just about anybody who will listen to me,
and it's because I really value education.
It's one of the things that I consider to be
one of the most important things in my life,
and certainly in the lives of our children going forward,
and in the lives of people around the world.
When I was before the Senate
at my confirmation hearings before going out to Vietnam,
I promised the senators
that I would double the number of students
going from Vietnam to American colleges and universities.
By the end of my tour
we had actually tripled the number of Vietnamese students.
Vietnam went from being like 13
in terms of sending countries
to the United States to being number 8,
and the demand is still extremely high there for,
for kids wanting to come to the United States.
The reason, I think,
is because they realize that
the United States does have
one of the best education systems in the world,
particularly higher education.
Now, we all complain about it
and we all have our own ideas
on how it ought to change
and that's fine and we ought to continue to improve it,
but certainly in the eyes of the rest of the world,
one of the global standards on education is the United States,
so it's really good for me to be here.
Now, some of the context in which,
in which we're meeting here
is the fact that, well,
I don't know what kind of culture
we're going to have over the next 5 to 10 years.
After hearing Andrea speak,
I know it's just going to be different from what it is today
because of all the economic turmoil
that we're going through right now.
But I have a feeling
that it's going to continue a very high percentage
of internationalization.
If my daughter is any indication,
I don't think she has spent any of her college vacations
in the United States at all.
She has traveled all over Asia,
all over India,
all over Europe,
and she still has not reached the age
at which I took my first airplane flight.
So, I mean, it's just amazing what,
what is going on today with children.
And when you look around the world,
because of the economic, uh,
economic straits that we find ourselves in,
it's pretty clear that we are not going to be
the engine of growth going forward.
And the engine of growth going forward
is going to be the emerging economies,
and it's going to be the emerging economies in Asia.
In fact, most of the, the APEC countries
are projected to grow at at least 5 1/2%,
with several of them growing higher than that,
and especially China,
and God only knows what they're going to grow at,
depending on whether or not you believe their statistics anyway.
But it's going to be high, you can count on that.
So I think that the, the impetus for PCC
to continue to do these kinds of,
these kinds of seminars is very high,
very high indeed.
PCC is, is the kind of a place where...
well, most community colleges were set up originally
to kind of serve the needs of the community in which they were.
But when you get to be as big a community college as PCC,
I think the vision for the future of this college
also needs to, needs to expand and needs to grow.
And I think that working in conjunction
with the East-West Center
on the, the Asian development program
is an excellent way to broaden the vision of the faculty,
broaden the vision of the school,
and broaden the vision of the students.
Some of these students are going to take the two years
and that's going to be enough for them,
and they'll go off and they'll earn good money
and, and get good jobs.
And many of them are going to start companies.
They'll start probably SMEs.
The Northwest is famous for having
a very high percentage of workers in,
in small and medium size enterprises.
And the commerce department did a study
from 2004 to 2009
in which they interviewed over 5,000 SMEs,
and they found that those SMEs that exported
saw their revenue, their bottom line, increase 35%
over the period of the study.
Those SMEs that did not have exports
in their business plan
saw their revenue drop by 7%.
So, again, another reason why
getting acclimated to international,
getting...understanding what, what can be done
by looking beyond our own borders,
is another reason for doing
the kind of seminars that we're doing here.
So we're going to be looking more at emerging economies,
and most of APEC is emerging economies.
We have...APEC has got 21 economies.
In fact, the slogan for this year
was 21 economies for the 21st century,
which I think is pretty cool.
But it is, uh, it is amazing that our exports to APEC
are probably greater than those we have to Europe,
greater than we have to any other block
of countries around the world.
So APEC is, is an aggregation of economies.
And the reason that we say economies is because
when APEC was formed, in 1989,
it was set up as a meeting of economic ministers.
The leaders were not involved in it at all.
It took until 1993,
when one month before the meeting of economic ministers,
which was going to take place in Seattle
out in Blake Island,
President Clinton said, "I'm going to go,"
and not only am I going to go,
but I want all of my colleagues from all of the economies
to come along too.
So in one month, the organizing committee
had to put together a meeting...
at that time I think it was only 18 economies...
to come together at Blake Island.
Now, if any of you have ever been involved in a Presidential visit
then you know, one month out to be told
that you're going to be doing this thing,
you've got to make sure that you've got hotels;
you've got to make sure you've got rental cars;
you've got to make sure you've got security.
It's a horrendous undertaking.
And thank god I was not involved in it,
but [laughs]
my friends with whom I work now were.
And they tell me,
the good news is we only had a month,
so nobody could second guess our plans.
The bad news is, we only had a month,
and we really had to get stuff,
get our, get stuff squared away before the,
before all the leaders came.
But anyway,
so, it went, APEC went from the meeting of economic ministers
to becoming a meeting at which the heads of state
of some of the most economically powerful countries
in the world would come.
So this is yet another reason why teaching kids now
about international, about Asia,
about APEC,
is something that, that
I think is, is extremely important.
APEC stands for the Asia Pacific Economic Cooperation.
So it's four adjectives in search of a noun.
And we usually say it's the APEC forum,
so Asia Pacific Economic Cooperation Forum.
Now, why do we want to talk about APEC?
You know, the other night, the other night
Don Helman had quite a bit to say about APEC
and Don is a good friend,
and I've talked to him about APEC before
and I will talk with him about APEC again.
But...APEC was never set up to be a negotiating forum.
It was always set up to be a consultative group
where people would get together to discuss ways
in which we could increase the economic efficiency
of all of the economies within APEC.
Now, we can them economies and not countries
because in 1990,
when we were trying to get China
to come into APEC,
we also, we were also under a great deal of pressure to bring in
Hong Kong and Taiwan.
And Hong Kong and Taiwan,
strictly speaking, are not countries,
so the solution was
it was called Hong Kong, China, and Chinese Taipei.
And the members are not countries, they're economies.
So that's why we, we keep saying "economies,"
because if we ever say "countries"
the Chinese get very upset
and that's more hassle than it's worth to deal with. So...
Now, what has APEC done? Eh?
APEC, everybody says it's a talk shop.
Well, I guess that depends on your point of view.
Because yes it's a talk shop,
and yes we don't do any negotiations,
but we do come up with some pretty good ideas.
One of the ideas that we came up with was
in the...about 1997, I think,
just as the Uruguay Tade Round was ending.
I think it was the United States that set it up...
But we decided to start an initiative within APEC
whereby countries would agree to make best efforts
to go to zero tariffs on all digital equipment,
on IT equipment, including cellphones.
And we got it passed within APEC.
The leaders signed off on it and said, yes,
this would be a great idea;
let's go ahead and try and do it.
Well, the United States then took that,
took that quote, unquote "agreement,"
and took it to the WTO,
and proposed in the WTO
that we make this one of the rules of the Uruguay Round.
And since we already had 18 countries,
18 of the most powerful countries
within the WTO
that had agreed to it,
we were able to get it through the WTO
and it became part of the regulations of the Uruguay Round.
And Motorola, and Intel,
and an awful lot of the IT companies
are now very, very happy
because they're making a whole lot of money based on that.
Right now we're working to expand that
because from 1997 to today,
obviously the whole IT landscape has changed
and now there are a whole lot of new products,
data services and other issues
that would benefit from similar treatment,
and so we're working on that even as we speak.
Some of the other things that we've done is customs;
harmonization of customs is always
one of the key objectives of the private sector
in working with APEC.
The private sector's objectives for APEC in general
would be to form what we call
a, a seamless commercial environment for the 21st century.
And by "seamless commercial environment"
we mean absolute free movement
of goods, services, data, money, people
throughout the APEC region.
So, we did a project the last time,
or the first time I worked on APEC,
I was secunded to an NGO in Seattle called
The National Center for APEC.
And I worked with a private sector;
we did a public/private partnership.
I had about ten companies,
each of which put in a bunch of money,
and we worked on modernizing customs operations
at the Port of Shanghai.
And we trained about 400 Shanghai customs officers
in the Harmonize system of tariffs,
a new tariff code classification that came in with the Uruguay Round,
as well as upgraded their computer operations,
and by the end of the day,
we had shaved about three days off
of customs clearance operations at the Port of Shanghai.
Aand we had gotten regulatory changes
from the Chinese government
to allow FedEx, UPS,
and a couple of other express package delivery companies
to invest in setting up a clearing operation at the,
at the Shanghai Airport.
So another kind of concrete thing which,
which APEC has, uh, has worked on.
A couple of other things which
I'm kinda proud of
because it happened while
I was in another APEC job.
I was the...I was our senior official for APEC,
which means I was the head of the United States delegation
for, uh, for APEC.
And we got, in my working very closely with USTR,
the US Trade Representatives Office,
we got an initiative
which said that APEC would look for ways
in which to come to a free trade area
of the Asia-Pacific:
the FTAAP. We call it "F-tap."
And at that time,
I think the Japanese were talking about
setting up a free trade area of the ASEAN countries plus six,
or the ASEAN countries plus three,
or I think there was even one
that was ASEAN countries plus eight.
A number of different groupings.
And we thought that
it would be a good idea to have APEC lead the charge on this.
So APEC went forward and began doing some guidelines;
that's generally what APEC is very famous for.
We set up sort of informal rules of the road
as to how to come to agreements on certain trade issues.
And at that time I think there were about,
oh, maybe 70 or 80
free trade agreements within the APEC area,
and we were looking for ways to,
to try to harmonize all this stuff because it was...
it looked like a noodle bowl
if you drew lines from, between all of the countries
that had free trade agreements.
So from our guidelines emerged a free trade area called the "P4."
And the P4 consisted of Brunei,
New Zealand and....shoot.
One other and I can't remember which one it was.
Probably Australia...yeah, I think it was Australia.
And after that APEC year, which was 2006...
it was the Vietnam year...
we began talking amongst ourselves
within the US government
about how we would go
about doing a free trade area of the Asia-Pacific.
And we came up with several different ideas,
but then I had to leave the APEC job
because that [I] was then
named as Ambassador to Vietnam.
And about six months or so after I got to Vietnam
we announced the, uh,
the beginning of the Trans-Pacific Partnership, or TPP,
which is now a group of nine countries
that has had probably about six rounds of negotiations
on setting up a new 21st century trade agreement
for countries, all of which are APEC members,
that we hope will be the kernel of the, of the FTAAP.
The idea being that
once these nine countries figure out what they want
for a trade agreement other countries will be allowed to,
to come in and join as they see fit to...
to respect the rules that we've come together with.
So that is another reason why
APEC is important and why it's going to be important,
particularly this year
because the United States is hosting it.
The, uh...
let me. [laughs]
Let me tell ya a little bit, again,
going back to the question of,
of whether or not APEC is a negotiating forum or not.
It's true, it's not.
In fact, that's one of the strongest arguments we have
in trying to gain consensus within APEC.
APEC is a consensus driven organization.
Any one country, any one economy,
can veto an initiative by simply saying nope,
we're not going to join the consensus, so forget it.
So one of the arguments that we use
with some of these countries,
one of which in particular has been a little bit obstreperous...
it begins with a "C" and ends in an "A" and it's not Canada
is to say, look, it's non binding!
APEC is non binding!
You don't have to do any of this stuff.
But if you think it's a good idea go ahead, agree with it,
and then, if you don't want to do it, that's okay.
And the Chinese always used to say to us
yeah, we know it's not binding.
We know that that's true.
But we know that if we agree to this
you Americans are going to be after us
to do whatever it was we said we were going to do.
So a lot of people, even though it's not binding,
they treat it as binding.
And we do get [laughs],
we do go after them
and try to make them live up to what they said they were going to do.
So that has worked out, worked out extremely,
uh, extremely well.
So, just to give you a little bit of, of APEC 101,
I thought I would go through a sort of a typical APEC year.
Because it is a whole year.
During the year we have,
oh, I would say about...
somewhere between 130 and 200 separate meetings.
And these meetings,
many of those are working group meetings.
APEC has about 50 different working groups working on,
oh god, you know, disaster assistance;
pandemic, uh, pandemic defenses;
customs, various types of customs harmonization;
rules of origin work;
work on open skies agreements for, uh,
for cargo airplanes, for passenger airplanes;
free movement of people.
God, the list goes on and on and on.
And there is [laughs],
there is a, a folder that you get when you start to work on APEC
that's about, oh, a quarter of an inch thick,
and it contains all of the acronyms that are associated with APEC.
There is the HLPDAWG [laughter],
and there is the CTI,
and there is the CTF,
and there is the...
oh, the list goes on and on and on and on and on.
So, each one of those acronyms corresponds
usually to a working group or to, to something that you,
that you're working on at APEC.
So you've got about 130 of these things.
And they take place throughout the year.
And throughout the year, you have...
we've got four major meetings,
which are meetings of the senior officials.
The first meeting almost always takes place in capitals,
so for us this year, first meeting was in March
in Washington, D.C.
And that's a meeting where all of the senior officials get together,
you meet the new guys,
the new people who have come in to replace the old ones,
and you begin to talk about your ideas
for what kind of initiatives the host country wants to have
during its APEC year.
The second meeting takes place generally sometime
around June or July,
and that is the meeting of the trade ministers.
So we have a meeting where all the trade ministers
get together and they,
they talk about the issues of the day.
They talk about whatever the initiatives are that you proposed
during the first APEC meeting.
And then they will come up
at the end of that meeting with the letter
which they will then send to leaders saying, you know,
these are the issues that we think you ought to work on.
The third meeting of the year is one
which we just had for the United States year,
but it is a meeting where you try to finish up
the initiatives that you started in, uh,
at the first senior official meetings.
And all during this time you've had the working group meeting,
which then feed into the senior official meetings,
which feed into the ministerial meetings,
which then feed into the leader meetings.
So the third meeting is a pretty busy one
because you're trying to get done all the stuff
that you started in January.
But we're all government workers,
we're all bureaucrats,
so of course we never get anything done by the third time,
or by the deadline that it was supposed to be.
So then you come up to the fourth meeting.
And the fourth meeting is a big one
because that's when the leaders come.
At the fourth meeting...
you've got your senior officials meetings,
then you've got a meeting of the trade ministers
and the foreign ministers,
and then you've got a meeting of the leaders.
Now, a dotted line off to the side
is the finance ministers' process.
And I don't know if anybody's ever worked
with the finance ministeries around the world,
but they are a very secretive bunch.
They generally don't like to talk to anybody except each other.
Which is not bad [laughs]...which is not bad,
because if you do talk to them
you can't understand what the hell they're talking about anyway!
And they're the guys
that got us into this mess in the first place, anyway.
So, their, their input also feeds into this ministerial process.
And then you've got the leaders meetings.
The leaders generally meet for about a half a day or a day
because they're all so busy
that it's hard to get them to go anywhere for longer than a day or so.
And they look at all the work that you've done
and then they sign off on the leaders' text.
And then that becomes the blueprint for the next year
and for, uh...declaring success
for all of the initiatives that you've been working on all during the year.
So, in between these four meetings,
you generally have all of the working group meetings.
You have various ministerial meetings.
And all of those meetings end up
culminating in what happens at the leaders meeting.
So this year, the leaders meeting is going to be in Honolulu,
which is a great place to have a meeting,
though I must admit,
I'm getting...much as I love going to Honolulu,
love meeting with the guys at the East-West Center;
it's really a great time...
but we have been there working on logistics,
working on security,
working on all of the different aspects of this meeting;
I'm getting sick and tired of going to Honolulu. [laughs]
I tell ya, it's a terrible thing to say, but by golly, ah,
you know, come November 14 when our events are done,
I'm outta there. It's...yeah.
So, the other aspect of APEC that is extremely important,
as actually Don Hellman referred to it last night,
is the involvement of the private sector.
And that's really what I'm most involved in this year.
The private sector, since about 1996,
has been intimately involved in the APEC process.
In 1996, at the Manila APEC meeting,
APEC created the ABAC, another set of acronyms,
the APEC Business Advisory Council.
And the APEC Business Advisory Council
is composed of there businessmen
from each APEC economy.
And these businessmen are often chosen by the leaders
of those economies,
or in our case, generally we submit some names
and the White House approves them.
And they are supposed to represent the voice of business at APEC.
And they also have four meetings a year
although they're, being the private sector,
they're more efficient.
They generally get their work done on time,
which is at the third meeting,
and then at the fourth meeting
they formally present their recommendations to the,
to the leaders to work on for the following year.
So, at each one of the senior official meetings
we generally try to get more than just the ABAC involved.
And that's because it doesn't matter how important
these three business leaders from each economy are,
they can't represent the interests of all of the businesses
throughout the APEC region.
So there are many groups
that get together to work on assembling private sector opinions
and working with the private sector
to try and put their issues on the APEC agenda.
For the United States,
the National Center for APEC, which is down in, in Seattle,
is actually the secretariat for the United States delegation to ABAC.
And this year, since we're hosting,
the, the NCAPEC was chosen to head up the private sector efforts
for ABAC...I mean, for APEC.
So what they did is,
they went out to all of the other organizations.
They went out to the US Chamber,
the US ASEAN Business Council,
to the US-China Business Council,
and all of those types of organizations,
brought them all together,
and said, okay, here, here's kind of the plan; here's the layout.
So they're acting...
the National Center was acting as the coordinator for, uh,
for the private sector input.
And in order to make it a national effort,
the National Center created a new legal entity,
completely separate financially and, you know,
ethically and everything else,
called the National...
the Private Sector Host Committee for APEC 2011.
And in its wisdom,
the State Department decided that
they needed a high level government representative
to work with them
to make sure that
a: we weren't working at cross purposes,
and b: they wanted somebody that could deal with the,
uh, with the overseas economies
because we do involve leaders in some of our activities,
and sometimes the leaders don't talk to anybody
if they don't have sort of "Ambassador" in front of your name.
So they said, okay, Michalak, you go and do this.
So, it's a fantastic job.
And I've been going around the region and around the United States,
talking about APEC,
and trying to increase private sector involvement in APEC.
Now, the United States did a really cool thing this year.
Instead of having these 130 or 200 meetings
scattered all over the country,
which is what many of the hosts often do,
the United States decided that we would cluster
all of those meetings around
each one of the four senior official meetings.
We did this because the United States
is the world's only first world country with a third world budget.
And so, in order to save money,
we decided, well, let's just cluster them all together;
we'll save a ton of money.
But the unintended consequence of that
is that it was great for us, great for the private sector,
because it created enormous targets of opportunity.
Because all of the government officials
were going to be in one place at one time.
We could predict when it was.
And we could set up a number of events with...
that would involve both the private sector and the government.
So, the...
at the first senior official meeting
we had a couple of receptions and, and some events were
the private sector representatives would,
would meet the new SOMS
and talk with them and begin to, to form a relationship.
The second meeting, the trade ministers' meeting,
was held in Big Sky, Montana.
It's very hard to get to, let me tell ya.
But once you're there it's a beautiful venue.
It's just very gorgeous.
And we did a number of seminars there,
which were really cool because it was the off-season,
so the rates were really cheap,
and we could get these little chateaus that had fireplaces in them.
And so we would have groups of, of 15 to 20
private sector representatives plus the ministers,
the trade ministers and staff, at three different locations.
One of them talked about energy security,
one of them talked about food security,
and one of them talked about next generation trade issues.
And the feedback that we got from the ministers was fantastic.
One of the ministers came up to me and said,
you know, that is the first time I've ever sat down
with somebody from the private sector,
and they've got some good ideas.
And I thought, gee, that's nice! [laughs]
Well, you know, whatever it takes.
At the third meeting, which just ended like,
god, about a week ago, I think.
It was down in San Francisco
and we had three or four different events that we did there.
We did one event which was kind of a follow-on
from the original energy seminar.
We did another energy seminar
at which we invited energy ministers,
and I think about ten ministers came.
Secretary Chu from our own Department of Energy was there.
And it was also the first time that we,
the government, had put together a meeting of energy ministers
and transportation ministers.
And they were talking about the intersection
of green growth and transportation.
So, in order to, to augment that event,
FedEx has a big, bonded facility down in San Francisco
and we took a portion of that
and set up a little track
and invited the APEC economies
to send their green growth transportation vehicles there.
So we had a number of electric vehicles from,
from China, from Japan, from the United States,
I think even from Korea. [laughs]
We had a clean air garbage truck.
We had electric motorcycles.
We had charging stations.
And it was just an excellent venue
for the companies that are working in this field
to meet with many of the ministers and to talk to them about
what kind of regulatory environment do we need
in order to proceed with the electrification
of our transportation system.
Then we also had another seminar on health
where we again invited health ministers..
we had Secretary Sebelius from Health
and Human Services there...
and talked a lot about non-infectious diseases
because all of the health ministers were going
from the APEC meeting to New York,
to the UN, where they were going to be
discussing this subject with all of their UN colleagues.
So it was, again, a good opportunity to, to have the,
have the input into, into the APEC process.
But the biggest event of the year
is in Honolulu with, uh, with the leaders.
There we do an event called the CEO Summit.
The CEO Summit is the best event for CEOs
to come and meet with leaders of the 21 APEC economies.
And usually these meetings are really boring.
I mean, you have 21 leaders,
all of whom want to stand up
and give 15 minute addresses saying
how great their economy is
and will you please come and invest in my economy,
and everybody sits in the audience
and takes pictures of the leaders
and doesn't listen to what they say.
And that's usually the CEO Summit.
Well, we're going to shake that up quite a bit this year.
We're going to really shakes it up.
First of all, we're saying no speeches.
You guys come,
and we'll give you an opportunity to make a five or ten minute video,
and you give us the video and we will release it before the...
on the day that the conference starts.
But at the conference there are two rules:
one of them is you gotta have a conversation.
You can't just sit there,
you can't just sit there and make a speech.
You've got to have a conversation, either with CEOs or with,
uh, you know, people like Charlie Rose
or Maria Bartiromo or people like that.
And no PowerPoint.
I'm sorry for you guys who love PowerPoint but nah,
that's death by PowerPoint, is what we call it.
And this year we're going to have a number of interactions
which are going to allow the CEOs to deal,
not exactly one on one, but in small groups with the leaders
going forward.
Now, where does academia fit in here?
Again, I think Don kind of talked yesterday a little bit about the,
about the APEC study centers.
And we use the APEC study centers throughout the year,
generally in, in trying to set up seminars
where we try to publicize APEC
and talk about some of the things that APEC has done
and what is on the agenda this year.
If you're interested in what's on the agenda this year
the US government has got three major priorities that it's working on.
One of them is regional economic integration,
which again is going to look at things like TPP.
It's going to look at other ideas
for free trade area of the Asia-Pacific.
And it will delve into a lot of the minutiae
that I mentioned earlier: things like rules of origin, customs
clearances, and cross-cutting,
uh, cross-cutting issues which I'll talk about a little bit later.
The second major priority is green growth.
Green growth means sustainability.
It means, uh, it means in the transportation sector
it would mean looking at how do we convert
from fossil fuels to something else,
or how do we use fossil fuels more efficiently
until we can convert to something else.
And it also contains an element of, uh,
of the WTO, sort of.
You know, for the past ten year,
the WTO has been trying to work on EGS:
Environmental Goods & Services.
And they've been trying to come up with a list
that we would all agree would... to have zero tariffs on.
And for ten years they've been arguing about it a
nd they can't seem to come to an agreement on it.
So, as we did with the information technology equipment,
this year the US government is trying to work on
coming up with a list that at least the APEC economies can agree on,
and then we'll take that list into the WTO,
should the WTO still be alive at that time,
and try to get it passed in the WTO.
And then the final objective for, uh, for this year
is what we call, or what the government calls,
regulatory coherence and cooperation.
And this is one of the biggest cross-cutting issues
that we have, one of the big issues that's going to be in the, the TPP,
the Trans-Pacific Partnership.
And what it, what it means is that
you have...trying to move goods and services around the APEC area,
you've got a number of investment rules.
You've got a number of permits that you have to get,
a number of certifications.
And most of these rules and certifications are what we call
"behind the border" issues.
In other words, it doesn't happen at the border.
It's done usually by one of the domestic agencies
within whatever economy you're trying to export to.
So regulatory coherence tries to look for ways
in which we can...maybe harmonization is the wrong,
is the wrong words,
but...get some common principles or, or common ideas
on how you do these sorts of regulations
so that it's not a, a starting from ground zero every time you export...
if you do export to Malaysia, then when you do it to Indonesia,
you don't have to start at ground zero;
there will be a lot of commonalities in the way
in which they, they set up their rules and regulations.
It's a very complex subject.
It's a very difficult subject.
But it's one that would make a huge difference
to trade and investment throughout the,
throughout the APEC region.
So listen, let me stop there.
Maybe I just...there were just a couple of things that were said
earlier today that reminded me of a couple of anecdotes,
so maybe I'll close with those.
One of them, you remember
Professor Wasserstrom was talking about, you know,
is the...are the Chinese communist or not,
and I remember, I was in China in...
god, when the hell was that...t
hat must have been 1992, I think it was.
And every year, every year
we had to get a human rights waver for China
because of one of the acts of Congress.
And this year we gave China the waver
but we conditioned it on some favorable results
on some human rights cases that we'd been working on with,
with China.
And we knew the Chinese were going to be furious.
We knew they were going to be furious about this.
So, sure enough, the annoucement came out that,
that it passed the Congress with these, uh,
these conditions on it, and the next day,
myself and one of my colleagues from the Embassy were called in
to the Foreign Ministry.
And the Director-General for the Americas,
Suwin Jung-Yu was there, and he was furious.
And he said, "Do you know what really makes us mad?"
And we said, no, what's that?
And he said, "You, your President called us communists!"
And we looked at him and we said, but you are!
He said, "yeah, but we don't call you imperialists!"
So, I don't know; are they communists or not?
And the other thing was
when we were talking about the homogeneity
of the Japanese people,
and the Japanese people do consider themselves to be very special.
I remember we were doing trade negotiations with the Japanese
on two occasions.
One of them was beef,
and I have worked on beef with Japan for,
I would say, seven years.
That's amazing.
But! But, the reason that we, in the early days,
the reason we could not export our beef into, uh, into Japan...
and I swear the guy with a perfectly straight face said this to me..
he said, well,
because the Japanese are different.
Our intestine is two feet longer than yours,
and this means [laughs] that we can't digest your beef.
Oh, really?
And then the second time, the second time,
again, it was a US company
which was trying to sell ski equipment into Japan.
And again, with a perfectly straight face, this guy says, well,
no, no, no, you have to go through
this ridiculously strict testing requirement
because Japanese snow is different from American snow.
So, this has been a great conference,
and I hope that we'll continue to talk more about internationalization.
But if you have some questions, either on, on APEC or on Vietnam
or on any of the countries within Southeast Asia,
I'd be more than happy to try to answer them.
Yes, sir.
>>AUDIENCE MEMBER 1: How difficult is it
to export into Vietnam, and part 2,
how difficult is it to set up an operation there say compared to China?
>>MICHAEL MICHALAK: Oh, compared to China, I'd say it's easier.
It definitely is easier to export into, uh, into Vietnam,
and it's also easier to set up a business there.
You can...technically, you can set up a 100% subsidiary in Vietnam,
but I would be real careful when you do that.
There are so many rules and regulations within Vietnam.
The bureaucracy is formidable, and it's hard to deal with.
But, uh, but technically speaking, you can do that.
Exporting into Vietnam is not, is not that difficult.
You do have to put up
with all of the same problems you have
in most emerging economies.
There are corruption issues.
There are permit issues and things of that nature.
But they're no more difficult than you'll find in most other places,
and probably a little bit easier.
The thing that I think makes Vietnam different
is that the government is very open
to having frank and serious discussions
with people that want to do business in Vietnam.
If you've got a problem,
you know, the first stop should be the Foreign Commercial Service
and the US Embassy,
but we often find out who the appropriate officer
is within the Vietnamese government,
and then the, the company just goes and talk to them direct
and nine times out of ten they can work it out.
When they can't, then they come back to the Embassy
and we try to work it out for them.
>>AUDIENCE MEMBER 2: How does the internal American debate
over "government should get out of the way
and just let the private sector take care of everything
and the economy
and the world will be better off" play out in ABAC and APEC and those kinds of things,
not only from the American side of it
but from the other countries too?
>>MICHAEL MICHALAK: Well, we had a whole, geez...Australia
during the Australia year,
they had a big initiative on regulatory reform
that was rooted in exactly that proposition.
And the proposition itself is probably not a real true proposition
because you do need regulations on certain things:
for safety reasons, for non-proliferation reasons,
for, for other reasons.
So the real question is
how do you get to a place where you have appropriate regulation
and, to the greatest extent possible,
get, get government the heck out of the way.
And most of the people that I work with fully subscribe to that.
And the real argument is over what's appropriate and what's not.
And that's why having the private sector sit down
and talk with the government usually does end up with us
being able to work some stuff out.
So, one of the biggest things that...
well, it's not actually APEC..
.but export controls are a huge issue for American business
because an awful lot of things
which we, we...export controls say that
you can't export certain kinds of Apple computers t
hat you can buy anywhere here in the United States,
and that you can buy the equivalent of anywhere overseas.
And trying to get the government to realize that,
and then to make the change in the, in the regulations as necessary,
is very hard.
But if we didn't have ways
for the private sector to talk to the government,
it just wouldn't happen; it would be horrible.
So I think, again, with APEC...and APEC, by the way,
with all of the organizations, you know, ASEAN
or the East Asian Summit
or any of the other organizations within Asia-Pacific I can think of,
the, uh, APEC is the only one that does have this,
this institution for private sector input.
And we've just found over the years that
it's been invaluable for most of our companies.
You can do it through APEC.
You can do it through individual lobbying from company
to, uh, to government.
But I think that APEC is, is a real good way
to get a lot of that stuff done.
Yes, ma'am?
>>AUDIENCE MEMBER 3: When you said that
you didn't start your life as a...
when you said you didn't start your life as an international traveler
how did you get connected to such an international life,
and since we have many students in Oregon
who for economic reasons
and background reasons don't see the need
to have an international awareness
and then eventually maybe to travel internationally or...they don't see...
>>AUDIENCE MEMBER 3: ...how that's going to happen
or how that's going to be important.
How did you start that life, and what advice would you give them?
>>MICHAEL MICHALAK: Well, that's... [laughs] I actually...
well, I actually started out working for NASA.
I'm actually a rocket scientist by training.
I have a master's degree in physics
and was working at Goddard Space Flight Center.
And then NASA's budget started to get cut
and I thought, oops! [laughter]
My project was, at that time...
this will tell you how old I am but...
my project at that time was a, a new and untested technology
that many people were working on called holography.
And we were working on things called
holographic non-destructive testing.
And basically I was the only guy on the whole base
that knew what I was doing.
And so when budgets started to get cut I thought well,
let me see. Which project do you think will go first?
The one that everybody knows about?
Or this one over here that there's one person in the whole base
that knows anything about it?
So I thought that I should look around for other opportunities, and...
Goddard Space Center is an Greenbelt, Maryland.
And most of us who were there
on the base used to go down into Georgetown,
Washington, DC, very close.
So we used to go down there on weekends and stuff.
And I met an awful lot of foreign service officers.
And I thought geez, these guys are a heck
of a lot more interesting than most of the engineers that I work with every day.
So, so literally, just for the hell of it,
I sat for the foreign service exam and I passed by one point.
And nobody ever asked me my score, so... [laughs]
So that's how I got into the business.
But it just, quite....
I, I just think that the world today is such that
you can't, uh, you can't be aware
of what's happening in the world
without understanding what a huge effect everybody else has.
And that was one of the issues that, again,
Professor Wasserstrom was saying, other countries matter.
Other countries matter when you're talking about China.
Other countries matter when you're talking about the United States.
You know, something that the Germans do
is, is going to affect
whether we have a double dip recession or not here
over the course of the next couple of months.
And whatever the Chinese do in the South China Sea
could affect whether or not there's going to be a,
you know, a real...
well, I don't want to say shooting war...
but some serious incidents happening, happening out over there.
And now, my god, even, even Canada is making huge claims
in the Antarctic!
And do you think the US is going to stand for that?
Well, I don't know, but...
If, if we don't, then...
So, again, it's just a matter of every time you look at the TV
there is something internationally that's going to come and affect you.
I mean, and, even if you live under a rock or something
you might be interested in, you know,
one of the latest murder cases that's happened out in the Bahamas
or out in Europe or something like that, so...
And it just seems that, that kids just travel today.
I don't know...well, I do know why my daughter does it.
I mean, she, she grew up in Japan
and grew up living in various countries around the world, but...
even her friends, all of her friends in high school;
summer vacation came and they said well, yeah,
we're going to go and visit so-and-so in, in Europe,
or so-and-so down in Latin America.
My other daughter is studying biology
and she went down to La-, uh, Central America all the time,
looking at birds and other weird creatures that live in the rainforest.
So, it just seems like
it's more a part of their lives than it ever was a part of mine.
And it's seminars like this. It's talking to people like yourselves
who are then going to go back to your classrooms
and are going to say, well,
do you know who this thing is going to affect your, uh,
how you deal with business, if you're going to do a business major.
Or, you know, as Tom is saying,
he's teaching Chinese Literature,
and talking about how each one of those sayings
that come out of Chinese Literature are a part of the way
in which a whole other society thinks.
Confucius. Everybody hears about Confucius
and everybody hears about Lao Tzu
and various Eastern philosophers,
and it's always kind of an interesting sort of a thing.
People wonder, man, what's this zen stuff all about really.
And the more that you talk about that with your, with the kids,
and the more opportunities that they have to, to do studies abroad
or to go on, I don't know, internships with a foreign company
or something like that, the better off they're going to be.
And the more foreign students that they meet.
I tell the Vietnamese all the time,
I say "you guys are much better ambassadors
for your country than I am.
So you guys get over there to the US
and you talk to the Ameican students
and tell them something about Vietnam."
And I think those are the ways that these things, t
hat these things'll happen.
And I think they will happen. I, I have no doubt about it.
And I think PCC is in a really good position,
not only to do your own two year thing, but to look with,
with PSU for instance, and, and become a feeder,
or become part of, you know, some two plus two program
that they're doing, or that some other college or university is doing.
There are plenty of opportunities,
and I think, I think you're very well placed to take advantage of those.
>>MODERATOR: We have time for one more.
>>MICHAEL MICHALAK: Okay. There it is. Yes, sir?
>>AUDIENCE MEMBER 4: Ambassador,
could you briefly compare and contrast
how President Clinton and President Obama
were received by the Vietnamese people?
>>MICHAEL MICHALAK: Were received by...?
>>AUDIENCE MEMBER 4: The Vietnamese people.
>>MICHAEL MICHALAK: By the Vietnamese people?
>>AUDIENCE MEMBER 4: Correct. Compare and contrast
how the Vietnamese people received President Clinton
and President Obama.
>>MICHAEL MICHALAK: Well, the president of Vietnam,
the last president of Vietnam...
they have a new president now..
.but the last president of Vietnam, President Triet,
was just overjoyed to have a chance to meet Obama at the UN.
They met at the UN a couple of times, I think.
The new president of Vietnam, President Sang,
is, is really, really, really, really-really-really [laughter]
wanting to meet Obama.
When, during the elections it was, it was amazing.
I was on a trip to somewhere in central Vietnam...
yeah, it was the central highlands, as a matter of fact,
and we were talking with some Communist Party members
who had just come back from a trip to the United States.
And I remember there were four of them,
and they were asking me about the elections.
They said, well, is Hilary going to run?
Is she going to run, you know.
And I said, well, I don't know.
And then they talked about,
I don't even remember what the issue was now,
but they knew more about the US elections than I did.
And I asked. I said okay, let's take a straw poll right here:
who would you vote for?
And it, it split up exactly the same that it did in the US.
The, the woman said Hilary.
The, the older guy said McCain.
The middle guy..
the other two said, well, we think Obama.
And it was..for a long time, I would,
I would just go around and do this at every meeting that I had,
and again, it mirrored the United States.
At the beginning, there were a lot of people
about evenly split between Hilary and Obama.
And most of the conservative folks liked McCain.
But McCain of course has got a special history with Vietnam,
so everybody liked him anyway.
But then, right about a month away from the election,
you could just see, there was like this landslide
that moved over to Obama.
And we did an, we did an election,
election party at one of the hotels there
and we must have had, oh god, I don't know,
maybe a couple of hundred Vietnamese there.
And it was...boy, you should have seen the party
when, you know, Obama went over the top.
Everybody was yelling and screaming.
It was, it was incredible. It was really amazing.
It's one of the things that I really like about the job;
you get to do all kinds of neat stuff like that.
Of course you've also got to talk about human rights,
which is often times difficult discussion, but it goes with the territory.
Okay! Well, listen...yes, sir, one more.
>>AUDIENCE MEMBER 5: You know, I wonder...
it seems to me like no one has a clue
how to solve some of our economic problems and...
>>MICHAEL MICHALAK: Yeah, so don't ask me!
>>AUDIENCE MEMBER 5: I pick up from your conversation
that free trade's a good thing, and of course a lot of people,
labor unions and so on, in this country
are very concerned about loss of jobs,
and I was wondering if the people in APEC, the leaders
and the folks you deal with,
could care less whether or not we lose our jobs.
>>MICHAEL MICHALAK: Could care less whether or not...
I don't think anybody puts it that way.
I think [laughs], I think what they say
is they would like to see the GDP in all of the APEC countries go up
so that the quality of life improves for all people
throughout the APEC region.
But are they going to do something to hurt themselves
to make sure that we have more jobs? I don't think so.
So I think the idea is that trade is a non zero sum game.
That if you do make the pie bigger
then that means you can have more people
have pieces of it and that's the, that's the overall goal.
And it's very clear
that there's not enough domestic demand in the United States
to enable us to grow at a rate that is going to,
that's going to bring down the unemployment rate.
So if we can't do it from domestic demand,
where do we have to go to find demand for our products?
And that's overseas.
So, it just seems to me that, you know,
if you think that by increasing,
by doubling our exports
we are going to be at a net loss of jobs in the United States,
I would reallly like to see that calculation,
cause I just can't see that happening.
It's got to increase.
It will definitely increase the number of jobs in the United States,
and it's been shown that
export related jobs tend to be higher paying than other,
other types of jobs.
And as I said, for SMEs, there is a clear, again, you've got,
we've got some facts there to show: 35% increase in their revenues.
So, yeah. I think it's a win-win situation.
There are losers in our economy, that's true.
And that's again where,
where institutions like community colleges make a difference,
when somebody does need retraining.
When somebody does need to figure out,
okay, my job just did get cut;
what the hell am I going to do now?
Hopefully, if TAA passes,
we'll be able to fund some programs
whereby the colleges like one can help those people, retrain them,
and make them ready to find new jobs.
Rosy outlook, but the alternative is much worse.
Okay, thank you very much!
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