Thomas A. Shannon, Assistant Secretary of State for Western Hemisphere Affairs; Daniel S. Sullivan, Assistant Secretary, Bureau of Economic, Energy and Business; and Craig Kelly, Principal Deputy Assistant Secretary

Foreign Press Center Briefing
Washington, DC
December 8, 2008

MODERATOR: Good morning. Welcome to the Washington Foreign Press Center. Today, we have with us Assistant Secretary of State for Western Hemisphere Affairs Thomas A. Shannon, and Assistant Secretary in the Bureau of Economic, Energy and Business Affairs Daniel S. Sullivan, along with Principal Deputy Assistant Secretary Craig Kelly. They’re here to talk to you today about the Pathways to Prosperity in the Americas initiative – ministerial , sorry, in Panama, December 10th, 2008.

We’re going to start off with Assistant Secretary Shannon, then we’ll go to Assistant Secretary Sullivan and Principal Deputy Assistant Secretary Kelly, and we’ll take your questions. Thanks.

ASSISTANT SECRETARY SHANNON: Good morning. Thank you all very much for being here. As noted, the Pathways to Prosperity ministerial meeting will be taking place in Panama City, Panama, on December 10, hosted by Vice President and Foreign Minister Samuel Lewis of Panama. We’re very grateful to the Panamanians for their hospitality and looking forward to this ministerial. As you know, the ministerial is a result of the launch of the Pathways to Prosperity initiative in September in New York on the margins of the UN General Assembly when President Bush met with leaders of our free trade partners to talk about ways in which we can begin to consolidate the free trade accomplishments of the hemisphere over the past eight years and look for ways to accentuate the positive aspects of trade but also ameliorate the negative aspects of trade, and ensure that our trade policies and our development policies, both economic and social development, are linked.

From our point of view, what the Bush Administration has accomplished over the past eight years in our free trade agenda in the Americas is significant. We’ve concluded over ten free trade agreements in the region. And when you combine that with our NAFTA partners, we have 12 free trade partners that stretch from Canada to the tip of Chile, all with the exception of the Dominican Republic along the Pacific coast looking across the Pacific to the dynamic economies of Asia, and effectively laying the groundwork for a larger American-Asian free trade area.

We also believe that the Pathways to Prosperity initiative, aside from doing the things that I had mentioned earlier, also is an effort to open a larger dialogue with other countries in the region that are open to trade and globalization. As President Bush noted in New York, the Pathways to Prosperity initiative is not an exclusive arrangement; on the contrary, it is inclusive. And in this ministerial, we are reaching beyond our free trade partners and have invited a variety of regional organizations, development banks, and significant trading partners such as Uruguay and Brazil.

And we believe that, as we look forward beyond this ministerial, that we have created a forum in which countries committed to trade and recognizing the role that trade plays in economic and social development, economic growth, and strengthening ties between countries, we’ll be able to discuss the broader aspects of our economic and social development agendas and the important role that trade plays.

We’re very lucky to have with us today Assistant Secretary Dan Sullivan, who’s been one of the driving forces behind the Pathways to Prosperity initiative, and can talk to you about the specific pillars of that initiative, especially in relationship to how trade links to our broader development agenda, but also how we see this developing over time. And also Ambassador Craig Kelly, the Principal Deputy Assistant Secretary in the Bureau of Western Hemisphere Affairs, who has played a very important role in the diplomacy of Pathways and ensuring that this initiative is indeed understood as an inclusive initiative designed to create a forum in which all countries in the region who are committed to open trade and economic growth and development can meet and talk about the broader aspects of trade.

Thank you very much. Dan.

ASSISTANT SECRETARY SULLIVAN: Thank you, Tom. I just want to add a few additional words to what Tom had laid out as how we see the ministerial developing in Panama on Wednesday. But essentially, what we’re looking at doing is building on kind of the next steps from this initiative. And hopefully, you have a handout there of the leaders’ communiqué that launched this initiative. And take a look at that again, because one of the things that happened, as Tom mentioned was launched on the margins of the UN General Assembly meetings, also kind of in the wake of a lot of what was going on with regard to the financial crisis. But we see this as an extremely important initiative. And when you get these leaders together, which they did, to agree to taking the steps that they did in that initiative, which is, again, why we wanted to have that communiqué at your disposal to take another look at it, we think that this has significant potential.

Both Tom and I were actually in the leaders meeting with Secretary Rice, Secretary Gutierrez, Ambassador Sue Schwab, and I can tell you that that meeting, there was significant enthusiasm for doing this, that this was a logical next step to build on what has been, as Tom mentioned, really an historic achievement over the last several years, not only under this President but the last two presidents before President Bush.

And so – and the key, the key if you look at that communiqué, is to focus on how our citizens can better take advantage of what has been the significant achievement in free trade agreements that we’ve had over the last several years.

So what we want to do – what we want to look to accomplish at the ministerial, which will have a very good representation of foreign ministers, trade ministers, economic ministers from all these countries, is to look at ways to build upon what the leaders agreed to, particularly focusing, if you look at paragraph five, which are the key pillars of this initiative, to provide some more details under which each of these pillars we can move forward with regard to progress. And so that’s what we’re going to be focusing on. There’ll be a – we’re hoping to have a ministerial action plan that will have some details that really fit with these five pillars that are laid out in the leaders’ communiqué.

We will also likely – clearly, the ministers will be discussing elements of how the global financial challenges, broader economic challenges can be addressed. One of the things that we are looking to do is hopefully build on what was achieved at the G-20 leaders summit on November 15th. And there’s been a lot of other organizations that have adopted what the G-20 leaders have done, and we think that that might be another important component of the ministerial in Panama.

Finally, I just want to say a word, because we get a lot of questions on this issue, is with regard to the issue of the transition. And looking at an initiative right now that is launched in the final year of President Bush’s Administration, how we see that playing out with – obviously, we’re going through a transition in our governments right now. And I think it’s important to note that within the United States there is a very strong bipartisan tradition of one administration working very closely with the next, particularly on economic integration initiatives, particularly with regard to this hemisphere.

So if you look at, whether it’s the end of President Bush 41 term, with regard to NAFTA, with regard to the Uruguay round, picked up by President Clinton, and not only picked up but very much strongly promoted. President Clinton was – his administration launched the FTAA, the U.S.-Chile FTA negotiations. President Bush picked these up and focused on these. So there’s a strong bipartisan tradition on economic integration initiatives, particularly in the hemisphere, that we think is an important element to remind people as we look forward to moving forward on this.

And of course, Tom and I and others, working closely with President-elect Obama’s transition team, have highlighted this initiative as something that we think is quite important. And it’s quite important when you see the leaders of all – of so many countries in the hemisphere committing to what they committed to at the original leaders meeting. And again, you have that communiqué in front of you. So we feel strongly and positively about this initiative, not only within this administration but continuing to move forward.

Craig Kelly will have some follow-on comments as well. Craig.

AMBASSADOR KELLY: Just a couple of brief points before we take your questions. As we went through the process of negotiating free trade agreements with countries in our region, there was an extraordinary spirit of cooperation among those countries themselves. That is, once one country had its free trade agreement, that country or those countries then supported the others who were in the process of negotiating their agreements and seeking congressional approval. That spirit is part of what underlies the Pathways initiative, this mutual support to try to further this process of integration and using trade to help real people.

And secondly, the countries in the region believe strongly that there is a very close connection between economic integration and freer trade and poverty alleviation. In the very period in which Chile has negotiated trade agreements with over 50 countries around the world, it has lowered its poverty rate to under 14 percent. Countries in the region have taken note of that extraordinary success, and Pathways is a way to make that process more efficient in a group context as a group initiative. Thank you.

MODERATOR: Okay. So we can take some questions. Let’s start out here in the front.

QUESTION: I’m Pauline Jelinek of the Associated Press. Thank you. Since part of the focus is broadening the sectors that can benefit from the free trade agreements, would someone talk a little specifically about who’s benefiting now? Do you mean manufacturing sectors? Is it a certain size or level of company? Just who benefits now, and then what are the types of things that you can do to broaden that to other sectors?

ASSISTANT SECRETARY SHANNON: Yeah, Assistant Secretary Sullivan will take that question.

ASSISTANT SECRETARY SULLIVAN: Yeah, I – let me – it’s a great question, and it’s – it’s a question that we focused on when we were putting this initiative together. And when I say we, I mean all the countries. And I think what’s very natural is any time you have a free trade agreement, the – and it’s not always the case, but the companies, the manufacturers who are already engaged in and familiar with international trade are the ones that initially benefit, because they’re already exporting, importing, and all of a sudden, you see tariffs go much lower, go to zero. That benefits them immediately.

If, again, you look at the leaders’ communiqué, what we are looking to do is try and broaden the category of companies and individuals and farmers and small businesses that benefit. And there’s a lot of ways that you can do that. But if you look at – again, I know I keep focusing on this, but if you look at the communiqué, it talks about, in the first pillar, increased opportunities for our citizens, particularly small businesses and farmers. Okay? So this looks to try to broaden the opportunities, particularly for those entities that have not traditionally engaged in trade.

And so there’s a number of ways you can do that, whether it’s through SME finance, through infrastructure finance and development. And again, we’re trying to – we will be looking at ways to provide additional details to this broad action plan laid out by leaders. But there has been a focus, as you mention, on assisting those who haven’t traditionally had the opportunity or even the knowledge to take advantage of what clearly has been a significant achievement of lowering barriers over the last several years with regard to hemisphere trade.

MODERATOR: Okay. Jordi.

QUESTION: Thanks. Jordi Zamora from AFP. You put the stress on this bipartisan tradition, you said, between American administrations towards free trade. Is it the fact that there is a new Democratic administration coming in? Do you think that it could be, itself, in jeopardy for this bipartisan tradition, tradition on focusing on free trade?

And I have a second question for Mr. Shannon. I don’t know if you – well, there’s a warship, a Russian warship which is staying now in Panama, kind of precisely when Secretary of State is coming. I don’t know if you wanted to comment on that or if you just think that it’s – it’s just casualidad*, as we say.

ASSISTANT SECRETARY SULLIVAN: Yeah, let me – I mean, your question – specifically, you had mentioned --

QUESTION: Do you think it’s in jeopardy, this bipartisan tradition now?

ASSISTANT SECRETARY SULLIVAN: No.

QUESTION: You mentioned that there’s always been a bipartisan tradition on focusing on advancing on free trade.

ASSISTANT SECRETARY SULLIVAN: In the hemisphere in particular.

QUESTION: Yeah.

ASSISTANT SECRETARY SULLIVAN: Do I think it’s in jeopardy?

QUESTION: Yeah.

ASSISTANT SECRETARY SULLIVAN: No.

QUESTION: Can you comment, please?

ASSISTANT SECRETARY SULLIVAN: Well, of course, this is a decision for the incoming administration. And as I mentioned, we – the transition – you probably have been reading articles about it – going very smoothly, a lot of continuous briefings between senior officials at the State Department and other agencies and President-elect Obama’s transition team.

But in answer to your question, I don’t think it is. I think deepening economic integration, particularly in this hemisphere, has been a bipartisan foreign policy goal of the United States for decades. And that’s because it’s in our interest and it’s because it’s in the interest of our neighbors in the hemisphere, and I don’t think that that longstanding U.S. foreign policy goal is in jeopardy.

MODERATOR: Susan.

ASSISTANT SECRETARY SHANNON: And on the second question, the United States has always supported free navigation of international seas and waterways, so we see nothing unusual, abnormal, or threatening about Russian vessels transiting the Panama Canal.

QUESTION: Susan Cornwell with Reuters. In your conversations with the transition team, though – the Obama transition team, you’ve told them you think this initiative is important. Do they think it’s important? How can you square what you just said about you don’t think this is in jeopardy with the things that Obama has said? For example, he doesn’t favor congressional approval of the Colombia free trade agreement. He wants to renegotiate part of NAFTA, I think the environmental and labor bit. So how can you square that for us? Or do you think he – maybe he’s going to change his mind on that?

The other question I had is why are you all inviting Uruguay and Brazil? What are you hoping to accomplish there? Thank you.

ASSISTANT SECRETARY SULLIVAN: Well, again, I don’t want to make this about speculating over the focus or the – where the next administration will move forward. What I do want, though, you to focus on is to look again – as I mentioned, paragraph five of this leaders’ communiqué.

Those five pillars, we view, we think are very much a agenda that would have broad bipartisan support not only – this is important – not only in the United States but throughout the hemisphere. Remember this is an initiative agreed to by the leaders of 12 countries. And so we think that that agenda is laid out in the leaders’ communiqué as something that could have broad bipartisan support in all the countries with whom we have free trade agreements, and including our own country.

ASSISTANT SECRETARY SHANNON: I’d like to underscore the fact that this is an initiative among free trade partners, which we are now hoping to expand to others who are interested. This is not just a U.S. initiative. In other words, it’s important, I think, for all of us to recognize that what this initiative signals is that the region is saying – that our partners are saying that they believe in free trade, they support free trade, and they understand the linkage between open markets and trade to economic growth and economic and social development.

In regard to the other invitations issued by the Panamanians, the idea was to be as inclusive as possible, and invitations were extended to regional groupings like the Andean Community and CARICOM, to multilateral development banks like the Inter-American Development Bank and the World Bank, and also to countries that have committed themselves to trade openings such as Brazil and Uruguay.

Because ultimately, as President Bush noted in New York, the purpose here is not to divide the region. The purpose is to unite it around a very important economic tool, which is trade, and to understand how our societies, through dialogue, through exchange of best practices, can understand the steps that we all need to be taking in regard to labor, in regard to the environment, in regard to education, in order to ensure that the benefits of trade are widely spread, that they’re available to the poorest and most vulnerable members of our community, and that they play a role in generating a prosperity that is shared.

MODERATOR: Betty.

QUESTION: Thank you. Betty Brannan, La Prensa of Panama. I have a lot of questions, but I’ll try and keep them to a minimum here. How do you respond to the idea that this is really a diluted – a very weakly diluted or strongly diluted, depending on your metaphor, version of the FTAA that the government – the Bush Administration has had to give up on? Why Pathways to Prosperity? It’s such an awkward name. I mean, can’t we call it the Pathways countries or something? It’s very clumsy. I’m looking for something that I can use to refer to these countries, like the G-11 or the WH-11 or something.

And more about the nuts and bolts of this conference; it’s only a one-day conference? Who exactly is coming? I mean, Uruguay and Brazil was invited, but are they coming? And finally, what’s happening with the Panama FTA? How do you look at that?

AMBASSADOR KELLY: Should I go ahead?

ASSISTANT SECRETARY SHANNON: Sure.

AMBASSADOR KELLY: In terms of the name, we chose a name that emphasized inclusion and the fact that this was an initiative moving forward. If you create a name that implies that there is a set group, that would undermine the principle behind this, which, as several of the leaders said on September 24th, is all about inclusion. So we chose a name that suggested movement forward and a process.

In terms of attendance, the Panamanians, as Assistant Secretary Shannon mentioned, have invited several groupings. They’ve also invited Trinidad and Tobago as the host of the upcoming Summit of the Americas to show that this is an initiative which is also very complementary to other processes. We are, to a certain degree, inspired by, you know, what the Europeans call variable geometry, that many different groupings can exist in the hemisphere that complement each other, that have laudable missions but slightly different missions. And therefore, we – this is a grouping and a term which would suggest movement forward and inclusion.

In terms of who is coming, I would refer you to the Panamanians as the host. But they have extended these invitations, and the response has been very, very enthusiastic. Most of the foreign and trade ministers of the member countries will be there.

MODERATOR: Okay. Nestor in the back.

QUESTION: Nestor Ikeda, an Associated Press reporter for Latin America. I have a question for Mr. Shannon. And you said that this Pathway initiative is an initiative between FTA partners, but in the group is not – Nicaragua is not present. And some –

ASSISTANT SECRETARY SHANNON: Actually, Nicaragua was invited. It was invited to the presidential meeting in September, and it’s invited to the ministerial.

QUESTION: Yes. And my question in regard to a kind of frustration of the Bush Administration, and in this group, in one side – well, Brazil and Argentina are not present. And in the other side, Bolivia, Nicaragua, Ecuador, and Venezuela. So is this Bush Administration finishing with commercial frustration with Argentina and Brazil, and political frustration with Bolivia, Nicaragua, Ecuador, and Venezuela?

ASSISTANT SECRETARY SHANNON: Actually, we think we’re finishing strongly and not in a frustrating fashion. We believe that, first of all, our ability to conclude ten free trade agreements was historic. No other administration has been able to do that in the Western Hemisphere up to this point. And as I noted, these – with the exception of the Dominican Republic, these free trade agreements are all along the Pacific coast. They represent some of the most dynamic and important economies in the region, and they all connect easily across the Pacific. And I think that’s an important signal for the future of this region because we believe that the future is largely an Asia-Pacific future, which I think is underscored by other initiatives that have emerged recently, including the idea of a transpacific free trade agreement.

But at the same time, while we have negotiated free trade agreements, we’ve also worked very closely with other partners in the hemisphere on Doha and other trade and commercial – if not agreements, at least negotiations and issues. We’ve been working with Uruguay on a step-by-step process to expand our commercial agreement and work towards some larger comprehensive agreement. We have, through our Economic Partnership Dialogue with Brazil, pursued ways to move forward our trade and commercial agenda in very important areas like civil aviation and telecommunications and infrastructure development, and also have begun important dialogues between our textile sectors and discussions about import safety and product safety.

In other words, I think that we have, even in a period in which lack of movement on agricultural subsidies in the Doha round has limited our ability to advance on FTAA, really been able to build bit-by-bit a larger trade network in the region, both through our FTAs and through our other outreach and dialogues that really create a virtual network that really, I think, hands to the next administration a powerful tool, a powerful structure of trade agreements and dialogues that can be taken up by the next administration in pursuit of economic growth and prosperity.

MODERATOR: Sonia.

QUESTION: Thank you. Sonia Schott with Radio Valera Venezuela and Selecta Panama. What kind of level of compromise do you expect to reach in this ministerial meeting, considering that not only the Bush Administration is in their last days, also the Torrijos Administration is going to leave very soon? So what can we expect in the long term in terms of compromises? Thank you.

ASSISTANT SECRETARY SHANNON: By compromise, you mean commitments?

QUESTION: Commitments, yes.

ASSISTANT SECRETARY SHANNON: Yeah, okay. Sorry. Well, this is a moving, living thing, and it’s going to require the goodwill of all parties to accomplish what we hope to accomplish. But again, I think as noted, as Assistant Secretary Sullivan noted, our commitment to integration in the hemisphere, our commitment to economic growth, our commitment to use trade as a tool to promote economic and social development, to attack poverty, to attack inequality, and to attack social exclusion, is not a partisan tool. It’s never been a partisan tool. And as noted, different administrations have always found ways across transitions to maintain important trade initiatives. And it’s our hope that this will continue with Pathways.

But ultimately, I think it’s important to understand that one of the strong and enduring aspects of democracies is that ultimately relations are not between governments; they’re between states and between peoples and between societies. And in this regard, I think we’re very well positioned, because one thing that we have tried to do over the past several years is to show that the relationship between the United States and the region goes far beyond the relationships of governments, and that ultimately our job as governments is to facilitate the contacts that exist between our societies, between our private sectors, between our investors, between our trade union movements, between our larger civil societies and our universities and our faith-based institutions. And I think that if you were to kind of strip away the overlay of governments, what you would see beneath it in the Americas today is a very, very vibrant network of connections linking all of our societies, what Secretary Rice called an alliance of peoples. And ultimately, this is one of the things we hope to be able to promote and facilitate though the Pathways initiative.

MODERATOR: Gonzalo, last question.

QUESTION: Hi. Considering this might be Secretary Rice’s last trip to the region, and if you could forget for a moment your diplomatic background, what would be for you the highest and lowest points in terms of achievements of these four years in the region?

ASSISTANT SECRETARY SHANNON: Well, that’s a big question, and in many ways I would prefer to kind of leave the answer to Secretary Rice herself. I don’t want to put words into her mouth.

But when Secretary Rice came to the State Department, she came building on the work of Secretary Powell. And the two Secretaries combined have traveled more in the region, have spent more time engaging in the region, than probably any two Secretaries of State combined. And I think what has happened in this period of time, and it’s a period of dynamic and powerful change in the region, when new political voices are emerging, new constituencies are emerging, countries like Brazil are transforming themselves into major international actors, and we’re addressing very specific and challenging issues, such as the fight against organized crime in Mexico and Central America.

And I think that what we have tried to do, first, is to fashion a positive agenda in the hemisphere that recognizes that our influence and our ability to have a meaningful role in the hemisphere depends on our ability, first, to understand the problems and challenges that our partners face, and secondly, to help them resolve those problems and challenges in a positive way, and to the extent possible, try to make sure that relationships with the United States are positive ones and not punitive ones.

Secondly, I think we have changed our vocabulary in order to make it very clear that we understand the principal problems that this region faces, especially the effort, as I mentioned earlier, to overcome poverty, inequality, and social exclusion, and to ensure that democracy can be seen as the revolutionary force that it is, and a force that is capable of fashioning societies in which individuals are seen as citizens not only in a political sense, but also in a social and economic sense.

And I think that we have also over time deepened our dialogue in the region and expanded the way in which we relate to the region. And this is true on the trade side. It’s true on the security side, where we’ve expanded our security dialogue far beyond the traditional dialogue of security assistance and counternarcotics, to include how states can better face the threat of organized crime, but how they can also better face the security threats posed by natural disasters, ecological disasters, and pandemics. And in the process, we have created, I think, a network of dialogue not only between traditional security institutions but also between emergency management institutions, disease control centers, and other public sector agencies that address the management or response to emergencies. And I think that’s significant.

And then finally, I think I would like to note – and again, this is not an all-inclusive list. We can sit down and go over this in great detail. But I think one thing that Secretary Rice would point out is that we have walked away from this idea of using political litmus tests to determine who we address or who we work with. And our message, the message of Secretary Rice and the President, has been that we’re prepared to work with anyone in the region who has a commitment to democracy and is prepared to work with us. And I think that really has defined a new understanding of partnership in the region, partnership among equals in which we recognize that we have common agendas, forged not only through our bilateral relationships but also through our multilateral relationships, and that our commitment to the inter-American system, to the OAS, to the IDB, but also to the more informal aspects of that system such as the Summit of the Americas, has really allowed us to have a level of communication which is unique in our modern history and really, again, has created, I believe, a strong platform for the steps that the next administration will take.

MODERATOR: Thank you, Assistant Secretary Shannon, Assistant Secretary Sullivan, and PDAS Kelly for coming. And with that, we’ll leave it there, and I hope you guys have a good day.

ASSISTANT SECRETARY SHANNON: Thank you all very much.