The U.S.-Japan Bilateral Economic Relationship: Past, Present, and Future: Welcome, Introduction, and Keynote Address
March 9, 2017
MATTHEW P. GOODMAN: OK. Well, good morning, everyone. Welcome to CSIS. My name is Matthew Goodman. I hold the Simon chair in political economy here at CSIS and I work on Asian economic including Japan – especially Japan – which is where I got my – started cutting my teeth in public policy 30 years ago. I’m delighted to have all of you with us. I know people will be drifting in this morning. Apparently there’s really bad traffic in the neighborhood, so I know we’re going to have more people coming in. Welcome also to our online audience. We always have a good audience online watching us as we stream this live.
A few administrative notices. First of all, if you have any noisemakers, please set them on stun. If you—if there’s any kind of emergency, which is unlikely—but if there is, basically follow me. We have emergency exits down the back here to the alley or we can go down the front to the little park across the street. We will be taking a break at about 11:00, 11:15. And there are restrooms behind – basically behind me here. You go around that way if you need those. And we’ll have coffee up on the Sam Nunn Terrace. So you’re welcome to have that. And I think with that – I think that’s all the administrative stuff.
So if you go back 30 years, when I was studying Japanese down the street here at SAIS, we were in a really bad patch in U.S.-Japan economic relations. In fact, I think 1987 was literally the low point. That’s when we had – we imposed sanctions on Japan for violation of a – alleged violation of a semiconductor agreement. Five congressmen beat up a Toshiba tape deck on the steps of the Capitol. We had, you know, a long list of trade and currency frictions. And it’s really hard to believe that that all happened at all.
And certainly if you look at where we are today, where for the last five years in particular we’ve been engaged in this effort to really effectively negotiate a bilateral free trade agreement between the United States in the guise of the Trans-Pacific Partnership, and to extend our mutual interest in high-standard rulemaking in the Asia-Pacific region. And this has been—you know, we’ve been just almost perfectly aligned on those issues. We’ve still have some of those old issues to resolve in automobiles and agriculture and other areas. But our common interest in the rulemaking part of our relationship is just amazing, in the context of that – beginning 30 years ago – for me, beginning 30 years ago on these issues.
So we want to look at that history and see how far we’ve come and why we’ve come here, but then, of course, want to look forward and see where the U.S. and Japan can and should be cooperating. And there’s a lot of areas. And we’re going to have a lot of different experts and speakers giving different perspectives on some areas of possible cooperation going forward.
So what we’re going to do, just to go through the flow of events here, in a second I’m going to introduce our keynote speaker. Then we will have a little conversation I’ll have with him up here on stage, and then invite you to ask questions and comments. Then we will put our first panel up, which is a terrific group of experts who I will introduce. And I’ll moderate that panel. Then we’ll have that break. And then we will have a final interesting, slightly outside-the-box conversation about – moderated by my friend and colleague Abigail Friedman – about our strategic partnership between the U.S. and Japan, and the local impacts and sort of what that means sort of on the ground from a perspective – from a state-level perspective and from a business perspective. So stay around for that, because that’ll be an interesting conversation.
And with that, I think I will move to introducing our keynote speaker. I’m just delighted to have the Honorable Joaquin Castro with us today. Congressman Castro has been a great champion of U.S.-Japan relations since he helped found the U.S.-Japan Caucus in Congress. He only joined Congress in 2012. He’s in his second term. He represents the 20th District in Texas, in the San Antonio area. And he’s already jumped into a number of leadership roles in Congress generally, on the House Foreign Affairs Committee, on the Select Intelligence Committee. And in fact, he has a couple of hearings he has to go to today on some topics relating to other countries that are in the news these days.
So we’re delighted that he agreed to take time to be with us today. And I’m going to just turn over the floor to him. Thank you. Please welcome Congressman Castro. (Applause.)
REPRESENTATIVE JOAQUIN CASTRO (D-TX): Good morning. I want to say, first of all, thank to Matthew for that introduction, and for the leadership you’ve shown throughout your career in strengthening ties between Japan and the United States. I’d also like to thank CSIS for organizing today’s event, for hosting us, and for all of your work that you do on this relationship and so many other relationships between the United States and the world.
As Matt mentioned, my name is Joaquin Castro and I’m in my third term representing my hometown of San Antonio. I spent two terms on the House Armed Services Committee and the Foreign Affairs Committee. And last year around September, I left the Armed Services Committee to join the House Permanent Select Committee on Intelligence. And so it’s wonderful to be here with you this morning to talk about something other than Russian dossiers. (Laughter.)
I’m also a founding co-chair of the bipartisan U.S.-Japan Caucus, which is now in its fourth year. I’m pleased to be working with my co-chair, Dave Reichert, a Republican from Washington State, to continue to grow our ranks. We currently have more than 100 members who represent communities all across the United States, both Republicans and Democrats, progressives and conservatives. In the Caucus and in each of my committees, we’ve examined at length U.S. policy towards Asia and the events in the region that shape our discussions and the issues of the world.
I’m glad to be here today with all of you to focus on the United States’ economic partnership with Japan and what we can expect in the coming years. A few weeks ago, I traveled to Japan and South Korea, where I met a number of officials to discuss the U.S.-Japan economic and security relationship. In Japan, I was honored to meet with Prime Minister Abe and several members of the Diet. While we discussed a range of issues, U.S.-Japanese economic engagement was a top priority for all of us in these conversations.
As you can imagine, there was a lot of curiosity and questions because we have a new president and, of course, a new Congress here in the United States. Trade, and what a future U.S.-Japan trade agreement might look like, came up quite frequently. As you all know, President Trump signed an executive order officially withdrawing the United States from the Trans-Pacific Partnership’s negotiations. I, like many of my colleagues, had concerns about the TPP, particularly the labor enforcement provisions. While I voiced that view to my constituents during town halls and to my colleagues through forums like the U.S.-Japan Caucus, Congress never had the opportunity to hold hearings or a public debate on the merits of a TPP.
Now that the TPP is no longer on the table, the administration has indicated its plans to forge a bilateral trade agreement directly between the United States and Japan. It’s unclear what the details of that agreement might look like, or if the agreed-upon provisions of the TPP will be the basis for future trade negotiations between the United States and Japan. I’m going to be watching the NAFTA renegotiation very closely. That will be our first and best glimpse at what a Trump administration trade agreement might look like.
There were also many folks in Japan who were still contemplating the idea of Japan continuing with the other countries involved in TPP and going forward on their own. In fact, there was some discussion about the idea that the TPP could be revived one day. And so my sense from among Diet members is that Japan has not completely given up on the TPP. But with regards to NAFTA, I think NAFTA negotiations will give us a sense of what to expect from the administration on future trade deals with partners like Japan and others.
President Trump and Prime Minister Abe had a constructive meeting last month, during which they reaffirmed their commitment to strengthening our nation’s economic partnership. It appears our economic ties with Japan are a real priority for the new administration, and that’s a good thing. Vice President Pence will be traveling to Japan in April, where he’ll meet with Deputy Prime Minister Taro Aso, setting the stage for a continued economic dialogue between the senior leaders of our nations.
Another major piece of our nation’s economic engagement is foreign direct investment. In fact, Japan was the second-biggest source of FDI flows from 2013 to 2015, with 17 percent of FDI inflows to the United States over that period coming from Japan. My home state of Texas has a particularly strong economic relationship with Japan. In 2013 alone, our business exported – our businesses exported more than $8.6 billion worth of goods to Japan. And more than 321 Japanese companies of all sizes have invested in the state of Texas.
I’ve spoken before, for example, about how the Toyota plant in San Antonio created thousands and thousands of jobs in a part of town that had been, by and large, neglected for decades. I know communities across the nation similarly benefit from Japanese investment. In fact, member companies of the Japanese Automobile Manufacturers Association, JAMA, have provided over 88,000 direct jobs to Americans. JAMA member companies also support more than 1.5 million American jobs overall, when including direct, intermediate, and spin-off jobs.
What we must all remember is that our economic partnership will always be stronger against a backdrop of security and stability in the Asia-Pacific region. The United States and Japan must work together to confront new security challenges that threaten stability in the region. Let me make two things clear here. The U.S.-Japan relationship is the linchpin of the United States role in Asia. And the United States Article 5 commitment to Japan are the unwavering law of the land.
We are Japan’s staunch ally in the face of threats, like the hostile North Korean regime and their continued nuclear and rocket tests. This week’s missile launches were particularly disconcerting, as they were supposedly training for strikes on U.S. bases in Japan. I’m very glad that we’re deploying the Thermal High Altitude Area Defense, or THAAD, missile defense system in nearby South Korea. I recognize that that deployment has caused increase tensions between South Korea and China, but at this moment the most imminent threat is North Korea’s missile program. And we must take all necessary steps to protect our allies.
The revised guidelines for U.S.-Japan defense – the U.S.-Japan defense cooperation are evidence of our nation’s 21st century partnership and the deepening of our security coordination. These guidelines will foster a more seamless bilateral response to the growing security challenges in the region, including asymmetric cyber threats. Japan’s approval of the guidelines came at a moment when conditions in the region are evolving. For example, China is playing an increasingly active role in the East and South China Seas, expanding its sphere of influence. That Secretary Mattis’ first overseas trip was to Japan and South Korea demonstrates the focus our nation continues to have on the Pacific region.
I’m glad that the secretary of state, Rex Tillerson, will be traveling to Japan, South Korea, and China later this month. Our military cooperation is essential, but diplomacy also plays a critical role as we navigate regional security challenges. We’ve seen the power of non-military action in the region. China’s ban on coal imports is helping pressure the North Korean regime to comply with U.N. Security Council resolutions, for example. But I’m very concerned about the budget blueprint the president released last week and the dramatic cuts it threatens to make at the Department of State.
Reports indicate that this initial proposal from the administration recommends budget cuts as high as 37 percent to the State Department and USAID. That would be a devastating blow to our non-military international work. I plan to vocally oppose and strongly oppose any severe cuts to the State Department. And I’m not alone in pushing back against this perilous proposal. Both Democrats and Republicans in both chambers of Congress have spoken out against such severe cuts.
More than 120 three- and four-star generals, including retired general and former CIA director David Petraeus and retired Admiral James Stavridis have sent a letter to the House and Senate leadership calling on Congress to ensure that our nation’s international affairs budget has the resources it needs to take on all of the challenges and opportunities facing the United States and our allies. Non-military engagement will be critical as we continue to work to ensure stability and security in the Pacific and beyond.
You know, the U.S.-Japan alliance is central to that effort. We must continue and strengthen our nation’s strategic partnership. Where I believe the future lies in developing the next generation of political leaders in Japan and the United States, and increasing those leaders’ engagement with one another with other allies in the region. We can never take for granted – as the last few generations have shown us – we can never take for granted the strong alliances shared by nations. Those must continue to be developed.
Building these bonds between our young leaders will serve as the foundation of our 21st century partnership. So in my recent visit to Tokyo and Seoul, I was pleased to meet with my counterparts and discuss ways we can work together for the years to come. The greater our understanding of each other’s priorities, policymaking, processes and customs, the more effectively we can work together to make the world a more secure, prosperous place. In fact, later today I’m meeting with members of the Japan-U.S. Parliamentary Friendship League. Particularly when it comes to economic engagement, it’s incredibly compelling to go beyond the top-line policies and talking points national governments issue and hear about the regional and even individual impacts trade and investments have in a nation – have in and on a nation.
While these are tumultuous times, filled with growing uncertainty, I truly believe that the U.S.-Japan economic partnership will only become more robust in the years ahead. The United States is committed to ensuring our alliance with Japan endures and thrives. Our economic ties and continuing prosperity are vital not only to our nations but also to the international community more broadly. I am optimistic that despite the challenges confronting our countries, the United States and Japan can continue to provide leadership and hope for the nations of the world. I am committed to this work, and I’m glad to see that all of you are as well. Thank you. (Applause.)
MR. GOODMAN: OK, terrific. Well, that was a just fantastic tour de force of – and tour de raison of the whole relationship in this excellent way that you weaved together the security, the diplomatic and the economic. And I’m particularly struck by your point about these proposed cuts to the State Department budget, which really, I think, is very short-sighted, because you do have to succeed with Japan. And in Asia, we have to have that component. So I applaud you for making that connection as well.
So 30 years ago, there was no Japan Caucus on the Hill. Kind of surprised me that when you founded this a few years ago, this was a first and there’d never been such a group. There was parliamentary exchange back then, which kind of died out. It’s back, as your trip and your comments made clear. But talk about sort of what the Caucus’ role is and legislative exchange as well, in terms of strengthening the relationship. Could you flesh that out a little more?
REP. CASTRO: Yeah. You know, the caucus – now, there was a U.S.-Japan study group. And Diana DeGette and others, Billy Long, have done wonderful work on that. There are only a handful of study groups in the U.S. Congress, for example, so their work has been very important. But the Caucus came about about four years ago. And as I mentioned, we’ve now about 100 members, representing just about every region of the country, of different ideologies and backgrounds who want to work to strengthen the U.S.-Japan relationship.
So what we’ve been is a conduit to discuss important issues. For example, we had Ambassador Kennedy a few times come in and address the group about the latest on TPP when those negotiations and talks were going on. It’s also been a conduit to make sure that when Diet members visit the United States Congress, at least on the House side, there’s a way to make sure that they get in front of the right committees and the right people to discuss the issues of concern for both of our nations. I think that infrastructure was lacking before, and that’s why folks came up with this idea of getting a caucus that’s actually doing the work of, you know, arranging those discussions. We’ve tried to be very helpful in that respect.
MR. GOODMAN: Great. And you also just founded a U.S.-ASEAN Caucus – Association of Southeast Asian Nations. Again, there wasn’t such a grouping and you helped form that. Can you talk about that and how that connects to your Japan work?
REP. CASTRO: Yeah, you know, I mean, I think in public service what I’ve tried to do – and not just on the issue of forming a caucus or foreign affairs, but I’ve really tried to figure out where there is a void and how we can fill that void. So I think this Caucus has done incredible things in the last few years to strengthen the U.S.-Japan relationship, especially in these – what have been some tumultuous times with the threat of North Korea, the aggressiveness of China in the South and East China Seas, and then just a new administration and the uncertainty that comes with that.
But with ASEAN, the economic impact of ASEAN already is incredible and continues to grow. And it’s consistent with what President Obama had talked about when he spoke of a pivot to Asia. If you think about it, the Asian economies throughout the region continue to play a more important role in the world economy, and with respect to the United States. And so we’ve just gotten that off the ground. Ann Wagner is my Republican co-chair on it. I met with the ambassador of Thailand yesterday. I know we’re scheduling a meeting with the Ambassador of Australia and several others as we get that one off the ground.
But I’d also like to find synergies between these two caucuses and how we can be helpful in building stronger relationships, not just between the United States and Japan or the ASEAN nations, but among our allies. That was part of the purpose of the trip in going to Japan and South Korea.
MR. GOODMAN: Great. Well, Japan, as you know, has had a very long and very productive relationship with Southeast Asia. And actually, my colleague, Mike Green, often cites the fact that when you – public polling of people of Southeast Asia showed Japan actually is more popular than the United States or China or anybody else. Japan has a great reputation in Southeast Asia. And so there is possibility, I think, for some synergy.
REP. CASTRO: Well, then maybe they can help us get a better reputation.
MR. GOODMAN: Yeah, I was going to say, I mean, literally, I think that is a contribution that we can make and we can work on.
So this dialogue that Vice President Pence and Deputy Prime Minister Aso are going to lead, allegedly or reportedly the middle of next month they’re going to kick it off. What do you think the value of that is? Or what do you think should be on the agenda? What should they be talking about, not just in economics but beyond that. This is an economic forum, but are there other things they should be talking about as well?
REP. CASTRO: Sure. No, you’re right. I think the centerpiece of it is an economic discussion. Basically, where do you go after TPP? I did get the sense in my conversation with Diet members and leadership in Japan that they’re struggling a bit with completely giving up on the idea of TPP – at least those who were in favor of it. I know there was, of course, some opposition. But also, trying to figure out whether they should go forward without the United States.
So I would say the big question is – the region is wondering, how involved is the United States going to be in the Asia-Pacific as an economic player? And is China is going to see this as a greater opening to start to take more of a lead? So those discussions are going to be very important. But, you know, honestly, you can’t – no top-ranking American official would go over there right now and not talk about security challenges in the region, particularly with what’s going on with North Korea right now as they’re trying to perfect nuclear weapons, now that we’ve started to deploy the THAAD defense system. So I suspect that that will be a big conversation piece.
I think everybody, when I visited Japan, by and large, regardless of political party, DPJ, LDP, everybody was basically satisfied with the meeting between Prime Minister Abe and President Trump. I think they thought that it went better than expected. I thought that it went better than expected. Some of the president’s campaign rhetoric early on was disconcerting to many folks, including myself. He seemed to be suggesting, as a candidate Trump, that perhaps Japan and South Korea should start to go – you know, go it alone more, which was disconcerting. But I think they’re a lot more reassured after these meetings.
MR. GOODMAN: Right. And I think you’re right that a dialogue cannot just be about one part of the relationship. It has to be about everything, and they’re all integrated. So I hope, and I expect, it will – it will cover all that ground. And you’re right that it’s a good opportunity to strengthen the relationship.
Just one other question, then I’ll let the audience come in because I want to hear what you all have on your minds. And you mentioned that you have a Toyota manufacturing facility in your district – or, maybe you didn’t say it was in your district – but you do have one in your district. And I wonder whether at the – at the local level in the U.S., whether people, like in your district, understand as a result of that, you know, what the contribution is that’s made from our engagement with countries like Japan and how – you know, not just economic but more broadly. Because I guess one has a sense sometimes that we all – especially people in this room who follow Asia and work on it all the time – are really focused and understand the complexities of the relationship. But I’m not always sure that people out in the real parts of America, you know, have a full appreciation of what we’re doing. Do these investments really help underscore the importance of our engagement?
REP. CASTRO: They do. Yeah, I mean, you know, Toyota is an example of one Japanese company that has made an incredible impact on one community – and really on Texas, because you not only have the Toyota plant in San Antonio, but Toyota relocated its North American headquarters to north Texas. And so the people of Texas obviously understand the value of that relationship between the United States and Japan and, in San Antonio, are incredibly grateful for the way that Toyota has conducted business. And I’ll give you one example, Matt, of what was very special about this Japanese company, Toyota, going into San Antonio.
When they came into San Antonio around 2003 and they started developing out their supply chain, they did something that no company – no big company has done before when it’s relocated jobs or started jobs in San Antonio. They said: We want the major suppliers – some of our major suppliers in the supply chain in that plant – for that plant to be basically local folks who are business owners. And we want to bring them into the supply chain. That, I think, is extraordinary, because it really got the community invested on a whole nother level. In addition to all the jobs that were created, it created new ownership in that Toyota supply chain.
And I’ve said it before, I mean, we haven’t even had our American companies that have gone in and done that, and really brought in the local community that way. So the city is deeply appreciative and grateful for the relationship.
MR. GOODMAN: Good. Well, that’s good to hear. I’m glad those connections are being made.
OK, I will turn it over to you. There are microphones that will be brought around. If you have a question, please identify yourself and do ask a question and, you know, broadly on the topics we’re talking about here would be idea. I’m sure the congressman can handle other things, but if you have questions? Ben, right here, the gentleman in the blue.
Q: Thank you very much. This is the best panel I’ve seen all year. It was wonderful. Thank you so much for the remarks. I’m Ben Self with the Maureen and Mike Mansfield Foundation.
I wanted to ask about your visit to Seoul. You were – I believe your first visit. And you were able to engage with both the Japanese Diet members who came to Seoul with you, and Korean National Assembly members. And I’m wondering, given the very tense historical debates between Japan and Korea, was the tenor of the discussions you had on a trilateral basis? And what do you think are the prospects for that trilateral U.S.-Japan-ROK cooperation going forward?
REP. CASTRO: Oh, that’s a great question. And one of the $64,000 questions, so to speak. You know, we honestly, as a nation, the United States, have a strong interest in our allies also being strong allies. And that’s true in the Pacific region for South Korea and Japan. We had a wonderful discussion with Diet members and then those in the Korean Assembly. We covered a range of issues. And I felt, at least with that group of people, that we left at a stronger place than we arrived.
But you could imagine, I mean, a lot of the concerns are very similar. You know, China’s aggressiveness in the region, who is going to be a dominant economic player in the region, whether it will be China or the United States and our allies. And then, you know, security and North Korea, the incident with the half-brother of Kim Jong-Un had just happened over in Malaysia, and so that was all over the news when I was in Japan and South Korea. So there are many things that unite us and bring us together. We had a chance to discuss all of those.
And then, you know, you’re right, there are historical tensions. And most specifically, the comfort women issue. And that’s something that the United States can’t solve for the two countries. But as I’ve said before, we want to, as much as possible, be a friendly voice and broker for our allies where we can. And so I felt like we were able to accomplish that in Seoul.
MR. GOODMAN: Great, thanks. Was that trip organized by the Mansfield Foundation?
REP. CASTRO: That was Mansfield, yeah.
MR. GOODMAN: I’m guessing, right. Yes, that’s – good. They do great work.
Other questions? Yes, sir.
Q: Hello, sir. Dan Vasquez, CEO of Intelliwings, San Antonio native. It’s always good to see another San Antonio native.
REP. CASTRO: Good to see another San Antonioan, yeah.
Q: My question, sir, is regarding Texas investing in the Shinkansen in Texas.
MR. GOODMAN: Bullet train.
REP. CASTRO: Mmm hmm, right.
Q: Do you think Texas should looking at Shinkansen, or go with a more cutting-edge technology, such as the maglev that’s being developed in Japan, or maybe even the hyperloop that Elon Musk is proposing? Thank you.
REP. CASTRO: Hmm, that’s a great question. You know, it’s interesting because Texas – geographically, my state is obviously, you know, the second-largest state in the nation next to Alaska, geographically. But we don’t have a lot of the high-speed infrastructure that you see certainly in other nations and other places. And so I’m hoping that this project will be successful. It looks like it’s moved forward. You raise an interesting question, which is essentially, you know, once you commit to build something, will the technology essentially, you know, move past you before you’re able to finish it off?
I think that we’re in a good position with this bullet train. I think that, you know, we’ve committed to it, and I think that we should go forward with it. I did see that – I’m forgetting the nation specifically, but it had hired consultants to really start to think about the hyperloop that Elon Musk had proposed. But, you know, getting any kind of high-speed rail in Texas has been a real challenge. And even now – I mean, I won’t – I won’t – I won’t lie to you. There are a lot of issues out in Texas, like eminent domain issues, that have been very thorny in terms of even this train. But I’m hoping that we’re able to do it and finish it off.
And also, when I was in Japan a few years ago, I met with the folks from JR Central, basically the parent company of the Texas company, and made the case that there should be a train, not only – not only from Houston to Dallas or College Station, but that you need one in Central Texas from Austin to San Antonio, perhaps to the valley. So, you know, I’m hoping in the future that our region in Texas won’t get left out, and that we’ll have similar infrastructure.
MR. GOODMAN: Great. Well, I hope it succeeds there, and that then the next – the next place is the East Coast corridor that we –
REP. CASTRO: And they’re getting the maglev, I think. I think the proposal was to do the Maglev in between Baltimore and Washington. And I don’t know where that is. But, sure, if we could get the faster one, that would be great. (Laughter.)
MR. GOODMAN: Everything’s bigger in Texas, and faster too, right?
REP. CASTRO: Yeah.
MR. GOODMAN: Right. OK, other questions? Oh, I’m sorry, I couldn’t see you against the light. The gentleman back there, thanks.
Q: I’m Sasayama from the Embassy of Japan. Thank you very much for your contributions, support for U.S.-Japan alliance.
And my question goes to our ASEAN friends, Asian friends in the region as well. I understand later this year they’re going to host a series of summit meetings in that region. And may I have your comment on how the U.S. should engage in that sort of undertakings?
REP. CASTRO: Sure. I think the United States should play a very prominent role in the region and with ASEAN. Some of the ASEAN nations, if you’ve followed, obviously, the news over the last year, are essentially negotiating their relationship with China. There’s been conflict between China on the seas, with countries like Vietnam and the Philippines, obviously. But I think the region right now is in a period where it’s feeling out how much the United States is committed to the U.S.-ASEAN relationship, how strong a player the United States is going to be economically in the region, or whether they should start to look somewhere else, specifically to China, you know, as a North Star, basically.
And so we need to make sure that we don’t – that there isn’t retrenchment, that we continue to move forward and develop strong relationship with these countries. The economies there are continuing to grow, and will continue to grow, if you look at the numbers, throughout the next few decades. And so I would say that the United States can’t afford to back away from its engagement with the ASEAN countries. And that’s a purpose – that’s one of the purposes of this Caucus – this new Caucus.
MR. GOODMAN: Well, she’s not here, but my colleague Amy Searight will think that’s music to her ears, because she works on ASEAN issues and makes exactly those points about what a big opportunity it is and how important it is for the U.S. to – you know, to engage on all levels with that part of the world. So we’ll have you back – she’ll have you back, I’m sure, to talk about that before long, if you’re willing.
Other questions? The congressman does have to go pretty soon, so if there’s any more burning questions we’ll take them. Otherwise, we’ll let him and get ready for his hearings, which as a citizen I’m glad we’re doing. OK, we got another question here, and then I think we’ll wrap it up.
Q: Hi, there. I’m an intern at the Department of State, EA PPD.
You just mentioned that you think we can’t afford to back out of, you know, helping out ASEAN countries and, you know, involvement in terms of economic and political institutions in Asia. I was just wondering if you had any thoughts on not being involved in AIIB and also Japan also not being involved.
MR. GOODMAN: The Asian Infrastructure Bank.
REP. CASTRO: Yeah. That China is leading.
MR. GOODMAN: That China is leading.
REP. CASTRO: Right. Well, and I know that, you know, some of the nations have moved forward with it. You know, we believe that for the United States that there is a stronger route, and a better way, and that the United States can be a leader with our Asian partners in developing these things. You know, we also feel that China has a different way of doing business than we do, that ours is more preferable.
But, look, there’s no denying that China’s economic ascendance continues, and that Asia – the region as a whole as ASEAN – are hungry for economic development and hungry to build their relationships around the world. And so we’ll see what becomes of it. You know, we’ll see how extensive it is, you know, how real it is. You know, to speak briefly to another part of the world – and the reason that I say the United States has to be very involved in the region is because if we aren’t, then you leave an opening for an economic competitor, like China, to come in and essentially usurp that role.
And so the other example that I want to give you is what’s going on with the Trump administration in Mexico. The Trump administration has continually talked about having Mexico pay for a wall on the U.S.-Mexico border. Well, Mexico is a top-three trading partner with the United States. So I have said that that would deeply undermine the relationship between the two countries. In fact, I think the president has shown a real hostility towards the nation of Mexico. But here’s my – here’s my comparison: Yeah, I think that there is an example there where if the United States forces Mexico somehow to pay for this wall, which it has clearly said that it doesn’t intend to do, that what you’re risking is an opening for Xi Jinping to come in there and essentially offer Mexico whatever the United States has taken away, right?
And so my point on the infrastructure bank is that the nations have to feel, those nations have to feel like the United States has its own plan, and like it’s – and as though it is committed to the region. Again, I think that’s part of our work that’s going to happen in the Caucus. And I’m hoping that the Trump administration will back it up with real action.
MR. GOODMAN: If I can just add a little bit to that, and a little bit of advertising thrown in there as well. I mean, the Asian bank is a complicated issue. And probably – and my guess is it’s going to be difficult for Congress to approve the – you know, the capital that would be required to join a bank like that. So I don’t think in the short term that’s probably going to be something the U.S. is going to move forward on. But there are a lot of other ways we can engage. And as the congressman said, we really need to put our foot forward here, because the region is expecting – I think the region – and I define the region to include Mexico, the broader Pacific Rim – I think wants the United States to engage and lead.
And including in infrastructure, where, you know, we don’t – we’re not going to do $200,000 billion plans for infrastructure investment. But we can mobilize private capital. We’ve got great companies that build thing. We’ve got – we’ve got the rule of law and a lot of soft infrastructure that we bring to this story. And so the reason I’m saying all that – even though this is not my show, I’m just the moderator – but we do have an initiative at CSIS called Reconnecting Asia. We’ve created a virtual website platform with a database on about 2,000 projects across the broader, you know, Eurasian landmass.
And you know, we’re looking at what’s driving all this infrastructure – roads, rails, ports – and what the implications are for regional integration. And part of this is to try and, you know, shine light on it here in Washington so that people understand what’s going on, and how the U.S. – what the U.S. has at stake, because I do think it’s a big part of the story out there. Alongside trade integration, there’s a big story out there. And so stay tuned for more events on that as we go forward.
But with that, unless there are other burning questions, I would like to ask you to join me in thanking Congressman Castro for his time and insight. Thank you, sir. (Applause.)
REP. CASTRO: Thank you very much.
MR. GOODMAN: Do come back.