Assistant Secretary's Statement
EEB's mission is to further economic security and prosperity, both at home and abroad. By working to open markets and break down barriers to global economic engagement, we seek to promote the prosperity that economic freedom brings, both for ourselves and other nations.
EEB’s work lies at the critical nexus of economic prosperity and national security; advancing progress in one contributes to progress in the other. In the post-9/11 world, we have recognized that threats to our security emanate from countries that are marginalized from the global economy. As Secretary Rice has said: "[i]f we look at the many countries that we and our allies are working to stabilize, through billions of dollars in foreign assistance, and in costly military deployments -- they all share one thing in common: They’re not strong, successful states; they are poorly governed states. In some cases, they are failing states. They are states that have yet to integrate into the global economy and realize its promise."
To achieve its goals, EEB strategically analyzes all of the policy tools of the U.S. government through a process we call “Total Economic Engagement,” using an on-line matrix of indicators we have developed detailing U.S. engagement with every country in the world. Through this approach EEB is: (1) promoting market-expanding trade, aviation, telecommunication, and investment agreements; (2) ensuring sound, stable financial systems to reduce debt and encourage pro-growth economic policies; (3) promoting energy security by working to diversify suppliers, foster alternative energy sources and increase emergency oil response mechanisms; (4) denying terrorists financial support; (5) fighting corruption and strengthening compliance with U.S. rules and norms; (6) promoting transportation and telecommunications infrastructure safety and security; and (7) supporting U.S. exporters and American businesses that seek opportunities abroad.
Over the past year, EEB has made significant progress on this multifaceted agenda. We helped secure Congressional approval for a free trade agreement (FTA) with Peru and boosted domestic support for pending FTAs with Colombia, Korea, and Panama. We negotiated the Rwanda bilateral investment treaty (BIT) signed by President Bush, and launched BIT negotiations and discussions with some of the world’s major emerging economies, including China, Brazil, India, Russia, and Vietnam. As G8 Foreign Affairs Sous Sherpa (FASS) for the President, EEB negotiated a successful G8 leaders’ statement that committed the G8 to match President Bush’s historic multi-billion dollar initiatives to fight global HIV/AIDS and malaria. We also have taken a lead role in developing the President’s response to the global food crisis.
An essential part of our work is to develop the agendas and prepare senior leaders -- including the President -- for major economic summits. This includes intensive, bureau-wide support for the G8, both in our role as FASS, and through our Bureau’s expertise on major G8 themes (e.g., Africa development, anticorruption, food security, and health.) We also strongly support the Asia Pacific Economic Cooperation, the Association of Southeast Asian Nations, and the U.S.-EU Summit, among other meetings.
Though the complexity of the world economy has increased, our resources have declined. EEB remains under-funded and under-staffed in relation to the tasks it now faces. We will need increased financial support to meet these demands and accomplish the work set out below.
Promoting Prosperity and Competitiveness through Open Markets
EEB is the Department's lead on international trade policy. Working with USTR and other agencies to open new markets for American businesses, we negotiate and implement trade agreements, including WTO accession agreements, and resolve disputes with our trading partners.
EEB is a vital part of the U.S. effort to complete the WTO Doha Development Round. We also work to bring new countries into the WTO so that they are subject to the rules and norms of the international trading system. In 2007, Vietnam, Cape Verde, and Tonga became WTO members. In May 2008, Ukraine, the second-largest economy outside the WTO completed its accession negotiations after 15 years of talks.
In response to rapidly rising food prices that have sparked a global crisis, EEB's leadership led to the Presidential response that called for immediate humanitarian actions, urgent measures to increase world food production, and action to address the policies and trade barriers that increase food prices. We have pioneered a successful program to spread the use of agricultural biotechnology, a proven tool for increasing agricultural productivity, which empowers growers in developing countries and opens new markets for American farmers and industry. We also work with our trading partners to ensure the safety of products entering the U.S.
In keeping with our past role in integrating developing countries into the global economy through trade preferences, we have developed new initiatives such as Reconstruction Opportunity Zones in Afghanistan and Pakistan for which legislation is now pending. We also launched the Economic Empowerment in Strategic Regions initiative, which brings the transformative power of private sector development to areas of the world where poverty and isolation provide fertile ground for extremism. We are further facilitating developing countries' integration in the world economy by promoting policies that accelerate their connection to the global 'on-line' community.
To promote open investment, EEB, in cooperation with USTR, is negotiating BIT talks with key emerging economies including China, India, and Russia. We also concluded a BIT with Rwanda, signed by President Bush during his visit to Africa in February. EEB also spearheaded the OECD's adoption of best practices for the treatment of investment by sovereign wealth funds by recipient countries and will continue to work within the OECD on open investment more broadly.
EEB is the Department's coordinator for the Committee on Foreign Investment in the United States (CFIUS) which reviews the national security implications of certain foreign acquisitions of U.S. companies. We worked to ensure that new CFIUS legislation and implementing regulations achieve our security objectives without undermining our openness to foreign investment and its contribution to U.S. prosperity.
EEB leads the negotiation of air services agreements that foster competition among airlines by removing restrictions on the number of carriers, routes, aircraft, services, and prices. In the past year, we signed Open Skies agreements with Australia and Croatia, and major market liberalizations with Russia and Colombia. We are pursuing additional liberalization with Brazil, Japan, Kenya, Laos, Mozambique, Russia, Tunisia, and Vietnam. We are coordinating the implementation of the landmark U.S.-EU Open Skies Agreement, bringing the benefits of the biggest advance in international aviation liberalization in decades to the American people. We have also reached a breakthrough agreement on overflight rights with Russia that will allow U.S. carriers to save on skyrocketing fuel costs.
EEB has the U.S. lead in international information and communications technology (ICT) policy, including Internet and radio spectrum issues vital to our prosperity and national security. We established the Secretary’s Global Internet Freedom Taskforce to monitor threats, respond to restrictions and advance “Internet Freedom.” We lead the President’s Digital Freedom Initiative to help the developing world benefit from ICTs, and we fund and lead initiatives under the Telecommunications Leadership Program to promote pro-competitive regulatory environments in the developing world.
Advancing U.S. and International Economic Programs and Ensuring Sound, Stable Financial Systems
EEB advances sustainable growth abroad by improving investment climates, fostering well-regulated financial markets, and helping countries reduce debt burdens and recover from financial crises. Official development assistance is an essential tool of our economic engagement. EEB coordinates with the international financial institutions (IFIs), other multilateral bodies, and other USG agencies to ensure the U.S. has a strategic framework for assistance. EEB supports and advises the Secretary in her role as Chair of the Millennium Challenge Corporation and will continue promoting initiatives on private sector-led development, entrepreneurship, and improved business climate.
Humanitarian crises spark instability and require U.S. assistance. EEB continues to support economic recovery in countries emerging from conflict, such as Haiti, Lebanon, and Liberia, by developing and implementing robust assistance initiatives and mobilizing international support. Last December, EEB was instrumental in mobilizing some $7 billion in support for Palestine from over 60 countries.
To prevent financial disruptions from undermining emerging markets, EEB works with Treasury and the IFIs to assist countries pursuing sound economic policies, keeping debt levels manageable and inflation low. We worked to get 102 countries to contribute to the clearance of Liberia's $1.4 billion in arrears to the IFIs, clearing the way for debt relief and new aid. EEB is also the U.S. lead in negotiations with the Paris Club of creditor nations. Through our efforts this year, we have secured debt relief agreements with Jordan, Afghanistan, Sierra Leone, CAR, and Guinea.
EEB has now taken responsibility for OECD policy. The OECD is transforming itself into a more globally-oriented organization promoting democracy, good governance, and market-based economic growth. Five new countries -- three from outside the EU -- have been invited to membership, while a program of 'Enhanced Engagement' has been launched to deepen the organization's ties with key emerging markets including China and India. The OECD recently approved a major overhaul of its finances, allowing its budget to grow in line with inflation while the U.S. contribution falls from 25 to 19 percent over the next ten years.
Promoting U.S. and Global Energy Security
In keeping with the Secretary’s decision to emphasize “Energy” in our Bureau’s core mission and nameplate, EEB is focused on the development of transparent, market-based energy markets. We seek to diversify energy suppliers, to promote alternative fuels and energy efficiency, to work internationally to protect energy infrastructure, and to enhance oil disruption emergency response. We are advancing diplomatic efforts to secure multiple pipelines for Eurasian oil and natural gas.
This year, EEB established a new office of the Eurasian Energy Coordinator. The coordinator will promote development of hydrocarbons in the Caspian Basin and their transport to global markets, working in support of the President’s Envoy on Eurasian Energy. This role responds to sharply increased demands for hands-on energy diplomacy and policy guidance coming from the Administration and our posts.
EEB holds a board seat and exerts considerable influence at the International Energy Agency (IEA). The IEA is critical to our emergency response capabilities and played a key role coordinating the release of strategic stocks after the hurricanes of 2005. We have won IEA agreement to actively engage India and China, and we are implementing a diplomatic strategy to afford them greater involvement inside the IEA structure, with a view to securing their eventual membership. We are leading the Secretary's MOU on Biofuels Cooperation with Brazil and are overseeing R&D exchanges, the development of a global biofuels market, and the promotion of biofuels in the Caribbean. With growing energy consumers such as China, India, and Russia, we are also encouraging energy conservation, enhanced efficiency, the uptake of modern energy technology, and market-based energy reforms. We are promoting responsible development of energy resources through the Extractive Industries Transparency Initiative, the Code of Corporate Responsibility, and the Voluntary Principles on Security and Human Rights in the extractive sector. Finally, we played a critical role in negotiating the G8 agreement on energy security and climate change, and will be a key part of implementing the President’s vision in this vital area.
Denying Terrorists Financial Support
EEB is a leader in the interagency effort to combat terrorist financing. We build strategic international coalitions against terrorist financing networks with Saudi Arabia, the EU, Persian Gulf countries, and the UK. EEB is leading a USG effort to launch a G8 leaders’ initiative that will promote countries' implementation of Financial Action Task Force guidelines to protect non-profit organizations from being misused or exploited by financiers of terrorism. We are working with Treasury and other USG agencies to address informal finance mechanisms such as cash couriers, abuses of charities, and alternative remittance systems such as hawalas. EEB will continue its critical role in implementing sanctions against Iran by discouraging Western companies from investing in Iran’s energy sector and working with Treasury to prevent Iranian abuse of the international financial system. EEB leads the USG in the “Kimberley Process,” which combats conflict-diamond-fueled civil wars throughout Africa.
Fighting Corruption and Strengthening Compliance with U.S. Economic Rules and Norms
The U.S. is a leader in international efforts to combat corruption and EEB is at the forefront of these efforts. In close cooperation with the International Narcotics and Law Enforcement Affairs Bureau, we work to unite governments under common commitments and help improve their capacity to meet those obligations. EEB leads the U.S. interagency process to strengthen the OECD Anti-Bribery Convention and reinforces this by improving anti-bribery disciplines for OECD-member export credit agencies.
The global economy depends on rules and norms that extend the benefits of the global economic system to all stakeholders. Examples include intellectual property rights (IPR) enforcement and the rules that govern the global trading system and international communication. EEB works diligently to maintain and improve these norms, pressing for U.S.-led standards and international compliance with them.
EEB advocates for U.S. IPR holders – leading negotiations to combat global piracy and counterfeiting and building our embassies’ capacity to represent America’s innovation industries abroad. In the U.S.-China Strategic Economic Dialogue, State leads an Innovation Dialogue aimed at ensuring that the market for innovative products and services in China is open to foreign participants, transparent, and based on the rule of law. We also provide policy guidance on IP issues to USG officials, promote the use of IP to drive economic growth, work to protect people from unsafe products, and direct the Administration’s overseas IPR enforcement, technical assistance, and training programs. Our work fights growing terrorist and organized crime networks that use counterfeiting and piracy to finance their operations.
EEB leads U.S. participation at the International Telecommunications Union (ITU) and other international organizations focused on efficient use of finite resources such as radio spectrum and satellite orbits, international standards for global telecom networks and services, and access to infrastructure and ICT services. We also will continue our successful diplomacy to ensure the complete freedom of the Internet from restrictions by any country or organization. At the ITU World Radiocommunication Conference 2007, the U.S. negotiated treaty language that opens up billions of dollars worth of global radio spectrum for commercial uses, as well as protecting significant commercial and security interests involving satellites. We will be heading the USG effort in the World Telecommunications Standardization Assembly in 2008 that will be critical in determining telecommunications standards work to be done in the ITU for the next four years.
Promoting Transportation and Telecommunications Infrastructure Development, Efficiency, Safety and Security
As the USG lead for coordinating international outreach for the President's National Strategies for Maritime and Aviation Security, EEB works closely with the U.S. Coast Guard and the Transportation Security Administration (TSA) to assess foreign government adherence to international transportation security standards. EEB also works with TSA to expand the Federal Air Marshal program and with the Department of Homeland Security (DHS) to facilitate transportation security information-sharing relationships with foreign partners. We have worked with Customs and Border Protection to set up the Container Security Initiative in more than 50 ports around the world to identify and examine high-risk containers before they arrive in the U.S.
In close coordination with the Federal Aviation Administration (FAA), EEB negotiates Bilateral Aviation Safety Agreements to provide for reciprocal acceptance of aviation safety certification standards around the world. EEB also works with the FAA, foreign governments, and the International Civil Aviation Organization to facilitate the global aviation community’s adherence to international aviation safety standards. On the maritime side, EEB shapes U.S. efforts at the International Maritime Organization to strengthen flag and port state enforcement of international shipping safety standards.
EEB has the USG lead in the International Telecommunications Satellite Organization that promotes satellite-based ICT connectivity for underserved areas. We play a critical role in protecting the U.S. Global Positioning System against competing systems and guarding against key infrastructure vulnerability in our undersea cables and satellites. EEB is the central State player in an NSC-developed process for addressing purposeful harming of commercial communications satellites. Also, EEB plays a major role on policy concerning the appropriate level of control over sensitive personal and business data.
Supporting U.S. Businesses
EEB and our embassies partner with the private sector to ensure that our policies address the challenges and opportunities that U.S. businesses face in the international marketplace. Our aggressive Commercial Advocacy Program has resulted in tens of billions of dollars in contracts for U.S. firms. Over the past four years, we have seen a substantial increase of non-traditional advocacy requests, involving border and infrastructure security, disaster relief, early-warning systems, counter-terrorism procurement, as well as civilian nuclear systems. With the Consular and Political-Military Bureaus, we work to ensure business travel and export licensing concerns are addressed. We have supported U.S. companies in the over 100 countries without a Commerce Department Commercial Service (CS) presence. On April 8, a State-CS MOU was completed to institutionalize the arrangements for ensuring all of our embassies are equipped to provide services to U.S. companies. A major portion of EEB’s Business Facilitation Incentive Fund will be used to support efforts called for under the MOU.
Getting out the Message
EEB builds outreach into all of our travel and strategic planning. In coordination with the Under Secretary, we coordinate press briefings and place editorials on such issues as the President’s economic record, energy strategy, FTAs, intellectual property, anticorruption, and development assistance. This year the Bureau conducted an extensive outreach campaign on the importance of the Colombia, Panama, and Korea Free Trade Agreements, delivering dozens of speeches throughout the U.S. We engaged in domestic diplomacy to communicate the importance of the Administration’s economic record to American security and prosperity, highlighting the ongoing, bipartisan work that will need to continue. We spoke extensively in cities in the U.S. and abroad to strongly promote U.S. energy strategy, and to build support for our efforts on biofuels. Finally, we conducted targeted outreach to students at universities in the U.S. and abroad to engage the next generation of American diplomats, and to build the foundation of U.S. relations with future foreign leaders.