Deputy Secretary's Speech

Deputy Commerce Secretary David A. Sampson
American Chamber Luncheon
Jakarta, Indonesia

Thank you, for the very kind introduction. And thank you all for coming today.

I was the CEO for the Arlington, Texas Chamber of Commerce before joining President Bush's economic team. So I have a special fondness for AmChams and their members, and, most important, what you stand for.

I know that the American business community here has an excellent relationship with our embassy and the Commerce Department back in Washington. And it's been a very successful partnership, accomplishing a great deal in promoting economic reform and improving the business climate in Indonesia, and among all the ASEAN nations.

First, I want to report to you that the American economy remains strong and the outlook is for more of the same.

We've had 31 consecutive months of job growth; creating some 5.2 million new jobs. The overall economy grew 3.2 percent last year. And the consensus among private forecasters is more of the same in 2006.

Except for energy prices, all the numbers are very positive: inflation, productivity, per capita income growth, housing, industrial output, consumer confidence, all remain strong.

Under President Bush's able leadership, the U.S. is the strongest and fastest-growing major economy in the world.

But we're not resting on our laurels. Ninety-five percent of our potential customers live outside our borders. So we must look to Asia and elsewhere to do business.

Let me first say that the Bush Administration takes a balanced view of Asia.

Most Asia-watchers agree that China's stature in the ASEAN region is rising as China increasingly looks outward and seeks partnerships in Asia and elsewhere, particularly in trade and investment. And it is also true that China gets a great deal of attention from both policymakers and the American business community, given its breathtaking pace of development over the past 20 years.

But what President Bush and his Administration want to make clear to Indonesia and all our allies in the region is that we strongly believe in the importance of ASEAN, in both political and commercial terms. Free markets and democracies abound in this populous and diverse region. With these common values, it is not surprising that some of our best and most dynamic relationships are in this part of the world.

We have a very proactive agenda in Asia, as most of you know. Improving bi-lateral trade remains at the top of the list, especially with long-standing partners like Singapore, Thailand, Malaysia and Korea.

But expanding regional trade is also a priority. Specifically, we have the Enterprise for ASEAN Initiative, which lays out a framework for strengthening U.S. trade and investment relations with ASEAN members. Last November, President Bush announced a second initiative--the ASEAN-Enhanced Partnership--that will further focus our efforts on strengthening our broad political, economic and cultural ties.

My visit clearly shows President Bush's commitment to the economic side of our relationship with Indonesia as well as with the entire ASEAN region. It also is a sign of the rapid commercial growth we've been seeing. The region as a whole is now our fourth largest trading partner, and U.S. businesses have some $88 billion in direct investments.

Earlier this week I visited Singapore and Malaysia for a series of meetings with business and government officials. Many had a big-picture point of view and see the ASEAN nations converging to a regional market.

President Bush believes that great progress can be made working nation-to-nation.

In November, for example, I was in Vietnam. It was an extraordinary trip. It's been 10 years since we normalized relations. And in my opinion, we are now poised for a deeper and more rapid expansion in trade and investment as Vietnam's economic reforms take hold.

Working nation-to-nation on the economic front also means negotiating free trade agreements (FTAs). As you know, we implemented our first FTA agreement in Asia with Singapore in January 2004. And that agreement has been very successful for both sides.

The U.S. and Malaysia recently announced our intention to begin negotiating an FTA. And I must say the people I met with in Kuala Lumpur are very enthusiastic about the upcoming talks.

We have made progress in FTA negotiations with Thailand. At the moment those talks are on hold awaiting formation of a new Thai government. But we remain optimistic on a favorable outcome down the road.

And we want to see Vietnam join the WTO as a full member of the global economy. We're working hard with the Vietnamese to bring them into the global fold.

As for Indonesia, progress continues under our Trade and Investment Framework Agreement. Earlier this month, Trade Minister Pangestu led a delegation to Washington for the latest round of talks. My boss, Secretary Gutierrez and I also met with her. We were very encouraged by what she said about the improving business climate. And I am impressed by what I've seen these past couple days.

It is clear that there is great optimism for the future. Economic reforms are being undertaken. And while they may be slow, there is great potential to be unleashed in Indonesia. My hope is that my visit here and my meetings with government and private sector leaders will lend support to this progress, by reinforcing positive developments.

The new Exxon Mobil contract to expand the Cepu oil field is the most recent case in point. This is the type of high-profile deal that sends a positive signal that Indonesia is open for business. So we think this deal is definitely a good sign.

But as we all know, we need to see more progress in a number of key areas.

Clearly the battle against corruption must continue. Recent efforts to root out corruption are indeed welcome and give foreign investors the confidence they need to invest more.

And the same can be said for the stepped-up enforcement of intellectual property protections in recent months. We applaud the Indonesian government for its stronger enforcement and prosecutions, ongoing inspections of optical disc factories, better export controls and the new presidential task force to combat intellectual property theft.

These measures will result in a marked decline in piracy and counterfeiting, which in turn will encourage foreign investment.

And such legal protections are also good for Indonesian innovators. Why would they want to take on risks with a new idea or product only to see it ripped off?

Without a doubt, certain challenges go along with the enormous opportunities in Indonesia. Still, the American business community thrives. In fact, I'd even say that you have become a permanent fixture on the landscape.

In closing, let me also say that the huge role that American businesses took in helping communities devastated by the tsunami in late 2004 demonstrated a commitment to Indonesia and to their corporate stewardship

Both the U.S. public and private sectors have been involved in a large way in the recovery and reconstruction efforts.

I'm very proud to see U.S. companies continuing their support by contributing money, food, medical supplies, equipment, and transport services. At the Department of Commerce, our National Oceanic and Atmospheric Administration is working with governments in the region to develop an Indian Ocean Tsunami Warning System.

I'm told a large number of AmCham member companies are involved in tsunami relief, and I would like to commend and acknowledge those efforts today. In a time of need, U.S. companies and the American people can always be counted on to step up to the plate and pitch in.

My trip to Southeast Asia has been very successful, and very productive. I am pleased that I have been able to make some new friends in Jakarta. I support the hard work and effort that American businesses are undertaking here to do business. And I look forward to continue working with you to advance our interests throughout the region.

Thank you.