The Administration's Success in Strengthening the Economy, Promoting Free Trade, and Enhancing U.S. Trade Opportunities

I am delighted to be with you to address a subject about which I have very strong--and proud--feelings. The world has seen extraordinary economic growth and progress thanks to the dynamic leadership of President Bush.

During the last six years, and despite great shocks to the global economy, the United States has achieved an outstanding record of vigorously promoting international economic freedom and prosperity, and in fostering development of emerging economies through innovative--and sustainable--new strategies.

To quote Martin Wolf's January article in the Financial Times, "the world economy is in a golden period of broadly shared growth, high profits, modest real and nominal interest rates and low prices for risk. It has ... adjusted with some ease to a series of shocks: stock market crash after 2000; terrorist outrages of September 11, 2001; wars in Afghanistan/Iraq; friction over U.S. policies; jump in oil prices to levels not seen since 1970s; cessation of WTO Doha negotiations; and confrontation over Iran's nuclear ambitions. It has coped, as significantly, with China's and India's economic resurgence." ("A Divided World of Economic Success and Political Turmoil," Financial Times, 1/30/07).

This progress has been achieved in the face of great challenges to world trading system from those who would undermine security on which that system depends -­and from those who fear that the increasing interdependence brought by globalization will dilute their power/prestige, that is, economic isolationists opposed to engagement opportunities resulting from globalization.

While all have benefited from this economic progress, too little public attention has been paid to policies on which it has been founded. So, I want to provide you with brief description of key components of this Administration's international economic policies.

The components are as follows:

1. Promoting free trade has been a top priority for this administration.
2. We recognize the true value of assistance provided to emerging economies is much more than just official development assistance--or ODA.
3. President Bush has provided record support to fighting pandemic and infectious diseases that ravage communities and undermine economic development.
4. We have been a leader in international efforts to combat corruption worldwide (bribery is one type of corruption).
5. We have championed the right to freedom of expression worldwide.
6. The United States is leading international efforts to shut down terrorist finance networks and calibrate sanctions to target those responsible for illicit activities.
7. By guiding our strong domestic economy with a steady hand, President Bush has enabled America to contribute greatly to a strong international economy.

This list of achievements does not suggest we can rest on our laurels. Still there is plenty of work to be done over the next two years, including forward thinking on other issues critical to our continuing prosperity: such as energy security, China, and opening India's telecom market.

Energy Security

The U.S. international energy security strategy promotes abroad the President's vision for energy security at home. Ensuring a sound energy future is one of the most critical challenges facing the world today. One of the most unexpected, indeed, disconcerting developments of recent years has been the warping effect that energy issues have had on the geopolitical landscape. Energy is truly a global challenge--making a decisive impact on issues as diverse as security, diplomacy, development, and climate change.

No one nation can address the global energy crisis alone. We need to work together to seize new opportunities to develop cleaner and more efficient sources of energy and to prevent the global and rapidly growing demand for energy resources from generating unnecessary confrontation in the years ahead. This is one of President Bush's highest priorities, and he has identified five key goals that will drive our policies at home and serve as the beginning of our consultations with allies abroad. They are:

1. to diversify world energy sources through free, open, competitive markets; 
2. to encourage a variety of energy sources, including renewable and alternate fuels; 
3. to use energy wisely through efficiency and conservation; 
4. to expand strategic energy reserves; and 
5. to protect the world's critical energy infrastructure.

Our strategy employs every tool at our disposal: diplomatic engagements--including bilateral and regional activities; U.S. leadership and active participation in multinational institutions, like the International Energy Agency (IEA), which will conduct a Ministerial in Paris May 14-15, attended by Secretary Bodman; energy-focused foreign assistance programs aimed to reduce energy poverty; and public-private dialogues to promote energy investment and innovative commercial activity.

Moreover, we continue to promote a diversification strategy based on multiple sources of energy suppliers through multiple routes to market. In this context, we are promoting development and export of Caspian region natural gas for sales to Southern and Central Europe.

President Bush has overseen investment of $12 billion for development of cleaner, cheaper more reliable energy. Last year he announced the "advanced Energy Initiative" to provide 22% increase in Department of Energy research funds to find clean energy alternatives.

We need to engage other major energy-producing and consuming nations (including China and India)--in January 2006 the President launched the Asia Pacific Partnership for Clean Development and Climate (voluntary measures, new investment opportunities, local capacity-building, removing barriers to the introduction of clean, more efficient technologies). The U.S. also championed the International Energy Agency's recent adoption of a robust outreach program to China and India designed to facilitate market-based policies encouraging adequate energy investments, undistorted energy pricing, and greater energy efficiency.

China

We are pushing China to continue its integration as a responsible member of the global economy. We are encouraging China to increase transparency in its approach to development assistance and lending as it seeks markets for its products and looks for new or untapped sources of energy and other raw materials in Africa and elsewhere. Specifically, we are concerned that China's stepped-up lending to developing countries risks saddling them with additional debt, and would like China to do more to coordinate its aid programs with other donors. We encourage China to become involved overseas in ways that enhance rather than undercut international efforts to nurture good governance and sustainable growth.

China must also do its part in addressing global imbalances by stimulating domestic demand, reforming its financial markets, and allowing greater exchange rate flexibility. As Secretary Paulson has said, "strengthening and reforming financial markets will ultimately allow the Chinese to freely float their currency."

As part of that effort, we held the inaugural Strategic Economic Dialogue (SED) meetings with the Chinese in Beijing in December; under Treasury Secretary Paulson's leadership, we will meet again with Chinese economic leaders in Washington in May. We are using SED meetings to discuss longer-term, cross­cutting economic issues that affect US-China economic relations and the global economy, but we also want to make progress on more pressing issues that strain our relationship in the short term, such as China's inflexible currency and weak IPR protection.

In preparation for the May SED meeting, we are working closely with the Chinese on several strategic areas. We are discussing the development of efficient service sectors and the creation of an innovative economy. We are exploring the possibility of a bilateral investment agreement. We are considering ways to cooperate to promote sustainable and clean energy use and to better protect the environment. We are also discussing how China can rebalance its growth through a strengthened social safety net and increased household consumption. Progress on these issues will benefit not only China and the U.S. but will also contribute to stronger growth for the entire global trading community.

India--Opening of its Telecom market

We have also been successful in advocating for more open telecommunications markets around the world. After nearly a year and a half of concerted and tactful lobbying efforts by the State Department and other U.S. government agencies, India's Cabinet approved on March 22 new guidelines that reduce restrictions on foreign direct investment (FDI) in telecommunications companies and raise the cap on FDI from 49 percent to 74 percent.

The new guidelines were passed without provisions that were originally included in the draft regulations that would have made it very difficult for foreign companies to do business in India's telecom market. The removal of these prohibitions enables foreign investors to more efficiently and flexibly manage and move data along their networks, and clears the way for U.S. companies to increase their presence in the world's fastest growing telecommunications market.

Other issues

Other issues will require our sustained leadership and engagement, including: translating the newfound urgency on WTO Doha by our European and other friends into concrete improvements in negotiating offers; expanding policies/programs that alleviate poverty by providing conditions for economic development when feasible and assistance as needed; remaining vigilant in battle against the HIV/AIDS; intensifying our efforts in fight against bribery and corruption; and continuing to lead the international struggle against terrorist financing.

We must continue to consolidate and secure our achievements. and show effective leadership to the community of nations on these issues.

The Bush presidency's international economic record of the past six years is one of great success and achievements that have set the conditions for even further robust economic growth and prosperity in America and the world.

We look forward to your advice and assistance in continuing these efforts and to spreading the message of achievement.