Tagged: FinancialCrisis

Magdy Martínez-Solimán: Statement at the Policy Symposium on “Financing Asia’s Future Growth”

06 Apr 2015

Ambassador Mr.  Abulkalam Abdul Momen (PR of Bangladesh to the UN),

Ambassador Mr. Mr. Durga Prasad Bhattarai (PR of Nepal to the UN),

Ambassador Mr. Desra Percaya (PR of Indonesia to the UN) (TBC),

Mr. Lenni Montiel, Assistant Secretary-General for Economic Development, UN DESA

Mr. Shang-Jin Wei, Chief Economist, Asian Development Bank

It is my great pleasure to welcome you to this seminar on “Financing Asia’s Future Growth”. This symposium is timely and important. Timely because the third International Conference on Financing for Development, to be held in Addis Ababa, Ethiopia, in July 2015 is a historic opportunity for the international community to agree on an ambitious framework for the post-MDG era. It is also important because of the ongoing inter-governmental discussions both on FfD and on post-2015 development agenda.

I bring you warm greetings from Haoliang Xu, UNDP Regional Director for Asia and the Pacific. Mr. Xu sends his sincere and heartfelt apologies for not being able to be with you today. I am grateful for his invitation to Chair this Symposium.

I am especially pleased that this event is being jointly hosted between UNDP and the Asian Development Bank (ADB). This year’s Asian Development Outlook (ADO) will give us a reference to guide our discussions. The ADO is ADB’s flagship annual economic report, analyzing trends in and proposing forecasts for the Asia-Pacific region. ADO is smart and influential  also inside the UN’s development community and beyond.

Excellencies, distinguished delegates, Ladies and Gentlemen,

This year’s ADO has as its special theme “Financing Asia’s Future Growth.” The way in which the report approaches the challenge of financing is refreshing and extremely relevant for the broader discussion around finance for development.

In the MDG-era, financing was often conceived as tallying up the resources available from different sources (mobilized domestically as well as international private flows, ranging from FDI to remittances) available to developing countries to meet the MDGs, with the gap being filled with Official Development Assistance (ODA). Over the last 15 years, estimates abounded of the billions in ODA that would be required to meet the MDGs.

It is clear that this “gap-filling” approach is insufficient as we confront the implementation of the post-2015 agenda. The universality and broad breadth of the new agenda (from poverty eradication, to economics lifestyle changes towards sustainable patterns of production and consumption, to promoting peaceful and inclusive societies) imply that estimating gaps – which is only partially possible – will inevitable take us to amounts in the trillions of dollars. We need to think anew about how we approach the challenge of financing development. And we need to think big.

While doing so, I want to emphasize the continued importance – and value – of development aid. The Addis Ababa conference represents an opportunity for donor countries to reaffirm their longstanding commitment to allocate 0.7% of GNI to ODA as well as pledge to allocate at least 0.15-0.2% of GNI to the LDCs or more. The current draft of the Addis Ababa outcome document being considered even suggests that countries agree to meet these targets by 2020. But the post-2015 agenda cannot be achieved through aid alone. There is a need to consider other forms of international public finance for investments in communicable disease control, climate change adaptation and mitigation, science, innovation and new technologies. More public resources for climate finance are needed, but these should not come at the expense of ODA.

Even lumped together, all sources of public finance will not suffice. We need to find the right convergence between policy driven and profit led sources of development finance. Incentives are needed to ensure that private investment decisions move the world towards sustainable development aspirations. The progressive elimination of inefficient and ineffective subsidies could help to shift transportation and energy investments towards less fossil fuel intensive and more sustainable options, while releasing public resources for social and development purposes. The ADO argues that the current context of low world oil prices presents an opportunity in Asia for this type of fiscal reforms. In fact, the report shows that several countries in Asia are already seizing on this opportunity, either by reducing fossil fuel subsidies, increasing taxes on their use, or both. This is the type of policy action that sends the right incentives to people and businesses, while releasing public resources, that are important in the context of the new agenda.

Financing for development in the post-2015 era cannot be considered only in the context of ‘stable times’; there are fewer of them and we have to recognize that volatility is becoming the new normal. This is particularly relevant to Asia, a region especially vulnerable to extreme climate events. But there are many sources of risk beyond disasters, with the costs of shocks as diverse as conflict and disease outbreaks high and increasing.
And, of course, we continue to face recurrent economic crisis. Asia had a painful experience with a major financial crisis in 1997/1998. The ADO reminds us of the traumatic growth collapses that occurred in 1998: Indonesia’s economy contracted by 13 percent, the Republic of Korea’s by 6 percent, Malaysia’s by 7 percent, and Thailand by 11’s percent (from pre-crisis annual growth in excess of 7 percent in every country). The development setbacks were deep and long-lasting. But Asia also showed resilience and has put in place a range of policies to better protect countries from economic shocks. It has bounced back with energy. What we need to achieve sustainable development is for nations and communities to be resilient, not only to economic but to a wider set of shocks, so that they are able to anticipate, shape and adapt to the many shocks and challenges that can devour development gains. All development needs to be risk-informed.

Excellencies, distinguished delegates, Ladies and Gentlemen,

In this context, and without preempting the detailed presentation of the report and its special theme, I want to emphasize that the perspective taken in the ADO on how to finance Asia’s growth is particularly relevant. The challenge of financing is presented less as one of mobilizing resources (domestically or from abroad), and more as one of ensuring that the financial systems in Asia work to allocate savings to high-return and productive investments. This is the type of analysis that will enable us to think more broadly about financing, as a challenge of unlocking funding by pursuing policies that enable more efficient and effective resource allocation.

Excellencies, distinguished delegates, Ladies and Gentlemen,

Allow me, before I introduce our speakers, to elaborate briefly on the important of financing for the achievement of post 2015 as well as the importance of inclusive financial sector for the eradication of extreme poverty and reduction of inequality.

Today 2.5 billion adults – more than half of the world’s working adults – are excluded from formal financial services. This is most acute among low-income populations in developing countries, where approximately 80% of poor people do not have access. Access to well-functioning and efficient financial services can empower poor women and men. It is now well-established that giving low-income households access to formal financial services can help reduce poverty and inequality.

In the Pacific, financial inclusion is particularly challenging, where less than 10 percent of adults seem to have access to basic financial services. Challenging geography, poor infrastructure and the high costs associated with delivering services to sparse populations are barriers in this region. UNDP and UNCDF are therefore jointly implementing a Pacific-wide Financial Inclusion Programme (PFIP), which helps low-income households to gain access to quality and affordable savings, insurance, credit and other financial services and financial education. The programme, with funding from the Australian Government, the European Union and the New Zealand Government, also disburses grants to financial service providers. The programme aims to add one million Pacific Islanders to the formal financial sector by 2019 by spearheading policy and regulatory initiatives, facilitating access to appropriate financial services and delivery channels and by strengthening financial competencies and consumer empowerment.

As we consider the importance of financial systems to help finance the post-2015 agenda and the need to ensure financial inclusion, UNDP’s programme in the Pacific is an illustration of the comprehensive and inclusive development approaches that we will need to pursue to finance development.

Let me take a moment to introduce our guests here.

We have with us today, Mr. Shang-Jin Wei, ADB’s Chief Economist. Mr. Wei is a key spokesperson for ADB and oversees the Economics and Research Department. Mr. Wei previously served as Professor of Finance and Economics at Columbia University’s Graduate School of Business. Before joining Columbia University, he held senior positions at the IMF, at the Brookings Institution, and at Harvard University’s Kennedy School of Government.

Ambassador Mr. Abulkalam Abdul Momen, Permanent Representative of Bangladesh to the United Nations, New York, has been serving in this role since August 2009. Prior to that, he served as Chairman of the Department of Economics and Business Administration, Framingham State College. He also worked earlier in senior positions in the government of Bangladesh.

Ambassador Mr. Desra Percaya, Permanent Representative of Indonesia to the United Nations, New York, has been serving in this role since Feb 2012. Prior to this, Dr. Percaya was Indonesia’s Deputy Permanent Representative to the United Nations in Geneva. He has held a variety of posts related to multilateral diplomacy and international security since joining the Ministry of Foreign Affairs in 1986.

We have with us today Ambassador Mr. Durga Prasad Bhattarai, Permanent Representative of Nepal to the United Nations, New York. Prior to this, he served as the Permanent Secretary of Nepal’s Ministry of Foreign Affairs. A career diplomat, Mr. Bhattarai held senior posts in Nepal’s foreign service and government.

Finally, we have with us Mr. Lenni Montiel, the Assistant Secretary-General for Economic Development, at UN DESA. Prior to his appointment, Mr. Montiel was the Director for Economic and Social Affairs in the Executive Office of the Secretary-General, preceded by a distinguished career in development as a colleague of ours in UNDP.

Thank you.

Australia-Japan-United States Trilateral Leaders Meeting Joint Media Release

The White House

Office of the Press Secretary

For Immediate Release

November 15, 2014

Prime Minister Tony Abbott of Australia, Prime Minister Shinzo Abe of Japan, and President Barack Obama of the United States met in Brisbane, Australia on 16 November 2014 in the margins of the G20 Leaders’ Summit.

The leaders expressed their commitment to deepening the trilateral partnership among Australia, Japan and the United States to ensure a peaceful, stable, and prosperous future for the Asia-Pacific region. They noted that this partnership rests on the unshakable foundation of shared interests and values, including a commitment to democracy and open economies, the rule of law, and the peaceful resolution of disputes.

The three leaders reaffirmed the global reach of their cooperation and the value of comprehensive US engagement in the Asia-Pacific region. They resolved to tackle pressing issues such as: degrading and ultimately defeating the threat of the Islamic State of Iraq and the Levant (ISIL) and countering the threat posed by foreign terrorist fighters; ending the deadly Ebola virus disease epidemic in West Africa; and opposing Russia’s purported annexation of Crimea and its actions to destabilize eastern Ukraine, and bringing to justice those responsible for the downing of Flight MH17. The three leaders also underscored the strength of their regional cooperation, including eliminating the North Korean nuclear and missile threat; addressing human rights in North Korea including the abductions issue; and ensuring freedom of navigation and over-flight and the peaceful resolution of maritime disputes in accordance with international law, including through legal mechanisms such as arbitration.

The leaders expressed their firm commitment to deepen the already strong security and defense cooperation among the three countries and to strengthen the collective ability to address global concerns and promote regional stability through enhanced cooperation on: trilateral exercises; maritime security capacity building and maritime domain awareness; peacekeeping capacity building, particularly in the area of prevention of violence against women; increasing development assistance coordination throughout the region; humanitarian assistance and disaster relief; cyber capacity building; and defense equipment and technology. They welcomed work being done to this end and directed their governments to expand trilateral cooperation in all of these areas.

The leaders resolved to continue to work together and with our partners in the region to promote strong sustainable growth and prosperity in the Asia-Pacific, including through cooperation in the G20, APEC, EAS and other regional forums to promote sustainable, inclusive, and resilient growth and prosperity, free trade and investment, including in infrastructure development and energy efficiency.

Fairer taxation for trust: the time is now!

Fairer taxation for trust: the time is now!

By Angel Gurría, Secretary-General of the OECD

Overhauling the global tax system and its practices is fundamental if we are to deliver stronger, cleaner and fairer growth for a post-Crisis world. The Secretary-General explains how the OECD, with the support of the G20, is finding ways to fix the current international tax situation.

Six years since the onset of the Crisis many advanced countries continue to face high unemployment, sluggish growth and weak public finances. Growth is also slowing down in emerging markets.

Meanwhile, as recent revelations have demonstrated, the frayed international tax system has long allowed multinationals to plan their way around paying corporate taxes. And bank secrecy has let individuals stash money undetected, and untaxed, in hidden corners of the world.

Such practices erode the integrity of our tax systems, damage the capabilities of our governments, diminish economic growth and corrode the trust of our citizens who are the vast majority of taxpayers. The way tax is levied and spent is one of the most important levers to address social inequalities, create jobs, pay for education, infrastructure and other public services and encourage investment in innovation.

The OECD has helped put the international tax system at the forefront of the international policy agenda. Our work has been endorsed by the G20, whose leadership deserves praise and recognition for giving top priority to calling time on tax havens and recognising that an international tax framework developed 100 years ago is no longer fit for purpose.

Accounting for almost 90% of the global economy, 44 countries including the G20 have tasked the OECD with finding ways to fix this situation. 

Read more at oecdinsights.org

Originally published on OECD Insights.

Useful links

Comabting BEPS and making sure we have fair tax systems

Are you following the G20 leaders’ summit in Brisbane this weekend? The OECD Observermagazine is here to help.  OECD Secretary-General Angel Gurría and Australian Treasurer Joe Hockey lead this fact-packed “300th edition” through the G20 issues on the table at Brisbane, with articles on growth (notably the 2% growth challenge), trade, gender and jobs. In our Ministerial Roundtable on employment, ministers from Australia, Germany, Korea, Spain and the US outline the actions they have been taking to create more and better jobs. Business and labour representatives add their perspectives. The edition also asks whether Europe can avoid deflation, and traces the fall in productivity growth across OECD countries since the 1960s. With Brisbane the focus of world attention, the OECD Observer casts a spotlight on Australia’s economy, and asks why the “lucky country” is also a happy one.  We recount how Australia came to join the OECD (not as smooth a path as you might imagine), and outline the country’s future challenges in the Asian Century.

300 full doc FINAL aw.indd

OECD and the G20

Related articles

The EU at the G20 Summit in Brisbane, Australia – Supporting global recovery

On 15 and 16 November 2014, European Commission President Jean-Claude Juncker and European Council President Herman Van Rompuy will participate in the 9th edition of the G20 summit in the Brisbane Convention and Exhibition Centre, Brisbane, Australia.

At the G20 summit in Brisbane (Australia) the President of the European Commission, Jean-Claude Juncker, and the President of the European Council, Herman Van Rompuy, will push for the adoption of a strong Brisbane Action Plan on Growth and Jobs to put the G20 collectively on a higher growth trajectory.

This and the European Union’s views on other key issues on the summit agenda (financial regulation, tax avoidance/tax evasion, development, anticorruption and energy matters) are reflected in the joint letter by the two Presidents to EU Heads of State and Government of 21 October 2014.

A background briefing by Commission and Council representatives will be held in the Berlaymont press room (for accredited journalists only) on Monday 10 November at 9am.

Background

The G20 leaders’ process has been co-initiated in 2008 by the European Union. The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The European Union thus is a full member of the G20 and is usually represented at G20 summits by the President of the European Commission and the President of the European Council.

The Brisbane Summit is the 9th edition of the Group of 20 (G20) Summit of the world’s major advanced and emerging economies. Together, the G20 members represent around 90% of global GDP, 80% of global trade and two-thirds of the world’s population. This year, Australia welcomes Spain as a permanent invitee; Mauritania as the 2014 chair of the African Union; Myanmar as the 2014 Chair of the Association of South-East Asian Nations (ASEAN); Senegal, representing the New Partnership for Africa’s Development; New Zealand; and Singapore. The 10th edition of the G20 Summit will be hosted by Turkey in 2015.

For more information:

Joint letter from the Presidents of the European Commission and the European Council ahead of the Brisbane G20 Summit: http://europa.eu/rapid/press-release_MEMO-14-600_en.htm

G20 website of the Australian Presidency: https://www.g20.org/

Two Europes or One Europe?

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Valedictory speech by President Barroso

European Parliament plenary session

Strasbourg, 21 October 2014

Mr President, Honourable Members,

First of all, I would like to thank you for the invitation to address this Parliament in what would be the last time I have this opportunity. In fact, we are coming to the end of my second mandate as the President of the European Commission and I am very happy to be here with you and my colleagues to present to you our bilan, since this is my second Commission, I think I can also refer to the last ten years.

I want to share with you my feelings, my emotions, what I think about the way the European Union has responded to these very challenging times and what I think are the most important challenges for the future.

I think you can agree with me that these have been exceptional and challenging times. Ten years of crisis, and response of the European Union to this crisis. Not only the financial and sovereignty debt crisis – let’s not forget at the beginning of my first mandate we had a constitutional crisis, when two founding members of the European Union rejected, in referenda, the Constitutional Treaty. So we had a constitutional crisis, we had a sovereign debt and financial crisis, and in the most acute terms we now have a geopolitical crisis, as a result of the conflict between Russia and Ukraine.

The constitutional crisis that we had was in fact solved through the Lisbon Constitutional Treaty. The reality is that at that time, many people were saying that it would be impossible for the European Union to find a new institutional setting. And in fact there were moments of ambiguity and doubt. But basically, we could keep most of the acquis of the European Union, including most of the new elements of the Lisbon Constitutional Treaty, which was ratified by all Member States including those that today seem to have forgotten that they have ratified the Lisbon Treaty.

More recently – because I learned to leave to the end the economic issues because they are still with us – we had this very serious challenge and threat to our stability, in Europe, coming from the unacceptable behaviour of Russia regarding Ukraine. And we took a principled position. We offered Ukraine an association agreement and a free trade agreement and I am happy that, in spite of all the difficulties, Ukraine was there, signing and ratifying the association agreement, and I want to congratulate this Parliament, because the same day at the same hour the Parliament in Ukraine was ratifying this agreement, you were also ratifying the agreement showing you can offer hope to Ukraine as part of the European family of nations.

At the moment I am speaking to you, this crisis is not yet solved – we know that. But I think we can be proud that we have kept a position of principle, that we have condemned in the most unequivocal terms the actions of Russia and that in fact an association agreement was ratified, not only with Ukraine, but also with Georgia and Moldova because I believe we have a duty to those countries that are looking to Europe with their spirit and their hope to share with us the same future and because they want to share with us the same values.

At this moment we are still mediating and, today, there is a meeting mediated by the Commission on energy with the Russian government and the Ukrainian government, so a political negotiated solution is possible, we are working for that. It is in the interest of all the parties to have a political agreement, but a political agreement that respects the principles of international law, a political agreement that respects the right of country that is our neighbour to decide its own future and a political agreement that respects the sovereignty, the independence of that country. So, we should be proud of what we have been doing in this very challenging geopolitical crisis.

And we also had the financial and sovereign debt crisis. The reality is that the crisis was not born in Europe, but the fact is that because we were not prepared, because the Euro-area had not yet the instruments, we were very much affected by it – not only in financial terms, in economic terms, in social terms and in political terms. I think this crisis was probably the biggest since the beginning of the European integration process in the 50s of the last century. Let’s now put things into perspective.

Dear Members of Parliament,

Let’s remind ourselves what was the main opinion of most analysts in the economic and financial media, or even many of our countries or outside of Europe, about what could happen: everybody was predicting Greek exit, Greece exiting the Euro, and, of course, Greece exiting Euro would certainly, immediately have had a cascading effect in other countries, a domino effect that was indeed already felt in countries such as Ireland or Portugal. But let’s not forget, Spain was also under very heavy pressure, and Italy. We were staring into the abyss. I remember well what happened in discussions in the margins of G20 in Cannes in 2011, I remember well when analysts were predicting with almost unanimity a Greek exit and at least 50% of them were predicting the implosion of the Euro. And what happened? Not only was there no exit of the Euro, now we are to welcome the 19th member of the Euro, Lithuania will join us in the 1st of January 2015. And not only did Greece not leave the Euro area, it has enlarged and the European Union has been enlarging as well. This is a point that has been very much underestimated in our analysis.

2004, the year I had the pleasure and the honour to assume the leadership of the European Commission, do you remember that we were 15? Today, we have 28 countries. So we have almost doubled the membership of the European Union during this crisis. Is there a better proof of the resilience and the capacity of adaptation of our Union? The fact that we were able to remain united and open during the crisis I think confirms the extraordinary resilience and the strength of the European Union and this should not be underestimated.

I know that, for some, these things do not count for much. They are in a way making an idealisation of the past; they dream probably of a closed Europe; they think Europe was better when half of Europe was under totalitarian communism. I don’t think that. I think Europe today is better than when half of Europe was under communism. The fact that the European Union was able, during all this crisis, to open, to consolidate and to unite on a continental scale almost all of Europe around the values of peace, of freedom and of justice, I think it is a great thing we should commemorate and not to be ashamed of, as some seem to be.

So, this is I think also a reason to commemorate. Many people were predicting, as you probably remember, those of you following these issues at that time, that the European Commission would not be able to function with 25 or 27 or 28 Members, that the European Union would be blocked. The reality is that the European Union was not blocked by the enlargement; the reality that I can share with you now is that sometimes it was more difficult to put together some of the founding Members of the Union than all the 28 countries of Europe.

So I think we should be proud of that as well, collectively, because the European Union was able to remain united and open during the crisis. And when I say open, I mean it in all senses of the word, including with an open attitude towards the world. For instance, when we have promoted a proactive climate agenda after the failure of the Doha Development Round and the Doha trade talks. And we are now leading in that sense, because I believe that trade can be one of the best ways to support growth globally and in the European Union. Or when we, because it was an initiative of the European Union, went to the former President of the United States of America, inviting him and convincing him to organise the first G20 meeting at Heads of State or Government level, because that was a way of having a global cooperative approach and to avoid the return to ugly, nasty protectionism. That could be a temptation in times of crisis. So we were able to keep Europe not only united and, in fact, enlarging its membership, but also open to the rest of the world.

But now, are we stronger or are we weaker? I know that the most critical people today will say that we are weaker. But are we really?

In fact, when the crisis erupted, we had almost no instruments to respond to it. We were facing, as it was said at that time, an unprecedented crisis. Yet we had no mechanisms, for instance to support the countries that were facing the immediate threat of default. A lot has been done. We have collectively, the Commission and the Member States and always with the strong support of the Parliament, we have created a new system of governance. We have today a much more reinforced governance system than before, including with unprecedented powers for the community institutions, and we have done everything to keep the community method at the centre of our integration. For instance, the Commission today has more powers in terms of governance of the Eurozone than before the crisis. The European Central Bank has today the possibility to make direct supervision of the banks in Europe, something that would have been considered impossible earlier; it would have been almost unimaginable before the crisis. And I remember when we spoke about the banking union, when I gave an interview saying that we need a banking union, I received some phone calls from capitals saying ‘Why are you speaking about the banking union? This is not in the Treaties’. And I responded, ‘Yes it is not in the Treaties, but we need it if we want to fulfil the objective of the Treaties, namely the objective of stability and growth’. And today we have a banking union.

Honourable members,

If we look at things in perspective and we think where we were ten years ago and where we are now, we can say with full rigour and in complete observance of the truth that today the European Union, at least in the euro area, is more integrated and with reinforced competences, and we have now, through the community method, more ways to tackle crisis, namely in the euro zone. Not only in the system of governance in the banking union, but also in the legislation of financial stability, financial regulation, financial supervision.

We have presented around 40 new pieces of legislation that were all of them approved by the European Parliament. And once again I want to thank you, because in almost all those debates the European Parliament and the European Commission were on the same side of the debate and were for more ambition, not less ambition for Europe. And so today, I can say that we are stronger, because we have a more integrated system of governance, because we have legislation to tackle abuses in the financial markets, because we have much clearer system of supervision and regulation. So, I think we are now better prepared than we were before to face a crisis, if a crisis like the ones we have seen before should come in the future.

Of course, you can say that there are many difficulties still. Yes, and I am going to say a word about this in a moment regarding the prospects for growth, but please do not forget where we were. We were very close to default, or, to use a less polite word, to a bankruptcy of some of our Member States. And look at where we are now. From the countries that had to ask for adjustment programmes, Portugal and Ireland exited the programme successfully. Ireland is now one of the fastest growing countries in Europe. And in fact all the others that were under the imminent threat of collapsing, are now in a much more stable mood. Spain, that asked for a programme for the banks, also has improved successfully. So in fact only two countries of all those, because we should not also forget the Central and Eastern European countries that also had adjustment programmes, even if they were not yet in the euro area, only two countries are still completing their adjustment programmes.

The deficits now on average in the Eurozone are 2.5%. This is much less than in the United States or in Japan. So, in terms of stability, we are much better now than before. By the way, the Eurozone has a trade surplus. The European Union in general now will have a surplus in goods, in services and, for the first time in many years, in agriculture.

I am saying that because very often the opinion in some of the political sectors is that we are losing with globalisation. This is not the case. Some countries of our Union in fact are not winning that battle, but on average we can say that Europe is gaining the global battle in terms of competition, namely in terms of trade and investment.

But of course, growth is still timid. I think that basically we cannot say that the crisis is completely over, because threats remain, but we have won the battle of stability. Today nobody in the world will honestly bet on the end of the euro. The euro has shown that it is a very strong, credible and indeed stable currency. The reality is that our growth is still timid and clearly below expectations.

So what can we do for growth? This is the important question. And for that I need to make a reminder once again. I know very well that very often the European Union policy and namely the European Commission policy has been presented as completely focused on austerity. I think this is a caricature.

We have constantly asked at least for three important lines – fiscal consolidation certainly, for the countries that are feeling the pressure of the markets. It would be completely irresponsible if they could not frontload a programme of rigour to correct their public finances, but we have always said with equal vigour, probably some would not like to listen, the need for structural reforms, for competitiveness, because the reality is that even before the crisis we were growing under our potential, that is the reality, and with serious problem of lack of competitiveness in some of our countries and so that is why we needed more ambitious structural reforms.

But we have also argued in favour of investment. I have always said that we need more investment, public and private investment. Private investment will come the more we show that we have competitive economies that we can attract private investment. Indeed I am now happy to see that most of our countries, certainly at a different pace, but they are pursuing ambitious structural reforms that would have been considered completely impossible before the crisis.

And the reality is, if we want to be honest in terms of the analysis that the countries that have suffered the most during the financial crisis were precisely those that have lost in terms of cost competitiveness before the crisis. And now, for instance the reforms that have been made by Spain, by Ireland, by Portugal, by Greece, are impressive.

Now, apart from the political consolidation and the structural reforms, we have always seen the need for more investment. Private investment, but public investment as well. You will remember the debate about the MFF. President Schultz remembers certainly. We were together in many meetings asking the Member States to do more in terms of investment and the most important instrument we have at European level for investment is the Multiannual Financial Framework, that is around one trillion euros.

So if there is not more ambitious investment it was not because of a lack of ambition of this Commission, or a lack of ambition of this Parliament. It was because of the opposition of some capitals. This is the reality. We are for solid investment, targeted investment for growth. Not only with the MFF. Remember the proposals that for instance here in the State of the Union speeches with you I have put forward. The increase of the capital for the EIB that finally was agreed. The project bonds that the Member States have accepted, but only as pilot project bonds. The facility that we have created for SMEs with loans from the EIB and funds from the structural funds, from our budget. Unfortunately only two countries wanted to pursue that line.

Or, for instance, the programme for youth, the Youth Guarantee that we have proposed and that the Member States have agreed. But now with the Youth Employment Initiative, only two countries have accepted to have a dedicated programme for youth employment.

So, my dear colleagues, let’s be clear: we are for investment. I wish all the best to the new Commission and to my friend and colleague Jean-Claude Juncker, to have the support of the Member States for a more ambitious investment programme for the next years. I believe this is possible now, I believe the awareness is much bigger on this matter. But once again this is part of a comprehensive strategy that combines fiscal consolidation with structural reforms and investment, and, of course, all the measures taken by us in terms of the banking union and in terms of financial regulation for stability.

And I’m saying this with this vigour because I think it would be now a mistake, after everything we have done, to give up, to show less determination, to abandon the road of structural reform. I think we have done a part of the job, stability is broadly there, growth, even if it is slower than what we would like to have, but now we need determination to complete the reforms so that sustainable growth, not growth fuelled by debt, excessive public or private debt – because such growth is artificial, it’s a fictional growth, and afterwards, sooner or later, we would pay the price – but sustainable growth – that I believe it is possible if we continue the courageous path of reforms and a stronger governance for the European Union.

I don’t have the time now to go over all the other policies we have been developing over the years. But let me just highlight one or two, because I think they are very much at the moment of decision, and I think they are important.

I’m extremely proud that is was my Commission in my first mandate, in 2007, that put forward the most ambitious programme for climate protection in the world. And we are still leading in the world in terms of the climate agenda.

In fact, we were able to join the climate agenda with the energy security agenda, and I’m saying that because this week we are going to have an important discussion in Brussels at Heads of State and Government level, and I hope that the European Union will keep its leadership role – of course not to be isolated but to have others, because we have a responsibility towards our planet. And this is was certainly one of the great advances of these years, that the European Union was able to make the most important and bold steps in terms of fighting climate change.

Another area where I think we could very proud is – in spite of all the restrictions because of our financial situation – that it was possible in the MFF to get 30% more for Horizon 2020, for research and technology. I think there is a great opportunity now for us to do more in that area, as also in the culture side, with our Creative Europe programme.

The reality is that in some areas it was possible, in spite of the economic and financial crisis, to increase investment at European level.

But I’m also very proud that in spite of the pressures of our budgets, we could always be there in terms of development aid and neighbourhood policy.

Whenever there was a big tragedy in the world, from the tsunami in Indonesia to the recent Ebola crisis, from the Syrian refugee crisis to Darfur, we were there, we were among the first. And I think we, Europeans, should also be proud of that, because we are still, together with our Member States, the most important donor for development aid in the world. That is something that corresponds very much to our values and I’m happy that in spite of all the crises we did not abandon our obligations in terms of development cooperation.

I have already said a word about trade. I think it is very important to keep an ambitious trade agenda, an open Europe but for free and fair trade. And the Commission has concluded a record number of agreements, not only with South Korea, Singapore, Central America – the first region to reach an agreement -, Peru, Ecuador, recently with Canada, with Western Africa, Eastern Africa and Southern Africa. And I could also mention some others that are now progressing, like Japan, the United States and also an investment agreement with China.

So we are the most important trade bloc in the world. We are the biggest economy in the world.

And I’m saying that because today I know it’s very fashionable the pessimism, the defeatism about Europe, what I call the intellectual glamour of pessimism. But I believe that we have a good record to show and I believe that together, collectively, we are much stronger and we can better defend our interests and protect our values.

Dear colleagues – I call you colleagues because I believe we have been sometimes in discussions but we have been colleagues in this great enterprise that is the European project -, I think politically we have some lessons to draw.

One is that we have shown great resilience. I think we can say that the forces of integration are stronger than the forces of disintegration. And I believed that day and night, sometimes in very dramatic moments, sometimes when I had to make dramatic appeals to some capitals: to the richer countries, asking them to show more solidarity; and to the poorer countries asking them to show more responsibility.

Sometimes we have done it very discretely, it’s true. The European Commission is probably more discreet than others. I did not want the Commission to be part of the cacophony of different voices during the most acute moments of the crisis. It was extremely market sensitive that situation. But I can tell you, in my full conscience, that we have done everything we could with existing instruments to avoid the fragmentation of the euro or to avoid a division in the European Union. And I very often had to call on my colleagues in the European Council, Heads of State and Government, to show the ethics of European responsibility.

But one of the lessons I draw from this is that if eventually it was possible to come to decisions, it is true that it was sometimes extremely painful and difficult. And took time. We have said also, and I think it is something that we can all agree: democracy is slower than the markets are.

The Commission would have preferred, and I’m sure this Parliament as well, decisions to be bolder, more comprehensive, faster. But we are a Union of democratic states, we are not a super state. And we have to respect different sensitivities.

One of the conclusions I draw from these ten years of experiences is the need to cooperate between institutions. I know sometimes it is more popular to put forward impossible ideas and to criticise others. But I firmly believe that we need to engage with different institutions, that it is not a solution to oppose the countries to the European Union. On the contrary, we have to show to our countries that they are stronger if they are part of the European Union. That we are not diluting their national identity but, on the contrary, we are asking them to share their sovereignty so they can project better their interests globally. I’m firmly convinced of this.

And I’m saying this to you now, as I am leaving in a few days: my only interest is that these lessons are learned so that we do not repeat some mistakes in the future. At the same time, I think we can say that it is not through confrontation but through cooperation that we can attain our objectives.

At the moment I prepare to hand over this very challenging and interesting job to my good friend Jean-Claude Juncker, I want to say here, on my behalf and on behalf of all my colleagues of the Commission, that we wish the new Commission all the best, that they have a great challenge ahead of them but that they could count also on our support. And I’m sure of the support that this Parliament is going to give to them.

Because, Mr President, the relations were not always perfect. But I think you can agree that we were able to establish a fruitful relationship between the Parliament and the Commission.

I’ve been in this Parliament more than 100 times. There was never a Commission that was so often represented in the Parliament as my two Commissions. We have established this cooperation and I’m so grateful because this Parliament, sometimes with very strong demands, was always supportive of the community method, was always supporting the community institutions. And I believe this is very important for the future of Europe.

My dear colleagues of the European project,

The way to solve the problems we have in Europe is not through revolution and even less through counter-revolution. It’s by compromise, it’s by reform. Evolution and reform. We have to reform to adapt to the new challenges but not with new clashes between the institutions, not with clashes against our countries. And I believe that if this idea of strong cooperation putting the European common good above all else, I think my colleague and friend Jean-Claude Juncker and his new Commission will have success, of course based on the support I’m sure you are going to give them.

Because the European Union is a union of values. In these last days I had to face many journalists and they asked me ‘what was your most emotional moment? Which moment did you prefer?’ And I have many, and I also had very difficult ones, to be honest. But one of my most emotional moment was when, on behalf of the European Union, together with Martin Schulz and the President of the European Council, Herman Van Rompuy, we received the Nobel Peace Prize on behalf of the European Union.

I think this was a powerful reminder sent to us from the global community that we count in this world and that what we do is very important. That the values that were at the origin of the creation of our Union, namely the value of peace, are still at our essence today. And that we have to fight for them.

And I think is the moment I really said I want to share with all those in the different institutions, including this Parliament, that have been working for a united, open and stronger Europe. And when I leave this office, with all my colleagues at the Commission, I can tell you that we have not achieved everything we could, or everything we would have liked to have achieved, but I think we have worked with the right conscience, putting the global interest of the European Union above specific interests. And I believe that now there are conditions to continue to do work for a united, open and stronger Europe.

I thank you for your attention.

Auf wiedersehen, goodbye, au revoir, adeus.

Muito obrigado, thank you very much.

Following the statements of the Members of the Parliament, President Barroso made the following closing remarks:

Mr President,

I should like to take up a number of the points raised by the previous speakers. Firstly, I believe that proof that we – and by “we” I mean the Commission of which I have had the honour of being Presidentare on the right track lies in the fact that the criticisms have come from the opposite ends of the spectrum, though often couched in the same terms, resolutely ignoring the difficulties and extraordinary challenges that we have had to face and failing to put forward any coherent response.

The truth is that we have been through possibly the worst economic and financial crisis we have seen since the countries of Europe began to come together and that it was not the European Union or Europe that spawned the crisis. This is what some defenders of national sovereignty, as they like to call themselves, do not or will not understand. It was not Europe that created excessive private debt or caused the financial sector to behave irresponsibly. Quite the opposite – this all took place under national scrutiny, or rather lack thereof. Europe is the answer. We now have one of the most ambitious regulatory and supervisory systems in the world, if not the most ambitious. In other words, saying that Europe is worse off because of the European Union is simply not true. It shows a complete lack of respect and a lack of intellectual rigour. Europe is not responsible for the financial crisis, which had its roots in the United States. Europe had its weaknesses, but what the European Union did was to respond. The blame for this does not lie with the European Union, and I believe this is something that all those who share the European ideal – be they at the left, right or centre of the political spectrum – should have the courage to state, because by remaining silent we will be reinforcing the populist rhetoric of the extreme right and extreme left.

I listened carefully to those of you who said that populism was on the rise and who laid the blame for this at the door of the European Union. Ladies and gentlemen, this is not true. It is abundantly clear that populism and xenophobia exist outside the European Union. Look at the anti-immigrant incidents that have taken place in Switzerland. Look at what happened in Norway when that terrorist killed all those young people because he was opposed to a multicultural Europe. Look at the Tea Party movement in the United States. Is Europe to blame for America’s Tea Party movement?

We are currently seeing an aggressive form of populism around the world, which espouses arguments from both the left and the right. Sometimes it is difficult to tell the difference. So to say the European Union is responsible for this shows a lack of intellectual rigour and a lack of political integrity. What we have to do, as Europeans, is to demonstrate that it was not Europe that caused the crisis or the public debt in the Member States. There was little that Europe could do when, for example, one Member State falsified its accounts. This is something Europe had to face. The first initiative of my second Commission was to ask the Member States to give us more powers to supervise national statistics, because in my first Commission this was rejected. And not by Greece. It was rejected by the big Member States, which were reluctant to hand more powers over to the European Union. So if we really want to have a debate, let us be quite clear and strict in terms of intellectual integrity and political candour.

Ladies and gentlemen, there is one thing that I would like to say to you with the greatest of conviction. The team that I have had the honour of heading has worked with enormous commitment and diligence, whilst always putting Europe’s interests first. There is something that I want to say to you, since this is a political assembly with a wealth of political dynamics, but where the emphasis is always on the common European good. My Commission was not made up of colleagues from the EPP, socialists or liberals. It was made up of people who worked for Europe. My party is the EPP and I am proud of that, but, as President of the Commission, my party is Europe and that is the message I wish to convey, in particular to the major forces of the pro-European centre-left and centre-right.  Differences must, of course, be aired, but they must not be allowed to weaken the pro-European camps. We cannot hand the extreme right or extreme left anything else on a plate. Pro-European forces must come together. They must have the courage to defend Europe. They must do so at national level, and not just here in Strasbourg. We need a major coalition of this nature for Europe because I believe that we have the strength to win the battles of the present and those of the future.

Thank you very much for your attention.

PM delivers remarks in Brampton

Brampton, Ontario – 12 August 2014

Prime Minister Stephen Harper today delivered the following remarks at India’s National Day Gala in Brampton:

“Thank you very much.

“Good evening.

“Namaste.

“I want to thank everybody for that warm welcome and just tell you how delighted I am to be here.

“Thanks of course to our masters of ceremonies, to Parm Gill and Angie Seth for kicking us off tonight.

“Also special greetings to all guests from all levels of government who are here with us tonight, both Canadian and international, to Consul General Mishra.

“Particularly to my colleagues from the Government of Canada, and I know they’ve already been introduced.

“There are way too many for me to name but look we’ve got a great turn out.

“I’d like them all to stand up one more time.

“Give all my colleagues from the Parliament of Canada your warm greeting.

“You will know ladies and gentleman that our Government has, in fact we’re proud to have, eight Canadians of Indian descent serving in our caucus.

“In fact, there are today more men and women who were born in India serving in Canada’s Parliament than at any other time in our country’s history.

“Let me also just recognize a few people who worked so hard to make this occasion such a tremendous success.

“Obviously first, my introducer, for her leading role in helping to drive the organization of this great event – she asked me 67 times to attend – let’s give her one more round of applause, my introducer, Dr. Senator Asha Seth.

“Now to be fair, the Senator was working with a great team, so let’s also show our appreciation once again to the other members of the Canada India Friendship Group and to members of the Advisory Board.

“Thank all of them for their great work in putting this tremendous event together.

“Now, ladies and gentlemen, I know tonight we’re a couple of days early but I would like to personally wish each of you, I would like to in fact wish all Indo-Canadians a very happy India Independence Day.

“In a matter of days, Prime Minister Modi will do, for the first time, what each of his predecessors have done: raise the deep saffron, white and green flag of India above the Red Fort in New Delhi.

“So, on behalf of the Government of Canada and indeed, I know, all of the people of Canada, let’s extend our best to Prime Minister Modi and the Indian people as they mark 67 years of independence.

“Now ladies and gentlemen, Canada’s relationship with India is special because despite the great differences between our two countries, we have growing economic ties, we have vast people-to-people ties, and all of these things are cemented together by common values: democracy, justice, pluralism, peace, human rights, the rule of law.

“And in what is a very uncertain and divided world, it is comforting to know that Canada has certain friends, like India, who share these values.

“Now ladies and gentlemen, in preparation for tonight’s event, I could not help but reflect on how much has changed here in Canada and around the world since my first visit to India back in 2009.

“Five years ago, our Government was navigating Canada through the midst of the worst global economic crisis since the Great Depression.

“Indeed, much has changed.

“With regards to the global recession, whereas Canada was the last G-7 country to feel its impact, we have been the first country to recover from it.

“And today, despite challenges and uncertainties around the world – challenges and uncertainties that do continue to impact us – Canada’s economy is strong, it is growing, creating good jobs and opportunities for hard-working Canadians.

“There are more Canadians working today than at any time in our country’s history.

“Today, Canada is also widely rated as the best country in the G-20 in which to do business.

“We have the soundest financial sector in the world.

“And we have the most prosperous middle class, among significant developed economies.

“We have lowered taxes and, next year, years ahead of other countries, we are going to balance the budget here in Canada.

“Now thinking again back to my trip to India in 2009, Canada then had free trade agreements with only five countries in the entire world.

“Since then, we have expanded that by almost 10 times.

“Today, we have free trade agreements, agreements in principle, with 43 countries.

“Put another way, Canada has secured free trade agreements with nearly a quarter of the world’s countries, and Canadian businesses are going to have tariff-free access to more than half of the total global economy, including, as you know, with the European Union and the Republic of Korea.

“Now it’s my hope – it’s our Government’s hope – that over the years to come Canada and India will continue to develop our own economic and trading relationship.

“And that is, of course, another area where things have changed greatly since 2009.

“We can rightly say that the chill that characterized relations between Canada and India for decades is a thing of the past.

“Before our Conservative Government came to office, Canada’s relationship with India had been essentially frozen for most of the period since the 1970s.

“Since taking office our Government has worked hard to revitalize and strengthen Canada-India relations.

“We have concluded a Social Security Agreement, an historic Nuclear Cooperation Agreement, and we have launched our own bilateral Canada-India free trade negotiations.

“Know that our Government will continue to work to break-down barriers that hinder bilateral trade and investment, and that senior members of our Government will continue to visit India.

“Just a couple of years ago I had the great fortune, as the Senator mentioned, of returning to India.

“Because one trip was obviously not near enough to even to scratch the surface of that large, ancient and fascinating civilisation.

“In fact, my second trip to India was the longest bilateral visit any Canadian Prime Minister has ever made to any country in the world.

“And we have been following up on that – we now have eight Canadian consular and trade promotion offices operating across the Republic of India, a number we are looking to add to.

“These offices are helping to facilitate visa and immigration applications, and they’re helping to create more opportunities for Canadian businesses in places such as New Delhi and Bangalore, Chandigarh in Punjab, and Ahmedabad in Gujarat.

“The state of Gujarat in particular – the state where Prime Minister Modi served as chief minister for more than a decade – is home to some of the brightest and best entrepreneurial minds in the world.

“Our Government sees tremendous potential for growth in collaboration with this regional economic powerhouse and we have been working hard to make this a priority for several years.

“Canada was pleased to serve as an official partner for Vibrant Gujarat 2011.

“And two years later, at Vibrant Gujarat 2013, not only did Canada serve as an official partner, but Minister Jason Kenney travelled all the way to Gujarat to represent Canada at the summit and to address all of its attendees.

“Ladies and gentlemen the bottom line is this: the bottom line is that the friendship between Canada and India is stronger, it is stronger than it has ever been and that is something that we all, in both of our countries, should be very proud of.

“Now ladies and gentlemen you should also know that our Government’s efforts to strengthen Canada-India relations go beyond expanding bilateral trade and investment, for example, through immigration reform.

“Canada’s past has been shaped by the millions who came from elsewhere and Canada’s future will depend on the millions yet to come.

“Yet, for far too long, previous governments, as you know, chose to ignore problems in Canada’s immigration system as if they would just fix themselves.

“Instead, the problems only intensified and the wait times got longer.

“Back then, if you had applied to become a permanent resident from India you could expect to wait five or six years for your application to be processed.

“It was that bad.

“As the immigration backlog grew, so too did the irritation of those patiently waiting their turn.

“Worse still, economic opportunities were denied not just to individuals from India, to immigrants, but to Canada itself.

“When our Government took office, we immediately got to work and tackled those problems head on.

“And I should tell you, ladies and gentlemen, that our Government’s reforms have been working and they have been working well.

“Today, the permanent residency approval rate for applicants from India is more than 85 per cent.

“I should add that these men and women don’t have to wait another four or five or six years for their residency because our Government has reduced processing times for recent applicants down to just one year.

“In 2005, fewer than twenty-five hundred student visas were granted to Indian students.

“Last year, our Government granted more than fourteen thousand such visas.

“More Indian students than ever before are studying at Canadian universities, and because our Government has made it easier for these bright young minds to qualify for permanent residency and to work, we hope these students, many of them, will stay and put their Canadian degrees to use right here in Canada.

“Our Government has also made the CAN+ program in India a permanent feature of our immigration system, meaning that persons who have travelled to Canada or the United States in the recent past can be fast-tracked for a visitor visa.

“Our CAN+ program has a 95 per cent approval rate, making more Indians able to visit Canada as tourists or to do business.

“By the way, did I mention ladies and gentlemen that this newest change to our immigration program was just announced by Chris Alexander last month in New Delhi, during his first trip to India as Canada’s new Minister of Citizenship and Immigration – congratulations!

“Look we all know that immigration enriches this country, and our Government’s ongoing reforms mean that more immigrants will be able to contribute to their maximum of their capacity, and that is good for everyone.  

“Today, India is Canada’s top source country for immigrants.

“And of course, this explains why Canada’s Indo-Canadian community is more than 1.2 million strong and continuing to grow.

“The Indo-Canadian community has a proud and rich history in our country.

“This community – the Indo-Canadian community – is comprised of ordinary people doing extraordinary things in business and in finance, in academia and medicine, in technology and agriculture, to list just a few areas.

“I want to give you just one example.

“Close to ten years ago, Naval Bajaj came to Canada from India with only $600 in his pocket.

“But he had big dreams, and he had energy and ambition.

“And ladies and gentlemen, in Canada, he also had opportunity.

“With hard work and determination, Naval eventually became a business consultant with 7-Eleven Canada and he is also a business owner himself.

“He has led two trade missions for Canada back to his home country.

“And he was the youngest ever elected president of the Indo-Canadian Chamber of Commerce.

“He also happens to be a member of the Canada India Friendship Group Advisory Board.

“Now ladies and gentlemen, I tell you that in my travels across Canada I meet many people like Naval.

“Men and women relentlessly pursuing their goals to build a better, more prosperous life for themselves and their families, and helping this country immensely in the process.

“In fact, I know that this room is full of people just like that.

“In my travels, I have also observed that wherever Indian immigrants settle, wherever they choose to put down roots, to start businesses, to raise families, be it Vancouver, Calgary, Montreal, Toronto or right here in Brampton, not by coincidence, those places thrive.

“I believe this is because Indo-Canadians possess a strong ethic of work and education, and an unwavering commitment to faith and to family.

“And these are the things that underlie not only the Indo-Canadian community’s success, but Canada’s success as a country as well.

“So look, let me just conclude tonight – I know you’re all anxious to get on with the meal – let me just conclude by taking this opportunity to thank each one of you.

“To thank all of you for choosing Canada.

“Thank you for contributing to Canada.

“Thank you for loving Canada.

“Because whether you’ve been here for one, 10 or 50 years, Canada is your country.

“Again, congratulations everyone on this tremendous event, and thanks once more for the invitation.”

Press Releases: Remarks With Secretary of Defense Chuck Hagel, Australian Minister of Foreign Affairs Julie Bishop, and Australian Minister of Defense David Johnston

FOREIGN MINISTER BISHOP: Ladies and gentlemen, today we have welcomed to Sydney and to AUSMIN Secretaries John Kerry and Chuck Hagel, and this is the second AUSMIN meeting that the four principals here have participated in. The United States alliance is the most important security relationship for Australia, and AUSMIN is an annual opportunity for us to take stock of this relationship. And today’s discussion was broad in its scope. We were frank in our exchanges, and there was a clear instinct for collaboration across a wide area of endeavor. There’s a desire to share the burden of implementing our mutual vision and mutual goal of regional and global peace and prosperity, security and stability.

At a bilateral level, we signed the Force Posture Initiatives, the formal, legally binding document about a presence of U.S. Marines in the north of our country, and we focused particularly on the humanitarian disaster relief aspects of having the assistance of the U.S. in our region, which is, sadly, prone to natural disasters and other tragedies. Now at a regional level, we discussed the tensions in the South China Sea. Secretary Kerry and I have just returned from the East Asia Summit and the ASEAN Regional Forum, where the South China Sea was discussed at length, and we went over some of those issues. But we also discussed the tensions on the Korean Peninsula and our mutual desire to see North Korea denuclearized in a verifiable way and returned to the Six Party Talks.

We discussed the regional architecture and the need for the East Asia Summit to be the premier regional forum. It has the right mandate, the right membership to discuss matters of regional strategic significance. We talked about the importance of the Trans-Pacific Partnership. This is where the U.S. rebalance finds its economic expression and how important the TPP will be to opening up and liberalizing markets in our region. We discussed the emergence of China and other major powers in our region.

Globally, in the wake of the downing of Malaysian Airlines Flight MH-17, we talked about the situation in eastern Ukraine and Russia’s intentions and the behavior of Russia in recent months and weeks involving the breach of sovereignty in Ukraine and elsewhere. We had a long discussion on the Middle East and the significant conflicts there, whether it be Syria, Iraq, or in Gaza, and we also talked about Afghanistan and our commitment to Afghanistan post-2014.

A considerable focus of our discussion was on counterterrorism and, more specifically, on the issue of foreign fighters. People going to fight in conflicts around the world, leaving their countries, going to Syria, Iraq, and elsewhere and becoming radicalized and taking part in extremist terrorist activities is, in fact, an international problem. It’s a concern for Australia, it’s a concern for the United States, but it’s a topic that’s raised increasingly in countries in our region and across Europe. It’s an international problem, but the barbaric ideology that these extremists embrace is, in fact, a threat to our way of life, a threat to our values, and we discussed ways that we can bring this issue to international attention. So a major focus on the issue of foreign fighters.

Overall, it was a most productive and most useful exchange from Australia’s point of view. We came up with a number of significant initiatives. The communiqué sets out the detail of it, but I want to thank both Secretary Kerry and Secretary Hagel for making the trip down under. We are always delighted to see you in our part of the world. You’ve been in Asia and Southeast Asia on so many occasions, and we always want you to come to Australia and count us in on your discussions. The relationship has never been stronger, and we have appreciated your commitment and focus on the issues that are of mutual concern and of concern to Australia’s national interest.

I’ll ask the Minister for Defense to say a few words and then pass over to our American friends.

DEFENSE MINISTER JOHNSTON: Well, thank you, Julie. To Secretary Kerry and Secretary Hagel, firstly, thank you for the magnanimous, generous, and gracious way that you’ve entered into our discussions. I must say I know I speak for Julie, it’s an absolute delight to be with you in your busy schedules to discuss matters that are regionally significant, but also in the wider area of world events, the problems we both are worried about, how best to confront them and how best Australia can help the United States in its very excellent leadership, particularly in this region.

Part of that is, of course, the rebalance, and we’re delighted to have 1,200 – approximately 1,200 U.S. Marines in Darwin. That, ladies and gentlemen, is going very seamlessly, very well, and it is a classic win-win situation. So today’s discussions have gone very cordially, very constructively, and very frankly as you would expect with partners and friends of long standing. So the rebalance has been, from our point of view, delivering the Marines into Darwin very, very successful so that our region has, of course, benefitted – and I reiterate this to the Secretaries – benefitted from the stability of the past 20, 30 years. That stability has been delivered by U.S. leadership and of course the booming middle class of Southeast and East Asia has been the end dividend of that stability.

And so today we’ve enjoyed discussing the challenges, what we perceive coming over the horizon in the future, matters such as counterterrorism, foreign fighters, which we both, as two countries have to deal with. Can I say that both Secretary Hagel and Secretary Kerry bring enormous amount of wisdom and wit to our discussions. And I must say to you the discussions have been most enjoyable. We share interoperability across so many fronts. We have very large numbers of people embedded in the United States in the U.S. military. We’ve got 400 people still in Afghanistan working with the Americans and our other ISAF partners going forward. I want to end on that note by just saying thank you very much for the trust. When we are doing things together in the defense space, trust is a really important part of that, and trust leads to great friendship, and I think we have great friendship, and I thank you both for that.

SECRETARY KERRY: Well, thank you very much, Julie. Good afternoon to all of you. And let me just – let me begin by saying that I am really delighted to be here with Secretary Hagel at the Australia-United States Ministerial Meeting. This is my first AUSMIN, as we call it, in Australia, and I really want to thank Foreign Minister Bishop and Defense Minister Johnston for their unbelievably warm welcome over the course of these two days. We had a very productive dinner discussion last night just over the way from here, and today we both join together in thanking Governor-General Cosgrove for opening up his magnificent residence to us. It afforded a really superb venue to be able to sit here quietly and be able to really dig in in very personal ways to very complicated issues, and we thank them for this special venue and special friendship that goes with it.

Secretary Hagel and I both want to begin any comments that we make here today with an expression of our deepest condolences to the families and the loved ones of the 38 Australians who lost their lives in the Flight 17 – Malaysia Airlines Flight 17. We both want to affirm to Australia and to the world that we absolutely demand, as does Australia, justice for this unconscionable crime. And just as we stand together on so many issues from the Asia Pacific to the Middle East to Afghanistan and beyond, we will see this through together.

I’ve also had the very good fortune to work with our Australian friends for many years, 29 years in the United States Senate and a number of years as chairman of the Foreign Relations Committee. So when Secretary Hagel and I served in Vietnam – slightly different times, but we both served there – we also fought alongside, side by side, with our Australian brothers who are great soldiers and great friends. In fact, Australian men and American men and women – men and women on both sides – have fought side by side in every major conflict since World War I, and we’re proud of the friendship and the trust, as Minister Johnston was just saying, that has grown out of this longtime relationship.

I was very privileged to join Secretary Hagel and Foreign Minister Bishop and Defense Minister Johnston last year at Arlington National Secretary where we honored this special bond between Australians and the United States, a bond that can only be forged through the sacrifice of war, which we both understand. So I thank Australia at this moment, particularly for stepping up yet again with their offer of humanitarian assistance in Iraq at this moment of crisis. The new Iraqi leadership has a very difficult challenge. It has to regain the confidence of its citizens by governing inclusively, but also by taking steps to demonstrate their resolve, and we’re going to continue to stand with the Iraqi people during this time of transition.

And though we live in different hemispheres and at opposite ends of the globe, the United States could ask for no better friend and no closer ally than Australia. Australia is a vital partner in so many different endeavors. It is vital as we deepen the U.S. economic engagement throughout the Asia Pacific, as we engage in the rebalances of – both ministers have referred to it, which will bring the United States even more to the effort to help create a larger economic transformation in the region and to bring about a rule of law-based structure where everybody understands the rules and where it is a race to the top, not to the bottom. We also are working hard together to try to complete a critical component of that race to the top, which is the Trans-Pacific Partnership trade agreement.

We also discussed, as has been mentioned by both ministers, difficult regional and global security challenges. We didn’t need to struggle to find commonality in our understanding of the fact that we are living in one of the most complicated moments of transformation and transition all across this planet. Instant communications, massive numbers of mobile devices, massive amounts of information moving at lightning speed around the globe informing everybody about everything all of the time. And that has changed politics, and it has changed international relations. It raises expectations among people all over the world. And it challenges politics in terms of building consensus around decisions.

So we face a lot of these challenges together in today’s world, and that is why it is so important to have the kind of discussion that we had here today where we lay out every one of those challenges and try to figure out how do we do this better, how can we have greater impact, how do we bring more people to the table in order to affect change. It has enabled both of our countries to stand with the people of Ukraine, support long-term progress in Afghanistan, reduce tensions in the South China Sea, collaborate in the United Nations Security Council on everything from Iran to Syria to restricting trade in illicit small arms and weapons and even in our fellow human beings.

Today’s session allowed us to consult and coordinate in depth on these issues and on the challenges that we face in Iraq and Gaza, and we also agreed in conjunction with our discussion about the foreign fighters that Julie raised a moment ago that we are going to work together to assemble a compendium of the best practices in the world today regarding those foreign fighters, and we intend to join together in order to bring this to the United Nations meeting next month and put it on the agenda in a way that will elicit support from source countries as well as those countries of concern.

Earlier today, as you all know, we signed a Force Posture Agreement that will further strengthen and deepen the U.S.-Australian defense relationship, and we agreed to expand our trilateral cooperation with Japan. So you can see that we covered a range of very important issues in the Asia Pacific region, including our commitment to the peaceful denuclearization of the Korean Peninsula. And the United States – I want to make this clear – is absolutely prepared to improve relations with North Korea if North Korea will honor its international obligations. It’s that simple. But make no mistake we are also prepared to increase pressure, including through strong sanctions and further isolation if North Korea chooses the path of confrontation.

So I join Secretary Hagel in thanking Foreign Minister Bishop and Defense Minister Johnston for very productive discussions over the past day, and we all look forward to continuing our work together in the years to come in order to address these complex challenges.

SECRETARY HAGEL: John, thank you, and I, too, appreciate an opportunity to be with Secretary Kerry here for the AUSMIN meetings that we are concluding this afternoon. I want to add my thanks as well to our hosts, Minister Bishop, Minister Johnston, and also to Governor-General Cosgrove for his hospitality here at Admiralty House. So thank you.

On a visit to the United States in 1960, the great Australian prime minister, Robert Menzies, said that strength is admirable, but only for the responsibilities it accepts and discharges. America, Australia, and this historic alliance has always, always sought to live up to those responsibilities around the world. Today’s agenda for the U.S.-Australia alliance, you have heard, span issues ranging from the South China Sea to Iraq where Secretary Kerry and I expressed our appreciation for Australia’s offer to contribute to the humanitarian and relief operations and where America is prepared to intensify its security cooperation as Iraq undertakes and makes progress towards political reform.

We also addressed the crisis in Ukraine as has been noted and Australia’s tragic loss of 38 citizens and residents aboard MH-17. And as I have said, as Secretary has – Secretary Kerry has expressed, our condolences to the people of Australia and especially the families of those who were lost in that tragedy. America will continue to work with Australia as we have said clearly and plainly to provide requested support and assistance.

Today we have reinforced the foundation of our alliances, defense, and security cooperation by, as Secretary Kerry noted, signing the U.S.-Australia Force Posture Agreement. This long-term agreement on rotational deployment of U.S. Marines in Darwin and American Airmen in northern Australia will broaden and deepen our alliance’s contributions to regional security and advance America’s ongoing strategic rebalance in the Asia Pacific. At today’s AUSMIN having just come from New Delhi and having consulted closely with our Japanese and Korean allies and ASEAN defense ministers, I see a new, committed resolve to work together, to work together to build a security system across this Indo-Pacific region, recognizing the independent sovereignty of nations, respecting that sovereignty, but also recognizing the common interests that we all have for a stable, peaceful, secure world.

The U.S. Australia alliance is spurring this progress and will remain a bedrock for a stable and secure order. Along with Secretary Kerry, let me again thank our hosts, Minister Bishop, Minister Johnston, and Governor-General Cosgrove for hosting this year’s AUSMIN and what they continue to do as we continue to collaborate and work together on some of the great issues of our time. As Secretary Kerry has noted, we live in an immensely complicated world, but a world that is still full of hope and promise if we endeavor to bring resolute, strong leadership, leadership that is committed to these virtues and values and principles that we all share and living up to the highest responsibilities as Prime Minister Menzies once said. Thank you very much.

MODERATOR: Okay. Thank you. We’re now going to have four questions, and I think Laura, you’re going to kick off. Thank you.

QUESTION: Laura Jayes from Sky News. Secretary Kerry, Secretary Hagel, thank you. Ministers, thank you. I wanted to first go to Russia, and our Australian Government has talked about greater sanctions on Russia, leaving that option open, uranium perhaps. Secretary Kerry, is that a path you would like to see Australia go down? There’s also the question of Vladimir Putin attending the G20 Summit. I wondered if you have a comment on that.

And also, as I guess a little bit out of that direct realm, China in all of this. We’ve seen the U.S. and EU impose quite strong sanctions against Russia in the last couple of months, but China has, I think, helped to dilute that in some ways, if you, Secretary Kerry, could address those questions, also, Minister Bishop as well.

SECRETARY KERRY: Well, thank you very much. On the subject of sanctions with respect to Russia, we are very understanding of our friend, Australia’s deep, deep anger and its need for justice with respect to what has happened. This is an unconscionable crime on a huge international order that findings already, without the full investigation being done – and we are pressing for a full investigation, because nothing is complete until you have a full investigation. But there is no question – and we’ve said this publicly previously, but that this type of weapon and all the evidence of it was seen on our imagery. We saw the takeoff. We saw the trajectory. We saw the hit. We saw this airplane disappear from the radar screen. So there’s really no mystery about where it came from and where these weapons have come from.

But we need to have the complete investigation, obviously, to legitimize whatever steps are going to be taken as we go down the road, and that’s why we’re all pressing so hard for that. The foreign minister of Australia traveled to New York, made an eloquent plea working with our ambassador and others there, Frans Timmermans of – the Dutch foreign minister spoke eloquently about what had happened. And the world can’t just sort of move by this and gloss by it. People need to remember this, because holding people accountable is essential not just to justice for what happened, but to deterrence and prevention in the future, and we don’t want to see these kinds of things ever repeated again.

So we’re open, but we haven’t made any decisions. I’m not sure Australia has either yet. We need to see what’s happening, but our hope and prayer – our hope is that in the next days and weeks we can find a way for President Poroshenko and Ukraine to be able to work with the Russians to provide the humanitarian assistance necessary in the east to facilitate the thoroughness of the investigation, to begin to bring the separatists to the degree that they are Ukrainian into the political process, and for those who are not Ukrainian, they need to leave the country, and there needs to be a process worked out where the supplies stop coming in both in money and arms and support and people and Ukraine is allowed to begin to protect its sovereignty and define its future. Our hope is that that can happen through the diplomatic process, but we’ve all learned that we need to be cautious and strong at the same time in our responses and clear about what is acceptable and what is not acceptable.

With respect to the G20 Summit, et cetera, no decisions have been made at this point in time. I think a lot of the attitudes about the – about that issue from the various countries attending can, frankly, be determined and impacted to some degree in what happens in these next days and weeks.

And finally, with respect to China and what is going on, we have said again and again – and we just had a Strategic and Economic Dialogue in China, Secretary Jack Lew of the Treasury and I were there, with two days of discussions, and we made it very clear to China that we welcome the rise of China as a global partner, hopefully, as a powerful economy, as a full participating, constructive member of the international community, and we want China to participate in constructive ways, whether it’s in the South China Sea or with respect to Japan and South Korea, with North Korea, with other issues that we face. We are not seeking conflict and confrontation, and our hope is that China will, likewise, take advantage of the opportunities that are in front of it to be that cooperative partner.

And so there are always differences, shades – there are differences with respect to certain issues, and we’ve agreed to try to find those things where we can really cooperate. We’re cooperating in Afghanistan, we’re cooperating on nonproliferation with respect to Iran, we’re cooperating to get the chemical weapons out of Syria, we’re cooperating on counterterrorism, we’re cooperating on nuclear weaponry and on the reduction of nuclear arms. So there are plenty of big issues on which we cooperate with Russia even now every day, and our hope is that on those things where we’ve obviously had some disagreements with China or with Russia that we can both find a diplomatic path forward, because everybody in the world understands the world will be better off if great power nations are finding ways to cooperate, not to confront each other.

FOREIGN MINISTER BISHOP: If I could put this question of sanctions in context, MH-17 was a commercial airplane flying in commercial airspace carrying 298 civilians. Passenger numbers included 80 children, and this plane was shot down, we believe, by a surface-to-air missile just inside eastern Ukraine. The deaths of so many people, including 38 Australian citizens and residents was shocking, and the implications for international aviation are profound. So after completing our humanitarian mission of removing the remains and personal effects from the crash site, we are now focused on the investigation into how this came to be, how this plane was shot down, and who did it, because those culpable for creating the circumstances or for actually causing the downing of this plane must be held to account, and the grief of our citizens demands answers. They must be held to account, the perpetrators, and brought to justice.

All the while, when Australian and Dutch teams, unarmed police, humanitarian teams were seeking to get to the crash site, all the while, Russia was supplying more armed personnel, more heavy weaponry over the border into eastern Ukraine. They didn’t cease, and in fact increased their efforts. And instead of listening to international concerns about a ceasefire and the need for a humanitarian corridor for us to conclude our work, on the very day that Australia was holding a national day of mourning to grieve the loss of so many Australian lives, Russia chose to impose sanctions on Australia through an embargo on our agricultural exports.

We are rightly focused on the investigation, supporting the Netherlands, Malaysia, Belgium, and Ukraine as part of an investigation team. But on the question of sanctions, we will consider the options available to us, but our focus at present is to bring closure to the families who are still grieving over this barbaric act of shooting down a plane that killed their loved ones.

As far as the G20 is concerned, as Secretary Kerry indicated, there’s been no decision. The G20 is an economic forum. There would have to be a consensus view as to whether or not steps should be taken in relation to President Putin’s presence here in Australia.

On China, I must say that China was extremely supportive of our resolution in the United Nations Security Council. As you’d be aware, it was a unanimous resolution. It was supported by all 15 members of the UN Security Council, and China has suffered a great loss through the disappearance of Malaysian Airlines Flight MH-370. Australia has done what we can to help in that search effort, and I have committed to Foreign Minister Wang Yi last weekend that Australia will continue to help search for that missing plane. So China grieves with us over the loss of people aboard airplanes that have crashed or disappeared in such extraordinary circumstances.

On the question of China’s support beyond MH-17, Russia’s behavior in recent months has been to breach the sovereignty of Ukraine, a neighbor, and this is not behavior that China, one would think, would condone. It’s behavior that China has pointed out to others would be unacceptable if it were to occur in China’s sphere of the world. So we’ll continue to consult, discuss with China the impact of the Russian-Ukrainian tensions, the conflict, the need for ceasefire, the need for humanitarian assistance and hope that China sees it as we do, an unacceptable breach of Ukraine’s sovereignty and urge Russia to stop the flow of weapons, stop the flow of armed personnel. Russia claims to be concerned about a humanitarian situation in Ukraine when the first thing it should do is stop sending weapons and armed personnel to the so-called separatists.

QUESTION: I’m (inaudible). I’m a reporter with Bloomberg News. Questions on Iraq first to Secretary Hagel: What kind of direct military assistance is the Pentagon prepared to offer the Kurds, and does it include sending heavy weapons to them?

And if I can ask Secretary Kerry: Can you talk a little bit more about what the United States is prepared to do once there is a new Iraqi Government? And both of you, do you share any concern that directly aiding and supporting the Kurds could potentially encourage them to break away from a united Iraq in the future?

And to the Australian officials, the U.S. has said it will assist and train Iraqi troops to combat ISIL. And have you been asked and are you prepared to send any of your troops to train the Iraqi forces? Thank you.

SECRETARY HAGEL: The United States Government is working with the Iraqi Government, the Iraqi security forces to get military equipment to the Peshmerga. That is Iraqi military equipment. We – our American forces through CENTCOM are helping get that equipment to Erbil. As to your question regarding a breakaway status of the Kurds into an independent Kurdistan, I think it’s important that – and we have taken this position and Secretary Kerry, who has been directly involved in this, may want to amplify on this point – but it’s important to note that America’s position is a unified Iraq.

You all know that the Council of Representatives announced today that it had selected a new prime minister, a new Shia prime minister. That then completes the new senior officers that the Counsel of Representatives have put forth, a new speaker of the parliament, a new president, a new prime minister. That’s good news. Now the next step has to move forward in getting that government ratified and in place, and we look forward to working with that new government.

SECRETARY KERRY: Well – sorry, go ahead. No, please.

DEFENSE MINISTER JOHNSTON: With respect to the Australian contribution to those people who are in the mountains around Erbil, we are going to be participate and deliver humanitarian relief in the nature of being able to drop supplies to them, and that is a (inaudible) capability we have long held probably since East Timor. And that’s the role that we’ll carry out, and we’ll fit into and be part of the planning of the United States and other partners who want to assist on that humanitarian basis, and that’s the way we’ll go forward. Sorry, John.

SECRETARY KERRY: No, no, no. That’s important, and I appreciate it. Let me just begin by congratulating Dr. Haider al-Abadi on his nomination, which now offers him an opportunity to be able to form a government over the next 30 days. And we urge him to form a new cabinet as swiftly as possible, and the U.S. does stand ready to fully support a new and inclusive Iraqi Government, particularly in its fight against ISIL.

Now I’m not going to get into the details today before a new prime minister is there and a government is there and we’ve talked to them and we know what they think their needs are and how they define the road ahead, but I will tell you that without any question, we are prepared to consider additional political, economic, and security options as Iraq starts to build a new government and very much calculated to try to help stabilize the security situation, to expand economic development, and to strengthen the democratic institutions. Those will be the guidelines.

We also would note that there are already a significant group of programs in place under the strategic framework agreement, and we, with a new government in place, would absolutely look to provide additional options, and we would consider those options for sure in an effort to strengthen an effort. Let me be very clear we have always wanted an inclusive, participatory government that represents the interests of Shia, Kurd, Sunni, minorities, all Iraqis. That’s the goal. And our hope is that when there is a new government, we will all of us in the international community be able to work with them in order to guarantee that outstanding issues that have just stood there absolutely frozen for years now, like the oil revenue law or the constitutional reform, all of these things need to be resolved, and that will really determine the road ahead.

Now with respect to the Kurds, we welcome increased coordination and support between the Iraqi security forces and the Kurdish forces. That is taking place right now. It’s quite unique, and we think that’s a signal of a growing potential for cooperation between Baghdad and Erbil. So as we’ve said last week, ISIL has secured certain heavy weaponry, and the Kurds need additional arms, and what is happening now is through the government in Baghdad, some of that assistance is being provided directly to the Kurds. I think that raises as many questions about the possibility of greater cooperation as it does with the possibility of further efforts for separation.

What I do know is from my own meetings with President Barzani recently, he is very committed to this transition in Baghdad, in Iraq, in the government. He is committed to trying to be a force for a strong federal government that works for all Iraqis, and that’s the only subject on the table at this point in time.

QUESTION: Secretaries, Ministers, Greg Jennett from the Australian Broadcasting Corporation. This is to any or all of you, but perhaps starting with you, Secretary Kerry. Following on from that question on Iraq and noting that you don’t want to get into details, but that stabilizing security is an option that the U.S. is prepared to explore with the government there, what are the circumstances in which the U.S. could look to allies, including Australia, to support security with further military commitments, if you could outline at least the parameters in which you would start that conversation.

And also on homecoming jihadists from the Middle East, what is the shared approach? Practically, what sort of initiatives are we talking about? As this – things before prosecution, after incarceration, before interrogation, is there any example of the types of actions you’d like to see the world take jointly?

SECRETARY KERRY: Well, let me let a couple of my colleagues – I’ll turn to Julie to address the issue on the foreign fighters, because we had a pretty robust discussion, and perhaps even Mr. Johnston and Hagel want to tackle that. So let me just answer the first part of the question, and they can answer the second.

The question is: How can we look towards this issue of stabilization and military assistance? And you said: Where would the discussion begin? Well, let me tell you in the simplest terms where the discussion begins. There will be no reintroduction of American combat forces into Iraq. That is the beginning of the discussion. This is a fight that Iraqis need to join on behalf of Iraq, and our hope is and the reason President Obama has been so clear about wanting to get the government formation before beginning to tackle ISIL in the most significant way excepting the kind of emergency circumstances that have arisen is because if you don’t have a government that is inclusive and that works, nothing else will work plain and simply.

So you have to have a government that can begin to be inclusive where the forces of Iraq are not a personal force defined by one particular sect and sworn to allegiance to one particular leader, but they truly represent Iraq, and Iraq’s future in a broad-based sense. And I think that everybody understands that is the direction that we have to go. Lots of countries who have an interest in stability in the region have already offered different kinds of assistance of one kind or another, but nobody, I think, is looking towards a return to the road that we’ve traveled. What we’re really looking for here is a way to support Iraq, support their forces with either training or equipment or assistance of one kind or another that can help them to stand on their own two feet and defend their nation. That’s the goal. That’s where the conversation begins, whoever is prime minister, and I think everybody is crystal clear about that.

We are convinced that with a unified effort by Iraqis, and particularly if there is a return to the kind of localized efforts that existed in the Sons of Anbar or the Iraqi Anbar Awakening, as it’s referred to, that there will be plenty of opportunity here for a pushback against ISIL forces which is why the restoration of a unified, inclusive government is so critical as a starting point. I think the President felt that that process was well enough along the way with the selection of a speaker, the selection of a president, and the clear movement of people towards a candidate for prime minister that he felt comfortable that the urgency of the situation, of protecting potential people moving towards Erbil or the extraordinary atrocities that were beginning to take place with respect to the Yazidis that it was critical to begin to move in that regard, and that’s why he made that decision, and I think it was a wise decision.

FOREIGN MINISTER BISHOP: Australia has long joined the international community in calling for a more inclusive government in Iraq, and the political instability that we have seen that hasn’t addressed the concerns of the Sunnis, hasn’t addressed the concerns of minorities, is of course a matter of grave concern. So political stability is the key for Iraq encountering the influence and impact of these extremist groups, including ISIL. And that brings me to the issue of foreign fighters. The Australian media has, this week, published some truly shocking photographs I assume have been verified of an Australian family in the Middle East holding up a severed head, a seven year-old child is involved in this barbarous display of ideology, and they’re Australian citizens.

So when the government says that there is a real domestic security threat from the phenomenon of foreign fighters, we have evidence that there are a significant number of Australian citizens who are taking part in activities in Iraq and parts of Syria, extremist activities, terrorist activities. Our fear is that they will return home to Australia as hardened, homegrown terrorists and seek to continue their work here in Australia. And it’s not a concern just of this country. As I mentioned earlier, at the East Asia Summit, a number of countries raised this issue of foreign fighters leaving countries, going to fight in these conflicts and coming home with a set of skills and experience as terrorists. That truly poses one of the most significant threats that we’ve seen in a very long time.

Our discussion today focused on what we can do to counter this risk. Australia, as the Australian media would be well aware, has announced a series of legislative reforms that deal with matters including the burden of proof for people’s presence in prescribed areas like Mosul, and why Australian citizens would be defying the Department of Foreign Affairs and Trade advice to not go to Mosul demands explanation. We are looking at issues involving passports and the cancellation and the ability to suspend passports so that we can investigate the activities of people within Australia and deal with them on their turn.

We know that one of the Australian citizens involved in these activities in the Middle East in Iraq had, in fact, been convicted of terrorist activities in Australia, had served time and then left Australia under a false identity. We also know that in coming weeks and months, a significant number of those convicted of terrorist activities in Indonesia will be released. Now the question is: Have they been de-radicalized in their time in prison? Clearly in the case of the Australian citizen, not. And we hold similar fears for those inmates leaving Indonesian jails. So the whole question of what we can do when these people are detained and what we can do if they’re prosecuted and found guilty and spend time in jail, they are matters that we have to look at. The whole question of reaching out to the communities in Australia and getting communities to assist us in fighting this extremist threat is important.

So as we were discussing these issues, Secretary Kerry said this is something we’ve got to bring to the attention of the international community. It’s a shared issue across Australia, Indonesia, Malaysia, Philippines, Europe, in Pakistan, in Great Britain, Canada. There are a number of countries across the globe reporting instances of citizens becoming extremist fighters in the Middle East. And so this idea of having a forum, discussion at UNGA Leaders’ Week is something that I believe will be well supported because so many countries are facing this threat, and if we can exchange ideas and practices and suggestions as how we can deal with it, then I think we will have made a great step forward, and so we certainly will support the United States and work very hard to ensure that we collectively deal with this growing threat to the security of our nation.

SECRETARY KERRY: Can I add one thing to that?

FOREIGN MINISTER BISHOP: Sure.

SECRETARY KERRY: I apologize, but I just want to underscore this image, perhaps even an iconic photograph that Julie has just referred to is really one of the most disturbing, stomach-turning, grotesque photographs ever displayed, this seven year-old child holding a severed head out with pride and with the support and encouragement of a parent with brothers there. That child should be in school, that child should be out learning about a future, that child should be playing with other kids, not holding a severed head and out in the field of combat. This is utterly disgraceful, and it underscores the degree to which ISIL is so far beyond the pale with respect to any standard by which we judge even terrorist groups, that al-Qaida shunted them aside. And that’s why they represent the threat that they represent. And it’s no accident that every country in the region is opposed to ISIL.

So this threat is so real, an African – north African president of a country recently told me that 1,800 identified citizens of that country have gone to Syria to fight. Believe it or not, 1,100 of them they knew had already been killed because their bodies had been returned or they were tallied as killed. Well, that leaves 7 or 800 still out there that they fear are going to return to that country knowing how to fix an IED, knowing how to arm weapons, knowing how to explode a bomb, knowing how to build a suicide vest or something like that. And this ideology is without one redeeming quality of offering people a job or healthcare or an education or anything other than saying don’t live any other way but the way we tell you.

So this is serious business, and we understand that, and I think the world is beginning to come to grips with the fact, the degree to which this is unacceptable. And we have a responsibility to take this to the United Nations and to the world so that all countries involved take measures ahead of time to prevent the return of these fighters and the chaos and havoc that could come with that, and I just wanted to underscore that with the – with Minister Bishop, because we’re all joined together in this effort, and that’s why we’re going to take it to the United Nations in the fall and try to get best practices put together by which all countries can begin to act together in unison in order to react to it.

QUESTION: Leslie Wroughton from Reuters. Please excuse if I don’t stand up. I’ve got too much equipment going here. Turning back to Iraq, you said that the U.S. was prepared to consider security, political, and economic options as Iraq forms this new government. Can you get into more specifics about that? We’ve heard some vague statements on how you ought to prepare to support. Does this include further airstrikes to push back ISIS? Once the government comes in, how do you secure that stability?

And then number two, on Ukraine, NATO Secretary General Rasmussen said today there’s a high probability of a Russian intervention in Ukraine. What specific steps, again, are you taking through diplomatic channels to address this. You talked about your hopes in the next days and weeks to – that you could find a way for President Poroshenko and Ukraine to be able to work with the Russians. Are you talking about a new diplomatic effort here? And what are you talking about? Thanks.

SECRETARY KERRY: Well, let me make it clear with respect to Ukraine, diplomatic efforts have never ceased. It’s not a question of a new one; it’s a question of ongoing diplomatic efforts. We have never stopped. The President has not stopped, the Vice President, myself have all been in touch with the top leadership of Ukraine, with leadership of Russia, and others. The President of the United States talked to President Putin a few days ago. I talked to Foreign Minister Lavrov just a couple days ago. I talked to President Poroshenko a few days ago. There are a lot of conversations taking place.

And even now as we stand here, there are efforts being made with our friends, with Germany, with the Ukrainians, with Russia, with others to try to see if there’s a way to work out a way forward on the humanitarian delivery with direct contact with the ICRC. There is direct contact with the Germans and others in this effort, and the hope is that through the meetings that will take place this week, there is a way to find a means that is acceptable to deliver humanitarian assistance without the guise of a military delivery in an effort to do so against the will and wishes of the country where it is being delivered and against the norms of the ICRC, the International Red Cross, and how it would react to that.

So that’s the effort that’s underway now. It’s been a consistent, continued diplomatic effort to try to find a way forward, but obviously the humanitarian assistance needs to get there, and there are a clear set of meetings scheduled, so there’s a timeframe within which we think we’re operating, which is why I mention that.

With respect to Iraq and the stability, I want – I think Chuck Hagel should speak specifically to any of the security components of that, but I’d just say on the economic and political front, the best thing for stability in Iraq is for an inclusive government to bring the disaffected parties to the table and work with them in order to make sure there is the kind of sharing of power and decision making that people feel confident the government represents all of their interests. And if that begins to happen, then there is a way for both investment, trade, economic, other realities to help sustain and build that kind of stability.

But if you don’t have the prerequisite, which President Obama identified at the outset, of an inclusive, working government, there’s no chance for any of that. That’s why we think the steps taken, the selection of a speaker, the selection of a president, and now a prime minister-designate who has an opportunity to be able to form a government are just essential prerequisites to this process of providing stability.

Do you want to talk to the security?

SECRETARY HAGEL: I’ll just mention a couple of things. One, as you know, it was the Iraqi Government that requested the U.S. Government’s assistance with humanitarian delivery on Mount Sinjar. And we complied with that request, agreed with that request for carrying out those missions. It was also the Iraqi Government’s request of the United States Government to assist them in transferring, transporting military equipment to Erbil to help the Peshmerga. As Secretary Kerry noted and as President Obama has said, as a new government begins, takes shape, we would consider further requests from that new government.

But I would just also reemphasize what Secretary Kerry has already noted, and President Obama has made this very clear, the future of Iraq will be determined by the people of Iraq. It will not be determined by a military solution. It will require a political solution, and I think Secretary Kerry’s comments about an inclusive participatory, a functioning government is critically important to the future of Iraq. So we would wait and see what future requests that this new government would ask of us, and we would consider those based on those requests.

FOREIGN MINISTER BISHOP: Just on Ukraine, Australia welcomes the efforts of the United States to assist in preventative diplomacy between Ukraine and Russia. As I made, I hope, very clear to Vice Minister Morgulov in Naypyidaw over the weekend, yes, there is a humanitarian situation in Ukraine that is serious, and it’s likely to worsen. But if Russia were concerned about the humanitarian situation in Ukraine, the first step is to stop the flow of fighters and weapons into eastern Ukraine and the so-called separatists are very professional, very well armed with the most sophisticated of weaponry and equipment, so to cease that flow of personnel and weapons would be a start.

I also hope I made very clear that any intervention by Russia into Ukraine under the guise of a humanitarian crisis would be seen as the transparent artifice that it is, and Australia would condemn in the strongest possible terms any effort by Russia to enter Ukraine under the guise of carrying out some sort of humanitarian mission. Clearly that kind of support must come from donor countries, from the UN, from the International Red Cross, and that is our expectation.

I think that’s it, (inaudible). Yes, ladies and gentlemen, thank you very much. We will now depart, and I just want to place on record again our thanks to Secretaries Kerry and Hagel for taking part in this AUSMIN, and we look forward to seeing them next year.

SECRETARY KERRY: Thank you.

# # #

Top News from the European Commission 19 July – 30 September 2014

European Commission

Top News

Brussels, Friday 18 July 2014

Top News from the European Commission
19 July – 30 September 2014

Background notes from the Spokesperson’s service for journalists
The European Commission reserves the right to make changes

Tuesday 22 July: Commission moves a step closer to an ‘EU Urban Agenda’ as citizens are asked their views on the ideal European city

The news:

On Tuesday, 22 July, European Commissioner for Regional Policy, Johannes Hahn will officially launch a public consultation seeking the opinions of European citizens on a future EU Urban Agenda – what form it should take and how it should be put into action. The Commissioner is calling for a wide engagement by stakeholders and inhabitants of cities.

The public consultation marks the adoption by the Commission of a formal Communication: “The Urban Dimension of EU Policies”, which proposes a set of questions for consultation aimed at further clarifying the need for an EU urban agenda, what its objectives should be and how it could function.

The background:

While 72 % of the total EU population live in cities, towns and suburbs, this proportion is likely to reach more than 80% by 2050. Currently, over two-thirds of all EU policies directly or indirectly affect towns and cities – such as in the fields of transport, energy, and environment. An Urban Agenda would aim for a more integrated approach to policy development, to ensure consistency and avoid contradictions.

A growing number of calls have come from the European Parliament, the Committee of the Regions, city associations and cities themselves for more involvement of cities in the design of EU policies and a greater coherence in the way Europe’s institutions tackle urban challenges.

The event:

Commissioner Hahn will make a press statement at the European Commission midday briefing in Brussels on Tuesday 22 July.

IP and MEMO will be available on the day.

  1. Available on EbS

The sources:

“Cities of Tomorrow: Investing in Europe” forum

EU Urban Policy Portal

  1. Video stock shots of Urban EU co-financed projects available on Ebs http://ec.europa.eu/avservices

Twitter @EU_Regional @JHahnEU #eucities

The contacts:

Shirin Wheeler +32 2 296 65 65

Annemarie Huber +32 2 299 33 10

Wednesday 23 July: Commission presents its Energy Efficiency Communication

The news:

On 23 July, the European Commission will adopt the Energy Efficiency Communication. The Communication consists of an in-depth analysis of the EU’s progress towards its 2020 energy efficiency target and an energy efficiency framework for the following years up to 2030.

It includes an examination of the current and future benefits of energy efficiency for European citizens and the economy.

The background:

The Energy Efficiency Communication is an important follow-up to the 2030 communication on energy and climate change which proposed 2030 targets for greenhouse gas reductions and renewable energy – 40% and at least 27% respectively.

The event:

An IP and a MEMO will be available on the day.

  1. Available on EbS

The sources:

For more information on the Energy Efficiency Communication:

http://ec.europa.eu/energy/efficiency/events/2014_energy_efficiency_review_en.htm

For more information on the Energy Efficiency Directive:

http://ec.europa.eu/energy/efficiency/eed/eed_en.htm

The contacts:

Sabine Berger +32 2 299 27 92 sabine.berger@ec.europa.eu

Nicole Bockstaller +32 2 295 25 89 nicole.bockstaller@ec.europa.eu

Wednesday 23 July: Energy efficiency, human capital and SMEs to receive bulk of EU Cohesion Policy investments from 2014-2020

The news:

The European Commission is set to publish its 6th Report on Economic, Social and Territorial Cohesion on 23 July, analysing the evolution of regional disparities in the Union over the past 4 year and the varying degrees of success in overcoming the impact of the crisis.

While unemployment has grown in almost all regions over that time, the Report highlights how the reform of EU Cohesion Policy, and its closer alignment with the Europe2020 Strategy, is turning things around and delivering growth and creating jobs.

The report outlines how investments will be focused on key areas like energy efficiency, employment, social inclusion and SMEs to get the most out of investments to the benefit of citizens.

It also finds that Cohesion Policy has cushioned the dramatic decline of public investment, injecting much needed liquidity in many Member States and creating vital financial stability.

The background:

The last Cohesion Report came out in late 2010 and emphasised the need for investments to support the realisation of the Europe2020 growth goals, with stricter pre-conditions and an increased focus on results. EU Cohesion Policy, as reformed for the 20014-2020 period has become highly strategic and modernised, with measureable impacts.

Investments now focus even more on the low-carbon economy, innovation and SMEs, quality employment, skills and social inclusion Meanwhile, new rules and pre conditions for funding ensure that the right regulatory and macro-economic framework is in place so the Policy has an even greater impact for the European economy and its citizens.

The event:

The Report will be published on 23 July.

An IP will be available on the day.

The sources:

The Sixth Cohesion Forum taking place in Brussels on 8-9 September 2014 will provide an opportunity to discuss the findings of the Report in the presence of high-level politicians and policy-makers.

Further information on EU Cohesion Policy and future events at:

http://ec.europa.eu/regional_policy/index_en.htm

The contacts:

Shirin Wheeler +32 2 296 65 65

Annemarie Huber +32 2 299 33 10

Saturday 15 and Sunday 16 November: The EU at the G20 Summit in Brisbane, Australia – media accreditation open

The news:

The President of the European Commission and the President of the European Council will represent the EU at this year’s G20 Summit, which will take place on 15 and 16 November in Brisbane, Australia. Leaders are expected, amongst others, to adopt the Brisbane Action Plan, putting in place concrete short and medium-term actions to develop comprehensive strategies to stimulate growth. These will include infrastructure investments, trade barrier reductions, employment and development measures. Furthermore, G20 leaders will discuss measures to make the global economy more resilient to deal with future shocks.

The Australian Presidency has now opened the procedure for media accreditation. Journalists can apply for official accreditation until 21 October 2014, 9:00 Brussels time, at https://www.g20.org/accreditation/media_registration. As the Australian government points out, it is important that media register for accreditation via the online accreditation portal as early as possible and then apply for their visa. Accreditation will only be confirmed once the applicant has an approved visa.

The background:

The Brisbane Summit is the 9th edition of the Group of 20 (G20) Summit of the world’s major advanced and emerging economies. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union. Together, they represent around 90% of global GDP, 80% of global trade and two-thirds of the world’s population. This year, Australia welcomes Spain as a permanent invitee; Mauritania as the 2014 chair of the African Union; Myanmar as the 2014 Chair of the Association of South-East Asian Nations (ASEAN); Senegal, representing the New Partnership for Africa’s Development; New Zealand; and Singapore. The 10th edition of the G20 Summit will be hosted by Turkey in 2015.

The event:

15 and 16 November 2014: 9th edition of the G20 Summit in the Brisbane Convention and Exhibition Centre, Brisbane, Australia, with the participation of the Presidents of the European Commission and the European Council.

Press events ahead of and during the G20 Summit are to be confirmed. Press material about the EU at the G20 will be made available in the week before and during the Summit.

  1. Available on EbS

The sources:

G20 2014 Media accreditation: https://www.g20.org/accreditation/media_registration

G20 website of the Australian Presidency: https://www.g20.org/

G20 section on President Barroso’s website:

http://ec.europa.eu/commission_2010-2014/president/g20/index_en.htm

The contacts:

Pia Ahrenkilde Hansen pia.ahrenkilde-hansen@ec.europa.eu +32 (0)2 295 30 70

Jens Mester jens.mester@ec.europa.eu +32 (0)2 296 39 73

Dirk Volckaerts dirk.volckaerts@ec.europa.eu +32 (0)2 299 39 44

UN World Food Programme Head To Visit Australia As Guest And Panellist Of The B20

SYDNEY – United Nations World Food Programme (WFP) Executive Director Ertharin Cousin will make a two-day visit to Australia this week to participate in the Business 20 Australia (B20) Summit in Sydney on Thursday 17 and Friday 18 July.

The B20 Australia Summit will bring together business leaders from across G20 member countries to focus on developing a set of clear, actionable recommendations that drive global economic growth and create jobs. They will be delivered to the G20 Presidency for consideration at G20 Leaders’ Summit to be held in Brisbane, Australia in November.

On Friday, Cousin will be a panellist on “The impact of G20 growth on food security.”  As the head of the world’s largest humanitarian agency fighting hunger, Cousin will provide insight into the impact of food insecurity on the world’s most vulnerable people. She will outline how WFP is working with public and private partners to link public safety nets to economic opportunity.

Cousin’s Australian agenda also includes meetings with business leaders to explore partnership opportunities. Australian businesses lead in the Asia-Pacific region, where WFP has many programmes aimed at achieving zero hunger.

The private sector’s specialized knowledge and expertise can help WFP assist hungry people more quickly and efficiently and through its networks reach new audiences to raise awareness and funds. On average, over the past 5 years, WFP’s private partners have ranked as WFP’s ninth largest donor, with cash and in-kind contributions totalling US$84.4 million in 2013 alone.

This is Cousin’s fourth visit to Australia since becoming WFP Executive Director in 2012.  As one of WFP’s strongest advocates, the Government of Australia has consistently been among WFP’s top 10 donors, playing a critical role in the Asia-Pacific region. As Asia undergoes substantial and dynamic economic and social changes, the Australian government’s commitment to the region, and regional stability and security is reflected in its partnership with WFP’s programmes.

To date in 2014, Australia has contributed over US$20.5 million to WFP programmes in Asia such as Bangladesh, Pakistan, Myanmar, Afghanistan, Lao PDR and DPR of Korea.

For B20 media registration: https://b20.centiumsoftware.com/ei/cm.esp?id=7&start=eiscript&cd=39427&p…

#                              #                                 #

WFP is the world’s largest humanitarian agency fighting hunger worldwide, delivering food in emergencies and working with resilience. In 2013, WFP assisted more than 80 million people in 75 countries.

Follow us on Twitter @wfp_media

For more information please contact (email address: firstname.lastname@wfp.org):
Emilia Casella, WFP/Rome, Tel. +39 06 6513 3854, Mob. +39 347 9450634
Monica Salvitti – Communications Consultant, Sydney, Tel. + 61 400 406 886. Email: Monica.salvitti@gmail.com

U.S.-China Relations

Introduction

Chairman Menendez, Ranking Member Corker, Members of the Committee, thank you for the opportunity to testify today on U.S.-China relations. It is also a great honor to be participating in today’s hearing with one of our nation’s most accomplished diplomats, Ambassador Stapleton Roy – a friend, former colleague, and one of the foremost experts on U.S.-China relations. Ambassador Roy’s contributions to the U.S.-China relationship have been invaluable, and I look forward to hearing his insights.

I would also like to take this opportunity to thank you, Mr. Chairman, for your leadership and to acknowledge this Committee’s contributions to the rich bipartisan tradition of engaging China. I have found it extremely valuable to work closely with the Committee’s Members, and in particular with the Asia Sub-committee, in advancing U.S. interests vis-à-vis China and the Asia-Pacific region as a whole.

Overall Bilateral Relations

This year marks the 35th anniversary of the establishment of official diplomatic relations between the United States and China. We have made remarkable progress since the era of back-channel messaging and secret trips. The scope of today’s U.S.-China relationship was unimaginable when President Nixon made his historic visit in 1972 to China.

Yet there is still enormous potential for progress in the U.S.-China relationship. Progress that will yield benefits to the citizens of both countries, our neighbors, and the world. To realize this progress and these benefits, we seek to ensure that the relationship is not defined by strategic rivalry, but by fair and healthy competition, by practical cooperation on priority issues, and by constructive management of our differences and disagreements. Where interests overlap, we will seek to expand cooperation with China. These areas include economic prosperity, a denuclearized Korean Peninsula, peaceful resolution of the Iranian nuclear issue, and a reduction in the emission of greenhouse gases. Where they diverge – and we have significant and well-known areas of disagreement – we will work to ensure that our differences are constructively managed.

Mr. Chairman, there are those who argue that cold war-like rivalry is inevitable and that the United States and China are condemned to a zero-sum struggle for supremacy, if not conflict. I reject such mechanistic thinking. As anyone who has served in government can tell you, this deterministic analysis overlooks the role of leaders who have the ability to set policy and to shape relationships. It gives short shrift to the fact that our two economies are becoming increasingly intertwined, which increases each side’s stake in the success of the other. It undervalues the fact that leaders in Washington and Beijing are fully cognizant of the risk of unintended strategic rivalry between an emerging power and an established power and have agreed to take deliberate actions to prevent such an outcome. And it ignores the reality of the past 35 years – that, in spite of our differences, U.S.-China relations have steadily grown deeper and stronger – and in doing so, we have built a very resilient relationship.

We view China’s economic growth as complementary to the region’s prosperity, and China’s expanded role in the region can be complementary to the sustained U.S. strategic engagement in the Asia-Pacific. We and our partners in the region want China’s rise to contribute to the stability and continued development of the region. As President Obama and Secretary Kerry have made very clear, we do not seek to contain China; to the contrary, we welcome the emergence of a stable, peaceful, and prosperous China. We believe all countries, and particularly emerging powers like China, should recognize the self-benefit of upholding basic rules and norms on which the international system is built; these are rules and norms which China has participated in formulating and shaping, and they are rules and norms that it continues to benefit from. In this context, we are encouraging China to exercise restraint in dealing with its neighbors and show respect for universal values and international law both at home and abroad.

A key element of our approach to the Asia-Pacific region, often called the rebalance, is strengthening America’s alliances and partnerships in the region. This contributes directly to the stable security environment that has underpinned the region’s – and China’s – dramatic economic growth and development.

A second element is working to build up regional institutions in order to uphold the international rules-based system and create platforms for the countries and leaders to work on priority strategic, economic, and other issues. These institutions help develop habits of cooperation and promote respect for the interests of all parties.

A third key element has been expanding and deepening our relationships with important emerging countries such as China, including through regular and high-level dialogue.

In just two weeks, our countries will hold the sixth round of the U.S.-China Strategic and Economic Dialogue – the “S&ED” – in Beijing. This annual dialogue is unique in its level and scope. It is led on the U.S. side by Secretaries Kerry and Lew and brings a number of Cabinet-level and other senior U.S. government officials together with their Chinese counterparts to work on the major issues facing us. The breadth of the agenda in the two tracks – strategic and economic – reflects the breadth of modern U.S.-China relations. The S&ED is an important vehicle for making progress in the pursuit of a cooperative and constructive relationship; for building a “new model” that disproves the thesis that the United States and China are somehow destined for strategic rivalry and confrontation.

The S&ED is an important forum for the United States and China to take stock of and set goals for the bilateral relationship, to review regional and international developments and explain our respective policies, to coordinate and seek practical areas of cooperation on important issues of mutual interest, and to constructively manage areas of difference through candid, high-level discussions.

Let me preview of some of the topics for upcoming discussions at this year’s S&ED:

  • We will exchange views and explore prospects for progress on regional challenges, including Sudan, Afghanistan, Iran, North Korea, Ukraine, Iraq, and maritime disputes in the South and East China Seas;
  • The world’s two largest economies will work on strengthening the global economic recovery;
  • The world’s two biggest energy consumers and carbon emitters will work on combating climate change, and expand cooperation on clean energy;
  • We will discuss global challenges ranging from cyber security to counterterrorism to wildlife trafficking, and the United States will raise our concerns over human rights;
  • Secretary Kerry will co-chair the annual U.S.-China High-Level Consultation on People-to-People Exchange, which supports exchange programs that build the foundation for mutual understanding and trust;
  • And Deputy Secretary of State Bill Burns and his Chinese counterpart will hold the U.S.-China Strategic Security Dialogue (SSD), our highest-ranking joint civilian-military exchange with China, where we will conduct frank discussions on some of the most sensitive strategic issues in the relationship.

The S&ED and our numerous other dialogues and official exchanges with the Chinese each year reflect the importance we attach to managing this relationship. This level and pace of engagement show the commitment of both sides to producing tangible benefits for our two peoples, the Asia-Pacific region, and the global community.

The United States and China have a vital stake in each other’s success. That is why we maintain an intensive schedule of engagement; President Obama and President Xi met in Sunnylands, California, a year ago and have met twice more since then. The President plans to visit Beijing in November when China hosts APEC. Secretary Kerry, as well as numerous Cabinet and sub-Cabinet officials, have visited China already in 2014 and have met with Chinese counterparts in the United States or at international fora.

We work with China in virtually all important international arenas, including the UN, the G20, the East Asia Summit, and APEC where we are cooperating closely on regulatory transparency, supply chain efficiencies, promoting clean and renewable energy, cross-border education, and combatting corruption and bribery. Our relationship touches on nearly every regional and global issue, and, as such, requires sustained, high-level attention. Moreover, few of these issues can be effectively addressed if China and the United States do not cooperate.

Economic Relations

Economic issues play a central role in the U.S.-China relationship. China’s economic success has added to our growth and increased the purchasing power of consumers in the United States. Our two-way trade has almost quadrupled since China joined the WTO in late 2001. While the long-standing imbalance in that trade remains troubling, China is now one of the fastest growing U.S. export markets. In fact, U.S. exports to China grew by more than 90 percent between 2007 and 2013. In our bilateral engagements, we are encouraging economic reforms within China to ensure not only that its economic behavior is sustainable on its own terms, but that it contributes to strong, sustainable and balanced growth of the global economy. This includes re-orienting its economy away from a development model reliant on exports and credit-fueled investment in real estate and infrastructure to one that increases consumer spending and contributes to global demand. Central to this goal has been urging China to move toward a market-determined exchange rate. We are also addressing sources of friction in our bilateral relationship by pressing China to change a range of discriminatory policies and practices that harm U.S. companies and workers and that undermine incentives to innovate. These include subsidies that tilt the competitive playing field in favor of Chinese national champions, policies that pressure companies to hand over intellectual property as a condition for access to the Chinese market, and export credits that unfairly advantage Chinese companies in third markets. U.S. businesses have investments totaling over $50 billion. And from 2012 to 2013, Chinese direct investment flows into the United States more than doubled, according to private sector figures, and now contribute to thousands of jobs here. Our ongoing bilateral investment treaty negotiations hold the potential for even more mutually beneficial economic ties.

Even as we increase trade and investment, we will continue insisting on tangible progress in other economic areas that matter to the United States. These include:

  • China continuing to move toward a market-determined exchange rate;
  • negotiating a Bilateral Investment Treaty;
  • increasing access to Chinese markets for U.S. businesses;
  • developing a more transparent regulatory regime;
  • ending industrial policies that favor state-owned enterprises and national champions and seek to disadvantage foreign companies and their products;
  • ending forced technology transfer; and
  • addressing U.S. concerns over the theft of intellectual property and trade secrets, including government-sponsored, cyber-enabled theft for the purpose of giving Chinese companies a competitive advantage.

We will also continue to encourage greater Chinese integration into the rules-based international economic and trading system, in order to create a level playing field

for domestic and foreign companies operating in its and other markets. Over the last few months, China’s leaders have announced plans for sweeping reforms that, if realized, could go a long way in moving China’s economy toward market principles. We are encouraged that these announced reforms would potentially give the market a greater role in the economy, and we are keenly interested to see such reforms put into practice. I believe we can do much to work with China as it transitions to a consumption-driven, market-oriented growth model that would benefit both our economies.

Military-to-Military Relations

On the military side of the U.S.-China relationship, we are committed to building a sustained and substantive military-to-military relationship that focuses on identifying concrete, practical areas of cooperation and reducing risk. This includes not only deepening the use of institutionalized dialogue mechanisms, including senior defense participation at the SSD and S&ED, but also inviting the Chinese to join regional cooperative exercises and expanding talks with the Chinese military about operational safety in the region. For the first time this year, China will participate in RIMPAC June 26-August 1 in Hawaii.

We also aim to continue high-level exchanges between our militaries. Recent exchanges have included visits to China by Secretary Hagel in April and General Odierno in February, and a visit to the United States by Chief of the General Staff General Fang Fenghui in May.

At the same time, we will continue to carefully monitor China’s military developments and encourage China to exhibit greater transparency with respect to its military spending and modernization. This will help countries better understand the motivations of the People’s Liberation Army. We continue to encourage China to use its military capabilities in a manner conducive to the maintenance of peace and stability in the Asia-Pacific region.

Global and Regional Issues

As the largest energy consumers, greenhouse gas emitters, and renewable energy producers, the United States and China share common interests, challenges and responsibilities. These are issues that relate directly to our economic and national security. Cooperation on climate change, energy, and environmental protection is more critical than ever and is an important area of focus in the U.S.-China bilateral relationship.

Through broad dialogues such as the Ten-Year Framework for Energy and Environment Cooperation and the S&ED, over the last year we have been able to produce new and expanded commitments to cooperation on climate change, energy, and the environment. During Secretary Kerry’s February trip to Beijing, he announced implementation plans for each of the five initiatives under the Climate Change Working Group as well as a new enhanced policy dialogue on domestic and international policies to address climate change that will be held on the margins of the upcoming S&ED.

China is a vital partner on some of the world’s most pressing proliferation challenges, including the DPRK and Iran. The United States and China agree on the importance and urgency of achieving a denuclearized, stable, and prosperous Korean Peninsula. While differences remain between us on some of the tactics, we coordinate closely and consult intensively on how to advance these shared goals. The result has been a tightened web of sanctions targeting North Korea’s nuclear, ballistic missile, and proliferation efforts. China has also strengthened its own sanctions enforcement, which we welcome, though it could do more to prevent North Korea from engaging in proliferation activities. Indeed, North Korea remains in flagrant violation of the UN Security Council resolutions that the United States and China approved and support. So we are urging China to make greater use of its unique leverage with the DPRK to produce concrete signs that the DPRK leader has come to the realization that his only viable path forward is denuclearization.

On Iran, the United States and China share the goal of preventing Iran from acquiring a nuclear weapon and are working together within the P5+1 negotiations with Iran toward that goal. Through our frequent and high-level engagement, we will continue to press China to honor its commitments, in particular those related to its imports of Iranian oil and enforcement of UN sanctions, in furtherance of reaching a comprehensive and long-term solution to the Iran nuclear issue.

Managing Differences

In the Asia-Pacific region, Beijing’s neighbors are understandably alarmed by China’s increasingly coercive efforts to assert and enforce its claims in the South China and East China Seas. A pattern of unilateral Chinese actions in sensitive and disputed areas is raising tensions and damaging China’s international standing. Moreover, some of China’s actions are directed at U.S. treaty allies. The United States has important interests at stake in these seas: freedom of navigation and overflight, unimpeded lawful commerce, respect for international law, and the peaceful management of disputes. We apply the same principles to the behavior of all claimants involved, not only to China. China – as a strong and rising power – should hold itself to a high standard of behavior; to willfully disregard diplomatic and other peaceful ways of dealing with disagreements and disputes in favor of economic or physical coercion is destabilizing and dangerous.

The United States does not take sides on the sovereignty questions underlying the territorial disputes in the South and East China Seas, but we have an interest in the behavior of states in their management or resolution of these disputes. We want countries, including China, to manage or settle claims through peaceful, diplomatic means. For example, the Philippines and Indonesia have just done so in connection with their EEZ boundary. Disputes can also be addressed through third-party dispute resolution processes. Where parties’ rights under treaties may be affected, some treaties provide for third-party dispute settlement, as is the case of the Law of the Sea Convention, an avenue pursued by the Philippines in an arbitration with China currently being considered by an Arbitral Tribunal constituted under that treaty. The United States and the international community oppose the use or the threat of force to try to advance a claim, and view such actions as having no effect in strengthening the legitimacy of China’s claims. These issues should be decided on the basis of the merits of China’s and other claimants’ legal claims and adherence to international law and norms, not the strength of their militaries and law enforcement ships or the size of their economies.

Another area where we believe China’s actions run counter to important universal principles is the worsening human rights situation in China. Just this month, China conducted a harsh crackdown on commemorations of the 25th anniversary of Tiananmen Square. China’s actions included the detention, harassment and arrests of journalists, lawyers, and activists. Top U.S. officials raise our concerns with Chinese leaders on a regular basis, and, as we have in every previous round, Secretary Kerry plans to raise human rights at this year’s S&ED. We express concern about the Chinese government’s censorship of the media and Internet. We push for the release of all political prisoners, including but not limited to prominent figures like Liu Xiaobo. We urge China to address the policies in Tibetan areas that threaten the distinct religious, cultural, and linguistic identity of the Tibetan people. Instability and violence are on the increase in the Xinjiang Uighur Autonomous Region. As we unequivocally condemn the acts of terrorism and violence, we also urge China to take steps to reduce tensions and reform counterproductive policies that stoke discontent and restrict peaceful expression and religious freedom.

Conclusion

Clearly, a wide-ranging and complex relationship such as ours with China comes with challenges. Some degree of friction is inevitable. But an essential tool for managing and resolving differences is open and extensive communications between our two countries – at senior and working levels of government, military to military, through local governments and organizations, between our business communities, and at the grassroots level.

We are now reflecting on the considerable progress attained in 35 years of bilateral relations. One key lesson is that to ensure that our relationship grows and matures, we need to build up the links among our two peoples. People-to-people exchanges are essential to enhancing mutual understanding and furthering U.S. strategic and economic goals. To that end, the United States in 2013 received 1.8 million Chinese visitors who collectively spent $9.8 billion on goods and services in our economy. Our State Department personnel work hard to facilitate growing Chinese demand for international travel by maintaining average visa wait-times under five days over the past two years.

Education also plays an important role fostering mutual understanding. In 2013, we had 235,000 students from China studying in the United States, more than from any other country, and the United States aspires to increase the number of American students studying in China and learning Mandarin through the 100,000 Strong Initiative. In March, PRC First Lady Peng Liyuan welcomed First Lady Michelle Obama to China where together they met with U.S. and Chinese students and faculty and promoted the value of study abroad and educational exchange.

We are also working with groups like the Sister Cities International and the U.S.-China Governors Forum. These programs help by encouraging and supporting cities and states to deepen their cultural or commercial ties with Chinese counterparts. In the last year alone, we have supported numerous visits of governors and state delegations and helped them to find opportunities to deepen their involvement and links to China.

The Department works closely with the United States Chamber of Commerce, AmCham China, the U.S.-China Business Council, and other business groups to support key priorities for U.S. companies doing business in China and to promote – greater Chinese investment in the United States. In partnership and consultation with those organizations, we have encouraged the Chinese government to eliminate investment restrictions, strengthen IPR protection, increase regulatory transparency, and establish a level playing field for all companies in China.

In conclusion, let me paraphrase what President Obama said earlier this year when he met with Chinese President Xi at the Nuclear Security Summit in The Hague. The U.S.-China relationship has made great strides over these past several decades, and both sides are committed to building a new model of relations between our countries defined by expanded cooperation and constructive management of differences.

Mr. Chairman, I thank you for the opportunity to appear before you today to discuss U.S.-China relations. I look forward to answering any questions you and others from the Committee may have.

President Barroso’s speech at the Euroscience Open Forum

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

President Barroso’s speech at the Euroscience Open Forum

Science building bridges

Euroscience Open Forum

Copenhagen, 22 June 2014

Your Majesty,

Dear Minister [Sofie Carsten-Nielsen, Minister of Higher Education and Science]

Dear Chair of ESOF [ESOF2014 Champion Professor Klaus Bock]

Dear President [Euroscience President, Professor Lauritz Holm-Nielsen]

Distinguished Guests,

Ladies and Gentlemen,

It gives me great pleasure to be here with you today for the 2014 Euroscience Open Forum. I would like to thank you for inviting me to take part in this very important event.

In a country with over 400 islands, with three bridges over six kilometres long, what more appropriate theme could have been given to this Forum than “Science building bridges”.

A country world-known for its scientific leadership; for its expertise across a range of fields, from clean technology to biotechnology, from pharmaceuticals to telecommunications.

A country proud and confident about its knowledge-based society, renowned for its openness, and desire to cooperate internationally; a country whose bridge, the Oresund Bridge, links, not just two countries, i.e. Sweden and Denmark, but Europe’s regions, from Scandinavia to Western and Central Europe.

Your Majesty,

Ladies and Gentlemen,

[Europe 2020/Horizon 2020]

As we start to move out of the worst financial and economic crisis since the 1930s, now is the time to focus on building a strong, sustainable future.

On building a bridge between our past scientific traditions and a world where we share increasingly important global challenges and where we need innovative solutions.

That is precisely why, back in 2010, we put in place our new Europe 2020 strategy, designed to build a balanced, knowledge-based economy, with education, science, research and innovation at its very heart.

That is also why we have managed to make the seven year budget for our European research programme, Horizon 2020, 30% larger than its predecessor, despite the slight decrease in the European budget as a whole. It was not easy but we got it. We managed to convince Member States that at least the science and innovation budget should be increased. At 80 billion Euros over seven years, Horizon 2020 is one of if not the largest research and innovation programme in the world, designed to complement other sources of national and private financing.

We have therefore managed to match ambition with resources, giving you the researchers the stability and long term commitment that you need.

This goes to show, as we discuss the challenges facing us in the years ahead, that science does indeed matter for the future of Europe.

Not just to a large audience such as yours, but to everyone in our societies. Because I believe that our social and economic progress and many of the solutions to today’s problems will come from science. And I would even say that “The future of Europe is science”.

[Successes]

As our recent Communication on research and innovation as sources for growth has shown, we have a lot to be confident about.

Europe undoubtedly remains a world leader in science and has the capacity to innovate.

Our European Research Area remains the largest knowledge-production house in the world: we have twice the number of science and technology graduates in Europe than in the United States; and with 7% of the world’s population, we still produce roughly a third not only of the GDP, but also of patents and high impact scientific publications.

And despite the financial and economic crisis we have managed to halve the innovation gap that we still have with the United States and Japan.

[More to do]

But we cannot afford to stand still, in a world where scientific and technological progress is accelerating at an unprecedented pace, and where South Korea is moving further ahead, with China quickly catching us up.

So we must adapt to the new challenges and new ways of working in the 21st Century.

The role of digital technologies and the wealth of information and data that is being produced pose many questions about how science and research will be performed in the future. I know that Commissioner Geoghegan-Quinn, whom I would like to congratulate, for her commitment and passion on these issues during her term as Commissioner, will discuss this particular matter with you on Tuesday morning.

We must also adapt our culture so that women are better represented in research and science, another matter close to my heart: indeed, whilst women hold 45% of all PhDs in Europe, they only represent 30% of career researchers.

Last but not least, we must bring in our younger generation into science and innovation, reinforcing and tailoring our educational systems so that they more fully embrace creativity and risk.

This is key to Europe’s future.

Your Majesty,

Ladies and Gentlemen,

Allow me to highlight briefly five bridges that we have been building and that we must collectively continue to build.

First, we are building bridges between all the scientific disciplines. Our Innovation Union seeks to mainstream science and innovation across all sectors, and cross-fertilise your ideas to develop new technologies, products and services for the complex multi-disciplinary challenges in our societies. This is why Horizon 2020 champions a challenge-based approach and why the European Institute of Innovation and Technology, recently launched its Call for Proposals for the Knowledge and Innovation Communities.

Secondly, we are building bridges between researchers and the general public. Horizon 2020 is a large programme, with a broad set of objectives from excellence in science – with the European Research Council now chaired by Professor Bourguignon – to industrial leadership and a number of key societal challenges, allowing us to focus on the big priorities relevant to every European citizen. I am very proud of the ERC. But in order to ensure that the progress you make, for example on new vaccinations or nano-technology, is properly explained and embraced rather than feared, across society, we need a considerable communication effort from scientists themselves as well as from policy makers. There is an important role for the media here.

Thirdly, we are building bridges between the laboratory and the marketplace. After 30 years of negotiation, we finally agreed a European-wide patent. Once fully implemented, this will reduce the cost by up to 80% for small and medium sized businesses and individual researchers to register their creative ideas. This should encourage more private investment, because at 1.30% of GDP, we still lag behind the United States, Japan or South Korea, where private investment, venture capital and the culture of risk are more widely shared.

Fourthly, we are building bridges between Member States. With the European Research Area, we are encouraging reforms for a greater mobility of researchers and for pan-European research infrastructures.

But our countries must make an equal effort in research if we are to bridge the gap in investment across Europe, and if research opportunities are available across Europe. Collectively, we are missing our Europe 2020 target of 3% GDP in research and development, averaging just under 2%, with more regional disparity and ten Member States still averaging under 1%. We are doing fiscal consolidation but we need smart fiscal consolidation.

Finally, we are building bridges internationally, trying to reach out to all countries in the world. Only two weeks ago, I signed an agreement with Prime Minister Benjamin Netanyahu, granting Israel – a leading nation in science and innovation – access to our Horizon 2020 programme, as part of our science diplomacy. The principle behind this agreement, as well as with agreements we have with twenty other partners, is simple: it is that we can tackle together more smartly and efficiently the global challenges we face. And this is also why I am pleased to see so many international participants at today’s Forum.

[Conclusion]

Your Majesty,

Ladies and Gentlemen,

We cannot afford to rest.

And although Niels Bohr once said that prediction is very difficult, especially if it is about the future, I have nevertheless asked the Science and Technology Advisory Council and Professor Anne Glover, my Chief Scientific Adviser, to produce a report on foresight. Let me take this opportunity to thank them for their dedication to this work, which will be unveiled in the conference “The future of Europe is science”, to be held in Lisbon on 6th and 7th of October.

I look forward to a successful Euroscience Forum and to an ever increasing role of Europe in science and innovation, with a view to the next Forum in 2016, in Manchester.

Thank you.