U.S. TRADE POLICY TOWARD SOUTHEAST ASIA AND OCEANIA HEARING BEFORE THE SUBCOMMITTEE ON ASIA AND THE PACIFIC OF THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION JUNE 25, 2003 Serial No. 108-37 Printed for the use of the Committee on International Relations Available via the World Wide Web: http://www.house.gov/international_relations 87-996PDF U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office DAN BURTON, Indiana SUBCOMMITTEE ON ASIA AND THE PACIFIC JAMES A. LEACH, Iowa, Chairman DOUG BEREUTER, Nebraska RON PAUL, Texas JEFF FLAKE, Arizona JERRY WELLER, Illinois THOMAS G. TANCREDO, Colorado ENI F. H. FALEOMAVAEGA, American SHERROD BROWN, Ohio EARL BLUMENAUER, Oregon GARY L. ACKERMAN, New York BRAD SHERMAN, California ROBERT WEXLER, Florida JAMES W. MCCORMICK, Subcommittee Staff Director The Honorable James A. Kelly, Assistant Secretary, Bureau of East Asia The Honorable Ralph F. Ives, Assistant U.S. Trade Representative for Asia- LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING The Honorable James A. Leach, a Representative in Congress from the State of Iowa, and Chairman, Subcommittee on Asia and the Pacific: Prepared U.S. TRADE POLICY TOWARD SOUTHEAST ASIA AND OCEANIA WEDNESDAY, JUNE 25, 2003 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ASIA AND THE PACIFIC, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. The Subcommittee met, pursuant to call, at 10:20 a.m. in Room 2172, Rayburn House Office Building, Hon. James A. Leach [Chairman of the Subcommittee] presiding. Mr. LEACH. The Committee will come to order. On behalf of the Subcommittee, I would like to welcome our distinguished Administration witnesses to the hearing. Appearing before us today are the honorable James A. Kelly, Assistant Secretary of State for East Asia and the Pacific; Mr. Ralph F. Ives, Assistant U.S. Trade Representative for Asia-Pacific and APEC Affairs. I particularly would like to express our appreciation to Assistant Secretary Kelly for his appearance today. As my colleagues may know, he has only recently returned from the Post-Ministerial Conference of the Association of Southeast Asian Nations in Phnom Penh, Cambodia. The subject of the hearing today is the United States trade and commercial policy toward Southeast Asia and Oceania. Here, a bit of perspective is in order. Just a decade ago the Asian miracle was described as one of the economic wonders of the world. American foreign policy was focused like never before on big emerging markets, particularly the East Asian tigers. More broadly, the 21st century appeared to be all about geoeconomics instead of geopolitics; that is, the dominant interplay of international finance, trade and economics on politics rather than politics dictating economics. As we all understand, however, the global financial crisis of 1997 and 1998, problems of inequality and corruption in the region, and the terrorist attacks of September 11th combined to shatter economic optimism. Subjects like counterterrorism and global security, and not international economic policy, now dominate our political lexicon. But rumors of the demise of American commercial diplomacy in Asia and elsewhere are greatly exaggerated. Indeed, with remarkably little publicity, the pace of American economic engagement with the ASEAN countries has actually increased since the go-go days of the early 1990s. The reasons for America's abiding interest are plain. The region, which includes leading moderate Islamic countries, is playing a critical role in the global campaign against terrorism. In addition, Southeast Asia remains a vast market for |