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The 110Th Congress Creates New Dynamics on Politics, Economics, and Security USAPC Interview with Senator J

The 110Th Congress Creates New Dynamics on Politics, Economics, and Security USAPC Interview with Senator J

U.S. Asia Pacific Council REPORT News and analysis from Washington, D.C. about key issues in U.S.-Asia Pacific Relations Volume 1 January 2007

The 110th Congress Creates New Dynamics On Politics, Economics, And Security USAPC Interview with Senator J. Bennett Johnston

“A new sheriff has come to town, taking the reins with a USAPC: How will Democratic control of Congress purpose,” Congressman Tom Lantos (D., California) said on affect U.S. policy toward the Asia Pacific? January 5, the day he assumed leadership of the House Foreign Affairs Committee from his Republican predecessor, Johnston: The mantra of this election was that it was retired Congressman Henry Hyde (R., ). Not a few about change. But it is important to bear in mind that congressional observers have wondered how the arrival of “change” is not a policy and it certainly does not define Congressman Lantos and other Democratic “sheriffs” who one. have been elevated to important leadership positions in the Among Democrats who will be leading the new 110th Congress will affect the course of U.S. foreign policy, Congress, however, there are some differences that could in general, and particularly with respect to the Asia Pacific. affect U.S. policy toward Asia. Rep. (D., Senator J. Bennett Johnston discusses what we might California), the new Speaker of the House, has been a expect from in the coming two years, drawing on strong proponent of human rights in . But my guess his in-depth, hands-on understanding of key congressional is that she will not use her position as Speaker or, indeed, players and procedures. even have time to use her position to pursue that issue. With respect to other House and Senate players active

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Democratic Pledge To ‘Shape’ Inside This Issue Trade Policy May Affect Asia 2 Official Washington State Department Personnel Senate (D., Mon- that the incoming Democratic leader- tana), the new chairman of the Senate ship “has a strong history in support 3 Committee Assignments: 110th Congress Finance Committee, and Congress- of expanded trade.” man (D., ), the Stronger Tools. Yet, both law- 7 USAPC In Action likely new chairman of the House makers have proposed policies to 4th Annual Washington Conference CSG on the Asia Pacific Economy: Ways and Means Trade Subcommit- grapple with the domestic downside tee, have sought to reassure the U.S. of globalization that likely would 8 Asia Pacific Dialogue  place greater pressure on China and PECC and CSCAP Meetings business community and trading Upcoming Key Official Meetings partners that they are not “economic other Asian trading partners to liber- isolationists.” alize their trading practices and eco- 9 Public Diplomacy U.S. Higher Education Delegation Baucus wrote in a Wall Street nomic policies. They are not expected to Asia Journal op-ed January 4 that the new to support the harsh retaliatory tariffs Congress will have “both the desire urged by Senator Charles Schumer 9 Foreign Policy Oversight Intensifies In Congress and opportunity to renew U.S. trade (D, ) in the last Congress to policy.” Levin asserted November 28 force China to revalue its currency. 9 China’s Currency Policy, continued on page four WTO Compliance

published by the East-West Center U.S. Asia Pacific Council 1819 L Street, N.W., Suite 200, Washington, D.C. 20036 Ph: 202.293.3995 Fax: 202.293.1402 www.usapc.org/ continued from page one Official Washington on foreign policy, there are not discernible differences between Republicans or Democrats on Asia-related In each issue, Washington Report will provide the issues. Senator (D., Delaware), the new Senate names and contact information for selected executive Foreign Relations Committee chairman, has worked branch officials with jurisdiction over economic, political, closely over the years with the outgoing chairman, and security issues important to U.S.-Asia Pacific rela- Senator (R., Indiana). tions. This issue will focus on pertinent personnel from the Similarly, Senator (D., Vermont), the Department of State. new Senate Appropriations Committee chairman, is not that different on Asia-related issues from Senator Mitch Mailing Address (unless otherwise indicated): McConnell (R., ), the outgoing chairman. And Department of State Congressman Tom Lantos (D., California), who has Harry S. Truman Building (HST) assumed leadership of the House Foreign Affairs 2201 C Street, N.W., Washington, D.C. 20530 Committee, likely will approach Asia policy issues in much the same way as Congressman Henry Hyde (R., Bureau of East Asian and Pacific Affairs: Illinois), the former chairman. Christopher R. Hill − Assistant Secretary for East Differences will emerge, however, on trade policy. Asian and Pacific Affairs − HST 6205, 202.647.9596 The vote on legislation to extend the President’s Trade Kathleen Stephens − Principal Deputy Assistant Promotion Authority (TPA) has always been close in the Secretary for East Asian and Pacific Affairs − HST House. TPA expires on June 30, 2007, and from what I’ve 6205, 202.736.4393 heard, it probably will not garner enough votes to be Glyn Davies − Deputy Assistant Secretary (Australia, extended. , and Pacific Islands) − HST 6205, I fear that new Members of Congress—both 202.647.8929 − Eric G. John Deputy Assistant Secretary (Southeast I fear the new Congress will become Asia) − HST 6205, 202.647.6904 Thomas J. Christensen − Deputy Assistant Secretary more protectionist (China, Taiwan, and Mongolia) − HST 6205, 202.647.6910 Democrats and Republicans—will try to move U.S. trade Michael W. Michalak − U.S. Ambassador to the Asia- policy in a protectionist direction. However, it also is a Pacific Economic Cooperation (APEC) forum − HST phenomenon that many new lawmakers enter Congress 6205, 202.647.7266 thinking and talking protectionist only to become more James Zumwalt − Director, Office of Japanese Affairs supportive of free trade after they have been exposed to − HST 4206, 202.736.7233 more points of view about world trade. So we’ll see what Sung Y. Kim − Director, Office of Korean Affairs − happens, but I do fear that the new Congress will become HST 5313, 202.647.7719 more protectionist. C. Steven McGann − Director, Office of Australia, Another important message of the November elec- New Zealand, and Pacific Island Affairs − HST 4312, tions was “talk to your enemies.” The electorate largely 202.736.4659 disapproved of the Bush Administration’s unilateral con- Chris Marut − Director, Office of Regional and duct of the War. The Iraq Study Group’s subsequent Security Policy Affairs − HST 4312, 202.647.2278 report emphasized the importance of engaging Iran and Clifford A. Hart, Jr. − Director, Office of Taiwan Syria in negotiations aimed at stabilizing the situation in Coordination − HST 4208, 202.647.7712 Iraq. Scot Marciel − Director, Office of Mainland and The Democratic-controlled Congress likely will argue Maritime Southeast Asia − HST 5210, 202.647.2143 that the same recommendation applies to North Korea, that is, that the should negotiate directly Office of the Under Secretary for Public Diplomacy with North Korea to secure an end to its nuclear program. and Public Affairs: That said, the President continues to be in charge of for- Karen P. Hughes − Under Secretary for Public eign relations. Diplomacy and Public Affairs − HST 7261, 202.647.9199 USAPC: What could Congress do legislatively to Dina Habib Powell −Assistant Secretary for affect changes in the conduct of U.S. foreign policy? Educational and Cultural Affairs − SA-44, 301 4th Could lawmakers use their budgetary authority? Street, S.W., Washington, D.C. 20547, 202.203.5118

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2 January 2007 Committee Assignments: 110th Congress*

Senate Appropriations

Robert C. Byrd (D., West Virginia) − Chair (R., Mississippi) − Ranking Minority Member Daniel K. Inouye (D., Hawaii) (R., Alaska) Patrick J. Leahy (D., Vermont) Arlen Specter (R., Pennsylvania) Tom Harkin (D., ) (R., New ) Barbara Milkulski (D., ) Christopher S. Bond (R., Missouri) (D., ) Mitch McConnell (R., Kentucky) (D., Washington) Richard C. Shelby (R., Alabama) (D., North Dakota) (R., New Hampshire) Diane Feinstein (D., California) Robert F. Bennett (R., Utah) Richard J. Durbin (D., Illinois) Larry E. Craig (R., ) Tim Johnson (D., ) Kay Bailey Hutchison (R., ) Mary L. Landrieu (D., ) (R., ) Jack Reed (D., Rhode Island) Wayne Allard (R., ) Frank R. Lautenberg (D., New Jersey) (R., Tennessee) Ben Nelson (D., Nebraska)

House Appropriations

David R. Obey (D., Wisonsin) − Chair Jerry Lewis (R., California) − Ranking Minority Member John P. Murtha (D., Pennsylvania) C.W. (R., ) Norman D. Dicks (D., Washington) Ralph Regula (R., Ohio) Alan B. Mollohan (D., West Virginia) Harold Rogers (R., Kentucky) (D., Ohio) Frank R. Wolf (R., Virginia) Peter J. Visclosky (D., Indiana) James T. Walsh (R., New York) Nita M. Lowey (D., New York) David L. Hobson (R., Ohio) Jose E. Serrano (D., New York) Joe Knollenberg (R., Michigan) Rosa L. DeLauro (D., ) Jack Kingston (R., ) James P. Moran (D., Virginia) Rodney P. Frelinghuysen (R., New Jersey) John W. Olver (D., ) Roger F. Wicker (R., Mississippi) (D., ) Todd Tiahrt (R., Kansas) David E. Price (D., North Carolina) Zach Wamp (R., Tennessee) Chet Edwards (D., Texas) (R., Iowa) Robert E. “Bud” Cramer, Jr. (D., Alabama) Robert B. Aderholt (R., Alabama Patrick J. Kennedy (D., Rhode Island) Jo Ann Emerson (R., Missouri) Maurice D. Hinchey (D., New York) (R., Texas) Lucille Roybal-Allard (D., California) John E. Peterson (R., Pennsylvania) Sam Farr (D., California) Virgil H. Goode, Jr. (R., Virginia) Jesse L. Jackson, Jr. (D., Illinois) John T. Doolittle (R., California) Carolyn C. Kilpatrick (D., Michigan) Roy LaHood (R., Illinois) (D., Florida) (R., Florida) Chaka Fattah (D., Pennsylvania) Michael K. Simpson (R., Idaho) Steven R. Rothman (D., New Jersey) John Abney Culberson (R., Texas) (D., Georgia) Mark Steven Kirk (R., Illinois) Marion Berry (D., ) (R., Florida) (D., California) Dennis R. Rehberg (R., Montana) (D., ) John R. Carter (R., Texas) (D., California) Rodney Alexander (R., Louisiana) Michael Honda (D., California) Betty McCollum (D., ) Steve (D., New York) Tim Ryan (D., Ohio) C. A. “Dutch” Ruppersberger (D., Maryland) Ben Chandler (D., Kentucky) (D., Florida) Ciro Rodriguez (D., Texas)

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January 2007 3 continued from page three

Committee Assignments: 110th Congress*

Senate Finance

Max Baucus (D., Montana) − Chair Charles E. Grassley (R., Iowa) − Ranking Minority Member John E. Rockefeller, IV (D., West Virginia) Orrin G. Hatch (R., Utah) (D., North Dakota) Trent Lott (R., Mississippi) (D., New Mexico) Olympia J. Snowe (R., Maine) (D., Massachusetts) (R., Arizona) (D., Arkansas) Craig Thomas (R., Wyoming) (D., ) Gordon H. Smith (R., Oregon) Charles E. Schumer (D., New York) Jim Bunning (R., Kentucky) (D., Michigan) Michael D. Crapo (R., Idaho) (D., Washington) (R., Kansas) Ken Salazar (D., Colorado)

House Ways and Means

Charles B. Rangel (D., New York) − Chair Jim McCrery (R., Louisiana) − Ranking Minority Member (D., California) Wally Herger (R., California) Sander M. Levin (D., Michigan) Dave Camp (R., Michigan) Jim McDermott (D., Washington) (R., Minnesota) John Lewis (D., Georgia) Sam Johnson (R., Texas) Richard E. Neal (D., Massachusetts) Phil English (R., Pennsylvania) Michael R. McNulty (D., New York) Jerry Weller (R., Illinois) John S. Tanner (D., Tennessee) Kenny C. Hulshof (R., Missouri) (D., California) Ron Lewis (R., Kentucky) (D., Texas) (R., Texas) Earl Pomeroy (D., North Dakota) Thomas M. Reynolds (R., New York) Stephanie Tubbs Jones (D., Ohio) (R., Wisconsin) Mike Thompson (D., California) (R., Virginia) John B. Larson (D., Connecticut) John Linder (R., Georgia) (D., Illinois) (R., California) (D., Oregon) Pat Tiberi (R., Ohio) (D., Wisconsin) Jon Porter (R., ) , Jr. (D., New Jersey) Shelley Berkley (D., Nevada) Joe Crowley (D., New York) (D., Maryland) Kendrick Meek (D., Florida) Allyson Schwartz (D., Pennsylvania) Artur Davis (D., Alabama)

continued on page five continued from page one of the Trade Act of 1974 to enable USTR to pursue an Instead, Baucus, Levin and others are expected to pro- unfair trade practices case against countries that engage mote creation of sharper tools to enforce the perceived in currency manipulation. Perhaps providing additional failure of certain trading partners to live up to trade and impetus to a 2007 version of this bill, the U.S.-China investment commitments. Economic and Security Review Commission included its China. In particular, insiders anticipate reintroduc- provisions among its 44 recommendations to Congress tion of legislation that enjoyed bipartisan support in the about China-related economic and security policies that it last Congress, the “Fair Trade with China Act.” The bill sent to Capitol Hill on October 30, 2006. would amend the Tariff Act of 1930 to apply its counter- Standards. Baucus and Levin, like the chairmen of vailing duty (CVD) requirements to nonmarket economy the foreign policy committees (see page 9), will place countries (such as China and Vietnam). It also would (1) greater emphasis on Congressional oversight of trade require the U.S. Trade Representative (USTR) to investi- negotiations. They want to ensure that bilateral, regional, gate China’s currency practices and (2) amend Section 301 continued on page five

4 January 2007 continued from page four Committee Assignments: 110th Congress*

Senate Foreign Relations

Jospeh R. Biden, Jr. (D., Delaware) − Chair Richard G. Lugar (R., Indiana) − Ranking Minority Member Christopher J. Dodd (D., Connecticut) Chuck Hagel (R., Nebraska) John Kerry (D., Massachusetts) (R., Minnesota) Russell D. Feingold (D., Wisconsin) Bob Corker (R., Tennessee) (D., California) John E. Sununu (R., New Hampshire) (D., Florida) George V. Voinovich (R., Ohio) (D., Illinois) (R., Alaska) Robert Menendez (D., New Jersey) Jim DeMint (R., South Carolina) Benjamin L. Cardin (D., Maryland) (R., Georgia) Robert P. Casey, Jr. (D., Pennsylvania) David Vitter (R., Louisiana) Jim Webb (D., Virginia)

House Foreign Affairs

Tom Lantos (D., California) − Chair Ileana Ros-Lehtinen (R., Florida) − Ranking Minority Member Howard L. Berman (D., California) Christopher H. Smith (R., New Jersey) Gary L. Ackerman (D., New York) Dan Burton (R., Indiana) Eni F. H. Faleomavaega (D., American ) Elton Gallegly (R., California) Donald M. Payne (D., New Jersey) (R., California) (D., California) Edward R. Royce (R., California) (R., Florida) (R., Ohio) Eliot L. Engel (D., New York) Donald A. Manzullo (R., Illinois) William D. Delahunt (D., Massachusetts) Thomas G. Tancredo (R., Colorado) Gregory W. Meeks (D., New York) Ron Paul (R., Texas) Barbara Lee (D., California) (R., Arizona) Joseph Crowley (D., New York) (R., Virginia) Earl Blumenauer (D., Oregon) (R., Indiana) Shelley Berkley (D., Nevada) Thaddeus G. McCotter (R., Michigan) Grace F. Napolitano (D., California) Joe Wilson (R., South Carolina) Adam Schiff (D., California) (R., Arkansas) Diane E. Watson (D., California) J. Gresham Barrett (R., South Carolina) (D., Washington) Connie Mack (R., Florida) Betty McCollum (D., Minnesota) (R., Nebraska) Ben Chandler (D., Kentucky) Michael T. McCaul (R., Texas) Dennis A. Cardoza (D., California) Ted Poe (R., Texas) Russ Carnahan (D., Missouri) Bob Inglis (R., South Carolina) (D., Florida) Luis G. Fortuno (R., Puerto Rico) (D., New Jersey)

*These committees have jurisdiction over most legislation that would affect U.S. economic, political, and cultural relations with the nations of the Asia Pacific. The next issue of USAPC Washington Report will feature pertinent subcommittee assignments.

. continued from page four Baucus has argued, so that Washington can affect a favor- and multilateral trade accords include tougher enforce- able outcome in the World Trade Organization (WTO) ment capabilities and certain minimum standards to pro- negotiations as well as lay the groundwork for potential tect the environment and worker rights. Free trade agree- FTAs with the European Union and Japan. ments (FTAs) currently being negotiated with Malaysia But TPA “should be improved as it is renewed,” and likely will not secure Congressional Baucus says, with stronger enforcement mechanisms and approval without meeting these requirements, Levin and labor and environmental standards. Levin concurs that others have suggested. this is how Congress should endeavor to “shape” trade TPA. Baucus also has urged prompt renewal of the policy so that U.S. workers and farmers will realize more President’s trade promotion authority (TPA), which benefits. The Bush administration likely will oppose expires in June. TPA gives USTR authority to negotiate tough standards in trade pacts, so observers are skeptical trade accords and provides for expedited congressional that TPA will be extended. That may jeopardize approval approval of such pacts. Quick action is imperative, of the pending FTAs with South Korea and Malaysia. )

January 2007 5 continued from page two members and the so-called “Blue Dog” members of the Johnston: Yes, Congress has the “power of the Democratic Party supported Congressman Hoyer. Those purse” and could use that to radically change U.S. policy two groups of Democrats tend to be more centrist in their toward Iraq, for example. If you recall the , policy views. Hoyer will have to consult them actively in Congress passed legislation stipulating that the United forming policy positions. States could not spend money in, on, around, or about I think one of the reasons the Republicans got into so Vietnam. That measure effectively ended U.S. involve- much trouble in the November elections was that policy ment in Vietnam. was totally under the control of the Speaker and the Lawmakers could do the same thing with respect to Majority Leader. Committee chairmen were not selected Iraq. As we speak, I don’t know whether they will use on the basis of seniority. They were selected and con- their budgetary power to that extreme, but clearly the trolled by the Speaker. Defense Department’s $600 billion budget request will be I recall approaching one subcommittee chairman with hotly debated. a legislative proposal that was decidedly in the interest of I don’t believe there is a similar legislative device that his district. He told me he could not support what his dis- could be used with respect to North Korea. Congress can- trict favored because the Speaker opposed the measure. That was the case across the board in the Republican-con- trolled House. Congress cannot mandate that USAPC: Speaking of Majority Leader Hoyer, in the President negotiate directly early December 2006 he declared that the 110th with the North Koreans Congress would work five days a week. This would be a far more ambitious work schedule than the previous not mandate that the President negotiate directly with the Congress, which was in session only about two and a North Koreans. They only can urge him to do so. half days a week. Do you think this represents an attempt by USAPC: Overall, what is your view of the new Congressman Hoyer to ensure that the new Congress is Democratic leadership? not another “no-nothing Congress?” Is it fair to say that the 109th Congress “did nothing?” Johnston: Speaker Pelosi and Senate Majority Leader Harry Reid (D., Nevada) both have indicated that they Johnston: Yes, the 109th Congress clearly was a “do- want to govern from the center. They want to approach nothing” Congress—and that was by design. The lawmaking in a bipartisan manner and accomplish a tar- Republican leadership wanted to avoid scheduling politi- geted set of goals. cally tough votes. These include: raising the minimum wage; improving Some Congresses have been “do-nothing” simply congressional ethics; eliminating tax breaks for big oil because lawmakers could not reach a mutually acceptable companies; reforming immigration policy; and employing compromise on certain issues in a timely fashion. But the the so-called pay-as-you-go approach to federal budget- last Congress was “do-nothing” by design. ing. This is a realistic agenda. The practice of meeting Tuesday through Thursday You will recall that Speaker Pelosi backed Congress- began when former Congressman Newt Gingrich (R., man John Murtha (D., Pennsylvania) in the race for Georgia) was Speaker of the House. He said at the time House Majority Leader over the clear favorite, Congress- that Members of Congress should live at home where man (D., Maryland). Hoyer ultimately won. they can be in touch with “what’s really going on.” It is The outcome of the Murtha-Hoyer race effectively has an evil thing for Members to be in Washington, Gingrich weakened Speaker Pelosi’s position. This means we likely and others suggested. will see her lead more by consensus than by the top- Well, I disagree. I think that’s a terrible approach. We down management style of recent Republican Speakers. live in a very complicated country that has many difficult Speaker Pelosi probably will have to consult more active- issues that must be addressed via legislation and congres- ly with her leadership team and committee chairmen—a sional oversight. You cannot do your job as a Congress- potential development that some people regard favorably. man or Senator, study the issues, and vote responsibly if you’re going to backyard barbecues back home. USAPC: Do you think governing from the center I think it’s great for Majority Leader Hoyer to insti- and leading by consensus will help to de-polarize poli- tute a five-day-a-week work schedule, but this may be tics in Congress? difficult initially. It would be very hard financially for many Senators and Congressmen who live back home to Johnston: Yes. Many of the newly elected House continued on page seven

6 January 2007 continued from page six move their families to the Washington, D.C. area. The USAPC in Action salaries of Members of the House and Senate simply have not kept up with the price of real estate here. So I imagine 4th Annual USAPC Washington Conference: Majority Leader Hoyer may have to implement this “Fundamental Change In Asia And The United schedule gradually in the coming two years. States Response” The U.S. Asia Pacific Council (USAPC) held its USAPC: I understand that some Democrats, led by 4th Annual Washington Conference on November 30, Senate Finance Committee Chairman Max Baucus (D., 2006 in Washington, D.C. Former U.S. Ambassador to Montana), would like to help American workers adjust China J. Stapleton Roy, who currently is chairman of to globalization through any number of different initia- the USAPC and managing director of Kissinger tives, including an overhaul of the Trade Adjustment Associates, opened the conference. He underscored Assistance Program, for example. the importance of U.S. involvement in the communi- Can we expect more worker-focused initiatives from ty-building dialogue now underway in East Asia. the Democrats? “The United States has not been paying adequate attention to economic, political, security, and attitudi- Johnston: As we speak, I don’t know whether nal trends in Asia and considering how those trends Senator Baucus actually has developed a worker-adjust- may affects its regional interests,” he warned. ment strategy or simply discussed the need for one. But A group of distinguished academics, legislators, as someone who believes in world trade, I think that is a diplomats, and policy commentators then provided very good approach.1 insights into how the Asia Pacific’s changing security A strong case can be made that global trade has dynamics, political relations, and trade and invest- helped the United States. Admittedly, some workers, par- ment patterns will challenge U.S. policy toward the ticularly in the textile sector, have been disadvantaged. region in the years ahead. Analysts also considered Trade adjustment assistance would be good for them and the implications of the 2006 mid-term congressional other workers in less competitive industries. elections on U.S. relations with the region. But at the end of the day, we don’t want to address The conference agenda and speaker information trade-related worker dislocation through protectionist are available at www.usapc.org/ (click on the Con- means. You could certainly impose protective tariffs ferences & Events tab). A transcript of the proceed- against imports from China, but then companies would ings will be posted on the USAPC’s website shortly. just move their purchasing and supply arrangements to Vietnam. Congressional Study Group on the Asia Pacific There is a great deal of labor around the world that is Economy: far less expensive than in the United States. Much of U.S.- “Managing Challenges in U.S.-China Economic based manufacturing will never be able to compete with Relations”—On December 4, the Congressional the cost of manufacturing in many Asia countries. It is a Study Group (CSG) on the Asia Pacific Economy held losing proposition to erect trade barriers in an effort to go a program that focused on salient issues in U.S.-China back to the old days. economic relations. Robert Dohner, deputy assistant secretary of the Treasury for Asia, discussed USAPC: How can we educate lawmakers and the Treasury’s goals for the inaugural meeting of the U.S.- American public about the importance of the Asia China Strategic Economic Dialogue in early Decem- Pacific to U.S. economic and political interests when it ber 2006. Jennifer Amyx, professor of political science appears that Iraq will continue to dominate the foreign at the University of Pennsylvania, provided a critical policy agenda of Congress in 2007? review of the Bush administration’s approach to chal- lenges posed by China’s rise in the global economy. Johnston: I strongly agree with experts, such as Ambassador J. Stapleton Roy, who have warned that the The East-West Center’s Congressional Study Groups United States risks finding itself excluded from important (CSG) provide fora for the dissemination of research and discussions of key issues in U.S.-Asia relations of potential 1On January 4, 2007, Senators Max Baucus (D., Montana) and Norm Coleman (R., Minnesota) introduced a bill to reauthorize and improve the federal Trade interest to U.S. lawmakers. The CSG on the Pacific Islands Adjustment Assistance (TAA) program. It would extend TAA benefits to U.S. examines political, economic, and social developments in workers in the services sector if it can be determined that trade negatively affects their jobs. The bill also would (1) help workers who take lower-paying jobs to the South Pacific. The CSG on the Asia Pacific Economy recoup a portion of lost wages by allowing them to apply for wage insurance; (2) help companies to retool trade affected businesses to avoid laying off workers alto- addresses current issues arising from the ever-deepening gether; and (3) allow workers in an entire U.S. industry to receive TAA benefits if it can be determined that trade affected a sector nation-wide. U.S. economic relationship with nations of the Pacific Rim. continued on page eight

January 2007 7 Asia Pacific Dialogue

Important ‘Track-Two’ Initiatives: Key Official Meetings/Events, January 2007: Pacific Economic Cooperation Council (PECC) — Secretary of State Condoleezza Rice and South On November 29, 2006, PECC held a special sympo- Korean Minister of Foreign Affairs Song Min-Soon sium in Washington, D.C., “Bond Market Development discussed efforts to persuade North Korea to abandon in the Asia-Pacific: Broadening Regional Business and its nuclear program and other bilateral issues in Cooperation Opportunities.” The event was jointly Washington, D.C., January 5. organized by the Chinese Taipei Economic Cooperation Secretary Rice and Defense Secretary Robert Council and the U.S. Asia Pacific Council. Experts from Gates will meet their Japanese counterparts, Foreign Asia and the Americas examined prospects for trans- Minister Taro Aso and Defense Agency Director Pacific collaboration in bond market development. General Fumio Kyuma for the so-called two-plus-two On December 1, 2006, the PECC Executive meetings in Washington, D.C., January 13. Committee Meeting was held in Washington, D.C. Leaders of the 10 member nations of the Members discussed PECC signature projects, such as Association of Southeast Asian Nations (ASEAN) will the State of the Region Report, and potential future proj- hold the 12th annual ASEAN summit in Cebu, ects, including the “Regional Institutional Architecture” Philippines, January 13. The 2nd East Asia Summit— project. Members also provided updates on individual involving leaders from the 10 ASEAN nations plus projects and discussed plans for the 7th PECC General Australia, China, India, Japan, New Zealand, and South Meeting in Sydney Australia, May 1−2, 2007. Korea—will be follow on January 15. Committee for Security Cooperation in the Asia Kim Jong-hun, Korea’s lead trade negotiator, Pacific (CSCAP) — On December 14, 2006, the CSCAP and Wendy Cutler, Assistant U.S. Trade Representa- Steering Committee held its annual meeting in tive, will hold the next round of Korea-U.S. Free Trade Wellington, New Zealand. Participants agreed to Agreement (KORUS-FTA) negotiations in Seoul, South launch an annual CSCAP Asia Pacific Security Outlook Korea, January 15−19. publication. The group also agreed to establish a Study President Bush delivers the State of the Union Group on Energy Cooperation in the Asia Pacific, that will address in the U.S. Capitol, January 23. be co-chaired by CSCAP Singapore and CSCAP India. International business and government leaders It has a two-year mandate and will focus on coopera- will meet in Davos, Switzerland for the World Economic tive approaches to enhancing energy security. Forum, January 24−28. continued from page seven continued from page nine community-building initiatives underway in the Asia past 12 years of Republican leadership, it was called the Pacific if it does not remain engaged in the region. But I House Committee. fear that Iraq will continue to suck all of the oxygen out In addition to reinvigorating U.S. foreign policy over- of the room. After all, we’re spending $200 billion a year sight, Lantos said he will focus on reversing the “severe in Iraq and Americans are getting killed there. loss of America’s prestige in recent years, improving The United States cannot remain in Iraq forever. international cooperation, and reinstating the United However, as soon as we leave the sectarian violence likely States’ role as the lodestar of democratic values and will intensify again. Who knows—by training the Iraqi human rights.” This undoubtedly will translate into hear- army we may find that we just have armed the Shiites ings and possibly legislation aimed at cracking down on and Sunnis for civil war. This issue will so dominate the human rights abuses in Burma, China, and North Korea. time and attention of Congressmen and Senators that we Lantos expressed interest in expanding his commit- will have to work even harder at getting them to focus on tee’s agenda in an unconventional direction to include Asia. ) energy security. This is an important foreign policy mat- ter, he said, “as our actions with respect to other coun- Senator J. Bennett Johnston's (D., Louisiana) political tries can be distorted by our dependence upon oil from career spanned 32 years, including eight years in the Louisiana overseas.” Lantos wants to use his new platform to Legislature and 24 years in the . He cur- encourage more widespread use of alternative fuels. rently is the chief executive officer of Johnston & Associates, a Biden also supports the move to alternative fuels and governmental and business consulting firm in Washington, agrees that “domestic energy policy is at the center of our D.C. An expanded version of this interview is available at foreign policy.” But it is unclear whether Biden will www.usapc.org/ResourceBlog/johnston.pdf. broaden his panel’s agenda to include energy matters. )

8 January 2007 Iraq, North Korea Public Diplomacy Policies Will Face Tough Spellings And Powell Lead U.S. Higher Education Scrutiny On Capitol Hill Delegation To Asia Secretary of Education Margaret Spellings and The Democratic Party leaders who assumed control Dina Habib Powell, Assistant Secretary of State for of the House and Senate on January 4 said that while they Educational and Cultural Affairs, led an historic dele- will seek bipartisan cooperation, they also plan to subject gation on a three-nation Asian tour November 13−18, the Bush administration’s foreign policies to more rigor- 2006. The goals of the trip were (1) to highlight the ous oversight. To underscore their intent, Senator Joseph United States as a premier destination for educational Biden (D., Delaware) and Congressman Tom Lantos (D., opportunities for Asian students and (2) to promote California), the chairmen of the Senate Foreign Relations greater collaboration between U.S. government, col- Committee and House Foreign Affairs Committee, respec- leges and universities and Asian governments, educa- tively, called Secretary of State Condoleezza Rice to testify tional institutions, and businesses. on January 11 about the deteriorating situation in Iraq. The 12 U.S. university presidents who comprised The Senate Foreign Relations Committee will follow the delegation were drawn from both large, private this up with a full month’s worth of hearings, featuring and state-sponsored institutions, such as the commentators from both the right and left of the political University of California at Santa Barbara and Johns spectrum, former high-ranking military and diplomatic Hopkins University, as well as from smaller, two-year officials, and former National Security Advisors and sec- community colleges, such as Community College of retaries of State and Defense. “Our purpose is not to Philadelphia and Piedmont Community College. revisit the past, but to help build a consensus behind a The delegation made stops in China, Japan, and new course for America in Iraq,” Biden said. South Korea. Notably, during the China visit Secretary Frustrated by the deadlock in the so-called Six Party Spellings and Minister of Education Zhou Ji signed a Talks aimed at ending North Korea’s nuclear program, Memorandum of Understanding. It pledged mutual Lantos said he also will hold hearings to consider a new emphasis on the advancement of higher educational approach that may entail direct U.S.-North Korea negotia- opportunities for U.S. and Chinese students in each tions. “Americans have demanded change in the way our other’s nation, by among other means, broadening country conducts itself in the world, [so] count on Chinese language study in the United States and Congress to see to it,” he said. English language study in China. For a detailed recap Further signifying that he will do things differently, of the Asian tour, see http://exchanges.state.gov /. Lantos, in one of his first acts as chairman, restored the name of the House Foreign Affairs Committee. For the continued on page eight

China Eludes Designation As Currency Manipulator But Gets Weak Marks For WTO Compliance Two executive branch reports on China’s economic would have obligated Treasury to promptly initiate for- policies issued in December 2006 may fuel congression- mal negotiations to liberalize China’s currency regime. al activity this year that could complicate the already Senate Finance Committee Chairman Max Baucus challenging course ahead for bilateral relations. (D., Montana) said the report has “seen its day.” He Treasury Report − The December 19 release of the pledged in 2007 to develop a “new approach and new Treasury Department’s Semiannual Report on Interna- tools” to realize market-based reforms to the currency tional Economic and Exchange Rate Policies greatly disap- policies of China and other nations. pointed critics on Capitol Hill and in business who WTO Compliance − The U.S. Trade Representative have charged that Beijing deliberately undervalues the (USTR) was not as charitable as Treasury in its annual yuan to promote exports. The report acknowledged that report to Congress on China’s compliance with its obli- China’s “cautious approach to exchange rate reform gations as a World Trade Organization (WTO) member continues to exacerbate distortions in the domestic issued on December 11. It described broad progress economy and impede adjustment of international im- made to date by China in implementing reforms, but balances.” But Treasury concluded that “no major trad- highlighted continued problems in China’s enforcement ing partner” met the technical requirements for desig- of intellectual property rights and “worrisome signs” nation as a currency manipulator. Such a designation that China’s market opening efforts have slowed.

January 2007 9 United States Asia Pacific Council Leadership and Members

Honorary Chairman Hon. George P. Shultz Thomas W. and Susan B. Ford Distinguished Fellow The Hoover Institution Chairman Amb. J. Stapleton Roy Managing Director Kissinger Associates, Inc.

Hon. George R. Ariyoshi Amb. Charles W. Freeman, Jr. Dr. Charles Morrison Chairman Emeritus Chairman, Projects International President, East-West Center East-West Center Board of Governors MGen. John L. Fugh Amb. Morton L. Abramowitz Co-Chairman, Committee of One Hundred Prof. Joseph S. Nye Jr. Senior Fellow, The Century Foundation Professor of International Relations Dr. William P. Fuller Kennedy School of Government Prof. Vinod K. Aggarwal President Emeritus, Director, APEC Study Center University of California, Berkeley Amb. Donald P. Gregg Dr. William H. Overholt President and Chairman, The Korea Society Asia Policy Chair Amb. Michael H. Armacost RAND Corporation Walter H. Shorenstein Distinguished Fellow Hon. Lee H. Hamilton Asia Pacific Research Center, Stanford University Director Dr. George R. Packard Woodrow Wilson International Center for Scholars President, United States-Japan Foundation Dr. Walter J. Armbruster President, Farm Foundation Prof. Harry Harding Mr. Torkel Patterson Elliott School of International Affairs President, Raytheon International Hon. Doug Bereuter The George Washington University President, The Asia Foundation Prof. Hugh T. Patrick Dr. Robert L. Healy Director, Center on Japanese Economics & Dr. C. Fred Bergsten Principal and Senior Director Business, Graduate School of Business Director, Peter G. Peterson Institute for Wexler & Walker Public Policy Associates Columbia University International Economics Hon. Carla A. Hills Prof. Peter A. Petri Adm. Dennis Blair Chairman, Hills and Company Dean, Graduate School of International Former Commander in Chief, U.S. Pacific Economics and Finance Command Prof. Merit E. Janow Brandeis University School of International and Public Affairs Amb. Julia Chang Bloch Columbia University Amb. Thomas R. Pickering President, U.S.-China Education Trust Sr. Vice President, International Relations Mr. Robbin S. Johnson The Boeing Company Amb. Stephen W. Bosworth Sr. Vice President, Cargill, Inc. Dean, Fletcher School of Law and Diplomacy Amb. Nicholas Platt Tufts University Sen. J. Bennett Johnston President Emeritus, The Asia Society President, Johnston & Associates, LLC Mr. Marshall M. Bouton Mr. Clyde V. Prestowitz, Jr. President, Chicago Council on Foreign Relations Amb. James R. Jones President, Economic Strategy Institute Co-Chairman, Manatt, Jones, Global Strategies Mr. Lawrence W. Clarkson Amb. Peter R. Rosenblatt Sr. Vice President, Projects International Hon. James A. Kelly Partner, Heller & Rosenblatt President, EAP Associates, Inc. Amb. Paul Cleveland Hon. Stanley O. Roth President Emeritus, US - Indonesia Society Amb. Sandra J. Kristoff Vice President, The Boeing Company Senior Vice President, Inter’l. Government Affairs Ms. Doral S. Cooper New York Life International Prof. Robert A. Scalapino President, C & M International Robinson Research Professor of Dr. Chong-Moon Lee Government Emeritus Dr. Vishakha N. Desai Chairman, Ambex Venture Group University of California, Berkeley President, The Asia Society Mr. Roland Lagareta Amb. Richard H. Solomon Prof. Richard L. Drobnick Chairman, Board of Governors President, U.S. Institute of Peace Director, Center for Global Business Excellence East-West Center Marshall School of Business Sen. Adlai E. Stevenson III University of Southern California Prof. Kenneth Lieberthal Chairman, Midwest US China Association Distinguished Professor, Wm. Davidson Institute Mr. Michael L. Ducker University of Michigan Mr. C. B. Sung Executive Vice President, Inter’l. & Express Freight Chairman, Unison Group Service, FedEx Corporation Amb. Edward E. Masters Co-Chairman Board of Trustees Mr. Henry S. Tang Amb. Richard Fairbanks U.S. Indonesia Society Vice Chair, Committee of One Hundred Counselor Center for Strategic and International Studies Dr. William F. Miller Mr. Ko-Yung Tung Professor of Public and Private Management, Of Counsel O'Melveny and Myers, LLP Prof. Richard E. Feinberg Emeritus, Stanford University Graduate School of International Studies Hon. Robert Underwood University of California, San Diego Mr. James Morgan Former Member of Congress Chairman Emeritus, Applied Materials, Inc. Amb. Tom S. Foley Amb. Linda Tsao Yang Partner, Akin, Gump, Strauss Hauer & Feld Board of Directors, Pacific Pension Institute

The United States Asia Pacific Council (USAPC) was founded in April 2003 by the East-West Center (EWC). It is a non-partisan organization composed of prominent American experts and opinion lead- ers, whose aim is to promote and facilitate greater U.S. engagement with the Asia Pacific region through human networks and institutional partnerships.

Mark Borthwick Barbara Wanner Liz Dorn Director Project Coordinator Program Associate

10 January 2007

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