Commerce Secretary Pritzker Speaks at ACCJ

Address to the American Chamber of Commerce of Japan
As Prepared for Delivery
Secretary of Commerce Penny Pritzker

Thank you, Jay Ponazecki, for your kind introduction. I am quite excited to be back in Tokyo. I love Japan, having visited many times with my family and on business. Actually, this country holds a special place in my heart. My father was stationed here in the 1950’s while he was in the Navy, and he fell in love with the country. When I was a child, he talked often of his time here. Now, I am back on my first trade mission to Asia.

I also want to thank the American Chamber of Commerce of Japan and Keizai Doyukai for hosting our delegation today.

Together, your two organizations represent nearly 2,000 American and Japanese companies, and share common goals:

  • To improve the business climate in Japan; and
  • To strengthen the economic ties between our two countries.

President Obama shares these aspirations.

My friend, Ambassador Caroline Kennedy, shares these aspirations, and she works every day – side by side with the Commerce Department’s Foreign Commercial Service Officers stationed in Japan – to support them. And the delegation of top executives from the 20 American companies, who are with me in Tokyo this week, support these aspirations.

We are all committed to working with you to build deeper business-to-business ties between the American and Japanese private sectors.

The 20 American companies on our trade mission are leaders and innovators in the energy and health care sectors. Our delegation includes both large multi-national corporations as well as small and medium-sized enterprises. All told, our companies represented here today have combined annual sales of nearly $300 billion.

Regardless of their size or focus, these firms all share a desire:

  • To do more business in Japan;
  • To develop new and deeper relationships here; and
  • To make investments in this market for the long-term.

Our job at the U.S. Department of Commerce is to open doors, to nurture connections between American and Japanese businesses, and to encourage investment in one another’s communities.

That is the core mission of our Foreign Commercial Service. Each day, this team of professionals, which works out of our U.S. embassies all over the world, helps American companies navigate foreign markets and sell their goods and services abroad – thereby increasing opportunities globally for our businesses and yours.

I want to recognize our excellent Foreign Commercial Service team here in Japan, led by Andrew Wylegala. Can you stand or raise your hand? If anyone in this room is looking for a U.S. partner or to meet someone from our delegation, our Commercial Service staff should be your first point of contact.

I want to begin our conversation today by making perfectly clear that the United States is – and will always be – a Pacific nation. Based on our shared history, as mutually supportive allies, our commitment to deepening economic ties to Japan should not be a surprise to anyone.

During the early days of his Administration, President Obama made a deliberate and strategic decision to deepen American engagement in the Asia-Pacific – the world’s fastest-growing region.

Some may question whether the Administration’s re-balance to Asia will persist and thrive as we address crises and opportunities elsewhere around the world. But let me be very clear: the United States has made a long-term commitment to the Asia-Pacific region.

No matter what crisis emerges next, our focus on this region will remain a centerpiece of the Obama Administration’s foreign policy. And beyond having great allies across the region, devoting more time, energy, and resources to Asia is just good business.

Today, this region is home to:

  • Nearly 60 percent of global GDP;
  • The world’s fastest-growing economies;
  • Half of the world’s population; and
  • An emerging middle class that is hungry for American products and services.

We know that a strong relationship between the United States and Japan is an anchor for the entire region.

Overall, the Administration’s re-balance is focused on security, prosperity, democratic governance, and human rights.

As America’s chief commercial advocate, my emphasis is on the economic dimension of the re-balance. This dimension involves deepening trade and investment ties with existing partners, especially Japan.

It also requires working multilaterally to build both the physical and soft infrastructure that is necessary for the growth of America’s emerging partners in the 21st century. And it entails building new mechanisms that establish a level playing field for commerce across the Asia-Pacific region.

Our focus on the economic dimension is, and always has been, a central feature of America’s re-balance.

President Obama has always understood that the Asia-Pacific is fundamental to America’s economic future and that our collective economic futures are inextricably intertwined, as both have been for the past 60 years.

Our trade mission is a reflection of that broad commitment – and of Japan’s centrality to the rebalance. In particular, we know that building the common future our two countries desire, requires us to share the most advanced technologies in the energy and health care sectors and unlock mutually beneficial commercial opportunities.

Japan’s energy security is – quite appropriately – a priority for this government. The country has a compelling need to develop new energy technology, optimize your mix of energy imports, and increase your energy conservation – and American companies can and want to help.

In fact, the companies on our trade mission bring critical expertise:

  • To improving energy efficiency;
  • To expanding the use of renewables;
  • To strengthening the smart grid; and
  • To developing safe and secure nuclear power.

Our government and our business community want to expand our commercial partnerships and help address your energy security needs.

At the same time, we are joined on this trip by leading American health care companies.

Today, Japan boasts a $153 billion market for medical and health products. Japan’s health expenditures are second only to the United States. Japan is looking for ways to care for a rapidly-aging population with state-of-the-art technologies in a cost effective manner – and American firms want to be more present in this market.

Our cutting-edge, life-saving technologies can benefit Japan. But too often, obstacles stand in the way. I am pleased to report that the Department of Commerce and Japan’s Ministry of Health, Labor, and Welfare are engaged in discussions to remove regulatory hurdles in the health care sector.

U.S. companies are prepared to help Japan improve its health IT, health treatments, health maintenance, and overall health outcomes, but we must address the market access challenges.

The business leaders who have joined me this week are committed to the Japanese market. They are helping carry forward a tradition of economic partnership between the United States and Japan that dates back more than 150 years.

In 1858, our two countries signed our first commercial treaty, which:

  • Enabled Japan to access more modern technology;
  • Expanded Japan’s economy; and
  • Laid the foundation for Japan’s integration into the global economic system.

So began the U.S.-Japan economic relationship.

Today:

  • Japan is America’s fourth largest trading partner, with total bilateral trade valued at $290 billion last year.
  • Japan is the second largest source of foreign direct investment into the United States, with a cumulative total of $344 billion invested by Japanese companies as of 2013.
  • The United States accounted for $123 billion in accumulated direct investment in Japan in 2013.

Indeed, the economic and commercial ties that bind our two countries are clearly strong and thriving. But we live in a world of rising powers and emerging markets, and we cannot sit idly by. A long history of partnership is not enough; we need a vision and an economic architecture that helps build our future.

The cornerstone of that architecture is the Trans Pacific Partnership, or TPP.

As everyone in this room well knows, we are in the final stages of negotiating the TPP, and it is time for all of us to be bold. Incremental steps will not lead us to the high-standard outcome that we all agreed to pursue when we joined the negotiations.

We are making good progress in our agriculture and auto negotiations. But we still have tough issues to work through. Strong outcomes in both of these areas are critical if we are to achieve the support needed at home to get this deal approved by our Congress.

Prime Minister Abe has eloquently described the economic and strategic importance of the TPP. I could not agree more.

Let us not forget: the opportunity presented by completing the TPP is profound.

By the year 2030, we expect there to be 2.7 billion middle class consumers across the Asia-Pacific region. Concluding this agreement will give businesses and workers in both the U.S. and Japan—as well as the other 10 members—better access to those consumers. And it will give those consumers better access to high-quality goods and services – ranging from food to health care to entertainment.

Concluding this agreement will give manufacturers, farmers, and ranchers in both of our countries access to markets on terms that allow them to compete fairly.

Concluding the agreement will allow us to shape our shared future in a manner that befits our shared values and ensures that the benefits of trade—and a global economy—are shared broadly.

From a purely economic perspective, the benefits of TPP for the United States and Japan will be substantial:

  • The Peterson Institute estimates that Japan’s annual GDP gains from TPP will be close to $100 billion in 2025;
  • Export gains for Japan are projected to be in the neighborhood of $140 billion by 2025.
  • For the United States, the Peterson Institute estimates that real income benefits of TPP will be close to $77 billion per year, and by 2025, a concluded deal would generate an additional $123.5 billion in U.S. exports.

But in focusing on the economic benefits, we must not overlook the fact that trade policy and foreign policy are inextricably linked. And it is difficult to overstate the strategic importance of countries with 40 percent of global GDP declaring – with one voice – that the rules of doing business in the 21st century are changing for the better and will reflect the emerging economic issues that we all face.

In this effort, we can declare a shared vision on a range of important issues, including protecting intellectual property, dealing with the role of state-owned enterprises in our economies, and promoting digital trade.

So let me be clear: if we do not set the rules of the road on these issues, our competitors surely will. The stakes for the work before us have never been clearer – and we cannot afford to sit on the sidelines.

We are now in the final stages of the negotiation, which is a challenging time for any negotiation – let alone a negotiation involving 12 parties and issues of deep economic and social importance.

We have an enormous opportunity before us to conclude a high-standard deal that sets the rules for years to come and adds momentum and energy to the global trading system at a critical moment in history.

Change is never easy, and we know what our shared future should look like. It should include more trade missions like this one. It should include new partnerships and joint ventures. It should mean new market access for our companies and workers. And it should mean greater prosperity for our citizens and deeper ties between allies.

The time is now to resolve the outstanding issues and reach an ambitious pact that advances our shared vision of more trade, more commerce, and more cooperation throughout the Asia-Pacific region.

The Trans Pacific Partnership is the next chapter in a story of economic partnership that began over 150 years ago and continues today – all part of the effort to draw our countries closer together.

To echo what President Obama said here in Tokyo five years ago, there must be no question: the United States is a Pacific nation. And through our partnership with Japan, through our cooperation with the nations of the Asia-Pacific region, we will continue to strengthen and sustain our leadership in this vitally important part of the world.

With the help of our private sector leaders, with the commitment of our political leaders, we will keep both the United States and Japan open for business – and open for more business with each other.

Thank you all for your work to reaffirm our strong commercial bonds and for doing your part to deepen those ties each and every day.