PBEC United States Member Committee

PACIFIC BASIN ECONOMIC COUNCIL
UNITED STATES MEMBER COMMITTEE | EVENTS | U.S. EVENTS | 2002 APC

The PBEC US Annual Policy Conference 2002

Getting Back to Business: Pacific Rim Growth and Security

Thursday, February 14, 2002
J.W. Marriott Hotel
1331 Pennsylvania Avenue NW
Washington, DC 20004
8:30 a.m. to 2:00 p.m.

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PBEC US's half-day Annual Policy Conference, designed to highlight the emerging challenges and opportunities facing trade in the Pacific Rim in light of the September 11th attacks, proved a solid success according to participants. The conference program was divided into two panel sessions, a Congressional viewpoint, and a breakfast and lunch keynote speech. The format allowed members of business, academic, and government communities — foreign as well as domestic — to weigh in on issues important to business.

The day preceding the conference, the PBEC US Board of Directors convened for its annual winter meeting to review PBEC institutional issues and discuss policy priorities for the year. The Directors meeting also included a special off-the-record briefing and discussion with Dr. Glenn Hubbard, Chairman of the President's Council of Economic Advisers, who discussed the U.S. economic outlook and the President's priorities in his trip to Asia.

In the breakfast keynote presentation to conference participants, His Excellency Dato A.K. Ghazzali, Malaysian Ambassador to the U.S., provided a Southeast Asian perspective on the challenges of eradicating terrorism and restoring economic growth. In his remarks, Ambassador Ghazzali emphasized his government's policy of "zero tolerance for terrorism", and highlighted the close cooperation between the U.S. and Malaysia in combating it. This firm stance is based on Malaysia's experiencing in defeating terrorist insurgency in the 1950s and 1960s, and the desire of the vast majority of Malaysians to preserve the nation's multi-religious, multi-ethnic and multi-cultural society and the spirit of ethnic tolerance that underlies it. Malaysians said the ambassador, "want to preserve our commitment to modernization, development, and openness to the outside world, which have played such an important roe in our unprecedented economic growth and prosperity over the past two decades."

The Ambassador summarized the close cooperation with the U.S., as well as Malaysia's leadership role in ASEAN on counter-terrorism. Noting that PBEC will hold its 35th annual International General Meeting in Kuala Lumpur in early May, the Ambassador extended a personal invitation to PBEC members to attend, noting that executives will find a dynamic, secure, comfortable and business-friendly environment. Expressing optimism about the nations' economic prospects, he noted the ongoing financial sector reforms, as well as reforms to improve corporate governance and accountability, all of which are aimed at supporting economic growth with greater openness, competitiveness and access to global markets.

Panel I provided participants with macroeconomic issues in the region. It was the opinion of experts that assuming there is not another attack, economic growth in the U.S. (external PDF) will pick up in 2002, leading growth in the Asia-Pacific more generally. Japan's economic situation remains a national problem and continues to be major source of concern and potential economic instability in the region.

Panel II examined the regional impacts of trade and security in light of September 11th from a microeconomic level. Experts highlighted the significant problem in transportation as the lynchpin for trade-and possible terrorist activities. The impacts have not been quantified but can be generally assumed to be significant. These constraints have also been seen in information security, as well as in the significant tightening that has occurred in insurance and particularly re-insurance markets. Less significant impacts, particularly in the long-term, have been felt in capital markets. Participants also learned how to get ahead of security concerns from the example of the food industry, which has undertaken a proactive effort to increase consumer protection from theoretical terrorist attacks, thereby bolstering confidence in food safety.

In pre-luncheon remarks, Senator Chuck Hagel, ranking member on the Senate Foreign Relations Committee's Asia Pacific Subcommittee, provided an in-depth Congressional perspective on the impacts of 9/11. Senator Hagel underscored the importance of trade to meet security needs, arguing that the only way to meet security challenges and other budgetary demands such as social security is not through cutting spending but through increasing trade and economic growth. Because trade is so important Hagel called on the President to provide vigorous leadership to win congressional approval of trade promotion authority (TPA) this year.

Steve Roberts, noted political commentator and syndicated columnist, highlighted the domestic political context in which these economic and security policy decisions must happen. Mr. Roberts noted the impact of trade on achieving security needs, and underscored the necessity for various interests in the US who have been against trade to look forward and recognize the national interest in free trade. He also offered suggestions on ways the U.S. could further strengthen international public support for the struggle against terrorism and for expanded international trade and investment.