Nicholas Burns Robert Kagan James Steinberg Moderator: Jeffrey Goldberg
Where Do We Go Next with US Foreign Policy?
THE ASPEN INSTITUTE
ASPEN IDEAS FESTIVAL 2012
WHERE SHOULD THE US GO NEXT WITH ITS FOREIGN POLICY?
Doerr-Hosier, McNulty Room
1000 N, Third Street
Friday, June 29, 2012
LIST OF PARTICIPANTS
Director, Aspen Strategy Group
Senior Fellow in Foreign Policy
Dean of the Maxwell School
* * * * *P R O C E E D I N G S
MR. GOLDBERG: Good morning. Thank you for coming out to this discussion. I'm Jeff Goldberg from the Atlantic, and we are the four tops.
My friend John Donvan from ABC who does -- moderates Intelligence Squared always says that for whatever reason moderators of panels always say, our panel needs no introduction, and then they proceed to introduce them. But our panel really needs no introduction.
Bob Kagan --
-- is many of you know, one of America's leading foreign policy thinkers. That's fair, right?
MR. KAGAN: If you say so; you're the moderator.
MR. GOLDBERG: One of is fair, one of.
Jim Steinberg is former deputy secretary of state, and now the supreme leader of Syracuse University. Nick Burns, next to me, is at Harvard now, was undersecretary of State for political affairs. So we're going to have, I think, a good discussion. And we're going to try to cover a lot of ground; all seven continents if we can. Okay and start with Antarctica.
MR. BURNS: Antarctica.
MR. GOLDBERG: Yeah, we're starting with Antarctica. I wanted to start big and then go to some specific problems. One of things that you notice in presidencies is that presidents come in, Bob and I were talking about this before, presidents come in with huge foreign policy goals, huge notions about how the world should be organized, and then succumb to events. Succumb might be the wrong term, but their days are filled with crises, and crises in places that you would never have imagined when you come in as a president that you would deal with it. But I'm sure the president didn't think he was going to be spending this much time on Syria.
But let's start with -- before we go to questions like Syria, let's start with a big subject which is the subject of American decline. Whether America is in decline or not? And if it is what that would mean for the world.
Bob, you've written about this quite a bit. And I was hoping you could do two things quickly, one is frame the issue, and the second is tell us what you think about that -- the notion that we're in decline.
MR. KAGAN: Well first of all, the president as you know has already answered this question, he said that anybody who thinks that we're in decline doesn't know what he's talking about. So Jeff, I hope -- I don't know what side of that issue you want to be on.
MR. GOLDBERG: Yes, yes.
MR. KAGAN: But, look, I think that the discussion of decline -- first of all of course we periodically go through this. One of my favorite quotations is from Patrick Henry, in 1788, talking about the United States had lost the vigor of its youth.
You know it's sort of in the DNA for us to be concerned. And I think in a way it's healthy. But I think if you do any kind of honest measurement, a sort of analytical way of looking at it, I think America has not been in decline. And the key mistake that people make, in my view, is they have an imagination of about a mythical past, when the United States could do whatever it wanted to do.
I mean you always say the United States can no longer do whatever it wants to do in the world. And my question is; when was that exactly?
MR. GOLDBERG: Well 1945 was about the top year, right.
MR. KAGAN: Well, it's been downhill ever since.
MR. GOLDBERG: Yes, it's been downhill ever since we won World War II.
MR. KAGAN: No, but really, if you look at the 1940s, since you raised the 1940s, and that's the period when we had 50 percent of global GDP and everybody else was on their back. And we -- and the United States did some very successful things in Europe, notwithstanding the half of it that was controlled by the Soviet Union.
But if you look at Asia it was one calamity after another; the Chinese revolution, which led almost immediately to the Korean War, which didn't end particularly well. And so what we need to remember is it's always difficult to exercise influence. You know, people say why haven't, you know, we can't solve the Middle East peace problem; well, when did we solve it you know.
And so we have to have a reasonable baseline. And to my mind, and this is true of this administration, it's clear that the United States remains the most influential power in the world. And I think that even if people in this administration came to office thinking that the United States was really damaged goods, and I think to some extent they did, I think one of the things that they learned and also one of the things that they repaired to some extent, but what they learnt was everybody still looks to see what the United States is going to do.
MR. GOLDBERG: Jim, argue with the premise if you want or not, but answer this question. If we are in decline what would it mean for our relationship with China and Russia, just for starters.
MR. STEINBERG: Well, I think that is a good question. Because I think -- I mean, objectively I think Bob is exactly right. So the question is more how do we perceive our world? Do we perceive ourselves in decline, and how does that affect the policy choices that we make if we think we're in decline, and are sort of preparing for that future. And perhaps even more important how do other people think about it.
Because in some ways the self-confidence that goes with the confidence of leading --
MR. GOLDBERG: Even talking about decline is a sign of decline?
MR. STEINBERG: It's a sign of decline, and it sends signals to others about how do you prepare yourself for a world in which the United States either is unwilling -- either incapable or more important, unwilling to play the role of global leader. I think that's what scares people frankly, because the vacuum that comes from a U.S. retreat, by choice or by lack of capacity, really creates a lot of uncertainty in the world.
The world, whether the United States you know is a hegemon or dominating the world, the world does need leadership, and when that withdraws people began to start hedging their bets, they begin to thinking about how do they protect themselves. And that creates a lot more conflict and a lot more uncertainty in the world.
So what we see if the United States pulled back was a lot of people trying to think, well, how do we protect ourselves. What will happen in that absence, will China become a dominant power? Will there be more anarchy? Will there be more competition among middle-level powers? And that creates a lot of uncertainties.
So that's why for all the discussion, even the BRICs and everybody else, you don't really see a sense that they want the United States to step back. That uncertainty is as worrisome as a dominant U.S. role.
MR. GOLDBERG: But if you -- well if you read the statements of Mitt Romney, on subjects like China and Russia, you'd think that they do want America to decline in influence. What would be the impact on, just take Asia for starters, if America were actually in decline? If we decided that, you know what we're not going to play the role that we've played for the last 60 years?
MR. BURNS: Right. I don't want to talk about decline because people who teach at Harvard leave that to people who teach at Yale. But having said that -- that's an inside joke.
MR. GOLDBERG: Yes.
MR. BURNS: Having said that, I think we have --
MR. GOLDBERG: It was a good joke too; by the way you're welcome.
MR. BURNS: Thank you. I'm glad you recognized it.
MR. GOLDBERG: No, I appreciated it as a joke, yes.
MR. BURNS: Having said that, I think we have to recognize that the relative power of the United States has declined relative to other powers in the world. Certainly if you look at the partial rise of India, Brazil, and China to a global economic, political, and military power we can no longer write the script the way we did when we had 50 percent of the world's GDP back after the end of the Second World War, but having said that, If you think about metrics of power, the Maxwell School or the Kennedy School, political power we're still the most influential country by a mile in the world.
Military power, everyone knows that the United States has unassailable military power. Joe Nye, our colleague and friend has talked about soft power; every country has it. We're probably even number one, North Korea is probably 193; but we've got a lot of it.
What I worry about is our economic strength, and the inability of our two political parties to make common decisions about our future. Because our military-political power rests on our economic power, and of course that's in some question right now. That's what I worry about.
I don't worry too much about China gaining on us or overtaking us. China doesn't have a single ally in the world. China has North Korea.
MR. GOLDBERG: North Korea.
MR. KAGAN: They used to have Burma.
MR. GOLDBERG: Yeah, they have also Burma.
MR. BURNS: Think of it this way, John Ikenberry, who teaches at Princeton has written a lot about this; the proper way to measure the strength of the United States versus China is to measure the U.S. alliance system versus China.
What's the U.S. alliance system; it's Canada, 26 European members of NATO, and it's all of our treaty allies including Japan, South Korea, Australia, the Philippines, Thailand, and countries that want to work with us; India, Vietnam, Singapore. That's a pretty awesome collection of countries, most democratic, some not. That's what the United States has going for.
MR. GOLDBERG: And the number one reason they want to be in alliance with us is to check China's power?
MR. BURNS: Some of them in Southeast Asia certainly want that. Leon Panetta, our secretary of defense was in Asia, in India, and Southeast Asia 3 weeks ago, and he paid a visit to Cam Ranh Bay -- for those of us who remember the Vietnam War, how ironic is that, that the Vietnamese are inviting us back, our Navy, to Cam Ranh Bay. So I think the United States ought to be the most powerful country in the world 50 years from today, and that's a good thing.
MR. STEINBERG: But it's bigger than that because the -- part of the reason they want to be aligned with us is because they see that they can be aligned with us without having to give up too much of their sovereignty. So it's not like they are a satrapy or dependency on the United States. It gives them the freedom to pursue their own things. There is an element of global goods that we're providing, there's a bit of free riding too, but we get enough of a benefit from that free riding in creating that global order that nobody else can create.
MR. KAGAN: And when you talk about these different rising powers you have to differentiate among them. I do think that China and Russia would like a diminished American role, certainly in their regions.
MR. GOLDBERG: Right.
MR. KAGAN: I don't think that's the way India feels, I don't even think that's really the way Brazil feels. And I guess I would disagree with Nick that the fact that India and Brazil are having economic success and are rising, I don't think that counts against American power.
You know when we talk about the rise of the rest today, the most impressive rise of the rest in history was the rise of Japan and Germany during the Cold War. Did that hurt or help the United States. And I think that if you look at the strategic picture we benefit from a stronger India, we benefit from a stronger Brazil. I think we even benefit from a stronger Turkey despite the complexity there.
Where the tension comes and where I think -- I'm not as sanguine as Nick that it's going to end well, is dealing with China. And what I'm pessimistic about with China is that if you look historically at any -- at the situation of a rising power confronting a status quo, one out of three times it ends in war. And so I'm hopeful that isn't the case, but that is the real challenge that we face.
MR. GOLDBERG: We'll come back to China in a second, but I am -- even if you don't buy the declinist argument you have to acknowledge at this point that there are many places in the world where we have huge interests and very limited sway. I don't know if the gap is more than usual in some of these places, but certainly in places like Egypt it is, in Syria it is, and I wanted to talk about some of these hotspots for a minute.
We saw in the news today that Syria -- the people of Syria had their worst day yesterday; 180-200 killed by the regime. We -- and not just us, we seem powerless to do anything about this. Is that -- are we in an unusual situation in that regard? And let me try to frame a very, very simple question to all of you is what should be done if anything?
MR. KAGAN: Well, again, it isn't so long ago, if you go back to the 1990s, when we were confronting a similar situation in Bosnia, there were thousands of lives being lost and we seemed unable to do anything partly because under the George H. W. Bush administration, and I would say in the first couple of years of the Clinton administration they didn't want to. Just in the same way that right now I don't think the Obama administration wants to confront this problem, and so it's happening.
But we've faced these problems in the past. I think -- my own view is that if we were not in a campaign season right now, with the president pretty convinced that the American people don't want a military intervention at this point, I believe the United States will be doing a great deal more. After all the situation is not that -- it's harder than Libya. But I don't remember we thought Libya was so easy either. I think that -- I think we probably would be taking more action if it weren't in this particular season.
MR. GOLDBERG: Jim, you agree with that?
MR. STEINBERG: You know I don't know whether it's attributable to the political season. I think there's a balance of risks here, I mean there's a balance of risk, there's a risk that greater intervention will create more chaos in Syria. And there is a risk that a failure to do so will also create a tremendous loss of lives and loss of influence frankly for the United States and others in the region. My own personal view is we should resolve that balance in favor of more action.
I don't think it should lead to our intervention. I think it would be counterproductive because I think that, just as we saw in Libya, the key is to have the United States and Europe in a supporting role with others in the lead. I think the key now is to put some additional pressure on the neighbors, on Turkey, on the Gulf states to play a more active role. But for us to be more clear that our objective is regime change in Syria, and that is the goal of the United States and our European partners, and we will work to that end. I don't think it requires U.S. or NATO forces to do that, but we do have to have a more focused and determined goal.
MR. GOLDBERG: Nick, let me -- I want you to answer the question, but let me frame it a little bit more politically. Do you think if we had a Republican president, if Mitt Romney were president right now we'd be intervening? Because we were just talking before about Mitt Romney's very busy first day as president. I don't know if you've been following -- but from what I understand, on the first day of his theoretical presidency he will be sanctioning China -- sanctioning Russia while doing it from the Western Wall. And so -- and he's been --
MR. BURNS: It's a modern technological age you know, you don't have to be in the White House to do these things, right.
MR. GOLDBERG: But you can do anything anywhere; you know with the little smart phones you could launch whole wars.
But do you think that we'd be in a different situation if we had a Republican president? Do you think that Romney would actually do anything different? And this a part of a broader question about continuity in foreign policy.
MR. BURNS: And the answer is no. And I think that Governor Romney would find it very difficult given what he said about Russia, that it's our most lethal adversary, and given the threat to sanction China, why haven't we been successful in Syria in part because Russia and China are blocking meaningful action in the Security Council. So we've got to find a way to work with the Russians and Chinese. And it's fine to oppose them where we have to, and we do that most days in American foreign policy. But we also have to engage both countries. And President Obama has a working relationship developing with President Putin, and of course with Hu Jintao. Governor Romney, if he is elected is going to face the reality of foreign policy; you can't walk away from relationships, you can't throw darts at countries and expect them to cooperate with you.
I think the problem in Syria is very difficult. I'm not sure a Republican administration would have handled it any differently. I served in the George W. Bush administration. It's infinitely more difficult than Libya. You don't have the Arab League blessing; please intervene in the internal affairs of one of our brethren states -- that's what they said on Libya. You don't have the Europeans --
MR. GOLDBERG: They are saying it privately though.
MR. BURNS: They're not saying it privately.
MR. GOLDBERG: Well.
MR. BURNS: And you don't have the Security Council's support the way you did in Libya. And you don't --
MR. GOLDBERG: The Sunni states are certainly not going to be overly objecting if the U.S. takes a more active role.
MR. KAGAN: And you're never going to get Security Council support again. I mean, the Russians thought that they would come through with Libya.
MR. GOLDBERG: The Russians will stop that.
SPEAKER: No, the Russians, they're very unhappy about what happened in Libya.
MR. BURNS: And the hardest thing Bob, you don't have Security Council's support and you don't have the Arab League's support. The hardest thing is this is block to block and street to street fighting in the Syrian cities. It's not the open desert that was -- where it was easily -- easy for us to distinguish between friend and a foe. So I actually think the president has been right to be a little bit reluctant to just wade in here.
I think Jim is right, that we ought to put some pressure, and I'm sure we are, on the Turks, on the Saudis, on the Emiratis to take the lead here. Kofi Annan said this morning, I think you all read it New York Times and Wall Street Journal, he is more optimistic that he can put a political deal together. I'm not so optimistic, I think we'll be back with these same set of difficult choices in the weeks to come --
MR. STEINBERG: But I think -- I do -- one thing, I don't fully agree with Nick on this, I don't think this is a question of kind of the military order or battle; it's a political question in Syria. And what we need to do is we need to change the balance of expectations among the people around Assad so that they know that the end is going to come sooner or later. And that if they want to find a way out they need to get out.
And I think we see some of the defections happening now in the military. The more clear we are in sending our signals about what our objective is the more that crystallizes the issue for people there. And I think it will ultimately be a political decision among the elites around Assad particularly the Sunni elites if they begin to abandon the regime, the situation changes. And it's not a question of winning a military battle on the ground.
MR. GOLDBERG: If you guys were all in the administration right now what would you tell -- and the president said, what's my number one problem; what would you say it is? Would it be Iran, would it be checking China? Bob?
MR. KAGAN: Well I think this -- the number one problem that is the big problem of the next two decades which is China. And then there's the number one problem which is the big problem of the next year which is Iran. And I'm sure that given the way policy works, as you guys know better than I do the near-term problem would probably swamp the long-term problem, although the administration has adjusted to China. But clearly Iran is the issue that --
MR. GOLDBERG: Do you think Obama is handling Iran well?
MR. KAGAN: I don't know whether there is a way to handle Iran well. I mean he certainly has been successful in strengthening the sanctions. I'm just not sure that sanctions at the end of the day are going to get us where we need to go. And I think the interesting question is whether a second term of Obama might ultimately decide to use military force to deal with Iran if they get close. I know there were some people who have worked in the administration who say that they think that's not inconceivable.
MR. GOLDBERG: Jim?
MR. STEINBERG: I think the key is whether sanctions work or not it is important to keep a broad international consensus together around this because if it ever gets to the point that Bob identified, which it may sanctions may not work, the more we've demonstrated that we've pursued all the other alternatives diplomacy, sanctions, even if people don't support the use of force there's going to be a greater acceptance of the fact that we were driven -- we hadn't prematurely moved to the other choices.
So I think the fact that we've been able to both get an extraordinary response by Europe. I think nobody would have ever anticipated the tough measures that Europe is taking, including a complete cutoff of oil from Iran. And the relatively strong support we've had from even China and Russia has all been from this patient management. Now, again, it may not be enough, but I think it's worth having gone through this process so that when and if the choice comes there will be a much stronger case to say all the other alternatives were exhausted.
MR. KAGAN: And I think there'll be substantial European support if it ever comes to that. I think it would be more than what people might expect.
MR. GOLDBERG: Answer the question of number one problem, and then answer this, and maybe you guys can do this. By the time I get to Nick I'll actually think of better questions.
The question is -- and I'm using the McCain formulation, you know, John McCain said a war with Iran would be terrible; Iran with a nuclear weapon would be worse. And I want you to break that down and tell us where you fall on that spectrum.
MR. BURNS: Well, I think President Obama has followed a sensible policy.
MR. GOLDBERG: And what is it?
MR. BURNS: He has said, we're going to try to negotiate with Iranians, and we're in the third month now, of very desultory problematic talks. But the reality is --
MR. GOLDBERG: Good use of the word "desultory" by the way.
MR. BURNS: Thank you.
MR. GOLDBERG: You're welcome.
MR. BURNS: Thank you very much. The reality is --
MR. GOLDBERG: He is like he used to be a spokesman.
MR. KAGAN: Yeah, but he was the State Department spokesman also.
MR. STEINBERG: We had breakfast together, we suggested that he just hold fort, and we would just -- we just have nicknames but he didn't want --
MR. GOLDBERG: No jokes today, no jokes.
MR. BURNS: The reality is, think about what the President is trying to do. And there's a high degree of integration between President Bush and President Obama. President Obama is saying; let's try negotiations because we haven't had a sustained negotiation meaningful with Iran since the Jimmy Carter administration, think of it that way.
So I think he's right to try diplomacy. But here's the problem; if we have another meeting in a couple of weeks and it fails, I know it's going to happen. The President's critics are going to come out and say well diplomacy has failed, the President is naïve, we've got to give up on that and turn to the military option. Diplomacy requires some patience, especially with a country with which we've been divorced for 32 years. We got to stay at the table the remainder of this year.
What he's also done, second thing, is put in place, along with the Europeans, the toughest sanctions ever imposed on Iran. The U.S. central bank sanctions actually took effect yesterday. The EU oil embargo kicks in Sunday and Monday. So I would say we've got to give the sanctions a couple of months to see if they are having the right effect.
And third, the President, I think very rightly, as President Bush did, has not taken off the table the possible use of force. And when you're dealing with the Revolutionary Guards, the supreme leader of Iran; they are a very tough, brutal, cynical people; they understand that. And I think we ought to all thank Prime Minister Netanyahu of Israel, he's made the threat of military force real to the Iranians. I think it's helped to get them to the table.
Will all of this work? Maybe, maybe not, but it's certainly worth trying now than resorting to war in 2012 either by Israel or the United States. So I am very much in support of what the administration has done. And I was up on Capitol Hill last week talking to a group of senators and representatives, and was really struck in that bipartisan group the degree to which nearly everybody around the table, I thought, was supportive of this effort. No reason to turn to force yet.
MR. GOLDBERG: By the way, and I want to come to you on this. It's very hard for me to picture President Obama thanking Prime Minister Netanyahu for anything, but you know maybe it's happened in private --
SPEAKER: In private.
MR. GOLDBERG: -- yeah, maybe it's happened in private. But you haven't answered the question, which one is worse for you?
MR. BURNS: I think the right goal is to deny Iran a nuclear weapons capability. And I was surprised, and actually really gratified when President Obama spoke to the APAC conference, in March, when he clearly took containment off the table, he said: I'm not willing -- I'm paraphrasing -- I'm not willing to live with a nuclear-armed Iran because of all the different consequences including other countries in the Middle East deciding they were going to be nuclear powers.
So I think that's the right goal to have, we should aim not to live with it, an Iranian nuclear capacity, but actually to deny it one way or the other.
MR. GOLDBERG: Jim, could you live with a nuclear Iran?
MR. STEINBERG: I don't think we should. I mean I think that the consequences and the risks are much greater than the risks of -- if it comes to it, thinking about the alternatives. I mean I think that the problem is both the specific problem of a region, which is what happens in the greater Middle East if Iran develops nuclear weapons. Because I am quite confident that this won't be the end of the story; the neighbors are not going to live quietly with a nuclear Iran, and it's not just Saudi Arabia.
MR. KAGAN: Well the Saudis will go shopping in Pakistan for nukes, right?
MR. STEINBERG: I think they probably figured this out already.
MR. KAGAN: Yes.
MR. STEINBERG: And I think that Turkey and others -- one should not underestimate the deep tensions between Turkey and Iran, and others. And so I think that the volatility that that creates in the region is deeply dangerous. And then more broadly the signal it sends, that we've sort of given up on this question of nuclear capacity and nuclear proliferation. And I think it's one that is not acceptable.
The administration has worked hard to try to reduce the salience of nuclear weapons, to then, sort of acquiesce with this and say (inaudible) for this is going to have it. I think it's deeply consequential now. It doesn't at all diminish all the risks and the limitations of what the military options would be. But I do not think that a strategy that says this is something we can live with is --
MR. GOLDBERG: So the panel does not agree with Kenneth Waltz that we should give Iran a --
MR. KAGAN: Yeah, yeah, that's not a good idea generally.
MR. GOLDBERG: But let me ask you this --
MR. KAGAN: But you get to be on the cover of foreign relations --
MR. GOLDBERG: Bob, let me ask you this though, we lived for decades with a nuclear-armed Soviet Union. We ultimately triumphed; their system is gone, our system is here. The Soviet Union had thousands of nukes, they controlled half the world. Iran is by comparison a pretty measly little country, with a regime that probably doesn't have a very long shelf life. I mean, are we just overreacting?
MR. KAGAN: I don't think so. And by the way, it wasn't a great thing that the Soviets controlled half the world under their nuclear umbrella --
MR. GOLDBERG: No, but patience --
MR. KAGAN: There were parts of the world that probably weren't very happy about that. And so I would say, I don't what to now live -- create a situation where we have to live with Iran's nuclear weapon. And by the way, it's not going to be one bomb right, it's going to be a hundred; that's the way these things work.
But the larger point, which Jim and Nick have already made, is it's not just Iran. We're talking about, you know, maybe another half-a-dozen or more countries getting nuclear weapons and we may be blowing up the entire -- what's left of the non-proliferation regime altogether. And I really think that may be what President Obama will have on his mind.
Because the consequences of that -- you know, for better or for worse, you know, you had the nuclear powers during the Cold War keeping a pretty tight grip on the nuclear weapons, and not allowing them to proliferate. We're talking about a brand new world. It may be John Mearsheimer's fantasy, but it's a world where many, many, many countries have nuclear weapons.
MR. STEINBERG: The other big difference, Jeff, is that the reason that we were able to not have a cascade or proliferation after the Soviets, and then the Chinese got the bomb is because we had a nuclear umbrella over Europe and Asia. And they were willing to accept that, and Germany didn't go for the bomb, they accepted us. Japan didn't go for the bomb. South Korea flirted with but didn't go for the bomb.
The problem is the Saudis and the Turks are not going to accept a nuclear umbrella from the United States. That's not an acceptable alternative. So the --
MR. GOLDBERG: They wouldn't accept that because they wouldn't trust us, because we allowed Iran to --
MR. STEINBERG: Partially couldn't trust us, but also we've seen the tensions. I mean even with the military -- U.S. military conventional forces in Saudi Arabia -- the idea that the holy places are being defended by American nuclear weapons is just not going to be acceptable to the Saudi leadership.
MR. GOLDBERG: That didn't work out.
MR. STEINBERG: So the ability to constrain proliferation, which came from extended deterrence and our treaty commitments in the Cold War, is just not available in this context. The neighbors are not -- they're going to have to take care of themselves. And that creates a very different dynamic than the one we saw in the --
MR. GOLDBERG: The -- Nick, maybe you can go to this because it's a fascinating thing. What you see on the left right now is this kind of meme that says: Obama is Bush. That when you look at drone strikes, when you look at his tough line on Iran, people are criticizing him from the left wing of his party saying, this guy's foreign policy is not that different from George W. Bush's.
Do you agree with that? And could you also sort of analyze the idea in the context of continuity between foreign policies of different presidents.
MR. BURNS: I don't agree with that. And I guess I should explain, I was a career diplomat, so I served Republican and Democratic administrations. And Jim can certainly speak with far greater authority than I can on President Obama. But my sense is that there has been, over the last three presidents, a high degree of continuity in foreign policy that you don't see in domestic policy.
But there are some clear differences. And obviously when President Bush left office in 2008, we were in a little bit of hole in certain parts of the world; the Muslim world certainly, Europe, parts of Latin America. I think President Obama has in many ways restored America's credibility around the world, which is a very good and important thing for our power.
MR. KAGAN: Yeah, but the -- sorry.
MR. BURNS: Secondly -- I was just -- just winding up here, Bob, but -- you'll get your chance.
MR. GOLDBERG: And actually I'm going to cut him off. So you --
MR. BURNS: Secondly and most importantly, and we were going to get to this at some point this morning, there is a changing leadership dynamic in the world. When Jim and I worked very closely together in the Clinton administration, you know, we must have made a hundred trips to Europe, because that's where a lot of the power was and that's where the core American allies are.
What President Bush and President Obama have tried to do is think of Brazil, of India, certainly China, as part of this new leadership group. And when I think -- President Obama has done well, in his management of the G20 and the economic issues. And in now I think taking President Bush's policy initially in Iran, and really expanding it, he's gotten greater buy-in from some of these powers to in a sense coerce around through sanctions. He's made some progress that we were not able to make when I served in the George W. Bush administration. I think he deserves credit for that; he's a modern leader, very much part of the 21st century. And I know he's got great credibility in places like Delhi, and in Brasilia where we need it for the future.
MR. GOLDBERG: But Bob, before you disagree, can I disagree with him for one second.
MR. KAGAN: But I spoke first.
MR. GOLDBERG: No, no, no, but I'm the moderator, I paid for this microphone.
Metaphorically. There's an irony here -- I mean fine, in Brasilia, maybe they buy the model of progressive, but in Pakistan, and in Yemen they see President Obama as the sort of king of drone strikes. I mean, one of the ironies here, and you bring this up to certain very partisan Republicans in the question, and they don't buy it, but one of the ironies here is that you have the first president of the United States of America with a Muslim name is -- and let me be blunt about it -- killing Muslims in more different countries than any other president in history. We are in active battles, and drones are a tool of war, they are cleaner, so-called, than other tools, but we're killing people in four or five different places at once --
MR. BURNS: But you don't disagree with that? You don't disagree with going after Osama bin Laden or -- MR. KAGAN: Nice, nice -- yeah.
MR. BURNS: Thank you.
MR. KAGAN: When did you stop --
MR. GOLDBERG: Wait -- wait.
MR. KAGAN: When did you stop disagreeing about going after Osama bin Laden?
MR. STEINBERG: So what's the premise of your question?
MR. GOLDBERG: Yeah. The premise of my question --
The premise of my question is obvious. Bin Laden, fine, you know, pull him out of the ocean and kill him again, I don't care.
But there are -- but these drone strikes that have collateral damage, so called -- which is a clean way of saying we're killing innocent people -- have real consequences. And we know, in places like Yemen and in Pakistan they are alienating people who otherwise might not be alienated.
MR. KAGAN: And by the way, just to add on to that, I mean --
MR. GOLDBERG: I love playing the left-winger by the way, I don't get to do it that often --
MR. KAGAN: I know that's your -- you could do it again.
MR. GOLDBERG: Steve Clemens will attest to that.
MR. KAGAN: As a matter of just measurement, the American standing today is lower in the Muslim world than it was even in the Bush years, and that's -- it's true in Turkey, where it's at an all-time low, it's true in Egypt. I'm not -- I am not even saying that -- you know, therefore Obama has failed or something; I'm just saying, you're just wrong to say that he's repaired relations with the Muslim world.
I think we have very complicated relations with the Muslim world partly because of the reason that Jeff is talking about, but --
MR. GOLDBERG: Part of the organic reasons that --
MR. KAGAN: Right, exactly -- which is also the part of continuity of American foreign policy, but the other thing though; Nick is that if you think about what President Obama is doing it is interesting given what peoples' impression of him was when he was elected.
Now, I think that impression was misplaced, but it was the impression. He is using extremely traditional tools, despite what you say about modern leadership. He's bringing us back to Asia. And what is the most prominent way -- I mean, Kurt Campbell laments the fact that this is our most prominent symbol of our return to Asia, is he's opening new bases in Australia, he's promising to shift naval vessels into Asia.
And the truth is what countries are still looking for from the United States, I think, is less the attractiveness of our president, the you know the way we talk, and still very much based on whether we are able to provide them security or not.
MR. STEINBERG: But it's bigger than that. Because the other thing they're looking for, for example, is economic, and the trans-pacific partnership which is an important dimension of the policy itself.
MR. KAGAN: Absolutely, fair enough --
MR. GOLDBERG: But I want to come to the pivot -- the everlasting pivot to Asia --
MR. BURNS: He wants us to stay in the Middle East.
MR. GOLDBERG: What -- no, no -- no, I don't want to stay in the Middle East, I'm sick of it. But -- I want you to rebut if you want to rebut, do you have anybody you want to rebut.
MR. BURNS: I'd be very happy to. I think you're being very selective when you talk about the Middle East. Talk to Libyans, and talk to Tunisians about President Obama. You got to give him some credit for having --
MR. GOLDBERG: No, I'm not saying --
MR. BURNS: -- for having transformed our policy in both places.
MR. GOLDBERG: Nick, I take it you're coming out of retirement hopefully in the next Obama term, but --
MR. BURNS: Unlike Bob Kagan, who has no ambition.
MR. KAGAN: Yes, exactly.
MR. BURNS: We used to be friends.
MR. KAGAN: Well, I actually I have no ambition, I already have somebody who works in the government, (inaudible) that's true.
But -- and again, I'm not saying that there's anything necessarily that's Obama-specific that we still have very low popularity ratings among the Middle East.
MR. BURNS: Here's the problem. I do have one thing. I've served in both Republican and Democratic administrations loyally. And I think that when Republicans see an American president -- a Democratic president, essentially undertake the kind of very tough-minded counter-terrorism policies that President Obama has, he deserves a little bit of credit. It will be very difficult for Governor Romney to run to his right on these issues. And that's going to be unusual in American politics.
MR. KAGAN: Well, that's an excellent political point, but --
MR. BURNS: Thank you very much.
MR. KAGAN: -- I am giving Obama credit. I do give him credit. I'm just talking about the irony that Jeff raised at the beginning of the question, when -- long time ago, when he first asked this question.
Which is --
MR. BURNS: It was like Tuesday, right -- or whatever, yeah --
MR. KAGAN: -- which is that you have a Barack Obama, and I think this is a winning point, and that's why they're doing it saying, look how many people I kill every day. You did not -- well, give it to the New York Times; this is specifically how I do the targeting, you know, they are making it an issue in the campaign, which -- you know that's what presidents do. I'm just saying that is not -- and I'm pleased about it, okay. But I'm saying that is not what people expected when they elected Barack Obama.
MR. STEINBERG: But may I just --
MR. GOLDBERG: Okay, wrap it up, yes.
MR. STEINBERG: It's important to (inaudible) and you did say it earlier. It may be that people had different expectations. But the President was clear in the campaign, he said Afghanistan was the real -- the important war, and that he identified -- he was the one who said explicitly that he was not going to respect Pakistani sovereignty if it came to an opportunity to deal with this. So -- I'm not disagreeing with you, but I think it's important to answer Jeff's question from the left, about it if there's a disappointment. It's because they weren't listening I think to candidate Obama.
MR. BURNS: The left should always have been disappointed.
MR. GOLDBERG: That would be true. By the way, in phase II of the secretary of State tryouts we're going to go to the bathing suit, and then the talent competition.
Which really -- stick around, I mean, really.
MR. BURNS: Watching an audience flood out of the room.
MR. GOLDBERG: Stick around for that, because that's going to be good, we'll bring in Richard Haass in, everybody is coming --
This is a fascinating conversation on many levels. And one of them is that this is what always happens in foreign policy conversations, which is -- we stay, no matter what we do -- I mean I would love to talk about our special relationship with Bolivia, obviously, at great length, but we never get to do that because we have the same problems that -- you have Iran, you have Yemen, you have Pakistan, you have the Middle East peace process which we haven't even touched on.
But the Obama administration has said very specifically and is doing things actually to pivot toward Asia, to deal with the long-term -- I suppose part of the motivation to deal with this long-term issue of a rising China. And I want to talk about that pivot, if it's working or not? Or if you -- and this gets back to that core point which is that presidents want to do all sorts of interesting things to advance American interests and advance global peace. But they get stuck dealing with a dysfunctional Pakistani government, for instance.
I mean, are we going to be able to make that pivot, or does the -- it's like the Godfather, every time you try to get off they pull you back in, and that's what you have in the greater Middle East.
MR. STEINBERG: First of all I think you know one of the great lessons is you've got to be able to do more than one thing at once while you're president and running the administration. But second, on Asia, I mean I do think the president, from his day one, signaled the importance that he was going to attach to Asia. And for first head of state that he invited to the White House was the Japanese prime minister at the time. Secretary of state's first trip as secretary of state was to Asia. One of the first policy decisions we made was to sign the so-called Treaty of Amity and Cooperation with ASEAN the Southeast Asian countries that allowed us to join the East Asian Summit, which is something that had been resisted in the past.
So the president, I think early on identified sort of the long-term set of interests to -- whether you call it a pivot, rebalancing -- it's to demonstrate that the United States sees critical long-term interest, economic security, political interest in Asia. And that very importantly -- and you have listen to the president's words on this, that this is not a contain China strategy. This is an engagement strategy in East Asia, it's a reassurance strategy out of the conviction that you're going to get a better result in China by knowing that the United States is there, that countries can rely on the United States being there. And it creates a climate in which, as China thinks about its choices, it's more likely to develop a cooperative strategy.
This is something that I don't think has gotten lost in the day-to-day of dealing with the Pakistans and the Syrias. It's been a sustained effort that started at the beginning of the administration and it's continued right up to the present.
MR. GOLDBERG: Nick, will you talk about re-balancing a little bit.
MR. BURNS: I was just going to say I think there's two problems with the word pivot; one is obviously we -- we are the global leader we've got to be involved in every continent of the world, most notably Latin America, Africa, Europe, not just Asia.
MR. KAGAN: And Antarctica.
MR. GOLDBERG: Very important.
MR. BURNS: And Antarctica. Second, pivot was a problem for a lot of people around the world because first it's what the Europeans heard was, you're pivoting away from us, your historic ally, towards Asia. The administration is not using the world rebalancing. It makes a lot of sense to me that we ought to be building up because that's where China, and Japan, and India are in Asia. Those are going to be critical allies for us. So I agree with the stationing of marines in Darwin, the use of Anderson Air Force Base as a strategic hub in the Pacific, much the way that Ramstein is in Europe, is very smart.
The problem here is China. I agree that we ought to be engaging China. There are very few people I think who would say we contain them. But it's engage comma hedge. There is a hedge to this policy. And the administration may not want to say it for obvious reasons, but part of it is we don't trust China long-term and Chinese intentions long-term.
So establishing a military partnership with India, reinforcing the alliances in Asia makes a lot of sense for the United States going forward.
MR. STEINBERG: You know the problem with the word hedge is that it begins with -- as you being to prepare for the worst case you begin to make it self-fulfilling. And of course we can't know what China's choices are going to be. But as soon as we begin to say, well we need all this capabilities that are going to make sure that if they're going in the wrong direction we're ready to beat them, they in turn see this through the same lens and they say, well the United States is prepared to keep us down.
And one has to take China's own history seriously; the century of humiliation, the sense of weakness and vulnerability. We need a new paradigm here, it should not be pollyannish about China, we don't know how it's going to come out. We don't even know internally what China will look like in 10 or 20 years. So we shouldn't assume the best.
But on the other hand preparing for the worst tends to make the worst the greatest danger. So we need a new approach. We need an approach that challenges China to demonstrate that its intentions are in line with what its rhetoric is. It likes to get away with the idea that it's just -- so just trust us, peace for rice. We shouldn't trust them because they say it, but we should say here are the things that you need to do to reassure us, to reassure your neighbors. And if you do that we can have this kind of cooperative relationship.
MR. GOLDBERG: Bob, any thoughts?
MR. KAGAN: Well, we can say whatever we want and call what we're doing whatever we want to call it. I'm very confident what the Chinese see as containment. And when they see us strengthening our military relationship with India, when they see us shifting naval vessels from the Atlantic to the Pacific, when they see us doing more and more joint naval exercises, now, with Korea in the Yellow Sea, it's inconceivable that they would not see that as containment.
Now I actually think there's nothing wrong with a policy which basically says to the Chinese the idea of acquiring military hegemony in this region is a non-starter. Pursue your economic glory, pursue -- solve the many, many problems in China, but the notion that you are going to say, these waters are ours, is just the wrong way to go. And I think it's very helpful of us actually to steer China in a different direction.
MR. STEINBERG: But that's starting with the political intentions. And the bigger problem in my view is trying to deal with the fact that China will have a more capable military. It will. I mean, any country that has the capacity to do it, and to protect its national security is going to take that.
So the challenge for us is to accept the fact that China's military is going to be more capable, and to challenge them to do it in a way that's not threatening to us and to others. That's the kind of dialog that traditionally doesn't take place but needs to take place, because that is going to determine whether we have rivalry and potentially conflict in East Asia or not.
MR. BURNS: But I think strategic mistrust is -- it may be unfortunate or non-unfortunate is a reality in the relationship. There is going to be strategic mistrust. And there was a very interesting -- you probably saw the little pamphlet put out by Ken Lieberthal and Wang Jisi, which is about, you know, strategic mistrust and you know both trying to reflect how China and the United States look at each other. I think it's an inescapable reality, and managing it is going to be the task.
MR. STEINBERG: It is managing, and understanding that we both have the stake in limiting the risks there and to identify the places where the mistrust is most likely to lead to conflict and trying to bind that.
MR. BURNS: I would say there's going to be rivalry and there's going to be strategic mistrust, we should just assume that. We got to try to work with China, and keep the peace with China. But it's easier to do that from a position of strength. So this buildup, and Bob referred to it, we've had a 50/50 split historically in our naval forces since the Second World War, Atlantic and Pacific. And Secretary Panetta just announced it's going to be 60/40 now, 60 percent of our naval forces in the Pacific. And none of the reductions in U.S. military spending and in force structure will come out of Asia, but it will come out of other theatres.
I think this is very sensible. And there ought to be a high degree of bipartisanship, I would think on this policy --
MR. KAGAN: But this gets to -- and I mean getting back to the rebalancing question, we are not going to be withdrawing from the Middle East, I mean that just --
MR. BURNS: I want to come to that point again.
MR. KAGAN: -- we are deep -- I would say in some respects we may be more deeply enmeshed in the Middle East in the years to come than we have in the past precisely because of all the ferment that is taking place there. And we're not going to shift away from the Middle East. And this is going to now, and we haven't talked about this, but this is going to get into resource questions. Because we simply -- it is not yet clear to me that we're going to be able to make the rebalancing real, for instance, if we go into sequestration of the defense budget, which is looming over everybody's head.
MR. GOLDBERG: Right.
MR. STEINBERG: But it's also -- I agree we have important strategic stakes in the Middle East, but I think we also should not underestimate the fragility of -- the basis for our presence there. Our presence is based in the Gulf monarchies, right. How long are they going to be there? How reliable is that? And I think this is one of the big long-term challenges for the United States. Are we going to be able to sustain that footprint in the Middle East? It's in our interest to do so, we need to find to -- but there are deep tensions there, as we've seen in Bahrain over the last 2 years. And this is going to be an increasing problem for the United States.
MR. GOLDBERG: We're going to go to questions in a few minutes I think -- 5 minutes. But I want to just -- let's just cover Middle East peace in 5 minutes if we can. And so --
-- why has the administration failed to bring about what President Obama wanted to bring about, which was a comprehensive Palestinian and Israeli peace, Nick?
MR. BURNS: Well, I think you know looking at the Obama foreign policy objectively this is the one issue where there's been absolutely no progress. And if -- I'm sure if the Obama team could replay the spring of 2009, the open challenge to Israel, the public disputes with Israel, they'd probably do that. There is an opportunity I think perhaps in 2013 for either Governor Romney or President Obama reelected to take this up again, and I think we ought to do it. The challenge to the Palestinians --
MR. GOLDBERG: How would you do it differently?
MR. BURNS: The challenge to the Palestinians is they are fundamentally divided. And I fear that the Mohamed Morsi presidency in Egypt might embolden Hamas to think that it doesn't have to compromise with Abu Mazen in Ramallah with the Palestinian Authority in Ramallah.
The problem with the Israeli government is -- well the strength of the Israeli government is this new constitution that now includes Shaul Mofaz as deputy prime minister does have the domestic strength to make some big decisions. They need to see that there is a united Palestinian delegation. It's never easy; it's been 64 years since this problem began. Every administration has tried; I don't think this administration has done well. But they may have a second chance if the president is reelected and they ought to take it.
MR. GOLDBERG: Jim?
MR. STEINBERG: I would emphasize the point that Nick made about the challenges on the Palestinian side. I mean I think we cannot continue to believe that the peace process is going to proceed in 2013, the way it did the 20 years before. The Arab Spring does make a difference. The world has changed in the region. And until some of these things are sorted out, the kind of conventional notion that the Israeli prime minister and the PA prime minister or president can sit down and cut a deal are just not true.
And so there is going to have to be a resolution on the Palestinian side. And some kind of consensus between Fatah, Hamas, and the other forces on the Palestinian side that makes it possible to even imagine what a negotiation is like. In the meantime, what needs to go on is the Fayyad plan, which is to continue to develop the capacity, and to not expect negotiations either driven by the United States, or driven by the two parties. They're not ripe right now. And you cannot make a negotiation happen when it's not ripe. Just kind of a coup de main kind of forcing out of Washington; everybody thinks that can happen if only somebody would punish somebody or threaten somebody this would happen.
The parties have to be in a position to make a deal. And right now with the uncertainties especially on the Palestinian side, but to some extent on the Israeli side as well, that's just not going to happen in the near term.
MR. GOLDBERG: Bob, answer the question, and fold this one in, we're talking about things coming down the road for American foreign policy. Do you think that the Camp David accord between Egypt and Israel is in trouble? I mean that would change everything.
MR. KAGAN: Well, I'm not sure -- I don't know what it would change actually. I mean I'm not -- there's not going to be a war between Israel and Egypt, but I would say the more democratic Egypt is the greater the likelihood that an Egyptian parliament could vote.
Now it's also possible for a variety of reasons, and I want to be as optimistic as reasonable that the Brotherhood may decide that's not the step they want to take right now, that that's not beneficial to their economic interests, it would create a crisis obviously with the United States which -- they don't like United States very much but I think they realize their dependency.
But I think we have to look at the very realistic possibility that if you let popular will in Egypt actually express itself I think that might be where it would go. But I'm not sure what the actual consequence of that is. And let me just say one final thing, when we were looking at the --
MR. GOLDBERG: But how could Jordan possibly keep its peace treaty if it's the only Arab state with a peace treaty with Israel?
MR. KAGAN: All these peace treaties just seems to me were built around a notion of eventually getting a global Arab peace with Israel. We are a long way from -- it's been a while since anybody thought that was a really serious possibility. And I also wonder about how unbelievably vital it is, especially in part because of what's going on right now.
And one question I would have is what is the effect actually, including on this issue of Assad falling to another kind of government? I mean, I'm not -- and I don't know whether it's good or bad but it will have real impact on what's going on in Lebanon, and it will have real impact in what's going on in the Palestinian territories.
MR. GOLDBERG: Well, the more instability surrounding Israel the less likely Israel is going to make some bold --
MR. KAGAN: But it could also under -- it could weaken certain forces that are now strengthened by Syria.
MR. GOLDBERG: Also true.
Do you want to finish that up, and then we'll go here.
MR. BURNS: I just want to say a lot depends on this and the very dramatic events happening in Egypt. The fact is that there's going to be a struggle for power between the military leaders and the new Muslim Brotherhood dominated government. And there are at least some indications this week that they are talking, and they may be compromising with each other.
I can't see an Egyptian government where the military has influence, walking away from the Camp David Accords. And I think it would be very consequential if they did; very bad news for Israel. And the U.S. has a role to play here; we're not the central actor but we do have our aid, $1.3 billion a year. And we ought to, behind the scenes, quietly make it clear to both sides in this struggle that the Camp David Accords are critical for us.
MR. STEINBERG: And depending how that comes out has a big influence within the Palestinian side because after all Hamas is now out to Syria, kind of thinking about moving to Egypt. If the Brotherhood finds a way to live with this that could have an influence on the Palestinians as well, not on Fatah, which is where Egypt normally had its influence, but ironically on the other side.
MR. KAGAN: Let me say I don't like the idea of putting all our money on the Egyptian military, for a variety of reasons that worries me.
MR. GOLDBERG: We're going to go to questions. There are mikes there, and there.
Yes, sir, if you just wait for the mike because we're recording this for posterity or something, I don't know why.
And make your questions in the form of a question.
SPEAKER: Anton Zonatma (phonetic). There are three factors that I haven't heard you talk about that I wanted your opinion on in terms of whether they are strategically important. One, Shell Gas, and how it makes the U.S. more energy independent, and the Middle East, particularly the Gulf, less relevant?
MR. GOLDBERG: You get one question. I'm sorry, we got so many people. Answer the energy question if you can.
MR. STEINBERG: So I think the big thing about, as you know well, it's not a question of whether we are independent. It's a question of what does the global energy system look like. And I do think this is significant, it's Shell Gas, it's a lot of the new technologies, it's the availability of LNG, and the more globalization and commodification of gas that allows us -- the world's system to be less dependent on any one region.
I think that's clearly a plus in every respect. I think that part of what we've been able to do with Iran is a function of the fact that people see the energy environment changing; the leverage of the producers is declining. So I think broader than just Shell Gas, but the diversification of the global energy supply over the long-term, coal, modern coal, cheaper and cleaner coal, all of these things is a hugely positive benefit I think for our strategic situation and our strategic flexibility.
MR. KAGAN: And it affects Russia too obviously.
MR. BURNS: I would also say it doesn't lead me to believe that we can somehow just consign the Middle East to a secondary importance because Israel is there. Israel is always going to be a -- Egypt is there, the keystone state. So it may give us a higher degree of independence typically from the Gulf states, doesn't really lessen the strategic importance of the region in my mind because of these other two countries that are so important to us for other reasons.
MR. GOLDBERG: I thought Pennsylvania was the keystone state.
MR. BURNS: Egypt.
MR. GOLDBERG: Egypt also, that is great.
MR. BURNS: It's on their license plates.
MR. GOLDBERG: I didn't have the license plate really.
Yes, sir. Wait for the mike.
SPEAKER: You've made it through the hour without mentioning the name of the secretary of state at all. I wonder if you'd give us a --
MR. STEINBERG: I did. Just for the record, so that my former boss knows I talked about her first trip to Asia.
SPEAKER: But you didn't mention her name. And the question is --
MR. BURNS: Hillary Clinton, Hillary Clinton, Hillary Clinton, Hillary Clinton, okay.
SPEAKER: Yes, thank you. Now the question really is what kind of a report card could you give on her role in the administration's foreign policy, and comparative to other past secretaries of state.
MR. GOLDBERG: Well, let's ask her former deputy for an honest assessment.
MR. BURNS: A plus.
SPEAKER: Or the person who is married to her spokeswoman.
MR. GOLDBERG: And Bob is married to her spokeswoman, so -- what are you going to do.
SPEAKER: Okay Nick.
MR. GOLDBERG: And Burns is a life long enemy.
SPEAKER: And the guy who wants to work in the next Obama term, so there --
MR. GOLDBERG: And my wife works for her also by the way, but we'll put that aside.
MR. STEINBERG: And I'm the only person --
MR. GOLDBERG: And here she is, thank you Hillary for coming, I think you know --
MR. STEINBERG: I'm the only person in this panel with no ties to this administration; I'll answer your question. I think what she -- she's done a lot of things extraordinarily well. Her early emphasis, as Jim said on Asia was important as a signal of changing U.S. priorities.
Second, if you look at where she travels and what she does in those countries. Typically -- and we've all worked for secretaries of state, you'd fly into the capital city, and only the capital city. I remember Secretary Clinton's first trip to India, in the summer of 2009. I think she spent two-and-a-half days outside the capital.
And she's focusing on -- of course, she's focusing on war and peace, and balance of power issues, but she's focusing on the role of women, she's focusing on development. She's lifted up development within the Department of State and made it a bigger priority. I think this is a pretty important contribution that she has made. So I've been very impressed by what she's done.
MR. GOLDBERG: Bob, I'm not going to put you on the spot.
MR. KAGAN: Thanks.
MR. GOLDBERG: Yes, you're welcome.
Go over there, and then I'll come around here, I'm sorry. Right here, yes, ma'am in the blue shirt.
SPEAKER: Just on the question of China. I would like to know what you think, they own so much of our debt. How does that affect our leverage with them -- against them?
SPEAKER: Well --
MR. GOLDBERG: Don't all jump at once.
MR. KAGAN: One of the mistakes I thought that Secretary Clinton did make was when she said it's difficult to say no to your banker. Because I actually don't believe that -- it's unclear to me what leverage that gives the Chinese. It seems to me it also gives us leverage over them. There a -- I don't know -- have enough money to know this is true, but apparently if you owe a bank $100 you're in trouble; if you owe the bank $100 million the bank is in trouble.
So I'm assuming that I wouldn't know what that actually means. But I'm assuming there's an element --
MR. GOLDBERG: I'll bet you $10,000 you do.
MR. KAGAN: The bottom-line is our economies are so mutually dependant that China has no interest in destroying the American economy. So I -- it's unfortunate, I would like to lower it significantly but I'm not sure what -- maybe Jim has a -- I don't whether Jim has different feeling.
MR. STEINBERG: No, I completely agree. I think this is a situation that they hold our debt because it is in their interest, it's in their interest for that the value of that debt to remain valuable to them. And they need the American economy to succeed. Their whole economy depends on our economy. So I think this is one in which their -- this is as much their dependence on us, and the fact that they're holding debt just deepens that dependence.
MR. GOLDBERG: The woman in the white -- raising her hand. Yes, wait for the mike.
I think we have time for two more.
MS. LEE: Okay, my name is Sonia Lee (phonetic) from Chinese People's Friendship Association with Foreign Countries. And in fact more than 20 years ago I studied in the States, and then when I returned worked to China. And I feel shocked. I use "shocked," definite. I mean, 20 years ago and now, big change.
However, from an economic viewpoint, GDP, and the export import number; big. Seems like a threat; however, please remember if you divide it by the 1.3 billion people the number immediately shrinked; small.
And then from a military viewpoint there is no single military base outside China. So I want to ask from what -- or which aspect China is a threat, thank you.
MR. BURNS: I would just say that I think there's a consensus in both of our political parties that we ought to do everything we can to get along with China and work with it. We're going to be the two most important countries -- most powerful at least in the 21st century. There's no question from our perspective that China is the most important relationship that we have. You'll see a lot of emphasis on China.
But from my own perspective, as a practicing diplomat, we've been concerned by Chinese actions in the South China Sea. We have treaty allies. Some of the disputants in the Spratly Islands, disputes for instance. We have obligations there. We have an interest in seeing problems worked out not by bullying. And sometimes China can be accused of bullying its neighbors, but more by consensual means, you know, negotiations.
Secondly, China has not played by the rules in intellectual property rights. Third, we have profound disagreements with the Chinese government on human rights, religious rights. And so we've got to be honest about the differences. And what you're seeing is, in our democratic society, people not holding back and people trying to move the relationship forward in an honest way. And I think that's what you're going to see in the future as well.
MR. GOLDBERG: Quickly, Bob.
I think we have time for one more. Is there anybody back -- yes, there's somebody all the way -- yes, the room extends, I'm sorry.
SPEAKER: When you talked about China, earlier, it was really couched in the military sense, the rebalancing, all that. It seems to me one of the most important things, maybe more important than the military is our commercial relationship, and not only with China, but through Asia. China will obviously dominate the Asian economies economically.
And what are we doing to ensure that we're a part of that, that we're a player out there, that they are successful and that we're successful economically in that region?
MR. KAGAN: Well one answer is the Korean Free Trade Agreement. I was just in Seoul a few weeks ago. And the relationship with Korea now is so good that the people in the embassy are saying it can only go downhill from here. That's -- a good Foreign Service attitude towards things.
MR. GOLDBERG: That's a declinist mentality, yes.
MR. KAGAN: But, I think that that free trade agreement has made a big difference, and the administration -- and Jim can talk to this more than I can. But the administration is making an effort with the Trans-Pacific Partnership and other means to try to get the United States back in the game.
I don't think anyone imagines that the United States is going to displace China or beat China in this respect. But the United States definitely can be in the game, and it is important. And I know that the State Department worries that there's too much emphasis on the military and not enough on the economic and the diplomatic, and that's what they're trying to repair.
MR. STEINBERG: The TPP, the Trans-Pacific Strategic Partnership is extremely important not only because it potentially puts the United States at the center of building a multilateral trading regime in East Asia, but it's also what we would call a high quality agreement; it protects intellectual property rights, it deals with some of the issues of labor and environment that we care about.
And so this is a model that really allows, not just the United States as a trading partner there, but it actually influence the rules of the road and it has a huge attraction. More and more countries want to be a part of it. Mexico and Canada now signed up to be a part of this. Japan is thinking about becoming a part of it. So we are actually now becoming the center of the economic architecture of East Asia if this is successful and it's moving forward in a good way.
Similarly on investment treaties; we finally cleared the way to make more progress on bilateral investment treaties, which is also really good for American firms moving into these markets. So I think you are right, this is a critically important area. And we want to make sure it's not a China-centric model of trade relations.
MR. GOLDBERG: Nick, you have the last word.
MR. BURNS: Last word on this. It has been difficult I think for President Clinton, President Bush, and President Obama to juggle these competing priorities with China. And President Clinton, I remember saying in his second term, the problem is not going to be a strong China, it may be a weak China.
And this gets back to a point that a couple of us have made. There's a symbiotic relationship that we've got economically with the Chinese. And we are the two leading actors in the world. And so in some ways, and you see this in the hedge, and you see this in the U.S. military buildup, we've got to position ourselves to be powerful in case the Chinese revolution goes the wrong way. But in the main, I would expect us to have a very close, not friendly perhaps, but close relationship with China, working out differences because we are in effect the stewards of global stability more than any two countries. This is a new thing for us, and very difficult to get this -- the balance right. But I do think there's a high degree of uniformity among the last three presidents in how to look at the Chinese challenge.
MR. GOLDBERG: Thank you very much guys, this has been great. Thank you much for coming, we appreciate it very much. Thank you.
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