Fact Sheet: U.S. Economic Relations with East Asia and the Pacific
(U.S. supports economic reforms, open markets in region)Following is the text of a State Department fact sheet on U.S. economic relations with the Asia-Pacific region:
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FACT SHEET: U.S. ECONOMIC RELATIONS WITH EAST ASIA AND THE PACIFIC
The economies in the East Asia and Pacific region were the most dynamic in the world during the 1980s and most of the 1990s and for most of recorded human history.
Japan is the world's second-largest economy, our largest trading partner after Canada and Mexico, and the world's leading aid donor. It is struggling to implement reforms needed to pull out it out of 10 years of economic stagnation.
China is a growing economic power that has been able to achieve impressive overall economic growth and poverty reduction at the same time it tackles the challenges of transition from a command to a market based system. China however faces problems of managing growing rural/urban imbalances, fundamentally restructuring its financial and state owned enterprise sectors, and environmental sustainability. A severe reduction in exports, particularly IT goods to the U.S., has throttled the recovery of ASEAN and Korean economies since the 1997-98 crisis.
Throughout the region accelerated reforms are needed to address the weaknesses revealed by the Achilles' heel of the Asian miracle: weak financial systems, crony capitalism, and dysfunctional and non-transparent domestic markets that grossly misallocated resources. Economic reforms to address these problems have shown some results, but more must be done.
The United States, in cooperation with international institutions and other partners, is helping the economies of the region resume growth and prosperity by:
-- Supporting economic reforms.
-- Maintaining strong U.S. growth with open markets for the region's exports.
-- Promoting an open international trade and financial system.
-- Supporting economic assistance to the countries hit by the financial crisis, and
-- Providing a military security umbrella that contributes to the confidence needed to expand international business.
The US advances this agenda bilaterally, including through the Economic Partnership for Growth with Japan and annual economic dialogues with China and Taiwan, and regionally, thorough our leadership of APEC, our participation in annual ASEAN Ministerial meetings and revival of the US-ASEAN trade dialogue. The United States has a great interest in continuing to assist Asia-Pacific economies, which are increasingly integrated with our own. Over one-third of U.S. total trade is now conducted with the region. However, this dramatic expansion has been accompanied by the development of recurring and growing U.S. trade deficits. In 2000, the United States had trade deficits with most economies of the region, totaling $186 billion. The largest deficit was with Northeast Asia (China, Hong Kong, Chinese Taipei, and South Korea) ($125 billion); the second largest was with Japan ($85 billion).
The United States played a key role in forming the Asia-Pacific Economic Cooperation (APEC) forum, a regional grouping of 21 economies. APEC's members account for 60% the world's economic output and nearly half its population, include our four largest bilateral trade partners, take over 62% of our exports, and provide nearly 65% of our imports.
The United States works actively with its APEC partners to promote the forum as a vehicle for regional economic cooperation. In 1993, the United States invited APEC Leaders to Blake Island, Washington. Leaders have met annually since, providing a new drive and momentum for economic cooperation in the region. In addition to the annual Leaders' Meetings, the annual Ministerial, Trade Ministerial and other APEC meetings cover topics ranging from e-commerce and energy to tourism and marine resource conservation. The United States provides leadership in many of the APEC fora.
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