Via Teleconference
9:33 A.M. EST
MS. BARKOFF: Thanks, everyone, for joining today’s call. On today’s call, we’re hoping to provide you all with more details of the Vice President’s schedule and goals during his trip to Panama next week. This call will be on background, and our speakers will be happy to take a few questions after they give some brief opening statements at the top. We’d like to keep this call focused on the trip as much as possible. And I want to remind everyone that it is one question per person today.
With that, I’m going to turn it over to our first speaker. You can quote them as a Senior Administration Official.
SENIOR ADMINISTRATION OFFICIAL: Thanks, Kendra.
I’m going to just take a couple of minutes to put this trip in a broader context, and then turn it over to my colleague to talk specifically about the Panama elements of the stop and the U.S.-Panama relationship.
The trip the Vice President is taking next week continues the most active year of engagement by this administration in the Western Hemisphere by any administration in quite a long time, with the President traveling to Mexico and Costa Rica in May; the Vice President traveling to Brazil, Colombia, and Trinidad and Tobago; welcoming heads of state here from Peru and Chile already, and then later this year from Colombia; the Vice President was in Mexico in September; met with the President of Uruguay on the margins of the UN General Assembly in New York; he has — the Vice President has initiated the first-ever sustained dialogue with members of Congress on the Western Hemisphere; and if you look at his call logs over the course of the past few weeks, there is a regular spot for leaders in the hemisphere on a wide range of issues.
So the President has made it a priority for the administration at all levels to elevate and intensify our engagement in the Western Hemisphere, and has asked the Vice President to play a role in helping lead and spearhead that effort. And this trip to Panama next week is simply the latest in that line of engagement, and comes in a broader context of our commitment to partnership and active engagement in the Western Hemisphere.
One of the reasons why we’re placing such a high premium on this intensive effort in the Americas is that the economic interconnections between the United States and the countries of the Americas, from Canada all the way down to Chile and everywhere in-between, create so many possibilities for American workers, for American businesses, and for the businesses and workers of all of the countries of the Americas.
The middle class in Latin America has expanded by 50 percent, from just over 100 million in 2003 to over 150 million in 2009. And over that same period, poverty has fallen from around 44 percent down to 30 percent.
If you look at where U.S. exports go, where the things, the stuff, that American workers make, is shipped overseas, nearly 40 percent of it goes to the Western Hemisphere. And between 2008 and 2011, U.S. exports to the Americas increased from $250 billion to nearly $750 billion.
If you look at particular pieces of our engagement in the hemisphere, just in North America alone, we have a trillion-dollar trading relationship with Canada and Mexico under NAFTA.
And the energy picture tells a very similar story. One third of our oil imports come from the region. And if you look at the growth, the added oil coming on to the market, it is coming on from places like the United States, like Brazil, and Mexico, and Canada, and other countries in the hemisphere.
So this is a story that cuts across every issue and every constituency. But the economic dimension of our relationship with the countries of the Americas is an especially central part of the pattern of engagement that we have pursued this year and will continue to pursue over the course of the next three years.
And that’s especially important when we think about going down to Panama, because obviously the Panama Canal is a lifeline for trade and commerce for the United States and for the world. And it connects directly to questions of economic development and job creation in the United States.
So before the Vice President actually goes to Panama, he’ll be stopping along the way to visit the port of Houston. And in Houston and then in Panama, where he will tour the Panama Canal expansion project and meet with Panamanian President Martinelli, he’ll be accompanied by a number of significant American leaders, both members of Congress, and city leaders, mayors. Specifically, he’s going to be joined by Secretary of Transportation Anthony Foxx, Senator Johnny Isakson of Georgia, Representative Debbie Wasserman Schultz of Florida, Mayor Stephanie Rawlings-Blake of Baltimore, Mayor Kasim Reed of Atlanta, and Mayor Michael Nutter of Philadelphia.
And the reason that these leaders are traveling with the Vice President is because they want to drive and reinforce the same message the Vice President does, which is that what happens with the Panama Canal matters for American jobs and American cities, it matters for economic growth in the United States, and it matters for broader economic growth throughout the Americas and around the world.
And so drawing this connection, this link, between the cities of the United States and the well-being and welfare of the American people to the important work that is going on in the expansion of the Panama Canal and the future of Panama itself — drawing that link is an essential way to show just how important our engagement in the Americas is.
With that, let me turn it over to my colleague to talk through the U.S.-Panama relationship, because the bilateral relationship and other issues of importance on foreign policy in the hemisphere are also going to be an important part of the Vice President’s trip.
SENIOR ADMINISTRATION OFFICIAL: Thank you very much.
As my colleague just mentioned, the Vice President’s visit to Panama should be seen in the context of our increased engagement with the Americas more broadly. President Obama has made six visits to Latin America during his time in office. And this is the Vice President’s sixth visit to the region and his fourth in the last 12 months alone.
In addition to our focus on Panama’s importance, has been an effective custodian of the Panama Canal, Vice President Biden is visiting to highlight our very positive bilateral relationship, and Panama’s important role in the region.
Panama, as you know, is going to be a very good location for the next Summit of the Americas, which it will host in 2015. We have a very strong economic relationship with Panama, with about $10.4 billion in trade in 2012. And trade has increased from that period by about 15 percent since our trade promotion agreement went into effect in October of 2012.
We also have a very successful security partnership with Panama and work together to combat organized crime, including organizations that take advantage of Panama’s strategic location and its role as an international logistics hub. That’s something that we’re going to continue to highlight, and it will certainly be a topic of discussion between Vice President Biden and President Martinelli.
President Obama and the Vice President are undertaking this outreach, including with Panama, because, as my colleague mentioned, we’ve seen the Americas as a region of opportunity for the United States, and we have a chance to build a hemisphere that’s secure, middle-class and democratic. And Panama is part of that. We see it as part of the broadly positive trend in the region, and while not losing sight of the fact that there’s still much more to do, particularly in Central America.
When President Obama visited Costa Rica in May and met with Central American leaders, one of the themes he emphasized was U.S. support for economic integration in Central America. As positive as the regional story has been, Central America’s slow economic growth and high level of insecurity in some countries remain a major source of concern. Our view is that the more that the countries of Central America work together collectively to reduce barriers and take advantage of what’s now a population that’s approaching 40 million people, the greater likelihood that they’ll be able to overcome the challenges they face, which we just described.
The Central American Integration System, or SICA, is really key to this effort. Panama and the canal are also an important part of the effort to integrate regional infrastructure and regional economies, to reduce the high transport costs of Central America and to address the high energy costs for local producers that are approximately three times the costs of energy in the United States.
Finally, the message that the Vice President is bringing is that the United States is a committed partner, and that we want to be part of the success of the region. Panama is a good example of how this partnership can bring concrete, positive results, both in the Americas and in the United States, to create jobs in both the United States and in Central America.
So thank you and I think we’re ready for some question.
SENIOR ADMINISTRATION OFFICIAL: Maybe before we go to questions, if I could take one more moment for those of you on the phone who don’t have the background on what is happening with the expansion of the Panama Canal, just to situate that because it’s an important part of what is bringing the Vice President down to Panama at this time.
As some of you know, ships currently passing through the Panama Canal have to be a certain dimension. Basically, they have to be able to go through 39.5 feet deep in the water to get through the canal’s two lanes. In 2015, Panama will complete a larger lane that will accommodate the larger — what are called Post-Panamax ships — up to 50 feet deep to pass through. Post-Panamax vessels currently handle about 87 percent of existing container ship fleets and can accommodate as much as three times more cargo than current ships that can go through the Panama Canal.
So the addition of this third lane will ease the bottleneck, will allow Post-Panamax ships to get through, and will create a more efficient system for existing Panamax ships to get through as well. What the Panama Canal Authority estimates that the cargo volume will actually double (inaudible), and as a result that will benefit a great number of ports in the United States as well as other countries in the Americas.
So that is the sort of context and backdrop for the trip to visit the Panama Canal expansion project. And in the run-up to this trip, the Vice President has actually made it a point to visit several key ports in our country to highlight the importance of infrastructure investment in the United States. In September, he visited Baltimore, Charleston and Savannah. In November, earlier this month, he traveled to the Northwest Ohio Intermodal Terminal near Toledo. And then obviously he will hit the port of Houston before heading down to Panama.
SENIOR ADMINISTRATION OFFICIAL: I think with that we’ll open it up to a few questions.
Q Thanks for doing the call. You mentioned that the President has asked the Vice President to spearhead the work on this relationship, and I just wonder if you could say a little bit more about that mission individually, and then also sort of how it fits into the Vice President’s larger portfolio.
SENIOR ADMINISTRATION OFFICIAL: Sure. Well, beginning early this year, the Vice President began a pretty intensive pattern of engagement in the hemisphere, both through travel, through calls, through outreach to the Hill and through public speeches where he tried to lay out and reinforce the President’s agenda, themes and messages for the hemisphere. He gave a speech at the Council of the Americas on May 8th that I think still stands as a pretty good blueprint for what the administration’s approach will be to the hemisphere in the second term.
And what both the President and the Vice President believe is that spending more time, having a deeper investment in building relationships and partnerships with the countries of the hemisphere benefits the United States in a range of ways, not just on foreign policy matters, but also as I said earlier in terms of economic growth and job creation in the United States.
And the connections between the United States and the hemisphere in terms of our economy and the regional economy are only growing and only becoming more important to our future prosperity. That’s true whether it’s measured in terms of exports — more than 40 percent of America’s exports go to the region. It’s true in terms of energy and the energy revolution that we’re seeing throughout the Americas. It’s true in terms of questions related to immigration and the movement of labor in the region. And it’s true on a range of other issues as well.
So an increased focus on the hemisphere and intensified engagement with the people and leaders of the region fits into the Vice President’s overall mission, working on behalf of the President, of trying to advance economic growth, job creation, infrastructure investment — all of the things that will improve the lives of the American middle class. And a key to doing that is building deeper, stronger and more durable connections with the countries of the hemisphere. And there’s no place that you can see that more plainly and acutely than in the relationship between the United States and Panama and the Panama Canal expansion project, how that relates very directly and very literally concretely to the development of ports along the East Coast of the United States and in the Gulf of Mexico.
And so you will see over the course of the coming months, as you’ve seen over the past months, a continued intensive engagement by the Vice President on this set of issues. And this is not the Vice President doing this, I mean, out of his own sense of what’s important; it is the President and the Vice President concluding together, with the President setting a clear mission and clear direction for what he believes is important to accomplish, and the President and the Vice President thinking through how we can carry out this enhanced, intensified engagement and partnership with the countries in the Americas.
Maybe I’ll ask my colleague if he has anything he wants to add.
SENIOR ADMINISTRATION OFFICIAL: No, I think the only thing I would add is another part of the calculus is a sense, and a clear understanding that countries of the Americas are playing a greater global role, and they’re moving into foreign policy areas where maybe we wouldn’t have worked as actively with them in the past. A good example of this is trade in the Pacific and the importance of the Trans-Pacific Partnership to the United States and to the region.
Clearly the inclusion of four countries, in addition to the United States, in this broad agreement is kind of a signal of where we see the region moving. Again, our work in the Americas is part of a broader global context where we see the growing importance of partnerships throughout the hemisphere.
SENIOR ADMINISTRATION OFFICIAL: And just one last point I’ll make, the Vice President gave a speech this summer at the Center for American Progress, which was a speech largely focused on Asia, because it preceded his trip to India and Singapore. But in the speech, he drew a clear line between the administration’s rebalance to Asia and the intensified work we’re doing here in the hemisphere because you can see from the Indian subcontinent to the shores of the Americas an opportunity for a kind of 21st century trade and investment partnership, both through TPP and APEC, but also just more broadly in terms of creating the rules of the road for 21st century trade that a number of countries in the Americas, including the countries that my colleague just mentioned, are going to be integral players in. And that’s something that connects two of the administration’s significant initiatives: intensified work in the hemisphere and the rebalance to the Asia Pacific.
Q Good morning, thanks for doing the call. I just wanted to ask a totally hometown question, and that is could you talk a little bit about the role that the visit to Houston plays in this effort, going down to Panama? And secondly, I see that the mayor from Houston is not one of the officials included, I just wonder if there are other officials from Houston who might be going as well?
SENIOR ADMINISTRATION OFFICIAL: Sure. So, one of the reasons that the Vice President thought it was important to stop in Houston on the way to the Panama Canal is because he wants to, as I said before, draw this link between the development of America’s ports to the expansion of the Panama Canal.
And over the past five years, the administration has made a number of investments in the Port of Houston, including $100 million through the Recovery Act. And it’s in part as a result of these investments and investments that Texas and Houston have made that the total amount of exports from the Port Houston has increased by 48 percent. So today the Port of Houston is responsible for about $500 billion of economic activity a year, which contributes in one way or another to over 2 million jobs around the country.
It’s numbers like that the President and the Vice President is really trying to reinforce with all of his visits to ports around the United States, that this is part of the lifeblood of the American economy, and that expanding the dynamism and sustainability of these ports into the future as ships get bigger, canals get wider is going to be an incredibly important part of the American recovery and growth story. So that is what is motivating his trip to Houston before he goes down.
And he will be highlighting the fact that forecasts from the Port of Houston indicate that by 2035, there will be more than five times as many containerized exports traveling from Houston to Asia via canal — the canal as there are today. So you can just see both what the present contribution is and what the future holds in terms of the Port of Houston’s activities.
On the question of officials in Houston and travel to the Panama Canal, the Houston mayor won’t be accompanying him to the canal, but he will have ample time to be able to consult with the mayor and a number of local leaders in Houston during his time on the ground in Houston on that day. So he’ll have a chance to consult on the work that they’re doing with the port, their own vision for economic growth and infrastructure development, and also be able to talk about his trip to Panama the next day.
Q Can you talk a little bit about what message the Vice President would have for the domestic side — the U.S. side? Are U.S. ports equipped to handle these ships? Is there something that the ports in the United States need to do to expand themselves to accommodate this larger traffic?
SENIOR ADMINISTRATION OFFICIAL: Sorry, you cut out towards the end there. Can you just repeat the second half of your question?
Q Yes, sure. Is there anything that U.S. ports need to do to get up to speed to accommodate this expanded traffic that would come through the canal with these larger ships?
SENIOR ADMINISTRATION OFFICIAL: So, you’re talking to a couple of foreign policy wonks who are not particularly well suited to talk about the engineering of ports, but I will say this: That because of the expansion of the canal to allow for ships that run at 50 feet deep — which are now becoming the dominant type of containerized ship carrying cargo through the canal to and from Asia — a lot of work is going to have to be done on U.S. ports to be able to prepare for those ships to dock there and load and unload goods.
And that’s part of what the Vice President has been focused on when he’s been going to ports up and down the Eastern Seaboard — about the infrastructure investments that are required to expand channels, deepen channels, build the physical, on-the-ground infrastructure to handle larger (inaudible).
So the short answer to your question is that there is a huge opportunity for jobs and infrastructure development at the ports to prepare for a Post-Panamax world. And that is part of the message that he’s been carrying in his port visits so far, it’s what he will discuss in Houston. And then it is what, obviously, he’ll be highlighting down at the canal expansion project itself.
And obviously he’s bringing with him Secretary of Transportation Foxx, who has played a lead role in terms of helping get American ports prepared for the type of cargo and volume that will be coming as a result of the expansion.
SENIOR ADMINISTRATION OFFICIAL: And we can circle back with you with additional information if you’d like to reach out to the Vice President’s communications office. We can provide you with any sort of additional questions on this — or answers.
Q I’m sort of — Mark at Reuters sort of asked my question about the status of U.S. ports’ own expansion to accommodate the larger ships. But I was wondering, is it possible to quantify — again, this may be a question you’ll have to take — possible to quantify how much of the President’s initiatives for infrastructure development would go to port expansion before 2015 preferably? And I’m also curious as to how the trip came to be two days instead of three days.
SENIOR ADMINISTRATION OFFICIAL: On the latter question, it was simply a question of scheduling. The important elements came together — the bilateral with the President, a visit to the port, the chance to see the presidential candidates — came together in a way where we were able to put it all on a single day rather than have it go over into a couple of days. And obviously given everything else going on here, having the opportunity for the Vice President to be back in Washington was a positive thing. But we didn’t have to cut anything from the program; it was merely a question of how to schedule it in a way that it could all be done in a single day.
In terms of the dollar figures, that’s the sort of specific question that I know we have an answer to but it would be best to have our communications folks get back to you with — to answer both with respect to investments between now and 2015, and then from 2015 and beyond what we would be talking about in terms of infrastructure dollars from the federal government and then from state and local governments as well.
Q Shifting topic right now, I was wondering if by any chance the issue of Panama’s desire for the United States to retrieve and clean up former chemical weapon munitions that were left on San Jose Island, whether that will be discussed with the Vice President. The Panamanian Foreign Minister has said that a deal has been reached with the Pentagon for them to retrieve and dispose of the weapons, but I haven’t heard of any formal announcement coming yet from the U.S. government. Thanks.
SENIOR ADMINISTRATION OFFICIAL: Thanks for that. Obviously we’re aware of Panama’s formal request in May to have eight U.S.-origin chemical munitions destroyed. This is something that we’re reviewing right now and have committed to resolving in a timely manner. We think that this probably will be part of the discussions and we’ll be prepared to talk about it directly based on the conversations that we’ve been having with Panamanian officials this month.
Q I would like to know, since you mentioned that you are trying to engage with the Americas and the Americas is divided. So do you have a plan on how to dealing with the countries who are not really engaged with the U.S., as Venezuela? And if you can update on us on what happened with Brazil in the meeting with President Obama? Thank you.
SENIOR ADMINISTRATION OFFICIAL: Thanks for that. We understand that there are going to be differences among governments in the Americas, but I think the bigger issue is that, in fact, there is a very unified view throughout the Americas of a need to drive up social indicators and have broad-based economic growth. That’s one area where there’s broad agreement. Another one is on the need to have new and strong energy sources. That’s something that sort of cuts across as well.
There are many areas where there is a great deal of unity in the Americas. And we certainly don’t view the need or the desirability of any types of divisions, and we certainly have conveyed our readiness to talk to any partner in the region to have as constructive relations as possible.
And we think we’re going to continue on that course. I think the main story is that in the Americas what you see is a range of countries that use democracy and open markets to drive social development and to elevate social indicators, as my colleague described it at the beginning, in reducing poverty by significant amounts and driving up the growth of the middle class. In Brazil and Mexico, you have middle-class majorities at this point; you have middle classes growing throughout the region. So, again, the broader story is quite positive.
With respect to Brazil, we have a very strong bilateral relationship. There are many areas where we have been working together over the last five years, in particular, to build an infrastructure in our relationships and bilateral mechanisms that are going to address the very significant bilateral relationship between our countries, particularly in terms of trade and people-to-people contacts. And we’re sure that that positive relationship is going to continue.
We’re obviously dealing with the concerns that have been raised in the last several months, but we are confident that we are going to overcome those in short order and move ahead with what is a very positive set of relationships.
Thank you.
MS. BARKOFF: With that, I think we’ll end the call. Thanks to everyone for joining us.
END
10:04 A.M. EST