U.S. Relations With the People's Republic of China (2006)

U.S. Department of State

Press Roundtable With Assistant Secretary Thomas Shannon

Thomas Shannon, Assistant Secretary for Western Hemisphere Affairs

Washington, DC
December 13, 2006

(9:30 a.m. EST)

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QUESTION: (Inaudible) Garcia from Reuters Latin America. Trade has been the main tool for the U.S. to fight poverty in the region. Do you see any changes on this policy towards aid when you have the results of the elections showing that people want a better social agenda? Like would that be a solution for the U.S. to increase its engagement in the region because, for example, Chavez offers almost double help in aid than the U.S. in the region?

ASSISTANT SECRETARY SHANNON: That's probably not true, you know.

QUESTION: Well, we do -- we read things but -- we could assume.

ASSISTANT SECRETARY SHANNON: It's a very good question. From our own point of view, we've been focusing on getting more resources into the region since the beginning of the Bush Administration. If you look at what this Administration has been able to do, we've doubled foreign direct assistance to the region. When the Bush Administration came into office, the U.S. on average was spending about $800 million a year in foreign direct assistance. And that's all assistance: development assistance, military assistance, counter-drug assistance, you name it. Even with the $1.3 billion spike of Plan Colombia at the end of the Clinton Administration, it still averages out to about $800 million a year. The Bush Administration has spent about $1.6 billion. On top of that, it has brought new funding sources to the region through the Millennium Challenge. If you add up what we've done in El Salvador, Honduras and Nicaragua and then add the threshold programs in Paraguay and Guyana, it's almost $900 million in addition to the 1.6 billion.

QUESTION: (Off-mike.)

ASSISTANT SECRETARY SHANNON: No, because the money gets spent over several years -- it depends on the program. In some countries it's a five-year program and in some countries less. But it's -- over time it's an additional -- it's just a little under, I think --

QUESTION: So is this obligated funds?

ASSISTANT SECRETARY SHANNON: Yes.

QUESTION: Appropriated or just obligated?

ASSISTANT SECRETARY SHANNON: No, no, it's done. They're done. These are compacts that have been signed.

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QUESTION: So politically, do you think that it would be important to engage more in aid? You mentioned that you've been asking for more resources.

ASSISTANT SECRETARY SHANNON: We'll take all the money we can get.

QUESTION: But especially with China having an increasing presence in the region is something that you consider?

ASSISTANT SECRETARY SHANNON: Well, first of all, right now we're on a continuing resolution. We don't even have an '07 budget yet. But we're working through the '08 budget process and, with the new Congress the Secretary would be going up to the Hill in either late January or February and presenting our '08 budget. So we've got lots of effort in front of us in terms of walking down funding for the region. There is a lot of competition, but we're going to continue to make the effort that we can use all the money they can give us, number one.

Number two, we need to understand that when we engage in the world it's not just the United States, not just the U.S. Government I mean, and in fact our bilateral assistance is really a pale reflection of the kind of resources that are flowing out of the United States to the region. If you look at remittances coming from the United States today into Mexico, Central America, the Caribbean and some of the Andes, depending on who's doing the counting, it's anywhere from $45 to $50 billion. That is multiples more than we give in foreign direct assistance. If you look at our trade and preferential access programs, about 85 percent of all the goods entering the United States from Latin America and the Caribbean enter duty free. And, again, our commerce has been growing over time, but that's probably about $200 billion worth of goods. Again, many multiples more than our foreign direct assistance.

If you look at U.S. foreign direct assistance in the region, I don't know what the most recent figures are but it's probably about $350 billion. We can get them for you if you'd like.

QUESTION: Assistance or investment?

ASSISTANT SECRETARY SHANNON: I mean investment, foreign direct investment. Again, many multiples more than our foreign direct assistance. Therefore, we have to understand our assistance as being very targeted and very catalytic. Its purpose is to make things happen. When it comes to the greater economic well-being of the region or the greater economic well-being of individual countries, what's important is access to our markets and attracting investment, both U.S. investment and other foreign investment.

QUESTION: In that regard, would you address China's role in the hemisphere and whether it -- how you see it?

ASSISTANT SECRETARY SHANNON: Sure. I went to China earlier this year and we held our first ever U.S.-China consultations on Latin America and we will invite the Chinese to Washington to continue those consultations in the new year.

From our point of view, it was very important to be able to sit down with the Chinese and share with them our vision of the region and our interests in the region and then to hear from them their vision of the region and their interests. What struck me is that at a basic level we share some common strategic interests with China, one of which being the economic success of the region and the second being political stability in the region. China's engagement in the region is all about China. It's all about finding energy resources to drive its industry and economy, basic resources for its manufacturing processes and food for its people.

QUESTION: So in other words, it has a selfish agenda, is what you're saying?

ASSISTANT SECRETARY SHANNON: Well, we all have selfish agendas. What I'm saying is that right now at least, its investment is all about finding resources and goods that China needs now to feed its people, to develop its economy, to run its industry. It has not reached a stage in which it's investing in the region in order to create companies, to create employment, to create wealth. It will eventually get there, but it's not there yet.

So what China needs in the region is reliable partners and reliable suppliers. Therefore, as I mentioned, it does share this fundamental interest we have in stable governments and economies that are successful. I think it's important for us with a country like China to recognize that we do have these common points because it creates a space where we can talk to each other and maybe even work together.

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Released on December 14, 2006