MODERATOR: Thank you so much, and good morning, everyone. Thank you for joining us today. And for those of you in California already, I hope you have a nice cup of coffee in your hand, appreciate the early wake-up call.
Before I turn it over to my colleagues to outline today's deliverables, I just wanted to remind everyone of the ground rules.
This call is on background, attributable to a "senior administration official." And we will lift the embargo today at 11:00 a.m. Eastern.
You should have received - if not, it's going out momentarily - a factsheet that's also currently under embargoed.
And we really - we'll have [senior administration official] kick off the call and then have [senior administration official] outline today's econ deliverable, and then we'll go over to questions.
With that, [senior administration official]?
SENIOR ADMINISTRATION OFFICIAL: Thank you. And thanks, everybody, for joining us this morning. As we've said, the President is very much looking forward to hosting the Ninth Summit of the Americas this week. But there's already been a fairly active pace of activity.
The theme yesterday, Tuesday, was on building strong and inclusive democracies, and you saw the Vice President announce $3.2 billion now in commitments from the private sector for nortern Central America women's empowerment initiative. The Secretary of State announced deliverables on independent journalism and the digital agenda for transformation.
Today, when the President arrives, the theme will be investments in the region's health and prosperity. And I'll let my colleagues speak to the Americas Partnership for Economic Prosperity.
On Thursday, we're going to focus on energy security and climate-smart recovery. And you'll see meetings that the President and Vice President will have with the Caribbean and others to focus on this issue.
And then lastly, on Friday, the focus is going to be on collaborative migration, where the President is going to meet with leaders to announce an unprecedented partnership on addressing migration challenges that are affecting all of us in the hemisphere.
So that is the focus. And today, I will turn it over to [senior administration official] to talk about the economic deliverables for today. Thanks.
SENIOR ADMINISTRATION OFFICIAL: Thanks. And thank you all for joining this morning.
So, today in Los Angeles, President Biden will announce a new economic agenda for the hemisphere, based on a vision of a region that is secure, middle class and democratic with the announcement, as [senior administration official] mentioned, of what we're calling the Americas Partnership for Economic Prosperity.
And it really is a fitting counterpart to the last time the U.S. hosted the Summit of the Americas 28 years ago, when then-President Bill Clinton really outlined an economic vision for that time that effectively laid the tracks for the next three decades of U.S. economic policy that followed.
So I think today's unveiling is a necessary update in matching that in scale and ambition, and really taking account of all the ways the world has changed and all the things that the region needs now to effectively run hard at the opportunities and address the challenges that the region has.
So, a bit on the "what." This historic agreement will be instrumental to deepening our economic cooperation, really focusing on the largest drivers of middle-out growth. And we think, going back actually to yesterday's themes of democracy, we see this as really a necessary part of the foundation for shoring up democracy in the region. Because I think - hopefully, it's obvious, but they're saying that we see democracy as not simply the right of people to choose their leaders, but the agency to shape the kind of economy we live in and the values that that economy serves.
So I think you will see three very clear through-lines of this effort. One is really building it, customizing it to run hard, fast, quickly, effectively at a set of challenges that we have today. I think that certainly the supply chain crisis that we're still in the middle of stands out as high on that list. And what will be a new kind of supply chain negotiation really meant to make the supply chains in the hemisphere resilient to unexpected shocks, I think, will be a centerpiece of this.
I think we will really think hard about innovation in both the public and private sectors, precisely to enable governments to better address society's most pressing challenges. This goes as much to the "how" of effective public administration as to the "what," mindful that the best way that people can claim agency over their economy is through their governments. And so, really thinking about how to make governments deliver better will be, I think, really key to a lot of this work.
And finally is just, I think, another instantiation of what has been a through-line of the Biden administration's work across its international economic style of really tethering, much more closely than I think previous administrations have, our efforts on climate to our efforts on international trade and economic engagement so that we create a better set of politics around climate.
And you've seen that borne out in President Biden's efforts domestically, when he says, "When I think climate, I think good jobs." That is, I think, no less true in other countries. And so I think part of the idea here is to take that same logic on the road, multi-lateralize it as part of our international economic engagements.
So, just a few more highlights of what this kind of negotiation will feature and the "how" of it.
Following the conclusion of the summit, the U.S. will hold initial consultations with partners in the hemisphere and arrange U.S. stakeholders on the following areas. I'll just hit them briefly, and then we can take questions.
The first is really reinvigorating regional economic institutions and mobilizing investment. Together, we will reinvigorate the hemispheres (inaudible) flagship economic institution and the Inter-American Development Bank.
And there, we are looking at the possibility of future capital for IDB Invest - that's the private sector investment arm of the IDB - as well as looking at a lot of the global multilateral development banks and making sure that they are adequately indexing our own hemisphere, mindful that the acute inequality that so many of the countries in the hemisphere face creates a kind of bimodal tendency in these countries that on average has them appear to be middle income in ways that, frankly, mask a whole lot of need for a whole lot of the populations of these countries that can often have the result of putting them last in line for the kind of supports and financial stabilization that a lot of the global (inaudibles) and multilateral banks can offer.
And so, I think just thinking hard about a set of measures that would make sure that we are adequately weighting the need in our own hemisphere with all the institutions that we can bring to bear.
Second, is really that body of work I mentioned earlier on - making more resilient supply chains in our hemisphere. I think we now know that our economic security rests on supply chains that are more diverse and secure and reliable and sustainable than, I think, the last 40 years of prioritizing a kind of narrow-minded efficiency that turned out to have been too fragile at the risk of other values like resilience.
And so, I think this work will really focus on helping our hemisphere reduce overt dependence and concentrations on certain countries and do the nearshoring and co-investment to run hard at those investments that make good economic and security sense for us.
Third would be what we're calling "updating the basic bargain." We are mindful that we have a generation of leaders in the region who pretty much (inaudible) are prioritizing a set of public investments in innovation and in the work of government to make life better and fairer for their respective citizens.
Yes, a lot of that work is necessarily domestic facing. But in many cases, I think it happens to be the kinds of things that tools with U.S. (inaudible), like the Development Finance Corporation and like a newly revamped Inter-American Development Bank, can do good work on.
This looks like investments and cooperation in areas like education, health, unemployment, retirement, childcare, women's economic empowerment, as well as the kinds of reforms that make those investments enduring, by which I mean helping these countries mobilize the domestic revenue through a set of tax reform measures and anti-corruption measures that will ultimately sustain them over time.
Fourth is the climate work that I mentioned earlier, advancing clean energy jobs and decarbonization in ways that hopefully create virtuous cycle politics as well as faster progress on decarbonization. And I think we will obviously build this out together with partners. But roughly, I think it hangs together as a negotiation through our ability to develop a financing mechanism to support a set of new asks on things like the percentage of renewables in the grids of these countries and a set of measures on deforestation and a range of other things.
And finally, ensuring sustainable and inclusive trade. I think we know that, after the last two years of the pandemic, that we've seen the important role that digital technologies and services play in our economy and the continued importance of trade that is really putting workers and families at the center.
And here, I expect that we will focus on the sort of customs facilitation - when you look actually at the region's sort of container dwelling times, import and customs clearance times, they're actually lagging behind many other regions in the world. And as we get into year two or two and a half of a supply chain crisis, I think if you ask a lot of CEOs, they would point to anything we could do to bring these customs and trade facilitation times down is really incredibly valuable and overlooked set of wins that we can probably get at quickly, depending on how we design the negotiation around this.
Beyond that, it's advancing transparency and good regulatory practices, pursuing high standards in the digital economy, responsibly supporting emerging technologies, building resilience in energy and food supply chains. Knowing that we are probably in the early days of a food security crisis handed to us by Russia's war of choice in Ukraine, it feels incredibly important to do as much as we can as quickly as we can to shave down the worst effects of that food security crisis.
And I think there's also been a number of innovations in areas like labor standards and - especially on incentivizing corporate accountability, as well as environmental standards - that a lot of our existing FTAs in this region, because they are some of our oldest, just have not benefited from that thinking. And so, this will also create a venue for us to bring in those kinds of commitments as well.
So, with that, I will stop and look forward to your questions. Thanks.
Q Hi, thank you for taking questions. Can you elaborate on how countries will be approached and what countries will be invited to negotiate this?
And then similarly, I wonder if you can elaborate on the structure. Will this be like IPEF, where countries opt into particular pillars and it's structured to be more flexible? Thanks.
SENIOR ADMINISTRATION OFFICIAL: Sure. And, yes, we are seeing this as effectively the beginning of a conversation that we want to have with, obviously, a set of countries in the region, really beginning with our most likeminded economic partners and - as well as U.S. stakeholders ranging from friends in Congress to labor and industry stakeholders - over the next, I would say, two to three months, aiming to, I think, really launch the beginning of formal negotiations once each of these five pillars I just outlined are scoped and we have a sense of country participation across them. That probably looks like a ministerial in early fall.
And on your question about structure and design and its proximity to IPEF, we are imagining sort of a flexible structure that does, again, begin with a set of our most likeminded trading partners in the region but, I think, could be opened over time - and is quite standards based once we have a sense of what those standards are - through the three-month process that I just described, that would be flexible in the sense of countries being able to join just one, just two, three, four, or all five of these pillars. So, in that sense, I think there is some similarity to the structural mechanics of IPEF.
But I actually think the comparison with IPEF is not quite right. So if I could softly push back in a couple of ways.
One, I think, in IPEF, you are - here, we are beginning with a set of, as I mentioned, likeminded partners where I think by and large we already have existing FTAs. And so, I think that just changes the kind of starting posture of this conversation from that of the partners that we're dealing with in the Indo-Pacific and in IPEF. And that's probably the largest difference. This really is about kind of updating a foundation laid by the several FTAs that we have in the region.
And second is when - you know, when you go through the pillars that I mentioned, two fifths of them are totally bespoke to the hemisphere - I think, appropriately so: the (inaudible) reinvigorating regional economic institutions, as well as the updating the basic bargain work that would be, we think, clear demand signals for from the region itself and areas that we think just, again, are quite well suited to the hemisphere.
And then, the through-lines that do exist are, frankly, just a reflection of this administration's top priorities. It would be, I believe, a little bit head scratching for us to attempt an update of our economic approach to the hemisphere in the scope that we're doing here and not include something on climate or supply chain.
Q Thanks for taking the question. I was wondering if there is any money associated with what you're announcing today, any U.S. dollar commitments?
SENIOR ADMINISTRATION OFFICIAL: I think that we are looking at making some commitments around a potential expansion of IDB and IDB Invest - really the IDB Invest piece - that has certain procedural hoops that we need to jump through. So I don't want to prejudge the - that we would ultimately be successful there.
But if that does run its course, that would, I think, come with new resources. And I think this is really the beginning of a signal that the President himself is sending about the direction of travel for the kind of economic policy and priorities there that he wants, and I think he would expect to see that reflected in the upcoming budget cycles.
Q Hi, thank you for taking the question. You said: Following the conclusion of the summit, the U.S. will hold initial consultation with partners in the hemisphere. Can you talk - elaborate on that please and talk about what discussions have been held up to now on the contents of this and how you see that going forward?
SENIOR ADMINISTRATION OFFICIAL: Sure. So, again, we're not announcing this in ways that has country participation today attached to it. That, I think, will evolve over the next two to three months, as I think we are prioritizing a set of countries that really are our most likeminded. I would leave it to [senior administration official], if he'd like, to kind of elaborate there, but I think that is exactly the work that we expect to get into, effectively starting today.
We have, I think, done some very notional conversations with some of these countries as part of our broader brainstorming around the summit to make sure that the notional contours of what we have put out will be well received, just to make sure that we are in the right universe. And I think we do have that comfort that this is something that the region will quite appreciate and we will see a fair bit of uptake for and likely quickly.
And so, I'll leave it at that. But, [senior administration official], I don't know if you want to try to answer that.
SENIOR ADMINISTRATION OFFICIAL: Yeah. Thank you, [senior administration official]. That's exactly right.
So the first thing I would say is that: In the development of this partnership, we've been consulting with experts and have been talking to governments, even formally through our embassies, to get their feedback, because we have our own concept of what this is based on a recognition of everything [senior administration official] laid out as some of the core challenges of the region and the foundation established by our free trade agreements as being something that has informed U.S. policy over the last 30 years but has not addressed some of these, I think, issues - inequality issues related to climate and a number of other pillars that [senior administration official] listed.
And so, what we want to do is really frame out a concept that (inaudible) receive widespread support from the countries of the region. And then identify, I think, a core set of countries that will help us set a very high ambition to this. And then have an open architecture where countries will self-select whether they're ready really to do this. If not, we're not negotiating a trade agreement that would go to Congress, but rather building on existing agreements to actually promote a race to the top.
SENIOR ADMINISTRATION OFFICIAL: And I would add, I think, on a pretty ambitious timeline. I think we are building this on the presumption that there are quick gains to be had and inroads to be cut on some of our most acute challenges that we have - again, that we are in the midst of. And I start with the fact that, again, we do have so many FTAs with a lot of the countries that we would expect to be the inaugural members of this, point one.
Second, the U.S.'s overall average tariff rate is, as you know, seen as 2.5 percent. I think (inaudible) an undertaking that would be many, many years that we're attempting to sort of (inaudible) the ability to run hard at things like the supply chain crisis, improvements that we think we can score on, shaving off the worst effects of the food security crisis, advance on climate, efforts around securing high standards and digital trade where there are no tariffs, our customs and trade facilitation, as I mentioned earlier - a few of the areas that we think that we could just manage some real wins for the bottom lines of American workers and families as well as countries in the region - that the ability to run quickly will be an added bonus for.
And I think then it comes to ensuring we can do this in a way that is enduring domestically, which obviously serves all of our interests. And I think that really goes to the kind of consultations that we expect and intend to have with both parties in Congress and a range of U.S. stakeholders in making sure that we develop something that really does put U.S. workers and families at the center and shows that we can pursue those gains for our domestic stakeholders while we are also pursuing a set of geopolitical imperatives in the hemisphere - that those two things can and should happen simultaneously.
Q Yes, I was wondering if you could just give a little bit of a preview of President Biden's remarks on this initiative and whether he'll emphasize rising trade flows between the region and China, which is now the largest trading partner for many of these countries, and how that will be discussed in his remarks. Thanks.
SENIOR ADMINISTRATION OFFICIAL: Sure. I want to like leave some space for him to make some headlines here as well, so I'm not going to get into the specifics of his actual remarks - other than, to your question on the China angle in particular, I don't expect that to be a large feature of this.
I think, frankly, the best antidote to China's inroads in the region is to ensure that we are fording our own affirmative vision for the region economically. And we think that that's why it's so important that we do lay down a really ambitious, regionally comprehensive, updated vision for the kind of economic partnership we want to have and lead in our hemisphere and use the summit to do that.
I think in that vacuum is where China has made the recent inroads that it has. And so I think we do ourselves both economic service as well as advancing our geostrategic gains by just putting out an affirmative vision that I think these countries will see the clear value proposition in, especially given the way that a lot of China's recent efforts through (inaudible) and some of its debt-trap diplomacy have really backfired, including in this instance.
MODERATOR: Thank you. And thank you so much, everyone, for joining today's background call.
Just as a reminder, this is under embargoed until 11:00 a.m. this morning, and you may attribute the contents of the call to a "senior administration official." And then also, thank you so much.