Stretching “from the west coast of India to the western shores of the United States” the Indo-Pacific region represents “the most populous and economically dynamic part of the world,” states the Trump administration’s National Security Strategy.
By 2030 the region will contain 66% of the world’s middle class and 59% of middle class consumption.
As the economies in this region grow, the Indo-Pacific draws more attention from U.S. government and business leaders.
At the U.S. Chamber’s Indo-Pacific Business Forum, business and government officials gathered to discuss the economic opportunities there.
To kick off the event, U.S. Chamber President and CEO Tom Donohue laid out three principles to reverse the trend of shrinking market share for U.S. companies in the region.
“First, we must recommit to openness,” he said. “We need to strengthen our existing partnerships in the Indo-Pacific region by lowering, not raising, barriers to trade. And when we run into barriers in other countries, we must overcome them through tough, fair, and enforceable trade deals.”
“The business community is eager to work with the administration to negotiate new trade agreements with high standards,” Donohue added.
The second principle is standing on American values, “starting with free enterprise, innovation, and the rule of law.” This is in contrast to model of state capitalism that uses unfair subsidies and trade practices to favor domestic firms.
Challenging that model should be done “in a way that adheres to our own free market principles and avoids self-harm,” Donohue advised.
The third principle is remembering history. After World War II, “successive rounds of tariff cuts over half a century helped increase world trade 40-fold,” said Donohue. “Our commerce has fostered economic growth and good jobs, but it has also strengthened ties of peace, cooperation, and friendship between nations.”
“Peace and prosperity have often gone hand in hand throughout history. But now, they are more closely related than ever,” he reminded the audience.
Three members of President Donald Trump’s cabinet addressed the importance of the region’s economic dynamism.
Secretary of State Mike Pompeo said business engagement is at the center of the administration’s strategy for a "free and open Indo-Pacific.”
“Today, no country does more two-way trade in the Indo-Pacific than the United States,” said Secretary Pompeo. “In Southeast Asia, the U.S. is the single largest source of cumulative foreign investment – larger than China, Japan and the European Union.”
The Trump administration’s goal is “to enhance the security of our partners and to assist them in developing their economies and societies in ways that ensure human dignity. We will help them,” Secretary Pompeo explained.
U.S. companies will play a major role in accomplishing this.
“Business can have confidence that the United States will continue to create the conditions for mutual prosperity in a free and open Indo-Pacific,” Secretary Pompeo said.
Commerce Secretary Wilbur Ross unleashed a host of statistics on the economic importance of the region to the U.S.
For instance, the U.S. exports about $450 billion of goods and services to the Indo-Pacific.
"Those exports to the region support some 550,000 jobs in the U.S.,” said Secretary Ross. “40,000 U.S. companies sell over $100 billion of products to the Indo-Pacific region."
In addition, "exports to the region grew by 10% last year."
An area of export growth is energy. Ross sees "very strong prospects for LNG," because "the Indo-Pacific does not have the hydrocarbon resources that it needs to sustain its growth rates, and we [the U.S.] are a very logical provider."
Energy Secretary Rick Perry went deeper into how the U.S. shale energy boom can supply hungry energy markets in the Indo-Pacific.
"The United States is now the world's leading producer of oil and natural gas,” said Secretary Perry. “We are setting and regularly breaking records for oil and natural gas production. And we're exporting LNG to 30 countries on five continents."
This means greater energy security for the region.
"By expanding our presence in the Indo-Pacific energy sector, we'll support and enhance our nation's commitment to regional peace and prosperity," Secretary Perry explained.
Through public and private sector cooperation, the prospects for U.S. companies in the region are bright.
“Today’s forum symbolizes the increasingly important role that India and the sub-continent plays in our economic relationship with Asia,” Donohue said. “It’s also a sign of the good will between the administration and the business community, and our shared desire to seize historic opportunities in the Indo-Pacific.”
About the authors
Sean Hackbarth
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.
