Under Secretary Garten visits East Asia, reports that economic growth is strong, business leaders eager for U.S. partners - Under Secretary of Commerce for International Trade Jeffrey E. Garten - includes related article

Business America,  March, 1994  

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U.S. firms are poised to expand their presence in East Asia for excellent reasons, according to Jeffrey E. Garten, Under Secretary of Commerce for International Trade. First, economic growth in the region will continue to outpace the rest of the world by significant margins. Second, Asian business leaders are looking for American business partners.

Garten returned March 4 from a two-week mission to Singapore, Indonesia, China, and Hong Kong, with a final stop in Japan, where he reported on the trip to the Keidanren, the Japanese Federation of Economic Organizations. Among those accompanying Garten on the mission were California's Lieutenant Governor Leo McCarthy; Michael Fitzgerald, Director of the Washington State Department of Trade and Economic Development; Patricia Davis, President of the Port of Seattle Commission; and Paul Cleveland, Coordinator for Commerce and Business, U.S. Department of State.

East Asia could grow twice as fast as the United States in the next decade and three times the rate of Europe, Garten said. "From the U.S. standpoint, the business opportunities in Asia outside Japan never looked better," he explained. "We in America need to reconceptualize our overall strategy in Asia. We need to look more intensely at the Asian markets that are growing faster than Japan, and that are more open than is Japan."

During the trip, Garten and his delegation met with more than 100 senior American leaders in the region and scores of executives from the host countries, as well as with senior government officials at each stop. "In some instances, we came to actively lobby on behalf of U.S. companies; we did this on two dozen separate projects, ranging from $100 million to several billion dollars in value," the Under Secretary said.

The Chinese Economic Area (including Taiwan and Hong Kong) is likely to be the site of almost $600 billion in infrastructure projects in the next several years.

Hundreds of billions of dollars of new construction and rebuilding contracts are being placed in Indonesia, well on its way toward becoming a major industrial power. Indonesia's GDP is the highest in Southeast Asia, and its economic growth rate is among the fastest in the world.

Asian business leaders are eager to work with American firms. Garten said, "They want to work with Americans. They view U.S. business people as pragmatic, honest, hard-working, and reliable. They consider U.S. companies to be world leaders. They deeply appreciate our willingness to share technology, train their people and help them build 'institutional infrastructure.' One of their principal questions for us was: 'How do we find American partners?'"

Three of the group's destinations are included in emerging markets that offer unusually good opportunities for U.S. firms to sell their products and services. Under the National Export Strategy, a concerted effort to harness the full resources of the U.S. government to stimulate exports, the Clinton Administration is focusing the government's export promotion activities in 10 major economies, termed the Big Emerging Markets (BEMs). Asia has four BEMs: Indonesia, the Chinese Economic Area (including Hong Kong and Taiwan), South Korea and India. The 10 BEMs around the world are likely to buy more goods and services from the United States than Europe and Japan combined by the year 2010, according to the Under Secretary.

The four Asian BEMs will account for the lion's share of this trade expansion, Garten said. Already, they constitute 40 percent of the world's population and half the GDP of all the BEMs. They could account for as much as two-thirds of the total import growth of the BEMs during the next 20 years.

Prime markets in East Asia in addition to the BEMs are Singapore, Thailand, Malaysia, Vietnam, Australia, and New Zealand. During the trip, another part of the National Export Strategy was launched: the Big Emerging Sectors (BES) program which identifies leading edge U.S. industries that are expected to be the important sectors of the future. Under the program, the U.S. government and business will work more closely together to open foreign markets and to ensure that U.S. products compete on a fair and even basis for large-scale projects. The mission to East Asia concentrated on aerospace, telecommunications, transportation, private power projects, and financial services.

From aerospace firms, the mission heard of possibilities to build aircraft in consortiums with Asian firms from Japan, Korea, Taiwan, Indonesia, and Singapore. The delegation's first stop was at the Asian Aerospace show in Singapore.

In Indonesia and China, Garten discussed ways to leapfrog telecommunications from early 20th Century to early 21st Century in technological development by beaming training programs via satellite over the countryside in an effort to massively upgrade technical and managerial skills. "Here is an area where the United States has technological capabilities which far surpass anyone else's," the Under Secretary observed.