The Future of the U.S. Rebalance to Asia

Ash Carter discusses U.S. policy in the Asia-Pacific region ahead of his upcoming trip to India and the Philippines. Carter reflects on challenges for the United States military, including in the East and South China Seas. Carter assesses the United States' outreach to partners and allies in the region, including Japan, South Korea, the Philippines, Vietnam, Indonesia, Australia, and India. Carter additionally addresses challenges for U.S. national security and defense policy in the realm of personnel and technology.

(Applause.)

HAASS: Well, good afternoon. I’m Richard Haass, and I want to welcome everyone in the room and watching from afar to the Council on Foreign Relations. And today we are fortunate and honored to have with us the 25th secretary of defense—or, if you prefer, SecDef of the United States, Ashton Carter.

Now, I realize ours is a country of about 320 million people, but if there ever was one person meant to be secretary of defense, it is Ash. (Laughter.) He is the consummate scholar practitioner. He’s held any number of influential positions in the five-sided building, including that of deputy secretary. But beyond that, he has degrees in medieval history and theoretical physics. I find it difficult to think of a better preparation—(laughter)—oh, you don’t even know what I’m going to say. (Laughter.) I find it hard to think of a better preparation for understanding what is happening or could come to happen in today’s Middle East.

He’s about to take off—probably not on JetBlue—for India and the Philippines, and that’s a very good thing. The Asia-Pacific region is the part of the world where a lot of this century’s history will be written. Now, I understand the Middle East gets the lion’s share of the headlines, but time spent in the Far East is time well spent. It’s essential that the urgent now crowd out the important.

Full disclosure: Ash and I have been friends and colleagues for over three decades now. We first got to know each other well in the 1980s when we were both faculty at Harvard’s Kennedy School. One way of another, though, that collaboration was destined to end in 1989 as either he was heading off for a big job in the Dukakis administration or I was going to work for then-Vice President George H.W. Bush. The rest, as they say, is history. (Laughter.)

Today’s meeting will begin with Secretary Carter delivering extensive remarks on the Asia-Pacific. This will then be followed by a conversation between the secretary and Mary Boies, who is, among other things, not just a prominent lawyer but also a member of our board of directors and someone with extensive knowledge of and experience with the U.S. military. Then the secretary will take a few questions, after Mary, from you, our members. The plan is to wrap up by about 3:15 or, as the secretary likes to call it, 15:15.

With that, Secretary Carter. (Applause.)

CARTER: Well, good afternoon, everyone. And, Richard, thanks. Thanks so much for those words, for decades of friendship, for your leadership here at the Council, and above all for your public service, which continues.

Richard is a member of the Department of Defense’s Defense Policy Board. We count on him for advice on all subjects all the time. He and I were just talking shortly before this about some things that he’s preparing to give us some advice on in just a few weeks’ time.

It’s nice to see a lot of old friends here at the Council, many of you. I looked at the list of attendees coming and it was like a homecoming in many, many ways—great to visit all my friends and be here at the Council, because for generations the Council’s hosted the debates and supported the thinkers and ideas that have shaped America’s relationship with the world, and those ideas are as important as ever as we enter a new strategic era.

Indeed, today’s security environment is dramatically different from the one that we have had for the last 25 years. In this era we face no fewer than five evolving major immediate challenges: countering the prospect of Russian aggression and coercion, especially in Europe; managing historic change in the vital Asia-Pacific region, including China’s rise, which we welcome, and some of its actions, such as in the South China Sea, about which we share the serious concerns of all in the region; strengthening our deterrent and defense forces in the fact of North Korea’s continued nuclear pursuits and provocations; checking Iranian aggression and malign influence in the Gulf; and protecting our friends and allies, especially Israel; and accelerating the defeat of ISIL and its parent tumor in Iraq and Syria and everywhere it’s metastasizing around the world, as well as protecting our people here in the homeland.

The United States and the Department of Defense must and will address all five of those challenges. To do so is going to require some new strategic and operational approaches, new force posture in many places, and large investments in new and enhanced capabilities—and all this we’re doing.

But today I want to talk to you about how we’re meeting the challenges and seizing the opportunities in the Asia-Pacific, and in particular our growing security network there. Almost all the nations there are asking us to do more with them, bilaterally and multilaterally. Tomorrow, as Richard said, I leave for India and the Philippines, and I’m going to highlight today some of the advances we’ll be announcing along the way.

The Asia-Pacific is—and Richard made this point—the single-most consequential region of the world for America’s future. We have long played an essential and pivotal role in that region, and we’re working today both individually and with our allies and partners to ensure the Asia-Pacific remains a region where everyone—everyone can rise and prosper.

That has been America’s objective and practice for decades. Regardless of what else was going on at home or in other parts of the world, during Democratic and Republican administrations, in times of surplus and deficit, war and peace, the United States has played a pivotal role economically, politically, and militarily in the Asia-Pacific.

Along with a wide variety of allies and partners, for decades we have stood tall for enduring principles, including peaceful resolution of disputes, the freedom of navigation and overflight. We’ve helped ensure that countries can make their own security and economic choices, free from coercion and intimidation. And we have promoted free trade and the rule of law to support development and unprecedented growth.

Of course, fundamentally sustaining this human progress requires, as a foundation, security and stability, and the United States has helped provide both with its strong defense engagement in the region. The highly capable men and women of the America armed forces and our unique technology and assets, coupled to our values, have long provided the necessary reassurance—an attractive and appealing reassurance—and worked to keep the peace in the Asia-Pacific.

And because we have done so inclusively and in a principled and respectful way, we have developed alliances and partnerships all over the region. These relationships, nurtured over decades, tested in crisis and built on shared interests, values, and sacrifice, form the bedrock of our role in the Asia-Pacific, and accordingly its stability and prosperity.

The results have been extraordinary in the interests of and to the benefit of all nations, including the United States. Since World War II, millions have been lifted from poverty and into the middle class. And even though there’s still room for improvement, democracy and freedom have spread to places across the region, and economic miracle after economic miracle has occurred in the region, first in Japan. Then Taiwan, South Korea, Southeast Asia rose and prospered. And now today China and India are doing the same.

This progress creates opportunities for the region to continue to grow, but of course dramatic change can also produce some negatives, and recently not all the news out of the Asia-Pacific has been positive. Indeed, in the South China Sea, China’s actions in particular are raising regional tensions. That’s why countries across the Asia-Pacific are voicing concern with militarization, and especially over the last year with China’s actions, which stand out in size and scope.

They’re voicing those concerns publicly and privately at the highest levels in regional meetings and global fora. That’s why many of these countries are reaching out anew to the United States to uphold the rules and the principles that have allowed the region to thrive. That’s why we support intensified regional diplomacy, not increased tensions, the threat of force, or unilateral changes to the status quo. And that’s one reason why we’re making enormous investments in our capabilities, why so many are asking us to do more with them, and why we’ll continue to fly and sail and operate wherever international law allows, because we must continue the progress that has helped so many in the region to rise and prosper. President Obama launched the rebalance to Asia-Pacific to ensure that we do our part to make that bright opportunity come to pass.

While I’ve, of course, absorbed myself with the defense component of the rebalance, I should be clear that one of the most important strategic parts of the rebalance is the Trans-Pacific Partnership trade pact. TPP will bind the United States more closely together with 11 other economies and unlock economic opportunities for the United States and many of its allies and partners. And TPP will help reinforce the open and inclusive economic approach that has benefited so many in the Asia-Pacific.

TPP should be ratified because of its economic and strategic benefits and because we must recognize what the alternative to TPP really is—a regional economy, largest in the world, with standards that don’t serve American interests and one that’s carved up by lopsided, coercively negotiated, lower-standard deals. That’s why I’ve said that TPP is as strategically important to the rebalance as an aircraft carrier. And I strongly urge Congress to approve TPP this year.

Militarily, the Department of Defense is operationalizing the next phase of the rebalance and cementing it for the long term. We’re enhancing America’s force posture throughout this vitally important region to continue playing a pivotal role from the sea and the air and under the water, as well as to make our posture more geographically distributed, more operationally resilient, and more politically sustainable.

To do so, we continue to bring the best people and platforms forward to the Asia-Pacific, not only increasing the number of U.S. military personnel in the region, part of some 365,000 assigned to the Asia-Pacific today, but also sending and stationing some of our most advanced capabilities there.

That includes F-22 and F-35 stealth fighter jets, P-8 Poseidon maritime surveillance aircraft, continuous deployments of B-2 and B-52 strategic bombers, and also our newest surface warfare ships like the amphibious assault ship USS America and all three of our newest class of stealth destroyers, the DDG-1000, which will be all home-ported with the Pacific Fleet. And all the while we’re bringing America’s regional force posture into the 21^st century by rotating American personnel into new and more places like northern Australia and new sites in the Philippines and modernizing our existing footprint in Japan and the Republic of Korea.

How we’re doing this is a reflection of a shift we’re making across the Army, the Navy, the Air Force, and the Marine Corps after 15 years of intensive effort in counterinsurgency in Iraq and Afghanistan toward full-spectrum operations.

And in our 2017 defense budget, which I’ve presented to Congress over the past few weeks, we’re making investments critical to the rebalance. One is our surface fleet, which under our budget grows both the number of ships and, importantly, above all, their capabilities to deter and, if deterrence fails, defeat even the most advanced potential naval adversaries and protect the maritime security we all depend on.

Just one new example of how we’re making our ships’ capabilities increasingly lethal is by maximizing production of the SM-6 missile, one of our most modern and capable munitions, which now has a brand new anti-ship capability. And I could go on. We’re also investing to ensure our continued air superiority and global reach, including with over $12 billion for the new B-21 long-range strike bomber.

Another investment is in undersea capabilities, where we continue to dominate and where we’re investing over $8 billion just next year to ensure ours is the most lethal and most advanced undersea and anti-submarine force in the world. That includes new undersea drones in multiple sizes and diverse payloads that can importantly operate in shallow waters, where manned submarines can’t.

We’re also making large new investments in cyber, in electronic warfare, space capabilities, a total of $34 billion just next year. Among other things, this will help us build our cyber-mission force, develop next-generation electronic jammers, and prepare for the possibility of a conflict that extends into space. And more is coming, including some surprises. (Scattered laughter.)

We’re also strengthening our alliances and partnerships, which will be the focus of my trip this coming week. And in that regard, let me take you on a brief tour of what we’re doing with partners around the region and then focus on India and the Philippines, where I’ll be traveling next week, and important advances are being made that occasion my trip.

Our alliances and partnerships are and will remain one of our most important strategic assets. Our allies around the world, including those in the Asia-Pacific, have stood with us and fought with us time and again, most recently in Iraq, Afghanistan, and against ISIL. And we’re just as committed to them. As history has shown, we’ve fought with our friends and allies and to defend the principles and values we share in the Asia-Pacific, in Europe, in the Middle East, and elsewhere.

And while I can’t take the time to detail it today, both Japan and the Republic of Korea are strengthening their own militaries and changing how they operate within our alliances in fundamental and forward-looking ways. We’re sharing our best and newest capabilities, including the F-35 Joint Strike Fighter, which will soon begin to operate with both Japan and the Republic of Korea.

Meanwhile, we’re developing newer partnerships with Vietnam, with Malaysia, with Indonesia, and others, while also enhancing our already high-performing relationship with Singapore. And we’re holding more numerous and more sophisticated exercises with a growing network of partner countries, none larger than this summer’s RIMPAC, which will bring together more than two dozen navies, nearly twice the number that participated just six years ago, to develop the relationships that are critical to ensuring the safety and security and peace of the region’s sea lanes.

You can see the breadth and depth of our bilateral efforts with one of our key growing partners, India, where I’ll arrive a short time from right now. The U.S.-India relationship is destined to be one of the most significant partnerships of the 21^st century. Ours are two great nations that share a great deal—democratic governments, multiethnic and multicultural societies with a commitment to individual freedom and inclusivity, and growing, innovative, open economies.

Over the course of my years at the Defense Department, I’ve seen a remarkable convergence of U.S. and Indian interests, what I call a strategic handshake. As the United States is reaching west in its rebalance, India is reaching east in Prime Minister Modi’s Act East policy that will bring it farther into the Indian and Pacific Oceans.

We see this handshake reflected in the Joint Strategic Vision Statement that President Obama and Prime Minister Modi released last January and the 2015 framework for the U.S.-India defense relationship, also a new thing, which Indian Defense Minister Parrikar and I signed last year in Delhi. The defense framework is foundational, and it’s going to guide the U.S.-India defense relationship for the next decade.

And there’s another handshake between our countries as well, a technological one. In 2012 the United States and India created the Defense Technology and Trade Initiative to leverage the convergence between our industrial and technological abilities in an unprecedented way, this after a half a century since Indian independence of separation of our militaries and our industrial systems.

That initiative grasps hands with Prime Minister Modi’s Make in India campaign to expand the nation’s industrial and defense base. And it will lead to greater production—co-production, excuse me—and co-development of defense capabilities.

While in India, I’ll meet with Prime Minister Modi and also Defense Minister Parrikar to discuss the progress we’ve made together in aircraft-carrier, jet-fighter, and jet-engine collaboration. And we’ll talk about exciting new projects, the details of which I can’t go into this afternoon, but stay tuned when I’m with Minister Parrikar.

There’s so much potential here, which is why we’re seizing every opportunity we can. Last year the Modi government reached out to the United States to discuss the possibility of launching joint production on a new platform to build on the work Lockheed Martin and Indian industry achieved on the C-130J project, and what Boeing and Indian industry will achieve in the production of Apache and Chinook helicopters in India, recently purchased.

Members of my team and industry are right now, as we are here in New York, in India looking at the potential co-production of fighter aircraft. These conversations represent the growing enthusiasm of U.S.-India partnership. And even more than that, its promise. While these negotiations can be difficult, and global competition is high, I have no doubt that in the coming years the United States and India will embark on a landmark co-production agreement that will bring our two countries closer together and make our militaries stronger.

As our strategic and technological interests are drawn together, so too have our military ties. We’re coming together operationally across domains by air, land, and sea, to collaborate on humanitarian assistance, disaster relief, maritime security, and maritime domain awareness. This week will also conclude several important agreements, including one on commercial shipping information exchange, which will make many new things possible in the future.

Our gathering partnership in defense can also be seen in India’s return to major joint exercises, like Red Flag, our prestigious U.S. Air Force-hosted aerial combat training exercise where all our top pilots, and those from countries like India, train together. India will again participate in RIMPAC, which I mentioned, the world’s largest international maritime exercise. And in the Malabar exercise, Japan, India, and the United States, all three, have operated together at sea in such critical training as air defense and anti-submarine warfare.

From India, I’ll travel to the Philippines, with which we have one of our longest relationships in the region. We share much history and many common ties with the Philippines, and our long-running defense alliance has been a cornerstone of peace and stability in the region for more than 65 years. And as President Obama has made clear, our commitment to the Philippines is ironclad. Today our alliance is as close as it’s been in many years, thanks to two major recent steps forward that occasion my visit in coming days.

First is the U.S.-Philippines Enhanced Defense Cooperation Agreement, the so-called EDCA, which is a landmark agreement that was ratified in the Philippines in January. And also, the new U.S. Southeast Asia Maritime Security Initiative, by which we—that is, the Department of Defense—is helping to fund these changes in the Philippines and other partners in the region. As part of EDCA’s implementation, we’re supporting modernization of the Philippine armed forces, and strengthening mutual defense, an arrangement that will allow our forces, at the invitation of the government of the Philippines, to conduct regular rotational training exercises and activities.

We recently announced an initial slate of five agreed locations for those alliance activities. Locations are arrayed throughout the archipelago. They will offer the opportunity for increasingly complex bilateral engagements. And I plan to visit two of those locations next week. First, Fort Magsinghsingh (sic; Magsaysay) and Antonio Bautista Air Force—-saysay, I should say—and Antonio Bautista Air Force Base. At Fort Magsaysay, the former home of the Philippines army’s premier training facility, we previously made use of limited preposition disaster relief supplies that supported our response to Typhoon Haiyan in 2013. EDCA will enable us to augment these stocks and add new ones to the air base, thereby improving our ability to respond to future disasters. I’ll be discussing both of these things at these sites when I arrive in the Philippines.

And last year, at the region’s Shangri-La Dialogue, I announced our Maritime Security Initiative. This initiative represents a $425 million, five-year commitment by the Defense Department to help countries like the Philippines share information, identify potential threats, and work collaboratively to address common challenges in the region. We’ve just released the first tranche of this money, nearly 80 percent of which is going to the Philippines.

There, it will help modernize the technology and train the staff at the Philippines National Coast Watch Center, enhance an information network to enable the sharing of classified communications between the U.S. Pacific Command and Hawaii and key Philippine maritime command centers, provide an aerostat reconnaissance platform, and outfit the Philippine navy patrol vessels with better sensors so they can do more in the region’s waters. These two things, EDCA and the Maritime Security Initiative, will take the U.S.-Philippines alliance capability to a new level, one that has not been seen in decades.

I will also see some of this first-hand at Exercise Balikatan 2016, our premier exercise with the Philippines. Balikatan is going on right now, and includes over 7,000 personnel from every military service in both countries, dozens of American aircraft, vehicles and vessels, including one of our aircraft carriers and several important components, including a simulated gas and oil platform recovery raid in the South China Sea. Balikatan signals shared resolve. It enhances our shared capabilities. And it demonstrates, once again, America’s dedication to standing shoulder-to-shoulder with the Philippines.

Like our alliance with the Philippines and our developing partnership with India, America’s bilateral relationships remain the bedrock of our presence and engagement in the Asia-Pacific. But in a large and interconnected region, especially one with so many strong, capable, and dedicated players, it makes sense to network and link relationships and produce gains for all. And that’s what we’re doing. Now, unlike—I mean—excuse me. Unlike elsewhere in the world, peace and stability in the Asia-Pacific has never been maintained by a region-wide alliance, like NATO. No comparable formal structure. That’s made sense for the Asia-Pacific, with its unique history, geography, and politics.

Instead, regional security, stability, and prosperity have required nations working together less formally. And the United States has been an important builder, cement, and participant in this arrangement. Today, as the region changes, the United States is augmenting our bilateral relationships and alliance with trilateral and multilateral arrangements. We’re weaving these partnerships together to more effectively bolster American and regional security. This network, with its shared values, habits of cooperation, and compatible and complementary capabilities, will expand the reach of all, responsibly share the security burden, and help ensure peace and stability in the region for years to come.

This burgeoning networks builds in three ways. First, the Department of Defense is strongly emphasizing trilateral mechanisms to bring together like-minded allies and partners to maximize individual contributions to regional peace and security, and link together nations that previously worked with us mostly separately. For example, the U.S.-Japan-Korea trilateral partnership helps us all work together, as well as share information and coordinate responses to, for example, North Korean provocations. Last month’s trilateral meeting between President Obama, Prime Minister Abe, and President Park on this topic was historic.

The U.S.-Japan-Australia relationship is also expanding practical cooperation, enhancing exercises, training, and information sharing, and building capabilities. And our burgeoning U.S.-Japan-India trilateral relationship is evolving from the strategic dialogue, where it began, through joint activities, like the Malabar Exercise, to real, practical security cooperation that spans the entire region, from the subcontinent right around to East Asia.

Second, to improve regional security, we’re encouraging our allies and partners to actively develop their own interconnected security relationships. Many countries within the Asia-Pacific are strengthening their bilateral relationships with one another in enhanced ways that we think also enhance regional stability. But they’re also creating their own trilateral arrangements. The Japan-Australia-India trilateral meeting last June, for example, was a welcome and brand-new development.

Third, we’re helping create an interconnected regional architecture, from one end of the region to another, through engagement and activities in multilateral fora, such as the ASEAN Defense Ministers Meeting. In this way, the United States is helping strengthen relationship and building partner capabilities on key issues, like maritime security, humanitarian assistance, and disaster relief. Singapore has shown great leadership in this area by hosting an operations center to coordinate activities across ASEAN.

It’s important to remember that our bilateral, trilateral, and multilateral relationships, and the developing network they comprise, is not aimed at any particular country. Rather, it demonstrates that the region wants cooperation, not coercion; and a continuation, not an end, of decades of stability, peace, and progress. The network’s not closed. It excludes no one. We want cooperation and shared leadership so that other nations who want to contribute to regional stability and security, they can work with the other nations of the region to do so.

For example—important example—we have disagreements with China, but we are committed to working through them in ways that do not destabilize the region. That’s one reason why we will continue to pursue a military-to-military relationship with China, focused on risk reduction and practical cooperation in areas of mutual interest.

This network overall demonstrates the United States’ commitment to remaining a pivotal and essential leader in the Asia-Pacific for decades to come. By operationalizing the rebalance, by transforming old alliances and new partnerships, and by networking security, we can gather force and respond to any manner of crisis, manmade or natural disaster, and continue to promote and defend the principles that have allowed so many in the region to rise and prosper for so long.

Let me close with a few words about who makes that possible. As I stand here, there are hundreds of thousands of men and women serving and defending our country—right now, in every time zone, every domain, in the air, ashore, and afloat. They are the ones who are operationalizing the rebalance. They’re making the network work. They need always to be in our minds.

You know, they say that security—frequently this is said in this region—is like oxygen: when you have enough of it, you pay no attention to it; but when you don’t have enough, you can think of nothing else. America’s service members provide that oxygen—the security that allows millions upon millions of people, not just in America and not just in the Asia-Pacific, but in so much of the world to be safe, to raise their children, to dream their dreams, to live lives that are full. Our soldiers, sailors, airmen, and Marines take grave risks to provide that security, and some make the ultimate sacrifice. They do so not just because they were ordered to, and they do so not only because they want to protect their buddies. They do so because they know that they help make the world a better place through American leadership.

In a new strategic era and at a time of great change, we must and will continue to play that essential, principled role in the Asia-Pacific. We will work with new partners and old allies. We’ll network our security relationships. We will invest and innovate. We’ll change how we plan, how we operate, even how we fight. But we will never change what we’re willing to fight for: for our safety and freedoms, and that of our friends and allies; and for the values, principles, and rule-based order that produced security, stability, and prosperity for all. Because we do so, we will continue to ensure that the Asia-Pacific remains a region where everyone can rise and prosper for generations to come.

Thank you. (Applause.)

BOIES: Thank you, Mr. Secretary.

CARTER: Thank you, Mary.

BOIES: And welcome to everyone at the CFR Corporate Conference.

You stated in the defense posture that was released, I believe, last month that—and I’m going to quote—“We expect China to uphold President Xi’s pledge not to pursue militarization of the Spratly Islands of the South China Sea.” There are reports of mounting evidence that the Chinese are doing in the Scarborough Shoals exactly what they were doing in the Spratly Islands; that is, namely, building an island around some kind of maritime feature or rock. The shoals have—are also claimed by the Philippines, who have brought an arbitration in The Hague. The shoals are 140 miles off the coast of Manila. Has the president of China broken his pledge?

CARTER: Well, we’ll see. But the president of China did make that pledge.

But let me back up a little bit because the South China Sea is a place that’s very much in the focus of many in the region, to which I’ll be traveling over the next few days. China is one of many claimants to various features throughout the region, many of which have taken steps that we oppose, namely militarization. But over the last year, the scale and scope, as I indicated, of China’s have been—have outstripped anybody else’s.

The United States’ position on this is we don’t take any position on the claims themselves, but we do take a position on militarization by anyone, but especially by China in this particular context. It won’t affect our operations, but it disquiets the region when this occurs. It has the effect of, of course, causing us to react—which will be to—in the ways that I described in terms of our own preparations—but also of having what I also described, which is many countries in the region want to work with us more. So that’s the effect of this.

But, you know, our approach, Mary, is that things in the South China Sea should be a reflection of our overall approach to the region, which is this is a region that has had it good for 70 years, and this would be a serious mistake for all of us to allow that to unravel, and for militarization to lead to tension to lead to conflict. So we’re trying to prevent that. That’s the position we come to this from, and we certainly have been given to believe that the president of China shares that view and made that commitment. But we’ll see.

BOIES: Critics have argued that our response has been rather weak. We have done some freedom of navigation operations within the 12-mile limit of features or islands that China declares are theirs, but then we’ve confused the issue by characterizing them as innocent passage, which does not suggest that we’re disputing the ownership. And we’ve had various of these operations, and they don’t seem to have a clear signal. Is there a reason for that?

CARTER: Well, their purpose isn’t to signal; their purpose is they’ve been going on for decades now, and we continue to do that. There are differences between different kinds of passage, as you indicate. We know what we’re doing. But, I mean, the basic point here is that the United States, here and everywhere around the world—whether it’s the Arctic, whether it’s the Horn of Africa—we, along with virtually everyone else, insists upon freedom of navigation consistent with international law. So that’s how we operate.

And you say, what are we doing more generally in the region? Well, and that’s what I was describing there, which is trying to work with others, to include China—and that’s an important point—to widen the network of security cooperation in a region where, remember, there is no NATO, where the wounds of the past never healed. And so it’s important. And the United States plays an important role, both with respect to China, but also with respect to Japan, South Korea, India. I mean, just walk around. And that’s what we’re doing there. We’re committed to that. We’ve played that role for decades. We want to keep a good thing going—we and everybody else in the region.

BOIES: And there are many areas in which we have found a lot of cooperation with China—

CARTER: Sure.

BOIES: —in areas of climate change; perhaps in the areas of cyber—it’s probably too early to see there; certainly to an extent with North Korea. Although North Korea nonetheless still seems to be persisting in developing its programs. It did a nuclear warhead test in January, more missile testing in February just of this year. And question there: Is our deterrence working? It doesn’t seem to be.

CARTER: Well, our deterrence of conflict has worked for 60 years, and we continue to strengthen that. We have a slogan for U.S. Forces Korea, which stand on the DMZ every day: “Fight tonight.” That’s not that they want to fight tonight, but they’re ready to fight tonight. That’s why we’re doing so much—and I won’t go into it here, but you can read about it—to strengthen and transform the U.S.-ROK alliance really in fundamental ways: its command and control, its basic structure, its approach to deterrence on the Korean Peninsula. And that deterrence has been strong now for 50, 60 years. We intend to keep it that way.

Now, it presents new challenges for deterrence when the North Koreans build missiles and test nuclear weapons. And to get to your point about China, you know, China has been a party to the talks in which people in the region—not just us but China also, South Korea, Japan, and also Russia—have tried to get the North Koreans to turn back. China has, logically speaking, by far and away the greatest leverage over North Korea by dint of geographical proximity, economic relations, and so forth. They have been unsuccessful so far, and certainly we have been unsuccessful in getting North Korea to stop.

What that’s causing us to do is we are reacting in terms of how we’re protecting ourselves, our forces on the peninsula—that’s what the THAAD missile defense system is about on the Korean Peninsula—and various changes we’re making to our defensive strategy and our deterrent plans on the Korean Peninsula. We don’t like to have to be doing that, but we’re doing that and we have to do that, as we have for decades, because we’ve got to keep deterrence strong.

BOIES: You mentioned the THAAD system, the Terminal High Altitude Defense system, and that is an area where the Chinese now are vigorously objecting should that system be deployed in South Korea, which, at the present time, it is not. Tell us what the risks and benefits that you see in that particular endeavor. Is it going to happen or are we going to back down?

CARTER: Oh, it’s going to happen. No, it’s a necessary thing. It’s between us and South Korea. It’s part of protecting our own forces on the Korean Peninsula and protecting South Korea. It has nothing to do with the Chinese.

And I do wish the Chinese would work with us, or really work bilaterally with North Korea more effectively—although it’s easy to say that but dealing with North Korea for anybody is a challenge—at heading off their missile challenge in the first place. But we need to defend our own people. We need to defend our own allies. And we’re going to do that.

BOIES: The Chinese ambassador to South Korea said that should the THAAD missile system be deployed in South Korea, that will—it was translated “in an instant” end the good bilateral relations that have been built up over at least the last three years between China and South Korea. Is that just an idle threat?

CARTER: Well, that would be sort of illogical. I can’t speak for a Chinese ambassador, but we’re actually quite encouraged to see the Republic of Korea and China strengthening their own relationship. That’s had its own ups and downs, and when you go back in the history of this whole region there’s a lot of history there, including between China and Korea.

So actually we think that’s a good thing and part of this network of security that we encourage—China, South Korea, and us all together. Obviously North Korea isn’t joining that right now and I can well see why it’s concerning to the Chinese. But I think you’ve seen in President Park and President Xi, as well as President Obama, as I mentioned, a real desire to join Korea—now, South Korea I’m talking about and China, and get over some of their previous history. We’re supporters of that.

BOIES: Do we have a red line with North Korea? They do not yet have the capability of hitting the United States but they’re certainly working on it. Do we have a point at which we will not just stand for—

CARTER: Well, we certainly have—

BOIES: —their activities?

CARTER: We certainly have a defensive plan, but it extends beyond the Korean Peninsula with respect to North Korea. As I said, their behavior is unpredictable. I would be imprudent as a secretary of defense to assume that North Korea isn’t going to continue to make progress.

Now, we will, ourselves, and with the help of the Chinese, try to make that less likely, but we’re taking—and we actually made this decision several years ago to increase the number and the capabilities of our defenses, including our missile defenses, of the Continental United States, of Alaska, of Hawaii. And so we’re taking steps, so we are—it definitely has consequences for us and we’re doing what we have to do. It’s part of our investments in our posture for the future there.

BOIES: You mentioned India, and you have certainly personally put a lot of time and attention into building what for us would be a very important and relatively new, strong alliance. You say that we may have what you characterize as difficult negotiations over co-production and co-development of military capability such as fighter airplanes. What is India going to want that we’re not going to give them?

CARTER: Well, it’s just difficult in the sense of it’s business.

BOIES: And there are technology transfer issues involved.

CARTER: There are. There are. In these cases I think that there are some of those issues, but really you’ve got to understand the challenges here I think are surmountable, but they derive from history more than they derive from today’s logic. The history goes like this: The United States and India, for 50 years, since after Indian independence, essentially lived apart. India’s policy was one of nonalignment in the Cold War. They wouldn’t do with us the kinds of things that we’re doing today—together today.

To the extent they had a technology relationship—military technology relationship with another country, it was mostly the Soviet Union. So their entire military industrial system and ours grew up very differently and remain quite different. So you’re talking about taking two things that are really quite different and trying to match them up and make them work together.

And a lot of the difficulties that—in just making the U.S.-India defense relationship go forward are simply of that nature. But there’s no difficulty in principle either with the idea, in our minds, that India is an enduring partner, or in their minds their willingness to work with us, although in a way that retains their independence, which is important.

BOIES: Right.

CARTER: Of course we don’t have any problem with that.

When it gets down to issues of co-production and co-development, I mean, there you get into, you know, situations where it’s not just technology but these are American companies. And we don’t do the negotiations for those companies; they do them themselves.

But, you know, my job is to make those kind of negotiations less difficult by making sure that this 50 years of history is overcome in the bureaucratic and administrative reflex sense, and that the tremendously bright opportunity of this huge place, a billion people, and the United States in decades to come—as I said, I use the word “destiny.” I see there’s no question about where the United States-India relationship is going. We can control and influence the pace, and I want to do that.

BOIES: My personal view is that you will go down as the most effective multi-tasker in the history of secretaries of defense. (Laughter.)

CARTER: I used to say that.

BOIES: And in that regard, you have started consortiums with Silicon Valley; you’ve enlisted Eric Schmidt to chair a committee that will do a lot of future looking. Just the other day you were at MIT announcing a consortium to develop fabrics—

CARTER: Yeah.

BOIES: —that will be of military use. Tell us about these innovative projects and what we can look forward to seeing.

CARTER: Well, one of the strengths—you know, what makes ours the finest fighting force the world has ever known? Well, first it’s our people. And I have to tend to that so that 10 years, 20 years, 30 years from now—it’s an all-volunteer force. We don’t make anybody do this. We continue to attract and retain great people.

But the second thing that makes—has made the American military great over decades and decades is technology. In the old days, in the old Sputnik days, much of the technology of consequence for military purposes was born in the United States and actually under the United States government. We still do a lot. We’re spending $72 billion on research and development this year. But we’re still—that’s more than twice what the major tech companies combined spent on R&D in a year. So were still a big dog, but it’s a much more diversified, industrial and technological landscape. And of course, it’s more international and it’s more commercial.

So if we’re going to stay great in that sense, we need to reach out. And that’s what I’m trying to do. I’m trying to build new bridges to what we know is a new, innovative culture. It’s not the same as it was in the ’50s, and ’60s, and ’70s. And glorious as our history is, with satellite communications and the Internet, and all the things that were born from defense innovation, it’s going to be different in the future. And I need to connect with those people. When I do so, and that’s what I was up there doing in Boston in this area of fabrics, which may sound like a niche, but it’s not really if you think about being able to wear clothing that will be your batteries, charge your batteries, and make it difficult to detect and see you, and regulate your temperature whether it’s cold or—all these things are now possible. So it’s just one—and, by the way, one that is of importance to the economy more generally.

So where I can create that unity in a new way, I really need to do that. I owe that to my successor and my successor’s successor. I find, when I do that, that the tech community of all kinds—it’s not just Silicon Valley and it’s not just tech-tech, you know, the IT. It’s sort of biotech. Boston is a big hub of that. Manufacturing technology, which is the purpose of the manufacturing institute that we funded up in the Boston area, which is number eight of eight that we’ve done of that kind. I find that the innovators of America are very welcoming of that. And they—first of all, they recognize that it’s serious business. Security—it’s not a game. And they recognize that. And secondly, these are people who like to do things that matter. And protecting our people and leaving a better world for our children, that really matters. So I find the uptake is really high.

And it’s just—and you know, every time I’m doing something in family programs, women in the military, and so forth, they say, why are you doing these things? I’m doing them because I want to make sure that we remain the finest fighting force the world has ever known. To that, I need to keep up with how generations change, how technology changes, and make sure that, as I constantly tell our people, we’re thinking outside of our five-sided box of the Pentagon. (Laughter.)

BOIES: I would like to open for questions. Please state your name and your affiliation. And please, try to keep your question shorter and more to the point than mine. (Laughter.)

Yes, sir.

Q: George Schwab, National Committee on American Foreign Policy. Thank you very much, Mr. Secretary.

I wonder, in your deterrence—in our deterrence policy, what role does Taiwan play?

CARTER: Well, Taiwan is a good trading partner of the United States. Our policy there derives from—and this gets down into the sort of lore of past times, but it still is the basis of our policy, has been for decades and it’s worked—goes back to the so-called three communiques between the United States and China, which settled between us the issue of was Taiwan—was there one China, and so forth. And that policy has been established now—it goes back to several administrations. It’s been sustained through that time, and by successive governments of Taiwan, and by successive governments in China as a good thing. And the other is the Taiwan Relation Act, which instructs us, and me as the secretary of defense, to maintain the capability to assist Taiwan in its own defense.

So we do that. But in the main, our policy derives from the three communiques. And that situation has been a peaceful one now for a number of decades. And if you go back to the 1950s, you know, you will remember, there was a real prospect of conflict over Taiwan. So it’s an example, if you like, of something that takes a long time. And, of course, it hasn’t been landed yet. But we’ve kept the peace in a way that has allowed Taiwan to certainly develop, in its own way, and kept it peaceful, in the peace between the United States and China and Taiwan and others in the region. So that’s the story.

BOIES: I’m going to take two questions. Yes, sir, in the front. And yes, sir, in the middle. Here.

Q: I don’t have a microphone, so I’ll speak loudly.

BOIES: You need a microphone, sir.

Q: David Rivkin, president of the International Bar Association.

I applaud your work with India. You didn’t mention at all how it might impact our relations with Pakistan, which are so important for many other reasons. So I was wondering if you could talk about that—

CARTER: Sure.

Q: —for just a minute.

CARTER: Sure. Sure. Well—

BOIES: Before you do, can I get another question in?

CARTER: Yeah.

BOIES: You in the middle. Sir.

Q: Secretary, Jason Sherman from Inside Defense.

As the department thinks about this region, I wonder if you could say a word or two about a relatively new entity stood up in the Office of Secretary of Defense called the China Strategic Initiative, about its composition, its role in policymaking, and planning and budgeting. Thank you.

CARTER: OK. Well, first of all, with respect to Pakistan, that also is an important security partner; a whole lot of issues, of which counterterrorism looms largest. And we work with the Pakistanis all the time on that.

It’s long past—we’re long past the point in U.S. policymaking where we look at the India-Pakistan dyad as the whole story for either one of them. We have much more to do with India today than has to do with Pakistan. There’s important business with respect to Pakistan, but we have much more—a whole global agenda with India, an agenda that covers all kinds of issues.

With respect to Pakistan, once again, totally different. We have a big set of issues having to do with the border with Afghanistan, where we continue to operate; with terrorism, both on the territory of Pakistan and also obviously cross-border into Afghanistan, including affecting U.S. service members there. And so I’m sure I’ll be asked about it in India.

But the first thing one needs to say, from an American policy point of view, these are both respected partners and friends. They find themselves in very different situations. And the days are gone when we only deal with India as the other side of the Pakistan coin, or Pakistan as the other side of the India coin. I know that there are those in India and Pakistan who are still glued to that dyad way of thinking. But the United States put that behind us some time ago.

BOIES: And then the question about China.

CARTER: Well, I don’t know specifically what is being referred to there, but we have a number of ways I’ve described—they weren’t described today, but the things that we’re doing to underwrite our ambition to have a stronger relationship with China in the military-to-military area.

Q: (Off mic)—but it’s a red team that—

CARTER: I believe that’s possible.

Q: It’s a red team at OSD. It’s the China Strategic Initiative?

CARTER: Well, I’m afraid I don’t know. There are lots of teams around, and particularly ones looking at China. So I don’t know what this particular one is.

BOIES: My cheap watch—

CARTER: I hope it’s doing good work. (Laughter.)

BOIES: My cheap watch does not match the clock. How are we for time? We’ve got—do we have time for more questions?

MR.     : I’m really sorry. We got to—

BOIES: OK. We have a hard stop, I am very sorry to say. Mr. Secretary, thank you so much.

CARTER: Thank you. It’s good to be with you. Appreciate it. (Applause.) Good to be with you. (Applause.)

(END)