SEC. PANETTA: This will be my fourth trip as secretary of defense, and what I'm looking forward to is, it'll be -- it'll be a quick trip. I'll -- we'll go in, meet with General Allen, Ambassador Crocker and Minister Wardak, and basically just get an update as to the situation there, plus the plans that General Allen has put in place for the drawdown on surge, see where stand with that and then the overall situation on the tranches and how that's going, as well as the situation with the Afghan army and police; and I think, in particular, obviously, to pay tribute to Ambassador Crocker for the service that he's provided. He's -- you know, he's -- he's been around a long time in some very tough positions, and you know, he was able, working with General Allen, to be able to complete the work on the MOUs (memorandums of understanding) and the strategic partnership that were very critical to our ability to move the ball forward with regards to, you know, the plan that General Allen wanted to put in place to be able to get that done.
So I'm going to pay tribute to Ryan and wish him well as he -- you know, as he concludes a very successful tour as ambassador there.
Other than that, you know, just really want to continue to get a feel for what's going on and get a sense of just exactly what are the Taliban doing. There clearly have been -- there's been an increase in the attacks, and we've seen a recent attack that, you know, was much more organized than what we've seen before, using a vehicle IED (improvised explosive device) combined with suicide bombers.
And you know, that would -- again, level of violence is still down, you know, compared to the past, but I think it's important to try to make sure we are aware of the kind of attacks they're going to engage in, particularly as we go through the rest of the summer and/or the latter part of this year.
OK. With that, we’ll throw it open.
Q: (Off mic.)
MR. GEORGE LITTLE: Are we using the microphone?
Q: Mr. Secretary, as you head into Afghanistan, it does seem as though violence has -- is on the uptick a little bit. Can you talk a little bit about how you think that may or may not affect General Allen's plans for troop withdrawals and what you're going to tell him about how you think things may or may not proceed?
And again, you mentioned today about the Haqqani network, and what do you think the impact is going to be of the Haqqani network, considering there isn't an any action being taken against it?
SEC. PANETTA: Well, I mean -- I mean, that's the -- the purpose is to really get General Allen's viewpoint of the situation there and, you know, his confidence level as to the ability to confront these threats from the Taliban and from the Haqqanis.
I -- you know, I think that in the conversation I had with him -- we do SVTCs (secure video teleconference) every week, and the last SVTC I had with him, while he expressed concern about, you know, these -- this renewed level of attacks, although I think he frankly anticipated that that would be the case -- that, you know, they would obviously try to uptick on the attacks -- that he was fully capable and that our forces are fully capable of meeting that threat. And you know, I want to be able to obviously get a sense from him as to, you know, the capability of doing that, plus make sure that as we -- as we do engage in the drawdown of the surge in particular, that we are able to do it in a way that maintains the security of the areas that'll be involved.
MR. LITTLE: Jennifer.
Q: Sir, what is the message that your trip here to India -- what message should Pakistan take from your trip to India?
Is there -- there's been some debate about whether there's any message for them. Is there a message? And also, have you given up on trying to open the supply routes -- the overland supply routes through Pakistan?
SEC. PANETTA: No. We are continuing to negotiate on the supply routes. And you know, we are -- we are working to see if we can arrive at -- (inaudible) -- that will allow us to be able to do it, and do it in a way that obviously will meet our needs and, you know, meet the targets that we established with regards to, you know, what we can afford. The -- so the answer to your question is yes. We are -- we continue to work on that.
You know, with regards to -- you know -- you know, there's no larger messages here other than the importance, I think, for both the United States and India to continue to do whatever we can to try to improve the relationship and try to be able to achieve some steps forward in the relationship so that, you know, we can try to reduce the level of instability that oftentimes threatens, you know, not only our forces but, you know, threatens to undermine the stability of Pakistan. Having a stable Pakistan is extremely important.
I mean, look -- you know, the -- you know, the three things that we're concerned about as we -- as we deal with the situation in Afghanistan are the following. One is obviously the resilience of the Taliban and, you know, their ability to be able to, you know, develop new approaches to how they attack our forces and be able to respond to that and do it effectively.
Two, the safe havens, which continue to be a concern, particularly with the recent Haqqani attacks that we've seen and, you know, the continuing -- the continuing threat of having those who can come across the border, attack our forces and then escape into the safe haven in Pakistan. And there, you know, we continue to urge Pakistan to deal with that and try to take on those terrorists who reside in the FATA (Federally Administrated Tribal Areas) who are conducting those kinds of attacks.
As I said at the institute, you know, these terrorists represent not just a threat to the United States, they represent a threat to Pakistan as well. So it's in their interest to try to take steps to deal with it. They've done it -- you know, in the past they have gone into Waziristan, and you know, we think it's really important that they continue to put pressure on the terrorists on that side as well.
The third area is just, you know, the amount of corruption that exists, you know, within all levels of the -- of the Afghan society and the ability to try to control that so that we can have stable governance there as we move into the future. That's another area I think we've got to pay attention to.
So you know, bottom line is, with regards to Pakistan, that it is, as I said, a complicated relationship, but it is a necessary relationship. There are some important things that we have to do in their country. There are some important things we have to do that -- in terms of protecting our security. And you know, we have to -- we have to keep working with them to hopefully get their cooperation in that effort.
They are important to the stability of this region. And for that reason, both the United States and India and others are going to have to do everything we can to try to do what is possible to improve the relationship.
MR. LITTLE: We'll do a follow-up, couple more on Afghanistan, and then we'll go to Act II.
Q: (Off mic.)
Q: Mr. Secretary, there was a question in the institute. One of them asked you about a Plan B, and I think you said we don't have a Plan B. But I think the question -- the larger question was, is there any thinking about a United Nations-led regional peacekeeping-type mission that can take over or assist the ISAF (International Security Assistance Force) as the drawdown begins? I mean, you've said how important it is for both Pakistan and India that there is a stable Afghanistan and vice versa. Why is that not a good idea, to think about a regional peacekeeping kind of an effort?
SEC. PANETTA: I think -- you know, I think -- I think the effort right now is to implement General Allen's plan and, you know, complete the transitions, complete the effort of moving operational capability to the Afghans and continue the drawdown towards the end of 2014, and then the effort to develop the enduring presence beyond 2014, which is going to be, you know, not just the United States but ISAF working together to develop that enduring presence.
I -- you know, I think right now we've got to put all of our confidence in the ability of the -- of the ISAF forces to be able to help the Afghans make that transition, number one. And number two, the key in the end is not going to be the U.N. or ISAF; it's going to be the Afghans and their capability to be able to secure their country. And the whole effort right now is to ensure that they have that capability. And that's the goal that we're really focusing on for the future.
MR. LITTLE: Dan.
Q: Yeah, on the Haqqanis, if Pakistan continues to fail to crack down on the Haqqani network, then is the U.S. prepared to take its own unilateral action to try to solve that problem? And then I have a follow-up question.
SEC. PANETTA: Yeah. Well, you know, look, one principle we always abide by in the United States military is to defend ourselves. And that's extremely important that we are -- you know, we have the capability to defend ourselves against any form of attack.
In this instance, obviously, you know, we haven't -- we have not given up hope that the Pakistanis, you know, are not going to take action to try to control the safe haven. In the discussions that our generals have had with General Kayani, General Kayani continues to indicate a willingness to cooperate in that effort. And I think what we have to do now is to do as much as we can to urge Pakistan to take that challenge on.
Q: And then just following up, how big of a risk do you see of a proxy war after 2014 with India and Pakistan? Been a lot of -- there are a lot of people who are predicting that.
SEC. PANETTA: In Afghanistan? Yeah. You know -- and you know, I know the concerns that are out there. But I have to tell you that there are -- there are several things that I think, at least from my viewpoint, are improving the situation with regards to the future here, that first of all, I think Afghanistan is making good progress at developing, you know, a stable country for the future. They are -- they are developing very good secure forces -- security forces that can provide stability. We are making the transitions. They do seem to be improving in their governance. And so, you know, good progress is being made there.
Secondly, progress is also being made between India and Pakistan to improve their relationship. You know, they are -- they're -- they are improving their trade relationship. They are continuing discussions with regards to their -- the military issues that they're involved with. In talking to Prime Minister Singh, he indicated -- he -- as some of you may know he was born in Pakistan. So he has an interest in trying to pursue improving that relationship. And so there clearly is a -- you know, it's a better situation.
Thirdly, Pakistan itself understands that -- you know, that as the situation has improved in Afghanistan, it is in their interest to try to work with us, particularly in areas like reconciliation, to try to see if ultimately we can bring the Taliban into the political process in Afghanistan.
So if you look -- you know, you look at a number of fronts, and I think, you know, the situation is improving. It doesn't mean that there aren't concerns, doesn't mean that -- you know, the history of divisions in this region, you know, can always -- can always explode again. But right now I think that all three countries, you know, are moving in a better direction than they were.
MR. LITTLE: Last question maybe in Act I anyway from Jim.
Q: Yeah, Mr. Secretary, you just answered the question I was going to ask. So --
MR. LITTLE: OK, Julian. Then we'll wrap it up with Julian and then go to intermission.
Q: You said today that we are at war in the FATA. Are we at war -- we're clearly at war with al-Qaida there. Are we at war with the Haqqani network? And how crucial are U.S. endeavors in the FATA that you referred to to the war in Afghanistan, i.e., is this critical pressure on the Haqqani network?
SEC. PANETTA: You know, obviously, you know, you're well-aware of the war we've conducted against al-Qaida since 9/11. And the -- you know, the primary thrust of that effort obviously has been at going after their leadership in the FATA. And we're continuing to do that, as you've seen.
The -- obviously the same is true with regards to those that attack our forces and come across the border to attack our forces. Those are -- those are our enemies, and we are going to do whatever we can, obviously, to confront them when they come across that border and to put pressure on Pakistan to try to deal with it on their side of the border as well.
So, you know, our security interests are involved here with regards to Pakistan, both in terms of the fight against al-Qaida but also the fight against those who continue to threaten our forces in Afghanistan.
MR. LITTLE: Thanks, everyone. That brings us to the end of Act I. We're now at intermission. And that's, of course, embargoed until arrival in Afghanistan.
Q: Much obliged.
MR. LITTLE: OK? So I understand that our TV colleagues need a little bit of time to switch tape? Is that correct?
OFF MIC: No, actually --
SEC. PANETTA: Are you telling --
MR. LITTLE: We're OK?
SEC. PANETTA: You tell me there's going to be more here? (Laughs/Laughter.)
Q: Can I ask you about the Monroe Doctrine? (Laughter.)
SEC. PANETTA: (Inaudible.) (Laughter.)
Q: Or the Truman Doctrine?
SEC. PANETTA: Or the base -- or the base in Bangladesh. (Laughter.)
MR. LITTLE: We're rolling now, so -- we're now in Act II, and this is on the record, unembargoed. We'll take a few questions. We got to wrap things up.
Q: In both Vietnam and India, it has seemed that both those governments have publicly said that they are particularly interested in getting access to more of our military technology, military hardware. They have seemed, at least publicly, less interested in close coordination of close alliances with the U.S. of the sort that you've described in your speech, various speeches.
Do you acknowledge that? And is it a problem for the U.S. strategy going forward?
SEC. PANETTA: No. You know, I don't see it that way. I really -- in the discussions I had both in Vietnam and here in India, it is very much the broad-based relationship that they're interested in. In Vietnam they -- you know, they clearly are interested, obviously, in some of our technologies, in the ability to -- you know, to have our ships visit their ports. But they're also interested in exchanges, you know, with regards to the ability to work together, to provide advice and assistance and to help them improve their capabilities. And I did not get the sense that this was kind of one-sided or that, you know, they had any concerns.
Now -- and by the way, the same thing is true for India. I think with the Indian relationship it's much clearer, that, you know, we do exercises with them. We do more exercises with them than others. And we obviously have a huge -- over $8 billion exchange with regards to technology and weapons. And so it is a pretty broad-based relationship as well.
I think what I sense from both countries -- and frankly, I sensed this in Shangri-La -- is that if they believe that the United States is truly interested in developing their capabilities and not just simply going in and telling them what to do or trying to overwhelm them with power, I think they're willing to listen. And so the real challenge is to convince them that that is, you know, what our intentions are all about. And I think we are making good progress on getting that point across.
Q: Can I follow up on that?
MR. LITTLE: Sure, Marcus.
Q: Again on the tech transfer. It came up several times on this trip and has come up in the past year in Brazil, for instance. How much, if at all, has the loss in the India fighter competition created this new effort to reach out in tech transfer more? And if not, why the desire to do that?
SEC. PANETTA: Well, you know, I guess I have a pretty pragmatic view of that. You know, countries are going to make decisions, and sometimes you win, sometimes you don't win. But that's the nature of competing in this arena.
I'm absolutely convinced that we have the finest technology and that we have cutting-edge stuff that's out there, and that we have very reliable and proven weapons and planes and, obviously, other technologies that are available. So I think we have a very good product to sell.
But in the process of competition, you know, there are going to be times when, you know, in a very competitive world, an increasingly competitive world, other countries are going to engage in that competition, and decisions are going to be made based on what they think is the best price for the weapon that they want to purchase.
Having said that, I mean, I kind of -- I kind of look at this as a real opportunity because of what they've done with the C-17s, with the C-130s, with the other weapons that they're interested in. It's pretty clear to me that they know that when you look at the broad range of potential purchases that they can make, we've got a hell of a lot more to offer than others. And that's what gives me confidence that, you know, we're going to be not only competitive; we're going to do well.
MR. LITTLE: William, did you have a question?
Q: Yeah, so we're at the end of this eight-day tour, and you kind of laid out the goal of it at the beginning of it explaining this, you know, rebalancing. So in rolling out this strategy at that initial first phase, and then now this deeper explanation, the 60-40, what's the next kind of thing for the strategy and where you go from here? And do you feel like it was fully successful in reassuring, you know, allies or partners that this is a substantive thing? Yeah, next steps.
SEC. PANETTA: Yeah. Well, in many ways, this was an effort to define the strategy so that they understood what the strategy was about and what it meant for the countries in this region. We now have to put meat on the bone, which means that we've got to follow through with actions. And that means that, you know, when we talk about improving their capabilities, when we talk about developing a rotational presence, when we talk about exercises, when we talk about training, advice and assisting, we've got to show that we can deliver. And that's going to be the next step.
MR. LITTLE: One or two more.
Q: While you were meeting in Asia with -- on this tour, the Chinese were hosting the Russians and the Iranian leaders for their own strategic dialogue. Are you concerned that this new strategy could lead to another Cold War? And what are you doing to prevent that from happening?
SEC. PANETTA: The important element of all of this is that this is not about retrenchment; this is about outreach. And the outreach is not just to our traditional allies. The outreach is to -- is to China, it's to Russia, and it's going to be to others, to try to ensure that, you know, we build better mil-to-mil relationships with all of those countries and build diplomatic ties, build trade ties to all of those countries for the future. I mean, that's -- that seems to me to be -- the dream of the 21st century is a world that shares in prosperity and security and peace. And the best way there is for -- is for the United States to work with all of these countries to ensure that we're all working towards the same goal.
I don't -- you know, look, the United States has to look at the world realistically, not be naive about, you know, the challenges that are out there, but at the same time not be afraid to engage. And I guess that's -- that is going to be a key to our ability to not only implement our strategy, but achieve the goals that I think we're all interested in.
MR. LITTLE: And one last question.
Q: You know, you've spoken in your address about working jointly with India to develop new weapons capabilities, systems.
SEC. PANETTA: Yeah.
Q: Do you have any idea what's holding that up, what areas you would like to go -- like to see that go in?
SEC. PANETTA: It's -- I mean, you know, for those of you that follow this stuff, it's a bureaucratic nightmare to deal with this stuff. You know, I've got -- we've got export control laws; we've got other laws that we've passed. There are -- you know, there were all kinds of concerns about, you know, what level of technology we ought to be sharing with others. And so as a result of that, it makes for a very complicated process.
And you know, what we're finding is, you know, here, you know, we have allies that are interested in technology; we want to -- we want them to develop their capabilities; we want them to be able to -- to be able to strengthen their security, and yet, you know, in many ways, some of these requirements inhibit us from doing what we think needs to be done.
So this has to be attacked in several ways. Number one, we are working to try to get changes in the Export Control Act to try to eliminate some of the barriers that are there, to loosen up on some of the bureaucracy that's involved with regards to those laws. That's -- you know, that's going to take a lot of work. But you know, we're beginning to make some progress on that front.
The second thing is that we too internally have to speed up the process within the Pentagon in dealing with these issues and to try to eliminate some of the internal barriers that are also there. And that's why I've suggested having Ash Carter, as deputy, be able to -- at the highest level, be able to say, you know, what is the broad strategy here; what do we want -- what does India need; what can we do to try to meet those needs, but then be able to look at the entire program to try to provide assistance, because in that way, it can, instead of doing this hit and miss with each system, look at the whole package and see if we can't speed up the entire process of providing these systems.
And so it has to be dealt with legislatively; it has to be dealt with administratively. And you know, that -- I'm not -- you know, again, it's not going to be easy. This is tough. But I -- we -- with India, just as an example, we've approved 85 percent of their requests. That's about 1,700 and something, you know, areas where we have approved it. That's a -- that's a good number -- (chuckles) -- considering the problems we do have. But that tells you that if you push hard enough, you can get this done.
OK? Thanks, guys.
MR. LITTLE: Thanks, everyone. Appreciate it.
Q: Thank you.