DEPUTY SECRETARY OF DEFENSE ASHTON B. CARTER: Well, good morning, and thanks, Neera, for that introduction. Rich, thanks for making this event possible. Rudy, my august predecessor there, Carolyn, a star student of mine, brilliant Harvard student that I'm now taking credit for, even though I had nothing to do with making her brilliant, thanks. And thanks to the Center for American Progress. What a wonderful institution.
I know John Podesta couldn't be here today, but also please give my best to John, from whom I've learned so much over the years.
Neera mentioned I just got back last week from India, Afghanistan, and Pakistan. And there I was able on behalf of Secretary of Defense Hagel to meet with officials in all three countries and a wide variety of folks, actually, in all three countries discussing regional and global security matters, and I have a number of lessons I took from those conversations I'd like to share with you today and then discuss.
But particularly, in light of Friday's successful meeting between Prime Minister Singh and President Obama, I thought I'd focus the preponderance of my remarks today on the strong and rapidly growing defense partnership between the United States and India, as we execute, as Neera said, the rebalance, so-called, to the Asia Pacific region.
First, however, let me digress just a moment to address what I know is on so many of your minds this morning, an impending government shutdown beginning tomorrow morning due to a lapse in our appropriations. And let me just emphasize that the administration firmly believes the shutdown can be avoided, should be avoided.
And while we in the Department of Defense are fully prepared to deal with a shutdown if it occurs, it will be extremely disruptive and unfortunate, especially for our men and women who are defending this country, who now have to worry about receiving their paychecks on time. And in addition, about half of our valued and dedicated civilian personnel who have already been furloughed for more than a week this year will be placed on no duty, no pay furloughs. This is no way to treat patriots working in our department and will cause serious harm to productivity and morale.
Finally, planning for the shutdown is itself disruptive. We're spending thousands of hours on complex planning for a shutdown instead of spending this time more wisely and efficiently on addressing our national security challenges.
Just a few minutes ago, I briefed Secretary of Defense Hagel, who's in Asia with General Dempsey, the Chairman of the Joint Chiefs of Staff, and Secretary Kerry, for important alliance consultations on the budget situation.
Let me conclude by saying that the Department of Defense is prepared to deal with a shutdown if it occurs, just like we were prepared to deal with sequestration, but a shutdown will be disruptive and harmful to the national security mission. We strongly urge the Congress to pass a budget and avoid a disruptive and stupid shutdown of the federal government.
And with that, let me turn back to the subject of today's discussion.
The Asia Pacific rebalance, as we call it, is mostly a political and economic concept, not a military one, but since I'm the Deputy Secretary of Defense, naturally I'm going to focus on the military aspects. And before I describe how we're implementing the rebalance in general, and specifically as it applies to India, let me put the rebalance in its overall strategic context.
We in the United States and in the Department of Defense are currently embarked upon a great strategic transformation -- or, sorry, transition. As we turn the corner from a decade of necessary focus and preoccupation with two wars of a particular kind in Iraq and Afghanistan to the challenges and the opportunities that are going to define our security future. You know what many of those challenges are -- continued turmoil in the Middle East, enduring threats like weapons of mass destruction, and a range of new threats in new domains, like cyber.
But we also see great opportunities, the most consequential of which is to shift the great weight of the Department of Defense, both intellectual and physical, to the Asia Pacific region, to reinforce our longstanding commitment to peace and stability there. The logic of our rebalance is simple. The Asia Pacific theater has enjoyed peace and stability for over 60 years. This has been true despite the fact that there's no formal overarching security structure there, no NATO, to make sure that historical wounds are healed.
And during those 60 years, first, Japan rose and prospered. And then South Korea rose and prospered. And then many countries of Southeast Asia rose and prospered. And today, India and China rise and prosper. And that's all a good thing.
But none of this was a foregone conclusion when you consider where the Asia Pacific region was at the end of World War II. While the Asian political and economic miracle was realized first and foremost by the hard work and talent of Asian people, it was enabled by two critical American contributions.
First are the enduring principles that the U.S. has stood for in the region. These include a commitment to free and open commerce, a just international order that emphasizes rights and responsibilities of nations and fidelity to the rule of law, open access by all to the shared domains of sea, air, space, and now cyberspace, and the principle of resolving conflict without the use of force.
And, second, and importantly, the Asian miracle was also enabled by the pivotal role of U.S. military power and presence in the region. Our strong security presence in the Asia Pacific has provided a critical foundation for the principles to take root. And we intend to continue to provide this foundation for decades to come. That in a nutshell is the reason for the so-called rebalance.
And our partners in the region welcome our leadership and our robust engagement. It's good for us, and it's good for everyone in the region, as it has been for all these decades. And it includes everyone in the region. It's not aimed at anyone, no individual country or group of countries. The defense portion of the rebalance entails sustaining and, indeed, strengthening our military presence and posture in the region, making new investments in new weapons applicable to the region, and in robust and expanding security partnerships and alliances.
With respect to presence and posture, our rebalance means that a higher proportion of our assets and our newest assets will be in that region, Navy, Air Force, Marine Corps, and Army, and given the unwarranted -- excuse me -- and, second, we're giving prioritization in our investments, our new investments, to the development of platforms and capabilities that have direct applicability and use in the region. These include the Virginia-class nuclear-powered submarine, the fifth-generation Joint Strike Fighter, the P-8 maritime patrol aircraft, a new stealth bomber, KC-46 tanker replacement, cruise missiles, ISR platforms, and much more.
And finally, and most importantly, we're revitalizing our defense partnerships across the region. Multilaterally, we recognize the importance of strengthening regional institutions, like ASEAN, and are taking steps to do that. Next month, the President will be traveling to Southeast Asia to attend APEC and the East Asia Summit, consulting with a wide range of partners on key areas of interest.
Bilaterally, this includes continuing to work with our strongest and longest-lasting allies there, as well as deepening relationships with many new countries across the region, Thailand, Vietnam, Malaysia, Indonesia.
Secretary Hagel and Secretary Kerry will be visiting Tokyo this week for the Security Consultative Committee, or two-plus-two meetings, with their counterparts. The results of those meetings will show the strength of the alliance with Japan, which is a cornerstone of our rebalance to the region.
And on the Korean peninsula, where Secretary Hagel has visited during our nighttime the DMZ, we're implementing the Strategic Alliance 2015 and taking steps to advance the alliance's military capabilities to meet the North Korean threat. This year's 45th Security Consultative Meeting marks significant achievements in 2013 to enhance the alliance's credibility and effectiveness towards continuing to maintain peace on the peninsula.
And we also seek to strengthen and grow our military-to-military relationship with China, which matches and follows our growing political and economic relationship with China.
I'm asked all the time, isn't our rebalance really about China? Or isn't it aimed at China? And the answer, as I've indicated is, no, it's not about China. It's about ensuring the peace and stability that the Asia Pacific has enjoyed for 60 years, making sure that's continued.
And we're committed to working closely with our Chinese counterparts and to maintaining a robust agenda of military-to-military engagements with them. And in this connection, we're encouraged to see increased Chinese involvement in multilateral military exercises in the region to include the U.S. Pacific Command's next Rim of the Pacific, or RIMPAC, Exercise the Chinese are going to participate in.
Now, all this doesn't mean that our efforts to rebalance will look the same across the Asia Pacific. In some places, we're investing in visible infrastructure, new basing, rotational presence, as in Australia and Singapore, future-focused capabilities.
But in other places, our rebalance is best measured by our investments of time and strategic attention to create wholly new types of relationships, which brings me to India. There's no doubt, no doubt in my mind, that the United States and India are destined to be partners on the world stage. There's something about a common way of looking at the world, a common way of thinking, a common set of values that destines us to be partners.
Indeed, President Obama has rightly described our relationship with India as one of the defining partnerships of the 21st century. From the beginning, we've seen India as integral to the rebalance. And the policy emphasis on a rebalance within the Asia Pacific, as well as to the Asia Pacific, that is, to include Southeast Asia and the Indian Ocean area, has been with the rebalance from its inception.
Our growing partnership with India does not involve the outward markers of presence and posture and basing, but does reflect a sustained effort by leaders in both countries to identify and build on our already close ties. The partnership is grounded, first and foremost, in the values that unite our countries, including a commitment to democratic governance and human rights, as well as those national rights and responsibilities I spoke of earlier.
It's strengthened by the close bonds of so many individuals and families who have traveled between our countries for work, for study, to seek cultural enlightenment, and to find greater opportunity for themselves and their families. We also share a bond forged through the governance of common security interests and outlooks. These include support for maritime security across the Indian Ocean region, humanitarian assistance and disaster relief, regional institutions such as ASEAN, a stable, secure and prosperous Afghanistan, where India's done so much for the economic development and for the -- excuse me, the Afghan security forces, and agreement on addressing broader regional issues, where we share long-term interests, if not always common approaches.
Now, I personally became an early and strong supporter of the U.S.-Indian relationship through my association with the Aspen Strategy Group in the late 1990s, working with the great Tarun Das and Kiran Pasricha and Shankar Bajpai, all three of whom I just saw in New Delhi a week ago.
And in 2005 and 2006, following the signing of the new framework for defense relations and the conclusion of the civil nuclear deal, I co-chaired an advisory group tasked by the Senate Foreign Relations Committee with assessing what was commonly known then simply as the India deal. The assessment I provided the Congress on the breakthroughs of that era was that the United States had made a long-term, but very consequential strategic investment. We had paid an upfront cost in nuclear acknowledgement in the conviction that our return on this investment would be high down the road.
The 2005 new framework set forth an ambitious vision. It laid the foundation for the enormous increases in defense cooperation we've seen in the eight years since. And we've worked during that time to deepen our defense cooperation and particularly our collaboration on defense systems and technology, but as we've done that, we've had to grapple with the historical reality that different approaches to the Cold War had left the United States and India with two very different post-Cold War systems and a huge gulf between them.
The Indian approach, with its focus historically on non-alignment, had a heavy emphasis on indigenous R&D and production of defense goods and, where imports were concerned, privileged the import of technology that came without strings attached.
We in the United States, conversely, had designed a defense trade architecture that prioritized stringent safeguards to protect our systems and technology from all but our most steadfast Cold War allies. In the post-Cold War era, as the U.S.-India relationship blossomed and simple defense sales between our two countries grew, it became increasingly clear that while the world had moved on, our bureaucratic systems had not.
And that is why a little over a year ago, former Secretary of Defense Panetta and Indian National Security Adviser Menon agreed that Shankar and I would find ways to take our defense cooperation to the next level, streamlining and aligning our bureaucratic processes and making our defense trade more simple, responsive, and effective.
Our two countries agreed to overcome bureaucratic and process obstacles so that in the future our defense cooperation would be limited only by our respective strategic, independent decisions, and not by our respective bureaucracies and procedures. That's the goal.
We began to call this initiative DTI. In a wonderful illustration of the challenges we set ourselves to resolving, we, the Americans, initially explained DTI as a defense trade initiative, highlighting a common approach to increasing bilateral trade, particularly through co-production and co-development opportunities. My Indian counterparts, meanwhile, referred to DTI as the defense technology initiative, highlighting the effort's goal of indigenization and technology transfer.
And the reality, of course, is that DTI is both of these things. So I've begun to refer to DTI as the defense trade and technology initiative. And the truth is, this is going to be a long and steady process of aligning our systems, and sometimes it may be difficult to see -- it may be difficult to see that we speak the same language.
I was reminded of this when I read some of the press surrounding my time in Delhi. At one point, when I spoke of U.S. support for what the Indians call indigenization, it was reported as support for indigenization, which we have, too, but it wasn't pertinent. On another occasion, though, it was reported as support for indignation. And I can -- think I can confidently assert that in the last year-and-a-half, what DTI hasn't accomplished is increasing levels of indignation. What it has accomplished is, to begin with, the disposing of a lot of misperceptions in India about U.S. willingness to share high-level technology and, on our side, some specific changes in our practices that we both changed and communicated better towards India in areas that had caused concern to them.
For example, toward that end, last fall, we sent to the government of India a comprehensive paper -- we'll call it a white paper -- that explained where the government of India falls within our export control system. Now, I always say that the export control system is the most important and serious really boring subject one can possibly talk about, so I'm going to try to just hit the wavetops here and hope that the seriousness of this audience will give you patience.
But the paper we sent them covered several key areas from export controls rules themselves to end use monitoring and the need to identify proposals for co-production and co-development. Let me start with something about export controls. We have demonstrated repeatedly that we can release sensitive technology to India. We've adapted our system in ways that will speed our release process for India, especially in the Department of Defense, recognizing that for, of course, all partners, this process is subject to case-by-case review and there will always be some technologies that we will keep to ourselves. We changed our mindset around technology transfer to India in the Department of Defense from a culture of presumptive no to one of presumptive yes.
This, at the same time, of course, that the rest of the government under President Obama's export control reform initiative is transforming the entire system, which can be difficult to navigate -- that's a very kind way of saying it -- and at times be overly restrictive.
For example, we grant -- now grant India -- not we, really, the -- the Commerce Department and the State Department -- preferential categorization under the U.S. Strategic Trade Authorization, which authorizes license exceptions for the export of many items on the commerce control list.
Specifically, under STA, there are a small number of items that can only be exported without a license to a select group of favored nations. This so-called Group of Eight now includes India.
We continue to vigorously support India's efforts to join the four major international export control regimes in a phased manner, and India's already taken positive steps in this regard. We've also focused on clarifying old misperceptions and generated creative workarounds to potential points of friction.
For example, we've clarified with our Indian partners the universal applicability of certain laws related to our exports that they believed applied only to them, such as end use monitoring, which we use even with our closest partners and allies.
We also decided with India that the conclusion of certain agreements, such as those that regulate communications interoperability, the so-called GSOMIA logistics support, the LSA and so forth, although potentially beneficial, should not serve as obstacles to progress with India.
We're also trying to find ways to make our licensing procedures more flexible. A year ago, we started looking at the problem of not being able to issue certain types of licenses before contract closure. What this meant in practice is that we couldn't be clear about the extent of possible technology transfer until the end of the contracting process. Well, this is a catch-22 for our industry trying to work in India.
To try to work around this obstacle, we're using what we call an advisory opinion that enables us to assess the likely level of technology we can release for a given case prior to formal license request. These advisory opinions aren't legally binding, but they do give the parties to a business deal an indication of whether it's going to go through or not. They're a great example of a creative approach.
And to get to the nitty-gritty, we've also taken unprecedented steps to identify forward-leaning proposals by industry from industry on both sides for defense items to be co-produced and, the true measure of our common goal, co-developed by the U.S. and India. These include a maritime helo, a naval gun, a surface-to-air missile system, and a scatterable anti-tank system, all of which I discussed with my Indian interlocutors during my trip.
As I made clear through those discussions, in each instance, the United States has fast-tracked these projects to ensure that our internal processes are ready to go as soon as the Indian government wants to move forward.
We also identified the critical role played by U.S. and Indian research and development experts and identified several thematic areas, including cognitive sciences, autonomy, and many others, in which we would incentivize increased cooperation by U.S. defense researchers. You know what incentivize means. India has a world-class -- has world-class defense researchers, just like they have world-class commercial innovators.
So these are the steps taken in the last 15 months or so as a result of the Panetta-Menon launching of the DTI. The focus of my trip two weeks ago was the next phase. What can be done to take these advances to the next level?
And so, in the United States, with U.S. industry, and with my Under Secretary for Acquisition, Technology and Logistics, Frank Kendall, as the job I used to have and really superb at it, we identified and put forward to the Indians truly groundbreaking, entirely new collaborative proposal to co-develop with India a next-generation Javelin antitank capability. This is a new twist on a very old dog in U.S.-Indian relations. This proposal would address a key military requirement for both our armies and is an unprecedented offer that we've made unique to India, so we're pretty enthusiastic about it.
And we're committed to continuing putting additional new ideas on the table. During my trip, I delivered a second round of potential capability areas of cooperation proposed to us by U.S. industry after we asked them to give us their business ideas for India. What would you like to do if only you could? And outreach to industry is going to continue so that we continue to encourage U.S. industry to join the DTI effort. And that includes outreach to Indian industry, also, so on my trip, I made sure to hear from senior Indian industry representatives on their ideas for how we can increase private-sector partnerships and build stronger ties between U.S. and Indian defense sectors, both Indian government and non-government. That's important.
We've also taken additional new steps in our S&T, science and technology, collaboration. On my end, I let the Indian government know last week that I will be incentivizing U.S. researchers who seek and find Indian partners in the key research areas we identified previously. And said differently, we'll ensure that those innovative projects receive priority funding. This is an approach we've only ever taken with the United Kingdom and Australia, and now India will join that company.
And finally, we'll continue to pursue simple sales, but with a new twist. Prior to this trip, when I last visited India a year ago and had the opportunity -- I had the opportunity to visit the Lockheed Tata plant in Hyderabad, which assembles parts for the C-130J cargo plane, which is entirely a partnership of two companies, one American and one Indian. This was a partnership that was encouraged and applauded by the U.S. and Indian governments, but was not founded by either one.
The C-130J is a great example of what India can accomplish. In a wonderful bookend to my trip last year to Hyderabad, this year, I had the opportunity to travel to Hindon Air Force Station, where the Indian Air Force operates a growing number of C-130Js and also C-17s. While I was there, I received an excellent brief from the Indian Air Force pilot who landed and, importantly, took off again a C-130J in the Himalayas from an altitude well above 16,000 feet, certainly a record and quite an accomplish, a very interesting individual.
We're excited to have the next tranche of six C-130Js included in a pipeline of several major defense sales currently under consideration by the Indian government. Our goal is for India to have all the capabilities it needs to meet its security requirements and to be a key partner in that effort. And I think when you look at pictures of the Indian Air Force's C-130s participating in the recent flood relief efforts in the north, that tells you we're on the right track together.
With respect to requests for proposals advanced by the Indian government, we're taking aggressive, concrete actions to curb the kind of delays that impede timely responses by U.S. bidders. For example, I've directed the department to conduct expedited, anticipatory reviews of complicate projects in anticipation of upcoming Indian RFPs. And, again, this sounds boring, but it's important. If you can't respond to an RFP, in India, if you miss the deadline, you're out of the game. You can't respond to an RFP under our law unless you can release technology associated with your response. To release that technology, you need to get action from the U.S. government, a catch-22 that I was speaking of.
We are vetting now offers even before an RFP is released, when we know an -- that an RFP is coming. We're also making standard operating procedure out of those innovations I discussed earlier, so as trying to better anticipate Indian requirements and streamlining our licensing processes. These changes not only lay the groundwork for more sophisticated cooperation, but make us competitive for every sale.
At the same time, even as we push our own system to make changes, we continue to advocate on behalf of U.S. industry for needed changes in the Indian system, such as continued reforms to their offset system and foreign direct investment policies.
One other note on our competitiveness that I've mentioned to my Indian counterparts is worth mentioning. At times, a U.S. bid may not come in at lowest cost, which disadvantages us in the Indian system. But it's important to note that U.S. bids often offer best value overall, especially when full life cycle costs are factored in, which we normally do and some other competitors do not.
Also, we -- of great importance, we offer a transparent corruption-free export system, be it FMS, DCS, or our hybrid models. And so here we remain hopeful that the Indian system will continue to adapt its thinking, which we believe will be in the interests of both of us.
Even as we invest in an extensive amount of brainpower and resources in the DTI, exercises -- joint exercises because our military and the Indian military remain the most visible cooperative efforts between us and serve as a cornerstone of our defense cooperation relationship. Exercises allow the U.S. and Indian militaries exposure to one another's tactics, techniques and procedures. They also allow Indian troops access to U.S. troops, making operating together possible, if it proves necessary to further U.S. and Indian interests and, perhaps most importantly, help foster the person-to-person ties in the defense area that are so important to our two countries in other areas.
This means, for example, that in May, 200 Indian Army soldiers trained with members of the 82nd Airborne Division at Fort Bragg, where they jointly conducted various scenarios related to a U.N. peacekeeping mission from humanitarian assistance to air assault. I hear Indian soldiers were even able to shoot off a Javelin or two, and one day soon, I'm confident that we'll co-develop these weapons.
Our navies and marines are also exercising together on key tasks, like explosive ordnance disposal and submarine rescue, and we're very pleased to hear that the Indian government has announced that it has decided to join us and nearly two dozen other countries in full participation at RIMPAC in 2014 in Hawaii. We're also encouraged with India's growing role in regional multilateral bodies. Like the U.S. -- like the U.S., India is a matter -- member of ASEAN's Defense Ministers' Meeting-Plus, which gives India an opportunity to put some meat on its Look East policy and to take a bigger role in regional security cooperation in the Indian Ocean region and beyond.
And we were very pleased to see India take on the co-chairmanship with Vietnam of the ADMM-Plus experts working group on humanitarian de-mining and look forward to working with them on this. And we're also, very importantly, looking forward to the next round of U.S.-India-Japan -- think about that -- trilateral discussions, which we've -- which have evolved into a useful and meaningful forum for discussions of regional security challenges bridging from Northeast Asia all the way down to the Indian Ocean.
To be candid, there was a time when we didn't consult as regularly with India as we should have on regional issues, but here, too, we've made progress, which showed during the time I spent with my Indian counterparts discussing India's critical role in the region.
With respect to Pakistan, in my conversations with both Pakistani and Indian leaders, I conveyed that over the last year, the United States and Pakistan have each worked hard to improve our bilateral defense relations. You remember that they were challenged by some border incidents between Afghanistan and Pakistan a little over a year ago.
And I noted that we and the United States look forward to maintaining that positive trajectory. I relate our support for Prime Minister Nawaz Sharif's work to improve civil-military relations in Pakistan. And I also noted that as he does that, the government of Pakistan is focusing on what we believe are his two highest priorities, namely, first, that Pakistan's continued economic development is central to its security and to the security of the region. In this connection, I applauded steps taken by Prime Minister Sharif to revitalize Pakistan's economy -- Nawaz Sharif's, to revitalize Pakistan's economy.
I was honest with my hosts in Islamabad in terms of how Pakistan must achieve peaceful relations with India on the east in order to reap the benefits of cross-border trade, if it's truly to develop its economy. And it needs a secure and stable Afghanistan on the west for the same reason. And I was equally frank with my interlocutors in Delhi that the United States supports Pakistani efforts to improve their bilateral relations and hope Delhi will reciprocate.
Second, I was clear in Pakistan that the principal threat to Pakistan is terrorism, not its neighbors. The government of Pakistan has flirted over time with using terrorism as an instrument of state policy, and it's coming to the realization that terrorism's a boomerang and it comes back on you when you try to use it for your own purposes.
Finally, with respect to Afghanistan, I noted to the Indians that U.S. government's appreciation for their support in the realms of humanitarian and development aid and their efforts to train the Afghan security forces in India, we must appreciate all that on behalf of the Indians.
Well, let me close by reiterating my firm and long-held belief that the U.S. and India are destined to be strategic partners. And India's also vital to lasting peace and security in South Asia and throughout the region. To move forward in this time of transition, South Asia must put its divisions behind it.
And as for us, the U.S. and India, we're each big, complicated democracies. We move slowly, but over the long run, we also move surely. And that, to me, is the trajectory for us and India in the defense area.