MODERATOR: Good evening everyone. Thank you for joining us. This is Paul Watzlavick at the U.S. Department of State Media Hub in Tokyo. Today we have with us Assistant Secretary Daniel Russel, who is in Rangoon attending the ASEAN Senior Official Meetings. He will be talking to us from there to discuss his feedback from the meetings and outcomes of the various events of that day. Sir, I invite you to make opening statements and callers when the assistant secretary finishes if you would like to ask a question, please dial 91 on your hand set to ask a question. Assistant Secretary Russel, if you would like to continue.

ASSISTANT SECRETARY RUSSEL: Great. Well thank you very much Paul, and thanks to everyone on the call for joining us and for being patient. I’m here in Rangoon, as Paul mentioned, to participate in a number of ASEAN based multilateral meetings and let me begin by underscoring the priorities that the U.S. government places on engagement with ASEAN and engagement in multi-lateral fora. A critical element of the President’s rebalancing strategy in the Asia-Pacific region is the effort to engage with, participate in, and strengthen regional organizations.

So over the last three days, as the senior official from the U.S. side, I met with ASEAN and partner colleagues in both the East Asia Summit format, the ASEAN Regional Forum format, which includes quite a few other partner countries from other parts of south Asia as well as the EU, and today I had a very productive and substantive dialogue in the U.S.-ASEAN context with the senior officials from the 10 ASEAN countries.

This is part of a process that leads to the ministerial meetings that will be hosted here in Burma in August, and it also leads ultimately to the leaders’ meetings in November, both the East Asia Summit and the U.S.-ASEAN Summit. It’s also a process in the sense of the U.S. long-term rebalance strategy in that we see ASEAN and the associated institutions in the region as building respect for basic rules and norms and as a vehicle for cultivating the kind of mindset and pattern of cooperation and compromise that is constructive and that helps maintain stability and security.

And we also see these forums and institutions as places where countries can raise areas of concern, can work through problems and can deal with disagreements in a diplomatic manner and a constructive manner. I’d say that there were a number of major themes and areas of focus in the three sets of meetings -- common concerns and also common objectives. There was considerable discussion about economic growth and economic engagement. There was discussion about various programs to increase maritime cooperation, some 80% of the region being ocean.

There was very significant and constant focus on the challenge of climate change, as well as discussion and some initiative regarding wildlife trafficking. And not surprisingly there’s a lot of work going on with regards to cooperation on humanitarian assistance and disaster relief given the state of natural disasters that’s afflicted the region, including most recently Typhoon Haian.

On security issues, there was a discussion in each of the fora of nonproliferation and particularly of North Korea and the threat posed by North Korea’s nuclear missile program. There was a delegate from North Korea attending the ASEAN Regional Forum meeting, as is the norm. And there was, as you might expect, a very extensive discussion of maritime security and particularly the situation in the South China Sea.

I’m not in the business of reading out on what other countries say – they can speak for themselves. But for our part naturally I laid out key tenets of the U.S. position that have guided our approach and diplomacy. I tried to offer some constructive suggestions in the spirit of a party that is neutral with regards to the territorial claims, as a party that is friends with each of the claimant countries, but also as a party that has a longstanding and a special responsibility for the maintenance for the peace and security in the Asia-Pacific region.

One of the things that I flagged was the significant opportunity presented by the International Tribunal on the Law of the Sea's recent invitation to China to participate in the arbitration proceedings. The tribunal has signaled that it would be open until mid-December for China to submit clarification of the legal basis of its claims, and I drew the attention of the group to this opening which, just as a modest suggestion, opens the door to the removal of some ambiguity regarding China’s claims that has helped fuel tension and uncertainty in the region.

The other suggestion that I made, and this is simply food for thought not a formal proposal, is based on the 2002 Declaration of Conduct that was agreed upon between the ASEAN countries and China. It forms the basis of the work being done by them now in trying to codify a code of conduct for behavior in the South China Sea, and the point that I made was really a common sense point that the claimant states themselves could identify the kind of behavior that they each find provocative when others do it, and offer to put a voluntary freeze on those sorts of actions on the condition that all the other claimants would agree to do so similarly.

So for example, would they be willing to make a pledge as simple as not to occupy any of the land features in the South China Sea that are currently unoccupied? That is the sort of thing that is very consistent with, if not actually implicit in, the Declaration of Conduct. And the point that I tried to make is that while they work at making progress on a long-term binding code of conduct, the pace of incidents and the level of tension in the South China Sea is going up, and going up quickly.

As the press has reported, there are signs of large-scale reclamation projects in the South China Sea and the construction of military facilities, and so on. And my suggestion was that if the claimants themselves engaged in a voluntary process, they would have an opportunity to lower the temperature, improve the prospects for the code of conduct negotiation, and minimize the risk of other dangerous incident. So that’s a quick overview of the issues that came up and the points that I’ve made. Let me now Paul turn it back to you and see if people have any questions.

MODERATOR: Thank you, Assistant Secretary Russel. Our first call is from Vietnam Tuoi Tre Newspaper. If you could please caller, if you could please identify yourself and ask your question clearly.

CALLER: Hi it’s Tuoi Tre newspaper. Thank you. I have two questions for Mr. Russel the first one that President Obama in his West Point speech has warned that China’s aggression could draw in U.S. military. Can you specify what is the limit of stressor for the U.S. to intervene or increase its military presence in the South China Sea? And the second one is that serious concerns has been in the region that China might drag the oil rig further south toward the Spratleys or may soon impose an ADIZ in the south china sea, bringing U.S. troops in (unintelligible) strait? What the comments on this possibility and what is something discussed between you and ASEAN SOM recently in general?

ASSISTANT SECRETARY RUSSEL: Well thank you very much. The speech that President Obama gave at West Point was focused on U.S. national security and the question of the use of force. It was a broad speech that laid out a series of principles and a construct but did not address specific scenarios and situations, particularly in the Asia-Pacific region.

I had the privilege of accompanying President Obama in April when he visited Asia and traveled to both northeast Asia and Southeast Asia, and he had opportunities in both Malaysia and in the Philippines to speak very directly to the issue of the South China Sea. Among the points that the President made, and that Secretary Kerry and more recently in Shangri-La, Secretary Hagel and other officials have underscored are two key elements. Number one, the United States is a resident Pacific power, and our security alliances and our formidable military presence have, for decades, kept the peace in the region and created the conditions that have permitted extraordinary economic as well as social and political growth.

China, Vietnam, and the other countries in the region and the countries with interest in the South China Sea have over the years been beneficiaries of the U.S. military presence and the system of alliances, and they will continue, I believe, to benefit in the future because our commitments and our purpose is not to wage war -- it is to prevent war.

So the second point that the President and others have made and that I would like to flag is that in the 21^st century, in the dynamic and economically importantly region of Asia, there is no reason why disputes cannot be settled peacefully. And it is precisely the focus on peaceful diplomatic resolution of disputes consistent with international law that formed the framework of the discussions that the ASEAN countries and others have been having over the last few days.

The second part of your question regarding air defense identification in the Spratleys or the South China Sea is what they call in the textbooks a hypothetical question. It hasn’t happened, it shouldn’t happen, and I seriously hope that it does not happen. It is a matter of, in the first instance, common sense that at a moment and in a region where tempers and tensions run high, all parties should --and must -- exercise restraint. I think that restraint and prudence are the watch words that should govern the behavior all of the countries in the region including, and particularly, the claimants in the South China Sea. Thank you.

MODERATOR: Thank you, Assistant Secretary Russel. Our next caller is from Singapore. Caller if you’d please identify yourself and also state your outlet and your question clearly. Thank you very much. (Pause)

Ok, our next caller comes from Beijing -- Caixin Media. Caller please state your name and question clearly. Thank you very much.

CALLER: Thank you. Ling from Caixin Media. I got two questions for you. The first during (unintelligible), the Foreign Ministry listed a document its website called “The Operation of the HYSY981 Drilling Rig -- Provocation and Tension in the Region.” Is that helpful for you to further understanding of the regional scenario? And the second question is to what extent do you think pushing China to articulate more on 9-1 would really help to solve the problems in South China Sea? Thank you.

ASSISTANT SECRETARY RUSSEL: I’m sorry, is it possible for the questioner to repeat the second question? I’m having a little trouble hearing. Perhaps not. Well, let me address the question I did hear which was in regard to the document or the statement issued by the Chinese Foreign Ministry the other day regarding the deployment of oil rig 981 and China’s claims in the Paracel Islands. I did see the document issued by the Foreign Ministry. I read it with interest. But the fact of the matter is that from the perspective of the United States, it is to some degree beside the point in the following respect: the United States has never take a position on China’s or Vietnam’s territorial claims in the South China Sea, including its claims in the Paracels. We don’t have a view whether China’s claim is stronger or Vietnam’s claim is stronger.

We do have a problem with the blanket assertion by both Vietnam and China that their claims are indisputable because clearly Vietnam does not accept China’s claims and China does not accept Vietnam’s. Whether its justified as the Vietnamese claim or whether it’s unjustified as the Chinese claim, the fact of the matter is that Vietnam has for a long time maintained a claim of sovereignty. Hence our recognition of the existence of a dispute. Moreover, Vietnam has been developing oil and gas reserves in areas that it has formally declared an EEZ derived from its mainland coast for a number of years. I’m not saying that their claim is justified, but I do recognize that a competing claim exists.

The issue for the United States, and this is a point that I made to my colleagues including the Vietnamese and the Chinese senior officials, is one of behavior not of one of absolute rights. And the problem with the deployment of the rig as we’ve noted is in part that it was done at a time of heightened tension following a series of other troubling confrontations at sea. All of the participants in the meetings that I have attended over the last few days agreed that it is very important to create a positive atmosphere.

I think that there is a consensus that countries should be working together in sensitive areas to manage differences. I’ve stressed in the meetings and in my private bilateral meetings with the Chinese and the Vietnamese our view is that both sides -- both Vietnam and China -- need to deescalate tensions. Both need to exercise restraint. Both need to insure the safe behavior and activities of their vessels.

My recommendation is that both Vietnam and China should remove all of their ships, and China should remove the oil rig-- not because we take a position on who’s right and who’s wrong with respect to the claim. We don’t. But because to do so would create space for a diplomatic process that would manage tension. Thank you.

MODERATOR: Thank you, Assistant Secretary Russel. We’re going to try to go back to Singapore again. Bloomberg I believe is on the line. Caller, please state your name and your question clearly. Thank you.

CALLER: Hello if you can hear me it’s Rosalind Mathieson speaking from Bloomberg in Singapore. Thank you for your time Assistant Secretary. I have a quick question going back to your initial remarks about the reclamation work near the Spratly Islands. I wondered if you could comment specifically on how concerned the U.S. is about the recent escalation in that reclamation work by China in the area and how much the U.S. sees this as an effort by China to remake the South China Sea to exert control over the area that it claims.

ASSISTANT SECRETARY RUSSEL: Thanks for the question. There have been a number of press reports about activities in the South China Sea such as reclamation work and such as large scale construction of outposts that go far beyond what a reasonable person would consider to be consistent with the maintenance of the status quo, particularly the status quo as applied in 2002 when the 10 ASEAN countries and China reached an agreement on a Declaration of Conduct that clearly and explicitly committed themselves to exercise restraint, to avoid occupying uninhabited land features, and -- to paraphrase -- to keep things as they were.

So certainly any type of behavior that runs counter to those precepts is going to be inconsistent with the goal of an atmosphere that’s conducive to negotiating quickly to reach a binding code of conduct that binds the claimants and the countries in the neighborhood. That’s a commitment that Vietnam, the Philippines, Malaysia, all the ASEAN countries, and China have made and have reaffirmed.

The South China Sea and its sea lanes are vital to the global economy. The South China Sea is home to a wealth of marine life and it also contains very important hydro carbon and other mineral reserves. The world needs those sea lanes to be free. The world needs those sea lanes to be secure. And the world needs the resources of that region to be managed in a responsible and sustainable way.

Now the fact that the U.S. is not a claimant -- we don’t stand to profit from the ultimate resolution of the territorial differences -- I think gives us a right to speak as a friendly but neutral party. And the heartfelt advice that we have issued to the concerned countries is that they should show restraint and find collaborative and diplomatic means to reconcile their differences or to shelve their differences.

Diplomacy is one option. Recourse to the international legal mechanisms is another option. But at the same time we’ve issued advice, we’ve issued a stern warning as well. Coercion and the threat of force as a mechanism for advancing territorial claim is simply unacceptable, and the United States has been outspoken in criticizing and condemning activities that fall into that category. Thank you.

MODERATOR: Thank you, Assistant Secretary. We’re going to try to get a couple more questions in. The next caller is from Taipei Liberty Times. Caller please state your name and your question clearly. Thank you.

CALLER: Hi, I’m Steven Tsao from Liberty Times. The question I would like to ask is the U.S. has repeatedly said that Taiwan is an important security ally to the U.S. Could you tell us why Taiwan hasn’t been invited to participate in the Pacific Rim exercise and the reason why there has been no progress being made since President Bush agreed in 2001 to help Taiwan acquire diesel-electric submarines? Thank you.

ASSISTANT SECRETARY RUSSEL: Well thank you very much for you question. Taiwan is a very important economy, Taiwan is a very important friend to the United States, and Taiwan is a very important partner on a range of issues. And we value very much the strong, friendly, robust and growing unofficial relations that we enjoy with Taiwan.

We, in particular, are appreciative of the tremendous growth in our economic trade and investment relationship. We are also focused on the commitment as a matter of U.S. policy to help Taiwan in maintaining a legitimate and credible defense capability. Now over the last 5 years, the world has seen significant progress in cross strait relations. This is something that the U.S. warmly welcomes and supports as do others in the international community.

We think that cross strait relations, by progressing at a pace the people on both sides are comfortable with, contributes directly and significantly to the security of the United States and the region.

Now there is no scenario in which I’m going to comment on the issue of potential arms sales from the United States to Taiwan or any particular defense system or program. I think it’s fair to say, however, that an important goal for cross strait relations, and part of the rationale behind Americas strong support for Taiwan’s legitimate defense needs, is that the people of Taiwan -- in order to make significant progress in their cross strait dialogue-- need to have confidence, the confidence that they are secure and the confidence that they are not vulnerable to military coercion and military threat.

In that context, of course, the U.S. has a role to play. But most importantly, Beijing in its approach and in its military strategy can, and should, help generate confidence among the people on Taiwan that will allow for continued and expanded progress. I don’t have details or a statement to make about the RIMPAC exercise and I’m sure you can bring that question to my colleagues in the Department of Defense. Thank you.

MODERATOR: Thank you, Assistant Secretary Russel. We are going to take one last question from here in Japan, Yoimuri press. Caller, if you could please state your name and your question clearly to the Assistant Secretary. Thank you. This will be our final question.

CALLER: Assistant Secretary Russel, this is Michiyo Hayashi of the Yoimuri, editorial writer. My question relates to your effort in building up multinational institutions. ASEAN, ARF, and other multinational institutions are becoming more and more important in the regional international system. It remains true in East and South China Sea like you have just pointed out that tension is being enhanced at high frequency. How could these institutions collectively let the message for sovereignty and stability and, if possible at all, have better influence on China’s maritime concept through creating positive atmosphere?

ASSISTANT SECRETARY RUSSEL: Well, thank you for that thoughtful question. There are two sets of meetings in recent weeks that I think have made very significant contributions along the lines of your question. I have participated personally in a few of them.

As I said, the East Asia Summit, the ASEAN Regional Forum and the related Senior Official Meetings that I held here over the last three days. And the fact that China the ten ASEAN countries, Japan, Australia, New Zealand, the United States, the Republic of Korea, were able to sit at their table and discuss in a constructive and a candid and direct way, the fact that we were able to listen and hear from the protagonists which included China, Vietnam, the Philippines, and others marks an important milestone in diplomatic process that we all hope will yield a peaceful resolution of the disputes, and more to the point, ensure the kind of responsible behavior that we all want to see in this important region.

The Chinese and the Vietnamese and the Philippines and the other claimant states not only had an opportunity to say their peace and make their arguments, they also had an opportunity to hear from the other side. Now I’m not naive or romantic. I don’t believe that just listening to contrary arguments solves the problem, but it is important that governments and decision makers in capitals get a full data set by which to evaluate the impact of decision on their neighbors and on their international reputation.

I know that the Chinese delegation, although it gave a spirited and vigorous defense of Chinese behavior and Chinese position, took note of the widespread concerns expressed about the deployment of the oil rig in an abrupt, unilateral, and provocative manner. I know that they took note of the widespread concerns over a broader pattern of behavior that the smaller neighbors find intimidating and challenging. And I hope and believe that they took note of a number of constructive suggestions from the U.S. and from other delegations that were offered not in the spirit of condemnation but in the spirit of compromise.

The second international meeting that we are paying close attention to is, of course, the Shangri-La dialogue in Singapore. I think it is very telling that Prime Minister Abe was the world leader asked to deliver a keynote address. My sense is that the three guiding principles that he laid out in his speech found great favor with a broad spectrum of the participating countries. And arguably what is most important and most noteworthy at the Shangri-La was not the debates and was not the full-throated rebuttals by military officers or others, but rather the opportunity that the forum provided for both informal consultation and exchange of views. But also as I’ve alluded to earlier the opportunity for leaders and policy maker to get an objective read on how the world is responding to their behavior.

So those are, to me, two examples of international fora that are making contributions in terms of increasing communication and promoting understand. It remains to be seen how effective those fora are, and certainly we believe that there is much more that the region can do in developing institutions that are capable of setting rules and ensuring that countries respect them. But for they are worth, I think that these two sets of meetings made a not insignificant contribution thank you.

MODERATOR: Thank you, Assistant Secretary Russel. We appreciate your making time for us today and we would also like to thank all of our participants who joined the call. We will be sending out the audio file of this event later to those participants who registered. Again thank you very much, sir and we look forward to the next time we have you on.