Remarks by Secretary Gates at the Shangri-La Dialogue, International Institute for Strategic Studies, Singapore

                MODERATOR:  Mr Secretary, thank you very much, and especially for the strong message that you gave us that strategic rivalries are not inevitable and that sustained and reliable military cooperation with China is important.  You made many other important reflections as well, which will have inspired debate and comment.

                Q     Thank you, Mr Secretary, for a comprehensive and very clear message.  You talked about the credibility of U.S. deterrence and I would like to ask you about deterrence in a conventional way.  What happened in Korea, namely the sinking of the South Korean ship by North Korea, was really concerning to the regional states, including Japan, in the sense of the credibility of the U.S. deterrence.  Apparently, North Korea was not deterred from making that attack and I hope this was not an indication of the deterioration of U.S. deterrence in this region.  Could you please tell us what we should read into this incident in terms of the credibility of the U.S. deterrence?  Thank you.

                SEC. GATES:  First of all, I think what it demonstrates is that a surprise and unprovoked attack by a country is very difficult to defend against, and particularly in a period when there has been no escalation of tensions that would lead people to place their forces on a higher level of alert.  So I think we've seen once again the military benefits of a surprise attack, sad to say.  I think the reality is American military power, and particularly conventional power, is, in my view, as strong today as it has ever been in the Pacific.  We are looking at ways to strengthen it further.

                Part of the effort that I have underway in terms of reallocations within the American defense budget is in fact to protect our force structure to ensure that we can continue our ship-building, building of aircraft, modern aircraft, and so on to be able to deal with whatever threats emerge, both here in Asia and elsewhere in the years to come, despite economic stringencies that affect most of our countries.  So I think the reality is there is no question about the strength of our conventional forces.  There is no question about the striking capability of those forces.

                The question that people have to contemplate is: what are the consequences for a country like North Korea of an unprovoked surprise attack on a neighbor?  For nothing to happen would be a very bad precedent here in Asia, and so I think we need to work together in terms of how to deal with this.

                Q     Secretary Gates, there are many reasons why the United States won the Cold War against the Soviet Union, but one reason was that American economic performance significantly outperformed Soviet economic performance.  Today, there is a surprising degree of pessimism about American economic prospects in the next few years whilst there is a rising level of confidence in China's prospects in the next few decades. So, to use an old Soviet phrase, how is this going to affect the correlation of forces in the Pacific if these trends continue?

                SEC. GATES:  It will not surprise you to know that when it comes to the United States, I am an eternal optimist, and I would tell you also as a historian that history is filled with examples of countries that thought the United States was in decline and underestimated our recuperative powers and our ability to correct course when it was required.  I think one of the advantages that the United States brings to the global economy - and I am no economist - but I think one of the advantages we bring is that we are without question, in my view, the most self-critical society in the world.

                We are faster to identify our problems, our underlying issues, and then take action to address those concerns more than virtually any other major power, and I think we will see that.  We certainly, along with many other countries in the world, are going through a tough period economically.  We're already seeing our economy recover and I have no doubt that the kind of economic strength that is required, frankly, from my perspective, to sustain our military capabilities as well as the prosperity of the people will return reasonably quickly.

                But I think it does raise an important point and one that I have spoken about at home, and that is - and we actually saw it in the case of the Soviet Union- you cannot have great military power that is not sustained by great economic power.  And, therefore, we have to do what we can to ensure from the military standpoint that we are spending our dollars as wisely as possible so that we can make a contribution in the recovery of fiscal discipline in the United States.  But I have no doubt about that the correlation of forces...First of all, correlation of forces between the U.S. and China is about countries that are economic co-operators as well as competitors, but it is peaceful competition and it is exactly the kind of competition that the world needs in the economic sphere.  So I don't see this as an adversarial relationship but one of mutual benefit going forward, and so as we come back from our economic problems I would expect to see the two-way trade between the United States and China continue to grow.

                Q     Secretary Gates, thank you for that very clear iteration of U.S. policy to sustained and reliable military to military ties with China.  However, given the decline by Beijing to approve or to delay the summit of defense chiefs of the two countries, to what extent is the United States ready, willing, and able to address China's concerns on arms sales to Taiwan.  I note you comment, Secretary Gates, that this is nothing new, but from the Chinese perspective, if one were to take as a starting point President Reagan's 1982 Shanghai Communiqué commitment to declining arms sales to Taiwan, and given the reality over the past 28 years that arms sales have not declined, given also improving Mainland-Taiwan cross-straits relations, to what extent should that issue be revisited so as not to jeopardize - or rather to facilitate - military-to-military relations between the two countries?

                SEC. GATES:  Well, first of all, as I underscored, from the time of normalization on, the United States, as a result of the Taiwan Relations Act of 1979, has been obligated to provide minimal levels of defensive capability for Taiwan.  Having been through this in 2007 with the Bush administration and last year with the Obama administration, I can tell you that in both administrations the items that were considered for sale were carefully thought-through with a focus on ensuring that we were providing defensive capabilities and, at the same time, underscoring, as I said in my remarks, our continued opposition to independence for Taiwan.

                We strongly encourage the cross-strait improvement in relations and perhaps a time will come when this issue will go away because of those improved relations, but we will maintain our obligations and, frankly, I would very much like to, as I said in my remarks, see the military-to-military relationship cease being the sole focus of the response to these sales because I think that there is great opportunity and great benefit in a greater dialogue between us.  When I was in China in 2007 and met with President Hu, we agreed on a long list of areas where we thought U.S.-Chinese military cooperation could be expanded in terms of exercises, in terms of exchanges among our professional military educational organizations, in terms of younger officers, and work together in areas associated with humanitarian assistance and disaster relief.

                There is still a very positive agenda out there for the two of us.  In addition to my strong belief that, as was the case during a very long period of time with the Soviet Union, in the discussions between the United States and the Soviet military, I believe that there were many occasions in which miscalculations and misunderstandings were avoided.  I believe that kind of a dialogue would be useful and productive between the United States and China as well.

                Q     Thank you, Secretary Gates, for a very thought-provoking and (inaudible) address.  In referring to your response to the sinking of the Cheonan, however, you said that two responses obviously were the referral to the Security Council and combined exercises with South Korea.  You also teased us a little in saying that you were looking at further options.  I wonder if you could, in this forum, elaborate perhaps on what those other options might be.

                SEC. GATES: I would prefer just to tease you.

                Q     Thank you, Mr Secretary.  As a member of the Korean delegation, I would like to really thank you for your unstinting support on behalf of our government at a time of national security challenges.  I have two quick questions.  Sir, you have mentioned hybrid security challenges as the most important issue in the next five to 10 year timeframe.  How do you then assess the so-called interagency intelligence coordination process within your government and what type of intra or inter-ally intelligence cooperation would you like to see in this part of the world, in particular between the U.S., Japan, and South Korea?  Thank you.

                SEC. GATES:  First of all, I think that there has been a dramatic improvement in the sharing of intelligence within the American government over the years.  When I was on the Iraq Study Group and visited Baghdad in September 2006, I met with a senior CIA officer and I asked him how the cooperation between the CIA and the military was going, and he said, perhaps without thinking through exactly what he was saying, 'Oh sir, it is so much better than when you were director.'  But what we have seen, in no small part because of our engagements in both Iraq and Afghanistan, is a dramatic improvement in the sharing of intelligence within our government.

                But one of the other developments that we have seen that I think has great promise for the future is that we have also strengthened the sharing of intelligence with our partners in Afghanistan in particular.  In Kandahar and various fusion centers, more and more of our allies are being exposed to more and more of our intelligence, and we to their intelligence, and I think that this has huge options going forward.  I think there are still some obstacles between governments in terms of intelligence-sharing but I think that, as we face common threats, such as violent extremism, that the exchange of information and particularly warning information among countries that you might not ordinarily think of as partners or allies has benefit because we share, in many cases, we share a common enemy - people who are trying to kill our innocent citizens.

                So I think that we have made a lot of improvements inside the U.S. government in terms of sharing but I think these conflicts and the number of partners we have had, particularly in Afghanistan, has also sparked a new wave of figuring out how to share intelligence among states, and I think it is a positive development and one that we should build on.

                Q     Sir, I want to make a very short comment on your remarks on the suspension of the military ties between our two countries.  It seems to me that it is not fair enough to owe the suspension of the military ties between China and the United States to the PLA or to the Chinese government because the Chinese have never hurt or damaged the interests of the United States, while the sales of arms to Taiwan really hurt the core interests of China.  And, I believe this sort of arms sale sends to the Chinese the wrong signal - that is the Chinese are taking the Americans as partners as well as friends while you Americans take the Chinese as the enemy.  The sole purpose, according to the understanding of most Chinese, of the arms sale is intended to prevent the unification of China.  Therefore, when the Chinese core interest is hurt, I think this sort of response is quite understandable.  This is my comment on your remarks.

                I have one question: as you know, recently two incidents have attracted the attention and aroused the concern from the world community.  One is the Cheonan incident.  On this incident, as you know, there are controversial views on who did it.  The other incident that has happened recently in the Mediterranean Sea was committed by the Israeli military.  It seems to me that there is a wide gap in the U.S. attitudes and policy towards the two incidents.  Would you please compare the policies and attitudes of the United States towards these two incidents that recently happened?  Thank you.

                SEC. GATES:  First of all I would just like to state for the record that the United States does not consider China as an enemy, but as a partner in many areas, and that there are many areas and a growing number of areas where we are working together, which makes the lack of progress on the military side stand out all the more.  I would go back to a comment that I made at the very outset in the question and answer period.  The attack on the Cheonan was a surprise attack without any warning and with the death of 46 sailors.  The tragedy in the eastern Mediterranean, there were warnings issued to the ships.  I won't make judgments on responsibility or fault - I think that there is value in an investigation that has international credibility in terms of responsibility in that case, but there was no surprise associated with it.  And, I think it needs to be investigated and we will withhold judgment until that investigation is complete, but, I think there is no comparison whatsoever between what happened in the eastern Mediterranean and what happened to the Cheonan.

                Q     Mr Secretary, you mentioned extended deterrence as an important part of deterrence capabilities.  Can you give us a layman's explanation of what extended deterrence involves and the scope of it?  What areas are involved in what you call extended deterrence?

                SEC. GATES:  Well, extended deterrence for us, with our allies and partners here in Asia, is in essence is that through both conventional and nuclear capabilities, we will extend an umbrella of protection over our allies.  And, I would say that it is an umbrella that is also intended to avoid further proliferation of weapons of mass destruction.  As long as our extended deterrence is reliable and is believed in by our allies and partners, then there is no need for additional nations to develop nuclear weapons.  We think that is a positive good.  We intend to continue this extended deterrence.  We are investing billions of dollars in our nuclear infrastructure to ensure that our stockpile is safe and reliable and effective.  Our F 35 new fighter will be a dual capable aircraft.  And so, I think we are making the appropriate investments to ensure that that extended deterrence is sustained far into the future.

                Q     Mr Secretary, the President of South Korea spoke last night about the situation in the Korean Peninsula extensively and in your remarks you have also articulated your concerns.  I have a short question, would it be possible for you to give us a read about the status of the current involvement of Democratic People's Republic of Korea in nuclear and missile proliferation considering that this issue was also a matter of concern in our region a couple of years ago?

                SEC. GATES:  I think there's a fairly sustained and elaborate record of North Korea providing ballistic missile technologies and technologies for weapons of mass destruction to other countries.  This has been one of our concerns about the developments in North Korea is their willingness to essentially sell anything they have to anybody who has the cash to buy it.  And, I think it's one of the reasons we have the elaborate UN Security Council resolutions that we have, trying to inhibit this trade going from North Korea to a variety of other countries.

                Q     Secretary Gates, how do you see the issue of U.S. basing arrangements in Okinawa proceeding with the new government of Prime Minister Naoto Kan? And while I have the floor, given your dismal assessment of the U.S./China Military to Military relationship, what steps can be taken to improve this relationship if the cessation of U.S. arm sales to Taiwan is a non-starter?

                SEC. GATES:  First of all, I think that the way forward in Okinawa and in our security relationship with Japan was signaled by the issuance of the two-plus-two statement last week in terms of going forward - that I, my counterpart and Secretary Clinton and her counterpart signed.  I think we now need to work together in terms of some of the commitments that were made in that agreement.  In terms of alternative areas for training and exercises; in terms of noise mitigation for people of Okinawa; new green initiatives to deal with environmental issues on Okinawa. We do have a list of actions that I think we now together need to take.  But, based on the two-plus-two agreement, I believe we are in a position to move forward at this point.  With respect to the military relationship, you know there have been, through this thirty year period, there have been periods of advance and periods of stagnation in the relationship.  And, my suspicion is that the way to get the relationship back on track is through a series of step-by-step measures that both sides agree to take, that begin slowly to widen the aperture in terms of which our cooperation can take place.

                Q     Thank you Secretary Gates.  I'd like to go back to a point you were addressing in your response to the question about intelligence sharing within the United States, particularly between the DOD (Department of Defense) and the CIA.  Last week, special reporter for the UN Philip Alston was critical of drone strikes, in particular in Pakistan but also elsewhere.  Particularly, he was critical of the role of the CIA, whose accountability mechanisms he compared unfavorably to the Department of Defense.  I have two questions.  First of all, do you have accountability concerns about the role of the CIA in drone strikes, and do you see this as a trend that will continue or decline in future years?

                SEC. GATES:  First of all, I am not going to get into any discussion of any kind of operations, but in terms of accountability, I would just say that I have watched this process develop since the onset of Congressional oversight in the United States of intelligence operations in the mid-1970s.  That oversight has become progressively better - better informed and fulsome.  I have no doubt whatsoever that the intelligence committees in the united States Congress are fully informed of the activities the CIA is carrying out, just as we inform the armed services committees of the activities that we are carrying out.  We now have almost two generations of intelligence officers in the United States who have grown up with an intrusive, legislative oversight of intelligence operations.  There is no resistance to this oversight in American intelligence, whether it's CIA or military intelligence.  It's a part of our culture, and frankly, we take pride in it.  And, as I wrote in my book, I frankly found it was helpful over the years; in meetings in the situation room - when someone would come up with a cockamamie idea for a covert operation - to be able to say, "It will never fly on Capitol Hill."  Therefore, I think that Congressional oversight also happens to provide some protection for the intelligence agencies when they are asked to do things that may not make sense.  Overall, I would say that accountability is thorough and I think there is full accountability to the Congress by CIA.

                MODERATOR:  Mr Secretary, you have provoked us into thinking more strategically about defense relationships in the region and also provided clear policy ideas on how that can be done.  For your strong address and your frank answers to questions, we thank you very much.